UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F
                                   (Mark One)
         |_| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                                       OR
            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For fiscal year ended December 31, 2003
                                       OR
          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the transition period from __ to __

                         Commission File Number: 0-27336

                                 SVG Capital plc
             (Exact name of Registrant as Specified in Its Charter)
                                England and Wales
                         (Jurisdiction of Incorporation)

                               31 Gresham Street,
                            London, EC2V 7QA, England
                    (Address of Principal Executive Offices)
                       __________________________________

           Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:            Name of Each Exchange On Which Registered:
None                            Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:

Title of Class:                Ordinary Shares of GBP1 each

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None

         Indicate the number of  outstanding  shares of each of the issuer's
classes of capital or common stock as of the close of the period covered by the
annual report: 112,655,174 Ordinary shares of GBP1 each

         Indicate by check mark whether the  registrant:  (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                 |X| Yes |_| No

Indicate by check mark which financial statement item the registrant has
elected to follow:

                            |X| Item 17 |_| Item 18



<PAGE>

                                 SVG Capital plc
                           Annual Report on Form 20-F
                            for the fiscal year ended
                                December 31, 2003

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

Item                                                                                                    Page No.

<S>                                                                                                          <C>
PART I........................................................................................................1

Item 1.      Identity of Directors, Senior Management and Advisers............................................1

Item 2.      Offer Statistics and Expected Timetable..........................................................1

Item 3.      Key Information..................................................................................1

A.       Selected Financial Data..............................................................................1

B.       Capitalization and Indebtedness......................................................................4

C.       Reasons for the Offer and Use of Proceeds............................................................4

D.       Risk Factors.........................................................................................4

Item 4.     Information on the Company........................................................................6

A.       History and Development of the Company...............................................................6

B.       Business Overview....................................................................................8

C.       Organizational Structure............................................................................18

D.       Property, Plants and Equipment......................................................................18

Item 5.     Operating and Financial Review and Prospects.....................................................18

A.       Operating Results...................................................................................18

B.       Liquidity and Capital Resources.....................................................................20

C.       Research and Development, Patents and Licenses, etc.................................................25

D.       Trend Information...................................................................................26

E.       Off-Balance Sheet Arrangements......................................................................26

F.       Tabular Disclosure of Contractual Arrangements......................................................26

G.       Safe Harbor.........................................................................................27

Item 6.     Directors, Senior Management and Employees.......................................................27

A.       Directors and Senior Management.....................................................................27

B.       Compensation........................................................................................27

C.       Board Practices.....................................................................................30

D.       Employees...........................................................................................32

E.       Share Ownership.....................................................................................32

                                       i

<PAGE>

Item 7.     Major Shareholders and Related Party Transactions................................................32

A.       Major Shareholders..................................................................................32

B.       Related Party Transactions..........................................................................34

C.       Interests of Experts and Counsel....................................................................34

Item 8.     Financial Information............................................................................34

A.       Consolidated Statements and Other Financial Information.............................................34

B.       Significant Changes.................................................................................35

Item 9.     The Offer and Listing............................................................................35

A.       Offer and Listing Details...........................................................................35

B.       Plan of Distribution................................................................................36

C.       Markets.............................................................................................36

D.       Selling Shareholders................................................................................36

E.       Dilution............................................................................................37

F.       Expenses of the Issue...............................................................................37

Item 10.    Additional Information...........................................................................37

A.       Share Capital.......................................................................................37

B.       Memorandum and Articles of Association of SVG Capital plc...........................................37

C.       Material Contracts..................................................................................42

D.       Exchange Controls...................................................................................43

E.       Taxation............................................................................................44

F.       Dividends and Paying Agents.........................................................................49

G.       Statement by Experts................................................................................49

H.       Documents on Display................................................................................49

I.       Subsidiary Information..............................................................................49

Item 11.    Quantitative and Qualitative Disclosures About Market Risk.......................................49

                                       ii

<PAGE>

Item 12     Description of Securities other than Equity Securities...........................................49

PART II......................................................................................................50

Item 13.    Defaults, Dividend Arrearages and Delinquencies..................................................50

Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds.....................50

Item 15.    Controls and Procedures..........................................................................50

Item 16.     [Reserved]......................................................................................50

Item 16A.      Audit Committee Financial Expert..............................................................50

Item 16B.      Code of Ethics................................................................................50

Item 16C.      Principal Accountant Fees and Services........................................................50

Item 16D.      Exemptions from the Listing Standards for Audit Committees....................................51

Item 16E.      Purchases of Equity Securities by the Issuer and Affiliated Purchasers........................51

PART III.....................................................................................................52

Item 17.    Financial Statements.............................................................................52

Item 18.    Financial Statements.............................................................................52

Item 19.    Exhibits.........................................................................................52
</TABLE>


                                      iii

<PAGE>




Unless  otherwise  indicated  herein,  all  information in this annual report is
presented as of December 31,  2003.  Amounts  expressed in ("GBP") are in United
Kingdom("U.K.")  pounds  sterling.  Amounts  expressed  in ("EUR")  are in euro.
According  to the  Federal  Reserve  Bank of New York,  the Noon Buying Rate for
pounds sterling in New York City expressed in U.S.  dollars per GBP1.00 (rounded
to the nearest cent) on July 7, 2004 was $1.86 and the Noon Buying Rate for euro
in New York City expressed in U.S.  dollars per EUR1.00  (rounded to the nearest
cent) on July 7, 2004 was $1.24.

                                     PART I

         This annual report on Form 20-F (this "annual  report" or "Form 20-F")
constitutes  the annual  report of SVG Capital plc (the  "Company").  Unless the
context  requires  otherwise,  the term "Company"  includes SVG Capital plc, its
subsidiary undertakings and associated undertakings (as defined in the Companies
Act 1985 of Great Britain (the "Companies Act")), the Platinum Trust (a Guernsey
unit trust  referred  to in this annual  report as the  "Trust"),  SVG  Advisers
Limited ("SVGA"),  SVG Investment Managers Limited ("SVGIM"),  SVG Advisers Inc.
("SVGAI") and SVG North America, Inc. ("SVGNA").


Item 1.           IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable to this Form 20-F.

Item 2.           OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable to this Form 20-F.

Item 3.           KEY INFORMATION

A.       Selected Financial Data

         The following selected financial information for the fiscal years ended
June 30, 2001 and 2002,  the six month  period  ended  December 31, 2002 and the
year  ended  December  31,  2003 and at June 30,  2002,  December  31,  2002 and
December 31, 2003 is derived from the audited consolidated  financial statements
included elsewhere in this Form 20-F. The selected financial information for the
six  month  period  ended  December  31,  2001 is  derived  from  the  unaudited
consolidated  financial  statements  included  elsewhere in this Form 20-F.  The
selected  financial  information for the years ended June 30, 1999 and 2000, and
at June  30,  1999,  2000 and  2001,  is  derived  from  the  Company's  audited
consolidated financial statements, which are not included in this Form 20-F. The
"Operating  Data" is for the Company and the Trust,  an operating  subsidiary of
the Company  described in more detail in "Item 4.  Information  on the Company -
Organizational  Structure - Description  of the Trust," and, with respect to the
periods ended June 30,  2001 onwards  includes SVGA and SVGNA,  as well as SVGIM
and SVGAI after their respective dates of incorporation.

                                       1

<PAGE>


<TABLE>
<CAPTION>


                                            Year ended    Year ended   Year ended    Year ended  Six months   Six months  Year ended
                                               June 30       June 30      June 30       June 30       ended        ended December 31
                                                  1999          2000         2001          2002 December 31  December 31        2003
                                                                                                       2001         2002
Operating data                                                                                              (GBP '000s)
<S>           <C>                                  <C>           <C>          <C>           <C>         <C>         <C>          <C>

Total revenues1                                  3,613         6,123        5,616         7,674       4,707        3,368       7,035
Administrative expenses                            668         1,106        2,235         7,293       4,131        4,065       7,642
Interest payable and similar charges               976           468          583         1,832         276        1,523       5,106
Net return/(deficit) after taxation              2,349         4,729        2,655       (1,555)         178      (2,185)     (5,531)
Basic revenue return per ordinary share          2.35p         4.68p        2.60p       (1.52)p       0.17p      (2.14)p     (5.32)p
Net return/(deficit) after taxation as
adjusted for US GAAP                             2,349         4,729        2,655       (1,555)         178      (2,185)     (8,762)
Basic revenue return per ordinary share as
adjusted for US GAAP                             2.35p         4.68p        2.60p       (1.52)p       0.17p      (2.14)p     (8.42)p



                                                 As at       As at       As at        As at          As at             As at
                                               June 30     June 30     June 30      June 30    December 31       December 31
                                                  1999        2000        2001         2002           2002              2003

Balance sheet data                                                                 (GBP '000s)
Total assets                                   360,571     466,702     422,007      466,970        507,529           623,256
Current liabilities                             26,941       5,087       4,747        4,357          4,783             8,111
Long-term debt                                  10,753           0           0       39,152         39,201            88,108
Minority interest                                  392         490         388          374            353               419
Net assets                                     322,485     461,125     416,872      423,087        463,192           526,618
Net asset value per Ordinary Share              325.9p      450.9p      407.6p       413.7p         452.9p            467.5p
Capital stock (excluding long-term debt and    322,485     461,125     416,872      423,087        463,192           526,618
redeemable preferred stock)
Number of Ordinary Shares outstanding as        98,966     102,266     102,266      102,266        102,266           112,655
adjusted to reflect changes in capital
Net assets as adjusted for US GAAP             322,682     463,527     414,827      421,246        463,192           526,618
Net asset value per Ordinary Share as adjusted
for US GAAP                                     326.1p      453.3p      405.6p       411.9p        452.9p            467.5p
</TABLE>



1     The Company's income and capital gains have been and in the future are
expected to be derived  primarily from  distributions in respect of its holdings
in  an  international  portfolio  of  investment  funds  structured  as  limited
partnerships  and unit trusts for which  Schroder  Ventures  or Permira  acts as
general partner,  manager, adviser or consultant (the "Funds"). The Company will
account for such  distributions  by  reference to the  underlying  source of the
distribution.


                                       2
<PAGE>


Dividend per Ordinary Share Information

         For the fiscal year ended December 31, 2003, the board of directors of
the Company (each a  "Director,"  and  collectively,  the  "Directors")  has not
recommended the payment of, and the Company will not pay, a final dividend.  The
Company reported a deficit for the fiscal year on its revenue account. See "Item
5. Operating and Financial  Review and  Prospects"  for more  information on the
Company's operations during its fiscal year ended December 31, 2003.

         The  following  table  presents a complete  summary of dividends  per
Ordinary Share stated in both pounds sterling and U.S.  dollars.  The amounts in
U.S. dollars are based on the exchange rates at each respective payment date.

<TABLE>
<CAPTION>

Payment Date                             Pounds Sterling                        U.S. Dollars

<S>                                        <C>                                    <C>
December 3, 1998                           1.30p                                  $0.0216
December 7, 1999                           1.50p                                  $0.0249
December 7, 2000                           3.80p                                  $0.0457
November 26, 2001                          1.80p                                  $0.0261
Calendar Year Ended 2002                   0.00p                                  $0.0000
Calendar Year Ended 2003                   0.00p                                  $0.0000
</TABLE>

Exchange Rate Information

         (a) The Federal  Reserve  Bank of New York Noon Buying Rate for pounds
sterling in New York City  expressed  in U.S.  dollars per GBP1.00 (rounded to
the nearest cent) (the "Exchange Rate") at June 30,  2004 was $1.81.

         (b)  The table below sets forth, for the periods indicated the high
and low Exchange Rates for each period.


<TABLE>
<CAPTION>
Last Six Months                          High              Low

<S>                                      <C>               <C>
January.............................     $1.85             $1.79
February............................     $1.90             $1.81
March...............................     $1.87             $1.79
April...............................     $1.86             $1.77
May.................................     $1.84             $1.75
June................................     $1.84             $1.81
</TABLE>

         (c) The table below sets forth for the periods  indicated the average
Exchange Rate for each period,  calculated by using the average of the Exchange
Rates on the last day of each month during the period.

<TABLE>
<CAPTION>

Fiscal Year Ended                        Average

<S>                                      <C>
June 30, 1998......................      $1.65
June 30, 1999......................      $1.65
June 30, 2000......................      $1.61
June 30, 2001......................      $1.47
June 30, 2002......................      $1.46
December 31, 2002 (six-month
period).............                     $1.57
December 31, 2003                        $1.64
</TABLE>

                                       3

<PAGE>


B.       Capitalization and Indebtedness

         Not applicable to this Form 20-F.

C.       Reasons for the Offer and Use of Proceeds

         Not applicable to this Form 20-F.

D.       Risk Factors

Risks Relating to Value and Liquidity of Ordinary Shares

         The Company's  Ordinary Shares are listed on the Official List of the
(the "Official List") United Kingdom Listing Authority  ("UKLA") and admitted to
trading on the market for listed  securities  of London Stock  Exchange plc (the
"LSE").  There is no guarantee that the market price of the Ordinary Shares will
reflect  the  underlying  net  asset  value of the  Company,  nor is  there  any
guarantee as to the level of liquidity  in the market for Ordinary  Shares.  The
Ordinary Shares will not be registered in the United States under the Securities
Act of 1933, as amended (the  "Securities  Act"),  or the securities laws of any
state. The Company has not registered under the Securities Exchange Act of 1934,
as amended  (the  "Exchange  Act"),  for the purpose of  facilitating  secondary
market  trading with respect to its  securities  in the United  States,  and the
Company does not intend, directly or indirectly,  to facilitate secondary market
activity.  Accordingly,  it is  expected  that there will be no market for these
securities in the United States.

Risks Relating to the Company's Lack of Control of Underlying Investments

         The Company's  portfolio  consists primarily of holdings in Funds
managed or advised by  "Permira"  or  "Schroder  Ventures",  an  association  of
independent  entities  providing  management or advisory services to buy-out and
development  capital  funds  ("Permira"  or  "Schroder  Ventures").  Pursuant to
statutory requirements governing U.K. investment trusts and the listing rules of
the UKLA (the "Listing Rules"),  however,  the Company may not hold interests in
any Fund which would enable the Company to control that Fund.  As a result,  the
Company will only be able to alter the investment  policies of a particular Fund
in which it is invested by acting in  conjunction  with other  investors in that
Fund. As a result,  the Directors have no control over the investment  decisions
made by the managers of individual investee companies.  An "Investee Company" is
a company in which one of the Funds has  invested.  Although  Fund managers must
act in accordance with common investment objectives and policies and are subject
to the restrictions set out in the documents establishing each Fund, the Company
can make no assurance that the Funds'  managers will make  investment  decisions
according  to the  Directors'  expectations.  See  "Item 4.  Information  on the
Company  -  Business  Overview  -  Investment  Portfolio  -  Diversification  of
Investment Portfolio Relating to Fund Investments."

Risks Relating to Changes in Value of the Company's Portfolio

         The ability to achieve capital  appreciation of the Funds could be
affected by any significant  general change in the value of the investments held
by the Funds. Private equity investments,  by their nature,  involve uncertainty
as to the  ultimate  value  likely  to be  realized  upon  disposition  of those
investments, particularly because their predominantly unquoted nature means that
a ready  market  may not exist for them.  The value of these  investments  could
decrease  and the Company,  as an investor in these  Funds,  may not recover the
full amount of its original investment, which may affect the market price of the
Ordinary Shares.

                                       4

<PAGE>


Risks Relating to Illiquidity of the Company's Investments

         In certain  circumstances,  the Company may wish to transfer  its
holdings in one or more Funds. In a majority of the Funds,  the general partner,
trustee or manager has the  ultimate  right,  similar to that  exercised  by the
board of directors of a private corporation,  to refuse to register the transfer
of an interest in such Fund. While the Company has no reason to believe that any
request  for the  transfer  of an  interest  in a Fund would be  refused,  it is
possible that the overriding  fiduciary duty of the general partner,  trustee or
manager of the Fund could require it to refuse to register a particular transfer
of an interest in that Fund proposed by the Company.

Risks Relating to Capital Calls

         To the extent that the Company  invests in a Fund that has not
completed its  investment  program,  or an "immature"  Fund,  the Company may be
required to provide  more  capital to the Fund in the future if requested by the
Fund's  managers  (these  requests  are  referred  to in this  annual  report as
"Calls").  If the  Company  fails to pay a Call when  due,  such  failure  could
require the Company to sell its existing interests at a discount of up to 25% of
their value and/or  dilute its existing  interests in that Fund by up to 25%. In
the case of a unit trust,  the Company's  failure to meet a Call could result in
the forfeiture of the units with respect to which the default occurred. Upon any
such default,  the Company could also lose the right to  participate  in further
investments  made by the Fund.  The same result would arise for the Trust to the
extent  that it  fails  to meet a Call  associated  with  its  investment  in an
immature  Fund. See "Item 4.  Information  on the Company - Business  Overview -
Description of the Funds - Calls."

Risks Relating to Changes in Value of Funds' Investments

         The value of the assets of the Funds may be affected by uncertainties,
such as  political  developments,  changes  in  government  policies,  taxation,
currency repatriation and other restrictions,  in some of the countries in which
the Funds may invest. The Company, directly or indirectly through the Funds, may
also be exposed to countries,  currencies  and  industries in which the Funds do
not currently hold any interest.

Risks Relating to Currency Fluctuations

         In addition,  the Funds are  denominated in a number of  currencies.
The Funds may,  but are not  required  to,  seek to  minimize  the  exposure  to
currency fluctuations through the use of hedging techniques and instruments, but
it may not be possible  or  practicable  to hedge  against  consequent  currency
exposure.  See "Item 4. Information on the Company - Business Overview - Foreign
Exchange."

Risks Relating to the Company's Investment Flexibility

         The Company has broad discretion regarding the types and amounts of
investments it can make in investments or  co-investments  involving one or more
Funds. The Company may invest in listed or unlisted  companies or other entities
with exposure to buy-out and development capital markets,  listed companies with
no  exposure  to  buy-out  and  development  capital  markets,   fixed  interest
securities,  marketable  debt  securities  and  synthetic  or traded  derivative
instruments.  Other than certain  investment  restrictions  and  diversification
obligations  under applicable laws and regulations  relating to qualification as
an investment  trust,  there are no  restrictions on the types of funds in which
the Company may invest. Many of these investments involve a high degree of risk,
including a possible loss of the entire investment.

                                       5

<PAGE>



Risks Relating to Investment Returns

         Past  performance is not necessarily a guide to future  performance.
The income from the Company's  investments  is subject to change,  which in turn
could  affect  the  Company's  investment  return  and may  affect the amount of
dividends  the Company pays to its  investors.  The  investment  returns for the
Company in the future may differ  materially from the historical  returns of the
Funds and will depend,  among other things, on changes in the composition of the
Company's portfolio.

Risks Relating to Taxation

         There can be no guarantee in advance  that the Company  will be
approved as an investment trust for U.K. tax purposes by the U.K. Inland Revenue
for any accounting periods. See "Item 10. Additional Information - Taxation."

         There is a risk that  certain of the  Company's  holdings  in unit
trusts and non-U.K.  resident companies (held through  partnerships or directly)
could be  treated as "loan  relationships"  for the  purposes  of the regime for
borrowers and lenders established by the UK Finance Act 1996. The consequence of
such  treatment  would be that the amount of any  increase in the value of these
holdings would be taxed as income to the Company.  The Company also would obtain
relief for reductions in the value of such holdings on a mark-to-market basis.

Item 4.           INFORMATION ON THE COMPANY

A.       History and Development of the Company

         The Company was  incorporated  and registered  under the laws of
England and Wales under the Companies Act as a public company  limited by shares
on June 12, 1995 under the name Chamwell Services plc. On February 20, 1996, the
Company changed its name to Schroder  Ventures  International  Investment  Trust
plc, and on April 3, 1996, the Company received its official  certificate  under
section 117 of the Companies Act entitling the Company to commence business. The
Company changed its name to SVG Capital plc on May 7, 2004. The Company does not
have a limited life.

         The Company's board of directors  consists of eight  Directors,  a
majority of whom are required by the  Company's  Articles of  Association  to be
persons   independent  of  Schroder  Ventures  and  of  Schroders  plc  and  its
subsidiaries,  subsidiary  undertakings  and  associated  undertakings  (all  as
defined in the Companies Act) (the "Schroder Group").

Enlargement of the Company's Operations

         In June 2001,  following  approval by the Company's  shareholders,
the Company acquired SVGA and SVGNA. SVGA and SVGNA each became  subsidiaries of
the  Company at that time.  The Company  acquired  SVGA from  Schroder  Ventures
Limited for GBP100,  and assumed  responsibility  for the costs and received the
benefit of the income  streams of SVGA  beginning on January 1, 2001.  SVGA then
acquired  SVGNA,  a  broker-dealer  registered  with the Securities and Exchange
Commission  ("SEC"),  from  Schroder  Venture  Managers  Inc. for  $50,000,  and
subsequently  paid the Schroder  Group an  additional  $250,000 in respect of an
increase in required capital for regulatory reasons.  Subsequently,  on June 26,
2001, April 22, 2002, December 19, 2002, and May 14, 2004 the Company subscribed
for 749,900,  750,000,  1,500,000  and 1,250,000  ordinary  shares of GBP1 each,
respectively, in SVGA.

                                       6

<PAGE>


         On December 13, 2002, SVGA acquired 100 common shares of $1 each in
SVG Advisers Inc. for $100.

         The Company acquired 100 ordinary shares of GBP1 each in SVGIM for
GBP100 on October 16, 2002. On May 16, 2003, SVGIM issued 99,900 ordinary shares
of GBP1 each to the Company for GBP99,900.

         The acquisition of SVGA and SVGNA has allowed the Company to provide
the following specialist financial advisory services:

         SVGA and SVGNA advise investment vehicles that invest in private
equity or public equity using private equity techniques.  These products seek to
generate absolute returns or outperform public markets.

         For more  information  regarding  the  acquisition  of SVGA and  SVGNA,
see "Item 4. Information on the Company - Business  Overview - Costs Relating to
Enlargement  of the Company's  Operations"  and "Item 5. Operating and Financial
Review and Prospects - Liquidity and Capital Resources."

Euro Depositary Receipts

         The Company's  euro-denominated  receipts  ("EDRs")  trade in
registered form on the LSE. EDRs are securities issued by a depositary bank that
represent the underlying shares of a company. EDRs are denominated and traded in
euros.

         The Company's EDRs are cleared  through  Euroclear and  Clearstream,
Luxembourg. The Bank of New York acts as depositary and custodian.

Subordinated Convertible Bonds due 2011

         On November 21, 2001, the Company issued  GBP40,000,000  nominal of
4 1/2% Subordinated  Convertible Bonds due November 2011 (the "Bonds 2011"). The
Bonds 2011 are convertible, at the option of the holders of the Bonds 2011, into
Ordinary Shares at a price of 399p per Ordinary Share. The Bonds 2011 are listed
on the  Official  List and were  admitted to trading on the LSE on July 5, 2002.
Since their issue,  a total of GBP600,000  Bonds 2011 have been  converted  into
150,375 Ordinary Shares.

Subordinated Convertible Bonds due 2013

         On May 21, 2003, the Company issued GBP40,000,000 nominal of 4.5%
Subordinated  Convertible Bonds due May 2013 ("Bonds 2013").  The Bonds 2013 are
convertible at the option of the holders of the Bonds 2013 into Ordinary  Shares
at a price of 480p per Ordinary Share. The Bonds 2013 are listed on the Official
List and were admitted to trading on the LSE on May 21, 2003.

                                       7

<PAGE>

         On July 16, 2003, July 18, 2003 and August 7, 2003 the Company issued
in three  tranches  an  additional  GBP9,000,000  nominal of Bonds  2013.  These
subsequent  tranches  of Bonds  2013 are also  convertible  at the option of the
holders of the Bonds 2013 into  Ordinary  Shares at a price of 480p per Ordinary
Share.  These subsequent  tranches of Bonds 2013 are listed on the Official List
and were admitted to trading on the LSE on August 18, 2003.

Electronic Settlement

         The  Company's  Ordinary  Shares are traded  through the CREST  system,
a  multi-currency  electronic  settlement  system for securities in the United
Kingdom and Ireland.

Registered and Head Offices

         The Company's  registered  office is 31 Gresham  Street,  London
EC2V 7QA England,  and its head office and principal place of business is 111,
Strand, London WC2R 0AG.

B.       Business Overview

         The Company carries on business as an investment trust, and is listed
on the Official List and admitted to trading on the LSE. The Company's principal
investment  objective is to achieve capital  appreciation by investing primarily
in an international  portfolio of buy-out and development  capital funds managed
or advised by Schroder  Ventures  or  Permira.  To  complement  this  investment
objective  and create  capital  and income for the  Company,  its fund  advisory
business  structures,  markets,  manages and advises  products for investment in
private  equity  and in public  equity  using  private  equity  techniques.  The
Company's consolidated revenues arise mainly from UK assets or operations.

         The  Directors  intend to manage the affairs of the Company so that it
will continue to satisfy the current  conditions for approval by the U.K. Inland
Revenue  as an  investment  trust  under  Section  842 of the  U.K.  Income  and
Corporation Taxes Act 1988 ("Section 842"). The last accounting period for which
the Company has been treated as approved by the U.K.  Inland  Revenue as meeting
the qualifying criteria for investment trust status is the period ended December
31, 2002, and the Company subsequently has conducted its affairs so as to enable
it to continue to qualify for such approval.

Investment Portfolio

         Investment in the Funds.  The Company's  investment  portfolio at
December 31, 2003 consisted of interests in 23 Funds, which for purposes of this
annual report includes  various  co-investments,  and is expected to continue to
consist  primarily of interests in these Funds and similar  funds offered in the
future by Schroder  Ventures or Permira.  Of these Funds,  13 were mature and 10
were  immature.  A  mature  Fund is one  that has  substantially  completed  its
investment  program,  while an immature Fund is one that has yet to complete its
investment program. See "- Description of the Funds - Calls."

         The Funds,  which  consist of limited  partnerships  and unit  trusts
organized  in the  United  States  and  various  foreign  countries,  have  been
organized at various times since 1985 for the purpose of making venture  capital
and buy-out investments in various business ventures located in approximately 19
countries,  including the United States. As of December 31, 2003, the Funds held
investments  in 135  business  enterprises.  The Funds have not been  offered or
traded publicly in the United States and are subject to various  restrictions on
transfers of interests  therein.  There is no public market for any of the Funds
in any country,  and there is no intention to create a public  market for any of
the Funds in the future.  Of the 23 Funds, 22 are 10-year  closed-end  funds and
one is an 8-year  closed-end  fund. Eight of the Funds that have reached the end
of their original terms have,  with the consent of their  respective  investors,
had their original terms extended.  Following the expiration of their respective
terms, the Funds will dissolve to permit an orderly liquidation of their assets,
and then  terminate.  The life of the Funds  generally may be extended only with
the consent of investors.  Permira Europe II may be extended with the consent of
its Advisory Committee.

                                       8

<PAGE>


         Diversification  of  Investment  Portfolio  Relating to Fund
Investments.  The  Directors  intend to  maintain  a  diversified  portfolio  of
investment  in the  Funds  and,  in  order to  maintain  such  diversity  in the
portfolio,  the Directors will consider the following  factors before committing
to any new investments:

-        the geographical and industrial distribution of the Company's
         underlying portfolio;

-        the number and size of the Company's investments; and

-        the investment objectives of the Fund being considered as an
         investment.

In addition,  both the conditions for  qualification  as an investment trust and
the Listing Rules impose certain investment diversification requirements. A list
of the  Company's  investments  at  December  31,  2003 is set forth at pages 18
through 21 of the Company's Report and Accounts 2003 (the "Report and Accounts")
and is incorporated herein by reference.

         Diversification  by Geographical  Area and Sector.  Although the
Company has no formal guidelines concerning diversification by geographical area
and sector,  the Directors expect that the Company's  investment  portfolio will
continue to reflect the broad geographical spread and sector  diversification of
the  underlying   investments  of  the  Funds.  The   "Geographical  and  Sector
Distribution"  section  of the  "Portfolio  Review" on page 10 of the Report and
Accounts,  incorporated herein by reference, provides a brief description of the
diversification of the Company's  investment  portfolio by geographical area and
sector.  The  Directors do not believe that there are any risks  specific to the
countries in which the Funds have invested that would have a materially  adverse
effect on the Company.

Future Investments

         Consistent with its investment  policy,  the Company may invest in any
Schroder  Ventures  or  Permira  funds  that are  launched  in the  future.  The
Directors  will consider  each such  investment on its merits and may decline to
invest if they determine that such  investment is not suitable for the Company's
portfolio.  The  Company's  investment  in a new fund may not  exceed 30% of the
total committed capital of such fund or such higher amount as may be agreed with
Schroder  Ventures  or  Permira.  The  Company  will invest on terms at least as
favorable as those available to other investors, subject to any alteration which
may  be  appropriate   for  the  Company  in  accordance   with  the  investment
restrictions set out below. It is anticipated that such investments will only be
made where the Company's cash resources  (including  ongoing  distributions from
the Funds),  revenues and credit  facilities  will be  sufficient to finance the
full  subscription  amount  payable by the Company in  connection  with any such
future investments.  See "Item 5. Operating and Financial Review and Prospects -
Liquidity and Capital Resources," below, for additional  information relating to
the Company's Facility Agreement.

                                       9

<PAGE>

         The Company may acquire  further  interests in existing Funds from
existing Fund investors if the Directors believe that such action is appropriate
and can be  accomplished  on  acceptable  terms.  The Company does not intend to
acquire further interests in any Fund if such an acquisition would result in the
Company acquiring control of that Fund.

         Co-Investment  and  Limitations.  The  Company  may  also  co-invest
alongside  one  or  more  of  the  Funds.   Co-investment   opportunities  arise
principally  where a proposed  investment  in an  Investee  Company  exceeds the
capacity of the  relevant  Fund.  The  aggregate of a single  co-investment  and
participation  in the same  company  through  the Funds may not exceed 5% of the
Company's  consolidated net assets.  The overall  restriction on  co-investments
remains at 10% of the Company's  consolidated  net assets.  The  calculation  of
these percentages will be made at the time any such co-investment is made. These
percentage  restrictions  on  co-investments  are  subject  to  change  and  are
regularly reviewed by the Directors. Any co-investment by the Company will be on
an arm's-length basis on terms that are at least substantially  similar to those
of the co-investing  Fund's  investment.  At December 31, 2003, the Company held
co-investments  totaling GBP8.9 million and representing  1.7% of the net assets
of the Company.

         Other Permitted  Investments.  The Company may also invest in
alternative  listed or unlisted  companies or other  entities  with  exposure to
buy-out and development capital markets. In addition, the Company may, from time
to time,  invest in other listed  companies and fixed  interest  securities  and
other  marketable  debt securities that are unrelated to buy-out and development
capital markets or retain cash balances pending  re-investment.  At December 31,
2003, the Company's gross cash balance of GBP47.7  million was held  principally
in a portfolio  of money market  funds.  The Company also has the power to enter
into transactions  involving  synthetic or traded derivative  instruments over a
range of different  underlying  securities and currencies.  The Directors expect
this  power  will be used for  hedging  or to gain  exposure  to  quoted  equity
instruments,  but  not  for  speculative  or  trading  purposes.  There  are  no
restrictions on the types of funds in which the Company may invest.

Portfolio at Fiscal Year End

         As of December  31, 2003,  the  Company's  investment  portfolio
consisted  of  interests  in each of the 26 Funds,  which for  purposes  of this
annual report includes various  co-investments.  The "List of Investments" table
on pages 18 through 21 of the Report and Accounts,  which is incorporated herein
by reference,  presents summary information, as of December 31, 2003, on each of
the Funds, as well as the Company's percentage ownership of each Fund, the value
of the Company's  holdings in each Fund and the  percentage of the Company's net
assets constituted by each Fund.

         As of December 31, 2003, no underlying  Investee Company  comprised
more than  10.2% by value of the  Company's  net  assets.  The  "Twenty  Largest
Underlying  Companies"  table on pages 13 through 17 of the Report and Accounts,
which is incorporated  herein by reference,  provides a brief description of the
20 largest  underlying  Investee  Companies  which,  as of  December  31,  2003,
represented  the largest  percentage  by value of the  Company's  total  assets,
determined based on value of investments.

         For a description of the analyses used to determine the value of the
Company's investments,  see "Valuation Policies," below.


                                       10

<PAGE>


Investment Restrictions and Diversification Obligations

         The  Directors  intend to  continue  to manage the  affairs of the
Company so that the Company will satisfy the current  conditions for approval by
the Inland  Revenue as an  investment  trust  under  Section  842.  One of these
conditions  restricts the  investments a company seeking such approval can make.
In order to satisfy  this  condition,  the Company  will not  acquire  shares or
securities  in any one company if such  shares or  securities  (taken  together)
would represent more than 15% of the Company's  investments by value at the time
of  acquisition.  For this  purpose,  unit  trusts  will  normally be treated as
companies and units therein as shares of such companies.  There are also special
rules under which all of the Company's holdings in subsidiary companies in which
it owns 51% or more (as defined for purposes of Section 842) will be  aggregated
and  treated as one holding in a single  company  for  purposes of the 15% test.
Further,  if the  Company's  interest in a company  increases  due to additional
investment in the same company (including further investment in the same company
through different funds or  co-investment),  the entire interest will be treated
as having been acquired at the time of the increased investment for the purposes
of satisfying the 15% test.

         In addition,  the Listing Rules  independently  require that the
Company  maintain an adequately  diverse  spread of  investments by investing no
more than 20% of its gross  assets  by value at the time of  acquisition  in any
Investee  Company or investee  group.  For the purposes of calculating the above
percentage  interest  for  the  Listing  Rules,  the  Company's  interest  in an
underlying  Investee Company of the Funds is calculated,  where  applicable,  by
aggregating  all of the  Company's  interests in  investments  in such  Investee
Company or investee  group,  irrespective of the Funds through which the Company
holds its  interest in the Investee  Company.  If the  Company's  interest in an
underlying Investee Company increases due to further investment in that Investee
Company, the entire interest will be treated as having been acquired at the time
of the increased investment.

         In order to ensure that the Company  satisfies  both the 15% and 20%
investment  limitations  described above,  "Permira" or "Schroder Ventures" will
notify the Company in advance of any proposed  investment in excess of specified
thresholds so that the Company can assess the effect of the  investment  and, if
necessary,  take  appropriate  action in order to avoid violating either of such
restrictions.  The Company  will only make new  investments  in future  funds if
either (i) the Directors  are satisfied  that the  investment  restrictions  set
forth above cannot be breached or (ii)  appropriate  opt-out  mechanisms  can be
obtained with the relevant Fund that will enable the Company,  without  penalty,
to limit or  eliminate  its  investment  in an Investee  Company if necessary to
permit the Company to ensure its own compliance with the above restrictions.  In
making other investments,  the Directors intend to ensure, where necessary, that
similar opt-out  mechanisms are available to the Company and that the investment
restrictions set forth above can be satisfied.

Borrowing Facility

         The Directors  expect the Company to meet its commitments to pay future
Calls in  respect  of its  existing  holdings  in  immature  Funds  from (i) the
existing cash resources of the Company,  (ii) the facilities available under the
EUR285,000,000  Revolving Credit Facility  Agreement (the "Facility  Agreement")
dated June 16, 2003 between the Company,  Barings (Guernsey) Limited (as trustee
of the Platinum Trust), The Governor and Company of The Bank of Scotland and The
Royal Bank of Scotland  plc, and (iii) from the proceeds of  distributions  from
its holdings in the Funds.  These  distributions  are expected to be principally
the net proceeds of realizations of investments held by the Funds. The timing of
future realizations and the dates of future Calls are necessarily uncertain. The
Directors  are able to draw on the  Facility  Agreement to enable the Company to
meet its commitment to pay future Calls.  In addition,  the Company may use this
borrowing  facility to make new investments or for general  corporate  purposes.
See "Item 5.  Operating  and  Financial  Review and  Prospects -  Liquidity  and
Capital Resources," below, for additional  information  relating to the Facility
Agreement.

                                       11

<PAGE>


Valuation Policies

         General Valuation  Policies.  In valuing its investments,  the Company
has complied and intends to continue to comply with the Statement of Recommended
Practice  issued  in  January  2003  by  the  Association  of  Investment  Trust
Companies.  In  particular,  the Directors  will consider  whether a fixed asset
investment falls within the definition of a subsidiary undertaking or associated
undertaking (as defined in the Companies Act) and apply the relevant  provisions
of the Companies  Act and  accounting  standards.  Accordingly,  investments  in
limited  partnerships or unit trusts will not usually be  consolidated  with the
Company's financial statements, because control of the affairs of these entities
typically rests with the general  partners or trustees.  In addition,  where the
Company does not exercise significant influence over the operating and financial
policy of a fixed asset  investment  due to the nature of that  investment  (for
example,  a limited  partnership  interest  or unit in a trust),  the  Directors
believe  that the  equity  method  of  accounting  does not give a true and fair
value.

         The  Company's  investments  in the various  Schroder  Ventures and
Permira  funds are valued by the  Directors at the balance sheet date by valuing
the underlying  investments  comprising the portfolios of the Schroder  Ventures
and Permira funds in accordance  with the valuation  policies set out below,  as
adjusted,  where  appropriate,  for other assets and liabilities of the Schroder
Ventures and Permira funds. The valuation policies of the Company are consistent
with the current  guidelines  issued by the British Venture Capital  Association
("BVCA"),  which came into effect on August 1, 2003.  In  accordance  with these
guidelines,  where,  in an  exceptional  case,  the  strict  application  of the
valuation  policies  set out below would not,  in the opinion of the  Directors,
result in a fair value being ascribed to an investment,  the Directors may adopt
an alternative  valuation in accordance  with the overriding BVCA principle that
the value should be a fair one.

         Valuation of the  Portfolio at December 31, 2003.  The  valuations  of
the Company's  holdings were based on the value of the underlying  assets of the
Funds as of December 31, 2003,  determined as described above and adjusted where
appropriate for other assets and liabilities of the Funds.

Description of the Funds

         Background.  Members  of the  Schroder  Group  established  Schroder
Ventures in 1983, which has since developed into an international association of
independent  entities.  As of December 31, 2003, these combined  entities had 13
offices world-wide,  providing  management  advisory or consultancy  services to
private equity funds.  In November 2001,  Schroder  Ventures  Europe changed its
name to  Permira  and the Funds  advised  by Permira  were also  renamed.  As of
December  31,  2003,  there were a total of 23 buy-out and  development  capital
Funds, with combined commitments of more than US$7.1 billion.

         Of the 23 Funds,  20 are for  investment  primarily  within a single
country or region,  and three are international  Funds focusing on investment in
the life  sciences  sector.  The  geographical  spread  of the  Funds  and their
advisers as of December 31, 2003 are summarized in the table below.

                                       12

<PAGE>


<TABLE>
<CAPTION>

                                Number of   Total Value of     Total Uncalled   Location of Advisers
Region                        Schroder or         Funds at        Commitments
                            Permira Funds     (GBP Millions)       (GBP Millions)

<S>                                     <C>          <C>                <C>     <C>
Continental Europe                      9            362.1              449.5   France, Germany, Italy, Spain
Asia                                    5             58.1               45.1   Hong Kong, India, Japan, Singapore
North America /                         6             72.3               62.9   Canada, United States, United Kingdom
International (Life
Sciences)
United Kingdom                          3             13.0                      United Kingdom
                                       23            505.5              557.5

</TABLE>


The value of Funds and uncalled commitments shown above is based on the
Company's exposure to those Funds at December 31, 2003.


Operation of Funds

         The following information relates to the structure,  operations,
investment policies and restrictions,  and management of the Funds.

         The Funds do not seek to take day-to-day  management control of
Investee Companies.  However, in exceptional  circumstances,  Funds, through the
exercise of shareholder  rights,  may take management control for a short period
of time  to  facilitate  a  reorganization  or  financial  restructuring  of the
investment. Schroder Ventures or Permira works closely with the Investee Company
throughout  the  life of the  investment  to  assist  it in  achieving  its full
potential and to seek to maximize returns for the Funds.

         Some Funds  consist of a single  investment  vehicle and others are
structured  as a number of investment  vehicles,  usually  limited  partnerships
and/or unauthorized unit trusts. The general partner of a limited partnership in
a Fund and the  trustee  of a unit  trust  are  responsible  for the  operation,
management and administration of the investment vehicles comprising a Fund. They
must act in accordance  with common  investment  objectives and policies and are
subject to the restrictions set out in the documents establishing the Fund.

         The  terms and  conditions  of the  individual  Funds  differ,
reflecting  the  investment  focus of the Fund,  the state of development of the
market  concerned  at the  time of  formation  of the  Fund  and the  investment
requirements of the investors in the Fund.

         Advisory or  consultancy  services to the Funds are provided by
Schroder   Ventures  or  Permira  entities  wholly  owned  by  their  individual
principals.  Affiliates  of Schroders  plc act as general  partner or manager to
Funds  launched  prior to January 1, 2000.  For Funds  launched after January 1,
2000,  entities  connected with Schroder Ventures Limited act as general partner
or manager.

         The  general  partner  or  manager is  responsible  for the  day-to-day
management  of the Fund and  makes all the  investment  decisions.  The  general
partner or  manager,  in turn,  appoints  and is  advised by a local  adviser or
consultant  to the Fund  with  experience  in the  relevant  country,  region or
industry. The advisers and consultants have no authority to conduct negotiations
resulting in legally binding obligations for, or in any way to bind, the Funds.

         The custody and security of the assets of the Funds is maintained by
the general partners of partnerships or the managers or trustees of unit trusts.
These functions are performed  either  directly by entities  affiliated with the
general partner, manager or trustee or by delegation to professional independent
investment  managers.  Where  these  controls  are  delegated,  the  responsible
affiliate  liaises closely with the independent  managers and receives  frequent
reports. Internal control procedures are subject to an annual external audit.

                                       13

<PAGE>


         Management contracts are typically terminable on six or 12 months'
prior notice by either party.

         Co-Investment  by Schroder  Ventures or Permira  Executives.  When a
new Fund is offered,  executives of Schroder  Ventures or Permira (each of which
included  executives  of the  Company  in the  past)  are  usually  offered  the
opportunity to co-invest  alongside the Fund (via a Fund-specific  co-investment
scheme) on the same or  substantially  the same terms on which the Fund invests.
Co-investment schemes have been offered for all Funds with a final closing after
1992.

         In addition,  Schroder Ventures  Investments Limited was established
in 1997 to provide  Schroders plc and senior  executives of Schroder Ventures or
Permira (each of which included  executives of the Company) with the opportunity
to co-invest  alongside new Funds on the same or substantially the same terms on
which those Funds invest.

         Advisory  Committees.  Each Fund has an advisory  committee  which
consists  of a majority of  representatives  of  investors  in the Fund or other
individuals who are independent of Schroder Ventures or Permira and the Schroder
Group. The advisory committee is not involved in the management of the Fund, but
may be  consulted  by the  general  partner or the Fund's  manager for advice on
matters such as issues of policy,  strategy and potential conflicts of interest,
although  neither  the  general  partner  nor the Fund's  manager is required to
follow the recommendations of the advisory committee.  The advisory committee is
not responsible for making investment decisions.  In some of the Funds, advisory
committee  approval is required  for certain  actions of the general  partner or
manager.

         Investment  Policies.  Despite the increasing  globalization  of
industry and commerce,  significant national differences in business methods and
business  cultures  remain,  particularly in Europe. A key element of the Funds'
investment  philosophy  is the use of local country  advisers,  many of whom are
industry specialists.

         While each of the  individual  Funds pursues the same  investment
objective of seeking above average returns for investors,  each of the Funds has
its own investment policies to achieve this end. These policies are agreed to by
the  investors  at the time of the  formation  of the Fund and cannot be changed
without the  consent of the  investors.  To the extent  that a Fund  consists of
several  entities,  the consent of each component  entity is required before the
investment policies can be changed. In some cases, however, the required consent
is based on the  relative  percentages  of capital  committed  by the  investors
across the whole Fund. Typically,  a Fund that is a limited partnership can only
change its  investment  policies with the consent of investors  holding at least
75% of its  committed  capital  (and in certain  cases  with the  consent of the
general partner), and a Fund that is a unit trust can only change its investment
policies  with the  approval of 75% of the  unitholders  present and voting at a
meeting for which a special quorum will apply. The terms of certain unit trusts,
however,  require  the  consent of  holders of at least 75% in nominal  value of
units in addition  to, or instead of, the approval  described  in the  preceding
sentence.

         A key feature of the investment  policies of each Fund is to achieve
diversity  of risk.  Consequently,  there  are  restrictions  in the  investment
policies  of each Fund which  limit the amount  that can be invested in a single
entity. In all of the country- or region-specific Funds, a balanced portfolio in
terms of industry sectors is sought,  with investment  focusing on those sectors
where there is particular  expertise  within the  investment  adviser.  Schroder
Ventures  International Life Sciences Fund, Schroder Ventures International Life
Sciences Fund II and  International  Life Sciences Fund III,  which are industry
specific, are diversified between the United States and Europe.

                                       14

<PAGE>


         Before making an  investment,  the general  partner or  investment
manager of a Fund reviews the exit options  which have been  discussed  with the
management  of  the  potential  Investee  Company.  The  investment   consultant
thereafter  monitors the progress of the Investee  Company and general  economic
conditions and works actively with  management of the company to review,  refine
and implement the exit plan.  Investments by the Funds in Investee Companies are
typically  realized  after  three to seven  years from the date of the  original
investment.  Since most  transactions  will not be  structured  to provide for a
liquidation of the investment  before this time, it is possible that a Fund will
not realize significant cash returns from the disposition of its investments for
several years after the Fund's inception.

         Calls.  Typically,  an investor in a Fund  commits to  subscribe  for
a specified amount of capital to the Fund in return for units in a unit trust or
interests in a limited  partnership  constituting the relevant Fund. The adviser
to the Fund reviews investment opportunities and recommends suitable investments
to the Fund's  manager or general  partner  in  accordance  with the  investment
policies of the Fund.  If the manager or general  partner  decides that the Fund
should make an investment,  further Calls are made to the investors in that Fund
for payment of part or all of the outstanding committed capital of the Fund. The
committed  capital of a Fund is typically  called within five years of the final
closing of the Fund. The failure by an investor in a Fund to pay a Call when due
could result in that investor  being  obliged to sell its existing  interests in
that Fund at a discount  of up to 25% of their value  and/or in that  investor's
existing  interests  in that Fund being  diluted by up to 25%.  In the case of a
unit  trust,  it could  result in the units with  respect  to which the  default
occurred being forfeited.  The investor could also lose the right to participate
in further investments made by the Fund.

         Distributions.  When an  investment  is realized or income from an
investment is received,  the capital  realized or income received (after payment
of expenses and special allocation of profits interest to individuals  connected
with  Schroder  Ventures  or Permira and members of the  Schroder  Group  (where
applicable) in accordance with the terms of the Fund's organizational documents,
as described  in more detail in "- Special  Allocation  of  Profits,"  below) is
generally  distributed  to the investors in proportion to their  holdings in the
Fund. In certain limited  circumstances,  which may vary between Funds,  capital
realizations  can  be  reinvested  by  the  Fund.  Investors  generally  receive
distributions (principally the proceeds of capital realizations) both before and
after the Fund  becomes  fully  called.  The Fund's term may be  extended  for a
specified  period to enable an orderly  disposition  of the Fund's  investments.
Alternatively,  the Fund's investments may be distributed as a dividend in kind.
Extension of a Fund's term usually requires the consent of investors holding, in
total,  at least 75% of the  interests in that Fund.  If,  toward the end of any
such extension,  there are still unrealized  investments in the Fund,  investors
may agree  either to a further  extension  or to a  distribution  in kind of the
Fund's investments.

         Restrictions  on  Investments.  Each  Fund  has  investment
restrictions  to  ensure  that  the  Fund  is run  according  to  pre-determined
investment  policies.  Certain levels of investor consent are required to change
any of the restrictions,  including 100% approval from all investors  (including
the Company in respect of its  holdings)  for a change which would  require more
investment in the Fund or which might affect  significantly the interests of the
investors in that Fund. These restrictions are designed to ensure that each Fund
continues to be run solely for the benefit of all investors equally. Because the
Company will not control any Fund, it will only be able to alter the  investment
policies of a particular  Fund in which it has invested by acting in conjunction
with other investors.

                                       15

<PAGE>

         In order to achieve  diversity of risk, each Fund is typically
prohibited  from  investing  more than a specified  percentage  of its committed
capital in a single  Investee  Company.  In addition,  immature Funds (which may
have further investment capacity because Calls will not have been made for total
committed  capital) are usually  prohibited from investing in property and other
buy-out or development capital funds.

         Remuneration

         The  entitlement to  remuneration  and the entities and  individuals
entitled  to  receive  remuneration  is  agreed  upon  by all  investors  at the
formation  of each Fund and is embodied  in its  organizational  documents.  The
remuneration  takes the form of management  fees,  carried interest and, in some
cases, fees payable by Investee Companies.

         Management  Fees.  Management  fees are  generally  paid  quarterly
in advance to the general partner or manager of the particular Fund on the basis
set out in the  Fund's  organizational  documents.  In some  Funds,  there  is a
priority  profit charge  instead of a management fee but, for ease of reference,
both are referred to as management fees in this annual report.

         Special  Allocation of Profits.  Individuals  connected  with Schroder
Ventures  or  Permira  and  members of the  Schroder  Group are  entitled  to an
allocation,  as a "carried  interest,"  of an  aggregate  of 20% of the  profits
arising in each Fund. In some Funds,  performance hurdles must be met before the
carried  interest is payable.  The performance  hurdles are established upon the
formation of each Fund and are based on a range of criteria.  These usually take
the  form of a  specified  internal  rate of  return  for  investors,  which  is
generally in the range of 5% to 12% for any one Fund.

         Profit for the purpose of determining the carried interest is generally
calculated using one of the following methods:

         (i)      following the return to investors of all capital they have
                  subscribed  and, if  applicable,  the  achievement of the
                  appropriate performance hurdle, the carried interest is
                  calculated as 20% of all subsequent distributions; or

         (ii)     upon the  realization  of an  investment  in an Investee
                  Company,  the  internal  rate of return based on either the
                  disposition of that  investment or on all investments realized
                  to date will be calculated.  An allocation of carried
                  interest  is  calculated  as 20% of the  excess  of the
                  investment  proceeds  over the cost of  investment  and,  if
                  applicable, the achievement of the appropriate performance
                  hurdle.

         In certain of the Funds which have  performance  hurdles,  the carried
interest  holders have a "catch-up"  right  whereby they receive all profit once
the  hurdle  has been  achieved,  until  they have  received  20% of the  profit
distributed  to  investors.  All  distributions  from the Funds  are made  after
allocation of any carried  interest  (where  appropriate) in accordance with the
terms of the Fund.  Distributions  to the Company,  in respect of its  holdings,
will be on the same basis as distributions to other investors.

                                       16

<PAGE>


         Fees  Payable by Investee  Companies.  The  advisers or  consultants
to the Funds may be entitled to  directors'  fees and/or  transaction  fees from
certain Investee Companies of the Funds. Transaction fees are negotiated and the
amount of any directors'  fees reflects those payable to other  directors on the
relevant boards of the relevant Investee Company.

Foreign Exchange

         The Funds are  denominated  in a number of  currencies.  The  Directors
have not caused the  Company to enter into any  foreign  exchange  contracts  to
hedge the  Company's  expected  liabilities  or  receipts  in these  currencies.
However, the Directors, in their discretion, may cause the Company to enter into
such  foreign  exchange  contracts  in the  future.  The  Company  may invest in
specified types of swap  agreements,  forward  contracts,  and foreign  exchange
contracts.

Material Regulations

         Distributions.  Pursuant to Section 263 of the Companies  Act, the
Company may not make a  distribution  except out of profits  available  for that
purpose. For these purposes a "distribution" includes the payment of a dividend,
and "profits available for distribution" are the Company's accumulated, realized
profits (so far as not previously  utilized by distribution  or  capitalization)
less its accumulated realized losses (to the extent not previously written off).
In addition,  because the Company has  "investment  company"  status  within the
meaning of Section  266 of the  Companies  Act,  it may also,  subject to and in
accordance  with the  provisions  of Section 265 of the  Companies  Act,  make a
distribution at any time out of its  accumulated,  realized  revenue profits (so
far as not previously  utilized by a distribution or  capitalization),  less its
accumulated  revenue  losses  (whether  realized or  unrealized),  so far as not
previously written off in a reduction or reorganization of capital duly made, if
at the time the amount of its assets is at least equal to one and one-half times
the  aggregate  of  its  liabilities,  and  if,  and  to the  extent  that,  the
distribution  does not reduce  that amount to less than one and  one-half  times
that  aggregate.  This  section  provides  a  short  summary  of the  provisions
contained in the Companies Act relating to  distributions by companies that have
"investment   company"  status  for  the  purposes  thereof;   further  detailed
provisions are set out in Section 265 of the Companies Act.

         Qualification  as an  Investment  Trust.  In order to qualify as an
investment  trust for U.K.  tax  purposes,  the Company must comply with certain
specific  requirements  relating to its structure and  operation.  See "Item 10.
Additional  Information  -  Taxation"  for a full  discussion  of  material  tax
regulations.

         Listing  Rules.  The Listing Rules  include  certain  requirements
relating  to  investment  trusts and the  Company's  ongoing  status as a listed
company.  In order to maintain  the listing of its  securities  on the  Official
List,  the Company must continue to satisfy the UKLA that the Directors will act
independently  of any  investment  managers.  In  addition,  a  majority  of the
Directors  cannot be directors or employees of or  professional  advisers to the
investment  managers  or any other  company in the same  group as an  investment
manager of a Fund. The Listing Rules contain extensive  provisions dealing with,
among other matters, the announcement of information to the UKLA and the LSE and
to  shareholders  of the Company,  transactions  entered into by the Company and
Directors' responsibilities.

                                       17

<PAGE>


C.       Organizational Structure

         A detailed description of the subsidiaries of the Company is included
in Note 13 on page 46 of the Report and Accounts, which is incorporated herein
by reference.

Relationship between Schroder Ventures or Permira and the Company

         The Company is an independent fund of funds that has holdings in all
23 Funds and, as such, is their largest investor.

         The Directors  manage the  Company's  investment  portfolio,  with
advice from the Company's  subsidiary,  SVGA, and from its investment committee.
See "Item 6. - Directors, Senior Management and Employees - Directors and Senior
Management."

         In addition,  the  investment  managers,  advisers and  consultants of
each of the Funds manage and advise upon the  investment  strategy and portfolio
of that Fund. The Company is entitled to receive information with respect to its
holdings on the same basis as other investors in the Funds.

D.       Property, Plants and Equipment

         SVG Capital plc does not own or lease any real  property.  SVG Capital
plc's  registered  office is  maintained  at the offices of Schroder  Investment
Management  Limited,  the company  secretary  and a wholly owned  subsidiary  of
Schroders plc. SVG Capital plc's  principal place of business and head office is
maintained at 111 Strand,  London WC2R 0AG, England.  SVGA is the lessee of this
property, and the Company guarantees SVGA's payment obligations under the lease.

Item 5.           OPERATING AND FINANCIAL REVIEW AND PROSPECTS

         The "Portfolio  Performance,"  "Operating  Review" and "Outlook"
sections of the  "Chairman  and CEO's  Statement" on pages 4 and 5 of the Report
and Accounts, and the "Portfolio Review" on pages 6 through 12 of the Report and
Accounts, are incorporated herein by reference.

A.       Operating Results

12 Months Ended December 31, 2003

         The Consolidated Total Return for the year ended December 31, 2003
amounted to a surplus of GBP17.4 million.

         During the year ended December 31, 2003, the Company received notices
of Calls aggregating  approximately GBP110.7 million, and received proceeds from
dispositions  of underlying  investments of the Funds of  approximately  GBP59.4
million.  Uncalled commitments to the Funds were approximately  GBP594.4 million
as of December 31, 2003.

         The "Company's  Business,"  "Revenue and  Earnings,"  "Dividend,"
"Policy for Payment of Creditors,"  "Purchase of Shares for  Cancellation,"  and
"Issue of New Shares"  sections of the "Report of the Directors" on pages 22 and
23 of the Report and Accounts, as well as the "Portfolio Performance",  "Capital
Raisings" and "Operating  Review" sections of the "Chairman and CEO's Statement"
on  pages  4  and  5 of  the  Report  and  Accounts,  the  "Summary"  and  "Fund
Transactions"  sections  of the  "Portfolio  Review" on pages 6 through 9 of the
Report and  Accounts  and the "Cash and  Marketable  Securities"  section of the
"Portfolio Review" on page 11 of the Report and Accounts are incorporated herein
by reference.

                                       18

<PAGE>


Six Months Ended December 31, 2002 Compared to Six Months Ended December 31,
2001

         The Consolidated  Total Return for the six months ended December 31,
2002 amounted to a surplus of GBP40.1 million,  compared to a deficit of GBP11.6
million for the six months ended December 31, 2001.  During the six months ended
December  31,  2002,  the  Company   received   notices  of  Calls   aggregating
approximately  GBP122.7  million,  compared  to notices of Calls  during the six
months ended December 31, 2001 aggregating  approximately  GBP53.7 million,  and
received  proceeds from  dispositions of underlying  investments of the Funds of
approximately  GBP104.5 million,  compared to proceeds of approximately  GBP15.8
million during the six months ended December 31, 2001.

         The  "Company's  Business,"  "Revenue and  Earnings,"  "Dividend,"
"Purchase of Shares for Cancellation," and "Issue of New Shares" sections of the
"Report  of the  Directors"  on page 21 of the  Company's  Report  and  Accounts
December  2002  (the  "Report  and  Accounts  December  2002"),  as  well as the
"Portfolio  Activity  for  the  six  months  to 31  December  2002",  "New  Fund
Commitments"  and  "Operating  Review"  sections  of  the  "Chairman  and  CEO's
Statement"  on pages 4 and 5 of the  Report  and  Accounts  December  2002,  the
"Summary" and "Fund Transactions"  sections of "Portfolio Review" on pages 6 and
7 of the Report and Accounts December 2002, and the "Portfolio  Performance" and
the "Cash and Marketable  Securities" sections of the Portfolio Review on page 9
of the Report and Accounts December 2002, are incorporated herein by reference.

     The  "Overview"  and  "Portfolio  Activity"  sections  of  the  "Chairman's
Statement" of the Company's  Interim Report 2001 (the "Interim  Report 2001"),
as well as the "Operating Review" and "Market Commentary" sections of the "Chief
Executive's  Review" of the  Interim  Report  2001,  and the  "Overview",  "Fund
Transactions" and "Portfolio  Performance" sections of the "Portfolio Review" of
the Interim Report 2001, are incorporated herein by reference.

Year Ended June 30, 2002 Compared to Year Ended June 30, 2001

         The  Consolidated  Total Return for the year ended June 30, 2002
amounted  to a surplus  of GBP6.2  million,  compared  to a deficit  of  GBP44.3
million for the year ended June 30, 2001.

         During the year ended June 30, 2002, the Company received notices of
Calls aggregating  approximately  GBP77.5 million,  compared to notices of Calls
during the year ended June 30, 2001 aggregating  approximately GBP155.4 million,
and received proceeds from  dispositions of underlying  investments of the Funds
of approximately GBP49.0 million,  compared to proceeds of approximately GBP51.9
million  during the year ended June 30, 2001.  Uncalled  commitments to Schroder
Ventures' Funds  decreased from  approximately  GBP456.3  million as of June 30,
2001 to approximately GBP403.2 million as of June 30, 2002.

         The "Company's  Business,"  "Revenue and  Earnings,"  "Dividend,"
"Policy for Payment of Creditors,"  "Purchase of Shares for  Cancellation,"  and
"Issue of New Shares"  sections of the "Report of the Directors" on pages 21 and
22 of the Company's  Report and Accounts 2002 (the "Report and Accounts  2002"),
as well as the  "Portfolio  Activity"  and  "Convertible  Bond"  sections of the
"Chairman and CEO's Statement" on pages 4 and 5 of the Report and Accounts 2002,
the "Overview" and "Fund Transactions" sections of "Portfolio Review" on pages 6
and 7 of the Report and Accounts 2002, the "Portfolio Performance" and the "Cash
and Marketable  Securities"  sections of the Portfolio Review on pages 10 and 11
of the Report and Accounts 2002, are incorporated herein by reference.

                                       19

<PAGE>

     The "Company's  Business," "Revenue and Earnings,"  "Dividend," "Policy for
Payment of Creditors,"  "Purchase of Shares for Cancellation," and "Issue of New
Shares"  sections of the "Report of the  Directors" of the Company's  Report and
Accounts 2001 (the "Report and Accounts  2001"),  as well as the  "Overview" and
"Portfolio  Activity"  sections of the "Chairman's  Statement" of the Report and
Accounts 2001, the  "Overview"  and "Fund  Transactions"  sections of "Portfolio
Review" of the Report and Accounts 2001, the "Portfolio  Performance" section of
"Portfolio  Review" of the Report and Accounts 2001 and the "Cash and Marketable
Securities" section of the Portfolio Review of the Report and Accounts 2001, are
incorporated herein by reference.

Foreign Currency Fluctuations

         Information regarding the impact of foreign currency fluctuations on
the Company is contained in Note 29 of the accompanying
financial statements.

B.       Liquidity and Capital Resources

         You should read this section in conjunction  with the selected
financial data and the  consolidated  financial  statements and the accompanying
notes in "Item 3. Key  Information  -  Selected  Financial  Data"  and "Item 17.
Financial Statements,"  respectively,  of this annual report. Historical results
and  percentage  relationships  set forth in these Items and this section should
not be taken as indicative of future  operations of the Company.  This Form 20-F
contains  forward-looking  statements  within the  meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act. These statements are
generally  characterized by terms such as "believe,"  "anticipate," "expect" and
"may."  Although the Company  believes that the  expectations  reflected in such
forward-looking statements are based upon reasonable assumptions,  the Company's
actual results could differ  materially from those given in the  forward-looking
statements.

General

         The "Portfolio  Performance," "New Fund  Commitments,"  "Capital
Raisings,"  "Operating Review" and "Outlook" sections of the "Chairman and CEO's
Statement"  on pages 4 and 5 of the  Report  and  Accounts,  and the  "Portfolio
Review"  on pages 6 through  12 of the Report  and  Accounts,  are  incorporated
herein by reference.

Commitments and Contingencies

         Costs  Relating to Enlargement of the Company's  Operations.  The
costs of  acquisition  of SVGA and SVGNA  (for  purchase  prices  of GBP100  and
$50,000,  respectively)  was primarily the result of added personnel and related
premises support requirements.  Although the acquisitions were completed on June
18,  2001,  the Company  assumed  responsibility  for the costs and received the
benefit of the income  streams of SVGA from  January 1, 2001.  For the 12 months
ending  December  31,  2001,  the costs did not exceed the  revenues  of GBP5.46
million,  principally  created  from the  provision  of services to the Schroder
Group  and  Schroder  Ventures.  SVGA  together  with  SVGNA  broke  even at the
profit-before-tax  level  for the 12  months  ended  December  31,  2001 and the
acquisition  had no  negative  impact on the  Company's  net return for the same
period.

                                       20

<PAGE>


         Fund Commitments.  The Company's uncalled commitments to the Funds
increased  from  approximately  GBP293.4  million  as of  December  31,  2002 to
approximately  GBP594.4  million as of December 31, 2003.  During the six months
ended  December 31, 2002,  the Company made no commitments to new private equity
funds.  During the year ended December 31, 2003, the Company made commitments to
two new private equity funds. The Company made a commitment of EUR508 million to
Permira Europe III and YEN3,747.6 billion to The Japan Fund IV. In addition, the
Company made an overall commitment of EUR104.8 million to P123, of which 60% was
initially  called and  satisfied  by a transfer of certain  interests in Permira
Europe I and II, respectively, less a cash rebate. Furthermore, the Company made
a  commitment  of GBP7.4  million  to the  Strategic  Recovery  Fund,  a limited
partnership, and GBP7.5 million to the SVG Focus Fund, a Dublin-listed OEIC.

         Calls.  As of December 31, 2003,  the Company had uncalled Fund
commitments of GBP594.4 million and may invest in other funds in the future. See
"Item 4. Information on the Company - Business Overview - Investment  Portfolio"
for more  information  relating to the  Company's  investment  in the Funds.  In
connection  with any  investment in a Fund, the Company  becomes  subject to the
obligation  to pay future Calls related to the  investment in that Fund.  See "-
Liquidity and Capital Resources - Fund Commitments" for information  relating to
the Company's  commitments to Funds.  To the extent that the Company is required
to meet Calls as a result of its  investment  in existing  Funds,  the Directors
expect to meet the  Company's  commitments  to pay these Calls from the existing
cash  resources  of the Company,  the  facilities  available  under the Facility
Agreement and from the proceeds of future  dispositions from its holdings in the
Funds.

         Dispositions.  For the six months ended  December 31, 2002,  the
Company  received  proceeds from  dispositions of underlying  investments in the
Funds of  approximately  GBP104.5  million,  which  together  with existing cash
resources of the Company were sufficient to satisfy notices of calls aggregating
GBP122.7 million received during such period.

         For the year ended  December 31, 2003,  the Company  received  proceeds
from  dispositions  of  underlying  investments  in the  Funds of  approximately
GBP30.2 million, which together with existing cash resources of the Company were
sufficient to satisfy notices of Calls  aggregating  GBP110.7  million  received
during such period.

         Recent  Developments.  On April 22, 2004,  the Company  announced  that
it had been  advised that funds  advised by Permira  have  divested 19% of their
indirect  holding  in SEAT  Pagine  Gialle.  The  approximate  net value of this
partial  realization  for the Company is GBP11.7  million,  a gross  multiple of
approximately  two times the  attributable  cost. The Company expects to receive
net proceeds of approximately  GBP11.0 million from the sale, with the remainder
being held within P123 for reinvestment in Permira Europe III. The value of this
partial realization  represents an uplift of approximately 3.8p per share (fully
diluted) to the December 2003 net asset value.

         The valuation of the Company's  remaining  holding in SEAT Pagine
Gialle will remain at cost,  and,  allowing  for  exchange  rate  movements,  is
approximately GBP27.2 million.

                                       21

<PAGE>


         On May  17,  2004,  the  Company  announced  that  it had  been
advised by Permira that one of its portfolio companies, austriamicrosystems, has
listed on the SWX Swiss  Exchange  with shares being placed at CHF 35 per share,
capitalizing the company at CHF 385 million.

         Funds advised by Permira sold 20% of their  shareholding  in the
company at flotation,  representing  an approximate  net value of GBP4.0 million
for the Company. Post flotation,  funds advised by Permira own approximately 6.1
million shares in austriamicrosystems.

         On May 19,  2004,  the Company  announced  that it had been  advised
by Permira and Schroder Ventures Life Sciences of the recapitalization of one of
their portfolio companies,  Cognis,  returning approximately 58% of the cost (in
local  currency)  of  the  investment  to  investors.  The  net  value  of  this
recapitalization for the Company will be approximately GBP19.1 million, of which
the Company expects to receive approximately GBP18.1 million, with the remainder
being held within P123 for  reinvestment  in Permira Europe III.  Following this
recapitalization,  funds advised by Permira and Schroder  Ventures Life Sciences
will continue to own the same proportion of Cognis' ordinary equity as before.

         Share  Repurchases.  At the Annual  General  Meeting of the Company
held on April 25, 2003,  the Company was authorized to purchase up to 15,348,412
Ordinary Shares (representing 14.99% of the Ordinary Shares in issue as of March
21, 2003).  The minimum  purchase price authorized to be paid per Ordinary Share
is GBP1.00  and the maximum  price is an amount  equal to 105% of the average of
the middle market  quotations for an Ordinary Share taken from the Official List
for the five business days immediately  preceding the purchase.  The Company was
authorized to purchase up to 14.99% of the Ordinary  Shares in issue pursuant to
a special  resolution  that was  approved at the April 29,  2004 Annual  General
Meeting.  The  Company  did not use the  authority  granted  at the 2003  Annual
General Meeting,  and has not yet used the authority  granted at the 2004 Annual
General Meeting, to purchase any Ordinary Shares.

Potential Sources of Capital

         Convertible  Bond Issuance.  On May 21, 2003, July 16 and 18, 2003 and
August 7, 2003, the Company issued, through a private placement,  GBP40 million,
GBP3 million, GBP3 million and GBP3 million,  respectively, of convertible bonds
with an annual coupon of 4.5%, due in 2013. The Bonds 2013 are convertible  into
fully paid Ordinary Shares at a conversion price of 480p. The Company may redeem
some or all of the Bonds 2013 at their  principal  amount  together with accrued
interest if

-        at any time on or after May 21,  2006,  the  average of the market
         price of the  Ordinary  Shares over a 20  consecutive  day
         trading period is equal to or greater than 130% of the conversion
         price, or

-        at any time, 85% or more of the principal amount of the Bonds 2013 has
         been converted, redeemed or purchased and cancelled.

         Following  the  Company's  delivery of a notice  that it intends to
redeem some or all of the Bonds 2013, any holder of the Bonds 2013 may, prior to
the  redemption,  elect in writing to the Company to convert any Bonds 2013 that
are subject to the redemption notice.

         GBP40 million in principal  amount of the Bonds 2013 were  admitted to
the Official  List and to trading on the LSE's market for listed  securities  on
May 21, 2003 and the  remaining  GBP9 million in  principal  amount of the Bonds
2013 were  admitted to the Official  List and to trading on the LSE's market for
listed securities on August 18, 2003.

                                       22

<PAGE>


         Share  Placing.  On October 7, 2003,  the Company issued  10,239,100
Ordinary Shares ("New Shares") to investors at 468p per Ordinary Share by way of
an underwritten  placing by J.P. Morgan Securities Limited.  The New Shares were
admitted  to the  Official  List and to trading  on the LSE's  market for listed
securities on November 3, 2003. The "Capital  Raisings" section of the "Chairman
and CEO's Statement" on page 4 of the Report and Accounts is incorporated herein
by reference.

         Borrowing  Limitations and Policy.  The Company's  Articles of
Association  limit the  Company's  ability  to borrow to an amount  equal to the
Company's  "adjusted  capital  and  reserves"  (as such term is  defined  in the
Company's  Articles of Association)  unless otherwise  authorized by an ordinary
resolution  of  the  shareholders  (see  "Item  10.  Additional   Information  -
Memorandum and Articles of Association - Borrowing  Powers" for a summary of the
relevant  provisions).  It is intended that total  borrowings less cash and cash
equivalents  (excluding the Bonds and their proceeds) will not exceed 40% of the
Company's consolidated net assets.

         Facility  Agreement.  On June 16, 2003,  the Company,  Barings
(Guernsey)  Limited (as trustee of the Platinum Trust), The Governor and Company
of The Bank of  Scotland  and The Royal Bank of Scotland  plc  entered  into the
Facility  Agreement to permit borrowings of up to EUR285 million  (approximately
GBP200.8 million as of December 31, 2003).  The Facility  Agreement is available
for a five-year  period.  The Company is obligated to pay, on a quarterly basis,
an annual commitment fee on any undrawn and uncancelled  amount outstanding from
time to time between the date of the Facility Agreement and the termination date
of the  Facility  Agreement.  The  Company  expensed  a  non-utilization  fee of
approximately  GBP0.9  million for the fiscal year ended  December 31, 2003. The
Company also paid an  arrangement  fee of GBP1.0  million  during the year ended
December 31, 2003.

         The Facility  Agreement is a  multi-currency  revolving loan facility
with  an  available   aggregate   principal  amount  of  up  to  EUR285  million
(approximately GBP200.8 million as of December 31, 2003). The Facility Agreement
is on normal  commercial  terms  (including  representations,  undertakings  and
events of default) and loans under the Facility  Agreement  bear interest at the
rate of LIBOR or,  in  relation  to any loan in euro,  EURIBOR,  plus  mandatory
costs,  if any, a margin of 1.50%  annually  (or 2.50%  annually if there is any
default in relation  to the payment of any sums due under the Finance  Documents
(as defined in the  Facility  Agreement)  has occurred or is  continuing)  and a
utilization  fee that  ranges  between  0.125% - 0.50%  depending  on the amount
outstanding.  The Facility Agreement may be used to meet future Calls in respect
of the Company's existing holdings in immature Funds, to make new investments or
for general corporate purposes.

         The terms of the Facility  Agreement  include a guarantee  given by
each borrower of the other borrower's  obligations.  The Facility Agreement also
requires the Company to maintain  certain  ratios of borrowings  to assets.  The
Company and Barings  (Guernsey)  Limited (as trustee of the Platinum Trust) also
each  entered  into a  debenture  dated  March  16,  2001 in  relation  to their
respective  obligations under the Facility  Agreement in favor of The Royal Bank
of Scotland plc as security trustee.

         As of December 31, 2003, there were no amounts  outstanding  under the
Facility  Agreement.  See "Item 10. - Other Information - Material Contracts."

                                       23

<PAGE>


Issues of New Shares

         At the April 25, 2003 Annual General  Meeting,  the  Directors,  on
behalf of the Company, were authorized to issue relevant securities and to issue
equity  securities  as if the  preemption  provisions  in  Section  89(1) of the
Companies Act did not apply. The following authorities were renewed at the April
29, 2004 Annual General Meeting:

1.       To issue relevant  securities up to an aggregate  nominal amount of
         (a) GBP1,126,551  (equivalent to 1% of the Company's  issued
         ordinary share capital as of March 26, 2004) in connection  with the
         Company's  Executive Share Option Plan 2001; and (b)  GBP37,551,724
         (equivalent  to one-third of the Company's  issued  ordinary  share
         capital as of March 26, 2004), and

2.       To issue equity  securities as if the  preemption  provisions in
         section 89(1) of the Companies Act did not apply (a) up to an
         aggregate  nominal amount of GBP1,126,551  (equivalent to 1% of the
         Company's  issued  ordinary share capital as of March 26,  2004) in
         connection  with the  Company's  Executive  Share  Option Plan 2001;
         (b) pursuant to rights issues and other preemptive issues;  and (c) up
         to an aggregate nominal amount of GBP11,265,517  (equivalent to 10%
         of the Company's issued ordinary share capital as of March 26, 2004).

         The  "Issue of New  Shares"  section of the  "Report  of the Directors"
on pages 22 and 23 of the  Report  and  Accounts  is incorporated herein by
reference.

Dividend Policy

         In order to comply with the current  conditions  for approval as an
investment  trust for U.K.  tax  purposes,  the  Company  is  prohibited  by its
Articles of Association  from  distributing  as dividends any capital  surpluses
arising from the sale or other disposition of its investments.  Accordingly, any
dividends  paid by the Company  will be funded out of its revenue  account.  The
Directors expect the Company to make sufficient  dividend payments to ensure the
Company is able to meet the current  conditions  for  approval as an  investment
trust for U.K.  tax  purposes.  The  Company's  investment  objective  is one of
capital  growth,  and the  Directors  expect  that any  returns  for  holders of
Ordinary  Shares will derive  primarily  from the  capital  appreciation  of the
Ordinary Shares rather than from the dividend income of the Ordinary Shares. The
Directors  have not  recommended  the payment of a final  dividend  for the year
ended  December  31, 2003  because  the  Company has  reported a deficit for the
financial year on its revenue account.

         The Company has been in  compliance  with its dividend  policy since
its inception. See "Item 3. Key Information - Selected Financial Data - Dividend
per Ordinary  Share  Information"  above for  additional  information  about the
Company's dividend payments.

Liquidity Requirements

         The Directors believe that capital  resources and revenues of the
Company,  together with any new issuances of Ordinary  Shares or borrowings that
the Directors  deem  necessary  under the Facility  Agreement or other issues of
capital or debt instruments, will be sufficient to fund the Company's short-term
and long-term obligations relating to commitments,  contingencies,  investments,
proposed  operations  and  required  cash  distributions  to the  holders of the
Ordinary  Shares.  See "Item 10.  Additional  Information  - Taxation - Dividend
Policy."

                                       24

<PAGE>



Critical Accounting Policies

         The significant  accounting  policies adopted by the Company are shown
in Item 17, in Note 1 of the Notes to the Accounts.  Of these,  the valuation of
investments could be regarded as a critical accounting estimate as the Company's
investment  portfolio  is the most  significant  asset in its balance  sheet and
therefore judgmental errors in applying this policy could have a material impact
on returns and  shareholders'  funds. The valuation  policies of the Company are
consistent  with the current  guidelines  issued by the BVCA. The guidelines are
intended to provide a framework  for BVCA members  carrying out such  valuations
for their investors. The objective of the guidelines is to promote best practice
and to  improve  consistency  and  comparability  across the  industry,  thereby
enabling better economic decisions by investors. Two of the key criteria used in
developing the guidelines were that they should have conceptual integrity from a
valuation  perspective  and be consistent  with  generally  accepted  accounting
principles.

         It is  important to recognise  the  subjective  nature of private
equity investment valuation. It is inherently based on forward-looking estimates
and  judgments  about  the  underlying  business  itself,  its  market  and  the
environment  in which it  operates,  the state of the mergers  and  acquisitions
market,  stock market conditions and other factors. As such, while valuations do
provide useful interim indications of the progress of a particular investment or
portfolio  of  investments,  ultimately  it is not until  realization  that true
performance is firmly apparent.

         Investments  should be reported at fair value at the reporting date,
except in  situations  where fair value  cannot be  reliably  measured.  In such
situations  the  investment  should be  reported  at the  carrying  value at the
previous  reporting date, unless there is evidence that the investment has since
then been impaired. In such case the carrying value should be reduced to reflect
the estimated extent of impairment.

         In  estimating  fair value for an  investment,  the valuer  should
apply a  methodology  that is  appropriate  in light of the  nature,  facts  and
circumstances  of the investment and its materiality in the context of the total
investment portfolio and should use reasonable assumptions and estimates.

         Methodologies  should be applied  consistently  from period to period,
except where a change would result in better estimates of fair value.

         Because of the uncertainties  inherent in estimating fair value for
private equity investments,  a degree of caution should be applied in exercising
judgment and making the necessary estimates.  However, the valuer should be wary
of applying excessive caution.

         Where the reporting  currency of the Fund is different from the
currency in which the  investment  is  denominated,  translation  should be done
using the exchange rate prevailing at the reporting date.

         Care must be taken to distinguish  the value that may be ascribed to
an investment  from the value that may be ascribed to the  underlying  business.
For  valuation   purposes  an  investment   stake  should  recognize  the  time,
uncertainty  and risk  involved  in  crystallizing  the  investment  value,  and
particularly the risk that value may be eroded before a sale can be achieved.

C.       Research and Development, Patents and Licenses, etc.

         None.

                                       25

<PAGE>


D.       Trend Information

         The  "Financial  Highlights  and  Historical  Record" on page 3 of the
Report and Accounts, the "Outlook" section of the "Chairman and CEO's Statement"
on page 5 of the  Report and  Accounts,  and the  "Portfolio  Review" on pages 6
through 12 of the Report and Accounts, are incorporated herein by reference.

E.       Off-Balance Sheet Arrangements

         None.

F.       Tabular Disclosure of Contractual Arrangements

         The  Company  has  contractual  obligations  that  require it to
provide further  capital to certain Funds in which it has invested.  An analysis
of the uncalled  commitments to these Funds at December 31, 2003 is shown below.
The uncalled  commitments  may be called,  or not called,  at any time until the
termination  date  of the  Fund  in  accordance  with  the  Limited  Partnership
Agreement of such Fund.

<TABLE>
<CAPTION>
                                                                            Fund         Amount             Uncalled
                                                                     Termination       uncalled         commitment**
                                                                           Date*         (local          (GBP million)
                                                                                      currency)
<S>                                                                         <C>          <C>                    <C>
Fund Commitments:
   International Life Sciences Fund III                                     2013         $59.6m                 33.3
   Permira Europe II                                                        2010      EUR130.0m                 91.6
   Permira Europe III                                                       2013      EUR508.0m                357.9
   P123                                                                  2005***       EUR41.9m                 29.5
   Schroder Canadian Buy-Out Fund II                                        2004         C$0.9m                  0.4
   Schroder Canadian Buy-Out Fund III                                       2011        C$36.5m                 15.8
   Schroder Ventures Asia Pacific Fund                                      2010         $41.4m                 23.1
   Schroder Ventures International Life Sciences     Fund II                2009          $2.0m                  1.2
   Schroder Ventures US Fund                                                2009         $21.7m                 12.2
   The Japan Venture Fund III                                               2007         487.4m                  2.5
   The Japan Venture Fund IV****                                            2014       3,747.6m                 19.5
   The Strategic Recovery Fund                                              2010        GBP7.4m                  7.4

   Total                                                                                                       594.4

</TABLE>


* Uncalled  commitments can be called at any time over the investment  period of
the Funds  and,  thereafter,  over the life of the Funds for  specified  limited
purposes. The life of the Funds may be extended with investor consent.

** Based on exchange rates at December 31, 2003.

***Date of final call.

****  Based on the  Company's  commitment  to the fund at its first  closing  in
December 2003. The Company  intends to commit a further  YEN1,624m at the fund's
final close in 2004.

The total  commitments  shown above include GBP1.1m in relation to Funds held by
Platinum  Trust and  EUR0.1m in  relation to SVLL.  P123  commitments  represent
uncalled amounts due on ordinary shares.

                                       26

<PAGE>


<TABLE>
<CAPTION>


                                                      Total    Less than     1-3 years      3-5 years   More than 5
                                                                  1 year                                     years*
                                                                          (GBP millions)

<S>                                                     <C>           <C>          <C>            <C>           <C>
Operating Lease Obligation:                             1.4           --           0.5            0.8           0.1

Bond Repayments:
   Subordinated Convertible Bonds 2011                 39.4           --            --             --          39.4
   Subordinated Convertible Bonds 2013                 49.0           --            --             --          49.0

Total                                                  89.8           --           0.5            0.8          88.5
</TABLE>


* Time periods calculated from the fiscal year ended December 31, 2003.

G.       Safe Harbor

Not applicable to this Form 20-F.

Item 6.           DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.       Directors and Senior Management

         The  descriptions of the Directors under the heading  "Directors" on
page 2 and under the  heading  "Directors"  on pages 23 and 24 of the Report and
Accounts are incorporated herein by reference. There are no family relationships
between a Director and any other Director.

B.       Compensation

Compensation of Directors

         Each  non-executive  Director is paid a fee at the rate  determined
by the Directors,  provided that the total fees paid to non-executive  Directors
(excluding amounts payable under other provisions of the Articles of Association
of the Company) may not exceed GBP200,000 per annum or such higher amount as may
from time to time be decided by ordinary resolution of a majority of the holders
of the issued Ordinary Shares represented at a shareholders' meeting.

         The following table presents the compensation received by each Director
for the year ended December 31, 2003:

<TABLE>
<CAPTION>
Name of Director                           Compensation Received
<S>                                                   <C>
J.J. McLachlan                                     GBP75,000
N.E.H. Ferguson (Executive)                       GBP761,000
C.J. Govett                                        GBP24,000
A.J. Habgood                                       GBP24,000
E.W. Koning                                        GBP21,000
D. Raeburn                                         GBP24,000
A.F. Sykes                                         GBP23,000
A.C. Williams (Executive)                         GBP552,000

Total                                           GBP1,504,000
</TABLE>


The  "Remuneration  Report" on pages 29 through 31 of the Report and Accounts is
incorporated  herein by  reference.  Each  Director may also be  reimbursed  for
reasonable travel,  hotel, and incidental  expenses of attending meetings of the
Directors, as well as meetings of committees of the Directors,  general meetings
of the Company, or any other meetings which, as a Director,  a particular member
is entitled to attend. Each Director is paid all expenses incurred by him in the
conduct  of the  Company's  business  or in the  discharge  of his  duties  as a
Director.  Any Director who travels or resides abroad for any Company purpose or
performs  services  beyond the  ordinary  duties of a Director  may be paid such
extra  remuneration  as the  Directors  may  determine  in addition to any other
remuneration from the Company.

                                       27
<PAGE>



Compensation of the Company Secretary

         Schroder  Investment  Management  Limited,  a subsidiary  of Schroders
plc, has been appointed as the company  secretary and provides  secretarial  and
administrative  services to the Company.  The company secretary's duties include
monitoring  the ability of the Company to satisfy the conditions for approval as
an  investment  trust for U.K. tax  purposes.  In exchange  for these  services,
Schroder  Investment  Management Limited receives an annual fee from the Company
equal to the aggregate of:

-        0.12% per annum of the Company's net assets up to and including GBP50
         million,

-        0.06% per annum of the Company's net assets in excess of GBP50 million
         but less than or equal to GBP100 million; and

-        0.04% per annum of the Company's net assets in excess of GBP100
         million;

provided,  however, that the annual fee shall, at a minimum, equal GBP75,000 per
annum.  During  the fiscal  year ended  December  31,  2003,  total fees paid or
payable to Schroder Investment  Management Limited, in consideration of services
it  rendered  to the  Company  in the  capacity  of company  secretary,  totaled
GBP280,000,  of which  GBP146,000  was  outstanding  at December 31,  2003.  The
appointment of Schroder  Investment  Management Limited as Company Secretary may
be terminated  upon four months' prior written notice and  immediately  upon the
occurrence of certain  insolvency  events and other events of default.  Schroder
Investment  Management  Limited also provides  taxation services to the Company.
Total fees payable for such services  during the fiscal year ended  December 31,
2003 totaled GBP22,000, all of which was outstanding as of such date.


         Schroder  Investment  Management  Limited also facilitates  investment
trust dealing services.  Total fees paid or payable to Lloyds TSB Registrars for
such services during the fiscal year ended December 31, 2003 totaled GBP12,000.

         Schroder  Investment  Management  Limited is also entitled to receive
a fee for the  management of the Company's  fixed  interest  portfolio  from the
Company  based on the average value of the  Company's  month-end  cash and fixed
interest portfolio, calculated at the rate of:

-        0.10% per annum on the first GBP75 million of assets,

-        0.05% per annum on the next GBP75 million, and

-        0.03% per annum on the excess,

provided,  however,  that the  minimum  annual fee shall not be less than
GBP20,000 per year. The total fees paid or payable for these services during the
year ended December 31, 2003 was GBP20,000,  of which  GBP10,000 was outstanding
as of December 31, 2003.

                                       28
<PAGE>


Compensation of Officers and Employees

         The Directors have appointed  Nicholas Ferguson as Chief Executive
Officer and Andrew Williams as an Executive Director.  SVG Capital plc currently
has no other Executive  officers or employees (other than the company secretary)
and it is  anticipated  that SVG  Capital  plc will have no other  employees  or
officers  (other than the company  secretary) in the future.  As of December 31,
2003,  the  Company's  subsidiaries,  SVGA and SVGNA,  had 18 employees and four
secondees from Schroder Investment  Management Limited.  However,  the Directors
may from time to time appoint one or more  Directors to hold any  employment  or
executive office with SVG Capital plc (including that of managing  director) for
such period (subject to the provisions of the Companies Act) and upon such other
terms as the Directors may decide and may revoke or terminate any appointment so
made. A Director so appointed shall receive such remuneration (whether by way of
salary, commission,  participation in profits or otherwise) as the Directors may
decide either in addition to or in lieu of his remuneration as a Director.

Executive Share Option Plan

         In May  2001,  the  shareholders  approved  the  adoption  of an
Executive  Share  Option  Plan (the  "Plan").  The Plan is  administered  by the
Remuneration  Committee  of the  Directors  and  is  eligible  to the  following
persons:

1)       Employees of the Company and its subsidiaries (which, for purposes of
         Part D of the Plan, includes joint ventures);

2)       Directors  of the  Company  and its  subsidiaries  who  work at  least
         25  hours  per  week  for  any of the  Company  or its subsidiaries;
         and

3)       Individuals seconded to the Company or its subsidiaries,

who are not within two years of their contractual retirement age and who are not
otherwise excluded by applicable law.

         The Plan has a 10-year term and the number of shares  issued and
issuable  under the Plan may not exceed  10% of the  Company's  issued  Ordinary
Shares.  Exercise of the  options  typically  will be subject to vesting  over a
period of years and to  satisfaction of performance  targets  established by the
Remuneration  Committee.  As of December 31, 2003,  the total number of Ordinary
Shares  issued and  issuable  (assuming  the  exercise  of all  options  and the
conversion of all convertible bonds) totaled 138,186,790 Ordinary Shares.

         The  following  table  presents  information  with respect to option
grants to Directors of the Company  under the Plan as of December 31, 2003:


<TABLE>
<CAPTION>

          Director                  Shares           Grant Date      Exercise         Earliest           Latest
                                  Underlying                           Price       Exercise Date      Exercise Date
                                   Options
<S>                                <C>                  <C>           <C>               <C>                <C>
N.E.H. Ferguson.....               715,446         June 21, 2001      410.00p      June 21, 2004      June 20, 2011
N.E.H. Ferguson.....               357,724         June 21, 2001      410.00p      June 21, 2005      June 20, 2011
N.E.H. Ferguson.....               404,484         April 5, 2002      334.50p      April 5, 2005      April 4, 2012
N.E.H. Ferguson.....               349,840         March 13, 2003     392.75p      March 13, 2006    March 12, 2013
A.C. Williams.......               373,983         June 21, 2001      410.00p      June 21, 2004      June 20, 2011
A.C. Williams.......               186,992         June 21, 2001      410.00p      June 21, 2005      June 20, 2011
A.C. Williams.......               272,645         April 5, 2002       334.5p      April 5, 2005      April 4, 2012
A.C. Williams.......               239,847         March 13, 2003     392.75p      March 13, 2006    March 12, 2013
</TABLE>

                                       29

<PAGE>




         The following table presents  information  with respect to option
grants to Directors  of the Company  under the Plan  subsequent  to December 31,
2003:

<TABLE>
<CAPTION>

          Director                  Shares           Grant Date      Exercise         Earliest           Latest
                                  Underlying                           Price       Exercise Date      Exercise Date
                                   Options
<S>                                <C>                   <C>          <C>                <C>               <C>
N.E.H. Ferguson.....               363,256         March 12, 2004     479.00p      March 12, 2007    March 11, 2014
A.C. Williams.......               248,851         March 12, 2004     479.00p      March 12, 2007    March 11, 2014

</TABLE>

         The following table presents  information  with respect to option
grants to Directors of the Company under the Plan during the year ended December
31, 2003:

<TABLE>
<CAPTION>

          Director                  Shares           Grant Date      Exercise         Earliest           Latest
                                  Underlying                           Price       Exercise Date      Exercise Date
                                   Options
<S>                                <C>                   <C>          <C>                <C>               <C>
N.E.H. Ferguson.....               349,840         March 13, 2003     392.75p      March 13, 2006    March 12, 2013
A.C. Williams.......               239,847         March 13, 2003     392.75p      March 13, 2006    March 12, 2013

</TABLE>

         It is intended  that  options  will be granted  regularly  to
qualifying  employees  and secondees and this policy has been followed as of the
date of this annual  report.  However,  the levels of such grants will be at the
discretion of the Directors, taking into account the development of the business
and  individual  performance.  All  options  are  granted at  approximately  the
prevailing  market  price at the time of grant and the ability to  exercise  the
options is subject to the satisfaction of certain performance targets.

         The effective  annual cost to the Company of the Plan will depend
primarily on the growth of the net asset value per Ordinary Share, the number of
options granted and the dates of exercise of such options.

         The "Share  Options"  section of the  Remuneration  Report on page 30
of the Report and  Accounts  is  incorporated  herein by reference.

C.       Board Practices

         At every Annual General  Meeting of the Company,  one-third of the
Directors,  or if their  number is not three or any  multiple  of three then the
number  nearest to and less than one third,  who are  subject to  retirement  by
rotation, will retire by rotation and be eligible for re-election. The Directors
who retire by rotation on each  occasion  will be those who have been longest in
office since their  appointment  but as between  persons who became or were last
reappointed  directors on the same day,  those to retire will be  determined  by
lot.  Andrew  Williams and John Govett  retired at the Company's  Annual General
Meeting  on April 29,  2004 and were  re-elected.  Andrew  Sykes  resigned  as a
Director on March 31, 2004.

                                       30
<PAGE>

         The Company's  Articles of Association also require that a majority of
the Directors,  including the Chairman,  be independent of Schroder Ventures and
the Schroder Group.  For this purpose,  a Director is deemed to be "independent"
of the Schroder Group unless (a) he is a director,  officer, general partner, or
employee of a member of the Schroder Group or (b) a member of the Schroder Group
is connected with him within the meaning given to that expression by Section 346
of the Companies Act. John McLachlan, John Govett, Anthony Habgood, Edgar Koning
and  Denis  Raeburn  are  independent  for  the  purposes  of  the  Articles  of
Association.  Any decision of the  Directors  requires a simple  majority  vote;
however,  a majority of the  Directors  voting in favor of the decision  must be
independent Directors.

         The Directors have appointed  Nicholas Ferguson as Chief Executive
Officer and Andrew Williams as an Executive Director.  SVG Capital plc currently
has no other officers or employees (other than the company  secretary) and it is
anticipated that SVG Capital plc will have no other employees or officers (other
than the company secretary) in the future.

         The Directors manage the Company's  investment in the Funds. The
Directors have established certain committees to assist in the management of the
Company. The investment  committee is responsible for the day-to-day  management
of the Company's portfolio,  for reviewing investment proposals for the Company,
for giving investment  recommendations to the Directors and for implementing the
Directors' decisions regarding any investment.  The SVGA team is responsible for
monitoring and providing  advice on  investments  to the committee.  The current
members of this  committee as of the date of this report are  Nicholas  Ferguson
(Chairman),  John Govett, John McLachlan, Edgar Koning, Denis Raeburn and Andrew
Williams.  The Company is entitled to receive  information  with  respect to its
holdings on the same basis as other investors in the Funds.

         The Directors  have  established an audit  committee,  which consists
of John McLachlan (Chairman),  Anthony Habgood,  Edgar Koning and Denis Raeburn.
All of the Directors  currently  serving on the audit  committee are independent
Directors under the standard described above. The audit committee is responsible
for ensuring that the Company  maintains  the highest  standards of integrity in
financial reporting.  The audit committee also meets with representatives of the
company  secretary and receives reports on the quality and  effectiveness of the
accounting  records  and  management  information  maintained  on  behalf of the
Company. See "Item 6. Directors,  Senior Management and Employees - Compensation
- Compensation of the Company Secretary."

         The Directors have also established a nominations  committee,  which
consists of Anthony Habgood (Chairman), John McLachlan, Nicholas Ferguson, Edgar
Koning  and  Denis   Raeburn.   The   committee   meets  as  necessary  to  make
recommendations to the Directors on the filling of Board vacancies.

         The  remuneration  committee is composed of John McLachlan  (Chairman),
John Govett and Anthony  Habgood and Denis  Raeburn all of whom are  independent
Directors  under the standard  described  above.  The  remuneration  committee's
responsibilities  include making recommendations to the Directors in relation to
the remuneration of the Executive Directors, the issuance of share option grants
under the  Company's  Executive  Share  Option  Plan and the  review of  certain
contracts with service providers.

                                       31

<PAGE>


         The  "Directors"  section  of the  "Report  of the  Directors"  on
pages 23 and 24 of the Report and Accounts,  the "Board  Committees"  section of
the "Corporate Governance" section on pages 26 and 27 of the Report and Accounts
and  the  "Policy  on  the  Remuneration  of  the  Directors"   section  of  the
"Remuneration  Report" on page 29 of the Report and  Accounts  are  incorporated
herein by reference.

D.       Employees

         See "Compensation of Officers and Employees," above.

E.       Share Ownership

         The following  table presents the number of Ordinary Shares
beneficially  owned by each Director or their families as of June 18, 2004:

<TABLE>
<CAPTION>
Name of Director                              Ordinary Shares
                                             Beneficially Owned

<S>                                                <C>
J.J. McLachlan                                     18,061
N.E.H. Ferguson                                   337,279
C.J. Govett                                        67,500
A.J. Habgood                                       25,000
E.W. Koning                                             0
D. Raeburn                                         60,000
A.C. Williams                                      13,091

Total                                             520,931
</TABLE>


         See "Executive Share Option Plan," above, for information about the
option ownership of the Directors of the Company under the Plan.

         The  description  of the share  ownership of the Directors of the
Company under the heading  "Directors" in the "Report of the Directors" on page
23 of the Report and Accounts is incorporated herein by reference.

Item 7.           MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.       Major Shareholders

         The Company's issued share capital at December 31, 2003 consisted of
112,655,174  Ordinary Shares,  par value GBP1 each, all of which were fully paid
as of December 31, 2003. Each Ordinary Share has the same voting rights as every
other Ordinary Share.

           At June 18, 2004,  the Company had been  notified of the  following
interests in excess of 3% of the issued  capital of the Company:

<TABLE>
<CAPTION>

                                                              # of Ordinary         % of Class
                                                                 Shares
         Schroders plc and its subsidiaries
         <S>                                                     <C>                    <C>
             --non beneficial, managed for clients             19,335,951             17.16
             --beneficial                                       7,113,449              6.31
         Aegon Investment Management BV                        24,603,665             21.84
         Lansdowne Partners                                     9,338,262              8.29
         Morley Fund Management Limited                         3,861,340              3.43
         Morgan Stanley Securities Limited                      4,052,793              3.59
</TABLE>

                                       32

<PAGE>


         As of June 18, 2004, the Directors and their families were the
beneficial  owners of an aggregate of 520,931  Ordinary Shares or  approximately
0.46% of all Ordinary Shares outstanding as of such date.  Nicholas Ferguson and
Andrew Williams have also been granted options  representing  3,513,068 Ordinary
Shares or 3.06% of the total number of Ordinary  Shares  outstanding  as of such
date. See Item 6. "Directors,  Senior  Management and Employees - Compensation -
Executive Share Option Plan."

         The Company is not directly or indirectly  owned or  controlled by
another  corporation  or by any foreign  government.  There are no  arrangements
known to the Company the  operations  of which may, at a date  subsequent to the
date of this annual report, result in a change of control of the Company.

Changes in Major Shareholder Ownership in Most Recent Three Years

     The table included in the section entitled "Substantial Share Interests" in
the "Report of the  Directors" on page 24 of the Report and Accounts,  the table
included in the section entitled "Substantial Share Interests" in the "Report of
the Directors" on page 22 of the Report and Accounts December 2002, the table in
the  section  entitled  "Substantial  Share  Interests"  in the  "Report  of the
Directors" on page 22 of the Report and Accounts  2002,  and the table  entitled
"Substantial Share Interests" in the "Report of the Directors" of the Report and
Accounts  2001,  each of which lists  owners of in excess of 3% of the  Ordinary
Shares as of specific dates, are incorporated herein by reference.

Record Ownership of the Ordinary Shares in the United States

         The following information is presented,  to the Company's knowledge,
with respect to the Company's major shareholders,  which means shareholders that
are the beneficial  owners of 3% or more of the Company's  Ordinary Shares.  The
section  entitled  "Substantial  Share  Interests"  on page 24 of the Report and
Accounts is incorporated herein by reference.

         As of December 31, 2003,  Metropolitan  Life Insurance  Company,  or
Met Life,  owned  GBP20  million  in  principal  amount of Bonds  2011 and GBP13
million in  principal  amount of Bonds  2013.  Because Met Life has the right to
convert the Bonds 2011 and Bonds 2013 into Ordinary  Shares at 399p and 480p per
Ordinary  Share,  respectively,  Met  Life  is  deemed,  under  applicable  U.S.
securities laws, to beneficially own Ordinary Shares.  If Met Life converted its
entire  holding of the Bonds  2011 and Bonds  2013,  it would own  approximately
7,720,864  Ordinary  Shares,  or  approximately  6.85% of the  total  number  of
Ordinary  Shares  outstanding  assuming the conversion of all the Bonds 2011 and
Bonds 2013.

Voting Rights of Major Shareholders

         The Company's major shareholders do not have different voting rights.

B.       Related Party Transactions

         Except as disclosed  herein,  none of the  Directors or their
immediate  families  or  associates  has  any  material  interest,  directly  or
indirectly,  in any transaction to which the Company or any of its  subsidiaries
is a party.  There are no outstanding loans or guarantees granted or provided by
the Company to or for the benefit of the Directors or their  immediate  families
or associates.

                                       33

<PAGE>

         Nicholas Ferguson,  a Director and the Company's Chief Executive
Officer, is also the Chairman of the Board of SVGA, a wholly owned subsidiary of
the Company. Andrew Williams, a Director, is Chief Executive Officer of SVGA.

         Nicholas  Ferguson  and Andrew  Williams,  who are employed by Schroder
Investment  Management Limited,  are seconded to SVG Capital plc. As part of the
secondment  arrangements,  SVG Capital plc will  reimburse  Schroder  Investment
Management  Limited for the salary,  bonus and other  benefits  paid by Schroder
Investment Management Limited to Nicholas Ferguson and Andrew Williams. Schroder
Investment  Management  Limited,  a wholly owned  subsidiary  of Schroders  plc,
provides  certain  administrative  and  secretarial  services  to the Company in
exchange for the fees  specified in "Item 6.  Directors,  Senior  Management and
Employees - Compensation - Compensation of the Company Secretary."

         Nicholas  Ferguson  and John  McLachlan  represent  the Company on the
advisory  committees that advise certain Funds. In addition,  Nicholas  Ferguson
and  members  of his  family  and  Andrew  Williams  are  entitled  to receive a
specified  percentage of the profits of each Fund raised before  January 1, 2001
when  the  returns  to  investors  in that  Fund  exceed  specified  performance
standards,  as  described  in "Item 4.  Information  on the  Company -  Business
Overview - Special Allocation of Profits."

         As a result of these  relationships,  these  Directors  may have
interests in transactions between the Company and these entities that may differ
from those of the holders of the Ordinary Shares.

C.       Interests of Experts and Counsel

         Not applicable to this Form 20-F.

Item 8.           FINANCIAL INFORMATION

A.       Consolidated Statements and Other Financial Information

         See Item 17.

Legal Proceedings

         Since its  incorporation,  the Company has not been engaged in, and is
not currently  engaged in, any  litigation or  arbitration  and no litigation or
claim is  pending or  threatened  against  the  Company.  There are no  material
proceedings  to which a director,  officer or affiliate  of the Company,  or any
associate of any such  director,  officer or affiliate of the Company is a party
adverse to the  Company or any of its  subsidiaries  or has a material  interest
adverse to the Company or any of its subsidiaries.

         During 2002, a former employee of Permira's  investment  consultants
in France was placed under  examination  ("mis en examen") in connection with an
inquiry  being  conducted  in  France  by  an  investigating  magistrate  ("juge
d'instruction").  It is  understood  that the  inquiry  was  into  circumstances
surrounding  a public  offering  in 1998 in shares  of an  Investee  Company  of
Schroder French Buy-Out Fund. The Investigating  Magistrate referred the case to
the  criminal  court and a  hearing  took  place on  November  25 and 26,  2002.
Judgment was reserved  until January 20, 2003 when judgment was entered  against
the former  employee.  The  Directors are of the opinion that the outcome of the
inquiry  has no bearing on the  Company's  relationship  with  Permira or on the
Company's financial position.

                                       34

<PAGE>


Dividend Policy

         For a  description  of the  Company's  policy on dividend distribution,
see "Item 10.  Additional  Information  - Taxation - Dividend Policy."

B.       Significant Changes

         None.

Item 9.           THE OFFER AND LISTING

         All portions of Item 9 other than Items 9.A.4 and 9.C are inapplicable
to this Form 20-F.


A.       Offer and Listing Details

Price Range of the Ordinary Shares

         The principal trading market for the Ordinary Shares is the LSE.  The
Ordinary  Shares  were  admitted  to the  Official  List  on May 23,  1996.  The
following tables set forth the range of the high and low closing sales prices of
our common stock for the periods indicated:

<TABLE>
<CAPTION>

         Five Most Recent Fiscal Years
                                                       Year                               Six Months          Year
                                                      Ended,                           Ended, December       Ended,
                                                     June 30                                  31          December 31

                                          1999       2000        2001         2002           2002             2003

<S>                                      <C>        <C>         <C>          <C>            <C>              <C>
    High Market price                    292.5p     462.0p      533.0p       393.0p         379.0p           508.5p

    Low Market Price                     149.0p     255.0p      380.5p       296.5p         456.0p           379.0p


         Two Most Recent Fiscal Years
                                          High Market Price          Low Market Price

    Fiscal Year Ended June 30, 2002            393.0p                     296.5p
    First Quarter                              393.0p                     296.5p
    Second Quarter                             348.5p                     305.5p
    Third Quarter                              350.5p                     307.5p
    Fourth Quarter                             372.0p                     331.0p

    Six Months Ended December 31,
    2002

    First Quarter                              422.0p                     379.0p
    Second Quarter                             456.0p                     414.5p

    Fiscal Year Ended December 31,
    2003
    First Quarter                              422.0p                     379.0p
    Second Quarter                             456.0p                     414.5p
    Third Quarter                              508.5p                     440.0p
    Fourth Quarter                             495.25p                    457.5p


         Most Recent Six Months

                                      High Market Price          Low Market Price

    January 04                        482.50p                    445.00p
    February 04                       473.50p                    450.00p
    March 04                          497.75p                    472.50p
    April 04                          499.25p                    487.00p
    May 04                            498.00p                    479.50p
    June 04                           521.00p                    493.00p
</TABLE>

                                       35

<PAGE>


B.       Plan of Distribution

         Not applicable to this Form 20-F.

C.       Markets

No Trading Market for the Ordinary Shares in the United States

         The Ordinary  Shares are not and are not  intended to be  registered
in the United  States under the  Securities  Act or the  securities  laws of any
state.  The  Ordinary  Shares will not be listed for  trading on any  securities
exchange in the United  States,  nor has the Company  registered  its securities
under the Exchange Act for the purpose of  facilitating  such  secondary  market
trading with respect to its securities in the United States. The Company has not
facilitated and does not intend, directly or indirectly, to facilitate secondary
market  activity.  Therefore,  the transfer of the Ordinary Shares in the United
States is subject to restrictions  which are designed to prevent the development
of a secondary market for any of the Company's securities in the United States.

D.       Selling Shareholders

         Not applicable to this Form 20-F.

E.       Dilution

         Not applicable to this Form 20-F.

                                       36

<PAGE>

F.       Expenses of the Issue

         Not applicable to this Form 20-F.

Item 10. ADDITIONAL INFORMATION

A.       Share Capital

         Not applicable to this Form 20-F.

B.       Memorandum and Articles of Association of SVG Capital plc

         Set forth below is information  concerning the Company's equity
capital structure and related summary information  concerning  provisions of its
Memorandum of  Association  and Articles of Association  and applicable  English
law. Since it is a summary,  it does not contain all of the information that may
be  important  to you, and the summary is qualified in its entirety by reference
to the Companies Act and the Company's Memorandum of Association and Articles of
Association.  A copy of each of the  Company's  Memorandum  of  Association  and
Articles of  Association  has been filed as an exhibit to this annual  report on
Form 20-F.

         The Company is incorporated  under the name SVG Capital plc and is
registered  in  England  and  Wales  with the  registered  number  3066856.  The
Memorandum of Association  states that the Company's  objectives are to carry on
the business of an investment  trust company and to undertake all kinds of trust
and agency  business.  The Company's  Memorandum of Association  and Articles of
Association  allow  for a wide  range of  activities  by which to carry  out the
Company's objectives. See Exhibit 1.1, Memorandum of Association, Article 4(A).

Board of Directors

         The  Company's  Articles of  Association  provide  that unless
otherwise  determined  by  ordinary  resolution,  the board of  directors  shall
consist of not less than two nor more than nine members.

         Except as noted  below,  the Board may at any time  appoint  any
person to be a Director  either to fill a vacancy or as an additional  Director,
provided  that the  number of  Directors  does not  exceed  nine.  Any person so
appointed  by the Board shall hold  office  only until the next  Annual  General
Meeting  of  shareholders  and  shall  then  be  eligible  for  election  by the
shareholders,  but shall not be taken into account in determining  the number of
directors  who are to retire by rotation at such  meeting as set out below.  See
Exhibit 1.2, Articles of Association, Part 2, Article 79.

         Interested  Director  Transactions.  Subject to certain  provisions
of the  Companies  Act designed to enforce fair dealing by directors and prevent
their taking financial advantage,  and provided that a Director has disclosed to
the Directors the nature and extent of any interest, a Director:

-        may be party to or  otherwise  interested  in any  contract,
         transaction,  or  arrangement  with the  Company or in which the
         Company is otherwise interested;

-        may be a director or other officer of or employed by a party to any
         contract,  transaction  or  arrangement  with or otherwise
         interested in any corporate entity promoted by the Company or in which
         the Company is in any way interested; and

-        may act in a  professional  capacity  for the Company  (other  than as
         auditor)  and be  compensated  therefore  and shall not (unless
         otherwise  agreed by him) be  accountable  to the  Company for any
         benefit  which he derives  from any such contract,  transaction  or
         arrangement  or from any such  office  or  employment  or from any
         interest  in any such corporate body or for such compensation.

                                       37

<PAGE>



         No  contract,  transaction  or  arrangement  in which a  director  has
an interest may be voided on the grounds of any such interest or benefit.

         A Director  generally  shall not vote on, or be counted in the quorum
in relation to, any  resolution of the Board in respect of any contract in which
he has an  interest  which  (taken  together  with any  interest  of any  person
connected with him) is to his knowledge a material interest and, if he does, his
vote  shall  not be  counted,  but  this  prohibition  shall  not  apply  to any
resolution  where that  material  interest  arises  only from one or more of the
following matters:

-        The giving to him of any  guarantee,  indemnity or security in respect
         of money lent or  obligations  undertaken  by him or by any other
         person at the Company's request or for the benefit of the Company or
         any of its subsidiaries,

-        The giving to a third party of any  guarantee,  indemnity or security
         in respect of a debt or obligation of the Company or any of its
         subsidiaries  for which he  himself  has  assumed  responsibility  in
         whole or in part under a  guarantee  or indemnity or by the giving of
         security,

-        Where the Company or any of its  subsidiary  undertakings  are offering
         securities  in which offer the Director is or may be entitled to
         participate as a holder of securities or in the  underwriting or
         sub-underwriting  of which the Director is to participate,

-        Any contract in which he is interested  by virtue of his interest in
         shares or  debentures or other  securities of the Company or any of
         its subsidiaries or by reason of any other interest in or through the
         Company or any of its subsidiaries,

-        Any contract  concerning any other company (not being a company in
         which the director and any persons  connected with him owns 3% or more)
         in which he is  interested  directly  or  indirectly  whether as an
         officer,  shareholder,  creditor  or otherwise,

-        Any  contract  concerning  the  adoption,  modification  or operation
         of a pension  fund or  retirement,  death or  disability benefits
         scheme which relates both to directors and employees of the Company or
         of any of its  subsidiaries  and does not provide in respect of any
         director as such any  privilege or advantage  not accorded to the
         employees to whom the fund or scheme relates,

-        Any contract for the benefit of  employees of the Company or of any of
         its  subsidiaries  under which he benefits in a similar manner to the
         employees and which does not accord to any director as such any
         privilege or advantage not accorded to the employees to whom the
         contracts relates, and

                                       38

<PAGE>


-        Any contract for the purchase or maintenance for any director or
         directors of insurance against any liability.

         Where a  company  in which a  director  owns 1% or more is  materially
interested in a contract,  he also shall be deemed materially interested in that
contract.

         The chairman of a Board meeting  shall  determine any question  that
arises at the meeting  regarding the entitlement of any director (other than the
chairman of the  meeting) to vote or be counted in the quorum with  respect to a
vote on a  matter  in which a  Director  may have a  material  interest.  If any
question  shall arise in respect of the  chairman of the  meeting,  the question
shall be decided by a  resolution  of the Board (for which  purpose the chairman
shall be counted in the quorum but shall not vote on the matter).

         A Director who to his  knowledge is in any way,  whether  directly or
indirectly,  interested  in a contract with the Company shall declare the nature
of his  interest at the  meeting of the Board at which the  question of entering
into the  contract is first taken into  consideration,  if he knows his interest
then  exists,  or in any other case at the first  meeting of the Board  after he
knows  that he is or has become so  interested.  In order to be  effective,  the
notice must either be given at a meeting of the Board or the Director  must take
reasonable  steps to assure  that it is  brought  up and read at the next  Board
meeting after it is given.

         See Exhibit 1.2, Articles of Association, Part 2, Article 92.

         Voting on  Compensation.  Each of the  Directors  shall be paid a fee
at such rate as may from time to time be determined by the Board,  provided that
that aggregate of all fees so paid to Directors (excluding amounts payable under
any other provision of the Company's  Articles of Association)  shall not exceed
GBP200,000  per annum or such higher  amount as may from time to time be decided
by ordinary resolution of the Company.

         Director  Employment.  The Board may from time to time  appoint one or
more  Directors  to hold any  employment  or  executive  office with the Company
(including that of managing director) for such period (subject to the provisions
of the Companies  Act) and upon such other terms as the Board may decide and may
revoke or terminate  any  appointment  so made.  A Director so  appointed  shall
receive such remuneration (whether by way of salary,  commission,  participation
in profits or otherwise) as the Directors may decide either in addition to or in
lieu of his remuneration as a Director.

         Borrowing  Powers.  Subject to the  limitations  noted  below,  the
Board may  exercise all powers for the Company to borrow  money,  to mortgage or
charge all or any part of the  undertakings,  property  and assets  (present and
future) and uncalled  capital of the Company,  and to issue debentures and other
securities,  whether outright or as collateral security for any debt,  liability
or obligation of the Company or of any third party. The Board shall restrict the
Company's borrowings and exercise all voting and other rights, powers or control
or rights of influence exercisable by the Company and any of its subsidiaries or
in relation to the Company's  subsidiaries  so that the aggregate  amount of all
money borrowed by the Company  (excluding  borrowings owed by the Company to any
subsidiary or by any subsidiary to the Company or another  subsidiary) shall not
at any time exceed an amount  equal to the  adjusted  capital and  reserves  (as
defined  therein)  unless  otherwise  authorized  by ordinary  resolution of the
shareholders. See Exhibit 1.2, Articles of Association, Part 1, Article 1(B).

                                       39

<PAGE>


         Retirement  of  Directors.  No person may be  disqualified  from being
appointed a Director,  and no Director is required to retire,  by reason only of
the fact that he has  obtained  the age of 70 years or any other age.  Where the
Board  convenes any  shareholders'  meeting at which a Director will be proposed
for  appointment  or  reappointment  who at the date for  which the  meeting  is
convened will be over the age of 70 years, the Board must give notice of his age
in years in the notice convening the meeting or in any document accompanying the
notice,  but  the  incidental  omission  to  do  so  shall  not  invalidate  any
proceedings or any appointment or reappointment of that director at the meeting.
See Exhibit 1.2, Articles of Association, Part 1, Article 1(I).

         At every  general  meeting  one-third of the  directors  who are
subject to  retirement  by  rotation  (or,  if their  number is not three or any
multiple of three,  then the number  nearest to and less than  one-third)  shall
retire from office,  provided  that if there are fewer than three  directors who
are subject to retirement by rotation they must all retire.

         The  directors  to retire by  rotation  on each  occasion  shall be
those  who  have  been  longest  in  office  since  their  last  appointment  or
reappointment  but,  as  between  persons  who  became or were last  reappointed
directors on the same day, those to retire shall (unless they  otherwise  agree)
be  determined  by lot.  The  directors to retire on each  occasion  (both as to
number and identity)  shall be determined by the composition of the Board at the
start of business on the date of the notice convening the Annual General Meeting
and no director  shall be required  to retire or be  relieved  from  retiring by
reason of any change in the number or identity of the directors  after that time
on the  date of the  notice  but  before  the  close  of the  meeting.  Retiring
directors  may stand for  re-election  at the first  succeeding  annual  general
meeting of  shareholders.  See Exhibit  1.2,  Articles of  Association,  Part 2,
Articles 80 and 81.

         Requirements  for  Qualification.  Directors are not required to hold
any  Ordinary  Shares in order to qualify for service as a Director.  A Director
who is not a  shareholder  is  nevertheless  entitled  to  attend  and  speak at
shareholders'  meetings.  See  Exhibit  1.2,  Articles of  Association,  Part 1,
Article 1(G) and Part 2, Article 58.

Rights, Preferences and Restrictions of Ordinary Shares

         Subject to any rights  conferred on the holders of any other shares,
any share may be issued with or have attached to it such rights and restrictions
as the shareholders may by resolution  decide or, if no such resolution has been
passed or the  resolution  does not make  specific  provision,  as the Board may
decide.  Also,  any  share may be issued  which is to be  redeemed,  or is to be
subject to redemption at the Company's option or that of the holder. See Exhibit
1.2, Articles of Association, Part 2, Articles 5 and 6.

         Declaration of Dividends.  Subject to the provisions of the Companies
Act,  the  shareholders  may by ordinary  resolution  from time to time  declare
dividends  in  accordance  with the  respective  rights of the members and their
interests  in the profits  available  for  distribution,  but no dividend  shall
exceed the amount  recommended by the Board. No dividend shall be payable except
out of the Company's  profits  (excluding any profits which under the provisions
of the  Articles  ought to be carried to the  credit of the  capital  reserve or
applied  in  providing  the  depreciation  or  contingencies).  The Board  shall
exercise  all voting and other  rights or powers of control  exercisable  by the
Company in relation to its subsidiary  undertakings so as to secure as far as it
can that such subsidiary  undertaking  shall distribute to the Company by way of
dividends all of their profits.  The determination of the board as to the amount
of  profits  at any time  available  for  distribution  by way of  dividends  is
conclusive. See Exhibit 1.2, Articles of Association, Part 2, Article 112.

                                       40

<PAGE>

         The Company has no further  obligation to send any check or warrant
through the mail or employ any other means of payment for any  dividend  payable
on any of its shares  which is normally  paid in that manner on those  shares if
the checks or warrants have been returned undelivered or remain uncashed or that
means of payment has failed either (i) with respect to at least two  consecutive
dividends  or  (ii)  with  respect  to  one  dividend  if  reasonable  enquiries
thereafter  fail to  establish  any new address of the  registered  holder.  The
Company  may again  begin to send  checks or  warrants by any other means if the
holder or an  authorized  person sends a request to the Company in writing to do
so. See Exhibit 1.2, Articles of Association, Part 2, Article 118.

         Any dividend  unclaimed  after a period of 12 years from the date when
it became due for payment  shall be  forfeited  and shall revert to the Company.
The payment by the Board of any unclaimed dividend or other sum payable on or in
respect of a share into a separate  account  does not make the Company a trustee
of such payment. See Exhibit 1.2, Articles of Association, Part 2, Article 119.

         Profit Sharing. See "Declaration of Dividends," above.

         Liquidation  Rights.  Upon  liquidation,  the liquidator may, by
special  resolution  of the  shareholders  of the Company,  (i) divide among the
shareholders,  in kind, the whole or any part of the Company's  assets  (whether
consisting of the same kind of property or not) and, for that purpose,  set such
values as he deems fair upon any  property to be divided and  determine  how the
division  shall be carried out as between the  members of  different  classes of
members,  or (ii) vest the whole or any part of the assets in trustees upon such
trusts for the benefit of the  contributories  as the  liquidator,  with similar
shareholder approval,  shall think fit, but no shareholder shall be compelled to
accept any shares or other assets upon which there is any liability. See Exhibit
1.2, Articles of Association, Part 2, Article 136.

         Capital  Call  Liability.  Subject  to the terms of issue,  the Board
may from time to time make  calls  upon the  members  in  respect  of any monies
unpaid on their shares  (whether on account of the nominal  amount of the shares
or by way of premium) and not payable on a date fixed by or in  accordance  with
the terms of issue, and each member shall (subject to the Company's serving upon
him at least 14 days' notice  specifying  when and where  payment is to be made)
pay to the Company as required by the notice the amount called on his shares.  A
call may be revoked or postponed  as the Board may decide.  A person upon whom a
call is made shall remain liable for all calls made upon him notwithstanding the
subsequent  transfer  of the shares in  respect of which the call was made.  See
Exhibit 1.2, Articles of Association, Part 2, Article 20.

         Action  Required to Alter  Rights of Holders.  All or any of the
rights  attached  to any class of shares  issued may from time to time be varied
with the  consent in writing of the  holders of not less than  three-fourths  in
nominal value of the issued shares of that class or by extraordinary  resolution
obtained  at a separate  general  meeting of the  holders of those  shares.  See
Exhibit 1.2, Articles of Association, Part 2, Article 8.

         Convocation of  Shareholder  Meetings and Conditions of Admission.
Any general  meeting other than an Annual  General  Meeting is an  Extraordinary
General  Meeting,  and such  meeting may be convened  at the  discretion  of the
Board.  The Board shall convene general  meetings as Annual General  Meetings in
accordance  with the  requirements  of the  Companies  Acts.  See  Exhibit  1.2,
Articles of Association, Part 2, Articles 48-50.

                                       41

<PAGE>


         Limitations  on Rights  to Hold  Shares.  Upon  receiving  notice
that any shares are or may be owned or held directly or  beneficially  such that
the  aggregate  number of United  States  persons who are holders or  beneficial
owners of the Company's  shares or other securities and who acquired such shares
from the  Company or its agents or  affiliates  or any  United  States  resident
transferee  of any  direct  purchaser,  is or may be more than 75, the Board may
require the transfer of such shares to a non-United States resident  transferee.
See Exhibit 1.2, Articles of Association, Part 1, Article 1(k).

         Alteration  of Share  Capital.  The Company may from time to time by
ordinary  resolution of the  shareholders  of the Company (i) increase its share
capital, (ii) consolidate and divide all or any of its share capital into shares
of larger amount than its existing shares,  (iii) subdivide the Company's shares
or any of them into shares of smaller  amount (as  between the shares  resulting
from the  subdivision,  any of them may have any  preference  or advantage or be
subject to any  restriction  as compared  with the others as  determined  by the
Board)  and (iv)  cancel  any  shares  that,  at the date of the  passing of the
resolution, have not been taken or agreed to be taken by any person and diminish
the  amount of the  Company's  share  capital  by the  amount  of the  shares so
canceled. See Exhibit 1.2, Articles of Association, Part 2, Article 45.

C.       Material Contracts

Trust Deeds

         The Company entered into a Trust Deed with The Law Debenture Trust
Corporation  p.l.c. on November 21, 2002 that constituted the Bonds 2011. Please
see "Item 4. Information on the Company - History and Development of the Company
- Subordinated Convertible Bonds due 2011".

         The Company entered into a Trust Deed with The Law Debenture Trust
Corporation  p.l.c. on May 20, 2003 and three  Supplemental Trust Deeds with The
Law  Debenture  Trust  Corporation  p.l.c.  on July 17, 2003,  July 21, 2003 and
August 8, 2003 that  together  constituted  the Bonds 2013.  Please see "Item 4.
Information  on  the  Company  -  History  and  Development  of  the  Company  -
Subordinated Convertible Bonds due 2013".

Placing Agreement

         The Company entered into a share placing agreement with J.P. Morgan
Securities  Limited on October 7, 2003  pursuant to which,  the  Company  issued
10,239,100 Ordinary Shares to investors.

         Please see "Item 5 - Operating and Financial Review and Prospects -
Liquidity and Capital Resources - Share Placing".

Facility Agreement

         The Company,  Barings (Guernsey)  Limited,  as trustee of the Platinum
Trust,  The  Governor  and Company of The Bank of Scotland and The Royal Bank of
Scotland plc entered into the Facility Agreement on June 16, 2003.

                                       42

<PAGE>

         Please see "Item 5 - Operating and Financial Review and Prospects -
Liquidity and Capital Resources - Facility Agreement" for a description of the
Facility Agreement.

         Except as disclosed in this Item, there are no material  contracts
(other than  contracts  entered into in the ordinary  course of business)  which
have been entered into by the Company within the two years immediately preceding
the date of this document and there are no other contracts (other than contracts
entered  into in the ordinary  course of  business)  entered into by the Company
which  contain any  provision  under which the  Company  has any  obligation  or
entitlement which is material to the Company as of December 31, 2003.

D.       Exchange Controls

         Limitations  Imposed by the Laws of the United Kingdom.  There are no
governmental  laws,  decrees or  regulations in the United Kingdom that restrict
the export or import of capital  (including  foreign exchange  controls) or that
affect the remittance of dividends,  interest or other payments to  non-resident
holders  of the  Company's  securities.  The laws of the  United  Kingdom do not
impose any limitations on the right of non-resident or foreign owners to hold or
vote in connection with the Company's securities.

         Limitations  Imposed by the Company's  Charter  Documents and the
Trust Deed. The Ordinary Shares were offered in the United States pursuant to an
exemption from registration under Section 4(2) of the Securities Act, Regulation
D thereunder, and exemptions under applicable state laws. Accordingly, all share
certificates  initially  issued  to  U.S.  investors  bear  appropriate  legends
addressing restrictions on transfer.  These restrictions include a limitation on
the number of U.S. persons who have acquired  securities of the Company from the
Company  or its  agents  or  affiliates  ("Direct  Purchasers")  or who are U.S.
resident transferees of Direct Purchasers to no more than 75.

         The  Company  also will have the right to require the  transfer of
securities to the extent necessary to maintain at 75 or fewer the number of U.S.
persons  beneficially  owning its securities who acquired such securities either
from  the  Company  or its  agents  or  affiliates  or from  any  U.S.  resident
transferee  of such Direct  Purchasers.  In addition,  the Company will have the
right to require the transfer of its  securities if the  Directors  become aware
that the  securities may be held or owned by any person or persons whose holding
or ownership might, in the determination of the Board:

(i)      cause a pecuniary or tax disadvantage to the Company or any other
         holder of Company securities; or

(ii)     require a registration of the Company as an investment company under
         the Investment Company Act.

         Further,  the Company's  Memorandum of Association  requires the
Directors  to direct the  transfer of the  Company's  securities  if they become
aware that the  securities  may be held or owned by a pension  or other  benefit
plan subject to Title I of the United States Employee Retirement Income Security
Act of 1974,  as amended  ("ERISA")  and in the  opinion of the  Directors,  the
Company's  assets  may  be  considered  "plan  assets"  within  the  meaning  of
regulations adopted under ERISA.

                                       43

<PAGE>

         The Company has not registered  under the Exchange Act for the purpose
of facilitating  secondary  market trading with respect to its securities in the
United  States,  and the Company  does not intend,  directly or  indirectly,  to
facilitate such secondary market activity.

E.       Taxation

         Investment  Trust Status.  The current  conditions for a company to be
approved by the Inland  Revenue as an investment  trust are set forth in Section
842. In order to be approved as an investment  trust for U.K. tax purposes,  the
Company  must  comply  with  the  following  conditions  throughout  each of the
accounting periods for which it seeks such approval:

(i)      the Company must not be a close company as defined for U.K. tax
         purposes;

(ii)     the Company must be resident in the U.K. for U.K. tax purposes;

(iii)    the Company's income must consist wholly or mainly of "eligible
         investment  income," meaning,  in the context of the Company,
         that its income must be derived wholly or mainly from shares or
         securities;

(iv)     the Company must not acquire  shares or  securities  in any one company
         if such shares or securities  (taken  together)  would represent more
         than 15% of the Company's  investments  by value at the time of
         acquisition.  For this purpose,  unit trusts will normally be treated
         as companies and units  therein as shares of such  companies.  There
         are also special rules under which all of the  Company's  holdings of
         shares or  securities in a group (as defined for the purposes of
         Section 842) will be aggregated  and treated as one holding in a single
         company for the purposes of this  condition.  Further,  if the
         Company's  interest in a company or group increases due to additional
         investment being made in that company or in any member of that group,
         the entire  interest  will be treated as having been acquired at the
         time of the increased investment for the purposes of satisfying the
         above condition;

(v)      the shares making up the Company's ordinary share capital must be
         listed in the Official List;

(vi)     the  distribution as dividends of surpluses  arising from the
         realization of investments  must be prohibited by the Company's
         memorandum or Articles of Association; and

(vii)    The  Company  must not retain  more than 15% of its  eligible
         investment  income,  meaning in the  context of the Company the
         income it derives from shares and securities.

         Whether or not the Company is approved in respect of an accounting
period can only be  determined  retrospectively.  There can be no  guarantee  in
advance that the Company will be approved in respect of any  accounting  period.
In the event the Company is not  approved as an  investment  trust for U.K.  tax
purposes,  there would be no direct U.K.  tax  consequences  to investors in the
Company. The consequence for the Company itself, however, would be that it would
be liable for U.K. corporation tax on its realized capital gains.


                                       44


         The last  accounting  period for which the Company has been treated as
approved by the Inland Revenue as an investment  trust is the accounting  period
ended on June 30, 2001. The Directors believe that the actions which the Company
has already taken,  and those which it proposes to take,  should together enable
the Company to continue to satisfy the  conditions of Section 842 for accounting
periods  commencing after June 30, 2001. See "Item 4. Information on the Company
- Business Overview."

         The Company will not be liable for U.K.  corporation tax on capital
gains  realized  during any  accounting  period for which it is  approved  as an
investment trust.  However,  the Company will be liable for U.K. corporation tax
on its income in each of its accounting periods. Certain investments in Investee
Companies will be held by the Company through Delaware limited partnerships.  As
long as the Inland  Revenue  maintains  its current  view,  the  disposition  of
Investee Companies held though Delaware limited  partnerships  should be treated
as giving  rise to  proceeds of a capital  nature.  There can be no  assurances,
however,  that the Inland  Revenue will not change its view of Delaware  limited
partnerships,  which could cause the Company to be treated as  realizing  income
(rather than capital  proceeds) upon a realization of an interest in an Investee
Company which is so held.

         Income and  Capital  Gains  Recognition.  It is intended  that the
Company's  income  will  be  derived  mainly  from  shares  and  securities.   A
significant  portion of the  Company's  income and capital  gains is expected to
derive from future distributions in respect of its investments in the Funds. The
Company will account for such  distributions  by  references  to the  underlying
source of such  distributions.  The Directors  expect that  distributions to the
Company  in respect  of its  investments  will  consist  principally  of the net
proceeds of realizations of investments held by the Funds and,  therefore,  will
be treated as capital gains rather than as ordinary income.

         Distributions  receivable by the Company which arise from dividends,
interest,  and other revenue items received by the Funds will be credited to the
Company's   revenue  account  when  such  income   distributions  are  declared.
Investment income arising from directly held investments of the Company will, in
the case of  dividends,  be  included  as revenue in the period in which the due
date for payment of the  dividend  arises  and, in the case of interest  income,
together with interest payable and all other revenue expenses,  be treated on an
accruals  basis.  The  proceeds,  net of  costs,  from  any  realization  of the
Company's  investments,   including  distributions  to  it  in  respect  of  its
investments which arise from realizations of investments held by the Funds, will
be credited, when declared, to a non-distributable capital reserve.

         Dividend  Policy.  In order to comply with the current  conditions for
approval as an investment trust for U.K. tax purposes, the Company is prohibited
by its  Articles of  Association  from  distributing  as  dividends  any capital
surpluses  arising from the  realization of its  investments.  Accordingly,  any
dividends paid by the Company will be funded out of its revenue  account.  It is
intended that the Company will make sufficient  dividend payments to ensure that
it is able to meet the current  conditions  for approval as an investment  trust
for U.K. tax purposes.  The Directors expect that any returns for holders of the
Ordinary  Shares will derive  primarily  from the  capital  appreciation  of the
Ordinary Shares rather than from their dividend income.

         Tax Treaty  Between the United  Kingdom and the United States.  A U.S.
investor in Ordinary  Shares that is a resident of the United  States within the
meaning of the double tax treaty  between the U.S. and the U.K.  (the  "Treaty")
will be  entitled  to  certain  benefits  under the Treaty  with  respect to the
receipt of dividends  on the  Ordinary  Shares.  Capital  gains  realized on the
disposition of such a U.S.  investor's  investments in the Ordinary  Shares will
not be subject to tax in the U.K.  While the Treaty allows the United Kingdom to
tax dividend  distributions  paid to U.S. Holders,  the Treaty limits to 15% the
rate of tax that may apply to such  distributions  so long as the Shares are not
held as part of a U.S. holder's  permanent  establishment  located in the United
Kingdom.  However,  the  United  Kingdom  does not  currently  impose a tax with
respect to Shares that are not so held.


                                       45

<PAGE>

United States Taxation

         General.  The following is a statement of material U.S.  federal income
tax  considerations  for investors in Ordinary Shares that are U.S. Holders,  as
defined below,  and is based upon existing U.S. federal income tax law, which is
subject to change,  possibly  with  retroactive  effect.  This  summary does not
discuss all aspects of U.S.  federal  income  taxation  that may be important to
particular investors in light of their individual investment circumstances, such
as investors subject to special tax rules,  including:  financial  institutions,
insurance companies, broker-dealers, tax-exempt organizations, persons that will
hold Ordinary Shares as part of a straddle,  hedge, conversion,  or constructive
sale  transaction for U.S. federal income tax purposes or that have a functional
currency other than the U.S.  dollar,  or holders of 10% or more of the Ordinary
Shares,  by vote or value,  all of which may be subject to tax rules that differ
significantly  from those summarized  below. In addition,  this summary does not
discuss any foreign,  or U.S. state or local, tax  considerations.  This summary
assumes that investors will hold their Ordinary  Shares as "capital  assets" for
U.S.  federal income tax purposes.  Investors  should consult with their own tax
advisors regarding the U.S. federal, state and local, as well as foreign, income
and other tax  considerations  of the purchase,  ownership,  and  disposition of
Ordinary Shares.

         For purposes of this summary,  a "U.S.  Holder" is a beneficial  owner
of  Ordinary  Shares  that is,  for U.S.  federal  income tax  purposes,  (i) an
individual  who  is  a  citizen  or  resident  of  the  United  States,  (ii)  a
corporation,  or other  entity  that is  taxable  as a  corporation,  created or
organized  under  the  laws of the  United  States  or any  state  or  political
subdivision  of the  United  States,  (iii) an  estate  the  income  of which is
includible in gross income for U.S.  federal  income tax purposes  regardless of
its  source,  or (iv) a trust  the  administration  of which is  subject  to the
primary  supervision  of a court in the United  States and for which one or more
U.S. persons have the authority to control all substantial  decisions,  or which
elects under U.S.  Treasury  regulations  to be treated as a U.S.  person.  If a
partnership  holds Ordinary  Shares,  the U.S. federal income tax treatment of a
partner will generally  depend upon the status of the partner and the activities
of the partnership.

         Taxation of Dividends.  Subject to the discussion under "Passive
Foreign  Investment  Company Status" below,  distributions  to U.S. Holders will
constitute  dividend  income for U.S.  federal income tax purposes to the extent
such  distributions are made from the Company's current or accumulated  earnings
and  profits,   as  determined  in  accordance  with  U.S.  federal  income  tax
principles.  Such  dividends  will not be  eligible  for the  dividends-received
deduction  otherwise  allowed  to U.S.  corporations  in  respect  of  dividends
received from other U.S.  corporations.  The amount of any such dividend will be
the U.S. dollar value of the British pounds sterling received, determined at the
spot British pound / U.S. dollar exchange rate on the date such  distribution is
includible  in  the  income  of the  U.S.  Holder,  regardless  of  whether  the
distribution  is in fact converted  into U.S.  dollars at that time. Any gain or
loss  recognized  upon a subsequent  sale or conversion of pounds sterling for a
different amount will be U.S. source ordinary income or loss.


                                       46

<PAGE>

         Subject to the discussion  under  "Passive  Foreign  Investment
Company Status" below, to the extent that the amount of any distribution exceeds
the Company's current and accumulated  earnings and profits,  it will be treated
first as a tax-free return of the U.S. Holder's tax basis in its Ordinary Shares
to the extent  thereof,  and then as capital gain. The Company does not maintain
calculations of earnings and profits in accordance with U.S.  federal income tax
principles.  Dividends  paid  by the  Company  will  constitute  foreign  source
dividend income for U.S. federal income tax purposes, which may be relevant to a
U.S.  Holder in calculating  such holder's  foreign tax credit  limitation  with
respect to foreign taxes paid or accrued by such U.S. Holder. Under the Internal
Revenue Code of 1986, as amended (the "Code"),  the  limitation on foreign taxes
eligible for credit is calculated separately with respect to specific classes of
income.  For this  purpose,  dividends  paid by the Company  will  generally  be
"passive"  income  or,  in the case of  certain  holders,  "financial  services"
income.

         Taxation  on Sale,  Exchange or Other  Disposition  of Ordinary
Shares.  Subject to the discussion  under "Passive  Foreign  Investment  Company
Status"  below,  a U.S.  Holder  will  recognize  capital  gain or loss for U.S.
federal income tax purposes on a sale, exchange or other disposition of Ordinary
Shares  equal to the  difference  between  the U.S.  dollar  value of the amount
realized and the U.S.  Holder's  adjusted basis  (determined in U.S. dollars) in
the Ordinary Shares. A U.S.  Holder's adjusted basis in the Ordinary Shares will
generally be equal to the U.S. dollar cost of the Ordinary Shares and reduced by
the U.S.  dollar  amount  of any  distribution  that is  treated  as a return of
capital.  Any such gain or loss will generally be from sources within the United
States.  Under U.S.  federal income tax law, capital gains may be taxed at lower
U.S.  federal  income tax rates than ordinary  income for certain  non-corporate
U.S. Holders. The deductibility of capital losses is subject to limitations.

         Any gain or loss  resulting  from currency  exchange  fluctuations
during the period from the date of the receipt of proceeds  from sale,  exchange
or other  disposition to the date such proceeds are converted into U.S.  dollars
will be treated as U.S. source ordinary income or loss.

         Passive  Foreign  Investment  Company  Status.  In general,  a non-U.S.
corporation such as the Company is a passive foreign investment company ("PFIC")
for U.S.  federal  income tax purposes if, for any taxable  year,  either (i) at
least 75% of its  gross  income  is  passive  income or (ii) at least 50% of the
value,  determined on the basis of a quarterly average, of its assets produce or
are held for the production of passive income. A corporation that owns (directly
or indirectly) at least 25% (by value) of the stock of another corporation takes
into  account  its  proportionate  share of the owned  corporation's  assets and
income in  applying  the asset and  income  tests.  The  Company  expects  to be
classified as a PFIC for U.S. federal income tax purposes.

         Under the PFIC rules,  unless a U.S.  Holder makes either a "QEF
election" or a  "mark-to-market  election,"  each as described  below,  the U.S.
Holder will be subject to certain punitive interest charge rules with respect to
any "excess  distribution" by the Company (defined as the U.S.  Holder's ratable
share of distributions  (including return of capital  distributions) in any year
that  exceeds  125% of the  average  annual  distribution  received by such U.S.
Holder in the three preceding  years or the U.S.  Holder's  holding  period,  if
shorter) and any gain realized on the sale or other  disposition of PFIC shares.
Under the interest charge rules, an excess  distribution or gain will be treated
as ordinary income and will be subject to tax as if (i) the excess  distribution
or gain had been realized ratably over the U.S.  Holder's  holding period,  (ii)
the amount deemed  realized had been subject to tax in each year of that holding
period at the highest  applicable tax rate for such year, and (iii) the interest
charge  generally  applicable  to  underpayments  of tax had been imposed on the
taxes  deemed to have been  payable in all years  prior to the year in which the
excess distribution or gain was actually realized. For purposes of the foregoing
rules, a U.S.  Holder who uses such Ordinary  Shares as security for a loan will
be treated as having disposed of such Ordinary Shares.

                                       47

<PAGE>

         The tax  consequences  described above may be avoided if a U.S. Holder
is eligible for and timely makes an election  either (i) to treat the Company as
a  "qualified  electing  fund"  ("QEF") or (ii) to mark the  Company's  Ordinary
Shares to market, each as described below.  Generally,  a QEF election should be
made on or before the due date for  filing a U.S.  Holder's  federal  income tax
return for the first taxable year for which it held Ordinary Shares. If a timely
QEF  election is made,  an electing  U.S.  Holder will be required to include in
gross  income  such  holder's  pro rata share of our  ordinary  earnings  and to
include  as  long-term  capital  gain such  holder's  pro rata  share of our net
capital  gain  for  the  taxable  year,  whether  or not  any of our  income  is
distributed to U.S. Holders in such year. If the Company does not distribute all
of its earnings in a taxable year, a U.S.  shareholder making a QEF election may
also be permitted  to elect to defer  payment of some or all of the taxes on the
QEF's income,  subject to an interest charge on the deferred amount. The Company
will provide, upon request, the information required for U.S. federal income tax
purposes to permit U.S. Holders to make a QEF election.

         Generally,  a U.S.  shareholder  of  "marketable  stock"  under the
PFIC rules may be able to avoid the  application  of the  interest  charge rules
described above by making a "mark-to-market  election." The Ordinary Shares will
be treated as marketable  stock if (i) the exchange on which the Ordinary Shares
are  traded  (the  LSE)  has  trading  volume,  listing,  financial  disclosure,
surveillance  and  other   requirements   designed  to  prevent  fraudulent  and
manipulative  acts and  practices,  to remove  impediments  to and  perfect  the
mechanism of a free and open, fair and orderly market, and to protect investors,
(ii) the laws of the  country in which the  exchange is located and the rules of
the exchange  ensure that such  requirements  are actually  enforced,  (iii) the
rules of the exchange  effectively  promote active trading of listed stocks, and
(iv) the Ordinary Shares are actively traded on that exchange, meaning that they
are traded other than in de minimis  quantities  on at least 15 days during each
calendar quarter.  If the  mark-to-market  election is available,  a U.S. Holder
making the  election  would  include as ordinary  income,  for each taxable year
during which such stock is held, an amount equal to the increase in value of the
U.S.  Holder's  Ordinary Shares  (measured as of the close of the U.S.  Holder's
taxable  year) and would be allowed a deduction for any decrease in the value of
its  Shares  for  the  year,  but  only to the  extent  of  previously  included
mark-to-market income.

         Whether or not the QEF or mark-to-market elections are made, a U.S.
Holder of PFIC stock must annually file IRS Form 8621.

         Information  Reporting and Backup  Withholding.  Dividend payments with
respect to Ordinary Shares and proceeds from the sale, exchange or redemption of
Ordinary Shares may be subject to information  reporting to the IRS and possible
U.S.  backup  withholding.  The U.S backup  withholding  rate is currently  28%.
Backup withholding will not apply,  however, if the beneficial owner of Ordinary
Shares  furnishes a correct  taxpayer  identification  number or provides  under
penalties of perjury a certificate of foreign status or otherwise establishes an
exemption from backup withholding. Amounts withheld under the backup withholding
rules may be credited against a beneficial owner's federal income tax liability,
and the beneficial  owner may obtain a refund of any excess amounts  withheld by
filing a claim for refund with the IRS.

F.       Dividends and Paying Agents

         Not applicable to this Form 20-F.

                                       48

<PAGE>


G.       Statement by Experts

         Not applicable to this Form 20-F.

H.       Documents on Display

         Copies of the documents  referred to in this Form 20-F are  available
for  inspection  during  normal  business  hours on any weekday (public holidays
excepted) at the Company's registered office.

I.       Subsidiary Information

         Not applicable to this Form 20-F.

Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The "Risks"  section of the Notes to the  Accounts on pages 53 and 54
of the Report and  Accounts  is  incorporated  herein by reference.

         Investment  in private  equity  carries a high degree of risk and may
be subject to sudden and large falls in value  resulting in investors losing the
value of their investments.

Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

         Not applicable to this Form 20-F.


                                       49

<PAGE>




                                     PART II

Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

None.

Item 15. CONTROLS AND PROCEDURES

         (a)      Our principal executive officer and principal financial
officer have  conducted an evaluation  of the  effectiveness  of our  disclosure
controls  and  procedures  as of the end of the period  covered  by this  annual
report. Based on that evaluation,  the principal executive officer and principal
financial  officer concluded that such controls and procedures were satisfactory
to ensure  that  material  information  regarding  our  company,  including  our
consolidated  subsidiaries,  was made known to such  officers  by others  within
those entities,  particularly  during the period in which this annual report was
being prepared.

         (b)      There  have not been  significant  changes in the registrant's
internal  controls or in other  factors  that could  significantly  affect these
controls  subsequent  to the  date of  their  evaluation,  nor  were  there  any
significant  deficiencies  or material  weaknesses  that required the Company to
take any corrective actions.

Item 16.         [RESERVED]

Item 16A.         AUDIT COMMITTEE FINANCIAL EXPERT

         Our board of directors has determined that J.J. McLachlan, a member
and the  Chairman  of the  Audit  Committee,  is the audit  committee  financial
expert.

Item 16B.         CODE OF ETHICS

         The Company is reviewing its governance arrangements in response to
recent  changes  to the U.K.  Listing  Rules  and,  as part of this  review,  is
developing a Code of Ethics that will be applicable  to our principal  executive
officer and principal financial officer.

Item 16C.         PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Our principal independent auditor is Ernst & Young LLP.


                                       50
<PAGE>

Fees and Services

         During the years ended June 30, 2002 and December 31, 2003, and the
6-month period ended December 31, 2002, we paid the following fees for
professional services to Ernst & Young:

<TABLE>
<CAPTION>

                                                                  Six Months Ended
                                           Year Ended December    December 31, 2002    Year Ended June
                                                 31, 2003                                30, 2002
                                                                   (GBP in thousands)

      <S>                                          <C>                  <C>                  <C>
      Audit Fees                                    50                   51                   89
      Audit-Related Fees                            --                   --                   21
      Tax Fees                                      --                   --                   --
      All Other Fees                                -                     -
      Total                                         50                   51                  110
</TABLE>

         Audit-Related Services comprise services provided in relation to the
issue of convertible bonds.

         Tax Services have not been provided by Ernst & Young LLP.

         Other Services have not been provided by Ernst & Young LLP.

         Our Audit Committee is responsible for the oversight of our independent
auditor's  work. Our Audit  Committee's  policy is to pre-approve  all audit and
non-audit  services provided by Ernst & Young.  These services may include audit
services, audit-related services and other services, as described above. In such
an event, the Audit Committee sets forth its pre-approval in detail, listing the
particular  services or  categories  of  services  which are  pre-approved,  and
setting  forth a specific  budget for such  services.  The Chairman of the Audit
Committee,  J.J. McLachlan,  may issue such a pre-approval.  Additional services
may be pre-approved on an individual basis.

         In the fiscal year ended December 31, 2003, our Audit Committee
pre-approved all audit and non-audit services provided by Ernst & Young LLP.

Item 16D.         EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.

Not applicable to this Form 20-F.

Item 16E.         PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
                  PURCHASERS

Not applicable to this Form 20-F.

                                       51

<PAGE>



                                    PART III


Item 17. FINANCIAL STATEMENTS

         The financial  statements  required by Item 17, together with the
report of Ernst & Young thereon,  are included as follows on Pages F1 through
F34 of this report:

Report of independent auditors                                           F1
Consolidated statement of total return for the year
 ended December 31, 2003, the six-months ended December 31, 2002
 and the years ended June 30, 2002 and 2001                              F2
Consolidated balance sheets at
 December 31, 2003 and December 31, 2002                                 F3
Consolidated cash flow statements for the year ended
 December 31, 2003, the six months ended December 31, 2002
 and the years ended June 30, 2002 and 2001                              F4
Notes to the accounts                                                    F6

Item 18. FINANCIAL STATEMENTS

         Not applicable to this Form 20-F.

Item 19. EXHIBITS

         The following exhibits are filed as a part of this annual report:



<TABLE>
<CAPTION>

Exhibit                                              Exhibit Name
Number
<S>                                                      <C>                                                 <C>
1.1             Memorandum of Association                                                                     *
1.2             Articles of Association, as adopted on December 5, 2000                                       *
2.1             Trust Deed, dated November 21, 2001, between the Company and The Law Debenture Trust         ***
                Corporation p.l.c.
2.2             Trust Deed, dated May 20, 2003, between the Company and The Law Debenture Trust             Filed
                Corporation p.l.c.                                                                         herewith
2.3             First Supplemental Trust Deed, dated July 17, 2003, between the Company and The Law         Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
2.4             Second Supplemental Trust Deed, dated July 21, 2003, between the Company and The Law        Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
2.5             Third Supplemental Trust Deed, dated August 8, 2003, between the Company and The Law        Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
4.1             Deposit Agreement, dated November 30, 2000, between the Company and The Bank of New           **
                York
4.2             Services Agreement, dated March 16, 2001, between the Company and Schroder Ventures           **
                K.K. (Japan)
4.3             Services Agreement, dated March 16, 2001, between the Company and Schroder Capital            **
                Partners Limited (Asia)
4.4             Services Agreement, dated March 16, 2001, between the Company and Schroders &                 **
                Associates Canada Inc. (Canada)
4.5             Services Agreement, dated March 16, 2001, between the Company and Schroder Ventures           **
                Life Sciences Advisers Limited (Life Sciences)

                                       52

<PAGE>


4.6             Services Agreement, dated March 16, 2001, between the Company and Schroder Venture            **
                Partners LLC (U.S.)
4.7             Services Agreement, dated March 16, 2001, among the Company, Schroder Ventures                **
                (London) Limited and Schroder Ventures Europe BV
4.8             Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroder Ventures Limited
4.9             Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroder Ventures Investments Limited
4.10            Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroders plc
4.11            Fund of Funds Agreement, dated March 16, 2001, between Schroder Ventures (London)             **
                Limited and Schroder Investment Management (Ireland) Limited
4.12            Facility Agreement, dated June 16, 2003, between the Company,  Barings (Guernsey)           Filed
                Limited, The Governor and Company of The Bank of Scotland and The Royal Bank of            herewith
                Scotland plc
4.13            The Executive Share Option Plan                                                               **
4.14            Placing Agreement, dated October 3, 2003, between the Company and J.P. Morgan               Filed
                Securities Limited                                                                         herewith
8.1             List of Subsidiaries of the Company                                                           **
10.1            The Company's 2003 Report and Accounts                                                      Filed
                                                                                                           herewith
10.2            The Company's December 2002 Report and Accounts                                              ****
10.3            The Company's 2002 Report and Accounts                                                       ***
10.4            Incorporated Sections of the Company's 2001 Report and Accounts                             Filed
                                                                                                           herewith
10.5            Incorporated Sections of the Company's Interim 2001 Report and Accounts                     Filed
                                                                                                           herewith
12.1            Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)                     Filed
                                                                                                           herewith
12.2            Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)                     Filed
                                                                                                           herewith
13.1            Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(b)                     Filed
                                                                                                           herewith
13.2            Certification of Chief Financial Officer pursuant to SEC Rule  13a-14(b)                    Filed
                                                                                                           herewith
</TABLE>


 *  Incorporated herein by reference to the Company's 2000 annual report on
    Form 20-F, filed with the Commission on January 16, 2001

 ** Incorporated herein by reference to the Company's 2001 annual report on
    Form 20-F, filed with the Commission on November 8, 2001

 ***  Incorporated herein by reference to the Company's 2002 annual report on
      Form 20-F, filed with the Commission on December 20, 2002

 ****  Incorporated herein by reference  to the Company's December 2002
       transition report on Form 20-F, filed with the Commission on April 3,
       2003


                                       53

<PAGE>



                                   SIGNATURES

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                  SVG CAPITAL PLC
                  (Registrant)


                                    By:  /s/ John Spedding
                                           John Spedding, for and on behalf of
                                           Schroder Investment Management
                                           Limited, Secretaries


Date: July 9, 2004


                                       54

<PAGE>


SVG Capital plc
Report of Independent Auditors


To: The Directors
     SVG Capital plc

We have audited the  consolidated  balance sheets of SVG Capital plc at December
31, 2003 and 2002, and the related  consolidated  statements of total return and
cash flows for the year ended  December 31, 2003,  the six months ended December
31,  2002 and the years  ended June 30, 2002 and 2001.  These  accounts  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these accounts based on our audits.

We conducted our audits in accordance with United Kingdom auditing standards and
the standards of the Public Company Accounting  Oversight Board (United States).
Those standards  require that we plan and perform the audit to obtain reasonable
assurance about whether the accounts are free of material misstatement. An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures  in the accounts.  An audit also includes  assessing the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall accounts presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion,  the accounts  referred to above present fairly, in all material
respects, the consolidated financial position of SVG Capital plc at December 31,
2003 and 2002, and its consolidated total return and its consolidated cash flows
for the year ended December 31, 2003, the six months ended December 31, 2002 and
the years ended June 30, 2002 and 2001 in conformity with accounting  principles
generally  accepted in the United Kingdom which differ in certain  respects from
those  generally  accepted  in the  United  States  (see Note 30 of Notes to the
Accounts).


                                                           /s/ Ernst & Young LLP
London, England

March 26, 2004

                                       F1

<PAGE>

SVG Capital plc
CONSOLIDATED STATEMENT OF TOTAL RETURN (Incorporating The Revenue Account)


<TABLE>
<CAPTION>

                                                                          For the year ended
                                                                           December 31, 2003
                                                        Note          Revenue      Capital        Total
                                                                       GBP000       GBP000       GBP000
<S>                                                      <C>              <C>         <C>          <C>
Realized gains on investments                            12                 -       10,894       10,894

Unrealized gains on investments                          12                 -       15,128       15,128

Gains on investments                                                        -       26,022       26,022

Foreign exchange gains on                                                   -          938          938
  non-cash balances

Foreign exchange gains/(losses) on
  cash balances                                                           178        (630)        (452)
Income                                                    2             6,857            -        6,857
Expenses                                                  3           (7,642)      (3,357)     (10,999)

Net (deficit)/return before finance   costs and                         (607)       22,973       22,366
taxation

Interest payable and similar charges                      7           (5,106)            -      (5,106)

Net (deficit)/return on ordinary   activities before                  (5,713)       22,973       17,260
taxation

Tax on ordinary activities                                9               182            -          182

(Deficit)/return on ordinary activities   after tax                   (5,531)       22,973       17,442
for the year

Minority interest - equity                                                  -         (66)         (66)

(Deficit)/return on ordinary activities                               (5,531)       22,907       17,376
  after tax and minority interest for the
   year attributable to equity
  shareholders (1)

Dividends                                                 8                 -            -            -

(Deficit)/surplus transferred (from)/to reserves                      (5,531)       22,907       17,376

Return per ordinary share                                10           (5.32)p       22.02p       16.70p
Return per ordinary share - diluted                      10           (5.32)p

</TABLE>

The revenue column is the consolidated profit and loss account of the group. All
revenue and capital items derive from continuing operations.  No operations were
discontinued in the year.

(1)   A summary of the significant adjustments to return on ordinary activities
      after tax and minority interest for the year attributable to equity
      shareholders that would be required had US generally accepted accounting
      principles been applied instead of those generally accepted in the United
      Kingdom is set out in note 30.

The notes to the accounts form an integral part of these accounts.

                                       F2

<PAGE>


SVG Capital plc
CONSOLIDATED STATEMENT OF TOTAL RETURN (Incorporating The Revenue Account)

<TABLE>
<CAPTION>
                                                                                              For the six months ended
                                                            For the six months ended              December 31, 2001
                                                                December 31, 2002                    (unaudited)
                                               Note        Revenue     Capital       Total    Revenue    Capital      Total
                                                            GBP000      GBP000      GBP000     GBP000     GBP000     GBP000

<S>                                             <C>             <C>     <C>         <C>          <C>     <C>          <C>
Realized gains on investments                   12               -      57,997      57,997         -     5,077        5,077
Unrealized losses on investments                12               -    (15,420)    (15,420)         -  (16,756)     (16,756)

Gains on investments                                             -      42,577      42,577         -  (11,679)     (11,679)

Foreign exchange losses on                                       -
  non-cash balances                                                          -       (901)         -         -            -

Foreign exchange gains/(losses) on
  cash balances                                                178        (17)        574         26      (94)         (68)

Income                                          2            3,385           -       3,385     4,681         -        4,681
Expenses                                        3          (4,065)           -     (4,065)   (4,131)          -     (4,131)

Net (deficit)/return before finance   costs                  (697)      42,267      41,570       576  (11,773)     (11,197)
and taxation
Interest payable and similar charges            7          (1,523)           -     (1,523)     (276)         -        (276)

Net (deficit)/return on ordinary                           (2,220)      42,267      40,047       300   (11,773)    (11,473)
  activities before taxation
Tax on ordinary activities                      9               36           -          36     (122)         -        (122)

(Deficit)/return on ordinary activities                    (2,184)      42,267      40,083       178   (11,773)    (11,595)
  after tax for the period
Minority interest - equity                                     (1)          23          22       (1)         20          19

(Deficit)/return on ordinary activities                    (5,531)      42,290      40,105       177   (11,753)    (11,576)
  after tax and minority interest for the
   period attributable to equity
  shareholders (1)
Dividends                                       8                -           -           -         -         -            -

(Deficit)/surplus transferred (from)/to                    (2,185)      42,290      40,105       177   (11,753)    (11,576)
reserves

Return per ordinary share                       10         (2.14)p      41.35p      39.21p     0.17p  (11.49)p     (11.32)p
Return per ordinary share - diluted             10         (2.14)p                             0.17p
</TABLE>


The revenue column is the consolidated profit and loss account of the group.
All  revenue and capital items derive from continuing operations. No operations
were discontinued in either period.

(1)   A summary of the significant adjustments to return on ordinary activities
      after tax and minority interest for the period attributable to equity
      shareholders that would be required had US generally accepted accounting
      principles been applied instead of those generally accepted in the United
      Kingdom is set out in note 30.

The notes to the accounts form an integral part of these accounts.

                                       F3

<PAGE>


SVG Capital plc
CONSOLIDATED STATEMENT OF TOTAL RETURN (Incorporating The Revenue Account)

<TABLE>
<CAPTION>

                                                             For the year ended                For the year ended
                                                                June 30 2002                      June 30 2001
                                               Note        Revenue    Capital     Total     Revenue    Capital     Total
                                                            GBP000     GBP000    GBP000      GBP000     GBP000    GBP000
<S>                                             <C>             <C>  <C>        <C>            <C>      <C>       <C>
Realized gains on investments                   12               -    11,914     11,914           -      4,774     4,774
Unrealized losses on investments                12               -   (4,202)    (4,202)           -   (49,190)   (49,190)

Gains on investments                                             -     7,712      7,712           -   (44,416)   (44,416)

Foreign exchange gains/(losses) on                               -         -          -           -         -         -
  non-cash balances

Foreign exchange gains/(losses) on
  cash balances                                                  3        42         45           -      (755)      (755)

Income                                          2            7,674         -      7,674       5,616          -     5,616
Expenses                                        3          (7,293)         -    (7,293)     (2,235)          -    (2,235)

Net (deficit)/return before finance   costs                    384     7,754      8,138       3,381   (45,171)   (41,790)
and taxation

Interest payable and similar charges            7          (1,832)         -    (1,832)       (583)          -      (583)

Net (deficit)/return on ordinary                           (1,448)     7,754      6,306       2,798   (45,171)   (42,373)
  activities before taxation

Tax on ordinary activities                      9            (105)         -      (105)       (141)          -      (141)

(Deficit)/return on ordinary activities                    (1,553)     7,754      6,201       2,657   (45,171)   (42,514)
  after tax for the year

Minority interest - equity                                     (2)        16         14         (2)        104       102

(Deficit)/return on ordinary activities                    (1,555)     7,770      6,215       2,655   (45,067)   (42,412)
  after tax and minority interest for the
   year attributable to equity
  shareholders (1)

Dividends                                       8                -         -          -     (1,841)          -    (1,841)

(Deficit)/surplus transferred (from)/to                    (1,555)     7,770      6,215         814   (45,067)   (44,253)
reserves

Return per ordinary share                       10         (1.52)p     7.60p      6.08p       2.60p   (44.07)p  (41.47)p
Return per ordinary share - diluted             10         (1.52)p                            2.60p
</TABLE>


The revenue column is the consolidated profit and loss account of the group. All
revenue and capital items derive from continuing operations.  No operations were
discontinued in the either year.

(1)   A summary of the significant adjustments to return on ordinary activities
      after tax and minority interest for the year attributable to equity
      shareholders that would be required had US generally accepted accounting
      principles been applied instead of those generally accepted in the United
      Kingdom is set out in note 30.

The notes to the accounts form an integral part of these accounts.

                                       F4

<PAGE>


SVG Capital plc

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                       At December 31      At December 31
                                                                                                 2003                2002
                                                                    Notes                      GBP000              GBP000

<S>                                                                    <C>                        <C>                 <C>
TANGIBLE FIXED ASSETS                                                  11                         399                 282


FIXED ASSET INVESTMENTS
Venture funds and co-investments                                    12/13                     560,287             483,959
UK listed equity funds                                              12/13                       8,184                   -
Money market instruments                                            12/13                      41,877              13,911
                                                                                              610,348             497,870

CURRENT ASSETS
Debtors                                                                14                       6,718               4,490
Cash at bank                                                                                    5,791               4,887
                                                                                               12,509               9,377

CURRENT LIABILITIES
Creditors: amounts falling due within one year                         15                       8,111               4,783

NET CURRENT ASSETS                                                                              4,398               4,594

TOTAL ASSETS LESS CURRENT LIABILITIES                                                         615,145             502,746

Creditors: amounts falling due after more than one year                16                      88,108              39,201

Minority interest - non-equity                                                                    100                 100
Minority interest - equity                                                                        319                 253

NET ASSETS                                                                                    526,618             463,192

CAPITAL AND RESERVES
Called up share capital                                                18                     112,655             102,266
Share premium account                                                  19                      43,114               7,453
Capital redemption reserve                                             20                       3,204               3,204
Share purchase reserve                                                 21                      92,054              92,054
Capital reserve                                                        22                     281,902             258,995
Revenue reserve                                                        23                     (6,311)               (780)

EQUITY SHAREHOLDERS' FUNDS(1)                                          24                     526,618             463,192

Net asset value per ordinary share -undiluted                          25                      467.5p              452.9p
                                   -diluted                            25                      458.7p              445.8p

</TABLE>


(1)   A summary of the significant adjustments to equity shareholders' funds
      that would be required if US generally accepted accounting principles
      were to be applied instead of those generally accepted in the United
      Kingdom is given in note 30.

The notes to the accounts form an integral part of these accounts.

                                       F5

<PAGE>


SVG Capital plc

CONSOLIDATED CASH FLOW STATEMENTS

<TABLE>
<CAPTION>
                                                  For the year       For the six      For the six   For the year   For the year
                                                ended December      months ended     months ended          ended          ended
                                                      31, 2003      December 31,     December 31,       June 30,       June 30,
                                                                            2002             2001           2002           2001
                                                                                      (unaudited)
                                        Note            GBP000            GBP000          GBP'000         GBP000         GBP000
<S>                                                        <C>               <C>            <C>            <C>            <C>
OPERATING ACTIVITIES
Income received on investments                             931               440            1,182          1,567          5,623
Bank interest received                                     424               228              227            454            570
Investment advisory fee income received                  4,442             1,857            3,468          5,047             35
Administrative expenses paid                            (8,068)           (2,433)          (3,626)        (7,279)        (2,417)

Net cash (outflow)/inflow from            26            (2,271)                92           1,251           (211)          3,811
operating activities

RETURN ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                           (2,808)           (1,801)               -              -           (224)
Loan facility finance costs                             (2,361)             (634)             (64)          (550)        (1,046)


Net cash outflow from investments and servicing         (5,169)           (2,435)             (64)          (550)        (1,270)
of finance

TAXATION
Income tax recovered                                        131                -                -              -            339
Overseas tax suffered                                       (8)              (24)            (122)          (117)          (154)

Total tax recovered/(paid)                                  123              (24)            (122)          (117)           185


CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of money market instruments                  (100,720)         (127,797)        (101,752)      (316,731)      (351,516)
Purchase of subsidiaries                                     -                 -                               -            (36)
Purchase of UK listed equity funds                      (7,477)                 -               -              -              -
Purchase of tangible fixed assets                         (221)              (34)            (310)          (311)             -
Sale of money market instruments                        73,052           144,494          102,165        311,001        452,217
Calls paid                                            (110,737)         (122,677)         (53,697)       (77,474)      (156,024)
Capital distributions received                          59,426           104,510           15,784         48,976         53,647

Net cash outflow from capital expenditure and          (86,677)           (1,504)         (37,810)       (34,539)        (1,712)
financial investment


EQUITY DIVIDENDS PAID
Dividends                                                    -                 -           (1,841)        (1,841)        (4,182)

Total dividends paid                                         -                 -           (1,841)        (1,841)        (4,182)

FINANCING
Drawdown from loan facility                               39,996          25,110                -              -              -
Repayment of loan facility                              (39,028)        (26,011)                -              -              -
Proceeds from ordinary share placing                      47,919               -                -              -              -
Issue and listing costs of ordinary shares               (2,448)               -                               -              -
Proceeds from convertible bond issue                      49,797               -             40,000         40,000            -
Issue and listing costs of convertible bonds               (886)            (218)            (579)           (675)            -

Net cash inflow/(outflow) from financing                  95,350           (1,119)           39,421         39,325            -

NET CASH INFLOW/(OUTFLOW)                                 1,356            (4,990)              835          2,067       (3,168)

</TABLE>

                                       F6

<PAGE>


SVG Capital plc

CONSOLIDATED CASH FLOW STATEMENTS (continued)

<TABLE>
<CAPTION>

RECONCILIATION OF NET                           For the year       For the six       For the six    For the year    For the year
CASH FLOW TO MOVEMENT                                  ended      months ended      months ended           ended           ended
IN NET (DEBT)/FUNDS                             December 31,      December 31,      December 31,        June 30,        June 30,
                                                        2003              2002              2001            2002            2001
                                                                                     (unaudited)
                                                      GBP000            GBP000           GBP'000          GBP000          GBP000

<S>                                                    <C>             <C>                   <C>           <C>           <C>
Increase/(decrease) in cash during the
period                                                 1,356           (4,990)               835           2,067         (3,168)
Cash acquired on purchase of subsidiaries                  -                 -                 -               -             834
Exchange (loss)/gain on cash balances                  (452)               574              (68)              45           (755)
Increase in convertible bonds                       (48,418)              (49)          (39,343)        (39,152)               -

Change in net debt                                  (47,514)           (4,465)          (38,576)        (37,040)         (3,089)
Net (debt)/funds at the beginning of the
period                                              (34,314)          (29,849)             7,191           7,191          10,280

Net (debt)/funds at the end of the period           (81,828)          (34,314)          (31,385)        (29,849)           7,191
</TABLE>



(1)   The significant differences between the cash flow statements presented
      above and those required under US generally accepted accounting principles
      are described in note 30.

                                       F7


<PAGE>


SVG Capital plc

NOTES TO THE ACCOUNTS (continued)

1.       ACCOUNTING POLICIES
         A summary of the more important accounting policies is set out below:

         a)       These accounts have been prepared under the historical cost
         convention modified to include certain investments at valuation, and in
         accordance with accounting standards applicable in the United Kingdom
         and the Statement of Recommended Practice "Financial Statements of
         Investment Trust Companies".

         b)       Tangible fixed assets
         The Group's assets include leasehold improvements, office equipment,
         telecommunications and computers which are included at cost and are
         depreciated over their useful lives on a straight line basis at rates
         varying between 20% and 33% per annum.

         c)       Fixed asset investments
         Equity share investments, fixed income and loan investments, interests
         in partnerships and unit trusts, together with interests in any
         associated undertakings and the investments in the various Schroder
         Ventures' and Permira funds, will be regarded as financial fixed assets
         as they are held for long term investment purposes. The treatment of
         associated undertakings in the same way as other fixed asset
         investments is in accordance with UK Financial Reporting Standard 9.

         d)       Valuation of investments
         The Company's investments in the various Schroder Ventures' and Permira
         funds are valued by the Directors at the balance sheet date by valuing
         the underlying investments comprising the portfolios of the Schroder
         Ventures' and Permira funds in accordance with the valuation policies,
         as adjusted, where appropriate, for other assets and liabilities of the
         Schroder Ventures' and Permira funds. The valuation policies of the
         Company are consistent with the current guidelines issued by the
         British Venture Capital Association ("BVCA"), which came into effect on
         August 1, 2003.


         Carried interest and management fees
         For the purpose of valuing the Company's holdings in the various
         Schroder Ventures' and Permira funds, management fees due to Schroder
         Ventures or Permira will be accounted for on the accruals basis. An
         estimate of Carried Interest, the allocation to Schroder Ventures or
         Permira of 20% of the profits arising in each Fund calculated by
         reference to the valuations of the underlying investments, will be
         deducted from the values of the Company's holdings. Disclosed
         valuations of individual investee companies will, by necessity, be
         shown before deduction of Carried Interest.

         e)       Income and capital gains recognition
         The Company's income and capital gains are expected to be derived
         primarily from future distributions in respect of its holdings in
         Schroder Ventures' or Permira funds. The Company accounts for such
         distributions by reference to the underlying source of the
         distribution.

         Revenue distributions receivable by the Company which arise from
         dividends, interest and other revenue items through the Schroder
         Ventures' or Permira funds are credited to the Company's revenue
         account when such income distributions are declared.  Investment
         income arising from directly held investments of the Company are, in
         the case of dividends, be included as revenue in the period in which
         they go ex-dividend, and, in the case of interest income which,
         together with interest payable and all other revenue expenses, are
         treated on an accruals basis.

         Realized profits on capital distributions receivable by the Company
         which arise from the realization of investments within the Schroder
         Ventures' and Permira funds are credited to the Company's capital
         reserve when they are declared.

                                       F8



<PAGE>

NOTES TO THE ACCOUNTS (continued)

1.       ACCOUNTING POLICIES (continued)

         f)       Foreign currencies
         Transactions denominated in foreign currencies are translated at the
         exchange rate at the date of the transaction.  Assets and liabilities
         recorded in foreign currencies are translated into sterling at exchange
         rates at the date of the accounts. Exchange differences arising from
         the re-translation of the opening net investments will be taken to
         reserves and reported in a consolidated statement of total return.
         Foreign subsidiary financial statements are translated into sterling
         using the closing rate method with all exchange differences taken to
         reserves and reported in the Consolidated Statement of Total
         Return. All other foreign exchange differences will be included as an
         exchange gain or loss in capital reserve or in the revenue account
         depending on whether the gain or loss of a capital or revenue nature
         respectively.

         g)       Finance costs
         All finance costs are charged directly to revenue.

         h)       Taxation
         Deferred tax is provided in accordance with FRS19 on all timing
         differences that have originated but not reversed by balance sheet
         date. Deferred tax assets are only recognized to the extent that they
         are recoverable.

         i)       Basis of consolidation
         The Consolidated Statement of Total Return and Balance Sheet include
         the financial statements of the company and its subsidiary undertakings
         made up to the balance sheet date using the purchase method. In the
         Company's accounts, investments in subsidiary undertakings are stated
         in accordance with the policies outlined under (d) above.

         j)       Capital reserves
         Capital Reserve - Realized
         The following are accounted for in this reserve:

         -        gains and losses on the realization of investments calculated
         by reference to their carrying value at the previous balance sheet
         date.
         -        realized exchange differences of a capital nature.
         -        other expenses of a capital nature.

         Capital Reserve - Unrealized
         The following are accounted for in this reserve:

         -        increases and decreases in the revaluation of investments held
         at the year-end.
         -        unrealized exchange differences of a capital nature.
         -        exchange differences arising on consolidation.

                                       F9


<PAGE>


NOTES TO THE ACCOUNTS (continued)

2.   INCOME

<TABLE>
<CAPTION>
                                                                                                               For the
                                                                                                            year ended
                                                                                                           December 31
                                                                                                                  2003
                                                                                                                GBP000

<S>                                                                                                                <C>
Income from money market instruments                                                                               454
Income from venture funds and co-investments                                                                       564
Interest receivable and similar income                                                                             401
Income from investment advisory services                                                                         5,438

                                                                                                                 6,857
</TABLE>

<TABLE>
<CAPTION>


                                                                                   For the six             For the six
                                                                                  months ended            months ended
                                                                                   December 31             December 31
                                                                                          2002                    2001
                                                                                                           (unaudited)
                                                                                        GBP000                 GBP'000

<S>                                                                                        <C>                     <C>
Income from money market instruments                                                       267                     394
Income from venture funds and co-investments                                               153                     764
Interest receivable and similar income                                                     249                     292
Income from investment advisory services                                                 2,716                   3,231

                                                                                         3,385                   4,681

                                                                                       For the                 For the
                                                                                    year ended              year ended
                                                                                       June 30                 June 30
                                                                                          2002                    2001
                                                                                        GBP000                  GBP000

Income from money market instruments                                                       767                   3,564
Income from venture funds and co-investments                                               770                   1,403
Interest receivable and similar income                                                     452                     541
Income from investment advisory services                                                 5,685                     108

                                                                                         7,674                   5,616
Income arises mainly from UK assets or operations.

</TABLE>

                                      F10

<PAGE>

NOTES TO THE ACCOUNTS (continued)

3.   EXPENSES

<TABLE>
<CAPTION>
                                                                                                                    For the
                                                                                                                 year ended
                                                                                                                December 31
                                                                                                                       2003
                                                                                                                     GBP000
<S>                                                                                                                     <C>
Fees payable to Schroder Investment Management Ltd (note 28)                                                            322
Directors' remuneration (note 4)                                                                                      1,504
Staff costs (note 5)                                                                                                  3,773
Depreciation (note 11)                                                                                                  100
General expenses                                                                                                      1,893
Enlargement of operations costs                                                                                           -
EDR listing and issue costs                                                                                               -
Auditors' remuneration
- audit                                                                                                                  46
- non-audit                                                                                                               4

                                                                                                                      7,642
</TABLE>


<TABLE>
<CAPTION>
                                                                                                 For the six      For the six
                                                                                                months ended     months ended
                                                                                                 December 31      December 31
                                                                                                        2002             2001
                                                                                                      GBP000           GBP000
<S>                                                                                                      <C>              <C>
Fees payable to Schroder Investment Management Ltd (note 28)                                             192              141
Directors' remuneration (note 4)                                                                         885              579
Staff costs (note 5)                                                                                   1,746            2,408
Depreciation (note 11)                                                                                    45               12
General expenses                                                                                       1,146              896
Enlargement of operations costs                                                                            -               62
EDR listing and issue costs                                                                                -                -
Auditors' remuneration
- audit                                                                                                   49               33
- non-audit                                                                                                2                -

                                                                                                       4,065            4,131


                                                                                                     For the          For the
                                                                                                  year ended       year ended
                                                                                                     June 30          June 30
                                                                                                        2002             2001
                                                                                                      GBP000           GBP000
Fees payable to Schroder Investment Management Ltd (note 28)                                             293              345
Directors' remuneration (note 4)                                                                       1,110              149
Staff costs (note 5)                                                                                   4,258               93
Depreciation (note 11)                                                                                    65                -
General expenses                                                                                       1,416              438
Enlargement of operations costs                                                                           62              840
EDR listing and issue costs                                                                                -              230
Auditors' remuneration
- audit                                                                                                   89               48
- non-audit                                                                                                -               92

                                                                                                       7,293            2,235
</TABLE>

                                      F11

<PAGE>

NOTES TO THE ACCOUNTS (continued)

4.   DIRECTORS' REMUNERATION

<TABLE>
<CAPTION>
                                                                                                                 For the
                                                                                                              Year ended
                                                                                                             December 31
                                                                                                                    2003
                                                                                                                  GBP000

<S>                                                                                                                   <C>
JJ McLachlan                                                                                                          75
NEH Ferguson                                                                                                         761
CJ Govett                                                                                                             24
AJ Habgood                                                                                                            24
EW Koning                                                                                                             21
D Raeburn                                                                                                             24
IP Sedgwick                                                                                                            -
J Strangfeld                                                                                                           -
AF Sykes                                                                                                              23
AC Williams                                                                                                          552

                                                                                                                   1,504
</TABLE>


<TABLE>
<CAPTION>


                                                                                           For the six       For the six
                                                                                          months ended      months ended
                                                                                           December 31       December 31
                                                                                                  2002              2001
                                                                                                             (unaudited)
                                                                                                GBP000            GBP000

<S>                                                                                                 <C>               <C>
JJ McLachlan                                                                                        38                38
NEH Ferguson                                                                                       467               485
CJ Govett                                                                                           12                12
AJ Habgood                                                                                          12                12
EW Koning                                                                                           11                10
D Raeburn                                                                                           12                11
IP Sedgwick                                                                                          -                 9
J Strangfeld                                                                                         -                 -
AF Sykes                                                                                            10                 2
AC Williams                                                                                        323                 -

                                                                                                   885               579


                                                                                               For the           For the
                                                                                            year ended        year ended
                                                                                               June 30           June 30
                                                                                                  2002              2001
                                                                                                GBP000            GBP000

JJ McLachlan                                                                                        75                50
NEH Ferguson                                                                                       823                15
CJ Govett                                                                                           24                18
AJ Habgood                                                                                          24                18
EW Koning                                                                                           20                17
D Raeburn                                                                                           22                 1
IP Sedgwick                                                                                         17                15
J Strangfeld                                                                                         -                15
AF Sykes                                                                                             4                 -
AC Williams                                                                                        101                 -

                                                                                                 1,110               149
</TABLE>

The amounts shown above do not include any payments or rights to pensions. As
shown above, Nicholas Ferguson is the highest paid director for the year ended
December 31, 2003.

                                      F12

<PAGE>

NOTES TO THE ACCOUNTS (continued)

5.   STAFF COSTS

<TABLE>
<CAPTION>
                                                                                                            For the year
                                                                                                                   ended
                                                                                                             December 31
                                                                                                                    2003
                                                                                                                  GBP000
<S>                                                                                                                <C>
Salaries and other remuneration                                                                                    2,924
Social security costs                                                                                                442
Pension costs (note 6)                                                                                               407

                                                                                                                   3,773

The Company has no employees. The average number of employees employed by group
undertakings was:

                                                                                                                  Number
Full-time employees                                                                                                   20
Seconded staff                                                                                                         4

                                                                                                                      24
</TABLE>

<TABLE>
<CAPTION>


                                                                                        For the six          For the six
                                                                                       months ended         months ended
                                                                                        December 31          December 31
                                                                                               2002                 2001
                                                                                                             (unaudited)
                                                                                             GBP000               GBP000
<S>                                                                                           <C>                  <C>
Salaries and other remuneration                                                               1,401                1,958
Social security costs                                                                           237                  217
Pension costs (note 6)                                                                          108                  233

                                                                                              1,746                2,408

The Company has no employees. The average number of employees employed by group
undertakings was:

                                                                                             Number               Number
Full-time employees                                                                              20                   14
Seconded staff                                                                                    4                    4

                                                                                                 24                   18


                                                                                            For the              For the
                                                                                         year ended           year ended
                                                                                            June 30              June 30
                                                                                               2002                 2001
                                                                                             GBP000               GBP000
Salaries and other remuneration                                                               3,491                   80
Social security costs                                                                           409                    6
Pension costs (note 6)                                                                          358                    7

                                                                                              4,258                   93

The Company has no employees. The average number of employees employed by group
undertakings was:

                                                                                             Number               Number
Full-time employees                                                                              17                   12
Seconded staff                                                                                    4                    4

                                                                                                 21                   16
</TABLE>

                                      F13
<PAGE>


NOTES TO THE ACCOUNTS (continued)

6.   PENSION COSTS

<TABLE>
<CAPTION>

The charge for pension costs
comprises:                                       For the      For the six       For the six       For the         For the
                                             year  ended     months ended      months ended    year ended      year ended
                                             December 31      December 31       December 31       June 30         June 30
                                                    2003             2002              2001          2002            2001
                                                                                (unaudited)
                                                  GBP000           GBP000            GBP000        GBP000          GBP000

<S>                                                  <C>               <C>               <C>           <C>              <C>
Defined benefit schemes                              172               29                26            52               1
Money purchase schemes                               235               79               207           306               6

                                                     407              108               233           358               7

</TABLE>

The Group does not  participate in a Group pension  scheme.  Costs in respect of
defined  benefit  schemes  relate to payments  due to the  Schroders  Retirement
Benefits  Scheme  ("the  Scheme")  in  respect  of 4  employees,  including  the
Company's  executive  directors,  seconded from Schroder  Investment  Management
Limited to SVG Capital plc. The Company and the Scheme's trustees, taking advice
from the independent actuaries, agree the contributions.

In accordance with UK Financial  Reporting Standard 17 ("FRS 17"), the scheme is
accounted  for as a defined  contribution  scheme on the basis that the Group is
unable to identify its share of the  underlying  assets and  liabilities  of the
Scheme at the balance sheet date.  Further details of the Scheme can be found in
the Annual Report and Accounts of Schroders plc. In  particular,  the Scheme had
612 active  members in the defined  benefit  section as at December 31, 2003 and
the accounts of Schroders plc disclosed a net pension  deficit in respect of the
Scheme of  GBP20.1million,  calculated under FRS 17 based on interim  valuations
prepared by independent qualified actuaries.


7.    INTEREST PAYABLE AND SIMILAR CHARGES

<TABLE>
<CAPTION>
                                                    For the        For the six       For the six       For the       For the
                                                 Year ended      months  ended     months  ended    year ended    year ended
                                                December 31        December 31       December 31       June 30       June 30
                                                       2003               2002              2001          2002          2001
                                                                                     (unaudited)
                                                     GBP000             GBP000            GBP000        GBP000        GBP000

<S>                                                   <C>                  <C>               <C>         <C>              <C>
Convertible bond interest                             3,050                900               213         1,100             -
Amortization of convertible bond premium,                95                 45                 -            45             -
issue and listing costs
Loan facility finance costs                           1,961                577                63           687           359
Other interest                                            -                  1                 -             -           224

                                                      5,106              1,523               276         1,832           583


8.    DIVIDENDS
                                                   For the        For the six      For the six        For the         For the
                                                Year ended       months ended     months ended     year ended      year ended
                                               December 31        December 31      December 31       June  30         June 30
                                                      2003               2002             2001           2002            2001
                                                                                   (unaudited)
                                                    GBP000             GBP000           GBP000         GBP000          GBP000

No final dividend (six months ended
December 31 2002: Nil; year ended June
30, 2002: Nil; year ended June 30,                       -                  -                -              -           1,841
2001: 1.80p per share)

June 30, 2001 final dividend is based on 102,265,699 ordinary shares in issue.
</TABLE>

                                      F14


<PAGE>


NOTES TO THE ACCOUNTS (continued)

9.    TAXATION

(a) The (credit)/charge for taxation for the period is made up as follows:

<TABLE>
<CAPTION>
                                                                                                                  For the
                                                                                                               Year ended
                                                                                                              December 31
                                                                                                                     2003
                                                                                                                   GBP000
<S>                                                                                                                    <C>
Current Tax
Corporation tax                                                                                                         -
Double taxation relief                                                                                                  -

                                                                                                                        -

Income tax suffered by the venture funds                                                                              (9)
Overseas tax                                                                                                            1
Prior year adjustment                                                                                               (174)

Total current tax (note 9(b))                                                                                       (182)

Deferred Tax
Deferred tax - prior year adjustment                                                                                    -

Total deferred tax                                                                                                      -

                                                                                                                    (182)
Total tax credit
</TABLE>


<TABLE>
<CAPTION>

                                                                                        For the six           For the six
                                                                                       months ended          months ended
                                                                                        December 31           December 31
                                                                                               2002                  2001
                                                                                                              (unaudited)
                                                                                             GBP000                GBP000
<S>                                                                                             <C>                   <C>
Current Tax
Corporation tax                                                                                   -                     -
Double taxation relief                                                                            -                     -

                                                                                                  -                     -

Income tax suffered by the venture funds                                                          -                     -
Overseas tax                                                                                      8                   122
Prior year adjustment                                                                          (44)                     -

Total current tax (note 9(b))                                                                  (36)                   122

Deferred Tax
Deferred tax - prior year adjustment                                                              -                     -

Total deferred tax                                                                                -                     -

                                                                                               (36)                   122
Total tax (credit)/charge
</TABLE>


                                       F15
<PAGE>

NOTES TO THE ACCOUNTS (continued)

9.    TAXATION (continued)

<TABLE>
<CAPTION>
                                                                                            For the               For the
                                                                                         year ended            year ended
                                                                                            June 30               June 30
                                                                                               2002                  2001
                                                                                             GBP000                GBP000
<S>                                                                                              <C>                  <C>
Current Tax
Corporation tax                                                                                   -                    34
Double taxation relief                                                                            -                   (34)

                                                                                                  -                     -

Income tax suffered by the venture funds                                                          -                     -
Overseas tax                                                                                    133                   141
Prior year adjustment                                                                          (64)                     -

Total current tax (note 9(b))                                                                    69                    141

Deferred Tax
Deferred tax - prior year adjustment                                                             36                     -

Total deferred tax                                                                               36                     -

                                                                                                105                    141
Total tax charge
</TABLE>

There are no profits chargeable to corporation tax in the current period. Excess
management  expenses  relating to the venture fund  investments are available to
set against the taxable income of the Company.  These excess management expenses
are included within the investments in venture funds in the balance sheet of the
Company and are not reflected in the Company's revenue account.

If in a future year in relation to the venture fund investments,  income exceeds
expenses,  the taxation charge to the Company's revenue account will include tax
on this excess with a suitable note by way of explanation.


<TABLE>
<CAPTION>


(b) Factors affecting current tax charge for the period:
                                                                                                                  For the
                                                                                                               year ended
                                                                                                              December 31
                                                                                                                     2003
                                                                                                                   GBP000
<S>                                                                                                                <C>
Deficit on ordinary activities before taxation                                                                     (5,713)

Corporation tax at 30%                                                                                             (1,714)
Effects of:
Overseas taxation written off                                                                                           1
Overseas tax claimed as an expense                                                                                      -
Non deductible expenses                                                                                                17
Taxable dividend credited to capital                                                                                    -
Unutilized current period expenses carried forward                                                                  1,700
Venture funds expenses utilized in period                                                                               -
Other timing differences                                                                                                 -
Income tax recoverable on venture funds                                                                                (9)
Income of subsidiary not taxable                                                                                       (3)
Prior year adjustment - corporation tax                                                                              (174)

                                                                                                                    (182)
Current tax credit for the period (note 9(a))
</TABLE>

                                      F16

<PAGE>



NOTES TO THE ACCOUNTS (continued)


9.    TAXATION (continued)

<TABLE>
<CAPTION>
                                                                                        For the six           For the six
                                                                                       months ended          months ended
                                                                                        December 31           December 31
                                                                                               2002                  2001
                                                                                                              (unaudited)
                                                                                             GBP000                GBP000
<S>                                                                                          <C>                       <C>
(Deficit)/return on ordinary activities before taxation                                      (2,220)                   300

Corporation tax at 30%                                                                         (666)                    90
Effects of:
Overseas taxation written off                                                                     8                     -
Overseas tax claimed as an expense                                                                -                      -
Non deductible expenses                                                                           8                   122
Taxable dividend credited to capital                                                              -                     -
Unutilized current period expenses carried forward                                              625                     -
Venture funds expenses utilized in period                                                         -                  (90)
Other timing differences                                                                         61                     -
Income tax recoverable on venture funds                                                            -                    -
Income of subsidiary not taxable                                                                (28)                     -
Prior year adjustment - corporation tax                                                         (44)                     -

                                                                                               (36)                   122
Current tax (credit)/charge for the period (note 9(a))


                                                                                            For the               For the
                                                                                         year ended            year ended
                                                                                            June 30               June 30
                                                                                               2002                  2001
                                                                                             GBP000                GBP000
(Deficit)/return on ordinary activities before taxation                                      (1,448)                2,798

Corporation tax at 30%                                                                         (434)                  839
Effects of:
Overseas taxation written off                                                                   133                   141
Overseas tax claimed as an expense                                                              (86)                    -
Non deductible expenses                                                                          54                   366
Taxable dividend credited to capital                                                            274                     -
Unutilized current period expenses carried forward                                              250                     -
Venture funds expenses utilized in period                                                         -                (1,136)
Other timing differences                                                                          -                     -
Income tax recoverable on venture funds                                                           -                     -
Income of subsidiary not taxable                                                                (58)                  (69)
Prior year adjustment - corporation tax                                                         (64)                    -

                                                                                                 69                    141
Current tax charge for the period (note 9(a))


</TABLE>

(c) Factors affecting future tax charges

The Group currently has and expects to generate  surplus tax losses.  A deferred
tax asset in respect of these  surplus  losses is not  recognized  because their
utilization is considered unlikely in the foreseeable future.

                                      F17

<PAGE>

NOTES TO THE ACCOUNTS (continued)

10.    RETURN PER ORDINARY SHARE


<TABLE>
<CAPTION>
                                                                                             For the year ended
                                                                                              December 31, 2003

<S>                                        <C>           <C>           <C>            <C>          <C>           <C>
GROUP                                                                                Revenue        Capital        Total
Return per ordinary share - basic                                                    (5.32)p        22.02p        16.70p
Return per ordinary share - fully diluted                                            (5.32)p

                                                For the six months ended                  For the six months ended
                                                   December 31, 2002                    December 31, 2001 (unaudited)
GROUP                                      Revenue       Capital       Total         Revenue        Capital        Total
Return per ordinary share - basic          (2.14)p       41.35p        39.21p         0.17p        (11.49)p      (11.32)p
Return per ordinary share - fully
diluted                                    (2.14)p                                    0.17p

                                                   For the year ended                        For the year ended
                                                     June 30, 2002                              June 30, 2001
GROUP                                      Revenue       Capital       Total         Revenue        Capital        Total
Return per ordinary share - basic          (1.52)p        7.60p        6.08p          2.60p        (44.07)p      (41.47)p
Return per ordinary share - fully
diluted                                    (1.52)p                                    2.60p

</TABLE>

The basic  revenue  return  per  ordinary  share is based on the net  deficit on
ordinary  activities after taxation and minority  interest of GBP5,531,000  (six
months  ended  December  31,  2002:  deficit of  GBP2,185,000;  six months ended
December 31, 2001:  return of GBP177,000;  year ended June 30, 2002:  deficit of
GBP1,555,000;  year  ended  June  30,  2001:  return  of  GBP2,655,000)  and  on
104,018,459  ordinary  shares (six months ended December 30, 2002:  102,265,699;
six months  ended  December  31,  2001:  102,265,699;  year ended June 30, 2002:
102,265,699;  year ended June 30, 2001:  102,265,699) being the weighted average
number of shares in issue  during each period.  The capital  return per ordinary
share is based on the net return for the eighteen months of  GBP22,907,000  (six
months  ended  December  31,  2002:  return of  GBP42,290,000;  six months ended
December 31, 2001: deficit of GBP11,753,000; year ended June 30, 2002: return of
GBP7,770,000;  year  ended  June  30,  2001:  return  of  GBP45,067,000)  and on
104,018,459  ordinary  shares (six months ended December 31, 2002:  102,265,699;
six months ended  December 31, 2001:  102,265,699;  June 30, 2002:  102,265,699;
year ended June 30,  2001:  102,265,699)  being the weighted  average  number of
shares in issue during each period.

The diluted  revenue  returns per ordinary share for the year ended December 31,
2003 have been  calculated in accordance  with FRS14 under which the convertible
bonds  are  regarded  as  dilutive  if, on  conversion,  the  increased  returns
attributable to equity shareholders arising from interest saved (less taxation),
divided by the increased  weighted  average number of shares,  are less than the
basic returns per ordinary share. These  calculations  assume that conversion of
dilutive  potential  ordinary  shares  takes  place on January  1,  2003,  at an
exercise price of 399p for the 2011 bonds, and 480p for the 2013 bonds. As there
are  revenue  losses,  the  convertible  bonds do not have a dilutive  effect on
revenue  returns in the year  ended  December  31,  2003,  the six months  ended
December 31, 2002,  or the year ended June 30,  2002.  In addition,  the average
market price of the Company's  shares was lower than the conversion price of the
2011  bonds  for the six  months  ended  December  31,  2001 and  therefore  any
conversion would not have had a dilutive effect.

The  diluted  revenue  returns  per  ordinary  share  have also been  calculated
assuming the exercise of all potential dilutive ordinary shares arising from the
share options in issue (see note 18). As there are revenue  losses,  the options
do not have a dilutive  effect on revenue returns in the year ended December 31,
2003, the six months ended December 31, 2002 or the year ended June 30, 2002. In
addition,  the average  market price of the Company's  shares was lower than the
exercise  price of the options for the six months  ended  December  31, 2001 and
therefore any exercise would not have had a dilutive effect.

Diluted  revenue  returns are  equivalent to basic revenue  returns for the year
ended June 30, 2001, as there were no convertible bonds in issue that could have
caused a dilution.  In addition,  share  options were first  granted on June 21,
2001 and as their  exercise  price  exceeded  the  fair  value of the  Company's
shares,  calculated  in accordance  with FRS 14, the options were  therefore not
dilutive.

                                      F18

<PAGE>

NOTES TO THE ACCOUNTS (continued)

11.   TANGIBLE FIXED ASSETS

<TABLE>
<CAPTION>

                             For the year ended December 31, 2003              For the six months ended December 31, 2002
                                                     Telecomm-                                            Telecomm-
                        Leasehold                   unications               Leasehold                   unications
                         Improve-      Computer     and Office                Improve-     Computer      and Office
                            ments     equipment      equipment      Total        ments    equipment       equipment      Total
                           GBP000        GBP000         GBP000     GBP000       GBP000       GBP000          GBP000     GBP000
<S>                           <C>           <C>             <C>       <C>          <C>          <C>              <C>       <C>
 Cost
 Opening balance              150           142             99        391          144          128              89        361
 Additions                      1           217              3        221            7           16              11         34
 Disposals                      -           (2)              -        (2)            -            -               -          -
 Exchange
 translation
 adjustments                  (1)           (4)            (2)        (7)          (1)          (2)             (1)        (4)

 Closing balance              150           353            100        603          150          142              99        391

 Depreciation
 Opening balance               35            53             21        109           23           32              10         65
 Charge for the                30            50             20        100           12           22              11         45
 period
 Disposals                      -           (1)              -        (1)            -            -               -          -
 Exchange
 translation
 adjustments                    -           (3)            (1)        (4)            -          (1)               -        (1)

 Closing balance               65            99             40        204           35           53              21        109

 Net Book Value
 Opening balance              115            89             78        282          121           96              79        296

 Closing balance               85           254             60        399          115           89              78        282

</TABLE>


                                      F19

<PAGE>


NOTES TO THE ACCOUNTS (continued)

<TABLE>
<CAPTION>


12.      INVESTMENTS                                                         For the year ended December 31, 2003
                                                       Venture funds and       Listed equity       Money market               Total
                                                          Co-investments               funds        instruments           portfolio
                                                                  GBP000              GBP000             GBP000              GBP000
<S>                                                              <C>                     <C>              <C>                <C>
 Cost brought forward                                            595,021                   -             13,875             608,896
 Unrealized loss brought forward                                (111,062)                  -                 36            (111,026)

 Valuation at the beginning of the period                        483,959                   -             13,911             497,870
 Calls and purchases payable                                     110,737               8,015            100,720             219,472
 Distributions and sales receivable                              (59,426)               (538)           (73,052)           (133,016)
 Realized gain/(loss) for the period                              10,985                 143              (234)              10,894
 Unrealized gain/(loss) for the period                            14,032                 564               532               15,128

 Valuation carried forward                                       560,287               8,184             41,877             610,348
</TABLE>

<TABLE>
<CAPTION>

                                           For the six months ended December 31, 2002     For the six months ended December 31, 2001
                                                                                                                         (unaudited)
                                          Venture funds and   Money market        Total  Venture funds and   Money market      Total
                                             Co-investments    instruments    portfolio     co-investments     instrument  portfolio

                                                     GBP000         GBP000       GBP000             GBP000         GBP000     GBP000

<S>                                                 <C>             <C>         <C>                <C>             <C>      <C>
 Cost brought forward                               486,785         30,994      517,729            438,230         24,916   463,146
 Unrealized loss brought forward                    (63,962)            56      (63,906)           (51,200)           (63)  (51,263)

 Valuation at the beginning of the period           422,823         31,000      453,823            387,030         24,853   411,883
 Calls and purchases payable                        122,677        127,797      250,474             53,697        101,752   155,449
 Distributions and sales receivable                (104,510)      (144,494)    (249,004)           (15,784)      (102,165) (117,949)
 Realized gain/(loss) for the period                 58,425          (428)       57,997              4,765            312     5,077
 Unrealized gain/(loss) for the period              (15,456)            36      (15,420)           (16,488)          (268)  (16,756)

 Valuation carried forward                          483,959         13,911      497,870            413,220         24,484   437,704
</TABLE>

                                      F20
<PAGE>


NOTES TO THE ACCOUNTS (continued)

12.   INVESTMENTS (continued)

<TABLE>
<CAPTION>
                                           For the six months ended December 31, 2002     For the six months ended December 31, 2001
                                                                                                                         (unaudited)
                                          Venture funds and   Money market        Total  Venture funds and   Money market      Total
                                             Co-investments    instruments    portfolio     co-investments     instrument  portfolio

                                                     GBP000         GBP000       GBP000             GBP000         GBP000     GBP000
<S>                                                 <C>             <C>         <C>                <C>             <C>      <C>
Cost brought forward                                438,230         24,916      463,146            294,775        123,585   418,360
Unrealized (loss)/gain brought forward              (51,200)           (63)     (51,263)            32,435          2,724    35,159

Valuation at the beginning of the period            387,030         24,853      411,883            327,210        126,309   453,519
Calls and purchases payable                          77,474        316,731      394,205            155,371        351,516   506,887
Distributions and sales receivable                  (48,976)      (311,001)    (359,977)           (51,889)      (452,218) (504,107)
Realized gain/(loss) for the period                  11,553            361       11,914              5,465           (691)    4,774
Unrealized (loss)/gain for the period                (4,258)            56       (4,202)           (49,127)           (63)  (49,190)

Valuation at end of the period                      422,823         31,000      453,823            387,030         24,853   411,883
</TABLE>

                                      F21


<PAGE>







<TABLE>
<CAPTION>



13.   GEOGRAPHICAL ANALYSIS OF INVESTMENTS

                                                                             At December 31, 2003    At December 31, 2002
                                                                                           GBP000                  GBP000
<S>                                                                                         <C>                     <C>
Venture funds and co-investments
Europe
United Kingdom                                                                             12,983                  13,344
France                                                                                        310                     488
Germany                                                                                     8,577                   8,496
Italy                                                                                       1,643                   1,642
Spain                                                                                       1,242                     930
Pan Europe                                                                                396,191                 315,253

Total Europe                                                                              420,946                 340,153

Asia
Asia Pacific                                                                               44,652                  37,800
Japan                                                                                      14,625                  15,918

Total Asia                                                                                 59,277                  53,718

North America
Canada                                                                                     15,764                  26,524
United States*                                                                             64,300                  63,564

Total Americas                                                                             80,064                  90,088

Total venture funds and co-investments                                                    560,287                 483,959


Listed equity funds
SVG UK Focus Fund                                                                           8,184                       -

Total UK listed equity funds                                                                8,184                       -

Money market instruments
Sterling denominated                                                                        9,960                  10,000
Euro denominated                                                                           31,917                   3,911
US dollar denominated                                                                           -                       -

Total money market instruments                                                             41,877                  13,911

Total investment portfolio                                                                610,348                 497,870

</TABLE>


* Schroder Ventures International Life Sciences Funds I and II and International
Life Sciences Fund III have been included within the United States.

All  venture  funds  held  by the  Group  are  unlisted.  However,  some  of the
underlying  companies held within those funds are listed.  Included in the value
of total venture funds and co-investments of GBP560,287,000  (December 31, 2002:
GBP483,959,000) are listed investments amounting to GBP43,500,000  (December 31,
2002: GBP26,081,000).

                                       F22


<PAGE>

13.    GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)

Significant interests in investment funds

Details of the Group's  investments,  as at December 31, 2003,  are shown in the
list of investments below. All of these funds are managed or advised by Schroder
Ventures or Permira. In addition, as at December 31, 2003, the Group had a 47.9%
interest  in the  SVG  UK  Focus  Fund,  a  Dublin-listed  OEIC  managed  by SVG
Investment Management Limited.

<TABLE>
<CAPTION>

                                                                                                 SVG    Value of SVG
                                                                              Original     Capital's       Capital's   SVG Capital's
                                                                     Year         life    holding in         holding      net assets
                                                                   formed      (years)      the fund
                                                                                                   %          GBP000               %

<S>                                                                  <C>          <C>            <C>            <C>             <C>
           ASIA

           Asia Pacific Trust
           Formed to invest in equity and near-equity investments
           in the high growth economies of the Asia Pacific
           region. This trust has been in liquidation since 1998.    1990           8*           6.4             490             0.1

           Asia Pacific Fund II
           Established to make equity and near-equity investments
           in buy-outs, buy-ins, development capital businesses
           and turnarounds, principally in the Asia Pacific region
           with an emphasis on Australia, China, Hong King, India
           Indonesia, Malaysia, Singapore and Thailand.              1994           10          14.0          15,425             2.9

           Schroder Ventures Asia Pacific Fund
           Established to make equity or near equity investments
           in companies that have significant exposure to the Asia
           Pacific region.  The fund focuses principally on
           management buy-outs and buy-ins, financial acquisitions
           and larger development capital opportunities.             1999           10          29.9          27,608             5.2

           Co-investments with Asia Pacific Fund II and Schroder
           Ventures Asia Pacific Fund
                                                                                                               1,129             0.2

           The Japan Venture Fund II
           Formed to invest in Japanese businesses with potential
           for capital growth.                                       1990          10*          13.7             615             0.1

           The Japan Venture Fund III
           Established to invest directly or indirectly in equity
           and near equity investment in a diversified portfolio
           of early stage, or development capital investments in
           leveraged and management buy-outs and buy-ins
           principally in Japan.                                     1997           10          20.3          14,010             2.8

           TOTAL ASIA                                                                                         59,277            11.3


</TABLE>

                                       F23
<PAGE>

<TABLE>
<CAPTION>

13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)
                                                                  Original       SVG Capital's   Value of SVG           SVG
                                                          Year       life       holding in the      Capital's     Capital's
                                                        formed     (years)                fund        holding    net assets
                                                                                             %         GBP000             %
<S>                                                       <C>          <C>               <C>             <C>            <C>
CONTINENTAL EUROPE

Permira Europe I
The first $1 billion fund raised for private equity
investment in Europe focusing on large and
medium-sized leveraged buy-out opportunities.
                                                          1997          10              13.5           54,235          10.4

Permira Europe II
Formed as the successor to Permira Europe I, the
fund will focus on European Buy-Outs and Buy-Ins,
in addition to growth capital investments.
                                                          2000          10              19.7          298,503          56.8

Permira Europe III
Formed as the successor to Permira Europe II, the
fund will focus on buy-outs/ins and growth capital
investments in European businesses with a strong
European presence.                                        2003          10              10.2         (2,408)+         (0.5)

P123
A fund of permira pan-European buy-out funds, with
interests in Permira Europe I, II and III.
                                                          2003          15              38.6           45,861           8.7

Permira France I
The fund's policy was to invest in  leveraged
buy-outs and development capital businesses
primarily in France. The fund was put into
liquidation in December 1999.
                                                          1989         10*              39.8              204             -

Permira France Venture I
Formed with a policy of investing in development
capital opportunities, principally in France.             1992         10*              19.0              106             -

Permira German Buy-Outs
Established to invest in buy-outs of companies in
Germany and some of its neighboring countries.
                                                          1986         10*              29.7            7,042           1.3

Permira German Buy-Outs 1992
Established to invest in a diverse portfolio of
buy-outs, buy-ins, development capital businesses
and turnarounds, principally in Germany, Austria
and Switzerland.
                                                          1991         10*              19.4            1,535           0.3

Permira Italy II
Established  to make equity and near-equity
investments in buy-outs and  buy-ins, including
development capital businesses, principally in
Italy.                                                    1993         10*              21.0            1,643           0.3

The Spanish Venture Fund
Established with a policy of investing in leveraged
buy-outs and development capital businesses in
Spain.                                                    1990         10*              23.2            1,242           0.2

TOTAL CONTINENTAL EUROPE                                                                              407,963         77.5

</TABLE>

+ At December  31,  2003,  Permira  Europe III had made a one  investment  which
settled in January 2004. The GBP(2.4) million is predominantly representative of
management  fees on  SVIIT's  commitment  to the fund  from its  first  close to
December 31, 2003.

                                       F24

<PAGE>

<TABLE>
<CAPTION>


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)
                                                                                  SVG Capital's
                                                                                     holding in    Value of SVG           SVG
                                                           Year       Original         the fund       Capital's     Capital's
                                                        formed    life (years)                          holding    net assets
                                                                                              %          GBP000             %
UNITED KINGDOM

<S>                                                        <C>            <C>               <C>           <C>           <C>
Permira UK III
Established as Permira's third buy-out fund in
the United Kingdom to invest in equity and
near-equity investments in buy-outs, buy-ins,
development capital businesses and turnarounds            1993            10            18.8           10,630           2.1

Permira UK Venture III
Established to invest in a diversified
portfolio of venture or development capital
businesses and buy-outs principally in the
United Kingdom.                                          1990           10*             8.7              389             -

Permira UK Venture IV
Established to follow the policies of the
fully invested Permira UK Venture III.                  1995            10             4.2            1,964           0.4

TOTAL UNITED KINGDOM                                                                                  12,983           2.5


NORTH AMERICA

Schroder Canadian Buy-Out Fund II
Established to invest in buy-outs and
development capital opportunities, principally
in Canada.                                                1994            10            22.6            6,493           1.2

Schroder Canadian Buy-Out Fund III
Established to invest pricipally in buy-outs,
buy-ins, leveraged build-ups and development
capital opportunities in Canada.                          2000            10            26.6            1,548           0.3

Co-investments with Schroder Canadian Buy-Out
Funds II and III                                                                                        7,723           1.5

Schroder Ventures International Life Sciences
Fund

Established to invest in life sciences
companies principally in the United States, the
United Kingdom and Continental Europe.
                                                          1993           10*             6.8            1,937           0.4


                                                           F25

<PAGE>



13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)
                                                                                  SVG Capital's    Value of SVG
                                                          Year        Original       holding in       Capital's          SVG
                                                        formed     life (years)        the fund         holding       Capital's
                                                                                                                     net assets
                                                                                           %             GBP000               %
NORTH AMERICA  (continued)
Schroder Ventures International Life Sciences
Fund II

Established as a successor to Schroder Ventures
International Life Sciences Fund, to invest in
a diversified portfolio of life sciences
companies principally in the United States and
Europe.  The majority of these investments will
be in early stage opportunities.                          1999            10            29.2           33,366           6.3

International Life Sciences Fund III
The successor to Schroder Ventures
International Life Sciences Fund II,
established to invest in a diversified
portfolio of life sciences companies
principally in the United States and Europe.
The majority of these investments will be early
stage opportunities.                                      2002            10            19.1            6,297           1.2

Schroder Ventures US Fund
Established to invest in larger development
capital and mid-sized buy-outs in the US, with
a particular focus on media, telecommunications
and technology sectors.                                   1999            10            29.9           22,700           4.2

TOTAL NORTH AMERICA                                                                                    80,064          15.1

TOTAL VENTURE FUND PORTFOLIO                                                                          560,287         106.4

Money market instruments                                                                               41,877           8.0

UK Listed equity investments                                                                            8,184           1.5

TOTAL INVESTMENTS                                                                                     610,348         115.9

Current assets less total liabilities                                                                 (83,730)        (15.9)


TOTAL NET ASSETS                                                                                      526,618         100.0


*    The lives of these funds have been extended.

</TABLE>

                                       F26

<PAGE>


<TABLE>
<CAPTION>


14.      DEBTORS
                                                                                         At December 31      At December 31
                                                                                                   2003                2002
                                                                                                 GBP000              GBP000
<S>                                                                                                <C>                <C>
Amounts falling due within one year:
Accrued investment advisory fee income                                                            4,460               2,495
Interest receivable                                                                                 107                  45
Prepayments and other debtors                                                                     2,151               1,950

                                                                                                  6,718               4,490



15.      CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
                                                                                         At December 31      At December 31
                                                                                                   2003                2002
                                                                                                 GBP000              GBP000

Interest payable and similar charges                                                                442                 219
Other creditors and accruals                                                                      7,669               4,564

                                                                                                  8,111               4,783


The group has in place a multicurrency revolving loan facility of EUR285 million
with the Royal Bank of Scotland. During the eighteen months to December 31,
2003, the Company borrowed EUR94.8 million and US$2 million under the facility.
The  loans were fully repaid by December 31, 2003.


16.      CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Amounts falling due after more than one year:                                            At December 31      At December 31
                                                                                                   2003                2002
                                                                                                 GBP000              GBP000

4.5% Subordinated Convertible Bonds 2011                                                        39,400              40,000
Unamortized issue and listing costs (note 30)                                                     (698)              (799)
                                                                                                38,702              39,201
4.5% Subordinated Convertible Bonds 2013                                                        49,000                    -
Unamortized premium, issue and listing costs (note 30)                                            (83)                    -
                                                                                                48,917                    -
Deferred staff compensation                                                                        489                    -

                                                                                                 88,108              39,201

</TABLE>

Creditors due after more than one year comprise  GBP39.4 million nominal of 4.5%
subordinated  convertible  bonds which mature on November 21, 2011.  These bonds
are convertible, at any time, into ordinary shares at a conversion price of 399p
per share. During the 18-month period, GBP0.6 million nominal of bonds have been
converted into 150,375 new shares.

During the year ended  December 31, 2003,  the Company  issued GBP40  million of
4.5%  subordinated  convertible bonds due 21 May 2013 at par on May 21, 2003. On
July,  16 and 18 and August 7, 2003, a further GBP9 million  nominal of the 2013
bonds was issued at a total  premium of  GBP797,000.  The market  price on these
dates was 108p, 108p and 114p, respectively. These bonds are convertible, at any
time, into ordinary shares at a conversion price of 480p per share.

In accordance  with FRS4 "Capital  Instruments",  issue costs are charged to the
revenue account over the term of the capital instrument.

FRS 13 requires  disclosure of the fair value of debt. The convertible bonds are
listed on the Official List of the UK Listing Authority and traded on the London
Stock Exchange.  On December 31, 2003 the closing  bid-offer spread of 114.9375p
to 115.0625p  for the 2011 bonds and  106.9375p to 107.0625p for the 2013 bonds.
This equates to a fair valuation range of GBP45.3 - GBP45.3 million for the 2011
bonds and GBP52.4 - GBP52.5 million for the 2013 bonds in issue.


                                       F27

<PAGE>



<TABLE>
<CAPTION>



17.  CAPITAL COMMITMENTS
At December 31, 2003 the Group had uncalled  commitments to its fund investments
as follows:

                                                                                   Amount          Uncalled
                                                                                 uncalled       commitment*
                                                                         (local currency)         GBP million

<S>                                                                                <C>                 <C>
International Life Sciences Fund III                                               $59.6m              33.3
Permira Europe II                                                               EUR130.0m              91.6
Permira Europe III                                                              EUR508.0m             357.9
P123                                                                             EUR41.9m              29.5
Schroder Canadian Buy-Out Fund II                                                  C$0.9m               0.4
Schroder Canadian Buy-Out Fund III                                                C$36.5m              15.8
Schroder Ventures Asia Pacific Fund                                                $41.9m              23.1
Schroder Ventures International Life Sciences Fund II                               $2.0m               1.2
Schroder Ventures US Fund                                                          $21.7m              12.2
The Japan Venture Fund III                                                      YEN487.4m               2.5
The Japan Venture Fund IV**                                                   YEN3,747.6m              19.5
The Strategic Recovery Fund                                                       GBP7.4m               7.4

Total                                                                                                 594.4

</TABLE>

* based on exchange rates at December 31, 2003.

**  based  on the  Company's  commitment  to the fund at its  first  closing  in
December 2003. The Company  intends to commit a further  YEN1,624m at the fund's
final close in 2004.

The total  commitments  shown above include GBP1.1m in relation to Funds held by
Platinum  Trust and EUR0.1m in relation to SVG Advisers  Ltd.  P123  commitments
represent uncalled amounts due on ordinary shares.

<TABLE>
<CAPTION>

18.  SHARE CAPITAL
                                             For the year      For the six        For the six      For the year   For the year
                                                    ended     months ended       months ended             ended          ended
                                             December 31,     December 31,       December 31,          June 30,       June 30,
                                                     2003             2002               2001              2002           2001
                                                                                  (unaudited)


<S>                                                  <C>              <C>                <C>               <C>            <C>
Shares of GBP1 each                                GBP000           GBP000             GBP000            GBP000         GBP000
Authorized:
Opening and closing balance:                      200,000          150,000            150,000           150,000        150,000

Allotted, called up and fully paid:
Opening balance                                   102,266          102,266            102,266           102,266        102,266
Issue of ordinary shares on conversion
of convertible bonds                                  150                -                  -                 -              -
Placing of new ordinary shares                     10,239                -                  -                 -              -

Closing balance                                   112,655          102,266            102,266           102,266        102,266

</TABLE>


Issue of shares
On January 9, 2003, the Company issued 125,313  ordinary shares on conversion of
GBP500,000  nominal of the 2011  convertible  bonds.  On November 10, 2003,  the
Company issued 25,062 ordinary shares on conversion of GBP100,000 nominal of the
2011 convertible bonds.

An  Extraordinary  General  Meeting of the Company was held on October 31, 2003.
Shareholders  approved  an  increase of GBP50  million to the  authorized  share
capital,  from GBP150  million to GBP200  million,  and the  allotment of equity
securities up to an aggregate  nominal  amount of  GBP12,798,876.  The Directors
utilized this authority to issue 10,239,100  ordinary shares on October 7, 2003,
at GBP4.68 per share, by way of an underwritten placing by J.P.Morgan Securities
Limited.

                                       F28

<PAGE>


18.  SHARE CAPITAL (continued)

Options over ordinary shares
During the year ended  December 31, 2003,  1,284,156  options were  granted.  No
options were exercised during the year and 88,923 lapsed.  At December 31, 2003,
5,448,596  (December 31, 2002:  4,253,363;  June 30, 2002:  4,253,363;  June 30,
2001: 2,841,766) options to subscribe for ordinary shares were outstanding:

<TABLE>
<CAPTION>

Issue date                Exercise price                       December 31       December 31       June 30        June 30
                               per share                              2003              2002          2002           2001
                                                           Number in issue   Number in issue     Number in      Number in
                                                                                                     issue          issue

<S>  <C>                         <C>                             <C>               <C>           <C>            <C>
June 2001                        410.00p                         2,813,407         2,813,407     2,813,407      2,813,407
June 2001                        405.50p                            28,359            28,359        28,359         28,359
April 2002                       335.00p                            14,476            34,774        34,774              -
April 2002                       334.50p                         1,333,476         1,376,823     1,376,823              -
March 2003                       397.50p                            18,616                 -             -              -
March 2003                       392.75p                         1,183,570                 -             -              -
October 2003                     493.00p                            56,692                 -             -              -

                                                                 5,448,596         4,253,363     4,253,363      2,841,766

</TABLE>


<TABLE>
<CAPTION>

19.  SHARE PREMIUM ACCOUNT
                                                 For the year      For the six      For the six    For the year   For the year
                                                        ended     months ended     months ended           ended          ended
                                                 December 31,     December 31,     December 31,   June 30, 2002       June 30,
                                                         2003             2002             2001                           2001
                                                                                    (unaudited)

                                                       GBP000           GBP000           GBP000          GBP000         GBP000

<S>                                                     <C>              <C>              <C>             <C>            <C>
Balance brought forward                                 7,453            7,453            7,453           7,453          7,453
Premium on shares issued on conversion of
bonds                                                     438                -                -               -              -
Premium on issue of shares via placing                 35,223                -                -               -              -

Balance carried forward                                43,114            7,453            7,453           7,453          7,453


20.      CAPITAL REDEMPTION RESERVE
                                            For the year ended        For the six       For the six   For the year    For the year
                                             December 31, 2003       months ended      months ended          ended           ended
                                                                     December 31,      December 31,       June 30,   June 30, 2001
                                                                             2002              2001           2002
                                                                                        (unaudited)

                                                       GBP000              GBP000            GBP000         GBP000          GBP000

Balance brought forward and carried forward            3,204                3,204             3,204          3,204           3,204


21.      SHARE PURCHASE RESERVE
                                            For the year ended        For the six       For the six   For the year    For the year
                                             December 31, 2003       months ended      months ended          ended           ended
                                                                     December 31,      December 31,       June 30,   June 30, 2001
                                                                             2002              2001           2002
                                                                                        (unaudited)


                                                        GBP000             GBP000            GBP000         GBP000          GBP000

Balance brought forward and carried forward           92,054               92,054            92,054         92,054          92,054


                                       F29
<PAGE>


22.   CAPITAL RESERVE
                                             For the year        For the six      For the six    For the year    For the year
                                                    ended       months ended     months ended           ended           ended
                                             December 31,       December 31,     December 31,   June 30, 2002   June 30, 2001
                                                     2003               2002             2001
                                                                                  (unaudited)

                                                   GBP000             GBP000           GBP000          GBP000          GBP000

Capital reserve brought forward                   258,995            216,705          208,935         208,935         254,002
Realized gains on venture fund                     10,985             58,425            4,765          11,553           5,465
distributions
Realized gains on sale of listed
equities                                              143                  -                -               -               -
Expenses charged to capital*                      (3,357)                  -                -               -               -
Realized exchange (losses)/gains on
non-currency balances                                 938              (901)                -               -               -
Realized exchange (losses)/gains on                 (599)                623             (94)              42            (755)
currency balances
Realized exchange losses on sale of
money market instruments                            (234)              (428)              312             361            (691)
Decrease/(increase) in unrealized
losses on venture funds                             14,032           (15,456)         (16,488)         (4,258)        (49,127)
Increase in unrealized gains on listed
equities                                               564                  -               -               -               -
Increase in unrealized exchange gains
on money market instruments                           532                 36            (268)              56            (63)
Exchange losses on consolidation                     (31)               (32)                -               -               -
Minority interest - equity                           (66)                 23               20              16             104

Balance carried forward                           281,902            258,995          197,182         216,705         208,935


* expenses  charged to capital in 2003  represent  one-off costs incurred on the
establishment of P123.

23.  REVENUE RESERVE
                                           For the year   For the six months      For the six    For the year    For the year
                                                  ended                ended     months ended           ended           ended
                                           December 31,    December 31, 2002     December 31,   June 30, 2002   June 30, 2001
                                                   2003                                  2001

                                                 GBP000               GBP000           GBP000          GBP000          GBP000

Balance brought forward                           (780)               1,405             2,960           2,960          2,146
Transfer to revenue account                     (5,531)             (2,185)              177         (1,555)             814

Balance carried forward                         (6,311)               (780)             3,137           1,405          2,960

                                       F30
<PAGE>


24.  RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

                                                 For the year      For the six      For the six    For the year   For the year
                                                        ended     months ended     months ended           ended          ended
                                                 December 31,     December 31,     December 31,   June 30, 2002       June 30,
                                                         2003             2002             2001                           2001
                                                                                    (unaudited)

                                                       GBP000           GBP000          GBP'000          GBP000         GBP000

(Deficit)/surplus attributable to equity
shareholders                                           (5,531)          (2,185)              177         (1,555)         2,655
Dividends                                                   -                -                -               -         (1,841)

                                                       (5,531)          (2,185)              177         (1,555)           814
Non-distributable capital gain/(loss) for
the period                                             22,907           42,290         (11,753)           7,770        (45,067)
Share issue on conversion of 2011 bonds                   150                -                -               -              -
Share premium on conversion of 2011 bonds                 438                -                -               -              -
Share issue on placing of new shares                   10,239                -                -               -              -
Share premium on placing of new shares                 35,223                -                -               -              -

Net addition to shareholders' funds                    63,426           40,105         (11,576)           6,215        (44,253)
Shareholders' funds brought forward                   463,192          423,087          416,872         416,872        461,125

Shareholders' funds carried forward                   526,618          463,192          405,296         423,087        416,872

</TABLE>

25.  NET ASSET VALUE PER ORDINARY SHARE

Calculation  of the net asset  values per share are based on Group net assets of
GBP526,618,000   (December   31,  2002:   GBP463,192,000;   December  31,  2001:
GBP405,296,000;  June 30, 2002: GBP423,087,000) and on 112,655,174 (December 31,
2002: 102,265,699;  December 31, 2001: 102,265,699;  June 30, 2002: 102,265,699)
ordinary shares in issue at the balance sheet date.

The Group  diluted net asset  values per share  assume the GBP39.4  million 2011
convertible  bonds are converted at the balance sheet date at an exercise  price
of 399p into 9,874,687 new shares (December 31, 2002: 10,025,062; June 30, 2002:
exercise  price of 410p into  9,756,097  new shares).  The GBP49.0  million 2013
convertible  bonds are not dilutive as their  exercise price of 480p exceeds the
undiluted net asset value per share at the balance sheet date. The Group diluted
net asset  values per share also  assume  that  share  options  (note 18) with a
strike price lower than the undiluted net asset value per share are exercised at
the  balance  sheet  date.  This  would  result  in the  issue of an  additional
5,391,904 ordinary shares for consideration of GBP20,881,000 (December 31, 2002:
4,253,363 shares for  consideration of GBP16,372,000:  June 30, 2002:  4,253,363
shares for consideration of GBP16,372,000).

Therefore,  the  calculation of the diluted net asset values per share are based
on Group net assets of  GBP586,899,000  and on  127,921,765  ordinary  shares in
issue at the  balance  sheet  date  (December  31,  2002:  Group  net  assets of
GBP519,564,000 and 116,544,124  ordinary shares; June 30, 2002: Group net assets
of GBP479,459,000 and 116,275,159 ordinary shares).

There was no dilutive  effect at December  31, 2001 from either the  exercise of
options or the conversion of bonds.

                                       F31
<PAGE>


<TABLE>
<CAPTION>

26.  RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM
     OPERATING ACTIVITIES
                                                                                                       For the year ended
                                                                                                        December 31, 2003
                                                                                                                   GBP000
<S>                                                                                                                 <C>
Net deficit before finance costs and taxation                                                                       (607)
Foreign exchange gains on revenue items                                                                             (178)
Increase in accrued income                                                                                       (1,059)
Increase in debtors                                                                                                 (813)
Increase in creditors                                                                                                 386

Net cash outflow from operating activities                                                                        (2,271)

</TABLE>


<TABLE>
<CAPTION>
                                                                                         For the six   For the six months
                                                                                        months ended                ended
                                                                                        December 31,    December 31, 2001
                                                                                                2002          (unaudited)
                                                                                              GBP000               GBP000
<S>                                                                                            <C>                    <C>
Net (deficit)/return before finance costs and taxation                                         (697)                  576
Foreign exchange (gains)/losses on revenue items                                                   17                 (26)
(Increase)/decrease in accrued income                                                           (861)                  196
(Increase)/decrease in debtors                                                                   (24)                   78
Increase in creditors                                                                          1,657                  427

Net cash inflow from operating activities                                                         92                1,251


                                                                                        For the year         For the year
                                                                                               ended                ended
                                                                                       June 30, 2002        June 30, 2001

                                                                                              GBP000               GBP000

Net return before finance costs and taxation                                                     384                3,381
Foreign exchange (gains)/losses on revenue items                                                  (3)                   -
(Increase)/decrease in accrued income                                                           (604)                 686
(Increase)/decrease in debtors                                                                   (15)                  31
Increase/(decrease) in creditors                                                                  27                 (287)

Net cash (outflow)/inflow from operating activities                                            (211)                3,811

</TABLE>


                                       F32
<PAGE>


<TABLE>
<CAPTION>


NOTES TO THE ACCOUNTS (continued)

27.    ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS


                                                         At  January 1,    Exchange loss    Cashflow       At December
                                                                   2003                                       31, 2003
                                                                 GBP000           GBP000      GBP000            GBP000
<S>                                                                 <C>              <C>         <C>               <C>
Cash at bank                                                      4,887            (452)       1,356             5,791
Debt due:
Within one year                                                       -                -           -                 -
After more than one year                                        (39,201)                -    (48,418)          (87,619)

Net debt                                                        (34,314)            (452)    (47,062)          (81,828)

</TABLE>



<TABLE>
<CAPTION>

                            At  July 1,  Exchange loss    Cashflow   At December   At  July 1,  Exchange loss  Cashflow  At December
                                   2002                                 31, 2002          2001                              31, 2001
                                 GBP000         GBP000      GBP000        GBP000        GBP000         GBP000    GBP000       GBP000
<S>                               <C>              <C>        <C>           <C>            <C>            <C>       <C>          <C>
Cash at bank                      9,303            574      (4,990)        4,887         7,191           (68)       835       7,958
Debt due:
Within one year                       -              -           -             -             -             -          -           -
After more than one year        (39,152)             -         (49)      (39,201)            -             -    (39,343)    (39,343)

Net (debt)/funds                (29,849)            574     (5,039)      (34,314)        7,191           (68)   (38,508)    (31,385)

</TABLE>

<TABLE>
<CAPTION>


                         At July 1,  Exchange   Cashflow   At June 30,   At July 1,  Cash acquired  Exchange  Cashflow  At June 30,
                               2001      gain                     2002         2000    on purchase      loss                   2001
                                                                                   of subsidiaries
                             GBP000    GBP000    GBP000        GBP000        GBP000         GBP000    GBP000    GBP000       GBP000
<S>                            <C>       <C>       <C>           <C>           <C>            <C>      <C>        <C>           <C>
Cash at bank                  7,191        45     2,067         9,303        10,280            834      (755)   (3,168)       7,191
Debt due:
Within one year                   -         -         -             -             -              -         -         -            -
After more than one year          -         -   (39,152)      (39,152)            -              -         -         -            -

Net funds/(debt)              7,191        45   (37,085)      (29,849)       10,280            834      (755)   (3,168)       7,191


</TABLE>

                                       F33

<PAGE>


NOTES TO THE ACCOUNTS (continued)

28.    RELATED PARTY TRANSACTIONS

The Company has appointed  Schroder  Investment  Management  Limited ("SIM"),  a
wholly owned  subsidiary of Schroders plc, to provide  company  secretarial  and
administrative  services.  Under the terms of this agreement, SIM is entitled to
receive an annual fee equal to the greater of GBP75,000 or the  aggregate of (i)
0.12% per annum of the first GBP50  million of net assets,  (ii) 0.06% per annum
of the next GBP50  million of such net assets and (iii)  0.04% of the  remaining
net assets.  The agreement is subject to a four-month  notice period.  The total
fees, including VAT, paid or payable to SIM for these services in respect of the
year ended  December 31, 2003 were  GBP280,000  (six months  ended  December 31,
2002:  GBP144,000;  six months ended December 31, 2001:  GBP123,000;  year ended
June 30,  2002:  GBP246,000;  year ended June 30,  2001:  GBP267,000),  of which
GBP146,000 (December 31, 2002: GBP144,000;  December 31, 2001: GBP123,000;  June
30, 2002: GBP126,000;  June 30, 2001: GBP132,000) was outstanding at the balance
sheet  date.  In  addition,  SIM  receives  fees for the  provision  of taxation
services  to the  Company.  The  total  fees  paid or  payable  to SIM for these
services  in respect of the year ended  December  31,  2003 was  GBP22,000  (six
months ended December 31, 2002:  GBP11,000;  six months ended December 31, 2001:
GBP11,000;  year ended June 30, 2002: GBP22,000; year ended June 30, 2001: Nil),
of which GBP33,000 (December 31, 2002: GBP11,000;  December 31, 2001: GBP11,000;
June 30, 2002: GBP22,000) was outstanding at the balance sheet date.

In consideration for its management of the Company's money market portfolio, SIM
receives a fee based on the average  value of the Company's  month-end  cash and
money market portfolio,  excluding funds managed by SIM,  calculated at the rate
of 0.10% per annum on the first GBP75 million of assets, 0.05% on the next GBP75
million and 0.3%  thereafter,  subject to a minimum fee of GBP20,000  per annum.
The total fees,  including VAT, paid or payable for these services in respect of
the year ended  December 31, 2003 were  GBP20,000 (six months ended December 31,
2002: GBP18,000; six months ended December 31, 2001: GBP18,000;  year ended June
30, 2002: GBP25,000;  year ended June 30, 2001:  GBP78,000),  of which GBP10,000
(December  31, 2002:  GBP29,000;  December 31, 2001:  GBP18,000;  June 30, 2002:
GBP10,000;  June 30, 2001: GBP43,000) was outstanding at the balance sheet date.
At  December  31,  2003,  SVIIT held an  investment  of  GBP9.96  million in the
Schroder  Offshore  Cash Fund  (December 31, 2002:  GBP10  million) and GBP31.92
million in a Royal Bank of Scotland International euro Money Market Fund.

SIM has also facilitated  investment trust dealing  services.  The total cost to
the Company for this service, payable to Lloyds TSB Registrars,  for the year to
December 31, 2003 was GBP12,000 (six months ended December 31, 2002:  GBP12,000;
year ended June 30, 2002: GBP21,000; year ended June 30, 2001: GBP11,000).

On April 22,  2002,  SVG Advisers  Limited,  a wholly  owned  subsidiary  of the
Company,  assigned a debt in respect of a future  revenue  stream of GBP1million
due from  Schroder  Investment  Management  (Ireland)  Limited  ("SIMIL") to the
Company for a  consideration  of GBP1  million.  This debt was repaid in full by
October 29, 2003. On May 8, 2003, SVG Advisers  Limited  assigned a further debt
in respect of a future  revenue stream for  EUR2.28million  due from SIML to the
Company  for  consideration  of  EUR2.28million.   At  the  balance  sheet  date
EUR1.972million was outstanding.

John McLachlan and Nicholas  Ferguson are members of the Advisory  Committees of
certain  of the  Schroder  Ventures'  and  Permira  funds in which  the  Company
invests.

Nicholas Ferguson and members of his family and Andrew Williams have an interest
in the Carried  Interest in respect of certain Funds.  With the  introduction of
the  Executive  Share  Option  Plan in May 2001,  Nicholas  Ferguson  and Andrew
Williams  have  forgone a portion of their  entitlement  to Carried  Interest on
existing Funds and any entitlement  they may have to Carried  Interest on future
Schroder  Ventures or Permira funds in return for share  options  granted by the
Company  under the  Executive  Share Option Plan.  Nicholas  Ferguson and Andrew
Williams also  participate  in the Schroder  Ventures  Co-Investment  Scheme and
Schroder Ventures Investment Limited.

                                       F34
<PAGE>

NOTES TO THE ACCOUNTS (continued)

29.      RISK

The  following  disclosures  relating  to the  risks  faced by the  Company  are
provided in accordance with Financial  Reporting  Standard 13,  "Derivatives and
other financial instruments disclosures".

Financial instruments and risk profile
The Company's principal  investment objective is to achieve capital appreciation
by investing primarily in an international  portfolio of buy-out and development
capital  funds,  which are managed or advised by  Schroder  Ventures or Permira.
These investments are typically illiquid.  In addition,  the Company holds money
market  instruments,  cash and  short-term  deposits  and various  items such as
debtors and creditors that arise directly from its  operations.  These financial
instruments held by the Company are generally liquid.

The  holding  of  securities,  investing  activities  and  associated  financing
undertaken  pursuant to this objective  involves certain inherent risks.  Events
may occur that would result in either a reduction in the Company's net assets or
a reduction of revenue profits available for dividend.

As an investment  trust the Company invests in securities for the long term. The
Company has not taken out any derivatives contracts to date.

Currency risk
The  Company is exposed to  currency  risk  directly  since the  majority of its
assets and liabilities  are  denominated in foreign  currency and their sterling
value can be significantly  affected by movements in foreign exchange rates. The
Company does not normally hedge against foreign currency movements affecting the
value of its investments,  but takes account of this risk when making investment
decisions.  The Company does have a EUR285million loan facility which, if drawn,
would  act  as  a  hedge   against  the  currency  risk  on  the  value  of  its
euro-denominated assets.
<TABLE>
<CAPTION>

Financial assets of the Group                  Floating       Fixed    Non-interest       Total
                                                   rate        rate         bearing

                                                 GBP000      GBP000          GBP000      GBP000
<S>                                                <C>           <C>           <C>           <C>
Currency denomination of assets at
December 31, 2003:
Sterling                                         15,680           -          26,430      42,110
Euro                                             31,943           -         409,415     441,358
US dollar                                            29           -         108,952     108,981
Japanese yen                                          -           -          14,625      14,625
Canadian dollar                                      16           -          15,767      15,783


                                                 47,668           -         575,189     622,857



Financial assets of the Group                  Floating       Fixed    Non-interest       Total
                                                   rate        rate         bearing

                                                 GBP000      GBP000          GBP000      GBP000

Currency denomination of assets at
December 31, 2002:
Sterling                                         14,765           -          17,834      32,599
Euro                                              3,989           -         326,809     330,798
US dollar                                            31           -         101,364     101,395
Japanese yen                                          -           -          15,918      15,918
Canadian dollar                                      13           -          26,524      26,537


                                                 18,798           -         488,449     507,247

</TABLE>

                                       F35

<PAGE>

NOTES TO THE ACCOUNTS (continued)

29.      RISK (continued)

Floating  rate assets  consist of  short-term  deposits and money market  funds.
Non-interest  bearing assets represent the fund investments,  co-investments and
other short-term debtors.  The fixed rate assets comprise treasury bills, net of
outstanding  redemptions  but excluding  other short term debtors and creditors,
and can be further analysed as follows:
<TABLE>
<CAPTION>

Fixed rate financial assets                 December 31, 2003                              December 31, 2002
                       Weighted average     Weighted average period on      Weighted average     Weighted average period on
                          Interest rate            which rate is based         Interest rate           which rate  is based

<S>                               <C>                       <C>                          <C>                             <C>
Euro                                  -                              -                     -                              -
US dollars                            -                              -                     -                              -
Sterling                              -                              -                     -                              -
</TABLE>

Financial liabilities of the Group
The  Company  issued  GBP40  million  nominal  of  10  year  4.5%   subordinated
convertible  bonds  in  November  2001,  of  which  GBP0.5million   nominal  and
GBP0.1million nominal were converted into ordinary shares on January 9, 2003 and
November 10,  2003.  The Company  issued a further  GBP49.0  million  nominal of
10-year 4.5%  subordinated  convertible  bonds in the current year.  The Company
does not have any other borrowings at balance sheet date,  although it does have
in place a loan  facility of EUR285  million with the Royal Bank of Scotland plc
and HBOS plc.

The main risk  arising from the  Company's  financial  instruments  is valuation
risk.  The Board  reviews and agrees policy for managing this risk as summarized
below. This policy has remained substantially  unchanged since the launch of the
Company.

Interest rate risk
The Company's  revenue will be affected by changes in prevailing  interest rates
since the majority of its income derives from money market  instruments and bank
deposit  interest.  It also pays  interest on short term loans that may be taken
out from time to time.  The effect of interest  rate changes on the valuation of
investments  and  debt  forms  part  of  valuation  risk,  which  is  considered
separately below.

Valuation risk
The Company's exposure to valuation risk comprises mainly movements in the value
of its  underlying  investments.  A breakdown of the fund  portfolio is given in
note 13 [and a detailed analysis of the twenty largest  underlying  companies is
given in the  December 31, 2003 Report and  Accounts].  In  accordance  with the
Company's accounting policies, as set out in note 1, all underlying  investments
are valued by the Directors in accordance with the current  guidelines issued by
the British Venture Capital Association  ("BVCA"),  adopting the overriding BVCA
principle  that the  value  should  be a fair one.  The  Company  does not hedge
against  movements in the value of these  investments.  Uncertainty  arises as a
result  of  future  changes  in  the  valuation  of  the  Company's   underlying
investments,  the  majority  of which are  unquoted,  and the effect  changes in
exchange rates may have in the sterling value of these investments.  Development
Stage Equity  Investments and Early Stage Equity  Investments,  by their nature,
involve  uncertainty  as to the  ultimate  value  likely to be  realised  on the
disposal of those investments,  particularly as their unquoted nature means that
a ready market may not exist for them.

The  Company's  sensitivity  to  valuation  risk will be  affected by changes in
levels of borrowing  and  liquidity,  as approved by the Board.  At December 31,
2003, a 10% movement in the valuation of the Group's fund  portfolio,  including
listed equity funds and co-investments, would have resulted in a 10.8% change in
net asset value per share.

The Directors believe that the diversified nature of the Company's portfolio and
the number of  underlying  investments  in the Funds  significantly  reduces the
risks normally associated with making investments in the buy-out and development
capital markets.


                                       F36
<PAGE>

NOTES TO THE ACCOUNTS (continued)


29.      RISK (continued)

Holding risk
In certain  circumstances,  the  Company may wish to  transfer  its  holdings in
particular  Funds.  In a majority of the Funds in which the Company will invest,
the general partner,  trustee or manager has the ultimate right, similar to that
exercisable by a board of a private company,  to refuse to register the transfer
of an interest.  While the Company has no reason to believe that any request for
the transfer of an interest would be refused,  it is of course  conceivable that
the general  partner's  trustee's or manager's  overriding  fiduciary duty could
result in its  refusing  to  register  a  particular  transfer  proposed  by the
Company.

If as a  consequence  of a failure  to pay a call,  the  Company is treated as a
defaulting investor under the relevant Fund, it will suffer a resultant dilution
in interest and possibly the compulsory sale of its interest.

Commitment risk
The nature of investing in buy-out and development  capital funds entails making
significant  financial  commitments,  as shown in note 17. At December 31, 2003,
the Group had significant uncalled  commitments of GBP594.4million,  compared to
its consolidated net assets of GBP526.6million.  It is anticipated that over the
longer-term,  and in normal  circumstances,  commitments  would be  financed  by
distributions received on the realization of existing investments.  In addition,
the group  has a  EUR285million  loan  facility  that  could be drawn on to meet
commitments  as they fall due.  However,  a residual risk remains that the group
could be unable to meet its future commitments in full.

                                        F37

<PAGE>

NOTES TO THE ACCOUNTS (continued)

30.  DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
     ACCOUNTING PRINCIPLES

The group's  consolidated  accounts are prepared in accordance  with  accounting
principles  generally  accepted in the United  Kingdom  ("UK GAAP") which differ
from United States generally  accepted  accounting  principles ("US GAAP").  The
significant differences applicable to the Group are summarized below:


Stock-based compensation
No  compensation  expense  arises in relation to the Company's  employees  share
option plan. Under US GAAP, the Company has elected to account for these options
under  Accounting  Principles Board Opinion No. 25 and as such the plan would be
regarded as variable.  No expense  would have arisen in the year ended  December
31,  2001 and the  amount  in the year  ended  December  2002  would  have  been
insignificant and not recorded. Compensation expense of GBP3,231,000 would arise
in the year ended December 31, 2003.

Unamortized issue costs
Under UK GAAP,  unamortized  issue costs are disclosed net against the liability
to which they relate.  Under US GAAP,  unamortized  costs are shown as an asset.
The increase in debtors and long-term  creditors that would result from applying
US GAAP  amounts to  GBP781,000  for the year ended  December  31,  2003  (2002:
GBP799,000), with no change to shareholders' equity.



Revenue returns
The following is a summary of the  significant  adjustments  to revenue  returns
which would be required if US GAAP were to be applied instead of UK GAAP:

<TABLE>
<CAPTION>

                                                            For the     For the six       For the year      For the year
                                                         year ended    months ended              ended             ended
                                                           December    December 31,           June 30,          June 30,
                                                           31, 2003            2002               2002              2001
                                                             GBP000          GBP000             GBP000            GBP000
<S>                                                          <C>             <C>                <C>                 <C>
Revenue (deficit)/surplus on ordinary activities             (5,531)         (2,185)            (1,555)             2,655
after tax and minority interest as reported in the
consolidated statement of total return under UK GAAP

Adjustments:
Stock Option Plan Expense                                    (3,231)               -                  -                 -

Revenue (deficit)/return on ordinary activities after        (8,762)         (2,185)            (1,555)             2,655
tax and minority interest as adjusted to accord with
US GAAP

Revenue return per share calculated on US GAAP               (8.42)p         (2.14)p            (1.52)p             2.60p
revenue (deficit)/return shown above


</TABLE>
                                       F38

<PAGE>


NOTES TO THE ACCOUNTS (continued)

30.  DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED
     ACCOUNTING PRINCIPLES (CONTINUED)

Consolidated statement of cash flows
The  consolidated  statement  of cash  flows  prepared  under  UK GAAP  presents
substantially  the  same  information  as that  required  under US GAAP but they
differ with regard to the classification of items within them and as regards the
definition  of cash under UK GAAP and cash and cash  equivalents  under US GAAP.
Under US GAAP  overdrafts  are classified as debt whereas under UK GAAP they are
netted against cash balances.

Under UK GAAP,  cash flows are presented  separately  for operating  activities,
returns on investments and servicing of finance,  taxation,  capital expenditure
and financial investment,  acquisitions,  equity dividends, management of liquid
resources  and  financing.  US GAAP require only three  categories  of cash flow
activity to be reported;  operating,  investing and  financing.  Cash flows from
taxation and returns on  investments  and  servicing  shown under UK GAAP would,
with the  exception  of  dividends  paid to minority  shareholders,  be included
within  operating  activities  under US GAAP. The payment of dividends  would be
included  within  financing  activities  under  US  GAAP.  Capital  expenditure,
financial  investments and acquisitions are included within investing activities
under US GAAP.

<TABLE>
<CAPTION>

The categories of cash flows under US GAAP can be summarized as follows:

                                                                         Six months        Six months   Year ended        Year
                                                      Year  ended    ended December             Ended      June 30       ended
                                                      December 31           31 2002       December 31         2002     June 30
                                                             2003                                2001                     2001
                                                           GBP000            GBP000            GBP000       GBP000      GBP000

<S>                                                        <C>               <C>               <C>            <C>        <C>
Cash (outflow)/inflow from operating activities            (7,317)           (2,367)           (1,065)        (878)      2,726
Cash (outflow)/inflow on investing activities             (86,677)           (1,504)             1,611     (34,539)       (878)
Cash inflow/(outflow) from financing activities             95,350          (1,119)           (1,841)       37,484      (4,182)

Increase/(decrease) in cash and cash equivalents            1,356           (4,990)               835        2,067      (2,334)
Exchange (loss)/gain on cash balances                       (452)               574              (68)           45        (755)
Cash and cash equivalents:
At the start of the period                                  5,791             4,887             7,191        7,191      10,280

At the end of the period                                   12,509             9,337             7,958        9,303       7,191

</TABLE>



Changes to accounting standards
US Standards
In January 2003, the Financial  Accounting Standards Board (the "FASB") released
Interpretation No 46,  "Consolidation of Variable Interest  Entities" ("FIN 46")
and  December  2003,  the FASB  published a revision  to FIN 46 ("FIN  46-R") to
address certain FIN 46  implementation  issues.  As an investment  company,  the
company is exempt from the requirements of FIN 46.

In May 2003, the FASB issued Financial  Accounting Standard No. 150, "Accounting
for Certain Financial  Instruments with  Characteristics of Both Liabilities and
Equity"  (FAS  150).  FAS 150  changes  the  accounting  for  certain  financial
instruments that, under previous  guidance,  issuers could account for as equity
and requires that these  instruments  be classified as liabilities in statements
of financial position.  This statement is effective  prospectively for financial
instruments  entered  into or  modified  after  May 31,  2003 and  otherwise  is
effective at the beginning of the first interim  reporting period starting after
June 15,  2003.  The  adoption of FAS 150 is not  expected to impact the group's
financial statements for US purposes.

International Financial Reporting Standards

The Company will adopt  International  Accounting  Standards ("IAS") with effect
from January 1, 2005. The main impacts of adopting IAS are expected to be:


                                       F39

<PAGE>

NOTES TO THE ACCOUNTS (continued)

     1.   Accounting  for share  options.  The cost to the  Company of  granting
          share options will be charged to the revenue account.  The cost should
          equate to the value of services  received by the Company in respect of
          which the options are  granted.  This should  typically be measured as
          the fair value of the options on the date they are  granted.  If there
          is a vesting period, the services are assumed to be rendered over that
          period  and  the  cost  should  be  amortized   accordingly.   Vesting
          conditions also need to be taken into account,  as well as an estimate
          of the frequency of staff turnover.

     2.   Accounting for convertible  bonds. The Company has issued  convertible
          bonds. The redemption value of these bonds amounted to GBP89.4 million
          at December 31, 2003 and is included in long-term creditors. Under IAS
          these  instruments  will  have to be  separately  valued  as debt  and
          equity.  The  debt  component  will  be  valued  by  reference  to  an
          equivalent  'straight' bond and the equity component will be the value
          of the option  element of converting  the bonds into ordinary  shares.
          The debt will be accounted  for as a creditor and the equity will form
          part of reserves.

                                       F40


<PAGE>


<TABLE>
<CAPTION>

                                   Exhibit Name
Exhibit
Number
<S>                     <C>                                                                                  <C>

1.1             Memorandum of Association                                                                     *
1.2             Articles of Association, as adopted on December 5, 2000                                       *
2.1             Trust Deed, dated November 21, 2003, between the Company and The Law Debenture Trust         ***
                Corporation p.l.c.
2.2             Trust Deed, dated May 20, 2003, between the Company and The Law Debenture Trust           Filed
                Corporation p.l.c.                                                                         herewith
2.3             First Supplemental Trust Deed, dated July 17, 2003, between the Company and The Law       Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
2.4             Second Supplemental Trust Deed, dated July 21, 2003, between the Company and The Law      Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
2.5             Third Supplemental Trust Deed, dated August 8, 2003, between the Company and The Law      Filed
                Debenture Trust Corporation p.l.c.                                                         herewith
4.1             Deposit Agreement, dated November 30, 2000, between the Company and The Bank of New           **
                York
4.2             Services Agreement, dated March 16, 2001, between the Company and Schroder Ventures           **
                K.K. (Japan)
4.3             Services Agreement, dated March 16, 2001, between the Company and Schroder Capital            **
                Partners Limited (Asia)
4.4             Services Agreement, dated March 16, 2001, between the Company and Schroders &                 **
                Associates Canada Inc. (Canada)
4.5             Services Agreement, dated March 16, 2001, between the Company and Schroder Ventures           **
                Life Sciences Advisers Limited (Life Sciences)
4.6             Services Agreement, dated March 16, 2001, between the Company and Schroder Venture            **
                Partners LLC (U.S.)
4.7             Services Agreement, dated March 16, 2001, among the Company, Schroder Ventures                **
                (London) Limited and Schroder Ventures Europe BV
4.8             Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroder Ventures Limited
4.9             Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroder Ventures Investments Limited
4.10            Services Agreement, dated March 16, 2001, between Schroder Ventures (London) Limited          **
                and Schroders plc
4.11            Fund of Funds Agreement, dated March 16, 2001, between Schroder Ventures (London)             **
                Limited and Schroder Investment Management (Ireland) Limited
4.12            Facility Agreement, dated June 16, 2003, between the Company,  Barings (Guernsey)         Filed
                Limited, The Governor and Company of The Bank of Scotland and The Royal Bank of            herewith
                Scotland plc
4.13            The Executive Share Option Plan                                                               **
4.14            Placing Agreement, dated October 3, 2003, between the Company and J.P. Morgan             Filed
                Securities Limited                                                                         herewith
8.1             List of Subsidiaries of the Company                                                           **
10.1            The Company's 2003 Report and Accounts                                                    Filed
                                                                                                           herewith
10.2            The Company's December 2002 Report and Accounts                                              ****
10.3            The Company's 2002 Report and Accounts                                                       ***
10.4            Incorporated Sections of the Company's 2001 Report and Accounts                           Filed
                                                                                                           herewith
10.5            Incorporated Sections of the Company's Interim 2001 Report and Accounts                   Filed
                                                                                                           herewith
12.1            Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(a)                   Filed
                                                                                                           herewith
12.2            Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a)                   Filed
                                                                                                           herewith
13.1            Certification of Chief Executive Officer pursuant to SEC Rule 13a-14(b)                   Filed
                                                                                                           herewith
13.2            Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(b)                   Filed
                                                                                                           herewith

</TABLE>


* Incorporated herein by reference to the Company's 2000 annual report on Form
  20-F, filed with the Commission on January  16, 2001

** Incorporated herein by reference to the Company's 2001 annual report on Form
   20-F, filed with the Commission on November 8, 2001

*** Incorporated herein by reference to the Company's 2002 annual report on
    Form 20-F, filed with the Commission on December 20, 2002

**** Incorporated herein by reference to the Company's December 2002 transition
     report on Form 20-F, filed with the Commission on April 3, 2003

<PAGE>


-----------
EXHIBIT 2.2
-----------


THIS TRUST DEED is made on                      , 2003 BETWEEN:

(1)      SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST  plc,  a  company
         incorporated  under the laws of England  and Wales,  whose  registered
         office is at 31 Gresham Street, London EC2V 7QA (the "Issuer"); and

(2)      THE LAW DEBENTURE TRUST  CORPORATION  p.l.c.,  a company  incorporated
         under the laws of England  and Wales,  whose  registered  office is at
         Fifth Floor,  100 Wood Street,  London EC2V 7EX (the "Trustee",  which
         expression shall, wherever the context so admits, include such company
         and all other  persons or companies  for the time being the trustee or
         trustees of these  presents)  as trustee for the  Holders  and,  where
         applicable, Couponholders (each as defined below).

WHEREAS:

(1)     By  resolution  of a duly  appointed  Committee  of the  Board  of
        Directors of the Issuer dated 12th May,  2003 and a resolution of the
        Board of Directors of the Issuer dated 6th March, 2003 the Issuer has
        resolved to issue GBP40,000,000 4.5 per cent.  Subordinated  Convertible
        Bonds due 2013 to be constituted by this Trust Deed.

(2)    The Trustee has agreed to act as trustee of these presents for the
       benefit  of the  Holders  and,  where  applicable,  Couponholders  upon
       and subject to the terms and conditions of these presents.

NOW THIS TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:

1.       Definitions

1.1  In these  presents,  unless  there is  anything  in the  subject or context
     inconsistent therewith, all words and expressions defined in the Conditions
     shall have the  meaning  in the rest of this  Trust Deed and the  following
     expressions shall have the following meanings:

     "Agency  Agreement"  means,  in relation to the  Securities  of any series,
     the agreement appointing the initial Principal Paying Agent and, if
     applicable, Registrar  and/or  Transfer  Agents in relation to such
     Securities and any other  agreement for the time being in force  appointing
     Successor  paying agents and, if applicable, registrars and/or transfer
     agents in relation to such  Securities,  or in connection  with their
     duties,  the terms of which have been previously approved in writing by the
     Trustee,  together with any agreement for the time being in force  amending
     or modifying with the prior written approval of the Trustee any of the
     aforesaid agreements in relation to such Securities;

    "Agent Bank" means,  in relation to the Securities of any relevant  series,
    the bank  initially  appointed as agent bank in relation to such  Securities
    by the Issuer pursuant to the relative Agent Bank Agreement or, if
    applicable, any Successor agent bank in relation to such Securities;

<PAGE>

                                     2


    "Agent Bank  Agreement"  means,  in relation to the  Securities  of any
    relevant series,  the  agreement  (which may, but need not, be the  relative
    Agency Agreement) appointing the initial Agent Bank in relation to such
    Securities and any  other  agreement  for the  time  being  in  force
    appointing  any Successor agent bank in relation to such Securities,  or in
    connection with its duties, the terms of which have been previously
    approved in writing by the  Trustee,  together  with any  agreement  for the
    time  being in force amending or modifying with the prior written approval
    of the Trustee any of the aforesaid agreements in relation to such
    Securities;

    "Appointee" means any attorney,  manager, agent, delegate, nominee,
    custodian or other person appointed by the Trustee under these presents;

    "Auditors" means the  auditors for the time being of the Issuer or, in the
    event of their  being  unable  or  unwilling  promptly  to carry  out any
    action requested of them pursuant to the provisions of these presents,
    such other firm of chartered  accountants as may be appointed for the
    relevant purpose by the Issuer and approved in writing by the Trustee for
    such purpose;

    "Bearer Securities" means those of the Securities which are for the time
    being in bearer form;

    "Business  Day" means a day  (excluding  Saturday  or Sunday or public
    holidays in England and Wales) on which banks  generally  open for business
    in the City of London for the transaction of normal banking business;

    "Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

    "Conditions" means:

    (i) in relation to the Original Bonds, the Conditions in the form set out in
        the Second Schedule as the same may from time to time be modified in
        accordance with these presents and any reference in these presents to a
        particular specified Condition or paragraph of a Condition shall in
        relation to the Original Bonds be construed accordingly; and

   (ii) in relation to the Further Securities of any series, the Conditions in
        the form set out or referred to in the supplemental trust deed relating
        thereto as the same may from time to time be modified in accordance with
        these presents and any reference in these presents to a particular
        specified Condition or paragraph of a Condition shall in relation to the
        Further Securities of any series, unless either referring specifically
        to a particular specified Condition or paragraph of a Condition of such
        Further Securities or the context otherwise requires, be construed as a
        reference to the provisions (if any) in the Conditions thereof which
        correspond to the provisions of the particular specified Condition or
        paragraph of a Condition of the Original Bonds;

   "Couponholders" means the several persons who are for the time being holders
   of the Coupons;

<PAGE>


                                        3


   "Coupons"  means  the  bearer  interest  coupons   appertaining  to  the
   Bearer Securities  in definitive  form or, as the context may require,  a
   specific number thereof and includes any replacements for Coupons issued
   pursuant to the Conditions and, where the context so permits, the Talons;

   "Euroclear" means Euroclear Bank S.A./N.V. as operator of the Euroclear
   System;

   "Event of Default'' means any of the conditions, events or acts provided in
   Conditions 8.1, 8.2 and 8.3;

   "Extraordinary Resolution" has the meaning set out in paragraph 20 of the
   Fourth Schedule;

   "Further Securities" means bonds or notes (whether in bearer or registered
   form) of the Issuer constituted by a trust deed supplemental to this Trust
   Deed pursuant to Clause 2.5 or the principal amount thereof for the time
   being outstanding or, as the context may require, a specific number thereof
   and includes any replacements for Further Securities issued pursuant to
   Condition 15 and, where applicable, any Global Security issued in respect
   thereof;

   "Global Security" means any global bond or note issued in respect of the
   Further Securities of any relevant series and includes any replacements for
   Global Securities issued in respect thereof;

   "Holders" means the several persons who are for the time being holders of the
   Securities (being, in the case of Bearer Securities, the bearers thereof and,
   in the case of Registered Securities, the several persons whose names are
   entered in the register of holders of the Registered Securities as the
   holders thereof) which expression shall, while any Global Security remains
   outstanding, mean in relation to the Securities represented thereby each
   person who is for the time being shown in the records of Euroclear or
   of Clearstream, Luxembourg as the holder of a particular principal amount of
   such Securities (in which regard any certificate or other document issued by
   Euroclear or Clearstream, Luxembourg as to the principal amount of Securities
   represented by a Global Security standing to the account of any person
   shall be conclusive and binding for all purposes) for all purposes other than
   with respect to the payment of principal, premium (if any) and interest on
   such Securities, the right to which shall be vested, as against the Issuer,
   solely in the bearer of such Global Security in accordance with and subject
   to its terms and the terms of these presents; and the words "holder" and
   "holders" and related expressions shall (where appropriate) be construed
   accordingly;

   "Liability" means any loss, damage, cost, charge, claim, demand, expense,
   judgment, action, proceeding or other liability whatsoever (including,
   without limitation, in respect of taxes, duties, levies, imposts
   and other charges) and including any amounts in respect of value added tax
   or similar tax included therein to the extent not recoverable by the person
   suffering the loss, damage, cost, charge, claim, demand, expense, judgement,
   action, proceeding or other liability or a member of such person's group and
   legal fees and expenses;

<PAGE>

                                           4



   "Original Bondholders" means the several persons who are for the time being
   Holders of the Original Bonds;

   "Original Bonds" means the bonds in registered form comprising the said
   GBP40,000,000 4.5 per cent. Subordinated Convertible Bonds due 2013 of the
   Issuer hereby constituted or the principal amount thereof for the time being
   outstanding;

   "outstanding" means, in relation to the Securities, all the Securities
   issued other than:

     (A)    those Securities which have been redeemed and cancelled pursuant to
          these presents;

     (B)  those  Securities  in  respect  of which  the date for  redemption  in
          accordance with the Conditions has occurred and the redemption  moneys
          (including  premium (if any) and all interest  payable  thereon)  have
          been duly paid to the Trustee or to the  Registrar  as provided for in
          Clause 2 or, in the case of Bearer Securities, to the Principal Paying
          Agent in the  manner  provided  in the  Agency  Agreement  (and  where
          appropriate  notice  to that  effect  has been  given to the  relative
          Holders in  accordance  with  Condition  18) and remain  available for
          payment against presentation of the relevant Securities and/or Coupons
          (if such presentation is required);

     (C)  those Securities which have been purchased and cancelled in accordance
          with the Conditions;

     (D)  those  Securities which have become void or in respect of which claims
          have become prescribed;

     (E)  in  the  case  of  Bearer  Securities,   those  mutilated  or  defaced
          Securities which have been surrendered and cancelled and in respect of
          which replacements have been issued pursuant to the Conditions;

     (F)  in  the  case  of  Bearer   Securities,   (for  the  purpose  only  of
          ascertaining  the principal  amount of the Securities  outstanding and
          without  prejudice to the status for any other purpose of the relevant
          Securities)  those  Securities  which are  alleged  to have been lost,
          stolen or  destroyed  and in respect of which  replacements  have been
          issued pursuant to the Conditions;

     (G)  in the case of Bearer  Securities,  any Global  Security to the extent
          that it shall have been  exchanged  for  another  Global  Security  in
          respect of the Securities of the relevant series or for the Securities
          of the relevant series in definitive form pursuant to its provisions,

     PROVIDED THAT for each of the following purposes, namely:

          (a)  the right to attend and vote at any meeting of the Holders or any
               of them;

<PAGE>

                                          5


          (b)  the  determination  of how many and which  Securities are for the
               time  being  outstanding  for the  purposes  of Clause  9.1,  the
               Conditions  and  paragraphs  2,  5,  6, 9 and  14 of  the  Fourth
               Schedule;

          (c)  any discretion,  power or authority  (whether  contained in these
               presents  or vested by  operation  of law)  which the  Trustee is
               required,  expressly or impliedly, to exercise in or by reference
               to the interests of the Holders or any of them; and

          (d)  the determination by the Trustee whether any event, circumstance,
               matter or thing is, in its opinion, materially prejudicial to the
               interests of the Holders or any of them,

     those Securities (if any) which are for the time being held by or on behalf
     of the  Issuer  or any of its  Subsidiaries  or any  person  acting in
     concert  with them shall  (unless and until  ceasing to be so held) be
     deemed not to remain outstanding;

     "Paying Agents"  means,  in  relation  to the  Securities  of any  relevant
     series, the several institutions  (including where the context permits
     the Principal  Paying  Agent) at their  respective  specified  offices
     initially appointed as paying agents in relation to such Securities by
     the Issuer  pursuant  to the  relative  Agency  Agreement  and/or,  if
     applicable,   any   Successor   paying  agents  in  relation  to  such
     Securities;

     "Potential Event of Default" means any condition,  event or act which, with
     the lapse of time  and/or the issue,  making or giving of any  notice,
     certification,   declaration,  demand,  determination  and/or  request
     and/or the taking of any similar  action and/or the  fulfilment of any
     similar condition, would constitute an Event of Default;

     "Principal  Paying  Agent"  means,  in  relation to the  Securities  of any
     relevant  series,  the institution at its specified  office  initially
     appointed as principal  paying agent in relation to such Securities by
     the  Issuer  pursuant  to  the  relative   Agency   Agreement  or,  if
     applicable,  any Successor  principal paying agent in relation to such
     Securities;

     "Reference  Banks"  means,  in relation to the  Securities  of any relevant
     series,  the several banks  initially  appointed as reference banks in
     relation  to such  Securities  by the  Issuer and  referred  to in the
     Conditions of such  Securities  and/or,  if applicable,  any Successor
     reference banks in relation to such Securities;

     "Registered  Securities"  means those of the  Securities  which are for the
     time being in registered form;

     "Registrar" means,  in relation to the  Securities  of any relevant  series
     (being, or which are exchangeable  for,  Registered  Securities),  the
     institution at its specified office  initially  appointed as registrar
     in relation to such  Securities by the Issuer pursuant to the relative
     Agency  Agreement  or,  if  applicable,  any  Successor  registrar  in
     relation to such Securities;

     "Relevant Date" has, in relation to any relevant  Further  Securities,  the
     meaning set out in the Conditions;

<PAGE>

                                       6

     "repay",  "redeem" and "pay" shall each include both the others and cognate
     expressions shall be construed accordingly;

     "Securities" means,  as the context may require,  the Original Bonds and/or
     any Further Securities and/or any series thereof;

     "Senior Liabilities" has the meaning given to it in Condition 21;

     "specified office" means, in relation to a Paying Agent,  Transfer Agent or
     Registrar (as appropriate), the office identified with its name at the
     end of the Conditions or any other office  approved by the Trustee and
     notified to Holders pursuant to Clause 14(xii);

     "Stock  Exchange"  means,  in relation to the  Securities  of any  relevant
     series,  the  stock  exchange  or  exchanges  (if any) on  which  such
     Securities are for the time being quoted or listed;

     "Subsidiary"  has the  meaning  ascribed  to it  under  Section  736 of the
     Companies Act 1985;

     "Successor"  means,  in relation to the Agent Bank,  the  Principal  Paying
     Agent, the other Paying Agents, the Reference Banks, the Registrar and
     the  Transfer  Agents,  any  successor  to any  one or more of them in
     relation to the  Securities of the relevant  series which shall become
     such pursuant to the provisions of these presents,  the relative Agent
     Bank Agreement  and/or the relative Agency  Agreement (as the case may
     be) and/or such other or further agent bank,  principal  paying agent,
     paying agents,  reference banks,  registrar and/or transfer agents (as
     the case may be) in relation to such Securities as may (with the prior
     approval  of, and on terms  previously  approved  by,  the  Trustee in
     writing)  from  time  to  time  be  appointed  as  such,   and/or,  if
     applicable,  such other or further  specified  offices  (in the former
     case  being  within  the  same  city  as  those  for  which  they  are
     substituted) as may from time to time be nominated in each case by the
     Issuer  and  (except  in the  case  of the  initial  appointments  and
     specified  offices  made under and  specified in the  Conditions,  the
     relative Agent Bank Agreement and/or the relative Agency Agreement, as
     the case may be) notice of whose  appointment  or, as the case may be,
     nomination has been given to the relevant  Holders  pursuant to Clause
     14(xii) in accordance with Condition 18;

     "successor in  business"  means any  company  which,  as the  result of any
     amalgamation,  merger  or  reconstruction  the  terms  of  which  have
     previously been approved in writing by the Trustee:

     (i)  owns beneficially the whole or substantially the whole of the
          undertaking, property and assets owned by the Issuer immediately
          prior thereto; and

    (ii) carries on, as successor to the Issuer, the whole or substantially the
         whole of the business carried on by the Issuer immediately prior
         thereto;

     "Talons" means the talons  appertaining  to, and exchangeable in accordance
     with the provisions therein contained for further Coupons appertaining
     to, the Bearer  Securities in definitive  form of any relevant  series
     and  includes  any  replacements  for Talons  issued  pursuant  to the
     Condition relating to such Bearer Securities;

<PAGE>

                                      7

    "these presents" means this Trust Deed and the Schedules and any trust deed
    supplemental  hereto  and  the  Schedules  (if  any)  thereto  and the
    Securities,  the Coupons and the Conditions,  all as from time to time
    modified  in  accordance   with  the  provisions   herein  or  therein
    contained;

    "Transfer  Agents"  means,  in relation to the  Securities  of any relevant
    series (being, or which are exchangeable for, Registered  Securities),
    the  institutions  at their  respective  specified  offices  initially
    appointed  as transfer  agents in relation to such  Securities  by the
    Issuer  pursuant  to  the  relative  Agency   Agreement   and/or,   if
    applicable,   any  Successor  transfer  agents  in  relation  to  such
    Securities; and

    "Trust  Corporation"  means a corporation  entitled by rules made under the
    Public Trustee Act, 1906 of Great Britain or entitled  pursuant to any
    other  comparable  legislation  applicable  to a trustee  in any other
    jurisdiction to carry out the functions of a custodian trustee.

    Wordsdenoting the singular  shall include the plural and vice versa;  words
    denoting one gender only shall  include the other  genders;  and words
    denoting  persons only shall include firms and  corporations  and vice
    versa.

1.2  (i) All  references in these  presents to principal  and/or  premium and/or
         interest  in respect  of the  Securities  or to any  moneys  payable by
         the Issuer under these  presents  shall be deemed to include a
         reference to any additional  amounts which may be payable under the
         Conditions  relating to the  relevant  Securities  or,  if  applicable,
         under any  undertaking  or covenant  given  pursuant  to  Clause
         21.1(ii)(b)  and all  references  to principal  and/or  principal
         amount  shall,  unless the context  otherwise requires,  be deemed to
         include a reference  to the net proceeds of sale of any Relevant Bonds
         pursuant to Condition 13.5.

     (ii) All  references  in these  presents to "pounds",  "sterling",  "pounds
          sterling",  "pence" or the signs  "GBP" or "p" shall be  construed  as
          references  to the  lawful  currency  for the time being of the United
          Kingdom.

    (iii) All  references  in these  presents to any statute or any provision of
          any  statute   shall  be  deemed  also  to  refer  to  any   statutory
          modification  or  re-enactment  thereof or any  statutory  instrument,
          order or regulation made thereunder or under any such  modification or
          re-enactment.

     (iv) All  references in these  presents to any action,  remedy or method of
          proceeding  for the  enforcement  of the rights of creditors  shall be
          deemed to include,  in respect of any jurisdiction other than England,
          references  to such  action,  remedy or method of  proceeding  for the
          enforcement  of the rights of creditors  available or  appropriate  in
          such  jurisdiction  as shall most nearly  approximate  to such action,
          remedy or method  of  proceeding  described  or  referred  to in these
          presents.

<PAGE>


                                          8


     (v)  All  references in these  presents to taking  proceedings  against the
          Issuer shall be deemed to include references to proving in the winding
          up of the Issuer.

    (vi)  All  references  in these  presents to Euroclear  and/or  Clearstream,
          Luxembourg shall be deemed to include references to any other clearing
          system as is approved by the Trustee.

   (vii)  Unless the context  otherwise  requires words or  expressions  used in
          these  presents  shall bear the same  meanings as in the Companies Act
          1985.

  (viii)  In this Trust Deed  references to Schedules,  Clauses,  sub-clauses,
          paragraphs and sub-paragraphs  shall be construed as references to the
          Schedules  to  this  Trust  Deed  and  to  the  Clauses,  sub-clauses,
          paragraphs and sub-paragraphs of this Trust Deed respectively.

    (ix)  In these presents  tables of contents and Clause headings are included
          for ease of reference and shall not affect the  construction  of these
          presents.

     (x)  If at any time any provision of these presents is or becomes  illegal,
          invalid  or  unenforceable  in  any  respect  under  the  law  of  any
          jurisdiction,  neither the legality, validity or enforceability of the
          remaining  provisions of these presents nor the legality,  validity or
          enforceability   of  such  provision   under  the  law  of  any  other
          jurisdiction shall in any way be affected or impaired thereby.

2.  Covenant to Repay and to Pay Interest on Original Bonds

2.1 The  aggregate  principal  amount  of the  Original  Bonds  is  limited  to
    GBP40,000,000.

2.2 The Issuer  covenants  with the Trustee that it will,  in  accordance  with
    these  presents,  on the due date for the final  maturity  of the  Original
    Bonds provided for in the  Conditions,  or on such earlier date as the same
    or any part thereof may become due and repayable thereunder, pay or procure
    to be paid unconditionally to or to the order of the Trustee in sterling in
    London in immediately  available funds the principal amount of the Original
    Bonds repayable on that date and shall in accordance with these presents in
    the  meantime  and until such date (both  before and after any  judgment or
    other order of a court of competent jurisdiction) pay or procure to be paid
    unconditionally  to or to the order of the  Trustee as  aforesaid  interest
    (which  shall  accrue  from  day to day)  on the  principal  amount  of the
    Original Bonds at the rate and on the dates specified in the Conditions.

    PROVIDED THAT:

     (a)  every  payment of  principal  or interest  in respect of the  Original
          Bonds made to an  account  specified  by the  Original  Bondholder  in
          accordance  with  the  Conditions  or by a  sterling  cheque  for  the
          relevant amount sent to the Original Bondholder in accordance with the
          Conditions   (provided   that  such   cheque  is   honoured  on  first
          presentation)  shall be deemed to be a  satisfaction  of the  covenant
          contained in this Clause;

<PAGE>

                                        9


     (b)  in any case where  payment of  principal  is not made to the  Original
          Bondholders  on or before the due date,  interest  shall  continue  to
          accrue on the principal  amount of each Original Bond (both before and
          after  any   judgment  or  other   order  of  a  court  of   competent
          jurisdiction) at the rate aforesaid up to and including the date which
          the Trustee determines to be the date on and after which payment is to
          be made to the Original  Bondholders in respect thereof as stated in a
          notice given to the Original  Bondholders in accordance with Condition
          18 (such  date to be not later than 30 days after the day on which the
          whole of such  principal  amount  together with an amount equal to the
          interest  which has accrued and is to accrue  pursuant to this proviso
          up to and including  that date has been  received by the Trustee,  the
          Registrar or the Original Bondholders); and

     (c)  in any case where  payment  of the whole or any part of the  principal
          amount of any Original Bond is improperly withheld or refused upon due
          presentation  thereof  (other than in  circumstances  contemplated  by
          proviso (b) above)  interest  shall  accrue on that  principal  amount
          payment  of which has been so  withheld  or refused  (both  before and
          after  any   judgment  or  other   order  of  a  court  of   competent
          jurisdiction)  at the rate  aforesaid  from and  including the date of
          such  withholding  or  refusal up to and  including  the date on which
          payment  of the full  amount  (including  interest  as  aforesaid)  in
          sterling payable in respect of such Original Bond is made.

     The  Trustee  will  hold the  benefit  of this  covenant  on trust  for the
     Original Bondholders and itself in accordance with these presents.

     Subordination

2.3  (i) In the event of the winding up of the Issuer, all amounts in respect of
         the Original Bonds paid to the Trustee by the liquidator of the Issuer
         in a winding up of the Issuer  (including for the avoidance of doubt
         pursuant to Clause 8) shall be held by the Trustee upon trust:

          (a)  first for payment or  satisfaction  of all  amounts  then due and
               unpaid  under  Clause  15  and/or  16(x)  to the  Trustee  or any
               Appointee;

          (b)  secondly for payment of claims of all Senior  Liabilities  of the
               Issuer in the  winding up of the  Issuer to the extent  that such
               claims are  admitted  to proof in the winding up (not having been
               satisfied  out of the other  resources  of the Issuer)  excluding
               interest accruing after commencement of the winding up; and

          (c)  thirdly as to the  balance  (if any) for  payment  pari passu and
               rateably  of the amounts  owing on or in respect of the  Original
               Bonds.

     (ii) The trust secondly  mentioned in Clause 2.3(i) may be performed by the
          Trustee  paying  over to the  liquidator  for the  time  being  in the
          winding  up of the  Issuer  the  amounts  received  by the  Trustee as
          aforesaid (less any amounts thereof applied in the  implementation  of
          the  trust  first  mentioned  in  Clause  2.3(i))  on terms  that such
          liquidator  shall  distribute the same  accordingly and the receipt by
          such  liquidator of the same shall be a good  discharge to the Trustee
          for the  performance by it of the trust  secondly  mentioned in Clause
          2.3(i).

<PAGE>

                                     10


    (iii) The Trustee shall be entitled and it is hereby  authorised to call for
          and to accept as conclusive  evidence  thereof a certificate  from the
          liquidator for the time being of the Issuer as to:

          (a)  the amount of the claims of the Senior Liabilities referred to in
               Clause 2.3(i); and

          (b)  the persons entitled thereto and their respective entitlements.

     Trustee's Requirements Regarding Paying Agents

2.4  At any time after an Event of Default or a Potential Event of Default shall
     have  occurred  or the  Securities  shall  otherwise  have  become  due and
     repayable or the Trustee shall have received any money which it proposes to
     pay under Clause 10 to the Holders and/or Couponholders, the Trustee may:

     (i)  by notice in writing to the Issuer,  the Principal  Paying Agent,  the
          other Paying Agents, the Registrar and the Transfer Agents require the
          Principal Paying Agent, the other Paying Agents, the Registrar and the
          Transfer Agents pursuant to the Agency Agreement:

          (a)  to act  thereafter  as Principal  Paying  Agent,  Paying  Agents,
               Registrar  and  Transfer  Agents  respectively  of the Trustee in
               relation  to  payments  to be made by or on behalf of the Trustee
               under the  provisions of these presents  mutatis  mutandis on the
               terms provided in the Agency  Agreement  (save that the Trustee's
               liability under any provisions thereof for the indemnification of
               out-of-pocket  expenses of the Paying  Agents,  the Registrar and
               the Transfer  Agents shall be limited to the amounts for the time
               being  held  by the  Trustee  on the  trusts  of  these  presents
               relating  to the  relative  Securities  and  available  for  such
               purpose) and  thereafter to hold all  Securities  and Coupons and
               all  sums,  documents  and  records  held by them in  respect  of
               Securities and Coupons to the order of the Trustee; or

          (b)  to deliver up all Securities and Coupons and all sums,  documents
               and records held by them in respect of Securities  and Coupons to
               the  Trustee  or as the  Trustee  shall  direct  in  such  notice
               provided  that such  notice  shall be deemed  not to apply to any
               documents  or  records  which  the  relative  Paying  Agent,  the
               Registrar or the relative  Transfer Agent, as the case may be, is
               obliged not to release by any law or regulation, and/or

<PAGE>


                                         11


     (ii) by notice in writing to the Issuer  require it to make all  subsequent
          payments in respect of the  Securities  and Coupons to or to the order
          of the Trustee and not to the Principal Paying Agent; with effect from
          the issue of any such  notice to the Issuer  and until such  notice is
          withdrawn proviso (A) to Clause 2.2 relating to the Original Bonds and
          any similar provisos relating to any Further Securities shall cease to
          have effect.

2.5      Further Issues

     (i)  The Issuer shall be at liberty  from time to time (but subject  always
          to the  provisions  of these  presents)  without  the  consent  of the
          Holders or  Couponholders  to create and issue  further bonds or notes
          (whether in bearer or registered form) either:

          (a)  ranking pari passu in all  respects (or in all respects  save for
               the first  payment  of  interest  thereon),  and so that the same
               shall be consolidated and form a single series, with the Original
               Bonds and/or the Further Securities of any series; or

          (b)  upon such terms as to  ranking,  interest,  conversion,  premium,
               redemption  and  otherwise as the Issuer may at the time of issue
               thereof  determine  provided  that holders of such bonds or notes
               shall be  considered a separate  series for all purposes of these
               presents.

     (ii) Any further bonds or notes which are to be created and issued pursuant
          to the provisions of paragraph (A) above so as to form a single series
          with the Original  Bonds and/or the Further  Securities  of any series
          shall be constituted by a trust deed  supplemental  to this Trust Deed
          and any  other  further  bonds or notes  which are to be  created  and
          issued  pursuant to the provisions of paragraph (A) above may (subject
          to  the  consent  of the  Trustee)  be  constituted  by a  trust  deed
          supplemental  to this Trust Deed.  In any such case where such further
          bonds or notes are to be constituted by a trust deed  supplemental  to
          this  Trust  Deed the  Issuer  shall  prior  to the  issue of any such
          further bonds or notes to be so constituted (being Further Securities)
          execute and deliver to the Trustee a trust deed  supplemental  to this
          Trust Deed (in relation to which all applicable  stamp duties or other
          documentation fees, duties or taxes have been paid and, if applicable,
          duly stamped or denoted accordingly provided that the Issuer shall not
          be responsible  for paying any United Kingdom stamp duty or stamp duty
          reserve tax arising in connection  with the issue or delivery of bonds
          or notes (or any shares or  securities  into which such bonds or notes
          convert)  to, or to a nominee or agent for (i) any person  providing a
          clearance  service  within the meaning of Section 70 or 96 Finance Act
          1986  or  (ii)  any  person  whose  business  is or  includes  issuing
          depositary receipts within the meaning of Section 67 or 93 Finance Act
          1986) and  containing  a covenant  by the  Issuer in the form  mutatis
          mutandis of Clause 2.2 in relation to the principal,  premium (if any)
          and  interest  in respect of such  Further  Securities  and such other
          provisions  (whether  or not  corresponding  to any of the  provisions
          contained in this Trust Deed) as the Trustee shall reasonably require.

<PAGE>

                                     12


    (iii) A memorandum of every such  supplemental  trust deed shall be endorsed
          by the  Trustee on this Trust Deed and by the Issuer on its  duplicate
          of this Trust Deed.

2.6  Any Further  Securities not forming a single series with the Original Bonds
     or  Further  Securities  of any series  shall  form a  separate  series and
     accordingly the provisions of Clause 2.4,  Clauses 4 to 22 (both inclusive)
     and Clause  23.2 and the Third and Fourth  Schedules  shall  apply  mutatis
     mutandis  separately and independently to each series of the Securities and
     in such Clauses and  Schedules  the  expressions  "Securities",  "Holders",
     "Coupons", "Couponholders" and "Talons" shall be construed accordingly.

3.   Form and Issue of Original Bonds

3.1  The Original Bonds shall be in definitive registered form, and shall comply
     with the provisions of Condition 1 and the Third Schedule.

3.2  The  provisions of the  Conditions and the Third Schedule shall have effect
     in relation to the transfer of the Original Bonds.

3.3  The certificates in respect of the Original Bonds shall be substantially in
     the form set out in the First  Schedule and shall be signed  manually or in
     facsimile by two of the  Directors or one Director and the Secretary of the
     Issuer on behalf of the Issuer.

3.4  The Issuer may use the  facsimile  signature  of any person who at the date
     such  signature  is affixed is a Director  or the  Secretary  of the Issuer
     notwithstanding  that, at the time of issue of any of the  certificates  in
     respect of the Original  Bonds, he may have ceased for any reason to be the
     holder of such office and certificates so issued shall be evidence of valid
     and binding obligations of the Issuer.

4.   Covenants in relation to Conversion Right

4.1  The Issuer hereby undertakes and covenants with the Trustee that:-

     (i)  so long as a Conversion  Right in respect of any of the Original Bonds
          remains exercisable, it will, subject to the Conditions:-

          (a)  keep available for issue free from pre-emptive  rights out of its
               authorised but unissued capital such number of ordinary shares in
               the issued share capital of the Issuer (the "Ordinary Shares") as
               would  enable  the  Conversion  Rights  and all  other  rights of
               conversion into or exchange or  subscription  for Ordinary Shares
               to be satisfied in full;

          (b)  not  issue or pay up any  securities,  in  either  case by way of
               capitalisation  of  profits  or  reserves,  other than (i) by the
               issue of fully paid Ordinary Shares to its Ordinary  Shareholders
               and other holders of shares in the capital of the Issuer which by
               their  terms  entitle  the  holders  thereof to receive  Ordinary
               Shares on a capitalisation of profits or reserves, or (ii) by the
               issue  of  Ordinary  Shares  paid up in full  out of  profits  or
               reserves (in accordance  with  applicable law) and issued wholly,
               ignoring fractional entitlements,  in lieu of a cash dividend, or
               (iii) by the issue of fully paid equity share capital (other than
               Ordinary  Shares) to the holders of equity  share  capital of the
               same  class and other  holders  of shares in the  capital  of the
               Issuer  which by their  terms  entitle  the  holders  thereof  to
               receive  equity share capital  (other than Ordinary  Shares) on a
               capitalisation of profits or reserves,  unless, in any such case,
               the  same  gives  rise  (or  would,  but for the  fact  that  the
               adjustment  would be less  than one per cent.  of the  Conversion
               Price  then  in  effect,  give  rise)  to an  adjustment  to  the
               Conversion Price;

<PAGE>

                                          13

          (c)  not in any way modify the rights attaching to the Ordinary Shares
               with respect to voting,  dividends or  liquidation  nor issue any
               other class of equity share capital carrying any rights which are
               more  favourable  than such  rights  but so that  nothing in this
               paragraph  (c) shall  prevent  (i) the issue of any equity  share
               capital to employees or secondees  (including  directors  holding
               executive   office)   whether   of  the  Issuer  or  any  of  the
               Subsidiaries or any of the Issuer's associated companies or joint
               ventures by virtue of their office or employment  pursuant to any
               scheme or plan approved by the Issuer in general meeting or which
               is established  pursuant to such a scheme or plan which is or has
               been so approved, or (ii) any consolidation or subdivision of the
               Ordinary  Shares or the  conversion  of any Ordinary  Shares into
               stock or vice  versa or (iii)  any  modification  of such  rights
               which is not, in the opinion of a merchant or investment  bank in
               the  City of  London  of  international  repute  selected  by the
               Issuer,  approved  in writing by the Trustee and acting as expert
               and not an arbitrator, materially prejudicial to the interests of
               the Original Bondholders or (iv) without prejudice to any rule of
               law or legislation  (including regulations made under Section 207
               of the Companies  Act 1989 or any other  provision of that or any
               other  legislation),  the conversion of Ordinary  Shares into, or
               the issue of any Ordinary Shares in,  uncertificated form (or the
               conversion shares in uncertificated  form into certificated form)
               or the amendment of the Articles of  Association of the Issuer to
               enable  title to  securities  of the Issuer  (including  Ordinary
               Shares)  to  be  evidenced  and  transferred  without  a  written
               instrument or any other  amendment to the Articles of Association
               of the Issuer made in  connection  with the matters  described in
               this paragraph or which is  supplemental  or incidental to any of
               the  foregoing   (including  any  amendment  made  to  enable  or
               facilitate  procedures relating to such matters and any amendment
               dealing with the rights and obligations of holders of securities,
               including  Ordinary Shares,  dealt with under such procedures) or
               (v) any issue of  equity  share  capital  where the issue of such
               equity share capital results or would,  but for the fact that the
               adjustment  would be less  than one per cent.  of the  Conversion
               Price  then in effect,  or that the  consideration  per  Ordinary
               Share receivable  therefor (as described in Condition  5.3(B)) is
               at least the Closing Price per Ordinary Share,  otherwise  result
               in an  adjustment  to the  Conversion  Price or (vi) any issue of
               equity share capital or modification  or rights  attaching to the
               Ordinary  Shares  where  prior  thereto  the  Issuer  shall  have
               instructed the Auditors  (acting as experts and not  arbitrators)
               to  determine  what (if  any)  adjustment  should  be made to the
               Conversion  Price as being fair and  reasonable  to take  account
               thereof and the  Auditors  shall have  determined  either that no
               adjustment  is required or that an adjustment is required and, if
               so, the new  Conversion  Price as a result  thereof and the basis
               upon which such  adjustment  is to be made and, in any case,  the
               date on which the  adjustment  shall take effect (and so that the
               adjustment shall be made and shall take effect accordingly);
<PAGE>

                                          14

          (d)  procure that no securities  (whether  issued by the Issuer or any
               of the  Subsidiaries  or  procured  by the  Issuer  or any of the
               Subsidiaries  to be issued) issued without rights to convert into
               or exchange or subscribe for Ordinary  Shares shall  subsequently
               be  granted  such  rights  exercisable  at  a  consideration  per
               Ordinary  Share which is less than the Closing Price per Ordinary
               Share at the close of business on the dealing day last  preceding
               the date of the  announcement  of the proposed  inclusion of such
               rights  unless the same  gives  rise (or would,  but for the fact
               that the  adjustment  would be less  than  one per  cent.  of the
               Conversion  Price then in effect,  give rise) to an adjustment to
               the Conversion  Price and that at no time shall there be in issue
               Ordinary Shares of differing nominal values;

          (e)  not reduce its issued share  capital,  share  premium  account or
               capital  redemption or any uncalled  liability in respect thereof
               except (i) pursuant to the terms of issue of the  relevant  share
               capital,  or (ii) by means of a purchase or  redemption  of share
               capital  of the  Issuer  which  would  not  constitute  a Capital
               Distribution as defined in Condition 21, or (iii) as permitted by
               Section  130(2) of the Companies Act 1985, or (iv) a reduction of
               share premium  account to facilitate  the writing off of goodwill
               arising on  consolidation  which requires the confirmation of the
               High Court and which does not involve the return, either directly
               or indirectly,  of an amount  standing to the credit of the share
               premium  account of the Issuer and in respect of which the Issuer
               shall have tendered to the High Court such  undertaking as it may
               require prohibiting, so long as any of the Original Bonds remains
               outstanding,  the distribution  (except by way of  capitalisation
               issue) of any reserve  which may arise in the books of the Issuer
               as a result of such reduction,  or (v) whether the reduction does
               not involve any  distribution of assets and is effected by way of
               cancellation for the purposes of a scheme of arrangement pursuant
               to  Section  425 of the  Companies  Act 1985,  or (vi)  where the
               reduction  results  in (or  would,  but for  the  fact  that  the
               adjustment  would be less  than one per cent.  of the  Conversion
               Price then in effect,  result in) an adjustment to the Conversion
               Price;

          (f)  if any offer is made to all (or as  nearly as may be  practicable
               all) Ordinary  Shareholders of the Issuer (or all or as nearly as
               may be practicable all such holders other than the offeror and/or
               any  associates of the offeror (as defined in Section  430E(4) of
               the  Companies  Act  1985  or any  modification  or  re-enactment
               thereof))  to acquire  all or a majority  of the issued  Ordinary
               Share of the  Issuer,  or if any person  proposes  a scheme  with
               regard to such  acquisition,  give notice of such offer or scheme
               to the  Original  Bondholders  at the  same  time  as any  notice
               thereof  is  sent  to its  Ordinary  Shareholders  (or as soon as
               practicable   thereafter)  such  notice  to  state  that  details
               concerning  such  offer  or  scheme  may  be  obtained  from  the
               specified  office of the  Registrar  and,  where such an offer or
               scheme  has been  recommended  by the Board of  Directors  of the
               Issuer,  or  where  such an offer  has  become  or been  declared
               unconditional in all respects,  use all reasonable  endeavours to
               procure that a like offer or scheme is extended to the holders of
               any  Ordinary  Shares  issued  during  the period of the offer or
               scheme arising out of the exercise of the Conversion Right and/or
               to the holders of the Original Bonds; and

<PAGE>

                                       15

          (g)  use all reasonable  endeavours to ensure that all Ordinary Shares
               issued  upon  conversion  of any Bonds  shall be  admitted to the
               Official  List by the UK  Listing  Authority  and will be listed,
               quoted or dealt in any other stock exchange or securities  market
               on which the  Ordinary  Shares  may then be listed or  granted or
               dealt in and will  thereafter  use all  reasonable  endeavours to
               maintain such listing, quotation or dealing (as the case may be);
               and

          (h)  upon any  adjustment of the  Conversion  Price  pursuant to these
               presents:-

               (I)  as soon as practicable  deliver to the Trustee a certificate
                    signed by two  Directors  of the Issuer  (which the  Trustee
                    shall be  entitled to accept as  sufficient  evidence of the
                    correctness  of the  matters  therein  referred  to) setting
                    forth  brief  particulars  of the  date on which  the  event
                    giving rise to the  adjustment  takes  effect and such other
                    particulars  and  information  as the Trustee may reasonably
                    require; and

              (II)  within  fourteen days thereafter give notice to the Original
                    Bondholders   in  accordance   with   Condition  18  of  the
                    adjustment to the Conversion Price.

     (ii) it will ensure that all  Ordinary  Shares  issued upon  conversion  of
          Bonds  will be duly  authorised  and  validly  issued,  fully paid and
          registered.

4.2  (i)  The  Trustee  may  at  its  absolute   discretion   (and  without  any
          responsibility  for any loss  occasioned  thereby),  after the
          seventh day immediately prior to the date fixed for redemption from
          time to time of any of the  Original  Bonds,  and up to but  excluding
          the date fixed for such redemption  elect to apply the principal in
          respect of such of the Original Bonds due for redemption on such date
          (other than Bonds in respect of which (a) a Conversion Right has been
          exercised by any Original  Bondholder under the  Conditions  or (b)
          the  Bondholder  has on or prior to the seventh day prior to the date
          fixed for such redemption  given written  notification to the Trustee
          in accordance  with Clause 26 that it does not wish the Trustee
          to apply the principal of such Bondholder's Original Bonds to
          subscribe for Ordinary Shares in accordance with the discretion
          granted to the Trustee in this Clause  4.2(i) (in this  sub-clause
          referred  to as the  "Unexercised Bonds"),  in  subscribing  that
          number of  Ordinary  Shares into which the Unexercised  Bonds would
          have been converted had they been converted on the seventh day prior
          to such  redemption date if the Trustee is satisfied that(a) the net
          proceeds  of sale of the  Ordinary  Shares  arising  from such
          subscription  (disregarding  any  liability  (other than a liability
          of the Trustee) to  taxation  consequent  thereon)  would be likely to
          exceed the principal and interest  which would  otherwise be payable
          in respect of the Unexercised  Bonds  and (b) all  (if  any)
          necessary  consents  have  been obtained for each of the transactions
          contemplated by this sub-clause.


<PAGE>

                                          16

     (ii) The  Issuer  undertakes  to allot to the  Trustee or its  nominee  the
          Ordinary Shares  required to be allotted  pursuant to paragraph (A) of
          this  sub-clause,  and to  deliver  to  the  Trustee  or to its  order
          certificates for such Ordinary  Shares,  within 14 days after the date
          of the  exercise  by the Trustee of its  discretion  in respect of the
          Unexercised  Bonds.  Ordinary  Shares so allotted will rank pari passu
          with fully paid  Ordinary  Shares in issue on the seventh day prior to
          the date fixed for redemption of the relevant  Unexercised  Bonds save
          that they will not be entitled to any dividends or other distributions
          declared or paid or made either in respect of financial  periods ended
          prior to such day or by reference to a record date prior to such date.

    (iii) If the Trustee  exercises the  discretion  conferred on it pursuant to
          paragraph (A) of this  sub-clause the Trustee shall  forthwith  notify
          the Issuer and the Registrar of the exercise of such  discretion.  The
          Issuer  undertakes  to procure that the Registrar  will,  upon written
          notice from the Trustee that the Trustee has exercised its  discretion
          under this sub-clause, repay to the Issuer on behalf of the Trustee in
          London within two Business  Days (as defined in the Agency  Agreement)
          of such  notice the  principal  amount in  respect of the  Unexercised
          Bonds  for  subscription  of  Ordinary  Shares to be  allotted  to the
          Trustee. The Trustee shall arrange for the sale of the Ordinary Shares
          allotted  to  or to  the  order  of  it or  its  nominee  as  soon  as
          practicable and (subject to any necessary  consents being obtained and
          to the  deduction by the Trustee of its liability to taxation (if any)
          and any costs  incurred by the Trustee on such allotment and sale) for
          the net  proceeds  of sale  thereof to be paid to the  Registrar.  The
          Issuer   further   undertakes  to  procure  that  the  Registrar  will
          distribute such net proceeds of sale on behalf of the Trustee rateably
          and equally to the holders of the Unexercised Bonds.  Payments will be
          made in accordance  with  Condition 7. The amount of such net proceeds
          of  sale,  which  shall  be  notified  to the  former  holders  of the
          Unexercised  Bonds in accordance  with  Condition 18, shall be treated
          for all  purposes  as the full  amount due by the Issuer in respect of
          the Unexercised Bonds.

    (iv) For the  purpose  of  this  sub-clause  the  Conversion  Price  of the
         Original  Bonds shall have the meaning  ascribed  thereto in Condition
         5.1(A).

4.3  No fraction of an Ordinary Share will be issued on conversion.  However, if
     more than one Bond shall be deposited for conversion at any one time by the
     same  Holder,  the number of Ordinary  Shares to be issued upon  conversion
     thereof shall be  calculated  on the basis of the principal  amount of such
     Bonds to be converted.
<PAGE>

                                          17

4.4  The Issuer may exercise such rights as it may, from time to time,  enjoy to
     purchase its own shares (including  Ordinary Shares) throughout the life of
     the Original  Bonds and without  further  reference  to them without  being
     required to obtain the prior sanction of the Original Bondholders.

5.   Fees, Duties and Taxes

     The  Issuer will pay any stamp, issue, registration,  documentary and other
     fees, duties and taxes, including interest and penalties,  payable (a)
     in the United Kingdom,  on or in connection with (i) the execution and
     delivery of these  presents  and (ii) the  constitution  and  original
     issue of the Securities and the Coupons and (b) in any jurisdiction on
     or in connection  with any action taken by or on behalf of the Trustee
     or (where  permitted  under  these  presents  so to do) any  Holder or
     Couponholder  to enforce  the  obligations  of the Issuer  under these
     presents  provided  that the  Issuer  does not agree to pay any United
     Kingdom  stamp duty or stamp duty  reserve tax  arising in  connection
     with the issue or delivery of Securities  (or any shares or Securities
     into which such  Securities  convert) to, or to a nominee or agent for
     (i) any person  providing  a clearance  service  within the meaning of
     Section 70 or 96 Finance Act 1986 or (ii) any person whose business is
     or includes issuing depositary  receipts within the meaning of Section
     67 or 93 Finance Act 1986.

6.   Covenant of Compliance

     The  Issuer covenants with the Trustee that it will comply with and perform
     and observe all the  provisions of these  presents which are expressed
     to be binding on it. The  Conditions  shall be binding on the  Issuer,
     the Holders and the  Couponholders  (if any) and the Issuer shall give
     effect to the Conversion  Right (if  exercised).  The Trustee shall be
     entitled to enforce the obligations of the Issuer under the Securities
     and the  Coupons  as if the same were set out and  contained  in these
     presents,  which shall be read and  construed as one document with the
     Securities and the Coupons. The Trustee shall hold the benefit of this
     covenant  upon trust for itself and the Holders and the  Couponholders
     according to its and their respective interests.

7.   Cancellation of Securities and Records

7.1  The Issuer shall procure that all  Securities  (i) redeemed or converted or
     (ii)  purchased  by or on behalf  of the  Issuer  or any  person  acting in
     concert  with them or any  Subsidiary  of the  Issuer and  surrendered  for
     cancellation  or  (iii)  which,  being  mutilated  or  defaced,  have  been
     surrendered  and replaced  pursuant to the  Conditions or (iv) exchanged as
     provided  in these  presents  (together  in each  case  with all  unmatured
     Coupons  attached  thereto or delivered  therewith) and all Coupons paid in
     accordance with the Conditions or which,  being mutilated or defaced,  have
     been  surrendered  and replaced  pursuant to the  Conditions and all Talons
     exchanged in  accordance  with the  Conditions  for further  Coupons  shall
     forthwith  be  cancelled  by or on behalf of the Issuer  and a  certificate
     stating:
<PAGE>


                                      18

     (i)  the aggregate  principal amount of Securities which have been redeemed
          or converted  and the  aggregate  amounts in respect of Coupons  which
          have been paid;

    (ii)  the   serial   numbers  of  such   Securities   in   definitive   form
          distinguishing between Bearer Securities and Registered Securities;

   (iii)  the total numbers (where applicable, of each denomination) by maturity
          date of such Coupons;

    (iv)  the  aggregate  amount  of  interest  paid  (and the due dates of such
          payments) on Global Securities and/or on Registered Securities;

     (v)  the aggregate  principal amount of Securities (if any) which have been
          purchased  by or on behalf  of the  Issuer  or any  Subsidiary  of the
          Issuer or any person acting in concert with them and cancelled and the
          serial  numbers of such  Securities in  definitive  form and the total
          number (where  applicable,  of each  denomination) by maturity date of
          the Coupons attached thereto or surrendered therewith;

    (vi)  the  aggregate  principal  amounts  of  Securities  and the  aggregate
          amounts  in  respect  of  Coupons  which  have  been so  exchanged  or
          surrendered  and replaced and the serial numbers of such Securities in
          definitive  form  and the  total  number  (where  applicable,  of each
          denomination) by maturity date of such Coupons;

    (vii) the total number (where applicable,  of each denomination) by maturity
          date of unmatured  Coupons  missing from Securities in definitive form
          bearing interest at a fixed rate which have been redeemed or exchanged
          or  surrendered  and replaced and the serial numbers of the Securities
          in   definitive   form  to  which  such  missing   unmatured   Coupons
          appertained; and

  (viii)  the  total  number  (where  applicable,  of  each  denomination)  by
          maturity date of Talons which have been exchanged for further Coupons

     shall be given to the  Trustee by or on behalf of the Issuer as soon as
     possible and in any event  within  four  months  after the date of such
     redemption, purchase,  payment,  exchange  or  replacement  (as the case
     may be).  The Trustee may accept such  certificate as conclusive  evidence
     of redemption, purchase, exchange or replacement pro tanto of the
     Securities or payment of interest thereon or exchange of the Talons
     respectively and of cancellation of the relative Securities and Coupons.

7.2  The Issuer shall  procure (i) that the Registrar (in relation to Registered
     Securities)  and  the  Principal   Paying  Agent  (in  relation  to  Bearer
     Securities)  shall keep a full and complete  record of all  Securities  and
     Coupons  (other than serial  numbers of Coupons)  and of their  redemption,
     conversion, purchase by or on behalf of the Issuer or any Subsidiary of the
     Issuer or any person acting in concert with them, cancellation,  payment or
     exchange (as the case may be) and of all replacement  securities or coupons
     or talons issued in substitution for lost,  stolen,  mutilated,  defaced or
     destroyed  Securities or Coupons (ii) that the Principal Paying Agent shall
     in respect of the Coupons of each  maturity  retain (in the case of Coupons
     other than Talons)  until the expiry of 10 years from the Relevant  Date in
     respect of such Coupons and (in the case of Talons) indefinitely either all
     paid or exchanged  Coupons of that maturity or a list of the serial numbers
     of Coupons of that maturity still remaining unpaid or unexchanged and (iii)
     that such  records  and  Coupons  (if any) shall be made  available  to the
     Trustee at all reasonable times.

<PAGE>

                                       19

8.   Enforcement

8.1  If an effective  resolution is passed,  or an order of a court of competent
     jurisdiction is made, for the Insolvency of the Issuer  (otherwise than for
     the purposes of a consolidation, amalgamation, merger or reconstruction the
     terms of which have  previously  been approved in writing by the Trustee or
     by an  Extraordinary  Resolution  or by a court of  competent  jurisdiction
     under  which the  continuing  corporation  or the  corporation  formed as a
     result  of  such  consolidation,  amalgamation,  merger  or  reconstruction
     effectively  assumes the entire obligations of the Issuer in respect of the
     Securities) the Securities shall  automatically  thereby  forthwith become,
     immediately  due and  repayable at their  principal  amount  together  with
     accrued  interest as provided in these presents without the requirement for
     any notice thereof by the Trustee or the Bondholders.

8.2  If a default is made for a period of seven  days or more in the  payment of
     any principal due in respect of the  Securities or the payment of an amount
     equal to the net proceeds of sale of any Relevant  Bonds or for a period of
     14 days or  more in the  payment  of any  interest  due in  respect  of the
     Securities,  the  Trustee  may,  subject as set out in Clause 9,  institute
     proceedings for the Insolvency of the Issuer.

8.3  Without  prejudice  to  Clause  8.1 or  8.2,  if  default  is  made  in the
     performance or observation  by the Issuer of any  obligation,  condition or
     provision under the Securities or these presents (other than any obligation
     for the payment of any amount due in respect of the  Securities)  or if any
     event  occurs or any action is taken or fails to be taken which is (or, but
     the  provisions  of any  applicable  law,  would be) a breach of any of the
     covenants  or  provisions  of these  presents  or the  Securities  then the
     Trustee may,  subject as set out in Clause 9,  institute  such  proceedings
     against  the  Issuer  as it may  think  fit or as it shall be  directed  or
     requested  pursuant  to Clause  9.1 in order to  enforce  such  obligation,
     condition,  provision or covenant  provided  that the Issuer shall not as a
     consequence  of  such  proceedings  be  obliged  to pay  any  sum  or  sums
     representing  or measured by  reference to principal or interest in respect
     of the Securities sooner than the same would otherwise have been payable by
     it. Such proceedings may only be instituted if a default  thereunder by the
     Issuer is not remedied (where, in the opinion of the Trustee,  such default
     is capable of being  remedied)  within 30 days after notice  requiring such
     default to be remedied has been given by the Trustee to the Issuer.

8.4  Proof that,  as regards any  specified  Security or Coupon,  the Issuer has
     made default in paying any amount due in respect of such Security or Coupon
     shall (unless the contrary be proved) be sufficient  evidence that the same
     default  has been made as regards all other  Securities  or Coupons (as the
     case may be) in respect of which the relevant amount is due and payable.

<PAGE>
                                    20


8.5  References in the provisions of any trust deed  supplemental  to this Trust
     Deed  corresponding  to  provisos  (b) and (c) to  Clause  2.2 to "the rate
     aforesaid"  shall,  in  respect of any  Securities  bearing  interest  at a
     floating or variable  rate, in the event of such  Securities  having become
     due and  repayable,  with  effect  from the expiry of the  interest  period
     during  which such  Securities  become due and  repayable,  be construed as
     references to a rate of interest  calculated mutatis mutandis in accordance
     with the  Conditions  except that no notices  need be  published in respect
     thereof.

9.   Action, Proceedings and Indemnification

9.1  The  Trustee  shall not be bound to take any  proceedings  or other  action
     mentioned  in Clause 8.2 and 8.3 or to take any other  action  under  these
     presents  unless (i) it shall  have been so  directed  by an  Extraordinary
     Resolution  of the Holders or so  requested in writing by the holders of at
     least  one-quarter in principal  amount of the Bonds then  outstanding  and
     (ii) it shall have been indemnified to its satisfaction.

9.2  No Holder shall be entitled to proceed  directly  against the Issuer unless
     the  Trustee,  having  become  bound  so to do,  fails  to do so  within  a
     reasonable period and such failure shall be continuing.  No Holder shall be
     entitled to institute  proceedings  for the Insolvency of the Issuer unless
     the  Trustee,  having  become  bound  to  proceed  against  the  Issuer  as
     aforesaid,  fails  to do so or,  being  able  and  bound  to  prove  in any
     Insolvency  of the Issuer fails to do so, in which case such Holder may, on
     giving an indemnity satisfactory to the Trustee, in the name of the Trustee
     (but not otherwise) himself institute proceedings for the Insolvency of the
     Issuer and/or prove in any Insolvency of the Issuer to the same extent (but
     not further or  otherwise)  that the Trustee would have been entitled to do
     so in respect of the Bonds.

10.  Application of Moneys

     All  moneys received by the Trustee under these presents shall,  unless and
     to  the  extent  attributable  in the  opinion  of  the  Trustee  to a
     particular  series of the  Securities,  be apportioned  pari passu and
     rateably  between  each  series  of the  Securities,  and  all  moneys
     received   by  the  Trustee   under  these   presents  to  the  extent
     attributable  in the opinion of the Trustee to a particular  series of
     the  Securities or which are  apportioned  to such series as aforesaid
     (including any moneys which represent  principal,  premium or interest
     in  respect of  Securities  or Coupons  which have  become  void or in
     respect of which claims have become  prescribed  under  Condition  11)
     shall be held by the  Trustee  upon  trust to apply them  (subject  to
     Clauses 2.3 and 12):

     FIRST in payment or  satisfaction of all amounts  then due and unpaid under
     Clauses 15 and/or 16(x) to the Trustee and/or any person  appointed by
     it under these presents;

     SECONDLY in or towards  payment pari passu and  rateably of all  principal,
     premium (if any) and  interest  then  accrued and unpaid in respect of
     the Securities of that series;

     THIRDLY in or towards  payment  pari passu and  rateably of all  principal,
     premium (if any) and  interest  then  accrued and unpaid in respect of
     the Securities of each other series; and

<PAGE>

                                          21


     FOURTHLY in  payment  of the  balance  (if  any)  to  the  Issuer  (without
     prejudice  to, or liability in respect of, any question as to how such
     payment  to the Issuer  shall be dealt with as between  the Issuer and
     any other person).

     Without prejudice to this Clause 10, if the Trustee  holds any moneys which
     represent  principal,  premium  (if any) or  interest  in  respect  of
     Securities  which have become void or in respect of which  claims have
     been  prescribed  under Condition 11 the Trustee will hold such moneys
     on the above trusts.

11.  Notice of Payments

     The  Trustee shall give notice to the relevant  Holders in accordance  with
     Condition 18 of the day fixed for any payment to them under Clause 10.
     Such  payment  may be  made in  accordance  with  Condition  7 and any
     payment so made shall be a good discharge to the Trustee.

12.  Investment by Trustee

12.1 The Trustee may at its discretion and pending  payment invest moneys at any
     time available for the payment of principal,  premium (if any) and interest
     on the  Securities  of  any  series  in  some  or  one  of the  investments
     hereinafter  authorised for such periods as it may consider  expedient with
     power from time to time at the like discretion to vary such investments and
     to accumulate such investments and the resulting  interest and other income
     derived  therefrom.  The  accumulated  investments  shall be applied  under
     Clause 10. All  interest and other income  deriving  from such  investments
     shall be applied first in payment or  satisfaction  of all amounts then due
     and  unpaid  under  Clauses  15  and/or  16(x) to the  Trustee  and/or  any
     Appointee and otherwise  held for the benefit of and paid to the Holders of
     the Securities of such series or the holders of the related Coupons, as the
     case may be.

12.2 Any  moneys  which  under the trusts of these  presents  ought to or may be
     invested by the Trustee may be invested in the name or under the control of
     the  Trustee in any  investments  or other  assets in any part of the world
     whether or not they produce income or by placing the same on deposit in the
     name or under the  control of the  Trustee at such bank or other  financial
     institution and in such currency as the Trustee may think fit. If that bank
     or  institution  is the  Trustee or a  Subsidiary,  holding  or  associated
     company of the  Trustee,  it need only  account  for an amount of  interest
     equal to the amount of interest  which  would,  at then current  rates,  be
     payable by it on such a deposit to an independent customer. The Trustee may
     at any time vary any such  investments  for or into  other  investments  or
     convert any moneys so  deposited  into any other  currency and shall not be
     responsible  for any loss resulting from any such  investments or deposits,
     whether due to  depreciation  in value,  fluctuations  in exchange rates or
     otherwise.

13.  Partial Payments

     Upon any  payment  under  Clause 10 (other  than  payment  in full  against
     surrender  of a Security or Coupon) the  Security or Coupon in respect
     of which such  payment is made shall be produced to the Trustee or the
     Paying  Agent by or through  whom such payment is made and the Trustee
     shall or shall cause such Paying Agent to enface  thereon a memorandum
     of the  amount  and the date of  payment  but the  Trustee  may in any
     particular  case or  generally  in relation to  Registered  Securities
     dispense with such production and enfacement upon such indemnity being
     given as it shall think sufficient.

<PAGE>

                                           22


14.  Covenants by the Issuer

     So long as any of the Securities remains  outstanding (or, in the case of
     paragraphs (vii),  (viii),  (xii),  (xiii), (xv), (xvii) and (xxi), so
     long  as  any  of  the   Securities  or  Coupons   remains  liable  to
     prescription) the Issuer covenants with the Trustee that it shall:

     (i)  at all times carry on and  conduct its affairs and use all  reasonable
          endeavours to procure its  Subsidiaries  to carry on and conduct their
          respective affairs in a proper and efficient manner;

    (ii)  so far as permitted by  applicable  law give or procure to be given to
          the Trustee such opinions,  certificates,  information and evidence as
          it  shall  properly  require  and in such  form as it  shall  properly
          require (including without limitation the procurement by the Issuer of
          all such  certificates  called for by the  Trustee  pursuant to Clause
          16(iii))  for the purpose of the  discharge or exercise of the duties,
          trusts,  powers,  authorities and discretions vested in it under these
          presents  or by  operation  of  law  provided  that  nothing  in  this
          paragraph shall oblige the Issuer to disclose confidential information
          relating to its customers;

   (iii)  cause to be prepared and  certified by its Auditors in respect of each
          financial  accounting period accounts in such form as will comply with
          all relevant legal and accounting  requirements  and all  requirements
          for the time being of the  relevant  Stock  Exchange or the UK Listing
          Authority (as the case may be);

    (iv)  at all times keep and use all  reasonable  endeavours  to procure  its
          Subsidiaries  to keep proper  books of account  and, at any time after
          the occurrence of an Event of Default or a Potential  Event of Default
          or if the Trustee has  reasonable  grounds to believe that an Event of
          Default or  Potential  Event of Default  has  occurred  or is about to
          occur,  allow  and  procure  its  Subsidiaries  to  allow,  so  far as
          permitted by applicable  law, the Trustee and any person  appointed by
          the Trustee to whom the Issuer or the relevant Subsidiary (as the case
          may be) shall have no reasonable  objection  free access to such books
          of account at all reasonable times during normal business hours;

    (v)   send to the  Trustee  (in  addition  to any  copies to which it may be
          entitled  as a holder of any  Securities  of the Issuer) two copies in
          English  of every  balance  sheet,  profit and loss  account,  report,
          circular and notice of general meeting and every other document issued
          or  sent to its  shareholders  generally  in  their  capacity  as such
          together with any of the foregoing,  and every document issued or sent
          to holders of  Securities  generally  in their  capacity as such other
          than its  shareholders  (including the Holders) as soon as practicable
          after the issue or publication thereof;

   (vi)   give to the  Trustee  (a) within  fourteen  days  after  demand by the
          Trustee  therefor and (b) (without the  necessity for any such demand)
          within 28 days  after  the  publication  of its  audited  accounts  in
          respect of each financial period  commencing with the financial period
          ending  31st  December,  2003 and in any event not later than 180 days
          after the end of each such  financial  period a certificate  signed by
          two  Directors  of the Issuer to the effect  that,  to the best of the
          knowledge,  information and belief of the persons so certifying,  they
          having made all reasonable enquiries, as at a date not more than seven
          days before  delivering such  certificate (the  "certification  date")
          there did not exist and had not existed since the  certification  date
          of the  previous  certificate  (or  in the  case  of  the  first  such
          certificate  the date  hereof)  any Event of Default or any  Potential
          Event of Default and that since such date the Issuer and its directors
          have complied with all their  obligations  contained in these presents
          (or if such exists or existed or is not the case specifying the same);

<PAGE>

                                      23


   (vii)  so far as permitted by  applicable  law, at all times execute all such
          further  documents and do all such acts and things as may be necessary
          at any time or times in the  opinion of the  Trustee to give effect to
          these presents;

  (viii)  to the extent  required by, and in accordance  with, the Conditions,
          at all times maintain an Agent Bank,  Reference Banks, Paying Agent, a
          Registrar and Transfer Agents;

   (ix)   procure the  Principal  Paying  Agent and the  Registrar to notify the
          Trustee  forthwith in the event that the Principal Paying Agent or, as
          the case may be, the Registrar does not, on or before the due date for
          any payment in respect of the  Securities or any of them or any of the
          Coupons,  receive  unconditionally  pursuant  to the Agency  Agreement
          payment of the full  amount in the  requisite  currency  of the moneys
          payable on such due date on all such Securities or Coupons as the case
          may be;

   (x)    in the event of the  unconditional  payment  to the  Principal  Paying
          Agent,  the  Registrar or the Trustee of any sum due in respect of the
          Securities  or any of them or any of the Coupons  being made after the
          due date for  payment  thereof  forthwith  give or procure to be given
          notice to the relevant  Holders in accordance with the Conditions that
          such payment has been made;

  (xi)    subject to and in  accordance  with the  Conditions  applicable to the
          relevant  Securities and to the terms of issue of such  Securities and
          if such  securities  have  been  listed on a Stock  Exchange,  use all
          reasonable  endeavours  to maintain the listing of the  Securities  on
          such  Stock  Exchange  or, if it is  unable to do so having  used such
          endeavours,  use all  reasonable  endeavours  to obtain and maintain a
          quotation or listing of the Securities on such other stock exchange or
          exchanges or securities  market or markets as the Issuer may (with the
          prior  written  approval  of the  Trustee)  decide and shall also upon
          obtaining a quotation or listing of the Securities on such other stock
          exchange or exchanges  or  securities  market or markets  enter into a
          trust  deed   supplemental   to  this   Trust  Deed  to  effect   such
          consequential  amendments to these presents as the Trustee may require
          or as shall be requisite to comply with the  requirements  of any such
          stock exchange or securities market;

<PAGE>

                                  24


   (xii)  give  notice to the Holders in  accordance  with  Condition  18 of any
          appointment, resignation or removal of any Agent Bank, Reference Bank,
          Paying Agent,  Registrar or Transfer Agent (other than the appointment
          of the initial Agent Bank,  Reference Banks, Paying Agents,  Registrar
          and Transfer  Agents) after having obtained the prior written approval
          of  the  Trustee   thereto  or  any  change  of  any  Paying  Agent's,
          Registrar's  or  Transfer  Agent's  specified  office  and  (except as
          provided by the Agent Bank  Agreement  or the Agency  Agreement or the
          Conditions)  at  least  30 days  prior to such  event  taking  effect;
          PROVIDED  ALWAYS  THAT  so  long  as  any of  the  Securities  remains
          outstanding in the case of the  termination of the  appointment of the
          Agent Bank, the Registrar or a Transfer Agent or so long as any of the
          Securities or Coupons  remains liable to  prescription  in the case of
          the  termination of the  appointment of the Principal  Paying Agent no
          such termination shall take effect until a new Agent Bank,  Registrar,
          Transfer Agent or Principal Paying Agent (as the case may be) has been
          appointed on terms approved in writing by the Trustee;

 (xiii)   promptly  give to the Trustee two copies of, the final form of every
          notice given to the Holders in accordance  with the  Conditions  (such
          approval,  unless so  expressed,  not to  constitute  approval for the
          purposes of Section 21 of the Financial  Services and Markets Act 2000
          (the  "FSMA") of the  United  Kingdom  of a  communication  within the
          meaning of Section 21 of the FSMA);

  (xiv)   comply  with and  perform  all its  obligations  under the Agent  Bank
          Agreement and the Agency  Agreement and use all reasonable  endeavours
          to procure that the Agent Bank, the Paying  Agents,  the Registrar and
          the  Transfer  Agents  comply with and  perform  all their  respective
          obligations  thereunder  and (in the case of the Paying Agents and the
          Registrar)  any notice given by the Trustee  pursuant to Clause 2.4(i)
          and  not  make  any  amendment  or  modification  to  either  of  such
          Agreements without the prior written approval of the Trustee;

   (xv)   in order to enable the Trustee to ascertain  the  principal  amount of
          Securities  of each series for the time being  outstanding  for any of
          the  purposes  referred  to  in  the  proviso  to  the  definition  of
          "outstanding" in Clause 1, deliver to the Trustee forthwith upon being
          so requested in writing by the Trustee a certificate in writing signed
          by two  Directors  of the  Issuer  setting  out the total  number  and
          aggregate principal amount of Securities of each series which:

          (a)  up to and  including  the  date of  such  certificate  have  been
               purchased  by the Issuer or any  Subsidiary  of the Issuer or any
               person acting in concert with them and cancelled; and

          (b)  are at the date of such  certificate held by, for the benefit of,
               or on behalf of, the  Issuer or any  Subsidiary  of the Issuer or
               any person acting in concert with them;

  (xvi) procure that the  Registrar  and each of the Paying  Agents makes
        available  for  inspection  by Holders and  Couponholders  at its
        specified office copies of these presents,  the Agency Agreement,
        the Agent Bank  Agreement  and the then  latest  audited  balance
        sheets and profit and loss accounts  (consolidated if applicable)
        of the Issuer;

<PAGE>

                                         25

(xvii) procure that the Conversion  Price under Condition 5 shall not be reduced
       so that on  conversion  share  capital would fall to be issued at an
       amount less than the nominal value of an Ordinary Share;

(xviii) procure that such part of its current  authority under Section 80 of the
        UK  Companies  Act 1985 which would be  required  to enable the
        Conversion Rights to be  satisfied  in full shall only be applied in the
        allotment of Ordinary Shares in satisfaction of the Conversion Right;

  (xix) at all times keep available  sufficient  authority  under Section 80 of
        the Companies  Act 1985 to enable the  directors of Issuer to allot such
        number of Ordinary  Shares as would enable all current and  outstanding
        rights of subscription  and exchange for and  conversion  into Ordinary
        Shares to be satisfied in full;

   (xx) not make any issue,  grant or distribution or take any other section if
        the effect  thereof  would be that, on the exercise of all  Conversion
        Rights, Ordinary Shares would have been issued at a discount to their
        nominal value or otherwise could not, under any applicable law then in
        effect, be legally issued as fully paid; and

  (xxi) if payments of principal,  premium or interest in respect of the
        Securities or the Coupons by the Issuer shall become  subject  generally
        to the taxing jurisdiction  of  any  territory  or  any  political
        sub-division  or  any authority  therein or thereof having power to tax
        other than or in addition to the  United  Kingdom  or any  such
        political  sub-division  or any such authority  therein or thereof,
        immediately  upon  becoming  aware  thereof notify the Trustee of such
        event and (unless the Trustee  otherwise agrees) enter forthwith into a
        trust deed  supplemental to this Trust Deed,  giving to the Trustee an
        undertaking  or covenant in form and manner  satisfactory to the Trustee
        in terms corresponding to the terms of Condition 10 with the
        substitution  for (or, as the case may be, the addition  to) the
        reference therein  to  the  United  Kingdom  or  any  political
        sub-division  or any authority  therein or thereof  having  power to
        tax of a reference  to that other  or  additional  territory  or  any
        political  sub-division  or  any authority   therein  or  thereof
        having  power  to  tax  to  whose  taxing jurisdiction such payments
        shall have become subject as aforesaid.

15.  Remuneration and Indemnification of Trustee

15.1 The  Issuer  shall pay to the  Trustee  remuneration  for its  services  as
     trustee as from the date of this Trust  Deed,  such  remuneration  to be at
     such  rate and to be paid on such  dates as may from time to time be agreed
     between  the  Issuer  and  the  Trustee.  Upon  the  issue  of any  Further
     Securities  the rate of  remuneration  in force  immediately  prior thereto
     shall be increased by such amount as shall be agreed between the Issuer and
     the Trustee, such increased remuneration to be calculated from such date as
     shall be agreed as aforesaid.  The rate of  remuneration in force from time
     to time may upon the final redemption of the whole of the Securities of any
     series be reduced by such amount as shall be agreed  between the Issuer and
     the Trustee,  such reduced  remuneration to be calculated from such date as
     shall be agreed as aforesaid.  Such  remuneration  shall accrue from day to
     day  and  be  payable   (in   priority  to  payments  to  the  Holders  and
     Couponholders) up to and including the date when, all the Securities having
     become due for redemption,  the redemption  moneys and interest  thereon to
     the date of redemption  have been paid to the  Principal  Paying Agent and,
     where  applicable,  the  Registrar  or,  as the  case may be,  the  Trustee
     PROVIDED  THAT if upon due  presentation  of any  Security or Coupon or any
     cheque payment of the moneys due in respect thereof is improperly  withheld
     or refused, remuneration will commence again to accrue.

<PAGE>

                                        26

15.2 In the event of the occurrence of an Event of Default or a Potential  Event
     of Default or the Trustee  considering  it  expedient or necessary or being
     requested  by the Issuer to  undertake  duties  which the  Trustee  and the
     Issuer agree to be of an exceptional  nature or otherwise outside the scope
     of the normal duties of the Trustee  under these  presents the Issuer shall
     pay to the Trustee such additional  remuneration as shall be agreed between
     them.

15.3 The Issuer  shall in  addition  pay to the  Trustee an amount  equal to the
     amount of any value added tax or similar tax  chargeable  in respect of its
     remuneration under these presents.

15.4 In the event of the Trustee and the Issuer failing to agree:

     (i)  (in a case to which Clause 15.1 above  applies) upon the amount of the
          remuneration; or

    (ii)  (in a case to which  Clause  15.2 above  applies)  upon  whether  such
          duties  shall be of an  exceptional  nature or  otherwise  outside the
          scope of the normal  duties of the Trustee  under these  presents,  or
          upon such additional remuneration,

     such matters shall be  determined by a merchant or investment  bank (acting
     as an expert and not as an  arbitrator)  selected  by the  Trustee and
     approved by the Issuer or,  failing such  approval,  nominated (on the
     application of the Trustee) by the President for the time being of The
     Law  Society  of  England  and Wales (the  expenses  involved  in such
     nomination  and the fees of such  merchant  or  investment  bank being
     shared   equally   between  the  Issuer  and  the   Trustee)  and  the
     determination  of any such merchant or investment  bank shall be final
     and binding upon the Trustee and the Issuer.

15.5 The Issuer shall also pay or discharge all Liabilities properly incurred by
     the Trustee in relation to the  preparation  and execution of, the exercise
     of its powers and the  performance  of its duties  under,  and in any other
     manner in relation to, these  presents,  including but not limited to legal
     and travelling expenses and any stamp, issue, registration, documentary and
     other taxes or duties paid or payable by the Trustee in connection with any
     action taken or  contemplated by or on behalf of the Trustee for enforcing,
     or resolving any doubt concerning, or for any other purpose in relation to,
     these presents provided that the issuer shall not be responsible for paying
     or  discharging  any United  Kingdom  stamp duty or stamp duty  reserve tax
     arising in  connection  with the issue or  delivery of  securities  (or any
     shares or securities into which the securities convert) to, or to a nominee
     or agent for (i) any  person  providing  a  clearance  service  within  the
     meaning  of Section  70 or 96  Finance  Act 1986 or (ii) any  person  whose
     business is or includes issuing  depositary  receipts within the meaning of
     Section 67 or 93 Finance Act 1986.

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                                     27

15.6 All amounts payable pursuant to Clause 15.5 above and/or Clause 16(x) shall
     be payable by the Issuer on the date  specified  in a demand by the Trustee
     and in the case of  payments  actually  made by the  Trustee  prior to such
     demand  shall (if not paid  within  three days  after  such  demand and the
     Trustee so requires)  carry interest at the rate of two per cent. per annum
     above the Base Rate from time to time of National Westminster Bank plc from
     the date  specified  in such  demand,  and in all other cases shall (if not
     paid on the date  specified in such demand or, if later,  within three days
     after such demand  and, in either  case,  the  Trustee so  requires)  carry
     interest  at  such  rate  from  the  date  specified  in such  demand.  All
     remuneration  payable to the Trustee shall carry interest at such rate from
     the due date therefor.

15.7 Unless otherwise specifically stated in any discharge of these presents the
     provisions of this Clause and Clause 16(x) shall continue in full force and
     effect notwithstanding such discharge.

15.8 The Trustee  shall be entitled in its absolute  discretion  to determine in
     respect of which series of Securities any Liabilities  incurred under these
     presents have been incurred or to allocate any such Liabilities between the
     Original Bonds and any Further Securities of any series.

16.  Provisions Supplemental to Trustee Act 1925 and the Trustee Act 2000

     The  Trustee  shall  have all the powers  conferred  upon  trustees  by the
     Trustee Act 1925 and by the Trustee Act 2000, and by way of supplement
     thereto it is expressly declared as follows:

     (i)  The Trustee may in  relation  to these  presents  act on the advice or
          opinion  of or any  information  obtained  from  any  lawyer,  valuer,
          accountant,  surveyor,  banker,  broker,  auctioneer  or other  expert
          whether obtained by the Issuer, the Trustee or otherwise and shall not
          be responsible for any Liability occasioned by so acting.

     (ii) Any such  advice,  opinion or  information  may be sent or obtained by
          letter,  telex,  telegram,  facsimile  transmission  or cable  and the
          Trustee  shall not be liable for  acting in good faith on any  advice,
          opinion or  information  purporting to be conveyed by any such letter,
          telex,  telegram,  facsimile  transmission  or cable although the same
          shall contain some error or shall not be authentic.

     (iii)The  Trustee  may  call for and  shall  be at  liberty  to  accept  as
          sufficient  evidence  of any fact or matter or the  expediency  of any
          transaction  or thing a certificate  signed by the Auditors or any two
          Directors of the Issuer and the Trustee shall not be bound in any such
          case to call for further  evidence or be responsible for any Liability
          that  may be  occasioned  by it or any  other  person  acting  on such
          certificate.

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                                   28

     (iv) The Trustee  shall be at liberty to hold these  presents and any other
          documents relating thereto or to deposit them in any part of the world
          with any banker or banking company or company whose business  includes
          undertaking the safe custody of documents or lawyer or firm of lawyers
          considered  by the Trustee to be of good repute and the Trustee  shall
          not be  responsible  for or required to insure  against any  Liability
          incurred in  connection  with any such  holding or deposit and may pay
          all sums  required  to be paid on account of or in respect of any such
          deposit,  provided that,  unless it is required in connection with the
          enforcement  of any  obligation of the Issuer under these  presents or
          otherwise  in  connection  with the  performance  of the duties of the
          Trustee  under these  presents or unless it  comprises  the holding or
          placing of such documents in the United  Kingdom,  the Trustee may not
          take any such action if a liability  to stamp duty or other  duties or
          taxes would thereby arise.

     (v)  The Trustee shall not be responsible for the receipt or application of
          the proceeds of the issue of any of the Securities by the Issuer,  the
          exchange  of any  Global  Security  for  another  Global  Security  or
          definitive  Securities,   the  delivery  of  any  Global  Security  or
          definitive  Securities to the person(s)  entitled to it or them or the
          exchange  of  Bearer  Securities  for  Registered   Securities  or  of
          Registered Securities for Bearer Securities.

     (vi) The  Trustee  shall not be bound to give  notice to any  person of the
          execution of any documents  comprised or referred to in these presents
          or to take any steps to ascertain  whether any Event of Default or any
          Potential  Event of Default or breach of any  obligation of the Issuer
          or its  directors  has  happened  and,  until  it  shall  have  actual
          knowledge  or  express  notice  pursuant  to  these  presents  to  the
          contrary,  the  Trustee  shall be  entitled to assume that no Event of
          Default or Potential  Event of Default or breach has happened and that
          the Issuer and its  directors  is/are  observing  and  performing  all
          its/their obligations under these presents.

     (vii)Save as expressly  otherwise  provided in these presents,  the Trustee
          shall have absolute and uncontrolled  discretion as to the exercise or
          non-exercise of its trusts, powers,  authorities and discretions under
          these presents (the exercise or  non-exercise  of which as between the
          Trustee and the  Holders and  Couponholders  shall be  conclusive  and
          binding on the Holders and Couponholders) and shall not be responsible
          for any Liability which may result from their exercise or non-exercise
          and in particular the Trustee shall not be bound to act at the request
          or direction of the Holders or otherwise  under any provision of these
          presents or to take at such  request or  direction  or  otherwise  any
          other action under any provision of these presents,  without prejudice
          to the generality of Clause 9.1,  unless it shall first be indemnified
          to its  satisfaction  against all  Liabilities  to which it may render
          itself liable or which it may incur by so doing.

     (viii) The  Trustee  shall not be liable to any  person by reason of having
          acted   upon  any   Extraordinary   Resolution   in   writing  or  any
          Extraordinary  or other  resolution  purporting to have been passed at
          any meeting of Holders of  Securities  of all or any series in respect
          whereof  minutes have been made and signed or any direction or request
          of  the  Holders  of  Securities  of all or  any  series  even  though
          subsequent to its acting it may be found that there was some defect in
          the  constitution  of the meeting or the passing of the  resolution or
          (in the case of an  Extraordinary  Resolution in writing) that not all
          Holders had signed the  Extraordinary  Resolution or (in the case of a
          direction  or  request) it was not signed by the  requisite  number of
          Holders or that for any reason the  resolution,  direction  or request
          was  not  valid  or  binding   upon  such  Holders  and  the  relative
          Couponholders.


<PAGE>

                                         29

     (ix) The  Trustee  shall not be  liable  to any  person by reason of having
          accepted  as valid or not  having  rejected  any  Security  or  Coupon
          purporting  to be such  and  subsequently  found to be  forged  or not
          authentic.

     (x)  Without  prejudice to the right of indemnity by law given to trustees,
          the Issuer shall indemnify the Trustee and every Appointee and keep it
          or him indemnified against all Liabilities to which it or he may be or
          become  subject or which may be incurred by it or him in the execution
          or  purported  execution  of  any  of  its  or  his  trusts,   powers,
          authorities  and  discretions  under  these  presents  or  its  or his
          functions under any such appointment or in respect of any other matter
          or  thing  properly  done or  omitted  in any way  relating  to  these
          presents or any such appointment provided that the Issuer shall not be
          required to indemnify the Trustee or any Appointee  against any United
          Kingdom  stamp duty or stamp duty  reserve tax  arising in  connection
          with the issue or delivery of Securities  (or any shares or securities
          into which the  Securities  convert)  to, or to a nominee or agent for
          (i) any person  providing  a clearance  service  within the meaning of
          Section 70 or 96 Finance Act 1986 or (ii) any person whose business is
          or includes issuing depositary  receipts within the meaning of Section
          67 or 93 Finance Act 1986.

     (xi) Any consent or approval given by the Trustee for the purposes of these
          presents may be given on such terms and subject to such conditions (if
          any) as the  Trustee  thinks fit and  notwithstanding  anything to the
          contrary in these presents may be given retrospectively.

     (xii)The Trustee shall not (unless and to the extent  ordered so to do by a
          court of competent jurisdiction) be required to disclose to any Holder
          or  Couponholder  any  information  (including,   without  limitation,
          information of a confidential,  financial or price  sensitive  nature)
          made  available  to the  Trustee by the Issuer or any other  person in
          connection with these presents and no Holder or Couponholder  shall be
          entitled  to take any  action  to  obtain  from the  Trustee  any such
          information.

     (xiii) Where it is  necessary or  desirable  for any purpose in  connection
          with these presents to convert any sum from one currency to another it
          shall (unless otherwise provided by these presents or required by law)
          be converted at such rate or rates, in accordance with such method and
          as at such date for the determination of such rate of exchange, as may
          be agreed by the Trustee in consultation with the Issuer and any rate,
          method and date so agreed shall be binding on the Issuer,  the Holders
          and the Couponholders.

<PAGE>

                                      30


     (xiv)The Trustee may, where  applicable,  certify whether or not any of the
          conditions,  events and acts set out in Condition 8 in relation to the
          Issuer (each of which conditions, events and acts shall, unless in any
          case the Trustee in its absolute discretion shall otherwise determine,
          for all the  purposes  of these  presents  be  deemed to  include  the
          circumstances   resulting  therein  and  the  consequences   resulting
          therefrom) is in its opinion  materially  prejudicial to the interests
          of the  Holders  and any  such  certificate  shall be  conclusive  and
          binding upon the Issuer, the Holders and the Couponholders.

     (xv) The Trustee as between  itself and the Holders and  Couponholders  may
          determine all  questions and doubts  arising in relation to any of the
          provisions of these presents. Every such determination, whether or not
          relating  in  whole  or in part  to the  acts  or  proceedings  of the
          Trustee,  shall be  conclusive  and  shall  bind the  Trustee  and the
          Holders and Couponholders.

     (xvi)In  connection  with the exercise by it of any of its trusts,  powers,
          authorities and discretions under these presents  (including,  without
          limitation, any modification, waiver, authorisation,  determination or
          substitution),  the Trustee shall have regard to the general interests
          of the Holders as a class and shall not have  regard to any  interests
          arising  from  circumstances   particular  to  individual  Holders  or
          Couponholders  (whatever  their number) and, in particular but without
          limitation,  shall  not have  regard to the  consequences  of any such
          exercise  for  individual  Holders or  Couponholders  (whatever  their
          number)  resulting  from  their  being for any  purpose  domiciled  or
          resident  in,  or  otherwise   connected   with,  or  subject  to  the
          jurisdiction   of,  any   particular   territory   or  any   political
          sub-division thereof and the Trustee shall not be entitled to require,
          nor shall any Holder or  Couponholder  be  entitled  to claim from the
          Issuer, the Trustee or any other person any indemnification or payment
          in respect of any tax consequence of any such exercise upon individual
          Holders or Couponholders  except to the extent already provided for in
          Condition 10 and/or any  undertaking  given in addition  thereto or in
          substitution therefor under these presents.

     (xvii) Any trustee of these presents being a lawyer, accountant,  broker or
          other person  engaged in any  profession or business shall be entitled
          to charge and be paid all usual  professional  and other  charges  for
          business  transacted  and acts  done by him or his firm in  connection
          with the trusts of these presents and also his  reasonable  charges in
          addition to disbursements for all other work and business done and all
          time spent by him or his firm in  connection  with matters  arising in
          connection with these presents.

     (xviii) The  Trustee  may  whenever  it  thinks  fit  delegate  by power of
          attorney or otherwise to any person or persons or fluctuating  body of
          persons  (whether  being a joint trustee of these presents or not) all
          or any of its trusts, powers,  authorities and discretions under these
          presents. Such delegation may be made upon such terms (including power
          to sub-delegate) and subject to such conditions and regulations as the
          Trustee may in the interests of the Holders  think fit.  Provided that
          the Trustee shall have exercised  reasonable  care in the selection of
          any such  delegate,  the Trustee shall not be under any  obligation to
          supervise the proceedings or acts of any such delegate or sub-delegate
          or be in any way responsible  for any Liability  incurred by reason of
          any  misconduct  or  default  on the  part  of any  such  delegate  or
          sub-delegate.  The Trustee  shall within a  reasonable  time after any
          such delegation or any renewal,  extension or termination thereof give
          notice thereof to the Issuer.

<PAGE>

                                          31

     (xix)The  Trustee  may in the  conduct  of the  trusts  of  these  presents
          instead of acting  personally employ and pay an agent (whether being a
          lawyer or other professional person) to transact or conduct, or concur
          in  transacting  or  conducting,  any business and to do, or concur in
          doing,  all acts required to be done in connection with these presents
          (including  the  receipt  and  payment  of money).  Provided  that the
          Trustee shall have exercised  reasonable  care in the selection of any
          such agent,  the Trustee shall not be in any way  responsible  for any
          Liability  incurred by reason of any misconduct or default on the part
          of any such agent or be bound to supervise the  proceedings or acts of
          any such agent.

     (xx) The Trustee  shall not be  responsible  for the  execution,  delivery,
          legality, effectiveness, adequacy, genuineness, validity, performance,
          enforceability  or admissibility in evidence of these presents (except
          for the  execution  and  delivery of these  presents by itself) or any
          other document  relating or expressed to be  supplemental  thereto and
          shall not be liable for any failure to obtain any licence,  consent or
          other authority for the execution, delivery, legality,  effectiveness,
          adequacy,  genuineness,   validity,  performance,   enforceability  or
          admissibility  in  evidence of these  presents  or any other  document
          relating or expressed to be supplemental thereto.

     (xxi)The  Trustee  may call for any  certificate  or other  document  to be
          issued by Euroclear or  Clearstream,  Luxembourg  as to the  principal
          amount of Securities  represented by a Global Security standing to the
          account of any person. Any such certificate or other document shall be
          conclusive  and binding  for all  purposes.  The Trustee  shall not be
          liable to any  person by  reason  of having  accepted  as valid or not
          having  rejected  any  certificate  or other  document  to such effect
          purporting to be issued by Euroclear or  Clearstream,  Luxembourg  and
          subsequently found to be forged or not authentic.

     (xxii)  The   Trustee   shall  not  at  any  time  be  under  any  duty  or
          responsibility  to any Holder to  determine  whether  any facts  exist
          which may  require  any  adjustment  to the  Conversion  Price or with
          respect to the nature or extent of any such  adjustment  when made, or
          with respect to the method employed,  or in these presents provided to
          be employed,  in making the same. The Trustee shall not at any time be
          under any duty or  responsibility  in respect of the validity or value
          (or  the  kind or  amount)  of any  Ordinary  Shares  or of any  other
          securities,  property or cash, which may at any time be made available
          or  delivered  upon the  conversion  of any  Security  and it makes no
          representation  with  respect  thereto.   The  Trustee  shall  not  be
          responsible for any failure of the Issuer to make available or deliver
          any Ordinary Shares or Ordinary Share certificates or other securities
          or property or make any payment  upon the  exercise of the  Conversion
          Right in respect of any  Security  or of the Issuer to comply with any
          of the covenants contained in these presents.
<PAGE>

                                       32

     (xxiii) Any  certificate  or report  of the  Auditors  or any other  expert
          called for by or provided to the Trustee in accordance with or for the
          purposes  of these  presents  may be  relied  upon by the  Trustee  as
          sufficient  evidence of the facts stated  therein  whether or not such
          certificate  or report is called for by or is addressed to the Trustee
          and  notwithstanding  that  such  certificate  or  report  and/or  any
          engagement  letter or other  document  entered  into by the Trustee in
          connection  therewith  contains  any  limit  on the  liability  of the
          Auditors or such other expert in respect thereof.

     (xxiv) The Trustee shall not be responsible for, or for  investigating  any
          matter   which   is  the   subject   of,   any   recital,   statement,
          representation,  warranty or covenant of any person contained in these
          presents,   or  any  other  agreement  or  document  relating  to  the
          transactions  contemplated  in  these  presents  or under  such  other
          agreement or document.

     (xxv)The Trustee shall not be liable or responsible  for any Liabilities or
          inconvenience  which may result  from  anything  done or omitted to be
          done by it in accordance with the provisions of these presents.

     (xxvi) The Trustee may appoint and pay any person to act as a custodian  or
          nominee  on any  terms  in  relation  to  such  assets  of the  trusts
          constituted by these presents as the Trustee may determine,  including
          for the purpose of depositing  with a custodian  these presents or any
          document relating to the trusts  constituted by these presents and the
          Trustee shall not be responsible for any Liability  incurred by reason
          of the  misconduct,  omission  or  default  on the part of any  person
          appointed by it hereunder or be bound to supervise the  proceedings or
          acts of such person; the Trustee is not obliged to appoint a custodian
          if the Trustee invests in securities payable to bearer.

17.  Trustee's Liability

     Section 1 of the  Trustee  Act 2000 shall not apply to these  presents  and
     where there are any  inconsistencies  between the Trustee Act 2000 and
     the  provisions of these  presents,  the  provisions of these presents
     shall,  to the extent allowed by law,  prevail and shall  constitute a
     restriction  or  exclusion  for the  purposes  of that  Act.  However,
     nothing in these  presents  shall in any case in which the Trustee has
     failed to show the  degree  of care and  diligence  required  of it as
     trustee having regard to the  provisions of these presents  conferring
     on it any  trusts,  powers,  authorities  or  discretions  exempt  the
     Trustee  from,  or indemnify it against,  any  liability for breach of
     trust of which it may be guilty in relation to its duties  under these
     presents.

18.  Trustee Contracting with the Issuer

     Neither the  Trustee  nor any  director  or  officer  or  holding  company,
     Subsidiary or associated  company of a corporation acting as a trustee
     under these presents shall by reason of its or his fiduciary  position
     be in any way precluded from:

     (i)  entering  into or being  interested  in any  contract or  financial or
          other transaction or arrangement with the Issuer or any person or body
          corporate associated with the Issuer (including without limitation any
          contract,  transaction or arrangement of a banking or insurance nature
          or any contract,  transaction or arrangement in relation to the making
          of loans or the provision of financial  facilities or financial advice
          to, or the purchase,  placing or underwriting of or the subscribing or
          procuring subscriptions for or otherwise acquiring, holding or dealing
          with,  or acting as paying agent in respect of, the  Securities or any
          other bonds, notes,  stocks,  shares,  debenture stock,  debentures or
          other  securities  of,  the  Issuer or any  person  or body  corporate
          associated as aforesaid); or

<PAGE>

                                      33

     (ii) accepting  or  holding  the   trusteeship  of  any  other  trust  deed
          constituting or securing any other securities issued by or relating to
          the Issuer or any such person or body  corporate so  associated or any
          other  office of profit  under the  Issuer or any such  person or body
          corporate so associated,

     and  shall be entitled to exercise and enforce its rights,  comply with its
     obligations  and perform  its duties  under or in relation to any such
     contract,  transaction  or  arrangement as is referred to in (i) above
     or, as the case may be, any such trusteeship or office of profit as is
     referred  to in (ii)  above  without  regard to the  interests  of the
     Holders  and  notwithstanding   that  the  same  may  be  contrary  or
     prejudicial  to  the  interests  of  the  Holders  and  shall  not  be
     responsible  for any Liability  occasioned to the Holders  thereby and
     shall be  entitled  to retain  and  shall not be in any way  liable to
     account for any profit made or share of  brokerage  or  commission  or
     remuneration  or  other  amount  or  benefit  received  thereby  or in
     connection therewith.

     Whereany holding company,  Subsidiary or associated  company of the Trustee
     or any  director  or officer of the Trustee  acting  other than in his
     capacity  as such a  director  or  officer  has any  information,  the
     Trustee  shall not  thereby be deemed also to have  knowledge  of such
     information  and,  unless  it  shall  have  actual  knowledge  of such
     information, shall not be responsible for any loss suffered by Holders
     resulting  from the Trustee's  failing to take such  information  into
     account in acting or  refraining  from acting  under or in relation to
     these presents.

19.  Waiver, Authorisation and Determination

19.1 The  Trustee may without the consent or sanction of the Holders and without
     prejudice  to its  rights in  respect of any  subsequent  breach,  Event of
     Default or Potential Event of Default from time to time and at any time but
     only if and in so far as in its opinion the  interests of the Holders shall
     not be  materially  prejudiced  thereby  waive or  authorise  any breach or
     proposed  breach  by the  Issuer  of any of  the  covenants  or  provisions
     contained  in these  presents  or  determine  that any Event of  Default or
     Potential Event of Default shall not be treated as such for the purposes of
     these  presents  PROVIDED  ALWAYS THAT the Trustee  shall not  exercise any
     powers  conferred  on it by this  Clause in  contravention  of any  express
     direction  given by  Extraordinary  Resolution  or by a  request  under the
     Conditions  but so that no such  direction  or  request  shall  affect  any
     waiver,  authorisation or determination  previously given or made. Any such
     waiver,  authorisation or determination  may be given or made on such terms
     and subject to such conditions (if any) as the Trustee may determine, shall
     be binding on the Holders and the  Couponholders  and, if, but only if, the
     Trustee shall so require, shall be notified by the Issuer to the Holders in
     accordance with Condition 18 as soon as practicable thereafter. This Clause
     shall not apply to the matters listed in Clause 5 of the Fourth Schedule.

<PAGE>

                                   34

     Modification

19.2 The  Trustee  may  without  the  consent  or  sanction  of the  Holders  or
     Couponholders  at any time and from time to time  concur with the Issuer in
     making any  modification  (i) to these presents which in the opinion of the
     Trustee  it may be  proper  to make  PROVIDED  THAT the  Trustee  is of the
     opinion that such  modification  will not be materially  prejudicial to the
     interests of the Holders or (ii) to these presents if in the opinion of the
     Trustee such  modification is of a formal,  minor or technical nature or to
     correct a manifest or proven error.  Any such  modification  may be made on
     such  terms and  subject to such  conditions  (if any) as the  Trustee  may
     determine,  shall be binding  upon the Holders and the  Couponholders  and,
     unless the Trustee agrees otherwise, shall be notified by the Issuer to the
     Holders in accordance with Condition 18 as soon as practicable  thereafter.
     This Clause shall not apply to the matters  listed in the proviso to Clause
     5 of the Fourth Schedule.

     Breach

19.3 Any breach of or failure to comply  with any such terms and  conditions  as
     are referred to in Clauses  19.1 and 19.2 above shall  constitute a default
     by the Issuer in the  performance  or observance of a covenant or provision
     binding on it under or pursuant to these presents.

20.  Holder of Definitive Bearer Security Assumed to be Couponholder

20.1 Wherever in these  presents the Trustee is required or entitled to exercise
     a power,  trust,  authority or discretion  under these presents,  except as
     ordered by a court of competent  jurisdiction  or as required by applicable
     law, the Trustee shall,  notwithstanding that it may have express notice to
     the  contrary,  assume  that  each  Holder  is the  holder  of all  Coupons
     appertaining  to each Bearer Security in definitive form of which he is the
     holder.

     No Notice to Couponholders

20.2 Neither the Trustee nor the Issuer  shall be required to give any notice to
     the   Couponholders   for  any  purpose   under  these   presents  and  the
     Couponholders  shall be  deemed  for all  purposes  to have  notice  of the
     contents  of any  notice  given  to the  Holders  in  accordance  with  the
     Conditions.

     Absolute Ownership

20.3 The Issuer, the Trustee,  the Paying Agents, the Registrar and the Transfer
     Agents may (to the fullest  extent  permitted by applicable  laws) deem and
     treat:-

     (i)  the holder of any Bearer Security or of a particular  principal amount
          of the Bearer  Securities and the holder of any Coupon as the absolute
          owner of such Bearer Security, principal amount or Coupon, as the case
          may be; and
<PAGE>

                                   35

     (ii) the person  whose name and  address  is  entered  on the  register  of
          holders for the relevant Registered  Securities as the holder of those
          Registered Securities,

     for  all purposes (whether or not such Security, principal amount or Coupon
     shall be overdue and  notwithstanding  any notice of ownership thereof
     or of trust or other interest with regard thereto,  any notice of loss
     or theft thereof or any writing thereon), and the Issuer, the Trustee,
     the Paying Agents,  the Registrar and the Transfer Agents shall not be
     affected by any notice to the contrary.  All payments made to any such
     holder of a Security in  definitive  form or a Coupon or to the bearer
     of a Global  Security shall be valid and, to the extent of the sums so
     paid,  effective to satisfy and discharge the liability for the moneys
     payable in respect of such Security,  principal  amount or Coupon,  as
     the case may be.

21.  Substitution

21.1 (i) The Trustee may without the consent of the Holders or  Couponholders at
         any time agree with the Issuer to the  substitution  in place of the
         Issuer (or of the previous  substitute  under this Clause) as the
         principal debtor under these  presents of any  successor in business of
         the Issuer (any such substituted  company being hereinafter  called the
         "New Company")  provided that a trust deed is executed or some other
         form of undertaking is given by the New Company in form and manner
         satisfactory to the Trustee, agreeing to be  bound  by the  provisions
         of these  presents  with  any  consequential amendments  which the
         Trustee may deem  appropriate  as fully as if the New Company had been
         named in these  presents as the principal  debtor in place of the
         Issuer (or of the  previous  substitute  under  this  Clause)  (on a
         subordinated basis equivalent to that referred to in the relevant terms
         and conditions and set out in Clause 2.3).

     (ii) The following further conditions shall apply to (i) above:

          (a)  the  Issuer  and the New  Company  shall  comply  with such other
               requirements  as the Trustee may direct in the  interests  of the
               Holders;

          (b)  where the New Company is incorporated,  domiciled or resident in,
               or subject  generally to the taxing  jurisdiction of, a territory
               other than or in addition to the United  Kingdom or any political
               subdivision  or any authority  therein or thereof having power to
               tax,  undertakings or covenants shall be given by the New Company
               in terms corresponding to the provisions of Condition 10 with the
               substitution  for (or, as the case may be, the  addition  to) the
               reference  to the United  Kingdom of a reference to that other or
               additional  territory  in which the New Company is  incorporated,
               domiciled  or  resident  or to whose  taxing  jurisdiction  it is
               subject;

          (c)  without  prejudice to the rights of reliance of the Trustee under
               the immediately  following  paragraph (iv) and in accordance with
               Clause  16(xvi),  the  Trustee  is  satisfied  that the  relevant
               transaction is not materially prejudicial to the interests of the
               Holders;

<PAGE>

                                           36

          (d)  if two Directors of the New Company (or other officers acceptable
               to the Trustee)  shall certify that the New Company is solvent at
               the time at which the  relevant  transaction  is  proposed  to be
               effected (which certificate the Trustee may rely upon absolutely)
               the  Trustee  shall not be under  any duty to have  regard to the
               financial  condition,  profits or prospects of the New Company or
               to  compare  the same with  those of the  Issuer or the  previous
               substitute under this Clause as applicable; and

          (e)  the Trustee  shall be  satisfied  that (a) all  governmental  and
               regulatory  approvals and consents necessary for or in connection
               with the assumption by the New Company of its  obligations  under
               these  presents  have been  obtained and (b) such  approvals  and
               consents  are at the  time  of  substitution  in full  force  and
               effect.

21.2 Any such trust  deed or  undertaking  shall,  if so  expressed,  operate to
     release the Issuer or the previous  substitute as aforesaid from all of its
     obligations  as principal  debtor under these  presents.  Not later than 14
     days  after  the  execution  of such  documents  and  compliance  with such
     requirements,  the  New  Company  shall  give  notice  thereof  in  a  form
     previously approved by the Trustee to the Holders in the manner provided in
     Condition 18. Upon the execution of such documents and compliance with such
     requirements, the New Company shall be deemed to be named in these presents
     as the principal debtor in place of the Issuer (or in place of the previous
     substitute under this Clause) under these presents and these presents shall
     be deemed to be  modified  in such  manner  as shall be  necessary  to give
     effect to the above provisions and, without limitation, references in these
     presents to the Issuer shall,  unless the context  otherwise  requires,  be
     deemed to be or include references to the New Company.

22.  Currency Indemnity

     The  Issuer shall indemnify the Trustee,  the Holders and the Couponholders
     and keep them indemnified against:

     (i)  any Liability  incurred by any of them arising from the non-payment by
          the  Issuer  of any  amount  due  to the  Trustee  or the  Holders  or
          Couponholders  under these  presents by reason of any variation in the
          rates of exchange  between those used for the purposes of  calculating
          the amount due under a judgment or order in respect  thereof and those
          prevailing at the date of actual payment by the Issuer; and

     (ii) any  deficiency  arising or resulting  from any  variation in rates of
          exchange  between  (i)  the  date  as  of  which  the  local  currency
          equivalent of the amounts due or contingently due under these presents
          (other  than  this  Clause)  is  calculated  for the  purposes  of any
          bankruptcy, insolvency or liquidation of the Issuer and (ii) the final
          date  for  ascertaining  the  amount  of  claims  in such  bankruptcy,
          insolvency  or  liquidation.  The amount of such  deficiency  shall be
          deemed  not to be  reduced  by any  variation  in  rates  of  exchange
          occurring between the said final date and the date of any distribution
          of  assets  in  connection  with any such  bankruptcy,  insolvency  or
          liquidation.

<PAGE>

                                         37

          The  above  indemnities  shall  constitute  obligations  of the Issuer
          separate and  independent  from its  obligations  under the other
          provisions of these presents and shall apply  irrespective of any
          indulgence   granted  by  the  Trustee  or  the  Holders  or  the
          Couponholders  from time to time and shall continue in full force
          and effect notwithstanding the judgment or filing of any proof or
          proofs in any bankruptcy, insolvency or liquidation of the Issuer
          for a  liquidated  sum or sums in respect  of  amounts  due under
          these presents  (other than this Clause).  Any such deficiency as
          aforesaid  shall be deemed to  constitute a loss  suffered by the
          Holders and  Couponholders and no proof or evidence of any actual
          loss  shall  be  required  by the  Issuer  or its  liquidator  or
          liquidators.

23.       New Trustee, Separate and Co-Trustees

23.1      The power to appoint a new trustee of these  presents  shall be vested
          in the  Issuer  but  no  person  shall  be  appointed  who  shall  not
          previously have been approved by an Extraordinary  Resolution.  One or
          more persons may hold office as trustee or trustees of these  presents
          but such trustee or trustees shall be or include a Trust  Corporation.
          Whenever  there shall be more than two trustees of these  presents the
          majority of such  trustees  shall be competent to execute and exercise
          all the duties, powers, trusts,  authorities and discretions vested in
          the Trustee by these presents  provided that a Trust Corporation shall
          be  included in such  majority.  Any  appointment  of a new trustee of
          these presents shall as soon as practicable  thereafter be notified by
          the Issuer to the Principal Paying Agent, the Registrar,  the Transfer
          Agents and the Holders.

23.2      Notwithstanding  the provisions of Clause 23.1 above, the Trustee may,
          upon giving prior notice to the Issuer (but without the consent of the
          Issuer,  the  Holders  or  the  Couponholders),   appoint  any  person
          established  or  resident  in  any   jurisdiction   (whether  a  Trust
          Corporation  or not)  to act  either  as a  separate  trustee  or as a
          co-trustee jointly with the Trustee:

          (i)  if the Trustee  considers such appointment to be in the interests
               of the Holders;

          (ii) for  the  purposes  of  conforming  to  any  legal  requirements,
               restrictions  or  conditions  in any  jurisdiction  in which  any
               particular act or acts is or are to be performed; or

          (iii)for the purposes of obtaining a judgment in any  jurisdiction  or
               the enforcement in any  jurisdiction of either a judgment already
               obtained or any of the provisions of these  presents  against the
               Issuer.

          The  Issuer irrevocably appoints the Trustee to be its attorney in its
          name  and on  its  behalf  to  execute  any  such  instrument  of
          appointment.   Such  a  person  shall  (subject   always  to  the
          provisions  of  these   presents)   have  such  trusts,   powers,
          authorities and discretions (not exceeding those conferred on the
          Trustee by these  presents)  and such duties and  obligations  as
          shall be conferred or imposed by the  instrument of  appointment.
          The  Trustee  shall have power in like  manner to remove any such
          person.  Such  reasonable  remuneration as the Trustee may pay to
          any  such  person,  together  with any  attributable  Liabilities
          incurred  by it in  performing  its  function  as  such  separate
          trustee or  co-trustee,  shall for the purposes of these presents
          be treated as Liabilities incurred by the Trustee.

<PAGE>

                                       38


24.      Trustee's Retirement and Removal

          A Trustee of these  presents  may retire at any time on giving not
          less than  three  months'  prior  written  notice  to the  Issuer
          without giving any reason and without being  responsible  for any
          Liabilities  incurred by reason of such  retirement.  The Holders
          may by  Extraordinary  Resolution  remove any trustee or trustees
          for the time being of these presents.  The Issuer undertakes that
          in the event of the only  trustee  of these  presents  which is a
          Trust  Corporation (for the avoidance of doubt,  disregarding for
          this purpose any separate or  co-trustee  appointed  under Clause
          23.2)  giving  notice  under  this  Clause  or being  removed  by
          Extraordinary Resolution it will use all reasonable endeavours to
          procure  that a new  trustee  of  these  presents  being  a Trust
          Corporation  is  appointed  as  soon  as  reasonably  practicable
          thereafter.  The  retirement or removal of any such trustee shall
          not become  effective  until a  successor  trustee  being a Trust
          Corporation is appointed and, if in such  circumstances,  no such
          appointment has become effective within two months of the date of
          such notice or  Extraordinary  Resolution,  the Trustee  shall be
          entitled  to  appoint a Trust  Corporation  as  trustee  of these
          presents,  but no  such  appointment  shall  take  effect  unless
          previously approved by an Extraordinary Resolution.

25.       Trustee's Powers to be Additional

          The  powers  conferred  upon the Trustee by these presents shall be in
          addition  to any powers  which may from time to time be vested in
          the  Trustee  by the  general  law or as a  holder  of any of the
          Securities or Coupons.

26.       Notices

          Any  notice or demand to the Issuer or the  Trustee to be given, made
          or served for any purposes  under these  presents shall be given,
          made or served by sending the same by pre-paid  post (first class
          if  inland,   first  class  airmail  if  overseas)  or  facsimile
          transmission or by delivering it by hand as follows:

         to the Issuer:                31 Gresham Street, London EC2V 7QA

                                       (Attention: Company Secretary)

                                       Facsimile No: 020 7658 3538


         and copied to:                Schroder Ventures (London) Limited
                                       Burleigh House
                                       357 Strand, London WC2R 0HS

                                       (Attention: Legal Director)

                                       Facsimile No: 020 7240 5346
<PAGE>

                                        39


         to the Trustee:               Fifth Floor
                                       100 Wood Street
                                       London EC2V 7EX

                                    (Attention:  the Manager, Trust Management)

                                     Facsimile No: 020 7696 5261


     or to such other address or facsimile  number as shall have been notified
     (in  accordance  with this  Clause) to the other party  hereto and any
     notice or  demand  sent by post as  aforesaid  shall be deemed to have
     been  given,  made or served  three days in the case of inland post or
     seven days in the case of overseas post after  despatch and any notice
     or demand sent by facsimile  transmission as aforesaid shall be deemed
     to have been given, made or served 24 hours after the time of despatch
     provided  that in the case of a notice  or demand  given by  facsimile
     transmission  such notice or demand  shall  forthwith  be confirmed by
     post. The failure of the addressee to receive such confirmation  shall
     not  invalidate  the  relevant  notice  or demand  given by  facsimile
     transmission.

27.  Contracts (Rights of Third Parties) Act 1999

     The  parties to this  Trust Deed do not intend  that any term of this Trust
     Deed  should be  enforceable,  by virtue of the  Contracts  (Rights of
     Third  Parties)  Act 1999,  by any  person  who is not a party to this
     Trust  Deed but this does not  affect any right or remedy of any third
     party which exists or is available apart from that Act.

28.  Governing Law

     These presents are governed by, and shall be construed in  accordance with,
     English law.

29.  Counterparts

     This Trust Deed and any trust deed supplemental  hereto may be executed and
     delivered in any number of counterparts, all of which, taken together,
     shall  constitute  one and the same deed and any  party to this  Trust
     Deed or any trust deed supplemental  hereto may enter into the same by
     executing and delivering a counterpart.



     IN WITNESS  whereof  this Trust Deed has been  executed  as a deed by the
     Issuer and the Trustee and  delivered on the date first stated on page 1.


<PAGE>

                                         40

<TABLE>
<CAPTION>

                                                 THE FIRST SCHEDULE
                                         Form of Original Bond Certificate

Certificate No.              Transfer No.               Date of                   Amount of Bonds
                                                        Registration              GBP

<S>                            <C>                         <C>                     <C>

</TABLE>


             SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                            (the "Company")

Incorporated with limited liability in England and Wales under the Companies Act
                    1985. Registered number 3066856

           4.5 PER CENT. SUBORDINATED CONVERTIBLE BONDS DUE 2013



Poweris reserved to the Company by the Trust Deed  referred to below and subject
as therein provided to create and issue further  securities  either ranking
pari  passu  in  all  respects  and  forming  a  single   series  with  the
above-mentioned  Bonds or carrying  such  rights as to  ranking,  interest,
premium, redemption conversion and otherwise as the Company may think fit.

         THIS IS TO CERTIFY that







is/are the registered holder(s) of   pounds of the above-mentioned 4.5 per cent.
Subordinated Convertible Bonds due 2013 which are constituted by a Trust Deed
dated 20 May, 2003 and made between the Company of the first part and The Law
Debenture Trust Corporation p.l.c. (the "Trustee") as trustee of the second part
and such Bonds are issued with the benefit of and subject to the provisions
contained in the said Trust Deed and the Conditions set out in the Second
Schedule to the Trust Deed.

This Bond is evidence of entitlement only. Title to the Bonds passes only on due
registration  on the  Register  and  only  the duly  registered  holder  is
entitled to payments in respect of this Bond.

Signed by



for and on behalf of                             for and on behalf of
Schroder Ventures International                  Schroder Ventures International
Investment Trust plc                             Investment Trust plc

<PAGE>

                                       41

NOTE:- This certificate must be surrendered to the Company's  Registrars for the
time being  before any  conversion  or  transfer of the whole or any part of the
Bonds comprised herein can be effected or registered or a new certificate issued
in exchange.  The Bonds are  transferable  in amounts and integral  multiples of
GBP100,000.

Registrar, Transfer Agent, Conversion Agent and Paying Agent:

                               JPMorgan Chase Bank
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                                   Bournemouth
                                     BH7 7DA

THIS  SUBORDINATED  CONVERTIBLE  BOND DUE  2013,  ANY  INTEREST  HEREIN  AND ANY
ORDINARY SHARES OF SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST PLC (THE
"ISSUER") ISSUABLE ON CONVERSION HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A UNDER THE  SECURITIES  ACT ("RULE 144A") IN A TRANSACTION  MEETING THE
REQUIREMENTS  OF RULE 144A, (2) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS
DEFINED IN RULE 501(A)(1),  (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES TO THE REGISTRAR A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO SUCH TRANSFER (THE
FORM OF WHICH  LETTER CAN BE OBTAINED  FROM THE  REGISTRAR),  (3) IN AN OFFSHORE
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 UNDER REGULATION S
UNDER THE  SECURITIES  ACT, OR (4)  PURSUANT TO AN EXEMPTION  FROM  REGISTRATION
UNDER THE  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION.

THE ISSUER HAS NOT BEEN,  AND WILL NOT BE,  REGISTERED AS AN INVESTMENT  COMPANY
UNDER THE INVESTMENT  COMPANY ACT OF 1940, AS AMENDED (THE  "INVESTMENT  COMPANY
ACT").  NO MORE  THAN 75 U.S.  PERSONS  AS  DETERMINED  IN  ACCORDANCE  WITH THE
INVESTMENT  COMPANY  ACT WHO HAVE  ACQUIRED  SECURITIES  OF THE ISSUER  FROM THE
ISSUER OR ITS AGENTS OR AFFILIATES  ("DIRECT  PURCHASERS")  OR ANY UNITED STATES
RESIDENT  TRANSFEREE OF ANY DIRECT PURCHASER  ("PRIVATE  OFFERING  HOLDERS") MAY
BENEFICIALLY OWN SECURITIES  (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES) OF THE
ISSUER. IF THE ISSUER'S  SECURITIES (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES)
INCLUDING  ORDINARY  SHARES AND THESE BONDS  COULD BE DEEMED TO BE  BENEFICIALLY
OWNED BY MORE THAN 75 PRIVATE  OFFERING  HOLDERS (AND IN OTHER  CIRCUMSTANCES AS
SET FORTH IN THE ISSUER'S  ARTICLES OF  ASSOCIATION)  THE ISSUER MAY REQUIRE THE
TRANSFER OF ANY SECURITIES OF THE ISSUER OWNED BY SUCH PRIVATE  OFFERING HOLDERS
AS WILL BE  REQUIRED  TO REDUCE TO 75 OR BELOW THE  NUMBER OF  PRIVATE  OFFERING
HOLDERS BENEFICIALLY OWNING SECURITIES OF THE ISSUER,  INCLUDING ORDINARY SHARES
AND THESE BONDS.

<PAGE>

                                       42

CONVERSION OF THIS BOND IS SUBJECT TO SATISFACTION OF CERTAIN  REQUIREMENTS  SET
FORTH IN THE TRUST DEED  RELATED  HERETO AND ANY  ORDINARY  SHARES  ISSUED  UPON
CONVERSION MAY BE SUBJECT TO THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.


<PAGE>


                                       43

                               THE SECOND SCHEDULE
                      The Conditions of the Original Bonds

                        TERMS AND CONDITIONS OF THE BONDS

The  GBP40,000,000  4.5 per cent.  Subordinated  Convertible Bonds due 2013 (the
"Bonds",  which  expression  shall  in  these  Conditions,  unless  the  context
otherwise  requires,  include any further bonds issued  pursuant to Condition 19
and forming a single series with the Bonds) of Schroder  Ventures  International
Investment  Trust plc (the "Issuer") are constituted by a trust deed (the "Trust
Deed")  dated 20 May,  2003  between  the  Issuer  and The Law  Debenture  Trust
Corporation  p.l.c. (the "Trustee") as trustee for the holders of the Bonds (the
"Holders").  The issue of the Bonds was authorised pursuant to a resolution of a
duly  appointed  committee of the Board of Directors of the Issuer dated 12 May,
2003 and a  resolution  of the Board of  Directors  of the Issuer dated 6 March,
2003. The statements set out in these Conditions  include  summaries of, and are
subject to, the detailed  provisions of the Trust Deed. Copies of the Trust Deed
and the registrar and paying agency agreement (the "Registrar  Agreement") dated
20 May,  2003 made between the Issuer,  the Trustee and  JPMorgan  Chase Bank as
registrar, paying agent and conversion agent (the "Registrar") are available for
inspection  during normal business hours by the Holders at the registered office
for the time being of the Trustee,  being at 20 May,  2003 at Fifth  Floor,  100
Wood  Street,  London EC2V 7EX.  The Holders are entitled to the benefit of, are
bound by, and are deemed to have notice of, all the provisions of the Trust Deed
and the Registrar  Agreement  applicable to them.  Words and expressions  unless
otherwise  defined in these  Conditions shall have the meanings given to them in
the Trust Deed.

1.       Form, Denomination and Title

1.1      The Bonds are in registered, certificated form and, subject to
         Condition 13, are transferable in amounts and integral multiples of
         GBP100,000.  Title to the Bonds will pass by transfer and registration
         in accordance with Condition 13, the Trust Deed and the Registrar
         Agreement.

1.2      The Issuer and the Trustee may (to the fullest extent permitted by
         applicable law) deem and treat the person or persons in whose name any
         Bonds are registered as the absolute owner for all purposes and shall
         not be required to obtain any proof thereof or as to the identity of
         such person.  All payments made to such person or persons shall be
         valid and, to the extent of the sums so paid, effective to satisfy and
         discharge the liability for the moneys payable upon such Bonds.

2.       Status and Subordination

         The Bonds constitute direct and unsecured obligations of the Issuer,
         subordinated as referred to below and the rights and claims of Holders
         against the Issuer rank pari passu without any preference among
         themselves. The rights and claims of the Holders  will,  in the event
         of the winding up of the Issuer,  be  subordinated in right of payment
         in the manner provided in the Trust Deed to all Senior Liabilities of
         the Issuer.

<PAGE>
                                       44



3.       Interest

3.1      Rate of interest

         The Bonds bear  interest  from (and  including) 20 May, 2003 (the
         "Closing Date") at the rate of 4.5 per cent. per annum (subject to the
         withholding  or  deduction  of  any  taxation  in the  United  Kingdom
         required to be withheld or deducted at source).

3.2      Payment of Interest

         Such  interest  will be payable  (subject to any  withholding  or
         deduction  as  aforesaid)  semi-annually  in  arrear  on 21 May and 21
         November in each year (an "Interest  Payment Date"),  commencing on 21
         November, 2003.

         Whenever  it is  necessary  to compute an amount of  interest  in
         respect  of any  Bond  for a  period  of less  than a full  year  such
         interest will be calculated on the basis of a 360-day year  consisting
         of 12 months of 30 days each and in the case of an  incomplete  month,
         the actual number of days elapsed (not being more than 30 days).

3.3      Interest accrued

         Subject to Condition 5.11 below, interest will cease to accrue on
         the Bonds from and including the due date of redemption thereof unless
         payment of  principal  or  interest in respect  thereof is  improperly
         withheld or refused or unless  default is otherwise made in respect of
         payment. In any such event,  interest will continue to accrue (as well
         after as before any judgment) as provided in the Trust Deed.

4.       Redemption and purchase

4.1      Final Redemption

         Unless previously redeemed,  converted or purchased and cancelled
         as  provided  below,  the Bonds will be  redeemed  at their  principal
         amount on 21 May, 2013 (the "Final Redemption Date").

4.2      Redemption at the option of the Issuer

         (A) The Issuer  may, at any time on giving not less than 21 days'
             notice  (which  notice  shall  include  the date  fixed  for such
             redemption (the "Exercise  Date")) to the Holders (the "Call
             Option"), redeem some, on a pro rata basis between Holders,  or all
             of the Bonds at their principal amount plus accrued and unpaid
             interest thereon to, but excluding, the date fixed for redemption
             if:

             (i)  at any time on or after 21 May, 2006, the Average Closing
                  Price immediately prior to the giving of such notice is equal
                  to or greater than 130 per cent. of the Conversion Price; or

<PAGE>

                                       45


             (ii) 85 per cent. or more of the issued Bonds (determined by
                  reference to principal amount) shall have been converted,
                  redeemed or purchased and cancelled;

          PROVIDED THAT if the principal  amount of Bonds to be redeemed in
          respect of a single Holder is not  GBP100,000 or an integral  multiple
          thereof,  then the principal amount of Bonds to be redeemed in respect
          of that Holder shall be rounded up to the nearest GBP100,000.

         (B) Upon the  expiration of any such notice,  the Issuer shall be
             bound to redeem the principal amount of the Bonds to which such
             notice relates  at their  principal  amount  with  interest
             accrued  to, but excluding, the date fixed for redemption.

4.3       Election by Holder

          If  the  Issuer  exercises  a  Call  Option  in  accordance  with
          Condition 4.2 above, a Holder may,  prior to the Exercise Date,  elect
          in writing to the Issuer to convert its Bonds being the subject of the
          Call Option into Ordinary Shares.

4.4       Redemption Notices

          All  notices  given to  Holders  by or on  behalf  of the  Issuer
          pursuant to Condition 4.2 above shall specify the Conversion  Price as
          at the date of the notice,  the Closing Price per Ordinary Share as at
          the latest practicable date prior to the publication of the notice and
          the  aggregate  principal  amount of the  outstanding  Bonds as at the
          latest practicable date prior to the publication of the notice.

4.5       Purchases

          (A) The Issuer or any of its Subsidiaries or any person acting in
              concert (which expression shall have the meaning given to it by
              the City Code on Takeovers and Mergers) with them may at any time
              purchase Bonds in any manner and at any price.  If purchases are
              made by tender, tenders must be made available to all Holders
              alike.

          (B) Bonds purchased pursuant to this Condition 4 may be cancelled, may
              be held by the purchaser for cancellation at a later date or may
              be reissued or resold but, so long as such Bonds are held by
              the purchaser, the purchaser may not cast any votes thereon and
              such Bonds shall not be deemed to be outstanding for the purposes
              of Condition 8.4 or for the purposes any quorum calculations
              pursuant to Condition 14.

4.6       Cancellation

          All Bonds  redeemed  pursuant to this  Condition  4 or  converted
          pursuant to  Condition 5 will be  cancelled  forthwith  and may not be
          reissued or resold.

<PAGE>
                                       46


5.       Conversion

5.1      Period and Price for Conversion

     (A)  Subject as  hereinafter  provided,  a Holder at any time has the right
          (the  "Conversion  Right") subject to compliance with these Conditions
          and to any applicable fiscal or other laws or regulations,  to convert
          the principal  amount of his Bonds into Ordinary Shares of the Issuer.
          The price at which  Ordinary  Shares  shall be issued upon  conversion
          shall initially be 480p per Ordinary  Share,  such price being subject
          to  adjustment  as provided  below (and such price  being  hereinafter
          called the "Conversion  Price").  Subject to Condition 5.3, the number
          of  Ordinary  Shares to be issued on exercise  of a  Conversion  Right
          shall be calculated  by dividing the  principal  amount of Bonds being
          converted by the Conversion Price.

     (B)  If there shall be default in making  payment in full in respect of any
          Bonds called for redemption pursuant to these Conditions,  on the date
          fixed for redemption  thereof,  the Conversion Right attaching to such
          Bonds shall  continue to be  exercisable  up to and including the date
          upon which,  the full amount of the moneys  payable in respect of such
          Bonds shall have been duly  received by the  Registrar or the Trustee,
          and notice of such receipt shall have been given to the Holders.

     (C)  Without  prejudice to the  provisions  of  Condition  5.1(A) no Holder
          shall be able to exercise  his  Conversion  Right after the date seven
          calendar days before the due date of redemption of the relevant Bonds.
          The  period  from the  Closing  Date to the date seven  calendar  days
          before  the due date of  redemption  of the  relevant  Bonds is herein
          referred to as the "Conversion Period".

     (D)  No  fraction  of an  Ordinary  Share  will be  issued  on  conversion.
          However,  if more than one Bond shall be deposited  for  conversion at
          any one time by the same Holder,  the number of Ordinary  Shares to be
          issued upon conversion thereof shall be calculated on the basis of the
          aggregate principal amount of the Bonds to be converted.

     (E)  Ordinary  Shares  arising on  conversion  will be  allotted as at, and
          within 14 days after,  the Conversion Date  (determined as provided in
          Condition  5.2) in the name of the  Holder  completing  the  notice of
          conversion  or his nominee and will rank pari passu with the  Ordinary
          Shares in issue on the relevant  Conversion  Date, save that they will
          not be entitled to any dividends or other distributions declared, made
          or paid either in respect of any financial  period ended prior to such
          Conversion  Date  or by  reference  to a  record  date  prior  to such
          Conversion Date.

5.2  Procedure for Conversion

     (A)  The  Conversion  Right  attaching to any Bonds may be exercised by the
          Holder  delivering prior to the expiry of the Conversion Period a duly
          signed and completed  notice of  conversion  (in the form for the time
          being current and available at the specified  office of any Conversion
          Agent)  at  the  specified   office  of  any  Conversion   Agent.  The
          "Conversion  Date" shall be the  Business Day (as defined in the Trust
          Deed) next  following  the date on which the duly signed and completed
          notice of conversion  shall have been so delivered and all (if any) of
          the payments referred to below required to be made by the Holder shall
          have been made. A Holder delivering a Bond for conversion must pay any
          taxes and capital,  stamp,  issue and  registration  duties arising on
          conversion  (other than any  capital,  stamp,  issue and  registration
          duties  payable in the United  Kingdom by the Issuer in respect of the
          allotment and issue of Ordinary  Shares on conversion) and such Holder
          must pay all, if any,  taxes  arising by  reference to any disposal or
          deemed disposal of a Bond in connection with such conversion.

<PAGE>

                                       47


     (B)  If the Ordinary Shares are then a participating security in a relevant
          system,  unless  The  Uncertificated  Securities  Regulations  2001 as
          amended  from  time to time (the  "Regulations")  and the rules of the
          relevant  system  concerned  otherwise  require  and unless  otherwise
          specified  by the  Bondholder,  the  Ordinary  Shares  to be issued on
          conversion  of a Bond shall be  allotted  and  issued in  certificated
          form.  Certificates  (if  certificates  for  Ordinary  Shares are then
          generally  being issued) for Ordinary Shares issued on conversion will
          be despatched by mail free of charge (but uninsured and at the risk of
          the person  entitled  thereto)  within one month after the  Conversion
          Date.  Ordinary Shares to be issued in uncertificated  registered form
          shall be credited by the Company to the account with a relevant system
          of the  person  or  persons  designated  in  the  relevant  notice  of
          conversion.  The term "relevant system" has the meaning given to it in
          the Regulations.

     (C)  A notice of conversion  once delivered  shall be irrevocable  provided
          that a notice of  conversion  shall have no effect if the  exercise of
          the  Conversion  Right  covered  by it  would  result  in  the  person
          acquiring the Ordinary  Shares on conversion  (or any person acting in
          concert  within the meaning of the City Code on Takeovers and Mergers)
          becoming  obliged to make an offer for the Company under Rule 9 of the
          City Code on Takeovers and Mergers.

     (D)  The name and specified office of the initial  Conversion Agent are set
          out at the end of these  Conditions.  The Issuer  reserves  the right,
          subject to the prior written  approval of the Trustee,  at any time to
          vary or  terminate  the  appointment  of any  Conversion  Agent and to
          appoint other or further Conversion  Agents,  provided that it will at
          all times  maintain a Conversion  Agent  having a specified  office in
          London.  Notice  of any such  termination  or  appointment  and of any
          change in the specified  office of the Conversion  Agent will be given
          to the Holders in accordance with these Conditions.

5.3  Adjustments to the Conversion Price

     (A)  Subject to Conditions 5.5 and 5.6, the Conversion  Price is subject to
          adjustment as follows:-

     (i)  If and whenever  there shall be an  alteration in the nominal value of
          the Ordinary Shares by reason of consolidation  or  sub-division,  the
          Conversion   Price  shall  be  adjusted  in  relation  to   subsequent
          conversions  of the Bonds by multiplying it by a fraction of which the
          numerator shall be the nominal value of one Ordinary Share immediately
          after  such  alteration  and of  which  the  denominator  shall be the
          nominal value of one Ordinary Share immediately before such alteration
          and such  adjustment  shall become  effective  immediately  after such
          alteration takes effect.

<PAGE>

                                       48


     (ii) If and  whenever the Issuer shall issue  (otherwise  than  pursuant to
          Condition  5.3(A)(vi)  or to  any  of the  transactions  described  in
          Condition 5.3(A)(iii) and Condition 5.3(A)(vii) below) wholly for cash
          any additional Ordinary Shares (other than Ordinary Shares issued upon
          conversion  of the Bonds or issued  pursuant  to  subscription  by the
          Trustee) at a price per Ordinary  Share which is less than the Closing
          Price per Ordinary Share on the dealing day last preceding the date of
          announcement  of the issue of such  additional  Ordinary  Shares,  the
          Conversion  Price shall be adjusted in relation to  conversions of the
          Bonds  subsequent to such issue by multiplying the Conversion Price in
          effect  immediately  prior to the  issue of such  additional  Ordinary
          Shares by a  fraction  of which the  numerator  shall be the number of
          Ordinary  Shares  outstanding  immediately  prior to the issue of such
          additional  Ordinary  Shares plus the number of Ordinary  Shares which
          the  aggregate   consideration   receivable  for  the  issue  of  such
          additional  Ordinary  Shares  (determined  as  provided  in  Condition
          5.3(B)(i)  below) would  purchase at such  Closing  Price per Ordinary
          Share and of which the  denominator  shall be the  number of  Ordinary
          Shares  outstanding  immediately  after the  issue of such  additional
          Ordinary Shares. Such adjustment shall become effective as at the date
          upon which such additional Ordinary Shares shall be issued.

     (iii)         (a) If and whenever the Issuer or any other entity at the
                       request or with the agreement of the Issuer shall issue
                       (otherwise than pursuant to Condition 5.3(A)(vi) below)
                       wholly for cash any securities (other than any Further
                       Bonds forming a single series with the Bonds) which by
                       their terms are convertible into or exchangeable for, or
                       carry rights of subscription for, Ordinary Shares and the
                       consideration per Ordinary Share receivable by the
                       Issuer upon conversion or exchange of, or upon exercise
                       of such rights of subscription attached to, such
                       securities (determined as provided in Condition 5.3(B)
                       (ii) below) shall be less than the Closing Price per
                       Ordinary Share on the dealing day last preceding the date
                       of announcement of the issue of such securities, the
                       Conversion Price shall be adjusted in relation to
                       conversions of the Bonds subsequent to such issue by
                       multiplying the Conversion Price in effect immediately
                       prior to the issue of such securities by a fraction of
                       which the numerator shall be the number of Ordinary
                       Shares outstanding on such date of issue plus the number
                       of Ordinary Shares which the aggregate consideration
                       receivable by the Issuer for such securities (determined
                       as provided in Condition 5.3(B)(ii) below) would
                       purchase at such Closing Price per Ordinary Share and of
                       which the denominator shall be the number of Ordinary
                       Shares outstanding on such date of issue plus the number
                       of Ordinary Shares to be issued upon conversion or
                       exchange of such convertible or exchangeable securities
                       or upon exercise of such rights of subscription attached
                       thereto at the initial conversion, exchange or
                       subscription price or rate.  Such adjustment shall become
                       effective as at the date upon which such securities shall
                       be issued.

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                                       49


                   (b) If and whenever the rights of conversion or exchange or
                       subscription attached to any such securities as are
                       referred to in section (iii)(a) of this Condition
                       5.3(A) are modified so that the consideration per
                       Ordinary Share receivable by the Issuer upon conversion
                       or exchange of, or upon exercise of such rights of
                       subscription attached to, such securities (determined as
                       provided in Condition 5.3(B)(ii) below) shall be less
                       than the Closing Price per Ordinary  Share on the dealing
                       day last preceding the date of announcement of the
                       proposals to modify such rights of conversion or exchange
                       or subscription, the Conversion Price shall be adjusted
                       in relation to conversions of the Bonds subsequent to
                       such modification by multiplying the Conversion Price in
                       effect immediately prior to such modification by a
                       fraction of which the numerator shall be the number of
                       Ordinary Shares outstanding on such date of modification
                       plus the number of Ordinary Shares which the aggregate
                       consideration receivable by the Issuer for such
                       securities (determined as provided in Condition 5.3(B)
                       (ii) below) would purchase at such Closing Price per
                       Ordinary Share and of which the denominator shall be the
                       number of Ordinary Shares outstanding on such date of
                       modification plus the number of Ordinary Shares to
                       be issued upon conversion or exchange of such securities
                       or upon exercise of such rights of subscription attached
                       thereto at the modified conversion, exchange or
                       subscription price or rate.  Such adjustment shall become
                       effective as at the date upon which such modification
                       shall take effect.  A right of conversion, exchange or
                       subscription shall not be treated as modified for the
                       foregoing purposes where it is adjusted to take account
                       of rights and capitalisation issues and other events
                       normally giving rise to adjustment of conversion terms or
                       provisions similar to that in Condition 5.3(A)(i).

     (iv) If and whenever the Issuer shall  capitalise  any amount of profits or
          reserves and apply the same in paying up in full the nominal  value of
          any Ordinary  Shares to be issued to the holders of Ordinary Shares or
          to any of them, the Conversion  Price shall be adjusted in relation to
          conversions of the Bonds subsequent to such issue by multiplying it by
          a  fraction  of which the  numerator  shall be the  aggregate  nominal
          amount of the issued Ordinary Shares immediately before such issue and
          of which the denominator  shall be the aggregate nominal amount of the
          issued  Ordinary  Shares   immediately   after  such  issue  and  such
          adjustments  shall  become  effective  as at the date upon  which such
          additional Ordinary Shares shall be issued.

<PAGE>
                                       50

     (v)  If and whenever the Issuer shall make any Capital  Distribution to the
          holders of Ordinary  Shares then,  except where the  Conversion  Price
          falls to be adjusted under Condition  5.3(A)(iv) above, the Conversion
          Price  shall be  adjusted  in  relation  to  conversions  of the Bonds
          subsequent  to  such  Capital  Distribution  by  multiplying  it  by a
          fraction  of which  the  numerator  shall  be the  Closing  Price  per
          Ordinary Share on the Operative Date and the denominator  shall be the
          Closing Price per Ordinary Share on the dealing day last preceding the
          Operative Date. Such adjustment  shall become effective as at the date
          on which the Capital Distribution is actually made.

     (vi) If and whenever  the Issuer shall issue any Ordinary  Shares by way of
          rights to the holders of Ordinary Shares or shall grant any options or
          warrants to the holders of Ordinary Shares entitling them to subscribe
          for or  purchase  Ordinary  Shares at, in any such  case,  a price per
          Ordinary  Share less than the Closing Price per Ordinary  Share on the
          dealing day last  preceding the date of  announcement  of the terms of
          such  issue or  grant,  the  Conversion  Price  shall be  adjusted  in
          relation to conversions of the Bonds subsequent to such issue or grant
          by multiplying  the Conversion  Price in effect  immediately  prior to
          such date of  announcement  by a fraction of which the numerator shall
          be  the  number  of  Ordinary  Shares  outstanding  on  such  date  of
          announcement  plus the number of Ordinary  Shares which the  aggregate
          amount payable for such rights,  options or warrants and for the total
          number of Ordinary  Shares  comprised  therein would  purchase at such
          Closing Price per Ordinary Share and of which the denominator shall be
          the number of Ordinary Shares outstanding on such date of announcement
          plus the aggregate number of additional  Ordinary Shares issued or, as
          the case may be, comprised in the grant.  Such adjustment shall become
          effective as at the date of issue of the  Ordinary  Shares or the date
          of grant of the options or warrants (as the case may be).

     (vii)If and  whenever  the  Issuer  shall  issue any  securities  by way of
          rights to the holders of Ordinary Shares or shall grant any options or
          warrants to the holders of Ordinary Shares entitling them to subscribe
          for or purchase any  securities by way of rights  (whether in any such
          case  such  securities  are of the  Issuer or any  other  entity,  but
          excluding  any issue or grant which may result in an adjustment of the
          Conversion  Price  pursuant  to  Condition   5.3(A)(vi)   above),  the
          Conversion  Price shall be adjusted in relation to  conversions of the
          Bonds  subsequent to such issue or grant by multiplying the Conversion
          Price in effect  immediately  prior to the date of the announcement of
          such issue or grant by the fraction:-

<PAGE>
                                       51



                                      A - B
                                        A

                                     where:-

                         A   is the Closing Price per Ordinary Share on the
                             dealing day last preceding such date of
                             announcement; and

                         B   is the fair market value as at such date of
                             announcement (as determined in good faith by a
                             merchant or investment bank in London selected by
                             the Issuer and approved by the Trustee) of the
                             portion of the rights attributable to one Ordinary
                             Share.

                         Such adjustment shall become effective as at the date
                         of issue of the securities or the date of grant of the
                         options or warrants (as the case may be).

     (viii) Where the  circumstances  giving rise to any adjustment  pursuant to
          this  Condition  5.3  have  already  resulted  or  will  result  in an
          adjustment to the Conversion Price or where the  circumstances  giving
          rise to any  adjustment  arise by virtue  of any  other  circumstances
          which have  already  given or will give rise to an  adjustment  to the
          Conversion  Price or where more than one event  which gives rise to an
          adjustment to the Conversion Price,  occurs within such a short period
          of time that, in the opinion of the Auditors,  a  modification  to the
          operation  of the  adjustment  provisions  is  required  to  give  the
          intended result,  such modification  shall be made to the operation of
          the  adjustment  provisions  as may be  determined  by the  Issuer and
          approved in writing by the Trustee to be in its opinion appropriate to
          give the intended result.

     (ix) If any  doubt  shall  arise as to the  appropriate  adjustment  to the
          Conversion  Price,  a  certificate  of the Auditors in respect of such
          adjustment to the Conversion  Price shall be conclusive and binding on
          all concerned, save in the case of manifest or proven error.

  (B)  For the  purposes  of any  calculation  of the  consideration
       receivable pursuant to Conditions 5.3(A)(ii) and 5.3(A)(iii)(b) above,
       the following provisions shall be applicable:-

     (i)  in the case of the issue of Ordinary  Shares for cash,  the  aggregate
          consideration  receivable  shall be the amount of such cash,  provided
          that in no case shall any deduction be made for any commissions or any
          expenses  paid or incurred by the Issuer for any  underwriting  of the
          issue or otherwise in connection therewith; and

<PAGE>
                                       52


     (ii) in  the  case  of  the  issue  of  securities   convertible   into  or
          exchangeable  for, or carrying  rights of subscription  for,  Ordinary
          Shares  (a)  the  aggregate  consideration  receivable  by the  Issuer
          therefor  shall  be  deemed  to  be  the  consideration   received  or
          receivable by the Issuer for any such  securities  plus the additional
          minimum  consideration  (if any) to be  received  by the Issuer or the
          issuer upon conversion or exchange  thereof,  or upon exercise of such
          rights of subscription  attached  thereto (the  consideration  in each
          case to be determined subject to the proviso in (A) immediately above)
          and (b) the  consideration per Ordinary Share receivable by the Issuer
          upon  conversion  or exchange  of, or upon  exercise of such rights of
          subscription  attached  to, such  securities  shall be such  aggregate
          consideration  (translated  into pounds  sterling,  if  expressed in a
          currency other than pounds  sterling,  at such rate of exchange as may
          be  determined  by a bank  approved by the Trustee to be the spot rate
          ruling  at the  close  of  business  on the  date  of  issue  of  such
          securities) divided by the number of Ordinary Shares to be issued upon
          such  conversion  or exchange  or exercise at the initial  conversion,
          exchange or subscription price or rate.

  (C)  If the  Conversion  Date in  relation  to any Bonds  shall be
       after the record  date for any such issue,  distribution  or grant (as
       the case  may be) as is  mentioned  in  Conditions  5.3(A)(iii)(a)  to
       5.3(A)(vii)  inclusive  of this  Condition  or any  such  issue  as is
       mentioned in Condition  5.3(A)(ii) or 5.3(A)(iii)(a) of this Condition
       which is made to the  holders  of  Ordinary  Shares or any of them but
       before the date of issue of the  Ordinary  Shares or other  securities
       (in the case of Conditions 5.3(A)(ii), 5.3(A)(iii)(a) and 5.3(A)(iv)),
       before the date that the Capital Distribution is actually made (in the
       case of Condition  5.3(A)(v)) or before the date on which the issue or
       grant is made (in the case of Condition 5.3(A)(vii)), the Issuer shall
       procure  that  there  shall be issued to the  converting  Holder or in
       accordance with the instructions contained in the notice of conversion
       (subject to any applicable laws or other  regulations) such additional
       number of Ordinary Shares as, together with the Ordinary Shares issued
       or to be issued on conversion of the relevant  Bonds,  is equal to the
       number of Ordinary  Shares which would have been required to be issued
       on  conversion  of  such  Bonds  if  the  relevant   adjustment  (more
       particularly referred to in the said sub-paragraphs) to the Conversion
       Price had in fact  been made  immediately  after the  relevant  record
       date.  Such  additional  Ordinary  Shares  will be allotted as at, and
       within 28 days after,  the relevant  Conversion Date and  certificates
       for such Ordinary  Shares will be despatched  within 28 days after the
       relevant issue, distribution or grant.


5.4  No adjustment  will be made if it would  result in an increase in the
     Conversion  Price  (otherwise  than by  reason of a  consolidation  of
     Ordinary Shares pursuant to Condition 5.3(A)(i)).

5.5  Notwithstanding any other provision of these Conditions, no adjustment will
     be made to the Conversion Price when Ordinary Shares or other securities
     (including rights, warrants or options) are issued, offered or granted to
     employees or secondees (including Directors holding executive office) of
     the Issuer or any subsidiary or any associated company or joint ventures of
     the Issuer pursuant to any employees' share scheme (as defined in section
     743 of the Companies Act 1985 of Great Britain) (or an equivalent scheme
     which is extended to secondees), or in respect of any offer or issue of, or
     grant of rights to subscribe for, Ordinary Shares in lieu of the whole or
     part of a cash dividend (where the cash dividend would not have constituted
     a Capital Distribution) save to the extent that the value of such Ordinary
     Shares, as determined by a merchant or investment bank in London of
     international repute, selected by the Issuer and approved in writing by the
     Trustee, exceeds the value of such cash dividend.

<PAGE>
                                       53

5.6  On the calculation of any adjustment, the resultant Conversion Price shall
     be rounded down to the nearest 1p.  No adjustment will be made to the
     Conversion Price where such adjustment would be less than one per cent. of
     the Conversion Price then in effect.  Any adjustment not required to be
     made and any amount by which the Conversion Price has been rounded down
     will be carried forward and taken into account in any subsequent adjustment
     as if the same had been made or had not been rounded down.  No adjustment
     will be made to the Conversion Price to the extent the adjustment would
     result in the Ordinary Shares being issued at less than their nominal
     value.  Holders will be given notice promptly of all adjustments in
     accordance with Condition 18.

5.7  If the Issuer (after consultation with the Trustee) or the Trustee (after
     consultation with the Issuer) determines that an adjustment should be made
     to the Conversion Price as a result of one or more events or circumstances
     not referred to in Condition 5.3, the Issuer shall, at its own expense and
     acting reasonably, request a financial adviser, selected by the Issuer and
     approved in writing by the Trustee, acting as an expert and not an
     arbitrator, to determine as soon as practicable what adjustment (if any) to
     the Conversion Price is fair and reasonable to take account thereof and the
     date on which such adjustment should take effect and upon such
     determination such adjustment (if any) shall be made and shall take effect
     in accordance with such determination.

5.8  (A)  If,  so  long as the  Conversion Right  in respect of any of the Bonds
          remains exercisable,  an effective resolution is passed or an order of
          a court of competent  jurisdiction is made that the Issuer be wound up
          or dissolved  (otherwise  than for the  purposes of a  reconstruction,
          merger  or  consolidation  the  terms  whereof  have  previously  been
          approved in writing by the Trustee or by an Extraordinary Resolution),
          notice  thereof shall  forthwith be given to the Holders in accordance
          with  these  Conditions  and each  Holder  shall  (whether  or not the
          Conversion Right attaching to his Bonds is then otherwise exercisable)
          be entitled at any time after the  passing of such  resolution  or (as
          the case may be) the making of such order until the  expiration of six
          weeks after the date of such notice (but not  thereafter) to elect (by
          delivering  as  aforesaid  a notice  of  conversion  duly  signed  and
          completed and otherwise  complying with this  Condition) to be treated
          as if his Bonds had been  converted at the date of the passing of such
          resolution or (as the case may be) the making of such order. Upon such
          deemed  conversion  the  Holder's  rights and  interests in such Bonds
          shall lapse.  Subject as provided in this  paragraph,  the  Conversion
          Right  shall  lapse in the event of a  resolution  being  passed or an
          order of a court of competent  jurisdiction being made that the Issuer
          be wound up or dissolved  (otherwise  than as aforesaid).  Interest in
          respect of any Bonds treated as so converted  shall cease to accrue as
          from the date of the  passing of such  resolution  or (as the case may
          be) the making of such order.

<PAGE>
                                       54


     (B)  If the  Trustee  shall give  notice to the  Issuer  that the Bonds are
          immediately due and repayable otherwise than because of the passing of
          an  effective  resolution  or the  making  of an  order  of a court of
          competent  jurisdiction  for  the  winding  up or  dissolution  of the
          Issuer,  notice  of such  fact  shall be given  by the  Issuer  to the
          Bondholders in accordance  with these  Conditions and each  Bondholder
          shall  (whether or not the Conversion  Right  attaching to his Bond is
          then otherwise  exercisable) be entitled at any time after the date on
          which the Bonds  become so due and  repayable  until the expiry of six
          weeks  after  the  date  of  such  notice  (but  not  thereafter)  (by
          delivering  as  aforesaid  a notice  of  conversion  duly  signed  and
          contemplated and otherwise complying with this Condition),  in lieu of
          having his Bond repaid,  to exercise the Conversion  Right pursuant to
          such  provisions in respect of such Bond as at the date of such notice
          by the Trustee.  Subject as provided in this paragraph, the Conversion
          Right shall  lapse in the event that the Trustee  shall give notice to
          the Issuer that the Bonds are immediately due and repayable (otherwise
          than as aforesaid).  Interest on any Bonds so converted shall cease to
          accrue as from the date of such notice by the Trustee.

5.9  Ordinary Shares will not be available prior to the "abolition day" as
     defined in section 111(1) of the Finance Act 1990 of the United Kingdom for
     issue upon conversion of any Bond or upon subscription by the Trustee (A)
     to, or to an agent or nominee for, Euroclear or Clearstream Luxembourg or
     any other person providing a clearance service within the meaning of
     section 70 or 96 of the Finance Act 1986 of the United Kingdom or (B) to,
     or to an agent or nominee for, a person whose business is or includes
     issuing depositary receipts within the meaning of section 67 or 93 of the
     Finance Act 1986 of the United Kingdom.

5.10 The Trust Deed provides that the Trustee may at its absolute discretion
     (and without any responsibility for any loss occasioned thereby), after the
     seventh day immediately prior to the date fixed for redemption from time to
     time of any of the Bonds, and up to but excluding the date fixed for such
     redemption elect to apply the principal in respect of such of the Bonds due
     for redemption on such date (other than Bonds in respect of which (A) a
     Conversion Right has been exercised by the Holder under these Conditions or
     (B) the Holder has on or prior to the seventh day prior to such date of
     redemption given written notification to the Trustee in accordance with
     Clause 4.2 of the Trust Deed that it does not wish the Trustee to apply the
     principal of such Holder's Bonds to subscribe for Ordinary Shares in
     accordance with the discretion granted to the Trustee in this Condition
     5.10) (in this Condition 5.10 referred to as the "Unexercised Bonds") in
     subscribing that number of Ordinary Shares into which the Unexercised Bonds
     would have been converted had they been converted on the seventh day prior
     to such redemption date (after making any appropriate adjustments to the
     Conversion Price in respect of transactions since that day) if the Trustee
     is satisfied that (i) the net proceeds of sale of the Ordinary Shares
     arising from such subscription (disregarding any liability (other than a
     liability which may be recovered from the Trustee) to taxation consequent
     thereon) would be likely to exceed the principal and interest which would
     otherwise be payable in respect of the Unexercised Bonds and (ii) all (if
     any) necessary consents have been obtained.  No interest shall accrue from
     the Interest Payment Date immediately preceding such redemption date in
     respect of such Unexercised Bonds.  The Ordinary Shares allotted on such
     subscription shall be sold by, or on behalf of, the Trustee as soon as
     practicable and (subject to any necessary consents being obtained and to
     the deduction by the Trustee of an amount equal to any taxation which may
     be recovered from the Trustee and any costs incurred by the Trustee on such
     allotment and sale) the net proceeds of sale shall be paid to the Registrar
     for distribution rateably to the holders of the Unexercised Bonds.
     Payments will be made in accordance with Condition 7.

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                                       55


5.11 Ordinary Shares allotted on conversion will be fully paid and will rank
     pari passu in all respects with the fully paid Ordinary Shares in issue on
     the Conversion Date, except that the Ordinary Shares so allotted will not
     rank for any dividend or other distribution declared or paid or made by
     reference to a record date for the payment of a dividend or other
     distribution with respect to the Ordinary Shares prior to such Conversion
     Date or in respect of any financial period ended prior to such Conversion
     Date.  No payment or adjustment shall be made on conversion for any
     interest accrued on the relevant Bonds since the last Interest Payment Date
     preceding the Conversion Date relating to such Bonds (or, if such
     Conversion Date falls before the first Interest Payment Date, since the
     Closing Date).

6.  Stock Exchange listing

6.1 If the Bonds are listed on a Recognised Stock Exchange, the Issuer will
    thereafter use all reasonable endeavours to maintain such listing.

6.2  The Issuer shall use all reasonable endeavours to ensure that the Ordinary
     Shares issued upon conversion of any Bonds shall be admitted to the
     Official List by the UK Listing Authority and will be listed,
     quoted or dealt in on any other stock exchange or securities market on
     which the Ordinary Shares may then be listed or quoted or dealt in and
     will thereafter use all reasonable endeavours to maintain such listing,
     quotation or dealing (as the case may be).

7.   Payments

7.1  Payment of principal and interest in respect of Bonds will be made to the
     persons shown on the Register at the close of business on the day falling
     fourteen days prior to the date on which the relevant payment is due (the
     "Record Date").  Such payments will be made by transfer to a sterling bank
     account specified by the Holder unless the Holder has requested that
     payment is made by sterling cheque posted to the Holder at his registered
     address on the business day prior to the due date for payment.  All
     payments in respect of the Bonds will be made subject to such (if any)
     other provisions as are set out in these Conditions and the Trust Deed and
     to any fiscal or other laws and regulations applicable in the place of
     payment but without prejudice to the provisions of Condition 11.

7.2  If, in the case of payment by transfer as referred to above, the due date
     for payment of any amount of principal or interest is not a business day,
     then payment shall be made on the next following business day and Holders
     shall not be entitled to any further interest or other payment in respect
     of any such delay.  In this paragraph, "business day" means, in relation
     to any place, any day (not being a Saturday or Sunday) on which commercial
     banks and foreign exchange markets settle payments in London.


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                                       56


8.   Events of Default and Enforcement

8.1  If an effective resolution is passed, or an order of a court of competent
     jurisdiction is made, for the Insolvency of the Issuer (otherwise than for
     the purposes of a consolidation, amalgamation, merger or reconstruction the
     terms of which have previously been approved in writing by the Trustee or
     by an Extraordinary Resolution or by a court of competent jurisdiction
     under which the continuing corporation or the corporation formed as a
     result of such consolidation, amalgamation, merger or reconstruction
     effectively assumes the entire obligations of the Issuer in respect of the
     Bonds), the Bonds shall automatically thereby forthwith become, immediately
     due and repayable at their principal amount together with accrued interest
     as provided in the Trust Deed without the requirement for any notice
     thereof by the Trustee or the Bondholders.

8.2  If a default is made for a period of seven days or more in the payment of
     any principal due in respect of the Bonds or the payment of an amount
     equal to the net proceeds of sale of any Relevant Bonds pursuant to
     Condition 13.5 or for a period of 14 days or more in the payment of any
     interest due in respect of the Bonds, the Trustee may, subject as set out
     in Condition 8.4, institute proceedings for the Insolvency of the Issuer.

8.3  Without prejudice to Conditions 8.1 and 8.2 above, if default is made in
     the performance or observation by the Issuer of any obligation, condition
     or provision under the Bonds or the Trust Deed (other than any obligation
     for the payment of any amount due in respect of the Bonds) or if any event
     occurs or any action is taken or fails to be taken which is (or, but the
     provisions of any applicable law, would be) a breach of any of the
     covenants or provisions of the Trust Deed or the Bonds then the Trustee
     may, subject as set out in Condition 8.4, institute such proceedings
     against the Issuer as it may think fit or as it shall be directed or
     requested pursuant to Condition 8.4 in order to enforce such obligation,
     condition, provision or covenant provided that the Issuer shall not as a
     consequence of such proceedings be obliged to pay any sum or sums
     representing or measured by reference to principal or interest in respect
     of the Bonds sooner than the same would otherwise have been payable by it.
     Such proceedings may only be instituted if a default thereunder by the
     Issuer is not remedied (where, in the opinion of the Trustee, such default
     is capable of being remedied) within 30 days after notice requiring such
     default to be remedied has been given by the Trustee to the Issuer.

8.4  The Trustee shall not be bound to institute any of the proceedings or take
     any other action referred to in Conditions 8.2 or 8.3 or to take any other
     action under the Trust Deed unless (A) it shall have been so directed by an
     Extraordinary Resolution of the Holders or so requested in writing by the
     holders of at least one-quarter in principal amount of the Bonds then
     outstanding and (B) it shall have been indemnified to its satisfaction.

8.5  No Holder shall be entitled to proceed directly against the Issuer unless
     the Trustee, having become bound so to do, fails to do so within a
     reasonable period and such failure shall be continuing.  No Holder shall
     be entitled to institute proceedings for the Insolvency of the Issuer
     unless the Trustee, having become bound to proceed against the Issuer as
     aforesaid, fails to do so or, being able and bound to prove in any
     Insolvency of the Issuer fails to do so, in which case such Holder may, on
     giving an indemnity satisfactory to the Trustee, in the name of the
     Trustee (but not otherwise), himself institute proceedings for the
     Insolvency of the Issuer and/or prove in any Insolvency of the Issuer to
     the same extent (but not further or otherwise) that the Trustee would have
     been entitled to do so in respect of the Bonds.

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                                       57

8.6  No remedy against the Issuer, other than as specifically provided by this
     Condition 8, shall be available to the Holders, whether for the recovery of
     amounts owing under the Bonds or in respect of any breach by the Issuer of
     any of its obligations under the Bonds or any of the provisions of the
     Trust Deed.

9.  Purchase of own shares

    The Trust Deed contains authority for the Issuer to exercise such rights as
    it may from time to time enjoy to purchase its own shares throughout the
    life of the Bonds without being required to obtain the prior sanction of
    Holders and without further reference to them.

10. Taxation

     All  payments in respect of the Bonds shall be made without withholding, or
     deduction of, or on account of, any taxes, duties, assessments or
     governmental  charges  of  whatever  nature  imposed or levied by or in the
     United Kingdom or by any authority  thereof or therein  having power to tax
     (together "Taxes"), unless such withholding or deduction is required by law
     in   which case  payments  will be made net of any such  Taxes.  The Issuer
     will not be obliged to gross up on account of any such Taxes.

11.  Prescription

11.1 The Issuer shall be discharged from its obligation to pay principal on
     any  Bonds to the extent that a cheque  which has been duly  despatched  in
     sterling  remains  uncashed  at the end of the  period of 10 years from the
     Relevant  Date in  respect  of  such  payment.  The  Issuer  shall  be
     discharged  from its  obligation  to pay  interest on any Bonds to the
     extent that a cheque which has been duly despatched in sterling remains
     uncashed at the end of the period of five years from the Relevant Date in
     respect of such payment.

11.2 For this purpose, the "Relevant Date" in respect of any payment means the
     date on which such payment first becomes due and payable but, if the full
     amount of the moneys payable on such date has not been received by the
     Registrar or the Trustee on or prior to such date, the "Relevant Date"
     means the date on which such moneys shall have been so received and notice
     to that effect shall have been given to the Holders by the Issuer in
     accordance with Condition 18.

12.  Registration

     The Issuer will cause to be kept at JPMorgan Chase Bank, Institutional
     Trust Services of 1 Chaseside, Ground Floor, Bournemouth BH7 7DA (or such
     other place in England or Wales as the Registrar may notify Holders in
     accordance with Condition 18) (the "Specified Office") of the Registrar for
     the time being a register (the "Register") on which shall be entered the
     names and addresses of the subscribers of the Bonds or, as the case may be,
     of the latest transferees of the same notified to the Registrar in
     accordance with Condition 13, together with the particulars of the Bonds
     held by them respectively, of all transfers of Bonds and of any entitlement
     to any interest payment which may be due notwithstanding conversion of the
     relevant Bonds.  The Issuer reserves the right, with the prior written
     approval of the Trustee, at any time to vary or terminate the appointment
     of the Registrar and to appoint another or a further Registrar, provided
     that there will at all times be a Registrar with a Specified Office in
     England or Wales.  Any variation or termination of appointment shall only
     take effect (other than in the case of insolvency of the Registrar, when
     it shall be of immediate effect) after not less than 21 nor more than 30
     days' notice thereof shall have been given to the Holders in accordance
     with Condition 18 and any change in the Specified Office of the Registrar
     shall also be promptly so notified.


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                                       58

13.  Transfer of Bonds

13.1 Bonds may, subject to the provisions of this Condition 13, the Trust Deed
     and the Registrar Agreement, be transferred by the registered holder free
     of and without regard to any set-off, counterclaim or equities between the
     Issuer and the first or any subsequent registered holder of such Bonds, in
     amounts and integral multiples of GBP100,000, by delivery to the Specified
     Office of a form of transfer in respect thereof in writing duly completed
     and signed and upon compliance with such reasonable requirements as the
     Issuer and the Registrar may prescribe without service charge but upon
     payment of any taxes, duties and other governmental charges in respect of
     such transfer.  No transfer of Bonds shall be recognised by the Issuer
     unless entered on the Register.  No transfers of Bonds shall be entered on
     the Register after the date 14 days before the Final Redemption Date.
     Bonds may be registered only in the name of, and transferred only to, a
     named person (or persons, not exceeding four in number) and the Registrar
     will not accept transfers of Bonds to "bearer".  The Registrar will within
     14 days of any duly made request to register the transfer of Bonds enter
     the transferee in the Register.

13.2 No holder of any Bonds may reoffer, sell, assign, transfer or otherwise
     dispose of Bonds other than:

     (A)  to a  person  whom  the  seller  reasonably  believes  is a  Qualified
          Institutional  Buyer  within the  meaning of Rule 144A  ("Rule  144A")
          under the United States  Securities Act of 1933 (the "Securities Act")
          in a transaction meeting the requirements of Rule 144A;

     (B)  in an offshore  transaction  meeting the  requirements  of Rule 903 or
          Rule 904 under Regulation S under the Securities Act;

     (C)  pursuant to an exemption  from  registration  under the Securities Act
          provided by Rule 144 thereunder (if available); or

     (D)  to  an  institutional   "accredited  investor"  (as  defined  in  Rule
          501(A)(1),  (2), (3) or (7) of Regulation D under the Securities  Act)
          that,  prior to such  transfer,  furnishes  to the  Registrar a signed
          certificate containing certain representations and agreements relating
          to such transfer (a form of which  certificate is attached as Schedule
          6 to the Trust Deed) and in accordance with all applicable securities
          laws of any other jurisdiction.


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                                       59



13.3 In  connection  with any  transfer  of Bonds,  other  than to the
     Issuer in connection  with a redemption of Bonds,  the Directors shall have
     the right to require the transferee of such Bonds to execute and deliver to
     the  Directors  appropriate  certificates  in  a  form  acceptable  to  the
     Directors  in  their  sole  discretion,  including,  if  requested  by  the
     Directors,  an opinion  of  counsel  acceptable  to the  Directors,  acting
     reasonably,  that such  transaction is in compliance with the  restrictions
     set out in Condition 13.2.

13.4 (A)  The Issuer  covenants that the Issuer shall not, and shall procure
          that its affiliates,  agents or  intermediaries do not,  directly,  or
          indirectly sell securities of the Issuer (other than short-term paper)
          to more than 75 United  States  Persons who are  beneficial  owners or
          take any other  actions  that  would  result in the  Issuer  having to
          register as an investment  company under the US Investment Company Act
          of 1940 (the "Investment Company Act").

     (B)  The  Issuer  covenants  that  if  it  or  its  affiliates,  agents  or
          intermediaries  directly or indirectly  sell  securities of the Issuer
          (other than  short-term  paper) to any United  States  Person who is a
          beneficial  owner,  it shall  procure that such United  States  Person
          agrees to comply with substantially identical transfer restrictions in
          respect of its  securities  as the Holders are required to comply with
          in respect of the Bonds.

     (C)  In the event that the Issuer, its affiliates, agents or intermediaries
          directly or indirectly sell or sells  securities of the Issuer to more
          than 75 United States Persons who are  beneficial  owners or any other
          event occurs that would result in the issuer  having to register as an
          investment  company  under the  Investment  Company  Act,  the  Issuer
          covenants  that it will take all necessary  actions to comply with the
          Investment  Company Act. Without limiting the generality of the above,
          the Issuer  shall use its best  endeavours  to take  advantage  of any
          statutory exemption or rule-based  exemption to registration under the
          Investment  Company Act and if no statutory  exemption  or  rule-based
          exemption is then  available to it, it will apply to the US Securities
          & Exchange  Commission for such  exemptive  relief as may be needed to
          ensure that it need not register as an  investment  company  under the
          Investment Company Act.

13.5     If it shall come to the notice of the Directors that any Bonds:

     (A)  are or may be owned or held  directly  or  beneficially  such that the
          aggregate   number  of  United  States  Persons  who  are  holders  or
          beneficial  owners (which for these purposes shall include  beneficial
          ownership  by  attribution  pursuant  to  section  3(c)(1)(A)  of  the
          Investment  Company Act) of Bonds or other  securities  of the Issuer,
          including  Ordinary Shares (other than certain  short-term  paper) and
          who acquired securities of the Issuer from the Issuer or its agents or
          affiliates  ("direct  purchasers") or any U.S. resident  transferee of
          any direct purchaser  ("Private  Offering  Holders") is or may be more
          than 75; or

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                                       60

     (B)  are or may be owned or held directly or beneficially by any persons to
          whom a transfer  of Bonds or whose  ownership  or holding of any Bonds
          might in the  opinion of the  Directors  require  registration  of the
          Issuer as an investment company under the Investment Company Act,

          the Directors may, and:

     (C)  if it shall come to the notice of the  Directors  that any Bonds are
          or may be owned or held directly or beneficially by any person who is
          a pension or other  benefit  plan  subject  to  Title 1 of the  United
          States  Employee Retirement  Income  Security Act of 1974,  as amended
          ("ERISA") and in the opinion of the Directors  the assets of the
          Issuer may be considered  "plan assets" within the meaning of
          regulations adopted under ERISA the Directors shall be required to,

     serve a notice (hereinafter called a "Transfer Notice") upon the person (or
     any one of such persons where Bonds are registered in joint names)
     appearing in the Register as the registered owner (the "Vendor") of any of
     the Bonds concerned (the "Relevant Bonds") requiring the Vendor within a
     period of 30 days from receipt of the Transfer Notice to serve a notice on
     the Issuer that it wishes to redeem the Relevant Bonds at their principal
     amount plus interest accrued to, but excluding, the date of redemption or
     to convert the Relevant Bonds into Ordinary Shares in accordance with
     Condition 5.2 and if the Vendor has not served notice in respect of such
     redemption  and  conversion  has not taken  place  within the said 30 days,
     allowing  the  Issuer to sell the  Relevant  Bonds on behalf of the  Vendor
     either itself or by  instructing  a member of the London Stock  Exchange to
     sell them in accordance with the best practice then obtaining to any person
     who, in the sole and conclusive  determination of the Directors,  would not
     fall within (A),  (B) or (C) above and whose  ownership  or holding of such
     Bond or Bonds  would not result in the  aggregate  number of United  States
     Persons who are beneficial  owners or holders of Bonds or other  securities
     of the Issuer (other than certain  short-term  securities) being 75 or more
     (such person being hereinafter called an "Eligible  Transferee").  For this
     purpose the  Directors  may authorise in writing any officer or employee of
     the Issuer to  execute  on behalf of the holder or holders of the  Relevant
     Bonds a transfer of the Relevant  Bonds to the purchaser or purchasers  and
     an instrument  of transfer  executed by that person will be as effective as
     if it had been  executed  by the  holder  of,  or the  person  entitled  by
     transmission to, the Relevant Bonds. The purchaser will not be bound to see
     to the  application  of the  purchase  moneys  nor  will  his  title to the
     Relevant  Bonds  be  affected  by any  irregularity  or  invalidity  in the
     proceedings  relating  to the  sale.  The net  proceeds  of the sale of the
     Relevant  Bonds shall be received by the Issuer,  whose  receipt shall be a
     good discharge for the purchase moneys,  and will belong to the Issuer and,
     upon  their  receipt,  the  Issuer  will  become  indebted  to  the  former
     registered  owner of, or person entitled by  transmission  to, the Relevant
     Bonds for an amount equal to the net proceeds of transfer upon surrender by
     him or them of the certificate of the Relevant Bonds which the Vendor shall
     forthwith  be  obliged  to  deliver  to the  Issuer.  Notice of  receipt of
     proceeds  by Issuer  shall be given to relevant  Holders.  No trust will be
     created in respect of the debt and no  interest  will be payable in respect
     of it and the Issuer will not be required to account for any moneys  earned
     from the net proceeds of transfer  which may be employed in the business of
     the Issuer or as it thinks fit. The Issuer may register the  transferee  or
     transferees  as the  registered  owner or owners of the Relevant  Bonds and
     issue  to  him or  them a  certificate  for  the  same  and  thereupon  the
     transferee or transferees shall become absolutely  entitled thereto. On and
     after  the  date of such  Transfer  Notice,  and  until  registration  of a
     transfer  of the  Relevant  Bonds  to  which  it  relates  pursuant  to the
     provisions of this  paragraph,  the rights and privileges  attaching to the
     Relevant Bonds shall be suspended and not capable of exercise.


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                                       61

13.6 A Holder shall not transfer Bonds without  completing and delivering to the
     Registrar a transfer  certificate in the form set out in Schedule 5 and, if
     appropriate,  Schedule 6 of the Trust Deed duly completed by the transferor
     and the proposed  transferee.  The  Registrar  shall refuse to register any
     purported  transfer of Bonds for which a transfer  certificate has not been
     duly completed and  delivered,  duly stamped,  and such purported  transfer
     shall be null, void and without effect.

13.7 A person who becomes aware that his holding,  directly or beneficially,  of
     Bonds will, or is likely to, fall within any of  subparagraphs  (A), (B) or
     (C) above or, being a Private  Offering  Holder and a  beneficial  owner or
     holder  of Bonds,  becomes  aware  that the  aggregate  number  of  Private
     Offering  Holders  who are  beneficial  owners or holders of Bonds or other
     securities of the Issuer (other than certain short-term securities) is more
     than 75, shall forthwith,  unless he has already received a Transfer Notice
     in  accordance  with  the  foregoing,  give a  request  in  writing  to the
     Directors  for the  issue  of a  Transfer  Notice  in  accordance  with the
     foregoing.  Every such request shall be accompanied  by the  certificate or
     certificates for the Bonds to which it relates. For the avoidance of doubt,
     the  receipt  of such  request  will not oblige  the  Directors  to issue a
     Transfer  Notice.  The  issue  of a  Transfer  Notice  shall be in the sole
     discretion  of the  Directors.  A person  shall have no  liability  for its
     failure to make a request in accordance with this Condition 13.7 other than
     the  obligation  by  such  person  to  comply  with a  Transfer  Notice  in
     accordance with Condition 13.5.

13.8 Subject to the  provisions of the Trust Deed, the Directors  shall,  unless
     any Director has reason to believe otherwise, be entitled to assume without
     enquiry  that  none of the Bonds  are held in such a way as to  entitle  or
     require the Directors to serve a Transfer  Notice in respect  thereof.  The
     Directors  may,  however,  at any time and from  time to time call upon any
     registered owner (or any one of joint owners) of Bonds by notice in writing
     to provide such information and evidence as they shall  reasonably  require
     for the purpose of determining any matter  connected with or in relation to
     such  registered  owner of Bonds  relating to compliance by the Issuer with
     applicable  provisions  of the US  Investment  Company  Act  of  1940,  the
     Securities Act and ERISA. In the event of such information and evidence not
     being so  provided  within such  reasonable  period (not being less than 21
     days after service of the notice requiring the same) as may be specified by
     the  Directors in the said notice,  the  Directors  may, in their  absolute
     discretion,  treat any Bond held by such registered owner or joint owner as
     being held in such a way as to entitle or require  them to serve a Transfer
     Notice in respect thereof.

13.9 The  Directors  shall not be required to give any reasons for any decision,
     determination  or declaration  taken or made in accordance  with the powers
     granted hereby. The exercise of the powers conferred by the foregoing shall
     not be questioned or  invalidated  in any case on the ground that there was
     insufficient evidence of direct or beneficial ownership or holding of Bonds
     by any person or that the true direct or beneficial  owner or holder of any
     Bonds was otherwise  than as appeared to the Directors at the relevant date
     provided that the said power shall have been exercised in good faith.

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                                       62


13.10 In this Condition:-

      (A)   "United States Person" or "U.S. Person" means a person resident in
            the United States, a corporation, partnership or other entity
            created or organised in or under the laws of the United States, or
            any estate or trust the income of which is subject to United States
            federal income taxation regardless of its source or any other
            person, entity, trust or estate included within the definition of
            "U.S. Person" in Rule 902(k) under the United States Securities Act
            of 1933, as amended;

      (B)   securities that are sold or acquired "directly or indirectly" by
            the Issuer or its affiliates, agents or intermediaries are
            securities that are knowingly sold by the Issuer or its affiliates,
            agents or intermediaries and are acquired directly or indirectly
            from the issuer or its agents, affiliates or intermediaries or are
            acquired in a transaction with the direct or indirect involvement of
            the Issuer or its agents, affiliates or intermediaries;

      (C)   "beneficial owner" means a person who has the beneficial ownership
            of securities by attribution pursuant to Section 3(c)(1) of the
            Investment Company Act;

      (D)   "short-term paper" has the meaning ascribed to it in Section 3(c)(1)
            (A) of the Investment Company Act; and

      (E)   "acquired securities" means securities acquired directly or
            indirectly.

14.  Meetings of Holders, Modification, Waiver and Substitution

14.1 The Trust Deed contains  provisions  for  convening  meetings of Holders to
     consider any matter affecting their interests including the modification by
     Extraordinary  Resolution  of  any  of  these  Conditions  or  any  of  the
     provisions of the Trust Deed.

14.2 The quorum at any such meeting for passing an Extraordinary Resolution will
     be:

     (A) at the first meeting,  one or more persons holding or representing  (a)
         in the  case of a  meeting  which  includes  any of the  matters  set
         out in the proviso to  paragraph  5 of  Schedule 4 to the Trust  Deed,
         not less than three quarters,  or (b) in the case of any other  first
         meeting a clear  majority  in principal amount of the Bonds for the
         time being outstanding; and

     (B) at  the  first  adjourned   meeting  one  or  more  persons  being  or
         representing  Holders and holding or  representing  one or more persons
         being or representing  Holders  (a) in the case of a meeting  which
         includes  any of the matters set out in the proviso to paragraph 5 of
         Schedule 4 to the Trust Deed, a clear  majority  or (b) in the case of
         any other  first  adjourned  meeting  any principal amount of the Bonds
         so held or represented; and

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                                       63


     (C) at all  subsequent  adjourned  meetings  one or more  persons  being or
         representing  Holders  and  holding or  representing  (a) in the case
         of meeting which  includes  any of the  matters  set out in the
         proviso to  paragraph 5 of Schedule  4 to the  Trust  Deed,  one
         quarter  or (b) in the case of any  other subsequent  adjourned meeting
         any  principal  amount  of the  Bonds so held or represented.

14.3 An  Extraordinary  Resolution  passed at any  meeting  of  Holders  will be
     binding on all Holders,  whether or not they are present at the meeting and
     whether or not they voted.

14.4 Save as provided in the next sentence,  the Trustee may agree,  without the
     consent  of the  Holders,  to any  modification  of,  or to any  waiver  or
     authorisation  of any breach or proposed breach of, any of these Conditions
     or any of the  provisions  of the Trust Deed  which,  in the opinion of the
     Trustee,  is not materially  prejudicial to the interests of the Holders or
     to any modification  which is of a formal,  minor or technical nature or to
     correct a manifest  or proven  error.  Such power does not extend to any of
     the matters listed in the proviso to Clause 5 of the Fourth Schedule to the
     Trust Deed.

14.5 Subject as provided in the Trust Deed, the Trustee, if it is satisfied that
     so to do  would  not be  materially  prejudicial  to the  interests  of the
     Holders,  may agree with the Issuer,  without the consent of the Holders to
     (a) the substitution on a subordinated basis equivalent to that referred to
     in Condition 2 of any  successor in business (as defined in the Trust Deed)
     of the  Issuer in place of the  Issuer in respect of the Trust Deed and the
     Bonds;  and (b) such amendments or modifications to these Conditions or the
     Trust Deed as may be necessary  to comply with the Listing  Rules of the UK
     Listing  Authority in connection  with any listing of the Bonds pursuant to
     Condition 6.

14.6 In  connection  with  the  exercise  by it of any of  its  trusts,  powers,
     authorities   and   discretions   (including,   without   limitation,   any
     modification,  waiver,  authorisation or  substitution),  the Trustee shall
     have  regard to the general  interests  of the Holders as a class but shall
     not have regard to any interests arising from  circumstances  particular to
     individual  Holders  (whatever their number) and, in particular but without
     limitation,  shall not have regard to the consequences of any such exercise
     for individual  Holders  (whatever their number) resulting from their being
     for any purpose  domiciled or resident in, or otherwise  connected with, or
     subject to the jurisdiction  of, any particular  territory or any political
     sub-division  thereof and the Trustee shall not be entitled to require, nor
     shall any Holder be entitled to claim, from the Issuer,  the Trustee or any
     other  person  any  indemnification  or  payment  in  respect  of  any  tax
     consequences of any such exercise upon individual Holders.

14.7 Any such  modification,  waiver,  authorisation  or  substitution  shall be
     binding on all Holders and, unless the Trustee agrees  otherwise,  any such
     modification or substitution shall be notified to the Holders in accordance
     with Condition 18 as soon as practicable thereafter.

14.8 The Trust  Deed  provides  that the  Trustee  may rely on  certificates  or
     reports from the Auditors or any other expert or other person in accordance
     with the  provisions  of these  Conditions or the Trust Deed whether or not
     any such  certificate  or report  or  engagement  letter or other  document
     entered  into by the Trustee  and the  Auditors or any other such expert or
     other person in  connection  therewith  contains any limit on the liability
     (whether monetary or otherwise) of the Auditors or any other such expert or
     other person.

<PAGE>
                                       64


15.  Replacement of Bonds

     Should any Bond be lost, stolen, mutilated, defaced or destroyed  it may be
     replaced at the  specified  office of the  Registrar  subject to applicable
     laws and stock  exchange  requirements  upon payment by the claimant of the
     expenses,  taxes and duties  incurred in  connection  therewith and on such
     terms as to evidence and  indemnity as the Issuer may  reasonably  require.
     Mutilated or defaced Bonds must be surrendered before  replacements will be
     issued.

16.  Contracts (Rights of Third Parties) Act 1999

     No person shall have any right to enforce any term or condition of the
     Bonds by virtue of the Contracts (Rights of Third Parties) Act 1999 but
     this does not affect any right or remedy of any person  which exists or is
     available apart from that Act.

17.  Indemnification of the Trustee

     The Trust Deed contains provisions for the indemnification of the Trustee
     and for its relief from responsibility including provisions relieving it
     from taking any action unless indemnified to its satisfaction.  The Trustee
     is entitled to enter into  business  transactions  with the  Issuer  or any
     Subsidiary without accounting for any profit resulting therefrom.

18.  Notices

     All notices regarding the Bonds will be valid if delivered or mailed by
     first-class post to the holders of the Bonds at their respective addresses
     as shown in the Register and, if mailed, shall be deemed to have been
     served on the day following the date of posting.

19.  Further issues

     The Issuer is at liberty from time to time without the consent of the
     Holders to create and issue further bonds or notes (whether in registered
     or bearer form) either (a) ranking pari passu in all respects, and so that
     the same shall be consolidated and form a single series, with the
     outstanding bonds or notes of any series (including the Bonds) constituted
     by the Trust Deed or any supplemental trust deed, or (b) upon such terms as
     to ranking, interest, conversion, redemption and otherwise as the Issuer
     may determine at the time of the issue provided that the holders of such
     bonds in the case of (b) shall be considered a separate series  for all the
     purposes of holding  meetings  and passing  resolutions  in respect of such
     bonds.  Any further  notes or bonds which are to form a single  series with
     the  outstanding  notes or  bonds,  of any  series  (including  the  Bonds)
     constituted by the Trust Deed or any supplemental trust deed shall, and any
     other further bonds or notes may (with the consent of the Trustee),  be
     constituted by a supplemental trust deed.


<PAGE>
                                       65



20.  Governing Law

     The Trust Deed and the Bonds are governed by, and shall be  construed  in
     accordance with, English law.

21.  Definitions

     In these Conditions:

     "announcement" shall include the release of an announcement to the press or
     the delivery or transmission by telephone, telex  or  otherwise  of  an
     announcement to a Stock Exchange and "date of the announcement"  shall mean
     the date on which  the  announcement  is first so  released,  delivered  or
     transmitted;

     "Auditors" means the Auditors for the time being of the Issuer or, in the
     event of their being unable or unwilling to carry out any action requested
     of them pursuant to the provisions of these Conditions or the Trust Deed,
     such other firm of chartered accountants as may be appointed for the
     relevant purpose by the Issuer and approved in writing for such purpose by
     the Trustee;

     "Average Closing Price" means the average of the Closing Prices over any
     20 consecutive dealing days;

     "Capital Distribution" means:-

     (A) any distribution of assets in specie (whether on a reduction of capital
         or otherwise) but excluding a distribution of assets in specie in lieu
         of, and to a value not exceeding, a cash dividend which would not have
         constituted a capital distribution under paragraph (ii) of this
         definition (and for these purposes a distribution of assets in specie
         includes an issue of shares or other securities credited as fully or
         partly paid up by way of capitalisation of reserves); and

     (B) any cash dividend or distribution of any kind howsoever described
         unless either:-

         (i)  it is paid out of the aggregate of the net profits (less losses)
              attributable to the members of the Issuer for all financial
              periods after 31 December, 2002 as shown in the audited
              consolidated accounts of the Issuer and its subsidiaries; or

        (ii)  to the extent that (i) above does not apply, the rate of that
              dividend or distribution, together with all other dividends and
              distributions on the class of capital in question charged or
              provided for in the accounts of the Issuer for the financial
              period in question, does not exceed the aggregate rate of dividend
              and distribution on such class of capital charged or provided for
              in the accounts for the last preceding financial period, and in
              computing such rates such adjustments shall be made as are, in the
              opinion of the Auditors, appropriate in the circumstances to make
              a fair comparison;

<PAGE>
                                       66


         "Closing Price" for any day shall mean the mean of the quotations of an
         Ordinary Share on that day as derived from the Daily Official List of
         the Stock Exchange for that day;

         "Conversion Agent" means, in relation to the Bonds, the Registrar as
         conversion agent and/or, if applicable, any additional or successor
         conversion agents appointed in relation to the Bonds;

         "dealing day" means a day on which the Stock Exchange is open for
         business;

         "Group" means the Issuer and its Subsidiaries;

         "indebtedness" means moneys borrowed or indebtedness in the nature of
         moneys borrowed;

         "Insolvency" means the winding-up, liquidation or dissolution (in
         England but not elsewhere) of the relevant company;

         "issue" shall include allot;

         "Liabilities" means, in respect of any person, all present and future
         sums, liabilities and obligations payable or owing by it in respect of
         indebtedness (whether actual or contingent, jointly or severally, or
         otherwise howsoever);

         "Operative Date" shall mean the first day on which the Ordinary Shares
         in question shall be quoted on a Stock Exchange ex the benefit of the
         Capital Distribution in question;

         "Ordinary Shares" (i) shall mean fully paid ordinary shares of GBP1
         each (or of such other nominal value in which such ordinary shares are
         for the time being denominated following any consolidation or
         sub-division which gives rise to an adjustment to the Conversion Price
         in accordance with sub-paragraph (l)(a) above) in the issued ordinary
         share capital of the Issuer and (ii) shall include for the purposes of
         Ordinary Shares comprised in any issue, distribution or grant pursuant
         to Conditions 5.3(A)(ii), 5.3(A)(iii), 5.3(A)(v), 5.3(A)(vi) or 5.3(A)
         (vii) any such ordinary shares which, when fully paid, will be Ordinary
         Shares;

         "Recognised Stock Exchange" has the meaning set out in Section 841 of
         the Income and Corporation Taxes Act 1988 of the United Kingdom;

         "record date" in relation to any issue of Ordinary Shares, securities,
         rights, options or warrants or any dividend or Capital Distribution
         shall mean the date as at which holders of Ordinary Shares must be
         registered in order to participate therein;

         "reserves" shall include unappropriated profits;

         "rights" shall include rights in whatsoever form issued;


<PAGE>
                                       67


         "Senior Liabilities" means the Liabilities of the Issuer arising under
         or in connection with the facility agreement dated 16th March 2001
         between the Issuer, Barings (Guernsey) Limited (as trustee of the
         Platinum Trust), the Financial Institutions listed in Schedule 1
         thereto and The Royal Bank of Scotland plc to the Finance Parties (as
         defined under the aforementioned agreement) as the same may be amended,
         restated, novated, replaced or substituted from time to time including,
         for the avoidance of doubt but without limitation, any amendment,
         restatement, novation, replacement or substitution to increase the
         principal amount outstanding provided that the principal amount
         outstanding under such agreement does not exceed EUR285 million (but
         excluding, for the purpose of this proviso, any interest, fees or any
         other amount arising or due thereunder);

         "Stock Exchange" has the meaning given in the Trust Deed;

         "Subsidiary" means each subsidiary for the time being of the Issuer
         and the term "Subsidiaries" shall be construed accordingly; and

         "subsidiary" has the meaning ascribed to it under Section 736 of the
         Companies Act 1985.



             REGISTRAR, TRANSFER AGENT, CONVERSION AND PAYING AGENT

                               JPMorgan Chase Bank
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                               Bournemouth BH7 7DA


<PAGE>
                                       68



                               THE THIRD SCHEDULE
                 Register and Transfer of Registered Securities

1.   The  Issuer  shall at all times  ensure  that the  Registrar  maintains  in
     London,  or at such other  place in the United  Kingdom as the  Trustee may
     agree, a register showing the amount of the Registered Securities from time
     to time outstanding and the dates of issue and all subsequent transfers and
     changes of ownership  thereof and the names and addresses of the holders of
     the Registered  Securities.  The Issuer,  Trustee, any person authorised by
     either of them and any holder of the  Registered  Securities or any of them
     may,  at the  expense of such  person  (except in the case of the  Trustee,
     provided such expense is properly incurred), at all reasonable times during
     office hours  inspect the  register and take copies of or extracts  from it
     save that, in the case of inspection by a holder of Registered  Securities,
     such  holder  shall only be  entitled  to take  extracts in relation to its
     relevant holding. The register may be closed by the Issuer for such periods
     and at such  times (not  exceeding  in total 30 days in any one year) as it
     may think fit.

2.   Each  Registered  Security  shall have an  identifying  serial number which
     shall be entered on the register.

3.   The  Registered   Securities  are  transferable  in  amounts  and  integral
     multiples  of  GBP100,000  by  execution  of the form of transfer  endorsed
     thereon  under the hand of the  transferor  or, where the  transferor  is a
     corporation, under its common seal or under the hand of two of its officers
     duly authorised in writing. In this Schedule, "transferor" shall, where the
     context  permits or requires,  include joint  transferors  and be construed
     accordingly.

4.   The  Registered   Securities  to  be  transferred  must  be  delivered  for
     registration to the specified office of the Registrar or any Transfer Agent
     together  with the  transfer  certificate  in the form set out in the Fifth
     Schedule  in  respect  thereof  duly  executed  by the  transferor  and the
     transferee  and,  where  the  transferee  is  an  institutional  accredited
     investor as defined in Rule  501(a)(1),  (2),  (3) or (7) of  Regulation  D
     under the United States  Securities Act of 1933, a transfer  certificate in
     the form set out in the Sixth  Schedule  duly  executed by such  transferee
     and, in each case,  duly stamped where  applicable and  accompanied by such
     other evidence  (including  legal opinions) as the Registrar may reasonably
     require to prove the title of the  transferor  or his right to transfer the
     Registered  Security and his identity  and,  that such form of transfer has
     been duly  stamped  and, if such form of transfer is executed by some other
     person on his behalf or in the case of the  execution of a form of transfer
     on behalf of a corporation by its officers, the authority of that person or
     those persons to do so. The Registrar may seek similar evidence as to title
     and  authority  (where  necessary) in respect of a Conversion  Notice.  The
     signature of the person  effecting a transfer of a  Registered  Security or
     signing a Conversion  Notice shall  conform to any list of duly  authorised
     specimen  signatures supplied by the registered holder or be certified by a
     recognised bank, notary public or in such other manner as the Registrar may
     require.

5.   The  executors  or  administrators  of  a  deceased  holder  of  Registered
     Securities  (not being one of several joint holders) and in the case of the
     death of one or more of several  joint holders the survivor or survivors of
     such joint  holders  shall be the only person or persons  recognised by the
     Issuer as having any title to such Registered Securities.

<PAGE>
                                       69


6.   Any person becoming entitled to Registered Securities in consequence of the
     death or bankruptcy of the holder of such  Registered  Securities may, upon
     producing  such  evidence that he holds the position in respect of which he
     proposes to act under this paragraph or of his title as the Registrar shall
     require (including legal opinions),  be registered himself as the holder of
     such  Registered  Securities or, subject to the preceding  paragraphs as to
     transfer,  may  transfer  such  Registered  Securities.  The Issuer and the
     Registrar  shall be at  liberty  to  retain  any  amount  payable  upon the
     Registered  Securities to which any person is so entitled until such person
     shall be  registered  as  aforesaid or shall duly  transfer the  Registered
     Securities.

7.   Unless otherwise  requested by him and agreed by the Issuer,  the holder of
     Registered  Securities  of any series shall be entitled to receive only one
     Registered Security in respect of his entire holding of such series.

8.   The joint holders of Registered  Securities of any series shall be entitled
     to one  Registered  Security only in respect of their joint holding of such
     series which shall, except where they otherwise direct, be delivered to the
     joint  holder  whose name  appears  first in the register of the holders of
     Registered Securities in respect of such joint holding.

9.   Where a holder of Registered  Securities has  transferred  part only of his
     holding of any series  there shall be  delivered  to him  without  charge a
     Registered Security in respect of the balance of such holding.

10.  The  Issuer  and the  Registrar  shall,  save in the  case of the  issue of
     replacement  Registered  Securities,  make no charge to the Holders for the
     registration  of any  holding  of  Registered  Securities  or any  transfer
     thereof  or for the  issue  thereof  or for  the  delivery  thereof  at the
     specified  office of the Registrar or of any Transfer Agent or by uninsured
     post to the  address  specified  by the Holder.  If any Holder  entitled to
     receive a  Registered  Security  wishes to have the same  delivered  to him
     otherwise than at the specified  office of the Registrar or of any Transfer
     Agent,  such  delivery  shall be  made,  upon his  written  request  to the
     Registrar or such  Transfer  Agent,  at his risk and (except  where sent by
     uninsured post to the address specified by the Holder) at his expense.

11.  The  Registrar  shall  within seven  London  business  days of a request to
     effect a transfer of a Registered  Security deliver at its specified office
     to the  transferee  or  despatch  by  uninsured  mail  (at the  risk of the
     transferee) to such address as the transferee may request, a new Registered
     Security in respect of the Registered Security transferred.  In the case of
     a  transfer  of part only of the  Registered  Securities  represented  by a
     Registered Security, a new Registered Security in respect of the balance of
     the Registered Security transferred will be so delivered to the transferor.

12.  The holder of a Registered Security may (to the fullest extent permitted by
     applicable  laws) be  treated  at all  times,  by all  persons  and for all
     purposes as the absolute owner of such Registered Security  notwithstanding
     any notice any person may have of the right,  title,  interest  or claim of
     any other person thereto.  The Issuer and the Trustee shall not

<PAGE>
                                       70

     be bound to see to the execution of any trust to which any  Registered
     Security may be subject  and no notice of any trust shall be entered on the
     register.  The holder  of a  Registered  Security  will be  recognised  by
     the  Issuer  as entitled  to his  Registered  Security  free from any
     equity,  set-off  or counterclaim  on the  part  of  the  Issuer  against
     the  original  or any intermediate holder of such Registered Security.


<PAGE>
                                       71



                               THE FOURTH SCHEDULE
                       Provisions for Meetings of Holders

1.   (A) As used in this  Schedule  the  following  expressions  shall  have the
         following meanings unless the context otherwise requires:

         (i)  "voting certificate" shall mean an English language certificate
              issued by a Paying Agent and dated in which it is stated:

              (a)  that on the date thereof Bearer Securities (whether in
                   definitive form or represented by a Global Security and not
                   being Bearer Securities in respect of which a block voting
                   instruction has been issued and is outstanding in respect
                   of the meeting specified in such voting certificate or any
                   adjourned such meeting) were deposited with such Paying Agent
                   or (to the satisfaction of such Paying Agent) were held to
                   its order or under its control and that no such Bearer
                   Securities will cease to be so deposited or held until the
                   first to occur of:

                   (1)   the conclusion of the meeting specified in such
                         certificate or, if applicable, of any adjourned such
                         meeting; and

                   (2)   the surrender of the certificate to the Paying Agent
                         who issued the same; and

              (b)  that the bearer thereof is entitled to attend and vote at
                   such meeting and any adjourned such meeting in respect of the
                   Bearer Securities represented by such certificate;

         (ii) "block voting instruction" shall mean an English language document
              issued by a Paying Agent and dated in which:

              (a)  it is certified that Bearer Securities (whether in definitive
                   form or represented by a Global Security and not being Bearer
                   Securities in respect of which a voting certificate has been
                   issued and is outstanding in respect of the meeting specified
                   in such block voting instruction and any adjourned such
                   meeting) have been deposited with such Paying Agent or (to
                   the satisfaction of such Paying Agent) were held to its order
                   or under its control and that no such Bearer Securities will
                   cease to be so deposited or held until the first to occur of:

                   (1)    the conclusion of the meeting specified in such
                          document or, if applicable, of any adjourned such
                          meeting; and

                   (2)    the surrender to the Paying Agent not less than 48
                          hours before the time for which such meeting or any
                          adjourned such meeting is convened of the receipt
                          issued by such Paying Agent in respect of each such
                          deposited Bearer Security which is to be released or
                          (as the case may require) the Bearer Security or
                          Bearer Securities ceasing with the agreement of the
                          Paying Agent to be held to its order or under its
                          control and the giving of notice by the Paying Agent
                          to the Issuer in accordance with paragraph 17 hereof
                          of the necessary amendment to the block voting
                          instruction;

<PAGE>
                                       72


              (b)  it is certified that each holder of such Bearer Securities
                   has instructed such Paying Agent that the vote(s)
                   attributable to the Bearer Security or Bearer Securities so
                   deposited or held should be cast in a particular way in
                   relation to the resolution or resolutions to be put to such
                   meeting or any adjourned such meeting and that all such
                   instructions are, during the period commencing 48 hours prior
                   to the time for which such meeting or any adjourned such
                   meeting is convened and ending at the conclusion or
                   adjournment thereof, neither revocable nor capable of
                   amendment;

              (c)  the aggregate principal amount of the Bearer Securities so
                   deposited or held are listed distinguishing with regard to
                   each such resolution between those in respect of which
                   instructions have been given as aforesaid that the votes
                   attributable thereto should be cast in favour of the
                   resolution and those in respect of which instructions have
                   been so given that the votes attributable thereto should be
                   cast against the resolution; and

              (d)  one or more persons named in such document (each hereinafter
                   called a "proxy") is or are authorised and instructed by
                   such Paying Agent to cast the votes attributable to the
                   Bearer Securities so listed in accordance with the
                   instructions referred to in (c) above as set out in such
                   document;

         (iii) "24 hours" shall mean a period of 24 hours including all or part
               of a day upon which banks are open for business in both the place
               where the relevant meeting is to be held and in each of the
               places where the Paying Agents have their specified offices
               (disregarding for this purpose the day upon which such meeting
               is to be held) and such period shall be extended by one period
               or, to the extent necessary, more periods of 24 hours until there
               is included as aforesaid all or part of a day upon which banks
               are open for business in all of the places as aforesaid; and

          (iv) "48 hours" shall mean a period of 48 hours including all or part
               of two days upon which banks are open for business both in the
               place where the relevant meeting is to be held and in each of
               the places where the Paying Agents have their specified offices
               (disregarding for this purpose the day upon which such meeting is
               to be held) and such period shall be extended by one period or,
               to the extent necessary, more periods of 24 hours until there is
               included as aforesaid all or part of two days upon which banks
               are open for business in all of the places as aforesaid.

<PAGE>
                                       73


     (B) A holder of a Bearer Security (whether in definitive form or
         represented by a Global  Security)  may  obtain a voting  certificate
         in  respect of such Bearer  Security  from a Paying  Agent or require a
         Paying Agent to issue a block voting  instruction in respect of such
         Bearer  Security by depositing such Bearer Security with such Paying
         Agent or (to the satisfaction of such Paying Agent) by such Bearer
         Security being held to its order or under its control,  in each case
         not less than 48 hours before the time fixed for the relevant  meeting
         and on the terms set out in  sub-paragraph  (A)(i)(a)  or (A)(ii)(a)
         above (as the case may be),  and (in the case of a block voting
         instruction)  instructing  such  Paying  Agent  to the  effect  set
         out in sub-paragraph (A)(ii)(b) above. The holder of any voting
         certificate or the proxies  named in any block  voting  instruction
         shall for all purposes in connection  with the relevant  meeting or
         adjourned  meeting of Holders be deemed to be the  holder of the
         Bearer  Securities  to which  such  voting certificate or block voting
         instruction  relates and the Paying Agent with which such Bearer
         Securities have been deposited or the person holding the same to the
         order or under the control of such Paying Agent shall be deemed for
         such purposes not to be the holder of those Bearer Securities.

   (C)   (i) A holder  of  Registered  Securities  (whether  in  definitive
             form or represented  by a Global  Security) may, by an instrument
             in writing in the English language (a "form of proxy") signed by
             the holder or, in the case of a corporation, executed under its
             common seal or signed on its behalf by an attorney or a duly
             authorised officer of the corporation and delivered to the
             specified office of the Registrar or any Transfer Agent not less
             than 48 hours before the time fixed for the relevant meeting,
             appoint any person (a "proxy") to act on his or its behalf in
             connection with any meeting of the Holders and any adjourned
             such meeting.

        (ii) Any holder of Registered Securities which is a corporation may by
             resolution of its directors or other governing body authorise any
             person to act as its representative (a "representative") in
             connection with any meeting of the Holders and any adjourned such
             meeting.

        (iii)Any proxy appointed pursuant to sub-paragraph (i) above or
             representative appointed pursuant to sub-paragraph (ii) above shall
             so long as such appointment remains in force be deemed, for all
             purposes in connection with the relevant meeting or adjourned
             meeting of the Holders, to be the holder of the Registered
             Securities to which such appointment relates and the holder of the
             Registered Securities shall be deemed for such purposes not to be
             the holder.

2.   The  Issuer or the  Trustee  may at any time and the  Issuer  shall  upon a
     requisition  in writing signed by the holders of not less than one-tenth in
     principal  amount  of the  Securities  of any  series  for the  time  being
     outstanding  convene a  meeting  of the  Holders  and if the  Issuer  makes
     default for a period of seven days in convening such a meeting the same may
     be convened by the Trustee or the requisitionists. Every such meeting shall
     be held at such time and place as the Trustee may appoint or approve.


<PAGE>
                                       74


3.   At least 21 days' notice (exclusive of the day on which the notice is given
     and the day on which the meeting is to be held)  specifying the place,  day
     and hour of meeting  shall be given to the Holders  prior to any meeting of
     the Holders in the manner  provided by  Condition  18. Such  notice,  which
     shall be in the English  language,  shall state generally the nature of the
     business to be transacted at the meeting  thereby  convened but (except for
     an  Extraordinary  Resolution) it shall not be necessary to specify in such
     notice  the terms of any  resolution  to be  proposed.  Such  notice  shall
     include statements, if applicable, to the effect that (i) Bearer Securities
     may,  not less than 48 hours  before  the time  fixed for the  meeting,  be
     deposited with Paying Agents or (to their satisfaction) held to their order
     or under their control for the purpose of obtaining voting  certificates or
     appointing  proxies  and (ii) the  holders  of  Registered  Securities  may
     appoint  proxies by executing and delivering a form of proxy in the English
     language to the specified office of the Registrar or any Transfer Agent not
     less than 48 hours before the time fixed for the meeting or, in the case of
     corporations,  may appoint representatives by resolution of their directors
     or other  governing body. A copy of the notice shall be sent by post to the
     Trustee  (unless the meeting is convened by the  Trustee) and to the Issuer
     (unless the meeting is convened by the Issuer).

4.   A person (who may,  but need not be, a Holder)  nominated in writing by the
     Trustee  shall be  entitled  to take the chair at the  relevant  meeting or
     adjourned meeting but if no such nomination is made or if at any meeting or
     adjourned  meeting  the person  nominated  shall not be  present  within 15
     minutes  after the time  appointed  for holding  the  meeting or  adjourned
     meeting  the  Holders  present  shall  choose  one of  their  number  to be
     Chairman,  failing which the Issuer may appoint a Chairman. The Chairman of
     an  adjourned  meeting  need not be the same person as was  Chairman of the
     meeting from which the adjournment took place.

5.   At any such  meeting one or more  persons  present  holding  Securities  in
     definitive form or voting  certificates or being proxies or representatives
     and holding or representing in the aggregate not less than one-twentieth of
     the principal amount of the Securities for the time being outstanding shall
     (except  for the  purpose of passing an  Extraordinary  Resolution)  form a
     quorum for the  transaction  of business  and no  business  (other than the
     choosing  of a Chairman)  shall be  transacted  at any  meeting  unless the
     requisite quorum be present at the  commencement of the relevant  business.
     The quorum at any such  meeting  for  passing an  Extraordinary  Resolution
     shall (subject as provided  below) be one or more persons  present  holding
     Securities in definitive  form or voting  certificates  or being proxies or
     representatives  and  holding  or  representing  in the  aggregate  a clear
     majority  in  principal  amount  of  the  Securities  for  the  time  being
     outstanding PROVIDED THAT at any meeting the business of which includes any
     of the  following  matters  (each of which  shall  only be capable of being
     effected after having been approved by Extraordinary Resolution) namely:

     (i)   reduction or cancellation of the amount payable or, where applicable,
           modification, except where such modification is in the opinion of the
           Trustee bound to result in an increase, of the method of calculating
           the amount payable or modification of the date of payment or, where
           applicable, of the method of calculating the date of payment in
           respect of any principal, premium or interest in respect of the
           Securities;


<PAGE>
                                       75


    (ii)   modifying the status, subordination and conversion terms (if any) of
           the Securities;

   (iii)   alteration of the currency in which payments under the Securities and
           Coupons are to be made;

    (iv)   alteration of the majority required to pass an Extraordinary
           Resolution;

     (v)   the sanctioning of any such scheme or proposal as is described in
           paragraph 18(I) below; and

    (vi)   alteration of this proviso or the proviso to paragraph 6 below;

     the quorum for passing the requisite Extraordinary  Resolution shall be one
     or more persons  present  holding  Securities in definitive  form or voting
     certificates   or  being   proxies  or   representatives   and  holding  or
     representing in the aggregate not less than three-quarters of the principal
     amount of the Securities for the time being outstanding.

6.   If within 15 minutes (or such longer period not exceeding 30 minutes as the
     Chairman may decide) after the time appointed for any such meeting a quorum
     is not  present  for the  transaction  of any  particular  business,  then,
     subject and without  prejudice to the  transaction of the business (if any)
     for which a quorum is  present,  the  meeting  shall if  convened  upon the
     requisition  of Holders  be  dissolved.  In any other  case it shall  stand
     adjourned  to the  same  day in the  next  week (or if such day is a public
     holiday  the  next  succeeding  business  day) at the same  time and  place
     (except in the case of a meeting at which an Extraordinary Resolution is to
     be proposed in which case it shall stand  adjourned for such period,  being
     not less  than 13 days nor more than 42 days,  and to such  place as may be
     appointed  by the  Chairman  either at or  subsequent  to such  meeting and
     approved by the  Trustee).  If within 15 minutes (or such longer period not
     exceeding 30 minutes as the Chairman may decide)  after the time  appointed
     for any adjourned  meeting a quorum is not present for the  transaction  of
     any  particular  business,  then,  subject  and  without  prejudice  to the
     transaction  of the  business  (if any) for which a quorum is present,  the
     Chairman  may either  (with the  approval  of the  Trustee)  dissolve  such
     meeting or adjourn  the same for such  period,  being not less than 14 days
     (but  without  any  maximum  number of days),  and to such  place as may be
     appointed by the Chairman either at or subsequent to such adjourned meeting
     and approved by the Trustee,  and the  provisions  of this  sentence  shall
     apply to all further adjourned such meetings.  At any adjourned meeting one
     or more persons  present  holding  Securities in definitive  form or voting
     certificates  or being proxies or  representatives  (whatever the principal
     amount of the  Securities so held or represented by them) shall (subject as
     provided  below) form a quorum and shall  (subject as provided  below) have
     power to pass any  Extraordinary  Resolution  or  other  resolution  and to
     decide upon all matters  which could  properly  have been dealt with at the
     meeting from which the adjournment took place had the requisite quorum been
     present PROVIDED THAT at adjourned  meetings the quorum for the transaction
     of  business  comprising  any of the  matters  specified  in the proviso to
     paragraph 5 above shall be one or more persons present  holding  Securities
     in  definitive   form  or  voting   certificates   or  being,   proxies  or
     representatives  and holding or  representing  in the  aggregate (a) in the
     case of the first  adjourned  meeting not less than a clear majority of, or
     (b) in the  case of  subsequent  adjourned  meetings,  one  quarter  of the
     principal amount of the Securities for the time being outstanding.


<PAGE>
                                       76



7.   Notice of any adjourned meeting at which an Extraordinary  Resolution is to
     be  submitted  shall be given in the same  manner as notice of an  original
     meeting but as if 10 were  substituted for 21 in paragraph 3 above and such
     notice shall state the relevant  quorum.  Subject as aforesaid it shall not
     be necessary to give any notice of an adjourned meeting.

8.   Every  question  submitted  to a  meeting  shall be  decided  in the  first
     instance by a show of hands and in case of  equality of votes the  Chairman
     shall both on a show of hands and on a poll have a casting vote in addition
     to the vote or votes (if any) to which he may be entitled as a Holder or as
     a holder of a voting certificate or as a proxy or as a representative.

9.   At any meeting unless a poll is (before or on the declaration of the result
     of the show of hands) demanded by the Chairman,  the Issuer, the Trustee or
     any  person  present  holding a  Security  in  definitive  form or a voting
     certificate  or being a proxy or  representative  (whatever  the  principal
     amount of the  Securities so held or  represented by him), a declaration by
     the Chairman that a resolution  has been carried or carried by a particular
     majority  or  lost  or  not  carried  by a  particular  majority  shall  be
     conclusive  evidence of the fact without  proof of the number or proportion
     of the votes recorded in favour of or against such resolution.

10.  Subject to paragraph 12 below, if at any such meeting a poll is so demanded
     it shall be taken in such manner and subject as hereinafter provided either
     at once or after an adjournment  as the Chairman  directs and the result of
     such poll shall be deemed to be the  resolution of the meeting at which the
     poll was demanded as at the date of the taking of the poll.  The demand for
     a poll shall not prevent the continuance of the meeting for the transaction
     of any business other than the motion on which the poll has been demanded.

11.  The  Chairman  may with the consent of (and shall if directed  by) any such
     meeting  adjourn  the same from time to time and from place to place but no
     business shall be transacted at any adjourned meeting except business which
     might  lawfully (but for lack of required  quorum) have been  transacted at
     the meeting from which the adjournment took place.

12.  Any poll  demanded at any such  meeting on the election of a Chairman or on
     any  question  of  adjournment  shall  be  taken  at  the  meeting  without
     adjournment.

13.  The  Trustee and its  lawyers  and any  director,  officer or employee of a
     corporation  being a trustee of these  presents and any director or officer
     of the Issuer and its lawyers and any other person  authorised  so to do by
     the Trustee may attend and speak at any  meeting.  Save as  aforesaid,  but
     without  prejudice to the proviso to the  definition  of  "outstanding"  in
     Clause 1, no person  shall be  entitled  to attend  and speak nor shall any
     person be  entitled  to vote at any  meeting  of the  Holders  or join with
     others in  requesting  the  convening  of such a meeting or to exercise the
     rights conferred on the Holders by the Conditions unless he either produces
     the Bearer Security or Bearer  Securities in definitive form of which he is
     the holder or a voting  certificate or is a proxy or a representative or is
     the holder of a Registered Security or Registered  Securities in definitive
     form.  No person  shall be  entitled  to vote at any  meeting in respect of
     Securities  held by, for the benefit of, or on behalf of, the Issuer or any
     Subsidiary of the Issuer,  or any person  acting in concert with them,  any
     holding  company  of the  Issuer or any other  Subsidiary  of such  holding
     company. Nothing herein shall prevent any of the proxies named in any block
     voting  instruction  or form of proxy or any  representative  from  being a
     director,  officer or  representative  of or otherwise  connected  with the
     Issuer.


<PAGE>
                                       77


14.  Subject as provided in paragraph 13 hereof at any meeting:

     (A)  on a show of hands every person who is present in person and
          produces a Bearer Security in definitive form or a voting
          certificate or is a holder of Registered Securities in definitive
          form or is a proxy or representative shall have one vote; and

     (B)  on a poll every person who is so present shall have one vote in
          respect of each GBP1 or such other amount as the Trustee may in its
          absolute discretion stipulate (or, in the case of meetings of holders
          of Securities denominated in another currency, such amount in such
          other currency as the Trustee in its absolute discretion may
          stipulate) in principal amount of the Securities so produced in
          definitive form or represented by the voting certificate so produced
          or in respect of which he is a proxy or representative or in respect
          of which (being in definitive form) he is the holder.

     Without  prejudice  to the  obligations  of the proxies  named in any block
     voting  instruction  or form of proxy any person  entitled to more than one
     vote  need  not use all his  votes  or cast  all the  votes  to which he is
     entitled in the same way.

15.  The  proxies  named in any block  voting  instruction  or form of proxy and
     representatives need not be Holders.

16.  Each block  voting  instruction  together  (if so requested by the Trustee)
     with proof  satisfactory  to the Trustee of its due  execution on behalf of
     the relevant  Paying Agent and each form of proxy shall be deposited by the
     relevant  Paying  Agent  or (as the case  may be) by the  Registrar  or the
     relevant Transfer Agent at such place as the Trustee shall approve not less
     than 24  hours  before  the time  appointed  for  holding  the  meeting  or
     adjourned   meeting  at  which  the  proxies  named  in  the  block  voting
     instruction  or form of proxy  propose  to vote and in  default  the  block
     voting  instruction  or form of proxy shall not be treated as valid  unless
     the  Chairman  of the meeting  decides  otherwise  before  such  meeting or
     adjourned meeting proceeds to business. A notarially certified copy of each
     block  voting  instruction  and form of proxy shall be  deposited  with the
     Trustee before the commencement of the meeting or adjourned meeting but the
     Trustee shall not thereby be obliged to  investigate  or be concerned  with
     the  validity of or the  authority  of the proxies  named in any such block
     voting instruction or form of proxy.


<PAGE>
                                       78


17.  Any vote given in accordance  with the terms of a block voting  instruction
     or form of proxy shall be valid  notwithstanding the previous revocation or
     amendment of the block voting instruction or form of proxy or of any of the
     Holder's  instructions  pursuant to which it was executed  provided that no
     intimation  in  writing of such  revocation  or  amendment  shall have been
     received  from the  relevant  Paying  Agent or in the case of a  Registered
     Security from the holder thereof by the Issuer at its registered office (or
     such other  place as may have been  required or approved by the Trustee for
     the  purpose) by the time being 24 hours and 48 hours  respectively  before
     the time  appointed  for holding the meeting or adjourned  meeting at which
     the block voting instruction or form of proxy is to be used.

18.  A meeting of the Holders shall in addition to the powers hereinbefore given
     have the following  powers  exercisable  only by  Extraordinary  Resolution
     (subject to the provisions relating to quorum contained in paragraphs 5 and
     6 above) namely:

     (A) Power to sanction any compromise or arrangement proposed to be made
         between the Issuer, the Trustee, any Appointee and the Holders and
         Couponholders or any of them.

     (B) Power to sanction any abrogation, modification, compromise or
         arrangement in respect of the rights of the Trustee, any Appointee, the
         Holders, the Couponholders or the Issuer against any other or others of
         them or against any of their property whether such rights shall arise
         under these presents or otherwise.

     (C) Power to assent to any modification of the provisions of these presents
         which shall be proposed by the Issuer, the Trustee or any Holder.

     (D) Power to give any authority or sanction which under the provisions of
         these presents is required to be given by Extraordinary Resolution.

     (E) Power to appoint any persons (whether Holders or not) as a committee or
         committees to represent the interests of the Holders and to confer upon
         such committee or committees any powers or discretions which the
         Holders could themselves exercise by Extraordinary Resolution.

     (F) Power to approve of a person to be appointed a trustee and power to
         remove any trustee or trustees for the time being of these presents.

     (G) Power to discharge or exonerate the Trustee and/or any Appointee from
         all liability in respect of any act or omission for which the Trustee
         and/or such Appointee may have become responsible under these presents.

     (H) Power to authorise the Trustee and/or any Appointee to concur in and
         execute and do all such deeds, instruments, acts and things as may be
         necessary to carry out and give effect to any Extraordinary Resolution.

     (I) Power to sanction any scheme or proposal for the exchange or sale of
         the Securities for or the conversion of the Securities into or the
         cancellation of the Securities in consideration of shares, stock,
         bonds, notes, debentures, debenture stock and/or other obligations
         and/or securities of the Issuer or any other company formed or to be
         formed, or for or into or in consideration of cash, or partly for or
         into or in consideration of such shares, stock, bonds, notes,
         debentures, debenture stock and/or other obligations and/or securities
         as aforesaid and partly for or into or in consideration of cash and for
         the appointment of some person with power on behalf of the Holders to
         execute an instrument of transfer of the Registered Securities held
         by them in favour of the persons with or to whom the Securities are to
         be exchanged or sold respectively.


<PAGE>
                                       79


19.  Any resolution passed at a meeting of the Holders duly convened and held in
     accordance  with  these  presents  shall be  binding  upon all the  Holders
     whether  present or not  present at such  meeting and whether or not voting
     and upon all  Couponholders  and each of them shall be bound to give effect
     thereto  accordingly  and the  passing  of any  such  resolution  shall  be
     conclusive  evidence that the circumstances  justify the passing thereof. A
     resolution  in  writing  signed by or on behalf of all the  Holders,  which
     resolution  in  writing  may be  contained  in one  document  or in several
     documents in or  substantially  in like form each signed by or on behalf of
     one or more of the Holders,  shall be as valid  effective  and binding as a
     resolution  duly  passed at such a  meeting.  Notice  of the  result of the
     voting on, or signing of, any  resolution  duly  considered  by the Holders
     shall be published in accordance  with Condition 18 by the Issuer within 14
     days of such result being known PROVIDED THAT the  non-publication  of such
     notice shall not invalidate such result.

20.  The expression "Extraordinary Resolution" when used in these presents means

     (a)  a  resolution passed at a meeting of the Holders duly convened and
          held in accordance with these presents by a majority consisting of not
          less than three-fourths of the persons voting thereat upon a show of
          hands or if a poll is duly demanded by a majority consisting of not
          less than three-fourths of the votes cast on such poll; or

     (b)  a resolution in writing signed by or on behalf of all the Holders.

21.  Minutes of all  resolutions and proceedings at every meeting of the Holders
     shall be made and  entered  in books to be from time to time  provided  for
     that purpose by the Issuer and any such Minutes as aforesaid if  purporting
     to be signed by the Chairman of the meeting at which such  resolutions were
     passed  or  proceedings  transacted  shall be  conclusive  evidence  of the
     matters  therein  contained  and until the  contrary  is proved  every such
     meeting in respect of the proceedings of which Minutes have been made shall
     be deemed to have been duly held and convened and all resolutions passed or
     proceedings transacted thereat to have been duly passed or transacted.

22.  If  and  whenever  the  Issuer  shall  have  issued  and  have  outstanding
     Securities  of more  than  one  series  the  foregoing  provisions  of this
     Schedule  shall  apply  separately  and  independently  to each  series  of
     Securities  and in  particular  a  resolution  which in the  opinion of the
     Trustee  affects the  Securities of any series shall be deemed to have been
     duly  passed  if  passed  at a  separate  meeting  of  the  holders  of the
     Securities of that series  notwithstanding  that the resolution affects the
     Securities  of more than one series and does not give rise to a conflict of
     interest.

<PAGE>
                                       80



23.  Subject to all other  provisions of these  presents the Trustee may without
     the consent of the Issuer, the Holders or the Couponholders  prescribe such
     further  regulations  regarding  the  requisitioning  and/or the holding of
     meetings of Holders and attendance and voting thereafter as the Trustee may
     in its sole discretion think fit.


<PAGE>
                                       81


                               THE FIFTH SCHEDULE
                              Transfer Certificate

                                    REGISTRAR
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                                   Bournemouth
                                     BH7 7DA


We, the undersigned are (a) the registered owner (the "Transferor") of GBP
face  amount  of 4.5 per  cent.  Subordinated  Convertible  Bonds  due 2013 (the
"Bonds")  represented  by  certificate  number [           ] issued by  Schroder
Ventures International  Investment Trust plc (the "Issuer") and constituted by a
Trust Deed,  dated 20 May, 2003,  between the Issuer and The Law Debenture Trust
Corporation  p.l.c.  (the "Trust  Deed") and (b) the  proposed  transferee  (the
"Transferee") of such Bonds.

Under this  Transfer  Certificate,  the Bonds are  transferable  in amounts  and
integral multiples of GBP100,000.

FOR VALUE RECEIVED,  the undersigned  Transferor  hereby sell(s),  assign(s) and
transfer(s) unto









[PLEASE  PRINT OR  TYPEWRITE  NAME AND ADDRESS  INCLUDING  POSTAL OR ZIP CODE OF
PROPOSED TRANSFEREE (NOT MORE THAN FOUR NAMES MAY APPEAR AS JOINT HOLDERS)]

the  accompanying   Bonds  and  all  rights   thereunder,   hereby   irrevocably
constituting  and  appointing [      ] with the necessary  authority to transfer
such Bonds on the books of the Issuer with full power of substitution in the
premises.


SIGNED FOR AND ON BEHALF OF THE TRANSFEROR               ....................

ADDRESS OF THE TRANSFEROR                                ....................

                                                         ....................


NAME AND CAPACITY OF PERSON(S) MAKING TRANSFER IF
TRANSFER IS NOT MADE BY REGISTERED HOLDER                ....................


<PAGE>
                                       82


SIGNED FOR AND ON BEHALF OF THE TRANSFEREE
                                                         ....................

ADDRESS OF THE TRANSFEREE                                ....................

                                                         ....................


<PAGE>
                                       83



I.       TRANSFEROR REPRESENTATIONS

A.       United States Securities Act

In  connection  with this  transfer  of the Bonds,  the  undersigned  Transferor
confirms that (please check box 1, 2 or 3 below):

1. _  Check if Transferee will take delivery of Bond pursuant to Rule 144A.

     The Bonds are  being  transferred  by the  undersigned  Transferor  without
utilising any general  solicitation or general advertising within the meaning of
Regulation D under the Securities Act of 1933 (the "Securities Act") to a person
(i) the undersigned Transferor reasonably believes is a "qualified institutional
buyer" (a "QIB") as defined in Rule 144A ("Rule 144A") under the  Securities Act
that is  purchasing  for its own account or for the account of a QIB and (ii) to
whom  notice has been given that the  transfer is being made in reliance on Rule
144A, pursuant to and in a transaction meeting the requirements of Rule 144A and
any applicable blue sky securities laws of any state of the United States.  Upon
consummation of the proposed transfer,  the transferred Bonds will be subject to
the restrictions on transfer enumerated in the legend printed thereon and in the
Trust Deed.

2. _  Check if Transferee will take delivery of Bond pursuant to Regulation S.

     The Bonds are  being  transferred  by the  undersigned  Transferor  without
utilising  directed selling efforts in contravention of the requirements of Rule
904(a) of  Regulation  S of the  Securities  Act and (i) is not being  made to a
person in the United  States  and (a) at the time the buy order was  originated,
the  Transferee  was outside the United States or the  Transferor and any person
acting on its behalf  reasonably  believed and believes that the  Transferee was
outside the United States or (b) the  transaction was executed in, on or through
the  facilities  of a  designated  offshore  securities  market and  neither the
Transferor  nor any person acting on its behalf knows that the  transaction  was
prearranged  with a buyer in the United States and (ii) the  transaction  is not
part  of a  plan  or  scheme  to  evade  the  registration  requirements  of the
Securities Act. Upon  consummation  of the proposed  transfer in accordance with
the terms of the Trust Deed, the transferred  Bond will not bear a legend nor be
subject to the restrictions on transfer enumerated in the Trust Deed.

3. _  Check if Transferee will take delivery of Bond pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S.

     The transfer is being effected in compliance with the transfer restrictions
applicable  to the Bonds and pursuant to and in accordance  with the  Securities
Act and any  applicable  blue sky  securities  laws of any  state of the  United
States,  and  accordingly the Transferor  hereby further  certifies that (please
check box (a), (b) or (c) below):

         (a)  _   such transfer is being effected pursuant to and in accordance
                  with Rule 144 under the Securities Act.  Upon consummation of
                  the proposed transfer in accordance with the terms of the
                  Trust Deed, the transferred Bond will not bear a legend nor be
                  subject to the restrictions on transfer enumerated in the
                  Trust Deed;

or

         (b)      such transfer is being effected to the Issuer or a subsidiary
                  thereof;

<PAGE>
                                       84


or

         (c)       such transfer is being effected to an institutional
                   "Accredited Investor," as defined in Rule 501(A)(1), (2), (3)
                   or (7) of Regulation D under the Securities Act, and pursuant
                   to an exemption from the registration requirements of the
                   Securities Act other than Rule 144A, Rule 144 or Rule 904,
                   and the Transferor hereby further certifies that it has not
                   engaged in any general solicitation or general advertising
                   within the meaning of Regulation D under the Securities Act
                   and the transfer complies with the requirements of the
                   exemption claimed, which certification is supported by (1) a
                   certificate executed by the Transferee in the form of
                   Schedule 6 to the Trust Deed (a copy of which is attached
                   to this certification) and (2) if such transfer is in respect
                   of a principal amount of Bonds at the time of transfer of
                   less than GBP250,000, an opinion of counsel provided by
                   the Transferor or the Transferee (a copy of which is attached
                   to this certification), to the effect that such transfer is
                   in compliance with the Securities Act.  Upon consummation of
                   the proposed transfer in accordance with the terms of the
                   Trust Deed, the transferred Bond will be subject to the
                   restrictions on transfer enumerated in the legend thereon and
                   in the Trust Deed.

B.       Investment Company Act

In  connection  with any  transfer  of the  Bonds,  the  undersigned  Transferor
confirms that neither the  undersigned  Transferor nor any beneficial  owner, if
any, for whom the undersigned Transferor has held the Bonds shall, following the
transfer, retain any beneficial interest in the Bonds.

C.       Authorization

The  undersigned  Transferor  confirms that this instrument has been executed on
its behalf by one of its executive officers duly authorized to do so.

D.       Notes

         (a)      The signature to this transfer must correspond with the name
                  as it appears on the face of the Bonds.

         (b)      A representative of the Transferor should state the capacity
                  in which he signs e.g. executor.

         (c)      The signature of the person effecting a transfer shall conform
                  to any list of duly authorised specimen signatures supplied by
                  the registered holder or be certified by a recognised bank,
                  notary public or in such other manner as the Registrar may
                  require.

         (d)      No transfer may be effected without the production of the
                  Bonds.

<PAGE>
                                       85


21.2     II      TRANSFEREE REPRESENTATIONS

A.       United States Securities Act

The undersigned  Transferee  represents and warrants that (Please check box (1),
(2) or (3) below):

1. _  Check if Transferee will take delivery of Bond pursuant to Rule 144A.

     (i)  It  is a QIB  and  acknowledges  that  it  either  has  received  such
information  regarding the Issuer as the  undersigned  Transferee  has requested
pursuant to Rule 144A or has  determined  not to request such  information;  and
(ii) it is aware  that the  registered  holder is relying  upon the  undersigned
Transferee's  foregoing  representations  in order to claim the  exemption  from
registration  provided  by Rule  144A.  It  acknowledges  and  agrees  that  the
transferred Bond will be subject to the  restrictions on transfer  enumerated in
the legend printed thereon and in the Trust Deed.

2. _  Check if Transferee will take delivery of Bond pursuant to Regulation S.

     (i) It is not in the  United  States  and (a) at the time the buy order was
originated, it was outside the United States or (b) the transaction was executed
in, on or through the facilities of a designated  offshore securities market and
was not  prearranged  with a buyer in the United States and (ii) the transaction
is not part of a plan or scheme to evade the  registration  requirements  of the
Securities Act. Upon  consummation  of the proposed  transfer in accordance with
the terms of the Trust Deed, the transferred  Bond will not bear a legend nor be
subject to the restrictions on transfer enumerated in the Trust Deed.

3. _  Check if Transferee will take delivery of Bond pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S.

     The transfer is being effected in compliance with the transfer restrictions
applicable  to the Bonds and pursuant to and in accordance  with the  Securities
Act and any  applicable  blue sky  securities  laws of any  state of the  United
States,  and  accordingly the Transferee  hereby further  certifies that (please
check box (a), (b) or (c) below):

         (a)      such transfer is being effected pursuant to and in accordance
                  with Rule 144 under the Securities Act.  Upon consummation of
                  the proposed transfer in accordance with the terms of the
                  Trust Deed, the transferred Bond will not bear a legend nor be
                  subject to the restrictions on transfer enumerated in the
                  Trust Deed;

or

         (b)     it is the Issuer or a subsidiary thereof;

or

         (c)     it is an institutional "Accredited Investor," as defined in
                 Rule 501(A)(1), (2), (3) or (7) of Regulation D under the
                 Securities Act, and such transfer is being effected pursuant to
                 an exemption from the registration requirements of the
                 Securities Act other than Rule 144A, Rule 144 or Rule 904, and
                 the transfer complies with the requirements of the exemption
                 claimed, which certification is supported by (1) a certificate
                 executed by the Transferee in the form of Schedule 6 to the
                 Trust Deed (a copy of which is attached to this certification)
                 and (2) if such transfer is in respect of a principal amount of
                 Bonds at the time of transfer of less than GBP250,000, an
                 opinion of counsel provided by the Transferor or the Transferee
                 (a copy of which is attached to this certification), to the
                 effect that such transfer is in compliance with the Securities
                 Act.

<PAGE>
                                       86


B.       Investment Company Act

The undersigned Transferee represents and warrants that (please check box (a) or
(b) below):

         (a)     It is, and the Bonds to be held by it will be deemed
                 beneficially owned by, a single person for purposes of Section
                 3(c)(1) of the Investment Company Act of 1940(The "1940 Act")

         (b)     The Bonds to be held by it will be deemed beneficially owned by
                 a Total of owners for purposes of Section 3(c)(1) of the 1940
                 Act.  The names of the beneficial owners, and the Principal
                 Amount of the Bonds beneficially owned by each of them, are as
                 follows:



Name                                                       Principal Amount



The undersigned  Transferee further represents that in making its representation
in Section II(B)(a) or Section II(B)(b) above (as applicable), it has counted as
a separate  beneficial  owner each person  including  itself if applicable)  for
whose account it is acquiring beneficial ownership of the Bonds and that, if any
such person (x) has been formed or recapitalized for the purpose of investing in
Bonds or (y) is an investment  company (as defined in the 1940 Act) or relies on
the   exceptions  in  the  1940  Act  for   companies   having  fewer  than  100
securityholders (Section 3(c)(1)) or for companies whose securityholders are all
qualified  purchasers  (Section  3(c)(7)),  or if any person (other than itself)
otherwise may be deemed to be a beneficial  owner of the Bonds, it has requested
(and has relied upon) the advice of counsel in determining the number of persons
who must be counted as beneficial owners of the Bonds.

C.       Authorization

The  undersigned  Transferee  confirms that this instrument has been executed on
its behalf by one of its executive officers duly authorized to do so.

The  undersigned  Transferee  will promptly (a) inform the Issuer if, during any
time the  undersigned  Transferee  holds  Bonds there shall be any change in the
representations  and  warranties  contained  in this Section II or if they shall
become  false  for  any  reason  and  (b)  deliver  to  the  Issuer  such  other
representations  and  covenants  as to such  matters,  as the Issuer may, in the
future,  request  in order to comply  with  applicable  securities  laws and the
availability of any exemptions thereunder.

<PAGE>
                                       87




D.       ERISA

The undersigned  Transferee confirms that it understands that in accordance with
the Employee  Retirement  Income  Security Act of 1974, as amended,  no employee
benefit  plan as to which the  Issuer  is a party in  interest  or  disqualified
person,  or a QIB acting on behalf of such a plan, may acquire a Bond unless the
acquisition would constitute an exempt  transaction under a statutory  exemption
or any one of the administrative exemptions by the U.S Department of Labor.

[INSERT NAME OF TRANSFEROR]

By:                       ___________________________________

Printed Name:             ___________________________________

Title:                    ___________________________________

Dated:                    ___________________________________

NOTICE:  The signature of the registered holder must correspond with the name as
written  upon the face of the within  instrument  in every  particular,  without
alteration or enlargement or any change whatsoever.

[INSERT NAME OF TRANSFEREE]

By:                       ___________________________________

Printed Name:             ___________________________________

Title:                    ___________________________________

Dated:                    ___________________________________

NOTICE: To be executed by an executive officer.

<PAGE>
                                       88



                               THE SIXTH SCHEDULE
                            Form of Certificate from
                   Acquiring Institutional Accredited Investor

Schroder Ventures International Investment Trust plc
31 Gresham Street
London
EC2V 7QA
England

Attn:  Company Secretary

The Law Debenture Trust Corporation p.l.c.
Fifth Floor
100 Wood Street
London EC2V 7EX

Attn:

         Re:      4.5 per cent. Subordinated Convertible Bonds due 2013 of
                  Schroder Ventures International Investment Trust plc

In connection with our proposed purchase of  GBP____________  face amount of 4.5
per cent Subordinated  Convertible  Bonds due 2013 (the "Bonds")  represented by
certificate   number  __________  issued  by  Schroder  Ventures   International
Investment  Trust plc (the  "Issuer") and  constituted  by a Trust Deed dated 20
May, 2003 between the Issuer and The Law Debenture Trust Corporation p.l.c. (the
"Trust Deed") we confirm that:

1. We  understand  that any  subsequent  transfer  of the Bonds or any  interest
therein is subject to certain restrictions and conditions set forth in the Trust
Deed and the  undersigned  agrees to be bound by, and not to  resell,  pledge or
otherwise  transfer the Bonds or any interest therein except in compliance with,
such  restrictions  and conditions and the United States  Securities Act of 1933
(the "Securities Act").

2. We understand  that the offer and sale of the Bonds have not been  registered
under the Securities Act, and that the Bonds and any interest therein may not be
offered or sold except as permitted in the following sentence.  We agree, on our
own behalf and on behalf of any accounts for which we are acting as  hereinafter
stated,  that if we should sell the Bonds or any interest therein, we will do so
only (A) to the Issuer or any subsidiary  thereof,  (B) in accordance  with Rule
144A under the Securities Act to a "qualified  institutional  buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below) that,
prior to such  transfer,  furnishes  (or has  furnished  on its behalf by a U.S.
broker-dealer)  to you and to the Issuer a signed  letter  substantially  in the
form of this letter and, if such transfer is in respect of a principal amount of
Bonds, at the time of transfer of less than GBP250,000, an opinion of counsel in
form reasonably  acceptable to the Issuer to the effect that such transfer is in
compliance  with  the  Securities  Act,  (D)  in  accordance  with  Rule  904 of
Regulation S under the  Securities  Act, (E) pursuant to the  provisions of Rule
144 under the  Securities Act or (F) in accordance  with another  exemption from
the  registration  requirements of the Securities Act (and based upon an opinion
of counsel  acceptable  to the Issuer),  and we further  agree to provide to any
person purchasing the Bonds from us in a transaction meeting the requirements of
this  paragraph  a notice  advising  such  purchaser  that  resales  thereof are
restricted as stated herein.

<PAGE>
                                       89


3. We understand  that, on any proposed resale of the Bonds, we will be required
to furnish to you and the Issuer such  certifications,  legal opinions and other
information  as you and the Issuer may  reasonably  require to confirm  that the
proposed sale complies with the foregoing  restrictions.  We further  understand
that the Bonds purchased by us will bear a legend to the foregoing effect.

4. We are an institutional  "accredited investor" (as defined in Rule 501(a)(1),
(2),  (3) or (7) of  Regulation  D under  the  Securities  Act)  and  have  such
knowledge and  experience in financial and business  matters as to be capable of
evaluating the merits and risks of our  investment in the Bonds,  and we and any
accounts for which we are acting are each able to bear the economic  risk of our
or its investment.

5. We are acquiring the Bonds  purchased by us for our own account or for one or
more accounts (each of which is an  institutional  "accredited  investor") as to
each  of  which  we  exercise  sole  investment  discretion  without  a view  to
distribution  thereof and without any present intention of selling such Bonds in
a transaction that would violate the Securities Act.

You and the Issuer are  entitled  to rely upon this  letter and are  irrevocably
authorized  to produce this letter or a copy hereof to any  interested  party in
any  administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                          [Insert Name of Accredited Investor]

                                          By:

                                          Name:

                                          Title:




                                          Dated:


<PAGE>
                                       90



EXECUTED AS A DEED BY SCHRODER VENTURES INTERNATIONAL   )
INVESTMENT TRUST PLC                                    )
acting by a director and its secretary/ two directors:  )
                                                        )
                                                        )
                                                        )



THE COMMON SEAL of THE LAW DEBENTURE TRUST              )
CORPORATION p.l.c. was affixed to this deed in the      )
presence of:                                            )
                                                        )
                                             Director:
                                 Authorised Signatory:


<PAGE>
                                       91



                              DATED        ,2003



              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc

                                       and

                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.





            ________________________________________________________

                                   TRUST DEED

                                  constituting
                                  GBP40,000,000
              4.5 per cent. Subordinated Convertible Bonds due 2013

                        (with authority to issue further
                                 bonds or notes)

            ________________________________________________________



                                 For the Issuer:

                                Slaughter and May
                                 One Bunhill Row
                                 London EC1Y 8YY



                                For the Trustee:

                                  Allen & Overy
                                 One New Change
                                 London EC4M 9QQ

<PAGE>


                                    Contents

                                                                  Page

1.       Definitions                                                1

2.       Covenant to Repay and to Pay Interest on Original Bonds    8

3.       Form and Issue of Original Bonds                           12

4.       Covenants in relation to Conversion Right                  12

5.       Fees, Duties and Taxes                                     17

6.       Covenant of Compliance                                     17

7.       Cancellation of Securities and Records                     17

8.       Enforcement                                                19

9.       Action, Proceedings and Indemnification                    20

10.      Application of Moneys                                      20

11.      Notice of Payments                                         21

12.      Investment by Trustee                                      21

13.      Partial Payments                                           21

14.      Covenants by the Issuer                                    22

15.      Remuneration and Indemnification of Trustee                25

16.      Provisions Supplemental to Trustee Act 1925 and the
         Trustee Act 2000                                           27

17.      Trustee's Liability                                        32

18.      Trustee Contracting with the Issuer                        32

19.      Waiver, Authorisation and Determination                    33

20.      Holder of Definitive Bearer Security Assumed to be
         Couponholder                                               34

21.      Substitution                                               35

22.      Currency Indemnity                                         36

23.      New Trustee, Separate and Co-Trustees                      37

24.      Trustee's Retirement and Removal                           38

25.      Trustee's Powers to be Additional                          38

26.      Notices                                                    38

27.      Contracts (Rights of Third Parties) Act 1999               39

28.      Governing Law                                              39

29.      Counterparts                                               39

THE FIRST SCHEDULE Form of Original Bond Certificate                40

THE SECOND SCHEDULE The Conditions of the Original Bonds            43

1.       Form, Denomination and Title                               43

2.       Status and Subordination                                   43

3.       Interest                                                   44

4.       Redemption and purchase                                    44

5.       Conversion                                                 46

6.       Stock Exchange listing                                     55

7.       Payments                                                   55

8.       Events of Default and Enforcement                          56

9.       Purchase of own shares                                     57

10.      Taxation                                                   57

11.      Prescription                                               57

12.      Registration                                               57

13.      Transfer of Bonds                                          58

14.      Meetings of Holders, Modification, Waiver and Substitution 62

15.      Replacement of Bonds                                       64

16.      Contracts (Rights of Third Parties) Act 1999               64

17.      Indemnification of the Trustee                             64

18.      Notices                                                    64

19.      Further issues                                             64

20.      Governing Law                                              65

21.      Definitions                                                65

THE THIRD SCHEDULE Register and Transfer of Registered Securities   68

THE FOURTH SCHEDULE Provisions for Meetings of Holders              71

THE FIFTH SCHEDULE Transfer Certificate                             81

THE SIXTH SCHEDULE Form of Certificate from  Acquiring Institutional
Accredited Investor                                                 88




<PAGE>

-----------
EXHIBIT 2.3
-----------


THIS FIRST SUPPLEMENTAL TRUST DEED is made on  17 July, 2003 BETWEEN:

(1)  SCHRODER   VENTURES   INTERNATIONAL   INVESTMENT   TRUST   plc,  a  company
     incorporated  under the laws of England and Wales,  whose registered office
     is at 31 Gresham Street, London EC2V 7QA (the "Issuer"); and

(2)  THE LAW DEBENTURE TRUST CORPORATION  p.l.c., a company  incorporated  under
     the laws of England and Wales,  whose registered  office is at Fifth Floor,
     100 Wood Street,  London EC2V 7EX (the "Trustee",  which expression  shall,
     wherever the context so admits,  include such company and all other persons
     or companies for the time being the trustee or trustees of these  presents)
     as trustee for the Holders and, where  applicable,  Couponholders  (each as
     defined in the Principal Trust Deed as defined below).

WHEREAS:

(1)  This First  Supplemental Trust Deed is supplemental to the Trust Deed dated
     20th May, 2003 (hereinafter called the "Principal Trust Deed") made between
     the Issuer and the Trustee and constituting the GBP40,000,000 4.5 per cent.
     Subordinated  Convertible Bonds due 2013 of the Issuer  (hereinafter and in
     the Principal Trust Deed called the "Original Bonds").

(2)  By virtue of Clause  2.5 of the  Principal  Trust  Deed,  the  Issuer is at
     liberty (subject as therein  provided)  without the consent of the Original
     Bondholders  to  create,  constitute  by a trust deed  supplemental  to the
     Principal  Trust Deed and issue  further  bonds  ranking  pari passu in all
     respects  and so that the  same  shall  be  consolidated  and form a single
     series with the Original Bonds.

(3)  By a resolution of a duly appointed  Committee of the Board of Directors of
     the Issuer dated 12th May,  2003 and a resolution of the Board of Directors
     of the Issuer  dated 6th  March,  2003 the  Issuer  has  resolved  to issue
     GBP3,000,000  4.5 per cent.  Subordinated  Convertible  Bonds due 2013 (the
     "New  Bonds") to be, and the Trustee has  consented to the New Bonds being,
     constituted in the manner hereinafter appearing and consolidated and form a
     single series with the Original Bonds.

NOW THIS FIRST  SUPPLEMENTAL  TRUST DEED  WITNESSES  AND IT IS HEREBY AGREED AND
DECLARED as follows:

1.   DEFINITIONS

1.1  Subject as  hereinafter  provided  and  unless  there is  something  in the
     subject matter or context inconsistent  therewith all words and expressions
     defined in the  Principal  Trust Deed shall have the same  meanings in this
     First Supplemental Trust Deed.

1.2  In this First  Supplemental  Trust Deed  unless  there is  anything  in the
     subject or context inconsistent  therewith the following  expressions shall
     have the following meanings:

     "New Bondholders" means the several persons who are for the time being
     Holders of the New Bonds; and

<PAGE>

     "New  Bonds"  means  the  bonds  in  registered  form  comprising  the said
     GBP3,000,000 4.5 per cent.  Subordinated  Convertible Bonds due 2013 of the
     Issuer  hereby  constituted  or the principal  amount  thereof for the time
     being outstanding.

2.   COVENANT TO REPAY AND TO PAY INTEREST ON NEW BONDS

2.1  The aggregate principal amount of the New Bonds is limited to GBP3,000,000.
     The New Bonds as and when issued shall be Further Securities and shall rank
     pari  passu  with and be  consolidated  and form a single  series  with the
     Original Bonds.

2.2  The Issuer  covenants  with the Trustee that it will,  in  accordance  with
     these  presents,  on the due date for the final  maturity  of the New Bonds
     provided for in the Conditions,  or on such earlier date as the same or any
     part thereof may become due and repayable thereunder,  pay or procure to be
     paid  unconditionally  to or to the order of the  Trustee  in  sterling  in
     London in immediately available funds the principal amount of the New Bonds
     repayable on that date and shall in accordance  with these  presents in the
     meantime  and until such date (both  before and after any judgment or other
     order of a court  of  competent  jurisdiction)  pay or  procure  to be paid
     unconditionally  to or to the order of the  Trustee as  aforesaid  interest
     (which  shall  accrue from day to day) on the  principal  amount of the New
     Bonds at the rate and on the dates specified in the Conditions.

     PROVIDED THAT:

     (a) every payment of principal or interest in respect of the New Bonds made
         to an account specified by the New Bondholder  in  accordance  with the
         Conditions or by a sterling cheque for the relevant amount sent to the
         New Bondholder in accordance with the Conditions (provided that such
         cheque is honoured on first presentation) shall be deemed to be a
         satisfaction of the covenant contained in this Clause;

     (b) in any case where payment of principal is not made to the New
         Bondholders on or before the due date, interest shall continue to
         accrue on the principal amount of each New Bond (both before and after
         any judgment or other order of a court of competent jurisdiction) at
         the rate aforesaid up to and including the date which the Trustee
         determines to be the date on and after which payment is to be made to
         the New Bondholders in respect thereof as stated in a notice given to
         the New Bondholders in accordance with Condition 18 (such date to
         be not later than 30 days after the day on which the whole of such
         principal amount together with an amount equal to the interest which
         has accrued and is to accrue pursuant to this proviso up to and
         including that date has been received by the Trustee, the Registrar or
         the New Bondholders); and

     (c) in any case where payment of the whole or any part of the principal
         amount of any New Bond is improperly withheld or refused upon due
         presentation thereof (other than in circumstances contemplated by
         proviso (b) above) interest shall accrue on that principal amount
         payment of which has been so withheld or refused (both before and after
         any judgment or other order of a court of competent jurisdiction) at
         the rate aforesaid from and including the date of such withholding or
         refusal up to and including the date on which payment of the full
         amount (including interest as aforesaid) in sterling payable in respect
         of such New Bond is made.

The  Trustee  will  hold the  benefit  of this  covenant  on  trust  for the New
Bondholders and itself in accordance with these presents.

<PAGE>


2.3  (i)   In the event of the winding up of the Issuer, all amounts in respect
           of the New Bonds paid to the Trustee by the liquidator of the Issuer
           in a winding up of the Issuer (including for the avoidance of doubt
           pursuant to Clause 8 of the Principal Trust Deed) shall be held by
           the Trustee upon trust:

           (a)  first for payment or satisfaction of all amounts then due and
                unpaid under Clause 15 and/or 16(x) of the Principal Trust Deed
                to the Trustee or any Appointee;

           (b)  secondly for payment of claims of all Senior Liabilities of the
                Issuer in the winding up of the Issuer to the extent that such
                claims are admitted to proof in the winding up (not having been
                satisfied out of the other resources of the Issuer) excluding
                interest accruing after commencement of the winding up; and

           (c)  thirdly as to the balance (if any) for payment pari passu and
                rateably of the amounts owing on or in respect of the New Bonds.

     (ii)  The trust secondly mentioned in Clause 2.3(i) may be performed by the
           Trustee paying over to the liquidator for the time being in the
           winding up of the Issuer the amounts received by the Trustee as
           aforesaid (less any amounts thereof applied in the implementation of
           the trust first mentioned in Clause 2.3(i)) on terms that such
           liquidator shall distribute the same accordingly and the receipt by
           such liquidator of the same shall be a good discharge to the Trustee
           for the performance by it of the trust secondly mentioned in
           Clause 2.3(i).

    (iii)  The Trustee shall be entitled and it is hereby authorised to call for
           and to accept as conclusive evidence thereof a certificate from the
           liquidator for the time being of the Issuer as to:

           (a)  the amount of the claims of the Senior Liabilities referred to
                in Clause 2.3(i); and

           (b)  the persons entitled thereto and their respective entitlements.

3.   FORM AND ISSUE OF NEW BONDS

3.1  The New Bonds shall be in definitive registered form, and shall comply with
     the provisions of Condition 1 and the Third Schedule to the Principal Trust
     Deed.

<PAGE>

3.2  The  provisions of the  Conditions  and the Third Schedule to the Principal
     Trust Deed shall have effect in relation to the transfer of the New Bonds.

3.3  The  certificates in respect of the New Bonds shall be substantially in the
     form set out in the  Schedule  to this  First  Supplemental  Trust Deed and
     shall be signed  manually or in  facsimile  by two of the  Directors or one
     Director and the Secretary of the Issuer on behalf of the Issuer.

3.4  The Issuer may use the  facsimile  signature  of any person who at the date
     such  signature  is affixed is a Director  or the  Secretary  of the Issuer
     notwithstanding  that, at the time of issue of any of the  certificates  in
     respect  of the New  Bonds,  he may have  ceased  for any  reason to be the
     holder of such office and certificates so issued shall be evidence of valid
     and binding obligations of the Issuer.

4.   PROVISION OF THE PRINCIPAL TRUST DEED

4.1  The New Bonds  shall be subject to the  Conditions  set forth in the Second
     Schedule to  Principal  Trust Deed as if the  references  to the Trust Deed
     therein had included references to this First Supplemental Trust Deed.

4.2  Clause 4 of the  Principal  Trust Deed shall apply to the New Bonds and the
     New  Bondholders  as if  references  therein to the Original  Bonds and the
     Original  Bondholders  were  references  to  the  New  Bonds  and  the  New
     Bondholders respectively.

5.   PRINCIPAL TRUST DEED CONSTRUCTION

The  Principal Trust Deed shall henceforth be read and construed as one document
     with this First Supplemental Trust Deed.

6.   GENERAL

     A memorandum of this First Supplemental Trust Deed shall be endorsed by the
     Trustee or the  Principal  Trust  Deed and by the  Issuer on the  duplicate
     thereof.

7.   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

     The  parties to this First  Supplemental  Trust Deed do not intend that any
     term of this First Supplemental Trust Deed should be enforceable, by virtue
     of the Contracts  (Rights of Third  Parties) Act 1999, by any person who is
     not a party to this First  Supplemental Trust Deed but this does not affect
     any right or remedy of any third party which exists or is  available  apart
     from that Act.

8.   GOVERNING LAW

     This First  Supplemental Trust Deed are governed by, and shall be construed
     in accordance with English law.


<PAGE>


                                  THE SCHEDULE
                          Form of New Bond Certificate

Certificate No.       Transfer No.         Date of             Amount of Bonds
                                           Registration              GBP


              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                                 (the "Company")

Incorporated with limited liability in England and Wales under the Companies Act
                         1985. Registered number 3066856

              4.5 PER CENT. SUBORDINATED CONVERTIBLE BONDS DUE 2013



     Power is reserved  to the  Company by the Trust Deed  referred to below and
subject  as  therein  provided  to create and issue  further  securities  either
ranking  pari  passu  in all  respects  and  forming  a single  series  with the
above-mentioned Bonds or carrying such rights as to ranking, interest,  premium,
redemption conversion and otherwise as the Company may think fit.

         THIS IS TO CERTIFY that



is/are the registered holder(s) of                         pounds of the
above-mentioned 4.5 per cent. Subordinated  Convertible Bonds due 2013 which are
constituted  by Trust Deeds of which the  principal  is dated 20 May,  2003 (the
"Principal  Trust  Deed") and made between the Company of the first part and The
Law Debenture Trust Corporation  p.l.c. (the "Trustee") as trustee of the second
part and such Bonds are issued with the benefit of and subject to the provisions
contained  in the said  Trust  Deeds and the  Conditions  set out in the  Second
Schedule to the Principal Trust Deed. The Bonds  represented by this Certificate
rank pari  passu in all  respects  with and are  consolidated  and form a single
series with the GBP40,000,000 4.5 per cent.  Subordinated  Convertible Bonds due
2013 of the Company constituted by the Principal Trust Deed.

This Certificate is evidence of entitlement only. Title to the Bonds passes only
on due  registration  on the  Register  and only the duly  registered  holder is
entitled to payments in respect of this Bond.

Signed by


......................                            .....................
for and on behalf of                             for and on behalf of
Schroder Ventures International                  Schroder Ventures International
Investment Trust plc                             Investment Trust plc

<PAGE>


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

NOTE:- This certificate must be surrendered to the Company's  Registrars for the
time being  before any  conversion  or  transfer of the whole or any part of the
Bonds comprised herein can be effected or registered or a new certificate issued
in exchange.  The Bonds are  transferable  in amounts and integral  multiples of
GBP100,000.

Registrar, Transfer Agent, Conversion Agent and Paying Agent:

                               JPMorgan Chase Bank
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                                   Bournemouth
                                     BH7 7DA

THIS  SUBORDINATED  CONVERTIBLE  BOND DUE  2013,  ANY  INTEREST  HEREIN  AND ANY
ORDINARY SHARES OF SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST PLC (THE
"ISSUER") ISSUABLE ON CONVERSION HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A UNDER THE  SECURITIES  ACT ("RULE 144A") IN A TRANSACTION  MEETING THE
REQUIREMENTS  OF RULE 144A, (2) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS
DEFINED IN RULE 501(A)(1),  (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES TO THE REGISTRAR A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO SUCH TRANSFER (THE
FORM OF WHICH  LETTER CAN BE OBTAINED  FROM THE  REGISTRAR),  (3) IN AN OFFSHORE
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 UNDER REGULATION S
UNDER THE  SECURITIES  ACT, OR (4)  PURSUANT TO AN EXEMPTION  FROM  REGISTRATION
UNDER THE  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION.

THE ISSUER HAS NOT BEEN,  AND WILL NOT BE,  REGISTERED AS AN INVESTMENT  COMPANY
UNDER THE INVESTMENT  COMPANY ACT OF 1940, AS AMENDED (THE  "INVESTMENT  COMPANY
ACT").  NO MORE  THAN 75 U.S.  PERSONS  AS  DETERMINED  IN  ACCORDANCE  WITH THE
INVESTMENT  COMPANY  ACT WHO HAVE  ACQUIRED  SECURITIES  OF THE ISSUER  FROM THE
ISSUER OR ITS AGENTS OR AFFILIATES  ("DIRECT  PURCHASERS")  OR ANY UNITED STATES
RESIDENT  TRANSFEREE OF ANY DIRECT PURCHASER  ("PRIVATE  OFFERING  HOLDERS") MAY
BENEFICIALLY OWN SECURITIES  (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES) OF THE
ISSUER. IF THE ISSUER'S  SECURITIES (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES)
INCLUDING  ORDINARY  SHARES AND THESE BONDS  COULD BE DEEMED TO BE  BENEFICIALLY
OWNED BY MORE THAN 75 PRIVATE  OFFERING  HOLDERS (AND IN OTHER  CIRCUMSTANCES AS
SET FORTH IN THE ISSUER'S  ARTICLES OF  ASSOCIATION)  THE ISSUER MAY REQUIRE THE
TRANSFER OF ANY SECURITIES OF THE ISSUER OWNED BY SUCH PRIVATE  OFFERING HOLDERS
AS WILL BE  REQUIRED  TO REDUCE TO 75 OR BELOW THE  NUMBER OF  PRIVATE  OFFERING
HOLDERS BENEFICIALLY OWNING SECURITIES OF THE ISSUER,  INCLUDING ORDINARY SHARES
AND THESE BONDS.

<PAGE>


CONVERSION OF THIS BOND IS SUBJECT TO SATISFACTION OF CERTAIN  REQUIREMENTS  SET
FORTH IN THE TRUST DEED  RELATED  HERETO AND ANY  ORDINARY  SHARES  ISSUED  UPON
CONVERSION MAY BE SUBJECT TO THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.



<PAGE>

    IN WITNESS whereof this First Supplemental Trust Deed has been executed as a
    deed by the Issuer and the Trustee and delivered on the date first state on
    page 1.



EXECUTED AS A DEED by SCHRODER VENTURES      )
INTERNATIONAL INVESTMENT TRUST PLC acting    )
by a director and its secretary/two          )
directors:                                   )
                                             )
THE COMMON SEAL of THE LAW DEBENTURE TRUST   )
CORPORATION p.l.c. was affixed to this       )
deed in the presence of:                     )
                                             )
                                  Director:
                      Authorised Signatory:

<PAGE>

                               DATED 17 July, 2003





              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc



                                       and



                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.





                _________________________________________________

                          FIRST SUPPLEMENTAL TRUST DEED

                                  constituting
                                  GBP3,000,000
              4.5 per cent. Subordinated Convertible Bonds due 2013

              _____________________________________________________





                                 For the Issuer:

                                Slaughter and May
                                 One Bunhill Row
                                 London EC1Y 8YY



                                For the Trustee:

                                  Allen & Overy
                                 One New Change
                                 London EC4M 9QQ

<PAGE>

-----------
EXHIBIT 2.4
-----------


THIS SECOND SUPPLEMENTAL TRUST DEED is made on 21 July, 2003 BETWEEN:

(1)  SCHRODER   VENTURES   INTERNATIONAL   INVESTMENT   TRUST   plc,  a  company
     incorporated  under the laws of England and Wales,  whose registered office
     is at 31 Gresham Street, London EC2V 7QA (the "Issuer"); and

(2)  THE LAW DEBENTURE TRUST CORPORATION  p.l.c., a company  incorporated  under
     the laws of England and Wales,  whose registered  office is at Fifth Floor,
     100 Wood Street,  London EC2V 7EX (the "Trustee",  which expression  shall,
     wherever the context so admits,  include such company and all other persons
     or companies for the time being the trustee or trustees of these  presents)
     as trustee for the Holders and, where  applicable,  Couponholders  (each as
     defined in the Principal Trust Deed as defined below).

WHEREAS:

(1)  This Second Supplemental Trust Deed is supplemental to the Trust Deed dated
     20th May, 2003 (hereinafter called the "Principal Trust Deed") made between
     the Issuer and the Trustee and constituting the GBP40,000,000 4.5 per cent.
     Subordinated  Convertible Bonds due 2013 of the Issuer  (hereinafter and in
     the  Principal  Trust Deed  called  the  "Original  Bonds"),  and the First
     Supplemental Trust Deed dated 17th July, 2003 made between the same parties
     and  constituting  a  further  GBP3,000,000  4.5  per  cent.   Subordinated
     Convertible   Bonds  due  2013  of  the  Issuer   (hereinafter  the  "First
     Supplemental  Trust Deed" and,  together with the Principal Trust Deed, the
     "Trust Deed"),  such further bonds being  consolidated and forming a single
     series with the Original Bonds (the "Further Bonds").

(2)  By virtue of Clause  2.5 of the  Principal  Trust  Deed,  the  Issuer is at
     liberty (subject as therein  provided)  without the consent of the Original
     Bondholders  to  create,  constitute  by a trust deed  supplemental  to the
     Principal  Trust Deed and issue  further  bonds  ranking  pari passu in all
     respects  and so that the  same  shall  be  consolidated  and form a single
     series with the Original Bonds and the Further Bonds.

(3)  By a resolution of a duly appointed  Committee of the Board of Directors of
     the Issuer dated 12th May,  2003 and a resolution of the Board of Directors
     of the Issuer  dated 6th  March,  2003 the  Issuer  has  resolved  to issue
     GBP3,000,000  4.5 per cent.  Subordinated  Convertible  Bonds due 2013 (the
     "New  Bonds") to be, and the Trustee has  consented to the New Bonds being,
     constituted in the manner hereinafter appearing and consolidated and form a
     single series with the Original Bonds and the Further Bonds.

NOW  THIS SECOND  SUPPLEMENTAL  TRUST DEED WITNESSES AND IT IS HEREBY AGREED AND
DECLARED as follows:

1.   DEFINITIONS

1.1  Subject as  hereinafter  provided  and  unless  there is  something  in the
     subject matter or context inconsistent  therewith all words and expressions
     defined in the  Principal  Trust Deed shall have the same  meanings in this
     Second Supplemental Trust Deed.

<PAGE>
                                       2




1.2  In this  Second  Supplemental  Trust Deed  unless  there is anything in the
     subject or context inconsistent  therewith the following  expressions shall
     have the following meanings:

     "New  Bondholders"  means the  several  persons  who are for the time being
     Holders of the New Bonds; and

     "New  Bonds"  means  the  bonds  in  registered  form  comprising  the said
     GBP3,000,000 4.5 per cent.  Subordinated  Convertible Bonds due 2013 of the
     Issuer  hereby  constituted  or the principal  amount  thereof for the time
     being outstanding.

2.   COVENANT TO REPAY AND TO PAY INTEREST ON NEW BONDS

2.1  The aggregate principal amount of the New Bonds is limited to GBP3,000,000.
     The New Bonds as and when issued shall be Further Securities and shall rank
     pari  passu  with and be  consolidated  and form a single  series  with the
     Original Bonds and the Further Bonds.

2.2  The Issuer  covenants  with the Trustee that it will,  in  accordance  with
     these  presents,  on the due date for the final  maturity  of the New Bonds
     provided for in the Conditions,  or on such earlier date as the same or any
     part thereof may become due and repayable thereunder,  pay or procure to be
     paid  unconditionally  to or to the order of the  Trustee  in  sterling  in
     London in immediately available funds the principal amount of the New Bonds
     repayable on that date and shall in accordance  with these  presents in the
     meantime  and until such date (both  before and after any judgment or other
     order of a court  of  competent  jurisdiction)  pay or  procure  to be paid
     unconditionally  to or to the order of the  Trustee as  aforesaid  interest
     (which  shall  accrue from day to day) on the  principal  amount of the New
     Bonds at the rate and on the dates specified in the Conditions.

     PROVIDED THAT:

     (a)  every payment of principal or interest in respect of the New Bonds
          made to an account specified by the New Bondholder in accordance with
          the Conditions or by a sterling cheque for the relevant amount sent to
          the New Bondholder in accordance with the Conditions (provided that
          such cheque is honoured on first presentation) shall be deemed to be
          a satisfaction of the covenant contained in this Clause;

     (b)  in any case where payment of principal is not made to the New
          Bondholders on or before the due date, interest shall continue to
          accrue on the principal amount of each New Bond (both before and after
          any judgment or other order of a court of competent jurisdiction) at
          the rate aforesaid up to and including the date which the Trustee
          determines to be the date on and after which payment is to be made to
          the New Bondholders in respect thereof as stated in a notice given to
          the New Bondholders in accordance with Condition 18 (such date to
          be not later than 30 days after the day on which the whole of such
          principal amount together with an amount equal to the interest which
          has accrued and is to accrue pursuant to this proviso up to and
          including that date has been received by the Trustee, the Registrar
          or the New Bondholders); and


<PAGE>
                                       3


     (c)  in any case where payment of the whole or any part of the principal
          amount of any New Bond is improperly withheld or refused upon due
          presentation thereof (other than in circumstances contemplated by
          proviso (b) above) interest shall accrue on that principal amount
          payment of which has been so withheld or refused (both before and
          after any judgment or other order of a court of competent
          jurisdiction) at the rate aforesaid from and including the date of
          such withholding or refusal up to and including the date on which
          payment of the full amount (including interest as aforesaid) in
          sterling payable in respect of such New Bond is made.

          The Trustee will hold the benefit of this covenant on trust for the
          New Bondholders and itself in accordance with these presents.



2.3      (i)  In the event of the winding up of the Issuer, all amounts in
              respect of the New Bonds paid to the Trustee by the liquidator of
              the Issuer in a winding up of the Issuer (including for the
              avoidance of doubt pursuant to Clause 8 of the Principal Trust
              Deed) shall be held by the Trustee upon trust:

              (a)  first for payment or satisfaction of all amounts then due and
                   unpaid under Clause 15 and/or 16(x) of the Principal Trust
                   Deed to the Trustee or any Appointee;

              (b)  secondly for payment of claims of all Senior Liabilities of
                   the Issuer in the winding up of the Issuer to the extent that
                   such claims are admitted to proof in the winding up (not
                   having been satisfied out of the other resources of the
                   Issuer) excluding interest accruing after commencement of the
                   winding up; and

              (c) thirdly as to the balance (if any) for payment pari passu and
                  rateably of the amounts owing on or in respect of the New
                  Bonds.

       (ii)   The trust secondly mentioned in Clause 2.3(i) may be performed by
              the Trustee paying over to the liquidator for the time being in
              the winding up of the Issuer the amounts received by the Trustee
              as aforesaid (less any amounts thereof applied in the
              implementation of the trust first mentioned in Clause 2.3(i)) on
              terms that such liquidator shall distribute the same accordingly
              and the receipt by such liquidator of the same shall be a good
              discharge to the Trustee for the performance by it of the trust
              secondly mentioned in Clause 2.3(i).

      (iii)   The Trustee shall be entitled and it is hereby authorised to call
              for and to accept as conclusive evidence thereof a certificate
              from the liquidator for the time being of the Issuer as to:


<PAGE>
                                       4


              (a) the amount of the claims of the Senior Liabilities referred to
                  in Clause 2.3(i); and

              (b) the persons entitled thereto and their respective
                  entitlements.

3.   FORM AND ISSUE OF NEW BONDS

3.1  The New Bonds shall be in definitive registered form, and shall comply with
     the provisions of Condition 1 and the Third Schedule to the Principal Trust
     Deed.

3.2  The  provisions of the  Conditions  and the Third Schedule to the Principal
     Trust Deed shall have effect in relation to the transfer of the New Bonds.

3.3  The  certificates in respect of the New Bonds shall be substantially in the
     form set out in the  Schedule  to this Second  Supplemental  Trust Deed and
     shall be signed  manually or in  facsimile  by two of the  Directors or one
     Director and the Secretary of the Issuer on behalf of the Issuer.

3.4  The Issuer may use the  facsimile  signature  of any person who at the date
     such  signature  is affixed is a Director  or the  Secretary  of the Issuer
     notwithstanding  that, at the time of issue of any of the  certificates  in
     respect  of the New  Bonds,  he may have  ceased  for any  reason to be the
     holder of such office and certificates so issued shall be evidence of valid
     and binding obligations of the Issuer.

4.   PROVISION OF THE PRINCIPAL TRUST DEED

4.1  The New Bonds  shall be subject to the  Conditions  set forth in the Second
     Schedule to  Principal  Trust Deed as if the  references  to the Trust Deed
     therein had included references to this Second Supplemental Trust Deed.

4.2  Clause 4 of the  Principal  Trust Deed shall apply to the New Bonds and the
     New  Bondholders  as if  references  therein to the Original  Bonds and the
     Original  Bondholders  were  references  to  the  New  Bonds  and  the  New
     Bondholders respectively.

5.   TRUST DEED CONSTRUCTION

     The Trust Deed shall  henceforth be read and construed as one document with
     this Second Supplemental Trust Deed.

6.   GENERAL

     A memorandum  of this Second  Supplemental  Trust Deed shall be endorsed by
     the Trustee or the Principal  Trust Deed and by the Issuer on the duplicate
     thereof.

7.   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

     The parties to this Second  Supplemental  Trust Deed do not intend that any
     term of this  Second  Supplemental  Trust Deed  should be  enforceable,  by
     virtue of the Contracts  (Rights of Third  Parties) Act 1999, by any person
     who is not a party to this Second Supplemental Trust Deed but this does not
     affect any right or remedy of any third party which  exists or is available
     apart from that Act.

<PAGE>
                                       5



8.   GOVERNING LAW

     This Second  Supplemental Trust Deed is governed by, and shall be construed
     in accordance with English law.

<PAGE>
                                       6




                                  THE SCHEDULE
                          Form of New Bond Certificate

Certificate No.        Transfer No.            Date of          Amount of Bonds
                                               Registration     GBP


              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                                 (the "Company")

Incorporated with limited liability in England and Wales under the Companies Act
                         1985. Registered number 3066856

              4.5 PER CENT. SUBORDINATED CONVERTIBLE BONDS DUE 2013



     Power is reserved  to the  Company by the Trust Deed  referred to below and
subject  as  therein  provided  to create and issue  further  securities  either
ranking  pari  passu  in all  respects  and  forming  a single  series  with the
above-mentioned Bonds or carrying such rights as to ranking, interest,  premium,
redemption conversion and otherwise as the Company may think fit.

      THIS IS TO CERTIFY that







is/are the registered holder(s) of                         pounds of the
above-mentioned 4.5 per cent. Subordinated  Convertible Bonds due 2013 which are
constituted  by Trust Deeds of which the  principal is dated 20th May, 2003 (the
"Principal  Trust  Deed") and made between the Company of the first part and The
Law Debenture Trust Corporation  p.l.c. (the "Trustee") as trustee of the second
part and such Bonds are issued with the benefit of and subject to the provisions
contained  in the said  Trust  Deeds and the  Conditions  set out in the  Second
Schedule to the Principal Trust Deed. The Bonds  represented by this Certificate
rank pari  passu in all  respects  with and are  consolidated  and form a single
series with the GBP40,000,000 4.5 per cent.  Subordinated  Convertible Bonds due
2013 of the Company constituted by the Principal Trust Deed and the GBP3,000,000
4.5 per cent.  Subordinated  Convertible Bonds due 2013 constituted by the First
Supplemental Trust Deed dated 17th July, 2003.

This Certificate is evidence of entitlement only. Title to the Bonds passes only
on due  registration  on the  Register  and only the duly  registered  holder is
entitled to payments in respect of this Bond.

Signed by


......................                            .....................
for and on behalf of                             for and on behalf of
Schroder Ventures International                  Schroder Ventures International
Investment Trust plc                             Investment Trust plc

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

NOTE:- This certificate must be surrendered to the Company's  Registrars for the
time being  before any  conversion  or  transfer of the whole or any part of the
Bonds comprised herein can be effected or registered or a new certificate issued
in exchange.  The Bonds are  transferable  in amounts and integral  multiples of
GBP100,000.

Registrar, Transfer Agent, Conversion Agent and Paying Agent:

                               JPMorgan Chase Bank
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                                   Bournemouth
                                     BH7 7DA

THIS  SUBORDINATED  CONVERTIBLE  BOND DUE  2013,  ANY  INTEREST  HEREIN  AND ANY
ORDINARY SHARES OF SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST PLC (THE
"ISSUER") ISSUABLE ON CONVERSION HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A UNDER THE  SECURITIES  ACT ("RULE 144A") IN A TRANSACTION  MEETING THE
REQUIREMENTS  OF RULE 144A, (2) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS
DEFINED IN RULE 501(A)(1),  (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES TO THE REGISTRAR A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO SUCH TRANSFER (THE
FORM OF WHICH  LETTER CAN BE OBTAINED  FROM THE  REGISTRAR),  (3) IN AN OFFSHORE
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 UNDER REGULATION S
UNDER THE  SECURITIES  ACT, OR (4)  PURSUANT TO AN EXEMPTION  FROM  REGISTRATION
UNDER THE  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION.

THE ISSUER HAS NOT BEEN,  AND WILL NOT BE,  REGISTERED AS AN INVESTMENT  COMPANY
UNDER THE INVESTMENT  COMPANY ACT OF 1940, AS AMENDED (THE  "INVESTMENT  COMPANY
ACT").  NO MORE  THAN 75 U.S.  PERSONS  AS  DETERMINED  IN  ACCORDANCE  WITH THE
INVESTMENT  COMPANY  ACT WHO HAVE  ACQUIRED  SECURITIES  OF THE ISSUER  FROM THE
ISSUER OR ITS AGENTS OR AFFILIATES  ("DIRECT  PURCHASERS")  OR ANY UNITED STATES
RESIDENT  TRANSFEREE OF ANY DIRECT PURCHASER  ("PRIVATE  OFFERING  HOLDERS") MAY
BENEFICIALLY OWN SECURITIES  (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES) OF THE
ISSUER. IF THE ISSUER'S  SECURITIES (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES)
INCLUDING  ORDINARY  SHARES AND THESE BONDS  COULD BE DEEMED TO BE  BENEFICIALLY
OWNED BY MORE THAN 75 PRIVATE  OFFERING  HOLDERS (AND IN OTHER  CIRCUMSTANCES AS
SET FORTH IN THE ISSUER'S  ARTICLES OF  ASSOCIATION)  THE ISSUER MAY REQUIRE THE
TRANSFER OF ANY SECURITIES OF THE ISSUER OWNED BY SUCH PRIVATE  OFFERING HOLDERS
AS WILL BE  REQUIRED  TO REDUCE TO 75 OR BELOW THE  NUMBER OF  PRIVATE  OFFERING
HOLDERS BENEFICIALLY OWNING SECURITIES OF THE ISSUER,  INCLUDING ORDINARY SHARES
AND THESE BONDS.

<PAGE>
                                       8


CONVERSION OF THIS BOND IS SUBJECT TO SATISFACTION OF CERTAIN  REQUIREMENTS  SET
FORTH IN THE TRUST DEED  RELATED  HERETO AND ANY  ORDINARY  SHARES  ISSUED  UPON
CONVERSION MAY BE SUBJECT TO THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.


<PAGE>
                                       9


     IN WITNESS whereof this Second Supplemental Trust Deed has been executed as
     a deed by the Issuer and the Trustee and delivered on the date first state
     on page 1.


EXECUTED AS A DEED by SCHRODER VENTURES      )
INTERNATIONAL INVESTMENT TRUST PLC acting    )
by a director and its secretary/two          )
directors:                                   )
                                             )
THE COMMON SEAL of THE LAW DEBENTURE TRUST   )
CORPORATION p.l.c. was affixed to this       )
deed in the presence of:                     )
                                             )
                                  Director:
                      Authorised Signatory:

<PAGE>



                               DATED 21 July, 2003





              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc



                                       and



                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.





                _________________________________________________

                         SECOND SUPPLEMENTAL TRUST DEED

                                  constituting
                                  GBP3,000,000
              4.5 per cent. Subordinated Convertible Bonds due 2013

              _____________________________________________________





                                 For the Issuer:

                                Slaughter and May
                                 One Bunhill Row
                                 London EC1Y 8YY



                                For the Trustee:

                                  Allen & Overy
                                 One New Change
                                 London EC4M 9QQ


<PAGE>

-----------
EXHIBIT 2.5
-----------


THIS THIRD SUPPLEMENTAL TRUST DEED is made on 8 August, 2003 BETWEEN:

(1)  SCHRODER   VENTURES   INTERNATIONAL   INVESTMENT   TRUST   plc,  a  company
     incorporated  under the laws of England and Wales,  whose registered office
     is at 31 Gresham Street, London EC2V 7QA (the "Issuer"); and

(2)  THE LAW DEBENTURE TRUST CORPORATION  p.l.c., a company  incorporated  under
     the laws of England and Wales,  whose registered  office is at Fifth Floor,
     100 Wood Street,  London EC2V 7EX (the "Trustee",  which expression  shall,
     wherever the context so admits,  include such company and all other persons
     or companies for the time being the trustee or trustees of these  presents)
     as trustee for the Holders and, where  applicable,  Couponholders  (each as
     defined in the Principal Trust Deed as defined below).

WHEREAS:

(1)  This Third  Supplemental Trust Deed is supplemental to the Trust Deed dated
     20th May, 2003 (hereinafter called the "Principal Trust Deed") made between
     the Issuer and the Trustee and constituting the GBP40,000,000 4.5 per cent.
     Subordinated  Convertible Bonds due 2013 of the Issuer  (hereinafter and in
     the  Principal  Trust  Deed  called  the  "Original   Bonds"),   the  First
     Supplemental Trust Deed dated 17th July, 2003 made between the same parties
     and  constituting  a  further  GBP3,000,000  4.5  per  cent.   Subordinated
     Convertible  Bonds  due 2013 of the  Issuer  (the  "First  Further  Bonds")
     (hereinafter  called the "First  Supplemental  Trust  Deed") and the Second
     Supplemental Trust Deed dated 21st July, 2003 made between the same parties
     and  constituting  a  further  GBP3,000,000  4.5  per  cent.   Subordinated
     Convertible  Bonds due 2013 of the  Issuer  (the  "Second  Further  Bonds")
     (hereinafter called the "Second Supplemental Trust Deed" and, together with
     the Principal Trust Deed and the First  Supplemental Trust Deed, the "Trust
     Deed"),   such  First  Further   Bonds  and  Second   Further  Bonds  being
     consolidated and forming a single series with the Original Bonds.

(2)  By virtue of Clause  2.5 of the  Principal  Trust  Deed,  the  Issuer is at
     liberty (subject as therein  provided)  without the consent of the Original
     Bondholders  to  create,  constitute  by a trust deed  supplemental  to the
     Principal  Trust Deed and issue  further  bonds  ranking  pari passu in all
     respects  and so that the  same  shall  be  consolidated  and form a single
     series with the  Original  Bonds,  the First  Further  Bonds and the Second
     Further Bonds.

(3)  By a resolution of a duly appointed  Committee of the Board of Directors of
     the Issuer dated 12th May,  2003 and a resolution of the Board of Directors
     of the Issuer  dated 6th  March,  2003 the  Issuer  has  resolved  to issue
     GBP3,000,000  4.5 per cent.  Subordinated  Convertible  Bonds due 2013 (the
     "New  Bonds") to be, and the Trustee has  consented to the New Bonds being,
     constituted in the manner hereinafter appearing and consolidated and form a
     single  series with the Original  Bonds,  the First  Further  Bonds and the
     Second Further Bonds.

NOW THIS THIRD  SUPPLEMENTAL  TRUST DEED  WITNESSES  AND IT IS HEREBY AGREED AND
DECLARED as follows:


<PAGE>
                                       2


1.   DEFINITIONS

1.1  Subject as  hereinafter  provided  and  unless  there is  something  in the
     subject matter or context inconsistent  therewith all words and expressions
     defined in the  Principal  Trust Deed shall have the same  meanings in this
     Third Supplemental Trust Deed.

1.2  In this Third  Supplemental  Trust Deed  unless  there is  anything  in the
     subject or context inconsistent  therewith the following  expressions shall
     have the following meanings:

     "New  Bondholders"  means the  several  persons  who are for the time being
     Holders of the New Bonds; and

     "New  Bonds"  means  the  bonds  in  registered  form  comprising  the said
     GBP3,000,000 4.5 per cent.  Subordinated  Convertible Bonds due 2013 of the
     Issuer  hereby  constituted  or the principal  amount  thereof for the time
     being outstanding.

2.   COVENANT TO REPAY AND TO PAY INTEREST ON NEW BONDS

2.1  The aggregate principal amount of the New Bonds is limited to GBP3,000,000.
     The New Bonds as and when issued shall be Further Securities and shall rank
     pari  passu  with and be  consolidated  and form a single  series  with the
     Original Bonds, the First Further Bonds and the Second Further Bonds.

2.2  The Issuer  covenants  with the Trustee that it will,  in  accordance  with
     these  presents,  on the due date for the final  maturity  of the New Bonds
     provided for in the Conditions,  or on such earlier date as the same or any
     part thereof may become due and repayable thereunder,  pay or procure to be
     paid  unconditionally  to or to the order of the  Trustee  in  sterling  in
     London in immediately available funds the principal amount of the New Bonds
     repayable on that date and shall in accordance  with these  presents in the
     meantime  and until such date (both  before and after any judgment or other
     order of a court  of  competent  jurisdiction)  pay or  procure  to be paid
     unconditionally  to or to the order of the  Trustee as  aforesaid  interest
     (which  shall  accrue from day to day) on the  principal  amount of the New
     Bonds at the rate and on the dates specified in the Conditions.

     PROVIDED THAT:

(a)  every  payment of principal or interest in respect of the New Bonds made to
     an  account  specified  by  the  New  Bondholder  in  accordance  with  the
     Conditions or by a sterling  cheque for the relevant amount sent to the New
     Bondholder in accordance with the Conditions  (provided that such cheque is
     honoured on first presentation) shall be deemed to be a satisfaction of the
     covenant contained in this Clause;

(b)  in any case where  payment of principal is not made to the New  Bondholders
     on or  before  the due  date,  interest  shall  continue  to  accrue on the
     principal  amount of each New Bond (both  before and after any  judgment or
     other order of a court of competent  jurisdiction) at the rate aforesaid up
     to and  including  the date which the Trustee  determines to be the date on
     and after  which  payment is to be made to the New  Bondholders  in respect
     thereof as stated in a notice given to the New  Bondholders  in  accordance
     with  Condition 18 (such date to be not later than 30 days after the day on
     which the whole of such principal  amount  together with an amount equal to
     the interest which has accrued and is to accrue pursuant to this proviso up
     to and including that date has been received by the Trustee,  the Registrar
     or the New Bondholders); and

<PAGE>
                                       3


(c)  in any case where payment of the whole or any part of the principal  amount
     of any New Bond is  improperly  withheld or refused  upon due  presentation
     thereof  (other than in  circumstances  contemplated  by proviso (b) above)
     interest shall accrue on that principal amount payment of which has been so
     withheld or refused (both before and after any judgment or other order of a
     court of competent  jurisdiction)  at the rate aforesaid from and including
     the date of such  withholding  or refusal up to and  including  the date on
     which  payment of the full  amount  (including  interest as  aforesaid)  in
     sterling payable in respect of such New Bond is made.

     The  Trustee  will hold the  benefit of this  covenant on trust for the New
     Bondholders and itself in accordance with these presents.



2.3  (i)  In the event of the winding up of the Issuer, all amounts in respect
          of the New Bonds paid to the Trustee by the liquidator of the Issuer
          in a winding up of the Issuer (including for the avoidance of doubt
          pursuant to Clause 8 of the Principal Trust Deed) shall be held by the
          Trustee upon trust:

          (a)   first for payment or satisfaction of all amounts then due and
                unpaid under Clause 15 and/or 16(x) of the Principal Trust Deed
                to the Trustee or any Appointee;

          (b)   secondly for payment of claims of all Senior Liabilities of the
                Issuer in the winding up of the Issuer to the extent that such
                claims are admitted to proof in the winding up (not having been
                satisfied out of the other resources of the Issuer) excluding
                interest accruing after commencement of the winding up; and

          (c)   thirdly as to the balance (if any) for payment pari passu and
                rateably of the amounts owing on or in respect of the New Bonds.

    (ii)  The trust secondly mentioned in Clause 2.3(i) may be performed by the
          Trustee paying over to the liquidator for the time being in the
          winding up of the Issuer the amounts received by the Trustee as
          aforesaid (less any amounts thereof applied in the implementation of
          the trust first mentioned in Clause 2.3(i)) on terms that such
          liquidator shall distribute the same accordingly and the receipt by
          such liquidator of the same shall be a good discharge to the Trustee
          for the performance by it of the trust secondly mentioned in
          Clause 2.3(i).

<PAGE>
                                       4


   (iii)  The Trustee shall be entitled and it is hereby authorised to call for
          and to accept as conclusive evidence thereof a certificate from the
          liquidator for the time being of the Issuer as to:

          (a)   the amount of the claims of the Senior Liabilities referred to
                in Clause 2.3(i); and

          (b)   the persons entitled thereto and their respective entitlements.

3.   FORM AND ISSUE OF NEW BONDS

3.1  The New Bonds shall be in definitive registered form, and shall comply with
     the provisions of Condition 1 and the Third Schedule to the Principal Trust
     Deed.

3.2  The  provisions of the  Conditions  and the Third Schedule to the Principal
     Trust Deed shall have effect in relation to the transfer of the New Bonds.

3.3  The  certificates in respect of the New Bonds shall be substantially in the
     form set out in the  Schedule  to this  Third  Supplemental  Trust Deed and
     shall be signed  manually or in  facsimile  by two of the  Directors or one
     Director and the Secretary of the Issuer on behalf of the Issuer.

3.4  The Issuer may use the  facsimile  signature  of any person who at the date
     such  signature  is affixed is a Director  or the  Secretary  of the Issuer
     notwithstanding  that, at the time of issue of any of the  certificates  in
     respect  of the New  Bonds,  he may have  ceased  for any  reason to be the
     holder of such office and certificates so issued shall be evidence of valid
     and binding obligations of the Issuer.

4.   PROVISION OF THE PRINCIPAL TRUST DEED

4.1  The New Bonds  shall be subject to the  Conditions  set forth in the Second
     Schedule to  Principal  Trust Deed as if the  references  to the Trust Deed
     therein had included references to this Third Supplemental Trust Deed.

4.2  Clause 4 of the  Principal  Trust Deed shall apply to the New Bonds and the
     New  Bondholders  as if  references  therein to the Original  Bonds and the
     Original  Bondholders  were  references  to  the  New  Bonds  and  the  New
     Bondholders respectively.

5.   TRUST DEED CONSTRUCTION

     The Trust Deed shall  henceforth be read and construed as one document with
     this Third Supplemental Trust Deed.

6.   GENERAL

     A memorandum of this Third Supplemental Trust Deed shall be endorsed by the
     Trustee or the  Principal  Trust  Deed and by the  Issuer on the  duplicate
     thereof.

<PAGE>
                                       5


7.   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

     The  parties to this Third  Supplemental  Trust Deed do not intend that any
     term of this  Second  Supplemental  Trust Deed  should be  enforceable,  by
     virtue of the Contracts  (Rights of Third  Parties) Act 1999, by any person
     who is not a party to this Third  Supplemental Trust Deed but this does not
     affect any right or remedy of any third party which  exists or is available
     apart from that Act.

8.   GOVERNING LAW

     This Third  Supplemental  Trust Deed is governed by, and shall be construed
     in accordance with English law.

<PAGE>
                                       6



                                  THE SCHEDULE
                          Form of New Bond Certificate

Certificate No.         Transfer No.          Date of            Amount of Bonds
                                              Registration       GBP


              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                                 (the "Company")

Incorporated with limited liability in England and Wales under the Companies Act
                         1985. Registered number 3066856

              4.5 PER CENT. SUBORDINATED CONVERTIBLE BONDS DUE 2013



     Power is reserved  to the  Company by the Trust Deed  referred to below and
subject  as  therein  provided  to create and issue  further  securities  either
ranking  pari  passu  in all  respects  and  forming  a single  series  with the
above-mentioned Bonds or carrying such rights as to ranking, interest,
premium, redemption conversion and otherwise as the Company may think fit.

     THIS IS TO CERTIFY that







is/are the registered holder(s) of                         pounds of the
above-mentioned 4.5 per cent. Subordinated  Convertible Bonds due 2013 which are
constituted  by Trust Deeds of which the  principal is dated 20th May, 2003 (the
"Principal  Trust  Deed") and made between the Company of the first part and The
Law Debenture Trust Corporation  p.l.c. (the "Trustee") as trustee of the second
part and such Bonds are issued with the benefit of and subject to the provisions
contained  in the said  Trust  Deeds and the  Conditions  set out in the  Second
Schedule to the Principal Trust Deed. The Bonds  represented by this Certificate
rank pari  passu in all  respects  with and are  consolidated  and form a single
series with the GBP40,000,000 4.5 per cent.  Subordinated  Convertible Bonds due
2013 of the Company  constituted by the Principal  Trust Deed, the  GBP3,000,000
4.5 per cent. Subordinated Convertible Bonds due 2013 of the Company constituted
by the First  Supplemental Trust Deed dated 17th July, 2003 and the GBP3,000,000
4.5  per  cent.  Bonds  due  2013  of the  Company  constituted  by  the  Second
Supplemental Trust Deed dated 21st July, 2003.

This Certificate is evidence of entitlement only. Title to the Bonds passes only
on due  registration  on the  Register  and only the duly  registered  holder is
entitled to payments in respect of this Bond.

<PAGE>
                                       7



Signed by


......................                            .....................
for and on behalf of                             for and on behalf of
Schroder Ventures International                  Schroder Ventures International
Investment Trust plc                             Investment Trust plc

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

NOTE:- This certificate must be surrendered to the Company's  Registrars for the
time being  before any  conversion  or  transfer of the whole or any part of the
Bonds comprised herein can be effected or registered or a new certificate issued
in exchange.  The Bonds are  transferable  in amounts and integral  multiples of
GBP100,000.

Registrar, Transfer Agent, Conversion Agent and Paying Agent:

                               JPMorgan Chase Bank
                          Institutional Trust Services
                            1 Chaseside, Ground Floor
                                   Bournemouth
                                     BH7 7DA

THIS  SUBORDINATED  CONVERTIBLE  BOND DUE  2013,  ANY  INTEREST  HEREIN  AND ANY
ORDINARY SHARES OF SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST PLC (THE
"ISSUER") ISSUABLE ON CONVERSION HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES  ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A UNDER THE  SECURITIES  ACT ("RULE 144A") IN A TRANSACTION  MEETING THE
REQUIREMENTS  OF RULE 144A, (2) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS
DEFINED IN RULE 501(A)(1),  (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES TO THE REGISTRAR A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO SUCH TRANSFER (THE
FORM OF WHICH  LETTER CAN BE OBTAINED  FROM THE  REGISTRAR),  (3) IN AN OFFSHORE
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 UNDER REGULATION S
UNDER THE  SECURITIES  ACT, OR (4)  PURSUANT TO AN EXEMPTION  FROM  REGISTRATION
UNDER THE  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION.

THE ISSUER HAS NOT BEEN,  AND WILL NOT BE,  REGISTERED AS AN INVESTMENT  COMPANY
UNDER THE INVESTMENT  COMPANY ACT OF 1940, AS AMENDED (THE  "INVESTMENT  COMPANY
ACT").  NO MORE  THAN 75 U.S.  PERSONS  AS  DETERMINED  IN  ACCORDANCE  WITH THE
INVESTMENT  COMPANY  ACT WHO HAVE  ACQUIRED  SECURITIES  OF THE ISSUER  FROM THE
ISSUER OR ITS AGENTS OR AFFILIATES  ("DIRECT  PURCHASERS")  OR ANY UNITED STATES
RESIDENT  TRANSFEREE OF ANY DIRECT PURCHASER  ("PRIVATE  OFFERING  HOLDERS") MAY
BENEFICIALLY OWN SECURITIES  (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES) OF THE
ISSUER. IF THE ISSUER'S  SECURITIES (OTHER THAN CERTAIN  SHORT-TERM  SECURITIES)
INCLUDING  ORDINARY  SHARES AND THESE BONDS  COULD BE DEEMED TO BE  BENEFICIALLY
OWNED BY MORE THAN 75 PRIVATE  OFFERING  HOLDERS (AND IN OTHER  CIRCUMSTANCES AS
SET FORTH IN THE ISSUER'S  ARTICLES OF  ASSOCIATION)  THE ISSUER MAY REQUIRE THE
TRANSFER OF ANY SECURITIES OF THE ISSUER OWNED BY SUCH PRIVATE  OFFERING HOLDERS
AS WILL BE  REQUIRED  TO REDUCE TO 75 OR BELOW THE  NUMBER OF  PRIVATE  OFFERING
HOLDERS BENEFICIALLY OWNING SECURITIES OF THE ISSUER,  INCLUDING ORDINARY SHARES
AND THESE BONDS.

<PAGE>
                                       8


CONVERSION OF THIS BOND IS SUBJECT TO SATISFACTION OF CERTAIN  REQUIREMENTS  SET
FORTH IN THE TRUST DEED  RELATED  HERETO AND ANY  ORDINARY  SHARES  ISSUED  UPON
CONVERSION MAY BE SUBJECT TO THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.


<PAGE>
                                       9




     IN WITNESS whereof this Third Supplemental Trust Deed has been executed as
     a deed by the Issuer and the Trustee and delivered on the date first state
     on page 1.



EXECUTED AS A DEED by SCHRODER VENTURES      )
INTERNATIONAL INVESTMENT TRUST PLC acting    )
by a director and its secretary/two          )
directors:                                   )
                                             )
THE COMMON SEAL of THE LAW DEBENTURE TRUST   )
CORPORATION p.l.c. was affixed to this       )
deed in the presence of:                     )
                                             )
                                  Director:
                      Authorised Signatory:


<PAGE>
                                       10





                              DATED 8 August, 2003





              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc



                                       and



                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.





                _________________________________________________

                          THIRD SUPPLEMENTAL TRUST DEED

                                  constituting
                                  GBP3,000,000
              4.5 per cent. Subordinated Convertible Bonds due 2013

              _____________________________________________________





                                 For the Issuer:

                               Slaughter and May,
                                One Bunhill Row,
                                London, EC1Y 8YY
                                  Ref: DTF/CMZN


                                For the Trustee:

                                  Allen & Overy
                                 One New Change
                                 London EC4M 9QQ


<PAGE>


------------
EXHIBIT 4.12
------------

CLIFFORD                                           LIMITED LIABILITY PARTNERSHIP
CHANCE


                                                                  CONFORMED COPY


                               DATED 16 JUNE 2003


              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                                       AND
                  BARINGS (GUERNSEY) LIMITED as trustee of the
                                 PLATINUM TRUST

                                      WITH

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                                       AND
                         THE ROYAL BANK OF SCOTLAND PLC
                         ACTING AS JOINT LEAD ARRANGERS

                         THE ROYAL BANK OF SCOTLAND PLC
                                ACTING AS TRUSTEE

                         THE ROYAL BANK OF SCOTLAND PLC
                                 ACTING AS AGENT

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                                       AND
                         THE ROYAL BANK OF SCOTLAND PLC
                               AS ORIGINAL LENDERS


   ---------------------------------------------------------------------------
                               AMENDMENT AGREEMENT
                          RELATING TO A EUR225,000,000
                               FACILITY AGREEMENT
                               DATED 16 MARCH 2001
   ---------------------------------------------------------------------------




THIS AGREEMENT is dated 16 June 2003 and made between:

(1)  SCHRODER VENTURES  INTERNATIONAL  INVESTMENT TRUST PLC (registered  number)
     3066856 and BARINGS  (GUERNSEY)  LIMITED as trustee of the  PLATINUM  TRUST
     (together, the "Obligors");

(2)  THE  GOVERNOR  AND  COMPANY OF THE BANK OF  SCOTLAND  and THE ROYAL BANK OF
     SCOTLAND PLC (the "Joint Lead Arrangers");

(3)  THE ROYAL BANK OF SCOTLAND PLC as agent of the Lenders (the "Agent");

(4)  THE ROYAL BANK OF SCOTLAND PLC as security trustee for and on behalf of the
     Agent and the Lenders (the "Trustee"); and

(5)  THE  GOVERNOR  AND  COMPANY OF THE BANK OF  SCOTLAND  and THE ROYAL BANK OF
     SCOTLAND PLC as original lenders (the "Original Lenders").

IT IS AGREED as follows:

1.   DEFINITIONS AND INTERPRETATION

1.1  Definitions
     In this Agreement:

     "Effective Date" means the date on which the Agent confirms to the Original
     Lenders and each Obligor that it has received each of the documents  listed
     in Schedule 1 (Conditions  Precedent) in a form and substance  satisfactory
     to the Agent (acting reasonably).

     "Restated  Agreement" means the Original Facility Agreement,  as amended by
     this  Agreement,  the terms of which are set out in  Schedule  2  (Restated
     Agreement).

     "Original  Facility  Agreement"  means  the  EUR225,000,000   multicurrency
     revolving facility agreement dated 16 March 2001 between the Obligors,  the
     Agent, The Royal Bank of Scotland plc as arranger and others.

1.2  Incorporation of Defined Terms
     (a)  Unless a contrary indication appears, a term used in any other Finance
          Document  or in any  notice  given  under  or in  connection  with any
          Finance  Document  has the same  meaning in that  Finance  Document or
          notice as in this Agreement.

     (b)  The  principles  of  construction  set  out in the  Original  Facility
          Agreement shall have effect as if set out in this Agreement.

1.3  Clauses
     (a)  In this Agreement any reference to a "Clause" or "Schedule" is, unless
          the context otherwise requires, a reference to a Clause or Schedule of
          this Agreement.

     (b)  Clause and Schedule headings are for ease of reference only.



                                     - 1 -
<PAGE>

2.   RESTATEMENT

     With effect from the Effective Date the Original  Facility  Agreement shall
     be amended  and  restated  so that it shall be read and  construed  for all
     purposes  as set out in  Schedule  2  (Restated  Agreement)  and the  Total
     Commitments shall be increased from EUR225,000,000 to EUR285,000,000.

3.   REPRESENTATIONS

     The Obligors make the  representations set out in Clause 19 of the Original
     Facility  Agreement  on the  Effective  Date as if each  reference in those
     representations to "this Agreement" or "the Finance  Documents"  includes a
     reference to (a) this Agreement and (b) the Restated Agreement.

4.   CONTINUITY AND FURTHER ASSURANCE

4.1  Continuing obligations
     The  provisions  of the Finance  Documents  shall,  save as amended in this
     Agreement, continue in full force and effect.

4.2  Further assurance
     Each of the  Obligors  shall,  at the  request  of the Agent and at its own
     expense,  do all such acts and things necessary or desirable to give effect
     to the amendments effected or to be effected pursuant to this Agreement.

5.   FEES, COSTS AND EXPENSES

5.1  Participation Fee
     SVIIT  shall pay a  participation  fee to each Joint Lead  Arranger  in the
     amount and at the times agreed in the  applicable  Fee Letter between SVIIT
     and such Joint Lead Arranger.

5.2  Transaction expenses
     SVIIT shall promptly on demand pay the Joint Lead Arrangers,  the Agent and
     the Trustee  the amount of all costs and  expenses  (including  legal fees)
     reasonably  incurred  by any of them in  connection  with the  negotiation,
     preparation,  printing  and  execution  of this  Agreement  and  any  other
     documents referred to in this Agreement.

5.3  Enforcement costs
     SVIIT shall,  within  three  Business  Days of demand,  pay to each Finance
     Party the amount of all costs and expenses  (including legal fees) incurred
     by that  Finance  Party in  connection  with  the  enforcement  of,  or the
     preservation of any rights under this Agreement.

5.4  Stamp taxes
     SVIIT shall pay and,  within three Business Days of demand,  indemnify each
     Finance Party against any cost, loss or liability that Finance Party incurs
     in relation to all stamp duty, registration and other similar Taxes payable
     in  respect of this  Agreement  but not,  for the  avoidance  of doubt,  in
     respect of any transfer of a Finance Party's rights under this Agreement.



                                     - 2 -
<PAGE>

6.   MISCELLANEOUS

6.1  Incorporation of terms
     The  provisions  of clause 34 (Remedies  and  waivers),  clause 33 (Partial
     Invalidity),  clause 38 (Governing Law) and clause 39  (Enforcement) of the
     Original Facility Agreement shall be incorporated into this Agreement as if
     set out in full in this  Agreement and as if references in those clauses to
     "this  Agreement"  or  "the  Finance  Documents"  are  references  to  this
     Agreement.

6.2  Counterparts
     This Agreement may be executed in any number of counterparts,  and this has
     the same effect as if the signatures on the  counterparts  were on a single
     copy of this Agreement.


THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.



                                     - 3 -

<PAGE>

                                   SCHEDULE 1
                              Conditions Precedent

1.   Obligors

     (a) A copy of the constitutional documents of each Obligor.

     (b) A copy of a resolution of the board of directors  (and, if relevant,  a
         committee of its board of directors) of SVIIT:

          (i)  approving  the terms of, and the  transactions  contemplated  by,
               this Agreement and resolving that it execute this Agreement;

          (ii) authorising  a  specified  person  or  persons  to  execute  this
               Agreement on its behalf; and

          (iii)authorising  a  specified  person or persons,  on its behalf,  to
               sign  and/or  despatch  all  documents  and  notices to be signed
               and/or  despatched  by  it  under  or  in  connection  with  this
               Agreement.

     (c) A copy of a resolution  of the board of  directors of Schroder  Venture
         Managers (Guernsey) Limited:

          (i)  approving  the terms of, and the  transactions  contemplated  by,
               this  Agreement  and resolving  that Platinum  Trust execute this
               Agreement;

          (ii) authorising  a  specified  person  or  persons  to  execute  this
               Agreement on behalf of Platinum Trust; and

          (iii)authorising  a  specified  person  or  persons  on  behalf of the
               Platinum Trust to sign and/or  dispatch all documents and notices
               to be signed and/or  dispatched by the Platinum Trust under or in
               connection with this Agreement.

     (d) A specimen of the signature of each person authorised by the resolution
         referred to in paragraph (b)(ii) and (c)(ii) above.

     (e) A certificate of an authorised  signatory of the relevant  Obligor
         certifying  that each copy  document  relating to it specified in this
         Schedule 1 is correct,  complete  and in full force and effect as at a
         date no earlier than the date of this Agreement.

     (f) A certificate  of each Obligor  (signed by a director of SVIIT or,
         as the  case  may be,  Barings  (Guernsey)  Limited)  confirming  that
         borrowing or guaranteeing, as appropriate, the Total Commitments would
         not cause any borrowing, guaranteeing or similar limit binding on such
         Obligor to be exceeded.

2.   Legal Opinions

     (a)  A legal opinion of Clifford  Chance LLP,  legal  advisers to the Joint
          Lead  Arrangers  and the Agent in England,  substantially  in the form
          distributed to the Lenders prior to signing this Agreement.



                                     - 4 -
<PAGE>


     (b)  A legal  opinion of Carey  Olsen,  in relation to the laws of Guernsey
          substantially  in the form distributed to the Lenders prior to signing
          this Agreement.

3.   Other documents and evidence

     (a)  A copy of any  other  Authorisation  or  other  document,  opinion  or
          assurance  which the Joint Lead Arrangers  consider to be necessary or
          desirable  (if  they  have  notified  the  Borrowers  accordingly)  in
          connection  with the entry  into and  performance  of the  transaction
          contemplated by this Agreement or for the validity and  enforceability
          of this Agreement.

     (b)  A signed  and  dated  transfer  certificate  (in  form  and  substance
          satisfactory  to the Agent and with the date of transfer  details left
          blank)  between Mizuho  Corporate  Bank,  Limited as  transferor,  The
          Governor  and Company of the Bank of Scotland  as  transferee  and The
          Royal Bank of Scotland plc as Agent,  transferring  the  EUR50,000,000
          Commitment  of Mizuho  Corporate  Bank,  Limited to The  Governor  and
          Company of the Bank of Scotland.

     (c)  Evidence  that the  fees,  costs  and  expenses  then  due from  SVIIT
          pursuant to Clause 5 (Fees, Costs and Expenses) of this Agreement have
          been paid.

     (d)  A copy of the listing  particulars  in respect of SVIIT's  issuance of
          GBP40,000,000  4.5% Subordinated  Convertible Bonds due 2013 (together
          with such  other  documentation  related  thereto  as the  Joint  Lead
          Arrangers' may reasonably request).



                                     - 5 -
<PAGE>


                                   SCHEDULE 2
                               Restated Agreement


                                 EUR285,000,000

                               FACILITY AGREEMENT

           dated 16 March 2001 as amended and restated on 16 June 2003

                                       for

              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                                       and
                           BARINGS (GUERNSEY) LIMITED
                                as trustee of the

                                 PLATINUM TRUST

                                   arranged by

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                                       and
                         THE ROYAL BANK OF SCOTLAND PLC

                                      with

                         THE ROYAL BANK OF SCOTLAND PLC
                        also acting as Agent and Trustee


   ---------------------------------------------------------------------------
                   MULTICURRENCY REVOLVING FACILITY AGREEMENT
   ---------------------------------------------------------------------------



                                     - 6 -
<PAGE>


                                    CONTENTS
<TABLE>
<CAPTION>

CLAUSE                                                                      PAGE
<S>                                        <C>                               <C>
1.     Definitions And Interpretation..........................................9
2.     The Facility...........................................................20
3.     Purpose................................................................20
4.     Conditions Of Utilisation..............................................20
5.     Utilisation............................................................22
6.     Optional Currencies....................................................23
7.     Repayment..............................................................24
8.     Prepayment And Cancellation............................................24
9.     Interest...............................................................27
10.    Interest Periods.......................................................27
11.    Changes To The Calculation Of Interest.................................28
12.    Fees...................................................................29
13.    Tax Gross Up And Indemnities...........................................31
14.    Increased Costs........................................................33
15.    Other Indemnities......................................................34
16.    Mitigation By The Lenders..............................................36
17.    Costs And Expenses.....................................................36
18.    Guarantee And Indemnity................................................38
19.    Representations........................................................41
20.    Information Undertakings...............................................43
21.    Financial Covenants....................................................46
22.    General Undertakings...................................................48
23.    Events Of Default......................................................52
24.    Changes To The Lenders.................................................55
25.    Changes To The Obligors................................................57
26.    Role Of The Agent, The Joint Lead Arrangers And Trustee................58
27.    Conduct Of Business By The Finance Parties.............................66
28.    Sharing Among The Lenders..............................................67
29.    Payment Mechanics......................................................69
30.    Set-Off................................................................72
31.    Notices................................................................72
32.    Calculations And Certificates..........................................74



                                     - 7 -
<PAGE>

33.    Partial Invalidity.....................................................74
34.    Remedies And Waivers...................................................74
35.    Amendments And Waivers.................................................75
36.    Counterparts...........................................................76
37.    Trustee................................................................76
38.    Governing Law..........................................................77
39.    Enforcement............................................................77

Schedule 1 THE ORIGINAL LENDERS...............................................78

Schedule 2 CONDITIONS PRECEDENT...............................................79

Schedule 3 REQUESTS...........................................................81

Schedule 4 MANDATORY COST FORMULA.............................................82

Schedule 5 FORM OF TRANSFER CERTIFICATES......................................85

Schedule 6 FORM OF COMPLIANCE CERTIFICATE.....................................91

Schedule 7 LMA FORM OF CONFIDENTIALITY UNDERTAKING............................93

Schedule 8 TIMETABLES.........................................................97

</TABLE>


                                     - 8 -
<PAGE>


THIS AGREEMENT is dated 16 March 2001, has been amended and restated on 16 June
2003 and made between:

(1)  SCHRODER  VENTURES  INTERNATIONAL  INVESTMENT  TRUST  PLC  (registered
     number 3066856) ("SVIIT");

(2)  BARINGS  (GUERNSEY)  LIMITED  as trustee  of the  PLATINUM  TRUST (the
     "Platinum Trust");

(3)  THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND and THE ROYAL BANK OF
     SCOTLAND PLC (each a "Joint Lead  Arranger" and  together,  the "Joint
     Lead Arrangers");

(4)  THE ROYAL BANK OF SCOTLAND PLC in its capacity as agent of the Lenders
     (the "Agent");

(5)  THE ROYAL BANK OF SCOTLAND PLC in its capacity as security trustee for
     and on behalf of the Agent and the Lenders (the "Trustee"); and

(6)  THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND and THE ROYAL BANK OF
     SCOTLAND PLC (together, the "Original Lenders").

IT IS AGREED as follows:

                                    SECTION 1
                                 INTERPRETATION

1.   DEFINITIONS AND INTERPRETATION

1.1  Definitions
     In this Agreement:

     "Affiliate"  means, in relation to any person,  a Subsidiary of that person
     or a Holding Company of that person or any other Subsidiary of that Holding
     Company.

     "Agent's Spot Rate of Exchange" means the Agent's spot rate of exchange for
     the purchase of the relevant  currency with the Base Currency in the London
     foreign exchange market at or about 11:00 a.m. on a particular day.

     "Amendment  Agreement"  means  the  amendment  agreement  relating  to  the
     Original Facility Agreement, dated 16 June 2003 and made between SVIIT, the
     Platinum Trust,  the Joint Lead Arrangers,  the Agent,  the Trustee and the
     Original Lenders.

     "Authorisation"  means an  authorisation,  consent,  approval,  resolution,
     licence, exemption, filing or registration.

     "Availability  Period" means the period from and including the date of this
     Agreement  to and  including  the  date  falling  one  month  prior  to the
     Termination Date.

     "Available Commitment" means a Lender's Commitment minus:

     (a) the Base Currency Amount of its participation in any outstanding Loans;
         and


                                     - 9 -
<PAGE>

     (b) in relation to any proposed Utilisation,  the Base Currency Amount
         of its participation in any Loans that are due to be made on or before
         the proposed Utilisation Date,

     other  than that  Lender's  participation  in any Loans  that are due to be
     repaid or prepaid on or before the proposed Utilisation Date.

     "Available  Facility"  means  the  aggregate  for the  time  being  of each
     Lender's Available Commitment.

     "Base Currency" means euros.

     "Base Currency  Amount" means, in relation to a Loan, the amount  specified
     in the Utilisation  Request delivered by the Borrower for that Loan (or, if
     the amount  requested is not denominated in the Base Currency,  that amount
     converted  into the Base  Currency at the Agent's  Spot Rate of Exchange on
     the date which is three  Business Days before the  Utilisation  Date or, if
     later, on the date the Agent receives the Utilisation  Request) adjusted to
     reflect any repayment or prepayment of the Loan.

     "Borrower"  means  SVIIT or,  as the case may be,  the  Platinum  Trust and
     "Borrowers" means both of them.

     "Break Costs" means the amount (if any) by which:

     (a) the interest  which a Lender  should have  received for the period from
         the date of  receipt of all or any part of its  participation  in a
         Loan or Unpaid  Sum to the last day of the  current  Interest  Period
         in respect of that Loan or Unpaid Sum,  had the  principal  amount or
         Unpaid Sum received been paid on the last day of that Interest Period;

     exceeds:

     (b) the  amount  which  that  Lender  would be able to obtain by placing an
         amount  equal to the  principal  amount or  Unpaid  Sum  received  by
         it on deposit with a leading bank in the Relevant  Interbank  Market
         for a period starting on the  Business Day  following  receipt or
         recovery and ending on the last day of the current Interest Period.

     "Business Day" means a day (other than a Saturday or Sunday) on which banks
     are open for general business in London and:

     (a) (in  relation to any date for  payment or purchase of a currency  other
         than euro) the principal financial centre of the country of that
         currency; or

     (b) (in relation to any date for payment or purchase of euro) any TARGET
         Day.

     "Charged Property" means the property charged pursuant to the Debentures.

     "Commitment" means:

     (a) in relation to an Original Lender,  the amount in the Base Currency set
         opposite  its name under the heading  "Commitment"  in Schedule 1 (The
         Original Lender)  and the  amount of any other  Commitment  transferred
         to it under this Agreement; and



                                     - 10 -
<PAGE>


     (b)  in relation to any other  Lender,  the amount in the Base  Currency of
          any Commitment transferred to it under this Agreement

     to the  extent  not  cancelled,  reduced  or  transferred  by it under this
     Agreement.

     "Compliance Certificate" means a certificate  substantially in the form set
     out in Schedule6 (Form of Compliance Certificate).

     "Confidentiality   Undertaking"   means   a   confidentiality   undertaking
     substantially  in a  recommended  form of the LMA as set out in  Schedule 7
     (LMA  Form of  Confidentiality  Undertaking)  or in any other  form  agreed
     between SVIIT and the Agent.

     "Debentures" means the SVIIT Debenture and the Platinum Trust Debenture.

     "Default" means an Event of Default or any event or circumstance  specified
     in Clause 23 (Events of  Default)  which  would (with the expiry of a grace
     period,  the giving of notice,  the making of any  determination  under the
     Finance  Documents or any  combination of any of the foregoing) be an Event
     of Default.

     "Delegate" means any delegate,  agent,  attorney or co-trustee appointed by
     the Trustee.

     "Effective Date" has the meaning given to it in the Amendment Agreement.

     "EURIBOR" means, in relation to any Loan in euro:

     (a)  the applicable Screen Rate; or

     (b)  (if no Screen  Rate is  available  for the  period  of that  Loan) the
          arithmetic mean of the rates (rounded  upwards to four decimal places)
          as supplied to the Agent at its request quoted by the Reference  Banks
          to leading banks in the European interbank market,

     as of the Specified  Time on the Quotation Day for the offering of deposits
     in euro for a period  comparable  to the  Interest  Period of the  relevant
     Loan.

     "Event of Default"  means any event or  circumstance  specified  as such in
     Clause 23 (Events of Default).

     "Facility"  means the revolving  loan facility  made  available  under this
     Agreement as described in Clause 2 (The Facility).

     "Facility  Office" means the office or offices  notified by a Lender to the
     Agent in writing on or before the date it becomes a Lender  (or,  following
     that date,  by not less than five  Business  Days'  written  notice) as the
     office or offices through which it will perform its obligations  under this
     Agreement.

     "Fee Letter"  means any letter or letters  between any Joint Lead  Arranger
     and SVIIT (or the Agent or the  Trustee  and SVIIT)  setting out any of the
     fees referred to in Clause 12 (Fees).



                                     - 11 -
<PAGE>

     "Finance  Document"  means  this  Agreement,  any  Fee  Letter,  the  SVIIT
     Debenture,  the Platinum Trust Debenture and any other document  designated
     as such by the Agent and SVIIT.

     "Finance  Party" means the Agent,  the Trustee,  a Joint Lead Arranger or a
     Lender.

     "Financial Indebtedness" means any indebtedness for or in respect of:

     (a)  moneys borrowed;

     (b)  any amount raised by acceptance under any acceptance credit facility;

     (c)  any amount raised pursuant to any note purchase  facility or the issue
          of bonds, notes, debentures, loan stock or any similar instrument;

     (d)  the amount of any  liability in respect of any lease or hire  purchase
          contract which would, in accordance with GAAP, be treated as a finance
          or capital lease;

     (e)  receivables  sold or  discounted  (other than any  receivables  to the
          extent they are sold on a non-recourse basis);

     (f)  any amount raised under any other  transaction  having the  commercial
          effect of a borrowing  and entered into with the  objective of raising
          finance;

     (g)  any derivative  transaction entered into in connection with protection
          against or benefit from  fluctuation  in any rate or price (and,  when
          calculating the value of any derivative  transaction,  only the marked
          to market value shall be taken into account);

     (h)  any counter-indemnity obligation in respect of a guarantee, indemnity,
          bond,  standby or documentary letter of credit or any other instrument
          issued by a bank or financial institution;

     (i)  any amount raised by the issue of redeemable shares to the extent that
          the redemption  date falls or is capable of falling on or prior to the
          Termination Date;

     (j)  any  amount of any  liability  under an advance  or  deferred  sale or
          purchase  agreement if the primary  reason  behind the entry into this
          agreement is to raise finance;

     (k)  (without  double  counting)  the amount of any liability in respect of
          any  guarantee  or  indemnity  for  any of the  items  referred  to in
          paragraphs (a) to (j) above.

     "GAAP" means generally accepted accounting principles in the United
     Kingdom.

     "Group"  means  SVIIT and its  Subsidiary  Undertakings  for the time being
     (but, for the avoidance of doubt, shall not include any Investee Company).

     "Guarantor" means SVIIT or, as the case may be, the Platinum Trust and
     "Guarantors" means both of them.



                                     - 12 -
<PAGE>

     "Holding Company" means, in relation to a company or corporation, any other
     company or corporation in respect of which it is a Subsidiary.

     "Indebtedness  for Borrowed Money" means Financial  Indebtedness  save
     for any  indebtedness  for or in respect of  paragraphs  (g) and (h) of the
     definition of "Financial Indebtedness".

     "Interest Period" means, in relation to a Loan,  each period  determined in
     accordance  with  Clause10  (Interest  Periods)and  in  relation to an
     Unpaid Sum,  each  period  determined  in  accordance  with  Clause 9.3
     (Default interest).

     "Investee  Company"  means a  company,  trust,  partnership,  fund or other
     entity  in which an  Obligor  (or  fund in  which  an  Obligor  has an
     interest) participates as a shareholder or holder of debt.

     "Investment Adviser" means Schroder Ventures (London) Limited.

     "Investment Policy" means the investment policy referred to in the Listing
     Particulars.

     "Lender" means:

     (a)  any Original Lender; and

     (b)  any  bank or  financial  institution  which  has  become  a  Party  in
          accordance with Clause 24 (Changes to the Lenders),

     which in each case has not ceased to be a Party in accordance with the
     terms of this Agreement.

     "LIBOR" means, in relation to any Loan other than a Loan denominated in
     euro:

     (a)  the applicable Screen Rate; or

     (b)  (if no Screen Rate is available for the currency or Interest Period of
          that Loan) the arithmetic  mean of the rates (rounded  upwards to four
          decimal  places) as supplied to the Agent at its request quoted by the
          Reference Banks to leading banks in the London interbank market,

     as of the  Specified  Time on the  Quotation  Day for the  offering of
     deposits in the  currency of that Loan and for a period  comparable  to the
     Interest Period for that Loan.

     "Listing  Particulars" means the listing  particulars  published under
     Part VI of the  Financial  Services  and Markets Act 2000 by SVIIT dated 13
     May 2003.

     "Loan" means a loan made or to be made under the Facility or the  principal
     amount  outstanding for the time being of that loan.

     "LMA" means the Loan Market Association.

     "Majority Lenders" means:

     (a)  until the Total  Commitments  have been  reduced to zero,  a Lender or
          Lenders  whose  Commitments  aggregate  more  than  50% of  the  Total
          Commitments  (or, if the Total  Commitments  have been reduced to zero
          and there are no Loans then  outstanding,  aggregated more than 50% of
          the Total Commitments immediately prior to the reduction); or



                                     - 13 -
<PAGE>

     (b)  at any other time,  a Lender or Lenders  whose  participations  in the
          Loans then  outstanding  aggregate more than 50% of all the Loans then
          outstanding.

     "Mandatory  Cost" means the  percentage  rate per annum  calculated  by the
     Agent in accordance with Schedule 4 (Mandatory Cost formulae).

     "Margin" means one point five zero per cent. (1.50%) per annum.

     "Material Adverse Effect" means a material adverse effect on:

     (a)  the business, operations, property, condition (financial or otherwise)
          or prospects of the Obligors taken together;

     (b)  the ability of an Obligor to perform its obligations under the Finance
          Documents; or

     (c)  the  validity  or  enforceability  of any  material  provision  of the
          Finance Documents or the rights or remedies of any Finance Party under
          the Finance Documents.

     "Month"  means a period  starting on one day in a calendar  month and
     ending on the  numerically corresponding day in the next calendar month,
     except that:

     (a)  (subject to paragraph (c) below) if the numerically  corresponding day
          is not a Business  Day, that period shall end on the next Business Day
          in that calendar month in which that period is to end if there is one,
          or if there is not, on the immediately preceding Business Day;

     (b)  if there is no numerically  corresponding day in the calendar month in
          which  that  period  is to end,  that  period  shall  end on the  last
          Business Day in that calendar month; and

     (c)  if an Interest  Period  begins on the last  Business Day of a calendar
          month,  that Interest Period shall end on the last Business Day in the
          calendar month in which that Interest Period is to end.

     The above rules will only apply to the last Month of any period.

     "Obligor" means a Borrower or a Guarantor.

     "Optional  Currency"  means a currency (other than the Base Currency) which
     complies  with the  conditions  set out in Clause 4.3  (Conditions
     relating  to Optional Currencies).

     "Original  Facility  Agreement"  means  the  EUR225,000,000   multicurrency
     revolving  facility  agreement  dated 16 March 2001  between the  Obligors,
     the Agent, The Royal Bank of Scotland plc as arranger and others.



                                     - 14 -

<PAGE>


     "Original Financial Statements" means:

      (a)      in  relation to SVIIT,  the  audited  consolidated  financial
               statements  of the Group for the financial half year ended
               31 December 2002; and

      (b)      in relation to the Platinum  Trust,  its audited  financial
               statements  for its financial half year ended 31 December 2002.

     "P123" means P123 Limited the closed-end investment company incorporated
     (or, as the case may be, to be incorporated) in Guernsey, in which SVIIT
     has (or, as the case may be, will have) an approximate 40% holding.

     "Participating Member State" means any member state of the European
     Communities that adopts or has adopted the euro as its lawful  currency in
     accordance  with  legislation  of the  European Union relating to European
     Monetary Union.

     "Party" means a party to this Agreement and includes its successors in
     title,  permitted assigns and permitted transferees.

     "Permira"  means the  international  network  of  entities  providing
     management,  advisory  or consultancy  services  to private  equity and
     other funds  under the  overall  business  name of Permira.

     "Permira  Europe I" means the  collection  of 11  Delaware  law  limited
     partnerships  that are advised by Permira which invest in entities using
     the name "Permira Europe I".

     "Permira Europe II" means the two Guernsey law limited  partnerships and
     the two Dutch law C.V.s that are advised by Permira which invest in
     entities using the name "Permira Europe II".

     "Permira Funds" means funds to which Permira acts as manager, advisor or
     consultant.

     "Permitted  Disposal"  means the  transfer or disposal  by SVIIT or an
     Affiliate  of SVIIT of a portion of its limited  partnership  interests in
     Permira Europe I and Permira Europe II to P123 undertaken  substantially
     in accordance with the details contained in version 17 of the draft of
     the  confidential  information  memorandum  relating to P123 dated
     3 June 2003  provided to the Lenders on 3June2003.

     "Platinum  Trust  Debenture"  means the  debenture  dated 16 March 2001
     granted by the Platinum Trust in favour of the Trustee.

     "Qualifying Lender" has the meaning given to it in Clause 13 (Tax gross-up
     and indemnities).

     "Quarter Dates" mean 31 March, 30 June, 30 September and 31 December in
     each year.

     "Quotation Day" means, in relation to any period for which an interest
     rate is to be determined:

      (a)  (if the currency is sterling) the first day of that period;

                                     - 15 -
<PAGE>

      (b)  (if the currency is euro) two TARGET Days before the first day of
           that period; or

      (c)  (for any other currency) two Business Days before the first day of #
           that period,

     unless  market  practice  differs in the  Relevant  Interbank  Market for a
     currency,  in which case the  Quotation Day for that currency will be
     determined by the Agent in accordance with market practice in the Relevant
     Interbank Market (and if  quotations  would  normally be given by leading
     banks in the  Relevant Interbank  Market on more than one day,  the
     Quotation  Day will be the last of those days).

     "Receiver"  means any  receiver or receiver  and manager or  administrative
     receiver of the whole or any of the Charged Property.

     "Reference  Banks"  means The Governor and Company of the Bank of Scotland,
     The Royal Bank of Scotland  plc and such other banks as may be  appointed
     by the Agent in consultation with the Borrower.

     "Relevant  Borrower"  means in  relation  to the  guarantee  of SVIIT,  the
     Platinum Trust and, in relation to the guarantee of the Platinum Trust,
     SVIIT.

     "Relevant  Interbank  Market"  means  in  relation  to euro,  the  European
     interbank  market and, in relation to any other currency,  the London
     interbank market.

     "Repeating  Representations"  means each of the  representations set out in
     Clauses 19.1 (Status) to 19.6 (Governing law and  enforcement),  Clause
     19.9 (No default),  Clause 19.10 (No  misleading  information),  Clause
     19.12 (Pari passu ranking) and Clause 19.13 (No proceedings pending or
     threatened).

     "Rollover Loan" means one or more Loans:

      (a)      made or to be made on the same day that a maturing Loan is due
               to be repaid;

      (b)      the aggregate amount of which is equal to or less than the
               maturing Loan;

      (c)      in the same  currency as the  maturing  Loan  (unless it arose
               as a result of the  operation of Clause 6.2 (Unavailability of a
               Currency)); and

      (d)      made or to be made to the same Borrower for the purpose of
               refinancing a maturing Loan.

     "Schroder  Venture  Funds" means funds to which  Schroder  Ventures acts as
     manager, advisor or consultant.

     "Schroder  Ventures"  means  the  international   association  of  entities
     providing   management,   advisory  or  consultancy   services  to  buy-out
     and development capital funds under the overall business name of Schroder
     Ventures.

     "Screen Rate" means:

      (a)      in relation  to LIBOR,  the  British  Bankers'  Association
               Interest  Settlement  Rate for the relevant currency and period;
               and

                                     - 16 -

<PAGE>

      (b)      in relation to EURIBOR,  the percentage rate per annum
               determined by the Banking  Federation of the European Union for
               the relevant period,

     displayed on the  appropriate  page of the Telerate  screen.  If the agreed
     page is  replaced  or  service  ceases to be  available,  the Agent may
     specify another page or service  displaying the appropriate rate after
     consultation with SVIIT and the Lenders.

     "Secured  Obligations"  means all  obligations  at any time  due,  owing or
     incurred  by any  Obligor to any  Finance  Party  under the  Finance
     Documents, whether present or future,  actual or contingent (and whether
     incurred solely or jointly and whether as principal or surety or in some
     other capacity).

     "Security"  means  a  mortgage,  charge,  pledge,  lien or  other  security
     interest  securing  any  obligation  of any  person  or any other
     agreement  or arrangement having a similar effect.

     "Specified  Time" means a time  determined  in  accordance  with Schedule 8
     (Timetables).

     "Subsidiary" and "Subsidiary  Undertaking" shall have the meanings ascribed
     to them by section 736 and section 258  respectively  of the  Companies
     Act 1985 and,  for  the  purposes  of  this  Agreement   "Subsidiary"
     and   "Subsidiary Undertaking" shall include the Platinum Trust.

     "SVIIT  Debenture" means the debenture dated 16 March 2001 granted by SVIIT
     in favour of the Trustee.

     "TARGET" means Trans-European  Automated Real-time Gross Settlement Express
     Transfer payment system.

     "TARGET  Day" means any day on which TARGET is open for the  settlement  of
     payments in euro.

     "Tax" means any tax, levy, impost, duty or other charge or withholding of a
     similar nature (including any penalty or interest payable in connection
     with any failure to pay or any delay in paying any of the same).

     "Taxes Act" means the Income and Corporation Taxes Act 1988.

     "Termination Date" means the day falling on the 5th year anniversary of the
     date of this  Agreement  (or, if that day is not a Business  Day, the
     preceding Business Day).

     "Total   Commitments"   means  the  aggregate  of  the  Commitments   being
     EUR285,000,000.00 at 16 June 2003.

     "Transfer  Certificate"  means a  certificate  substantially  in one of the
     forms set out in  Schedule5  (Form of Transfer  Certificates)  or any
     other form agreed between the Agent and the Borrower.

     "Transfer Date" means, in relation to a transfer, the later of:

      (a)      the proposed Transfer Date specified in the Transfer  Certificate
               provided it is not less than five  Business  Days  after  the
               date  on  which  the  Agent  receives  the  Transfer Certificate
               (or such other date as the Agent may agree); and

                                     - 17 -
<PAGE>

      (b)      the date on which the Agent executes the Transfer Certificate.

     "Trust Assets" means all the cash, assets and property held or deemed to be
     held by Barings  (Guernsey)  Limited on the trusts  contained  in the
     Trust Deed dated 29 March 1996  constituting  the Platinum  Trust and made
     between  Barings (Guernsey) Limited and Schroder Venture Managers
     (Guernsey) Limited.

     "Unpaid  Sum" means any sum due and payable but unpaid by an Obligor  under
     the Finance Documents.

     "Utilisation" means a utilisation of the Facility.

     "Utilisation Date" means the date of a Utilisation, being the date on which
     the relevant Loan is to be made.

     "Utilisation  Request" means a notice  substantially in the form set out in
     Schedule 3 (Requests).

     "VAT" means value added tax as provided for in the Value Added Tax Act 1994
     and any other tax of a similar nature.

1.2  Construction

      (a)      Unless a contrary indication appears a reference in this
               Agreement to:

                (i)      "assets" includes present and future properties,
                         revenues and rights of every description;

               (ii)      the  "European   interbank   market"  means  the
                         interbank   market  for  euro   operating  in
                         Participating Member States;

              (iii)      a "Finance  Document"  or any other  agreement  or
                         instrument  is a reference  to that Finance Document
                         or other agreement or instrument as amended or
                         novated;

               (iv)      "indebtedness"  includes any  obligation  (whether
                         incurred as principal or as surety) for the payment or
                         repayment of money,  whether present or future,
                         actual or contingent other than any such obligation in
                         respect of uncalled commitments;

                (v)      a "person" includes any person, firm, company,
                         corporation,  government,  state or agency of a
                         state or any association,  trust or partnership
                         (whether or not having separate legal personality) of
                         two or more of the foregoing;

               (vi)      a  "regulation"  includes  any  regulation,  rule,
                         official  directive,  request or  guideline (whether
                         or not having the force of law) of any governmental,
                         intergovernmental or supranational  body,  agency,
                         department or regulatory,  self-regulatory  or other
                         authority or organisation;

              (vii)      a provision of law is a reference to that provision as
                         amended or re-enacted;

             (viii)      a time of day is a reference to London time; and

                                     - 18 -
<PAGE>


               (ix)      any reference  herein to "this  Agreement"  shall,  on
                         and after the Effective  Date,  mean the Original
                         Facility  Agreement as amended and restated  pursuant
                         to the Amendment Agreement.

      (b)      Section, Clause and Schedule headings are for ease of reference
               only.

      (c)      Unless a contrary  indication  appears,  a term used in any
               other  Finance  Document  or in any notice given under or in
               connection with any Finance  Document has the same meaning in
               that Finance Document or notice as in this Agreement.

      (d)      A Default or an Event of Default is "continuing" if it has not
               been remedied or waived.

1.3  Currency Symbols and Definitions

     "$" and "dollars"  denote lawful  currency of the United States of
     America,  "GBP" and  "sterling" denotes  lawful  currency of the United
     Kingdom and "EUR" and "euro" means the single  currency unit of the
     Participating Member States.

1.4  Third party rights

      (a)      Except as  provided  in a Finance  Document,  the terms of a
               Finance  Document  may be enforced only by a party to it and the
               operation of the  Contracts  (Rights of Third  Parties) Act 1999
               is excluded.

      (b)      Notwithstanding  any provision of any Finance  Document,  the
               Parties to a Finance  Document do not require the consent of any
               third party to rescind or vary any Finance  Document at any
               time.

                                     - 19 -
<PAGE>


                                  SECTION 2
                                THE FACILITY

2.       THE FACILITY

2.1      The Facility
         Subject to the terms of this  Agreement,  the Lenders make available
         to the Borrowers a multicurrency  revolving loan facility in an
         aggregate  amount equal to the Total Commitments.

2.2      Lenders' rights and obligations
          (a)     The  obligations  of each Lender under the Finance  Documents
                  are several.  Failure by a Lender to  perform  its
                  obligations   under  the  Finance  Documents  does  not
                  affect  the obligations  of any other  Party  under the
                  Finance  Documents.  No Finance  Party is responsible  for
                  the  obligations  of any  other  Finance  Party  under  the
                  Finance Documents.

          (b)     The rights of each Lender under or in  connection  with the
                  Finance  Documents are separate and independent  rights and
                  any debt arising under the Finance  Documents to a Lender
                  from an Obligor shall be a separate and independent debt.

          (c)     A Finance Party may, except as otherwise stated in the
                  Finance  Documents,  separately  enforce its rights under the
                  Finance Documents.

3.       PURPOSE

3.1      Purpose
         The Borrowers shall apply all amounts  borrowed by them under the
         Facility towards their general corporate purposes (which shall include,
         without limitation,  gearing, funding investment timing differences
         and payment of any fees,  costs and  expenses  associated  with the
         amendment  and restatement of this Agreement on 16 June 2003).

3.2      Monitoring
         No Finance Party is bound to monitor or verify the application of any
         amount  borrowed  pursuant to this Agreement.

4.       CONDITIONS OF UTILISATION

4.1      Initial conditions precedent
         No  Borrower  may  deliver a  Utilisation  Request  unless  the Agent
         has  received  all of the documents and other evidence  listed in
         Schedule 2 (Conditions  precedent) in form and substance satisfactory
         to the Agent  (acting  reasonably).  The Agent shall notify the
         Borrowers and the Lenders promptly upon being so satisfied.

                                     - 20 -
<PAGE>

4.2      Further conditions precedent
         The Lenders will only be obliged to comply with Clause 5.4  (Lenders'
         participation)  if on the date of the Utilisation Request and on the
         proposed Utilisation Date:



         (a)      in the case of a Rollover  Loan,  no Event of Default is
                  continuing  or would  result from the proposed  Loan,  and,
                  in the case of any other Loan, no Default is continuing or
                  would result from the proposed Loan;

         (b)      the  Repeating  Representations  to be made by each Obligor
                  are true in all material  respects; and

         (c)      in the case of a Loan to be made to the Platinum  Trust,  the
                  aggregate  of the Base  Currency Amount of the  proposed
                  Loan and the Base  Currency  Amount of all other  outstanding
                  Loans made to the Platinum  Trust (less the Base  Currency
                  Amount of all Loans to the Platinum  Trust to be repaid or
                  prepaid on or prior to the  Utilisation  Date) is less than
                  15 per cent. of the Total Commitments at such time.

4.3      Conditions relating to Optional Currencies
         (a)      A currency  will  constitute  an  Optional  Currency  in
                  relation to a Loan if it is dollars or sterling or if:

                   (i)      it is readily  available in the amount required and
                            freely  convertible  into the Base Currency in the
                            Relevant  Interbank  Market on the Quotation Day
                            and the Utilisation Date for that Loan; and

                  (ii)      it has been approved by the Agent (acting on the
                            instructions  of all the Lenders) on or prior
                            to receipt by the Agent of the relevant Utilisation
                            Request for that Loan.

         (b)      If the Agent has  received a written  request  from a
                  Borrower  for a currency  to be  approved under  paragraph
                  (a)(ii)  above,  the Agent  will  confirm  to the  Borrowers
                  by the Specified Time:

                   (i)      whether or not the Lenders have granted their
                            approval; and

                  (ii)      if approval has been granted,  the minimum  amount
                            (and, if required,  integral  multiples) for any
                            subsequent Utilisation in that currency.

         (c)      A Loan denominated in euro will only be made available in the
                  euro unit.

4.4      Maximum number of Loans
         (a)      A Borrower may not deliver a  Utilisation  Request if as a
                  result of the  proposed  Utilisation fifteen or more Loans
                  would be outstanding.

         (b)      Any Loan made by a single Lender under Clause 6.2
                  (Unavailability  of a currency) shall not be taken into
                  account in paragraph (a) above.


                                      - 21 -
<PAGE>


                                    SECTION 3
                                   UTILISATION

5.       UTILISATION

5.1      Delivery of a Utilisation Request
         A Borrower  may utilise the  Facility by delivery to the Agent of a
         duly  completed  Utilisation Request not later than the Specified Time.

5.2      Completion of a Utilisation Request
         Each  Utilisation  Request is irrevocable and will not be regarded as
         having been duly completed unless:

         (a)      the  proposed   Utilisation  Date  of  each  requested  Loan
                  is  a  Business  Day  within  the Availability Period;

         (b)      the currency and amount of each  Utilisation  complies  with
                  Clause 5.3  (Currency  and amount) and paragraph (b) of
                  Clause 22.22 (Condition Subsequent); and

         (c)      the  proposed  Interest  Period for each  requested  Loan
                  complies  with  Clause 10  (Interest Periods).

5.3      Currency and amount
         (a)      The currency  specified in a Utilisation  Request for a
                  proposed Loan must be the Base Currency
                  or an Optional Currency.

         (b)      The  amount of each  proposed  Loan must be an amount  whose
                  Base  Currency  Amount is not more than the Available
                  Facility and which is:

                    (i)     if the  currency  selected is the Base  Currency,
                            a minimum of  EUR1,000,000  or if less,  the
                            Available Facility; or

                   (ii)     if the  currency  selected  is an  Optional
                            Currency,  the  minimum  amount  (or  an  integral
                            multiple,  if required) specified by the Agent
                            pursuant to paragraph  4.3(b)(ii) of Clause 4.3
                            (Conditions  relating to Optional  Currencies)  or,
                            if less,  the Available Facility.

5.4      Lenders' participation
         (a)      If the  conditions  set out in this  Agreement  have  been
                  met,  each  Lender  shall  make its participation in each
                  Loan available through its Facility Office.

         (b)      The amount of each Lender's  participation  in each Loan will
                  be equal to the proportion  borne by its Available
                  Commitment to the Available Facility immediately prior to
                  making the Loan.

         (c)      The Agent shall  notify each Lender of the amount,  currency
                  and the Base  Currency  Amount of each Loan at the Specified
                  Time.


                                      - 22 -
<PAGE>

6.       OPTIONAL CURRENCIES

6.1      Selection of currency
         A Borrower shall select the currency of a Loan in a Utilisation
         Request.

6.2      Unavailability of a currency
         If before the Specified Time on any Quotation Day:

         (a)      the Agent has received  notice from a Lender that the Optional
                  Currency  requested  for a Loan is not readily available to
                  it in the amount required; or

         (b)      a Lender  notifies the Agent that  compliance  with its
                  obligation to participate in a Loan in the proposed Optional
                  Currency would contravene a law or regulation applicable to
                  it,

         the Agent will give notice to the  relevant  Borrower to that effect
         by the Specified Time on that day. In this event, any Lender that
         gives notice pursuant to this  Clause  6.2 will be  required  to
         participate  in the Loan in the Base Currency (in an amount equal to
         that  Lender's  proportion  of the Base Currency Amount  or, in
         respect of a Rollover  Loan,  an amount  equal to that  Lender's
         proportion  of the Base  Currency  Amount of the maturing Loan that is
         due to be repaid) and its participation  will be treated as a separate
         Loan denominated in the Base Currency during that Interest Period.

6.3      Participation in a Loan
         Each Lender's  participation in a Loan will be determined in
         accordance with paragraph 5.4(b) of Clause 5.4 (Lenders'
         participation).


                                      - 23 -
<PAGE>



                                   SECTION 4
                 REPAYMENT, PREPAYMENT AND CANCELLATION

7.       REPAYMENT

         Each  Borrower  which has drawn a Loan  shall  repay  that Loan on the
         last day of its  Interest Period.

8.       PREPAYMENT AND CANCELLATION

8.1      Illegality
         If, at any time, it is or will become unlawful in any  jurisdiction
         for a Lender to perform any of its obligations as contemplated by this
         Agreement or to fund its participation in any Loan:

         (a)      that Lender shall promptly notify the Agent upon becoming
                  aware of that event;

         (b)      upon the Agent  notifying the  Borrowers,  the  Commitment
                  of that Lender will be  immediately
                  cancelled; and

         (c)      each  Borrower  shall repay that Lender's  participation  in
                  the Loans made to that Borrower on the last day of the
                  Interest  Period  for each  Loan  occurring  after  the Agent
                  has notified the Borrowers or, if earlier,  the date
                  specified by the Lender in the notice delivered  to the Agent
                  (being no earlier  than the last day of any  applicable  grace
                  period permitted by law).

8.2      Change of control
         (a)      If a group of persons  who at the date hereof do not have
                  control of SVIIT,  acting in concert gains control of SVIIT:

                     (i)      SVIIT shall promptly notify the Agent upon
                              becoming aware of that event;

                    (ii)      SVIIT and the Lenders shall  immediately  enter
                              into negotiations for a period of not more than
                              60 days with a view to agreeing  whether the
                              Facility  shall continue to be made
                              available and whether any amendment is required;

                   (iii)      if no such agreement is reached within such 60
                              day period then:

                              (A)      any  Lender by notice to the Agent and
                                       to SVIIT may  cancel  its  Commitment
                                       and on receipt by SVIIT of such a
                                       notice,  each  Borrower  to  which a
                                       Loan is  outstanding shall immediately
                                       repay that Lender's participation in the
                                       Loan; and

                              (B)      if the Majority  Lenders so require,
                                       the Agent  shall,  by not less than 30
                                       days notice to the Borrowers,   cancel
                                       the  Facility  and  declare  all
                                       outstanding  Loans, together with
                                       accrued  interest,  and all other
                                       amounts  accrued under the Finance
                                       Documents  immediately  due and payable,
                                       whereupon  the Facility will  be
                                       cancelled   and  all  such   outstanding
                                       amounts  will  become immediately due
                                       and payable.


                                      - 24 -
<PAGE>


         (b)      For the purpose of paragraph (a) above "control" means:

                     (i)      the power (whether by way of ownership of shares,
                              proxy, contract, agency or otherwise) to:

                              (A)      cast, or control the casting of, more
                                       than  one-half of the maximum  number of
                                       votes that might be cast at a general
                                       meeting of SVIIT; or

                              (B)      appoint or remove  all, or the  majority,
                                       of the  directors  or other  equivalent
                                       officers of SVIIT; or

                              (C)      give  directions  with  respect to the
                                       operating  and  financial  policies  of
                                       SVIIT which the directors  or other
                                       equivalent  officers  of SVIIT are
                                       obliged to comply with; or

                    (ii)      the holding of more than one-half of the issued
                              share capital of SVIIT  (excluding  any part of
                              that  issued  share  capital  that  carries  no
                              right to  participate  beyond a specified amount
                              in a distribution of either profits or capital).

                   (iii)      For the  purpose of  paragraph  (a) above
                              "acting in  concert"  means a group of persons
                              who, pursuant  to  an  agreement  or
                              understanding  (whether  formal  or  informal),
                              actively co-operate,  through the acquisition by
                              any of them, either directly or indirectly of
                              shares in SVIIT, to obtain or consolidate control
                              of SVIIT.

8.3      Voluntary cancellation
         SVIIT may, if it gives the Agent not less than five  Business  Days'
         (or such shorter  period as the  Majority  Lenders may agree)  prior
         notice,  cancel the whole or any part (being a minimum amount of
         EUR1,000,000)  of the  Available  Facility.  Any  cancellation  under
         this Clause 8.3 shall reduce the Commitments of the Lenders rateably.

8.4      Voluntary prepayment of Loans
         Any  Borrower  to which a Loan has been  made  may,  if it gives  the
         Agent  not less than five Business Days' (or such shorter period as the
         Majority  Lenders may agree) prior notice,  prepay the  whole or any
         part of a Loan  (but,  if in part,  being an  amount  that  reduces
         the Base Currency Amount of the Loan by a minimum amount of
         EUR1,000,000).

8.5      Right of repayment and cancellation in relation to a single Lender
         (a)      If:

                  (i)      any sum payable to any Lender by an Obligor  is, or
                           will be,  required  to be  increased  under
                           paragraph (d) of Clause 13.2 (Tax gross-up); or

                 (ii)      any Lender  claims  indemnification  from any
                           Borrower  under Clause 13.3 (Tax  indemnity)  or
                           Clause 14.1 (Increased costs),

                  the relevant  Borrower may, whilst the circumstance  giving
                  rise to the requirement or indemnification  continues, give
                  the Agent notice of cancellation of the Commitment of that
                  Lender and its intention to procure the repayment of that
                  Lender's  participation in the Loans.


                                      - 25 -
<PAGE>


         (b)     On receipt of a notice  referred  to in  paragraph  (a) above,
                 the  Commitment  of that Lender shall immediately be reduced
                 to zero.

         (c)     On the last day of each  Interest  Period  which ends  after
                 the  relevant  Borrower  has given notice under  paragraph (a)
                 above (or, if earlier,  the date specified by the relevant
                 Borrower in that notice),  that Borrower  shall repay that
                 Lender's  participation  in that Loan.

8.6      Restrictions

         (a)      Any notice of  cancellation  or  prepayment  given by any
                  Party  under  this  Clause 8 shall be irrevocable  and,
                  unless a  contrary  indication  appears  in this  Agreement,
                  shall specify the date or dates upon which the relevant
                  cancellation or prepayment is to be made and the amount of
                  that cancellation or prepayment.

         (b)      Any  prepayment  under this  Agreement  shall be made
                  together  with  accrued  interest on the amount prepaid and,
                  subject to any Break Costs, without premium or penalty.

         (c)      Unless a contrary  indication  appears in this  Agreement,
                  any part of the  Facility  which is prepaid may be reborrowed
                  in accordance with the terms of this Agreement.

         (d)      The  Borrowers  shall  not repay or  prepay  all or any part
                  of the Loans or cancel  all or any part of the Commitments
                  except at the times and in the manner expressly  provided for
                  in this Agreement.

         (e)      No  amount  of the  Total  Commitments  cancelled  under  this
                  Agreement  may be  subsequently reinstated.

         (f)      If the Agent  receives a notice  under this Clause 8 it shall
                  promptly  forward a copy of that notice to the Borrowers or
                  the affected Lender, as appropriate.


                                      - 26 -
<PAGE>



                                    SECTION 5
                             COSTS OF UTILISATION

9.       Interest

9.1      Calculation of interest
         The rate of  interest on each Loan for each  Interest  Period is the
         percentage  rate per annum which is the aggregate of the applicable:

         (a)      Margin;

         (b)      LIBOR or, in relation to any Loan in euro, EURIBOR; and

         (c)      Mandatory Cost, if any.

9.2      Payment of interest
         The  Borrower to which a Loan has been made shall pay accrued
         interest on that Loan on the last day of each  Interest  Period,
         (and, if the Interest  Period is longer than six Months,  on the
         dates falling at six Month intervals after the first day of the
         Interest Period).

9.3      Default interest
         (a)      If an Obligor fails to pay any amount  payable by it under a
                  Finance  Document on its due date, interest  shall  accrue
                  on the  overdue  amount  from  the due date up to the date of
                  actual  payment (both before and after  judgment) at a rate
                  one per cent.  higher than the rate which would have been
                  payable if the overdue  amount had,  during the period
                  of  non-payment,  constituted  a  Loan  in the  currency  of
                  the  overdue  amount  for successive  Interest  Periods,
                  each  of a  duration  selected  by the  Agent  (acting
                  reasonably).  Any  interest  accruing  under  this  Clause
                  9.3  shall be  immediately payable by the Obligor on demand
                  by the Agent.

         (b)      Default  interest (if unpaid)  arising on an overdue amount
                  will be compounded with the overdue amount at the end of each
                  Interest  Period  applicable to that overdue amount but will
                  remain immediately due and payable.

9.4      Notification of rates of interest
         The Agent shall promptly notify the Lenders and the relevant  Borrower
         of the determination of a rate of interest under this Agreement.

10.      Interest Periods

10.1     Selection of Interest Periods
         (a)      Each Loan shall have an Interest  Period which  commences on
                  the  Utilisation  Date and ends on the first  Quarter Date to
                  fall after the relevant  Utilisation  Date provided that if
                  as a result any Loan would have an  Interest  Period of less
                  than one week's  duration the Interest  Period for such Loan
                  shall end on the second  Quarter Date falling after
                  the relevant Utilisation Date.

         (b)      An Interest Period for a Loan shall not extend beyond the
                  Termination Date.

         (c)      A Loan has one Interest Period only.


                                      - 27 -
<PAGE>


10.2     Non-Business Days
         If an Interest  Period would  otherwise  end on a day which is not a
         Business Day, that Interest Period will  instead end on the next
         Business Day in that  calendar  month (if there is one) or the
         preceding Business Day (if there is not).

11.      CHANGES TO THE CALCULATION OF INTEREST

11.1     Absence of quotations
         Subject  to Clause  11.2  (Market  disruption),  if LIBOR or, if
         applicable,  EURIBOR  is to be determined by reference to the
         Reference  Banks but a Reference Bank does not supply a quotation
         by the Specified Time on the Quotation Day, the applicable  LIBOR or
         EURIBOR shall be determined on the basis of the quotations of the
         remaining Reference Banks.

11.2     Market disruption
         (a)      If a Market  Disruption  Event occurs in relation to a Loan
                  for any Interest  Period,  then the rate of interest on each
                  Lender's share of that Loan for the Interest  Period shall be
                  the rate per annum which is the sum of:

                     (i)      the Margin;

                    (ii)      the rate  notified to the Agent by that Lender as
                              soon as  practicable  and in any event before
                              interest is due to be paid in respect of that
                              Interest Period,  to be that which expresses as a
                              percentage  rate per annum the cost to that
                              Lender of funding its participation in that Loan
                              from whatever source it may reasonably select;
                              and

                   (iii)      the Mandatory Cost, if any, applicable to that
                              Lender's participation in the Loan.

         (b)      In this Agreement "Market Disruption Event" means:

                     (i)      at or about noon on the Quotation Day for the
                              relevant  Interest  Period the Screen Rate is not
                              available  and none or only one of the  Reference
                              Banks  supplies a rate to the Agent to determine
                              LIBOR or, if applicable,  EURIBOR for the
                              relevant  currency and Interest Period; or

                    (ii)      before close of business in London on the
                              Quotation Day for the relevant  Interest Period,
                              the Agent receives  notifications from a Lender
                              or Lenders (whose  participations in a Loan
                              exceed  40 per  cent.  of that  Loan)  that the
                              cost to it of  obtaining matching  deposits in
                              the Relevant  Interbank Market would be in excess
                              of LIBOR or, if applicable, EURIBOR.

11.3     Alternative basis of interest or funding
         (a)      If a Market  Disruption Event occurs and the Agent or either
                  of the Borrowers so requires,  the Agent and SVIIT  shall
                  enter into  negotiations  (for a period of not more than
                  thirty days) with a view to agreeing a substitute basis for
                  determining the rate of interest.

         (b)      Any alternative  basis agreed pursuant to paragraph (a) above
                  shall,  with the prior consent of all the Lenders and SVIIT,
                  be binding on all Parties.


                                      - 28 -
<PAGE>


11.4     Break Costs
         (a)      Each  Borrower  shall,  within three  Business Days of demand
                  by a Finance  Party,  pay to that Finance Party its Break
                  Costs  attributable to all or any part of a Loan or Unpaid
                  Sum being paid by that  Borrower  on a day other than the last
                  day of an  Interest  Period for that Loan or Unpaid Sum.

         (b)      Each Lender shall,  as soon as reasonably  practicable  after
                  a demand by the Agent,  provide a certificate  confirming the
                  amount of its Break Costs for any Interest Period in which
                  they accrue.

12.      FEES

12.1     Commitment fee
         (a)      SVIIT  shall pay to the  Agent  (for the  account  of each
                  Lender) a fee in the Base  Currency computed  at the  rate of
                  0.60  per  cent.  per  annum  on  that  Lender's  Available
                  Commitment for the Availability Period.

         (b)      The  accrued  commitment  fee is  payable  on the last day of
                  each  successive  period of three Months which ends during
                  the Availability  Period, on the last day of the Availability
                  Period and on the  cancelled  amount of the relevant
                  Lender's  Commitment at the time the cancellation is
                  effective.

12.2     Utilisation Fee
         (a)      SVIIT shall pay to the Agent (for the  account of each
                  Lender) a  utilisation  fee in the Base Currency computed as
                  follows:

                  (i)      0.125% per annum on the aggregate Base Currency
                           Amount of the Loans  outstanding  hereunder for
                           each day on which they are  greater  than 25%,  but
                           less than 50%,  of the Total Commitments;

                 (ii)      0.25% per annum on the aggregate Base Currency
                           Amount of the Loans  outstanding  hereunder for
                           each day on which they are equal to or greater  than
                           50%,  but less than 75%, of the Total Commitments;
                           and

                (iii)      0.50% per annum on the aggregate Base Currency
                           Amount of the Loans  outstanding  hereunder for
                           each day on which they are greater than 75% of the
                           Total Commitments.

         (b)      The  accrued  utilisation  fee,  if any,  shall be  payable
                  in  arrear on the last day of each successive  period of
                  three months which ends after the date of this  Agreement and
                  on the Termination Date.

12.3     Participation Fee
         SVIIT shall pay a  participation  fee to each Joint Lead Arranger in
         the amount and at the times agreed in the applicable Fee Letter
         between SVIIT and such Joint Lead Arranger.

12.4     Agency fee
         SVIIT shall pay to the Agent (for its own  account) an agency fee in
         the amount and at the times agreed in a Fee Letter.


                                      - 29 -
<PAGE>


12.5     Trustee's Fee
         SVIIT shall pay to the Trustee  (for its own  account) a trustee's
         fee in the amount and at the times agreed in a Fee Letter.

12.6     Trustee's Ongoing Fees
         In the event of the  occurrence  of (a) an Event of Default or (b) the
         Trustee  considering  it necessary  or expedient  or (c) being
         requested  by an Obligor or a Lender to undertake  duties which the
         Trustee and SVIIT agree to be of an  exceptional  nature  and/or
         outside the scope of the normal  duties of the Trustee  under the
         Finance  Documents,  SVIIT shall pay to the Trustee such  additional
         remuneration  (together with an amount equal to any applicable  VAT)
         as may be agreed  between  them.  If the Trustee and SVIIT fail to
         agree upon the nature of such duties or upon such additional
         remuneration,  that dispute shall be determined by a merchant bank
         (acting as an expert  and not as an  arbitrator)  selected  by the
         Trustee  and  approved  by SVIIT or, failing such  approval,
         nominated (on the  application of the Trustee) by the President for
         the time  being of the Law  Society of England  and Wales (the costs
         of such  nomination  and of the merchant bank being payable by SVIIT)
         and the  determination  of any such merchant bank shall be
         final and binding upon the parties to this Agreement.


                                      - 30 -
<PAGE>



                                    SECTION 6
                      ADDITIONAL PAYMENT OBLIGATIONS

13.      TAX GROSS UP AND INDEMNITIES

13.1     Definitions
         (a)      In this Clause 13:

                  "Protected  Party"  means a Finance  Party  which is or will
                  be,  for or on account of Tax,  subject to any  liability  or
                  required to make any payment in relation to a sum received or
                  receivable  (or any sum deemed for the  purposes of Tax to be
                  received or receivable) under a Finance Document.

                  "Qualifying  Lender"  means a Lender which (on the date a
                  payment falls due) is within the  charge to United  Kingdom
                  corporation  tax in respect  of,  and is  beneficially
                  entitled to, that payment and is receiving  that payment in
                  respect of an advance made by a person  that was a bank (as
                  defined  for the purpose of section 349 of the Taxes Act in
                  section 840A of the Taxes Act) at the time that advance was
                  made.

                  "Tax Credit" means a credit or relief against, remission in,
                  or repayment of, any Tax.

                  "Tax  Deduction"  means a  deduction  or  withholding  for or
                  on account of Tax from a payment under a Finance Document.

                  "Tax Payment"  means an increased  payment made by an Obligor
                  to a Finance Party under Clause 13.2 (Tax gross-up) or a
                  payment under Clause 13.3 (Tax indemnity).

         (b)      In this Clause 13 a reference to  "determines" or
                  "determined"  means a determination  made in the absolute
                  discretion of the person making the determination.

13.2     Tax gross-up
         (a)      Each Obligor shall make all payments to be made by it without
                  any Tax  Deduction,  unless a Tax Deduction is required by
                  law.

         (b)      Each Lender  represents  and warrants as at the date of this
                  Agreement (or at the date on which it becomes a party to this
                  Agreement)  to the  Obligors  that were a payment  under a
                  Finance Document to be made to it on such date it would be a
                  Qualifying  Lender.  This representation  shall be deemed  to
                  be  repeated  on the  first  day of each  Interest Period by
                  reference  to such day.  The  Obligors  may request a Lender
                  to confirm its status as a Qualifying  Lender.  Each Lender
                  agrees to provide such  confirmation  as soon as reasonably
                  practicable.

         (c)      The Borrowers or a Lender shall  promptly  upon becoming
                  aware that an Obligor must make a Tax Deduction  (or that
                  there is any  change in the rate or the basis of a Tax
                  Deduction) notify the Agent  accordingly.  If the Agent
                  receives such  notification from a Lender it shall notify the
                  Borrowers and that Obligor.


                                      - 31 -
<PAGE>


         (d)      If a Tax  Deduction  is  required  by law to be made by an
                  Obligor in one of the  circumstances set out in paragraph (e)
                  below,  the amount of the payment due from that Obligor shall
                  be  increased to an amount which  (after  making any Tax
                  Deduction)  leaves an amount equal to the payment which would
                  have been due if no Tax Deduction had been required.

         (e)      The  circumstances  referred  to in  paragraph  (d) above are
                  where a person  entitled  to the payment:

                     (i)      is the Agent or a Joint Lead Arranger (on its own
                              behalf);  or

                    (ii)      is a Qualifying Lender; or

                   (iii)      is a Lender  which is not or has  ceased  to be a
                              Qualifying  Lender to the  extent  that this
                              altered  status  results  from any  change  after
                              the date on which it became a Lender   under
                              this   Agreement   in  (or  in  the   official
                              interpretation, administration,  or  official
                              application  of) any  United  Kingdom  law or any
                              published  practice  or  published  concession
                              of  any  United  Kingdom  taxing authority.

         (f)      If an Obligor is required to make a Tax  Deduction,  that
                  Obligor shall make that Tax Deduction and any  payment
                  required  in  connection  with that Tax  Deduction  within
                  the time allowed and in the minimum amount required by law.

         (g)      Within  thirty days of making  either a Tax  Deduction  or
                  any payment  required in  connection with that Tax Deduction,
                  the Obligor  making that Tax Deduction  shall deliver to the
                  Agent for the Finance Party entitled to the payment evidence
                  reasonably  satisfactory to that Finance  Party that the Tax
                  Deduction  has been made or (as  applicable)  any
                  appropriate payment paid to the relevant taxing authority.

13.3     Tax indemnity
         (a)      SVIIT shall  (within three  Business  Days of demand by the
                  Agent) pay to a Protected  Party an amount equal to the loss,
                  liability  or cost which that  Protected  Party  determines
                  will be or has been  (directly  or  indirectly)  suffered  for
                  or on account of Tax by that Protected  Party on or by
                  reference to any sum payable or deemed payable to or by
                  it under a Finance Document.

         (b)      Paragraph (a) above shall not apply with respect to any Tax
                  assessed on:

                   (i)      a Finance Party:

                             (A)      under  the law of the  jurisdiction  in
                                      which  that  Finance  Party  is
                                      incorporated  or,  if different,  the
                                      jurisdiction  (or  jurisdictions)  in
                                      which that  Finance Party is treated as
                                      resident for Tax purposes; or

                             (B)      under the law of the  jurisdiction in
                                      which that Finance Party's  Facility
                                      Office is located in respect of amounts
                                      received or receivable in that
                                      jurisdiction, if that Tax is imposed on
                                      or calculated by reference to the net
                                      income,  profits or gains of that Finance
                                      Party; or


                                      - 32 -
<PAGE>


                  (ii)     the  Agent,  as a result of the  failure by a Lender
                           to satisfy on the due date of a payment of interest
                           either of the conditions  set out in paragraphs
                           26.25(a) and 26.25(b) of Clause 26.25 (Lenders' tax
                           status confirmation).

         (c)      A Protected  Party making,  or intending to make, a claim
                  pursuant to paragraph (a) above shall promptly  notify the
                  Agent of the event  which will  give,  or has given,  rise to
                  the claim, following which the Agent shall notify the
                  Obligors.

         (d)      A Protected  Party  shall,  on  receiving  a payment  from an
                  Obligor  under this Clause  13.3, notify the Agent.

13.4     Tax Credit
         If an Obligor makes a Tax Payment and the relevant Finance Party
         determines that:

         (a)      a Tax Credit is attributable to that Tax Payment; and

         (b)      that Finance Party has obtained, utilised and retained that
                  Tax Credit,

         the Finance Party shall pay an amount to the Obligor which that
         Finance  Party  determines  will leave it (after that  payment) in the
         same  after-Tax  position as it would have been in had the
         circumstances giving rise to the Tax Payment not occurred.

13.5     Stamp taxes
         SVIIT shall pay and, within three Business Days of demand,  indemnify
         each Finance Party against any  cost,  loss or  liability  that
         Finance  Party  incurs  in  relation  to all  stamp  duty,
         registration  and other similar Taxes payable in respect of any
         Finance Document but not for the avoidance  of doubt in respect  of
         any  transfer  of a Finance  Party's  rights  under a Finance
         Document.

13.6     Value added tax
         (a)      All  consideration  payable under a Finance  Document by an
                  Obligor to a Finance Party shall be deemed to be  exclusive
                  of an amount in respect of any VAT. If VAT is  chargeable  in
                  respect of any such  consideration,  upon receipt of an
                  invoice the Obligor  shall pay to the Finance Party (in
                  addition to paying the  consideration) an amount equal to the
                  amount of the VAT.

         (b)      Where a Finance  Document  requires an Obligor to  reimburse
                  a Finance  Party for any costs or expenses,  that  Obligor
                  shall also at the same time pay and  indemnify  that Finance
                  Party  against  all VAT  incurred  by that  Finance  Party in
                  respect of the costs or expenses  save to the extent  that
                  that  Finance  Party is entitled  to  repayment  or credit in
                  respect of the VAT.

14.      INCREASED COSTS

14.1     Increased costs
         (a)      Subject to Clause 14.3  (Exceptions)  SVIIT shall,  within
                  three  Business  Days of a demand by the Agent,  pay for the
                  account of a Finance Party the amount of any  Increased
                  Costs incurred  by that  Finance  Party  or any of its
                  Affiliates  as a  result  of (i) the introduction of or any
                  change in (or in the  interpretation or application of) any
                  law or regulation  or (ii)  compliance  with any law or
                  regulation  made after the date of this Agreement.


                                       - 33 -
<PAGE>


         (b)      In this Agreement "Increased Costs" means:

                    (i)      a  reduction  in the  rate  of  return  from  the
                             Facility  or on a  Finance  Party's  (or its
                             Affiliate's) overall capital;

                   (ii)      an additional or increased cost; or

                  (iii)      a reduction of any amount due and payable under
                             any Finance Document,

                  which is  incurred  or suffered  by a Finance  Party or any
                  of its  Affiliates  to the extent  that  it is  attributable
                  to that  Finance  Party  having  entered  into  its
                  Commitment or funding or performing its obligations under any
                  Finance Document.

14.2     Increased cost claims
         (a)      A Finance  Party  intending  to make a claim  pursuant to
                  Clause 14.1  (Increased  costs) shall notify  the Agent of
                  the event  giving  rise to the claim,  following  which the
                  Agent shall promptly notify SVIIT.

         (b)      Each  Finance  Party  shall,  as soon as  practicable  after
                  a demand by the  Agent,  provide a certificate confirming the
                  amount of its Increased Costs.

14.3     Exceptions
         (a)      Clause 14.1 (Increased costs) does not apply to the extent
                  any Increased Cost is:

                      (i)      Tax on the net profits, income or gains of a
                               Finance Party;

                     (ii)      attributable to a Tax Deduction required by law
                               to be made by an Obligor;

                    (iii)      compensated  for by Clause  13.3 (Tax  indemnity)
                               (or would  have been  compensated  for under
                               Clause 13.3 (Tax  indemnity)  but was not so
                               compensated  solely because one of the
                               exclusions in paragraph 13.3(b) of Clause 13.3
                               (Tax indemnity) applied);

                     (iv)      compensated for by the payment of the Mandatory
                               Cost; or

                      (v)      attributable  to the  breach by the  relevant
                               Finance  Party or its  Affiliates  of any law or
                               regulation.

         (b)      In this Clause 14.3, a reference to a "Tax  Deduction"  has
                  the same meaning  given to the term in Clause 13.1
                  (Definitions).

15.      OTHER INDEMNITIES

15.1     Currency indemnity
         (a)      If any sum due from an Obligor under the Finance  Documents
                  (a "Sum"),  or any order,  judgment or award given or made in
                  relation to a Sum,  has to be  converted  from the  currency
                  (the  "First  Currency")  in which  that Sum is payable  into
                  another  currency  (the "Second Currency") for the purpose
                  of:


                                       - 34 -
<PAGE>


                     (i)      making or filing a claim or proof against that
                              Obligor;

                    (ii)      obtaining  or  enforcing  an  order,  judgment
                              or  award  in  relation  to any  litigation  or
                              arbitration proceedings,

                  that  Obligor  shall as an  independent  obligation,  within
                  three  Business  Days of demand,  indemnify  each Finance
                  Party to whom that Sum is due against any cost,  loss
                  or  liability  arising  out  of  or  as a  result  of  the
                  conversion  including  any discrepancy  between (A) the rate
                  of exchange  used to convert that Sum from the First Currency
                  into the Second  Currency and (B) the rate or rates of
                  exchange  available to that person at the time of its receipt
                  of that Sum.

         (b)      Each  Obligor  waives any right it may have in any
                  jurisdiction  to pay any  amount  under the Finance
                  Documents  in a  currency  or  currency  unit  other than
                  that in which it is expressed to be payable.

15.2     Other indemnities
         SVIIT shall (or shall  procure  that an Obligor  will),  within three
         Business  Days of demand, indemnify each Lender against any cost, loss
         or liability  properly incurred by that Lender as a result of:

         (a)      the occurrence of any Event of Default;

         (b)      a failure  by an  Obligor  to pay any  amount  due under a
                  Finance  Document  on its due date, including  without
                  limitation,  any cost,  loss or  liability  arising as a
                  result of Clause 28 (Sharing among the Lenders);

         (c)      funding,  or making  arrangements to fund, its  participation
                  in a Loan requested by a Borrower in a  Utilisation  Request
                  but not made by reason of the  operation of any one or more
                  of the provisions of this Agreement  (other than by reason of
                  default or negligence by that Lender alone); or

         (d)      a Loan (or part of a Loan) not being  prepaid in accordance
                  with a notice of prepayment  given by a Borrower.

15.3     Indemnity to the Agent
         SVIIT shall promptly  indemnify the Agent against any cost, loss or
         liability  properly incurred by the Agent (acting reasonably) as a
         result of:

         (a)      investigating any event which it reasonably believes is a
                  Default; or

         (b)      entering  into or  performing  any  foreign  exchange
                  contract  for the  purposes  of Clause 6 (Optional
                  Currencies); or

         (c)      acting or relying on any notice,  request or  instruction
                  which it  reasonably  believes to be genuine, correct and
                  appropriately authorised.


                                       - 35 -
<PAGE>


15.4     Indemnity to Trustee
         The Trustee may, in priority to any payment to the Lenders,  indemnify
         itself out of the Charged Property in respect of, and pay and retain,
         all sums necessary to give effect to this indemnity and shall have a
         lien on the Security and the  proceeds of the  enforcement  of the
         Security for all moneys payable to it under this Clause.

16.      Mitigation by the Lenders

16.1     Mitigation
         (a)      Each Finance Party shall, in  consultation  with SVIIT,  take
                  all reasonable  steps to mitigate any  circumstances  which
                  arise and which would result in any amount becoming  payable
                  under,  or  cancelled  pursuant  to,  any of Clause 8.1
                  (Illegality),  Clause 13 (Tax gross-up and  indemnities) or
                  Clause 14 (Increased  costs)  including (but not limited
                  to)  transferring  its rights and obligations  under the
                  Finance  Documents to another Affiliate or Facility Office.

         (b)      Paragraph  (a)  above  does not in any way  limit  the
                  obligations  of any  Obligor  under the Finance Documents.

16.2     Limitation of liability
         (a)      SVIIT shall  indemnify  each Finance  Party for all costs and
                  expenses  reasonably  incurred by that Finance Party as a
                  result of steps taken by it under Clause 16.1 (Mitigation).

         (b)      A Finance  Party is not obliged to take any steps under
                  Clause  16.1  (Mitigation)  if, in the opinion of that
                  Finance Party (acting  reasonably),  to do so might be
                  prejudicial to it.

17.      COSTS AND EXPENSES

17.1     Transaction expenses
         SVIIT  shall  promptly  on demand pay the Agent,  the Joint Lead
         Arrangers  and the Trustee the amount of all costs and expenses
         (including legal fees)  reasonably  incurred by any of them in
         connection with the negotiation, preparation, printing and execution
         of:

         (a)      this Agreement and any other documents referred to in this
                  Agreement; and

         (b)      any other Finance Documents executed after the date of this
                  Agreement,

         and all costs and expenses  reasonably incurred by them in connection
         with the perfection of the Security contemplated in the Finance
         Documents.

17.2     Amendment costs
         If (a) an Obligor  requests  an  amendment,  waiver or consent or (b)
         an  amendment  is required pursuant to Clause 29.9 (Change of
         currency),  the Obligor  requesting the amendment,  waiver or
         consent  necessitating the amendment pursuant to Clause 29.9 (Change
         of Currency) shall,  within three  Business  Days of demand,
         reimburse  the Agent for the amount of all costs and  expenses
         (including  legal  fees)  reasonably  incurred  by  the  Agent  in
         responding  to,  evaluating, negotiating or complying with that
         request or requirement.


                                       - 36 -
<PAGE>


17.3     Enforcement costs
         SVIIT shall,  within three Business Days of demand,  pay to each
         Finance Party the amount of all costs and expenses  (including legal
         fees) incurred by that Finance Party in connection with the
         enforcement of, or the preservation of any rights under, any Finance
         Document.


                                       - 37 -
<PAGE>



                                      SECTION 7
                                      GUARANTEE

18.      GUARANTEE AND INDEMNITY

18.1     Guarantee and indemnity
         Each Guarantor irrevocably and unconditionally:

         (a)      guarantees  to each Finance Party  punctual  performance  by
                  the Relevant  Borrower of all that Borrower's obligations
                  under the Finance Documents;

         (b)      undertakes  with each  Finance  Party that  whenever  the
                  Relevant  Borrower  does not pay any amount when due under or
                  in  connection  with any  Finance  Document,  that  Guarantor
                  shall immediately on demand pay that amount as if it was the
                  principal obligor; and

         (c)      indemnifies  each  Finance  Party  immediately  on demand
                  against any cost,  loss or liability suffered  by that
                  Finance  Party if any  obligation  guaranteed  by it is or
                  becomes unenforceable,  invalid or illegal.  The amount of
                  the cost,  loss or liability  shall be equal to the amount
                  which that Finance Party would  otherwise have been entitled
                  to recover.

18.2     Continuing guarantee
         This  guarantee  is a  continuing  guarantee  and will  extend to the
         ultimate  balance of sums payable by the Relevant  Borrower under the
         Finance  Documents,  regardless of any  intermediate payment or
         discharge in whole or in part.

18.3     Reinstatement
         If any payment by an Obligor or any discharge  given by a Finance
         Party  (whether in respect of the  obligations  of any Obligor or any
         security for those  obligations or otherwise) is avoided or reduced as
         a result of insolvency or any similar event:

         (a)      the  liability  of each  Obligor  shall  continue as if the
                  payment,  discharge,  avoidance or reduction had not occurred;
                  and

         (b)      each  Finance  Party  shall be  entitled  to recover  the
                  value or amount of that  security  or payment from each
                  Obligor,  as if the payment,  discharge,  avoidance or
                  reduction had not occurred.

18.4     Waiver of defences
         The  obligations  of each  Guarantor  under  this  Clause  18 will
         not be  affected  by an act, omission,  matter or thing which, but for
         this Clause, would reduce, release or prejudice any of its obligations
         under this Clause 18 (without  limitation and whether or not known to
         it or any Finance Party) including:

         (a)      any time, waiver or consent granted to, or composition with,
                  any Obligor or other person;

         (b)      the release of any other  Obligor or any other  person  under
                  the terms of any  composition  or arrangement with any
                  creditor of any member of the Group;


                                       - 38 -
<PAGE>


         (c)      the taking, variation,  compromise,  exchange,  renewal or
                  release of, or refusal or neglect to perfect,  take up or
                  enforce,  any rights  against,  or  security  over assets of,
                  any Obligor or other person or any  non-presentation or
                  non-observance of any formality or other  requirement  in
                  respect of any  instrument  or any  failure to realise the
                  full value of any security;

         (d)      any  incapacity or lack of power,  authority or legal
                  personality  of or dissolution or change in the members or
                  status of an Obligor or any other person;

         (e)      any  amendment  (however  fundamental)  or  replacement  of a
                  Finance  Document  or any  other document or security;

         (f)      any  unenforceability,  illegality  or  invalidity  of any
                  obligation  of any person under any Finance Document or any
                  other document or security; or

         (g)      any insolvency or similar proceedings.

18.5     Immediate recourse
         Each  Guarantor  waives  any  right it may have of first  requiring
         any  Finance  Party (or any trustee or agent on its behalf) to proceed
         against or enforce  any other  rights or security or claim payment
         from any person before  claiming  from that  Guarantor  under this
         Clause 18. This waiver applies irrespective of any law or any
         provision of a Finance Document to the contrary.

18.6     Appropriations
         Until all amounts which may be or become  payable by the Obligors
         under or in  connection  with the Finance  Documents have been
         irrevocably paid in full, each Finance Party (or any trustee or
         agent on its behalf) may:

         (a)      refrain from  applying or enforcing  any other  moneys,
                  security or rights held or received by that  Finance  Party
                  (or any  trustee  or agent on its  behalf)  in  respect  of
                  those amounts,  or apply  and  enforce  the  same in such
                  manner  and  order as it sees fit (whether  against those
                  amounts or  otherwise)  and no Guarantor  shall be entitled to
                  the benefit of the same; and

         (b)      hold in an  interest-bearing  suspense  account any moneys
                  received  from any  Guarantor or on account of any Guarantor's
                  liability under this Clause 18.

18.7     Deferral of Guarantors' rights
         Until all amounts which may be or become  payable by the Obligors
         under or in  connection  with the  Finance  Documents  have been
         irrevocably  paid in full and  unless  the  Agent  otherwise directs,
         the Guarantor  will not exercise any rights which it may have by
         reason of performance by it of its obligations under the Finance
         Documents:

         (a)      to be indemnified by an Obligor;

         (b)      to claim any  contribution  from any other  guarantor of any
                  Obligor's  obligations  under the Finance Documents; and/or

         (c)      to take the benefit (in whole or in part and whether by way
                  of  subrogation  or  otherwise)  of any  rights  of the
                  Finance  Parties  under  the  Finance  Documents  or of any
                  other guarantee or security taken pursuant to, or in
                  connection with, the Finance  Documents by any Finance Party.


                                       - 39 -
<PAGE>


18.8     Additional security
         This  guarantee  is in addition to and is not in any way  prejudiced
         by any other  guarantee or security now or subsequently held by any
         Finance Party.


                                       - 40-
<PAGE>



                                    SECTION 8
           REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

19.      REPRESENTATIONS

         Each Obligor makes the  representations and warranties set out in this
         Clause 19 to each Finance Party on the date of this Agreement.

19.1     Status
         (a)      In the case of SVIIT,  it is a corporation  duly
                  incorporated  and validly  existing under the law of its
                  jurisdiction of  incorporation.  In the case of the Platinum
                  Trust, it is a trust duly  constituted  and  established  and
                  validly  existing under the laws of its jurisdiction of
                  establishment.

         (b)      It and each of its Subsidiaries  (other than, for the
                  avoidance of doubt,  Investee  Companies) has the power to
                  own its assets and carry on its business as it is being
                  conducted.

19.2     Binding obligations
         The  obligations  expressed to be assumed by it in each  Finance
         Document  are,  subject to any general  principles of law as at the
         date of this Agreement  limiting its obligations  which are
         specifically  referred to in any legal opinion  delivered  pursuant to
         Clause 4  (Conditions  of Utilisation), legal, valid, binding and
         enforceable obligations.

19.3     Non-conflict with other obligations
         The entry into and  performance  by it of, and the  transactions
         contemplated  by, the  Finance Documents to which it is a party do not
         and will not conflict with:

         (a)      any law or regulation applicable to it;

         (b)      its constitutional documents; or

         (c)      any agreement or instrument binding upon it or any of its
                  assets.

19.4     Power and authority
         It has the power to enter  into,  perform and  deliver,  and has taken
         all  necessary  action to authorise its entry into,  performance  and
         delivery of, the Finance  Documents to which it is a party and the
         transactions contemplated by those Finance Documents.

19.5     Validity and admissibility in evidence
         All Authorisations required or desirable:

         (a)      to enable it lawfully to enter into,  exercise  its rights
                  and comply with its  obligations  in the Finance Documents to
                  which it is a party; and

         (b)      to  make  the  Finance  Documents  to  which  it is a  party
                  admissible  in  evidence  in  its jurisdiction of
                  incorporation  (in the case of SVIIT) or jurisdiction of
                  establishment (in the case of the Platinum Trust),

         have been obtained or effected and are in full force and effect.


                                       - 41 -
<PAGE>


19.6     Governing law and enforcement
         (a)      The choice of English law as the  governing  law of the
                  Finance  Documents  will be  recognised and  enforced  in its
                  jurisdiction  of  incorporation  (in  the  case  of  SVIIT)
                  or jurisdiction of establishment (in the case of the Platinum
                  Trust).

         (b)      Any  judgment  obtained in England in relation to a Finance
                  Document  will be  recognised  and enforced in its
                  jurisdiction of  incorporation  (in the case of SVIIT) or
                  jurisdiction of establishment (in the case of the Platinum
                  Trust).

19.7     Deduction of Tax
         It is not required under the law of its jurisdiction of incorporation
         (in the case of SVIIT) or jurisdiction of  establishment  (in the case
         of the Platinum Trust) to make any deduction for or on account of Tax
         from any payment it may make under any Finance Document.

19.8     No filing or stamp taxes
         Under the law of its  jurisdiction  of  incorporation  (in the case of
         SVIIT) or jurisdiction of establishment  (in the  case  of the
         Platinum  Trust)  it is not  necessary  that  the  Finance Documents be
         filed,  recorded or enrolled with any court or other authority in that
         jurisdiction (save for the filing of the  particulars of the
         Debentures  with the Registrar of Companies (in the case of SVIIT) or
         that any stamp,  registration  or similar Tax be paid on or in
         relation to the Finance Documents or the transactions contemplated by
         the Finance Documents.

19.9     No default
         (a)      No Event of Default is  continuing  or might  reasonably  be
                  expected to result from the making of any Utilisation.

         (b)      No other event or  circumstance  is  outstanding  which
                  constitutes  a default under any other agreement or
                  instrument which is binding on it or any of its Subsidiaries
                  (other than Investee  Companies)  or to  which  its (or its
                  Subsidiaries'  (other  than  Investee Companies')) assets are
                  subject which might have a Material Adverse Effect.

19.10    No misleading information
         All written  information  supplied by an Obligor is true,  complete
         and accurate in all material respects  as at the date it was  given
         and at such  date  was not  misleading  in any  material respect.

19.11    Financial statements
         (a)      Its Original Financial Statements were prepared in accordance
                  with GAAP consistently applied.

         (b)      Its Original  Financial  Statements  fairly  represent its
                  financial  condition and  operations (consolidated in the
                  case of SVIIT) during the relevant financial year or
                  half-year.

         (c)      There has been no material  adverse  change in its  business
                  or  financial  condition  (or the business  or  consolidated
                  financial  condition  of the Group,  in the case of SVIIT)
                  since the date to which the Original Financial Statements
                  were drawn up.


                                       - 42 -
<PAGE>


19.12    Pari passu ranking
         Its payment  obligations under the Finance Documents rank at least
         pari passu with the claims of all its other  unsecured  and
         unsubordinated  creditors,  except  for  obligations  mandatorily
         preferred by law applying to companies generally.

19.13    No proceedings pending or threatened
         No litigation,  arbitration or administrative  proceedings of or
         before any court, arbitral body or agency  which have a  reasonable
         prospect of being  adversely  determined  and, if adversely
         determined,  might reasonably be expected to have a Material Adverse
         Effect have (to the best of its  knowledge  and belief) been  started
         or  threatened  against it or any of its  Subsidiaries (other than any
         Investee Company).

19.14    Security
         (a)      The Obligors will at all times during the  subsistence  of
                  the Security be the sole,  legal and beneficial  owner of all
                  of their  assets  and will keep  their  assets  free from any
                  Security (other than any Security permitted under this
                  Agreement).

        (b)      Each of the Debentures  constitutes a first ranking  floating
                 charge over the assets subject to such  Debenture  and such
                 assets are not  subject to any prior  ranking or pari passu
                 Security.

        (c)      Each of the  Debentures  to which it is a party  validly
                 creates the Security  expressed to be created thereby and
                 evidences such Security.

19.15    Ownership of the Platinum Trust
         As at 31  December  2002,  SVIIT held 99% of all A units and 90% of all
         B units in the  Platinum Trust.

19.16    Constitution of the Platinum Trust
         The  Platinum  Trust was  constituted  by the Trust  Deed dated
         29 March  1996  between  Barings (Guernsey) Limited and Schroder
         Ventures Managers (Guernsey) Limited.

19.17    Repetition
         The Repeating  Representations  are deemed to be made by each Obligor
         (by reference to the facts and  circumstances  then existing) on the
         date of each Utilisation  Request and the first day of each  Interest
         Period  and in the case of  Clause  19.9  (No  default)  and  Clause
         19.13  (No proceedings  pending or threatened)  such  representations
         shall be deemed made as if paragraph (a) of the definition of
         "Material Adverse Effect" had been deleted.

20.      INFORMATION UNDERTAKINGS

         The  undertakings  in this Clause 20 remain in force from the date of
         this Agreement for so long as any amount is outstanding under the
         Finance Documents or any Commitment is in force.

20.1     Financial statements
         SVIIT shall supply to the Agent in sufficient copies for all the
         Lenders:

         (a)      as soon as the same become  available,  but in any event
                  within 180 days after the end of each of its financial years:


                                      - 43 -
<PAGE>


                   (i)      its audited consolidated financial statements for
                            that financial year; and

                  (ii)      the audited financial statements of the Platinum
                            Trust for that financial year; and

         (b)      as soon as the same  become  available,  but in any event
                  within 90 days after the end of each half of each of its
                  financial years:

                   (i)      its consolidated financial statements for that
                            financial half year; and

                  (ii)      the financial statements of the Platinum Trust for
                            that financial half year.

         (c)      monthly management  valuations of the investment  portfolio
                  on the basis agreed in writing with the Joint Lead Arrangers
                  prior to the date hereof.

20.2     Compliance Certificate and Management Portfolio Valuations
         (a)      SVIIT shall supply to the Agent,  on the last day of each
                  calendar  month and with each set of financial  statements
                  delivered  pursuant to paragraph  20.1(a)(i)  or  20.1(b)(i)
                  of Clause  20.1  (Financial  statements),   a  Compliance
                  Certificate  setting  out  (in  reasonable detail)
                  computations as to compliance with Clause 21 (Financial
                  covenants) as at such  date  or,  as the  case  may be,  the
                  date as at  which  those  financial statements  were drawn up
                  and setting out the  management  portfolio  valuation of the
                  investment  portfolio  pursuant  to  paragraph  20.1(c)  or
                  the  valuation  determined pursuant to Clause 21.4
                  (Valuation) as at the end of the first half of each financial
                  year or the end of each financial year, as the case may be.

         (b)      Each Compliance  Certificate  shall be signed by the company
                  secretary and the Chief Financial Officer of SVIIT.

         (c)      If the  Majority  Lenders  believe  in good  faith and  based
                  on  reasonable  grounds  that any financial  statements  or
                  calculations  provided  pursuant  to  this  Clause  20  are
                  inaccurate or incomplete the Agent may seek verification of
                  such financial  statements or  calculations  from  SVIIT's
                  auditors.  The costs and  expenses of any such action
                  shall be for the  account of SVIIT.  The Agent may not seek
                  such  verification  unless there are amounts  outstanding
                  under this Agreement or a Utilisation  Request has been
                  delivered to the Agent.

20.3     Requirements as to financial statements
         (a)      Each set of  financial  statements  delivered  pursuant to
                  Clause 20.1  (Financial  statements) shall be certified  by a
                  director of the  relevant  company or trustee of the relevant
                  trust as fairly  representing its financial condition as at
                  the date as at which those financial statements were drawn up.

         (b)
                   (i)  SVIIT shall procure that each set of financial
                        statements of an Obligor delivered  pursuant to
                        Clause  20.1  (Financial  statements)  is  prepared
                        using  GAAP and  accounting practices and financial
                        reference periods  consistent with those applied in the
                        preparation of the Original  Financial  Statements for
                        that Obligor  unless,  in relation to any set of
                        financial  statements,  it notifies the Agent that there
                        has been a change in GAAP or the accounting  practices
                        or reference  periods and its auditors (or, if
                        appropriate,  the auditors of the Obligor)  deliver to
                        the Agent:


                                      - 44 -
<PAGE>


                        (A)      a  description  of any change  necessary  for
                                 those  financial  statements to reflect the
                                 GAAP, accounting  practices  and  reference
                                 periods  upon which that  Obligor's
                                 Original Financial Statements were prepared;
                                 and

                        (B)      sufficient  information,  in form and substance
                                 as may be reasonably  required by the Agent,
                                 to enable the Lenders to determine  whether
                                 Clause 21 (Financial  covenants) has been
                                 complied  with  and  make an  accurate
                                 comparison  between  the financial  position
                                 indicated  in  those  financial  statements
                                 and that Obligor's Original Financial
                                 Statements.

                  (ii)  If SVIIT  notifies the Agent of a change in accordance
                        with paragraph (i) above then SVIIT and the Agent shall
                        enter into negotiations in good faith with a view to
                        agreeing:

                        (A)      whether or not the change might result in any
                                 material  alteration in the commercial  effect
                                 of any of the terms of this Agreement; and

                        (B)      if so, any amendments to this  Agreement which
                                 may be necessary to ensure that the change
                                 does not result in any material  alteration in
                                 the  commercial  effect of those terms,

                         and if any  amendments  are agreed they shall take
                         effect and be binding on each of the Parties in
                         accordance with their terms.

         Any reference in this Agreement to those financial  statements shall
         be construed as a reference to those  financial  statements  as
         adjusted to reflect the basis upon which the Original Financial
         Statements were prepared.

20.4     Information: miscellaneous
         The Obligors shall supply to the Agent (in sufficient  copies for all
         the Lenders,  if the Agent so requests):

         (a)      all  documents  dispatched  by such  Obligor to its
                  shareholders  or trustee,  unitholders  or beneficiaries  (or
                  any class of them) or its  creditors  generally at the same
                  time as they are dispatched;

         (b)      promptly  upon  becoming  aware  of  them,  the  details  of
                  any  litigation,  arbitration  or administrative  proceedings
                  which are  current,  threatened  or pending  against  any
                  member of the  Group,  and which  might,  if  adversely
                  determined,  have a  Material Adverse Effect; and

          (c)     promptly,  such further information regarding the financial
                  condition,  business and operations of any member of the
                  Group as any Finance  Party  (through  the Agent) may
                  reasonably request.


                                      - 45 -
<PAGE>


20.5     Notification of default
         (a)      Each  Obligor  shall  notify the Agent of any Default  (and
                  the steps,  if any,  being taken to remedy it) promptly  upon
                  becoming  aware of its  occurrence  (unless that Obligor is
                  aware that a notification has already been provided by
                  another Obligor).

         (b)      Promptly upon a request by the Agent,  SVIIT shall supply to
                  the Agent a certificate  signed by two of its directors or
                  senior  officers on its behalf  certifying  that no Default
                  is continuing  (or if a Default is continuing,  specifying
                  the Default and the steps,  if any, being taken to remedy it).

21.      FINANCIAL COVENANTS

21.1     Financial definitions
         In this Clause 21:

         "Cash and Cash Equivalents" means at any time:

          (a)      cash in hand or on deposit with an  acceptable  bank and
                   which in either case is  remittable to the United Kingdom;

          (b)      certificates  of deposit  maturing  within one year after
                   the date of calculation  issued by an acceptable bank;

          (c)      open market commercial paper:

                    (i)     for which a recognised trading market exists;

                   (ii)     which matures within one year after the relevant
                            date of calculation; and

                  (iii)     which has a credit  rating of either A-1 by
                            Standard & Poor's  Rating  Services,  a division of
                            The McGraw Hill Companies,  Inc. (or its successors)
                            or Fitch IBCA, Inc. (or its successors) or P-1 by
                            Moody's  Investors  Service,  Inc. (or its
                            successors) or, if no rating is  available  in
                            respect of the  commercial  paper,  the issuer of
                            which has in respect of its long-term debt
                            obligations, an equivalent rating;

          (d)      Sterling  bills of exchange  eligible for  rediscount at the
                   Bank of England and accepted by an acceptable bank; or

          (e)      United States treasury bills; or

          (f)      Euro  denominated  debt  securities  issued by the
                   government of an acceptable  member state of the European
                   Union (for these  purposes an "acceptable  member state"
                   means any of the United Kingdom,  France,  Germany, The
                   Netherlands,  Belgium,  Spain, Italy,  Ireland, Denmark and
                   Sweden),

        in each case to which an Obligor is  beneficially  entitled at that
        time. An  "acceptable  bank" means any of the Original  Lenders,
        Schroders & Co. Limited,  ING Bank N.V. or any Affiliate of either of
        the foregoing or a commercial  bank or trust company which has a rating
        of A or higher by Standard & Poor's  Rating  Services,  a division of
        The McGraw Hill  Companies,  Inc. (or its successors)  or Fitch  IBCA,
        Inc.  (or its  successors)  or A2 or higher by  Moody's  Investors
        Service, Inc. (or its successors).


                                      - 46 -
<PAGE>


        "Consolidated  Gross  Borrowings"  means at any time the aggregate
        amount of all obligations of the Group (or, for the purposes of Clause
        21.2(b) below,  Barings  (Guernsey) Limited as trustee of the Platinum
        Trust) for or in respect of  Indebtedness  for Borrowed Money but
        excluding any such  obligations  to any other  member of the Group (and
        so that no amount shall be included or excluded more than once) and any
        obligations  subordinated  to the  obligations of the Obligors
        under the Finance  Documents on terms  satisfactory to the Agent
        (acting on the  instructions of the Majority Lenders (acting
        reasonably)).

        "Consolidated Adjusted Investment Assets" means Consolidated Investment
        Assets less:

        (a)      the  amount by which the value of an  investment  by a fund
                 (or any member of the Group) in any one underlying unquoted
                 Investee Company exceeds 15% of the Portfolio Value;

        (b)      the  amount by which the value of an  investment  by a fund
                 (or any member of the Group) in any one underlying  Investee
                 Company which is quoted on any public stock exchange exceeds
                 20% of the Portfolio Value;

        (c)      the  amount  by which  the value of the  twenty  largest
                 underlying  investments  in  Investee Companies exceed 85% of
                 the Portfolio Value; and

        (d)      the amount by which the P123 Adjusted Asset Value exceeds 7.5%
                 of the Portfolio Value.

        For the avoidance of doubt the value of the  investment  (or part
        thereof) shall not be deducted from the portfolio value more than once.

        "Consolidated  Investment  Assets"  means  at any time  the sum of the
        value  of the  Obligors' investments  in Schroder  Ventures  Funds,
        Permira  Funds or other funds,  or held  directly in Investee
        Companies (but (a) excluding the value of SVIIT's investment in the
        Platinum Trust and (b) for the  purpose  of  determining  the  value
        of  SVIIT's  holding  in P123  this  shall be calculated by multiplying
        the then most recent book valuation of SVIIT's  investment in P123 by
        30% (the resultant figure being defined as the "P123 Adjusted Asset
        Value")),  all Cash and Cash Equivalents held by the Obligors and all
        other  investments held by the Obligors and approved by the Agent (the
        latter being subject to a de minimus  requirement that the value
        thereof does not exceed 5% of total gross assets of the Obligors).

        "P123  Adjusted  Asset  Value"  has  the  meaning  given  to  such  term
        in the  definition  of "Consolidated Investment Assets" in this Clause
        21.1.

        "Portfolio Value" means the amount of the Consolidated Investment
        Assets of the Obligors.


                                      - 47 -
<PAGE>


21.2    Financial condition
        SVIIT shall ensure that:

        (a)      Consolidated  Gross Borrowings shall not be more than 30% of
                 Consolidated  Adjusted  Investment Assets at any time; and

        (b)      the  Consolidated  Gross  Borrowings of Barings  (Guernsey)
                 Limited as trustee of the Platinum Trust shall be less than 15%
                 of the Total Commitments at all times.

21.3     Financial testing
         The  financial  covenants  set out in  Clause  21.2  (Financial
         condition)  shall be  tested by reference to each of the  financial
         statements  and/or each  Compliance  Certificate  delivered  pursuant
         to Clause 20.2 (Compliance Certificate and Management Portfolio
         Valuations).

21.4     Valuation
         The  value of each  Investee  Company  shall be  assessed  (at the
         cost of the  Obligors)  on a semi-annual and annual basis according to
         the British  Venture  Capital  Association  Guidelines  published from
         time to time.

22.      GENERAL UNDERTAKINGS

         The  undertakings  in this Clause 22 remain in force from the date of
         this Agreement for so long as any amount is outstanding under the
         Finance Documents or any Commitment is in force.

22.1     Authorisations
         Each Obligor shall promptly:

         (a)      obtain, comply with and do all that is necessary to maintain
                  in full force and effect; and

         (b)      supply certified copies to the Agent of,

         any Authorisation  required under any law or regulation of its
         jurisdiction of incorporation (in the case of SVIIT) or  jurisdiction
         of  establishment  (in the case of the  Platinum  Trust) to enable it
         to perform its  obligations  under the Finance  Documents  and to
         ensure the legality, validity,  enforceability  or admissibility in
         evidence in its jurisdiction of incorporation (in the case of SVIIT)
         or jurisdiction of  establishment  (in the case of the Platinum Trust)
         of any Finance Document.

22.2     Compliance with laws
         Each Obligor shall comply in all respects  with all laws to which it
         may be subject,  if failure so to comply would  materially  impair its
         ability to perform its obligations  under the Finance Documents.


                                      - 48 -
<PAGE>


22.3     Financial Indebtedness
         Neither of the Obligors nor any of their  Subsidiaries  shall incur
         any  Financial  Indebtedness (including,  without limitation,
         guaranteeing any participating loan notes or convertible bonds
         issued from time to time by P123) other than:

         (a)      unsecured  overdraft  facilities  with any Joint Lead
                  Arranger or any  Affiliate  of any Joint Lead Arranger which
                  in aggregate do not exceed  GBP1million (or its equivalent
                  in other currencies);

         (b)      Financial  Indebtedness  which is  subordinated  to the
                  obligations  of the Obligors under the Finance  Documents on
                  terms  satisfactory to the Agent (acting on the  instructions
                  of the Majority Lenders (acting reasonably)); and

         (c)      any  Financial  Indebtedness  described  in  paragraph  (g)
                  of  the  definition  of  "Financial Indebtedness"  contained
                  in Clause 1.1  (Definitions)  incurred by SVIIT in accordance
                  with Clause 22.20 (Hedging).

22.4     Negative pledge
         (a)      No Obligor shall create or permit to subsist any Security
                  over any of its assets.

         (b)      No Obligor shall:

                    (i)      sell,  transfer or otherwise  dispose of any of
                             its assets on terms  whereby they are or may be
                             leased to or re-acquired by any other member of
                             the Group;

                   (ii)      sell, transfer or otherwise dispose of any of its
                             receivables on recourse terms;

                  (iii)      enter into any  arrangement  under which money or
                             the benefit of a bank or other account may be
                             applied, set-off or made subject to a combination
                             of accounts; or

                   (iv)      enter into any other preferential arrangement
                             having a similar effect,

                  in  circumstances  where the arrangement or transaction is
                  entered into primarily as a method of raising Financial
                  Indebtedness or of financing the acquisition of an asset.

         (c)      Paragraphs (a) and (b) above do not apply to:

                    (i)      any  netting or set-off  arrangement  entered  into
                             by any member of the Group in the  ordinary course
                             of its banking  arrangements  for the purpose of
                             netting debit and credit balances;

                   (ii)      any lien arising by operation of law and in the
                             ordinary course of trading;

                  (iii)      any set-off arising by operation of law;

                   (iv)      any Security constituted by or pursuant to the
                             Debentures;


                                      - 49 -
<PAGE>


                    (v)      any other  Security  created or  subsisting  with
                             the prior  written  consent  of the  Majority
                             Lenders; and

                   (vi)      any  Security  created  by any fund in which  an
                             Obligor  participates  over  its  holding  or
                             participation in any Investee Company.

22.5      No Subsidiaries

          No   Obligor will allow to exist any Subsidiary other than:

          (a)  in the case of  SVIIT,  the  Platinum  Trust,  Schroder  Ventures
               (London) Limited,  Schroder Ventures North America Inc., Schroder
               Ventures  Boston  Inc.,  SVIIT  Investment  Managers  Limited and
               Private Equity Advisers Limited; and

          (b)  any future  management  companies  formed or  acquired to provide
               management  services to the  companies  comprising  the  Schroder
               Ventures and/or Permira Group or Schroders plc or third parties,

          without the prior written approval of the Majority Lenders.

22.6      Disposals
          No  Obligor  shall  enter  into a single  transaction  or a series  of
          transactions  (whether  related  or  not)  and  whether  voluntary  or
          involuntary to sell, lease, transfer or otherwise dispose of any asset
          other than (a) for full  consideration  on arm's  length  terms in the
          ordinary  course of business  and in  accordance  with the  Investment
          Policy, or (b) the Permitted Disposal.

22.7      Merger
          No Obligor  shall (and SVIIT shall  ensure that no other member of the
          Group  will)  enter  into  any  amalgamation,  demerger  or  corporate
          reconstruction other than on a solvent basis.

22.8      Change of business
          SVIIT shall procure that no substantial  change is made to the general
          nature of the  business of SVIIT or the Group from that  carried on at
          the date of this  Agreement  except  as  contemplated  by the  Listing
          Particulars.

22.9      Insurance
          Each  Obligor  shall (and SVIIT  shall  ensure that each member of the
          Group will) maintain insurances on and in relation to its business and
          assets with  reputable  underwriters  or insurance  companies  against
          those  risks and to the extent as is usual for  companies  carrying on
          the same or substantially similar business.

22.10     Taxation
          Each Obligor  shall duly and  punctually  pay and  discharge all Taxes
          imposed upon it or its assets within the time period  allowed  without
          incurring  penalties  (save to the  extent  that (i)  payment is being
          contested  in  good  faith  and  (ii)  adequate   reserves  are  being
          maintained for those Taxes.

22.11     Dividends
          Following a Default which is continuing, no Obligor shall pay, make or
          declare any dividend or other distribution in respect of any financial
          year  save  to the  extent  required

                                      -50-

<PAGE>

          to maintain its status as an investment  trust for Tax purposes  under
          section 842 of the Taxes Act.

22.12     Investment Adviser
          SVIIT  shall  ensure  that  there is no change of  Investment  Adviser
          without the prior written consent of the Majority Lenders.

22.13     Further investments
          No  Obligor  will  enter  into any  commitment  to  invest or make any
          investment in any new fund if  Consolidated  Gross  Borrowings  exceed
          twenty-five per cent. of Consolidated  Adjusted  Investment  Assets at
          any time provided that the Obligors  shall be entitled to make such an
          investment in such circumstances  where such Obligor was under a prior
          commitment to make such investment and at the time such commitment was
          entered into it was not reasonably foreseeable that Consolidated Gross
          Borrowings   would  exceed  twenty  five  per  cent.  of  Consolidated
          Adjustment Investment Assets at the time of investment.

22.14     Diverse Investments
          The Obligors will ensure that their investments in Investee  Companies
          will be held directly or indirectly through any fund in at least fifty
          separate companies.

22.15     Investment in Schroder Venture Funds and/or Permira Funds
          The Obligors will ensure that, at any time, at least  seventy-five per
          cent. of Consolidated Investment Assets less Cash and Cash Equivalents
          will be represented  by investments in Schroder  Ventures Funds and/or
          Permira Funds.

22.16     Investment Policy
          The Obligors  shall  maintain the  Investment  Policy set forth in the
          Listing Particulars in all material respects.

22.17     Ownership of the Platinum Trust
          SVIIT will ensure  that at all times it owns at least 99 per cent.  of
          the A units and 90per cent. of the B units in the Platinum Trust.

22.18     Investment Trust status
          SVIIT will ensure that at all times it will be an investment trust for
          Tax purposes under section 842 of the Taxes Act.

22.19     Amendments to Trust Deed
          The  Obligors  will  ensure  that no change is made to Clause 2 of the
          Trust Deed dated 29 March 1996  constituting  the  Platinum  Trust and
          made between Barings  (Guernsey) Limited and Schroder Venture Managers
          (Guernsey)  Limited  without the prior written consent of the Majority
          Lenders (such consent not to be unreasonably withheld or delayed).

22.20     Hedging
          At any time when  amounts  outstanding  under  this  Agreement  exceed
          EUR100,000,000  in aggregate,  SVIIT will (unless the Majority Lenders
          agree  otherwise)  enter into  interest rate hedging  arrangements  in
          respect  of  interest  due  hereunder  on terms  and in  respect  of a
          notional   principal   amount   satisfactory   to  the  Agent  (acting
          reasonably).
                                      -51-

<PAGE>


22.21     Capital Structure of P123
          SVIIT will ensure that:

          (a)  the  initial  capital   structure  of  P123  (the  "P123  Capital
               Structure") shall be substantially in accordance with the details
               contained  in  version  17  of  the  draft  of  the  confidential
               information  memorandum  relating  to  P123  dated  3  June  2003
               provided to the Lenders on 3June2003;

          (b)  no change  occurs to the Permira  Capital  Structure  which would
               have a material  adverse  effect on the  ability of the  relevant
               Obligor to perform its obligations  under the Finance  Documents;
               and

          (c)  the Agent is provided  (with  sufficient  copies for the Lenders)
               with the final  offering  document in respect of P123 at the same
               time (or as soon as  practicable  thereafter) as it is despatched
               to potential investors in P123.

22.22     Condition Subsequent
          (a)  SVIIT will ensure that evidence  satisfactory to the Lenders that
               the holders of SVIIT's existing  GBP40,000,000  4.5% Subordinated
               Convertible Bonds due 2011 issued in November 2001 have consented
               to the  increase  in the Total  Commitments  contemplated  by the
               Amendment  Agreement  shall be  provided  to the Lenders no later
               than 30 days from the date of the Amendment Agreement.

          (b)  The  Obligors  hereby   acknowledge  and  agree  that  until  the
               condition  set out in paragraph (a) of this Clause 22.22 has been
               satisfied,   the  aggregate   amount  of  Utilisations   advanced
               hereunder shall not exceed EUR 225,000,000 at any time.

23.       EVENTS OF DEFAULT

          Each of the events or  circumstances  set out in Clause 23 is an Event
          of Default.

23.1      Non-payment
          An  Obligor  does not pay on the due date any amount of  principal  in
          excess of  EUR100,000  payable  pursuant to a Finance  Document at the
          place at and in the  currency in which it is  expressed  to be payable
          unless  payment is made  within 3 Business  Days of its due date or an
          Obligor does not pay any other amount payable  pursuant to the Finance
          Documents at the place and in the currency in which it is expressed to
          be payable  unless payment is made within ten Business Days of its due
          date.

23.2      Financial covenants
          Any requirement of Clause 21 (Financial covenants) is not satisfied.

23.3      Other obligations
          (a)  An Obligor  does not comply  with any  provision  of the  Finance
               Documents   (other   than  those   referred  to  in  Clause  23.1
               (Non-payment) and Clause 23.2 (Financial covenants)).

          (b)  No Event of Default  under  paragraph (a) above will occur if the
               failure to comply is capable of remedy and is remedied  within 14
               days of the Agent giving  notice to the  relevant  Obligor or the
               relevant Obligor becoming aware of the failure to comply.

                                      -52-

<PAGE>

23.4      Misrepresentation
          Any  representation  or  statement  made  or  deemed  to be made by an
          Obligor in the Finance Documents or any other document delivered by or
          on behalf  of any  Obligor  under or in  connection  with any  Finance
          Document  is or proves to have been  incorrect  or  misleading  in any
          material respect when made or deemed to be made.

23.5      Cross default
          (a)  Any Financial Indebtedness of an Obligor is not paid when due nor
               within any originally applicable grace period.

          (b)  Any  Financial  Indebtedness  of an Obligor is  declared to be or
               otherwise becomes due and payable prior to its specified maturity
               as a result of an event of default (however described).

          (c)  Any  commitment for any Financial  Indebtedness  of an Obligor is
               cancelled  or suspended by a creditor of such Obligor as a result
               of an event of default (however described).

          (d)  Any  creditor  of any  Obligor  becomes  entitled  to declare any
               Financial  Indebtedness  of such Obligor due and payable prior to
               its  specified  maturity  as a  result  of an  event  of  default
               (however described).

          (e)  No Event of Default  will occur  under  this  Clause  23.5 if the
               aggregate  amount of Financial  Indebtedness  or  commitment  for
               Financial Indebtedness falling within paragraphs (a) to (d) above
               is less than  GBP500,000 (or its equivalent in any other currency
               or currencies).

23.6      Insolvency
          (a)  An Obligor is unable or admits inability to pay its debts as they
               fall due,  suspends  making  payments  on any of its debts or, by
               reason of actual or anticipated financial difficulties, commences
               negotiations  with  one or more of its  creditors  with a view to
               rescheduling any of its indebtedness.

          (b)  The  value  of  the  assets  of  an  Obligor  is  less  than  its
               liabilities  (taking  into  account  contingent  and  prospective
               liabilities but excluding uncalled commitments).

          (c)  A  moratorium  is declared in respect of any  indebtedness  of an
               Obligor.

23.7      Insolvency proceedings
          Any corporate action,  legal proceedings or other procedure or step is
          taken in relation to:

          (a)  the  suspension of payments,  a moratorium  of any  indebtedness,
               winding-up, dissolution, administration or reorganisation (by way
               of voluntary arrangement,  scheme of arrangement or otherwise) of
               an Obligor otherwise than on a solvent basis;

          (b)  a composition,  assignment or arrangement with any creditor of an
               Obligor;
                                      -53-

<PAGE>

          (c)  the  appointment  of  a  liquidator,   receiver,   administrator,
               administrative  receiver,  compulsory  manager  or other  similar
               officer in respect of an Obligor or any of its assets; or

          (d)  enforcement  of any  Security  over  any  material  assets  of an
               Obligor,

          or any analogous procedure or step is taken in any jurisdiction and is
          not discharged, stayed or released within 30 days.

23.8      Creditors' process
          Any expropriation,  attachment,  sequestration,  distress or execution
          affects  any asset or assets of an Obligor  and is not  discharged  or
          released within 30 days.

23.9      Unlawfulness
          It is or  becomes  unlawful  for  an  Obligor  to  perform  any of its
          material  obligations  under the  Finance  Documents  or any  Security
          created or  expressed  to be created or  evidenced  by the  Debentures
          ceases to be effective or enforceable.

23.10     Repudiation
          An Obligor  repudiates a Finance Document or any Security or evidences
          an intention to repudiate a Finance Document or any Security.

23.11     Material adverse change
          Any event or circumstance occurs which the Majority Lenders reasonably
          believe might have a Material Adverse Effect.

23.12     Acceleration
          On and at any time after the  occurrence  of an Event of Default which
          is continuing  the Agent may, and shall if so directed by the Majority
          Lenders, by notice to the Obligors:

          (a)  cancel the Total Commitments  whereupon they shall immediately be
               cancelled;

          (b)  declare  that all or part of the  Loans,  together  with  accrued
               interest,  and  all  other  amounts  accrued  under  the  Finance
               Documents be  immediately  due and payable,  whereupon they shall
               become immediately due and payable; and/or

          (c)  declare  that all or part of the  Loans  be  payable  on  demand,
               whereupon they shall immediately  become payable on demand by the
               Agent on the instructions of the Majority Lenders.

                                      -54-

<PAGE>



                                    SECTION 9
                               CHANGES TO PARTIES

24.       CHANGES TO THE LENDERS

24.1      Assignments and transfers by the Lenders
          Subject to this Clause 24, a Lender (the "Existing Lender") may:

          (a)  assign any of its rights; or

          (b)  transfer by novation any of its rights and obligations,

          to another bank or financial institution (the "New Lender").

24.2      Conditions of assignment or transfer
          (a)  The consent of SVIIT is required for an assignment or transfer by
               a Lender,  unless the assignment or transfer is to another Lender
               or an Affiliate of a Lender.

          (b)  The consent of SVIIT to an  assignment  or  transfer  must not be
               unreasonably withheld or delayed.

          (c)  The consent of SVIIT to an  assignment  or  transfer  must not be
               withheld  solely because the assignment or transfer may result in
               an increase to the Mandatory Cost.

          (d)  An  assignment  will only be effective on receipt by the Agent of
               written  confirmation  from the New Lender (in form and substance
               satisfactory  to the  Agent  (acting  reasonably))  that  the New
               Lender  will  assume the same  obligations  to the other  Finance
               Parties as it would have been under if it was an Original Lender.

          (e)  A transfer  will only be  effective if the  procedure  set out in
               Clause 24.5 (Procedure for transfer) is complied with.

          (f) If:

               (i)  a  Lender   assigns  or  transfers  any  of  its  rights  or
                    obligations  under the  Finance  Documents  or  changes  its
                    Facility Office; and

               (ii) as a  result  of  circumstances  existing  at the  date  the
                    assignment,  transfer or change occurs,  an Obligor would be
                    (but for this  paragraph  (f))  obliged to make a payment to
                    the New Lender or Lender  acting  through  its new  Facility
                    Office under Clause 13 (Tax  gross-up  and  indemnities)  or
                    Clause 14 (Increased costs),

          then the New Lender or Lender acting  through its new Facility  Office
          is only  entitled to receive  payment  under those Clauses to the same
          extent as the Existing  Lender or Lender  acting  through its previous
          Facility Office would have been if the assignment,  transfer or change
          had not occurred.

                                      -55-

<PAGE>

24.3      Assignment or transfer fee
          The New Lender shall, on the date upon which an assignment or transfer
          takes  effect,  pay  to the  Agent  (for  its  own  account)  a fee of
          EUR1,500.

24.4      Limitation of responsibility of Existing Lenders
          (a)  Unless expressly agreed to the contrary, an Existing Lender makes
               no  representation or warranty and assumes no responsibility to a
               New Lender for:

               (i)  the   legality,   validity,   effectiveness,   adequacy   or
                    enforceability   of  the  Finance  Documents  or  any  other
                    documents;

               (ii) the financial condition of any Obligor;

               (iii)the  performance  and  observance  by  any  Obligor  of  its
                    obligations   under  the  Finance  Documents  or  any  other
                    documents; or

               (iv) the  accuracy of any  statements  (whether  written or oral)
                    made in or in  connection  with any Finance  Document or any
                    other document,

               and  any   representations  or  warranties  implied  by  law  are
               excluded.

          (b)  Each New Lender  confirms  to the  Existing  Lender and the other
               Finance Parties that it:

               (i)  has made (and shall  continue  to make) its own  independent
                    investigation and assessment of the financial  condition and
                    affairs  of  each  Obligor  and  its  related   entities  in
                    connection with its  participation in this Agreement and has
                    not relied exclusively on any information  provided to it by
                    the Existing Lender in connection with any Finance Document;
                    and

               (ii) will continue to make its own  independent  appraisal of the
                    creditworthiness  of each  Obligor and its related  entities
                    whilst any amount is or may be outstanding under the Finance
                    Documents or any Commitment is in force.

          (c)  Nothing in any Finance Document obliges an Existing Lender to:

               (i)  accept a re-transfer  from a New Lender of any of the rights
                    and  obligations  assigned or transferred  under this Clause
                    24; or

               (ii) support any losses  directly or  indirectly  incurred by the
                    New Lender by reason of the  non-performance  by any Obligor
                    of its obligations under the Finance Documents or otherwise.

24.5      Procedure for transfer

          (a)  Subject to the conditions  set out in Clause 24.2  (Conditions of
               assignment or transfer) a transfer is effected in accordance with
               paragraph  (b) below when the Agent  executes an  otherwise  duly
               completed  Transfer  Certificate  delivered to it by the Existing
               Lender and the New Lender. The Agent shall, as soon as reasonably
               practicable  after  receipt  by it of a duly  completed  Transfer
               Certificate  appearing  on its face to  comply  with the terms of
               this Agreement and
                                      -56-

<PAGE>

               delivered in accordance with the terms of this Agreement at least
               five  Business  Days  prior  to the  proposed  date of  transfer,
               execute that Transfer Certificate.

          (b)  On the Transfer Date:

               (i)  to the extent that in the Transfer  Certificate the Existing
                    Lender   seeks  to  transfer  by  novation  its  rights  and
                    obligations under the Finance Documents each of the Obligors
                    and the  Existing  Lender  shall be  released  from  further
                    obligations  towards one another under the Finance Documents
                    and their  respective  rights  against one another  shall be
                    cancelled (being the "Discharged Rights and Obligations");

               (ii) each  of the  Obligors  and  the  New  Lender  shall  assume
                    obligations   towards  one  another  and/or  acquire  rights
                    against one another which differ from the Discharged  Rights
                    and  Obligations  only  insofar as that  Obligor and the New
                    Lender have  assumed  and/or  acquired  the same in place of
                    that Obligor and the Existing Lender;

               (iii)the Agent,  the Joint Lead Arrangers,  the Trustee,  the New
                    Lender and other  Lenders  shall acquire the same rights and
                    assume the same obligations between themselves as they would
                    have  acquired  and  assumed  had  the  New  Lender  been an
                    Original Lender with the rights and/or obligations  acquired
                    or  assumed  by it as a result of the  transfer  and to that
                    extent the Agent, the Joint Lead Arrangers,  the Trustee and
                    the  Existing  Lender  shall each be released  from  further
                    obligations to each other under this Agreement; and

               (iv) the New Lender shall become a Party as a "Lender".

24.6      Disclosure of information

          Any Lender may disclose to any of its Affiliates and any other person:

          (a)  to (or through)  whom that Lender  assigns or  transfers  (or may
               potentially  assign or  transfer)  all or any of its  rights  and
               obligations under this Agreement;

          (b)  with  (or  through)   whom  that  Lender   enters  into  (or  may
               potentially enter into) any  sub-participation in relation to, or
               any other  transaction  under  which  payments  are to be made by
               reference to, this Agreement or any Obligor; or

          (c)  to whom,  and to the extent that,  information  is required to be
               disclosed by any applicable law or regulation,

          any information about any Obligor, the Group and the Finance Documents
          as  that  Lender  shall  consider   appropriate  if,  in  relation  to
          paragraphs (a) and (b) above, the person to whom the information is to
          be given has entered into a Confidentiality Undertaking.

25.       CHANGES TO THE OBLIGORS

          No Obligor may assign any of its rights or transfer  any of its rights
          or obligations under the Finance Documents.

                                      -57-

<PAGE>


                                   SECTION 10
                               THE FINANCE PARTIES

26.       ROLE OF THE AGENT, THE JOINT LEAD ARRANGERS AND TRUSTEE

26.1      Appointment of the Agent
          (a)  Each of the Joint Lead  Arrangers  and the Lenders  appoints  the
               Agent  to act as its  agent  under  and in  connection  with  the
               Finance Documents.

          (b)  Each of the Joint Lead  Arrangers and the Lenders  authorises the
               Agent to exercise the rights, powers, authorities and discretions
               specifically  given to the Agent under or in connection  with the
               Finance  Documents  together  with any other  incidental  rights,
               powers, authorities and discretions.

26.2      Declaration of Trust
          The Trustee  declares that it shall hold the Security on trust for the
          Finance Parties on the terms contained in this Agreement.  Each of the
          parties to this  Agreement  agrees  that the  Trustee  shall have only
          those duties,  obligations and responsibilities expressly specified in
          the Finance  Documents  to which it is a party (and no others shall be
          implied).  The Finance Parties shall not have any independent power to
          enforce,  or have  recourse to, any of the Security or to exercise any
          rights or powers pursuant to the Security Documents except through the
          Trustee. The rights, powers and discretions conferred upon the Trustee
          by this Agreement shall be supplemental to the Trustee Act 1925 and in
          addition  to any which may be vested in the  Trustee by general law or
          otherwise.

26.3      Trustee's Discretions
          The Trustee may:

          (a)  assume, unless it has, in its capacity as Trustee received actual
               notice to the contrary that (a) any representation made or deemed
               to be made by an Obligor in connection with the Finance Documents
               is true,  (b) no Default has occurred and no Obligor is in breach
               of or default under its obligations  under the Finance  Documents
               and (c) any right,  power,  authority or discretion vested by any
               Finance  Document  upon a Lender or any other person has not been
               exercised;

          (b)  refrain from acting in accordance  with any  instructions  of the
               Agent  (including any  instructions  to begin any legal action or
               proceedings  arising  out of or in  connection  with the  Finance
               Documents)  until it shall  have  received  such  indemnification
               and/or  security as it may require  (whether by way of payment in
               advance or otherwise)  for all costs,  claims,  losses,  expenses
               (including   legal  fees)  and  liabilities   together  with  any
               applicable  VAT which it will or may expend or incur in complying
               with those instructions.

26.4      Trustee's Obligations
          The Trustee shall promptly inform the Agent of:

          (a)  the  contents  of any notice or  document  received  by it in its
               capacity as Trustee from any Obligor under any Finance  Document;
               and
                                      -58-

<PAGE>

          (b)  the  occurrence  of any Event of  Default or  Potential  Event of
               Default or any default by an Obligor in the due performance of or
               compliance with its obligations  under any Finance  Document,  of
               which the  Trustee  has  received  notice from any other party to
               this Agreement.

26.5      Duties of the Agent and Trustee
          (a)  The Agent  shall  promptly  forward to a Party the  original or a
               copy of any  document  which is  delivered  to the Agent for that
               Party by any other Party and the Trustee shall  promptly  forward
               to the Agent any such document.

          (b)  If the  Agent  receives  notice  from a Party  referring  to this
               Agreement, describing a Default and stating that the circumstance
               described is a Default, it shall promptly notify the Lenders.

          (c)  The Agent  shall  promptly  notify  the  Lenders  of any  Default
               arising  under Clause 23.1  (Non-payment)  and the Trustee  shall
               promptly notify the Agent of any such Default.

          (d)  The Agent's and Trustee's duties under the Finance  Documents are
               solely mechanical and administrative in nature.

26.6      Role of the Joint Lead Arrangers
          Except as  specifically  provided in the Finance  Documents,  no Joint
          Lead Arranger has any obligations of any kind to any other Party under
          or in connection with any Finance Document.

26.7      No fiduciary duties
          (a)  Nothing in this Agreement constitutes the Agent or any Joint Lead
               Arranger as a trustee or fiduciary of any other person.

          (b)  Neither the Agent nor any Joint Lead  Arranger  shall be bound to
               account to any  Lender  for any sum or the profit  element of any
               sum received by it for its own account.

26.8      Business with the Group
          The  Agent,  the Joint  Lead  Arrangers  and the  Trustee  may  accept
          deposits  from,  lend  money to and  generally  engage  in any kind of
          banking or other business with any member of the Group.

26.9      Rights and discretions of the Agent
          (a)  The Agent may rely on:

               (i)  any representation,  notice or document believed by it to be
                    genuine, correct and appropriately authorised; and

               (ii) any statement  made by a director,  authorised  signatory or
                    employee  of any  person  regarding  any  matters  which may
                    reasonably  be assumed to be within his  knowledge or within
                    his power to verify.

                                      -59-

<PAGE>

          (b)  The Agent may assume  (unless  they have  received  notice to the
               contrary in their  capacity as agent or trustee for the  Lenders)
               that:

               (i)  no Default has occurred (unless it has actual knowledge of a
                    Default arising under Clause 23.1 (Non-payment));

               (ii) any right,  power,  authority  or  discretion  vested in any
                    Party or the Majority Lenders has not been exercised; and

               (iii)any  notice  or  request   made  by  SVIIT   (other  than  a
                    Utilisation  Request)  is made on  behalf  of and  with  the
                    consent and knowledge of the Platinum Trust.

          (c)  The Agent and the  Trustee  may  engage,  pay for and rely on the
               advice or  services of any  lawyers,  accountants,  surveyors  or
               other experts.

          (d)  The Agent and the  Trustee  may act in  relation  to the  Finance
               Documents through their personnel and agents.

26.10     Majority Lenders' instructions
          (a)  Unless a contrary  indication appears in a Finance Document,  the
               Agent shall (a) act in accordance with any instructions  given to
               it by the Majority  Lenders (or, if so instructed by the Majority
               Lenders,  refrain  from acting or  exercising  any right,  power,
               authority  or  discretion  vested in it as Agent)  and (b) not be
               liable for any act (or  omission)  if it acts (or  refrains  from
               taking any action) in accordance  with such an instruction of the
               Majority Lenders.

          (b)  Unless a contrary  indication appears in a Finance Document,  any
               instructions given by the Majority Lenders will be binding on all
               the Lenders and the Joint Lead Arrangers.

          (c)  The  Agent  may  refrain  from  acting  in  accordance  with  the
               instructions  of the Majority  Lenders (or, if  appropriate,  the
               Lenders)  until it has received  such  security as it may require
               for any cost,  loss or liability  (together  with any  associated
               VAT) which it may incur in complying with the instructions.

          (d)  In the absence of instructions from the Majority Lenders, (or, if
               appropriate,  the  Lenders)  the Agent may act (or  refrain  from
               taking  action) as it considers to be in the best interest of the
               Lenders.

          (e)  The Agent is not authorised to act on behalf of a Lender (without
               first   obtaining   that  Lender's   consent)  in  any  legal  or
               arbitration proceedings relating to any Finance Document.

26.11     Trustee's Actions
          The Trustee:

          (a)  shall, except as otherwise  provided,  act in accordance with any
               instructions  given to it by the Agent and shall be  entitled  to
               assume  that any  instructions  received by it from the Agent are
               (a) duly given by or on behalf of a Finance  Party in  accordance
               with  the  terms  of the  Finance  Documents  and all  applicable

                                      -60-

<PAGE>

               conditions  have  been  satisfied  and (b) have not been  revoked
               unless it has received actual notice of revocation;

          (b)  shall be entitled to request  instructions,  or  clarification of
               any direction,  from the Agent as to whether, and in what manner,
               it should exercise or refrain from exercising any rights,  powers
               and  discretions  and the Trustee may refrain from acting  unless
               and until those instructions or clarification are received by it;

          (c)  may, in the absence of any  instructions  to the  contrary,  take
               such  action  in the  exercise  of any of its  duties  under  the
               Finance  Documents which in its absolute  discretion it considers
               to be for  the  protection  and  benefit  of  all of the  Finance
               Parties;

          (d)  may,  and shall if so  directed  by the Agent,  at any time after
               receipt by the  Trustee of notice  from the Agent  directing  the
               Trustee to exercise all or any of its rights, remedies, powers or
               discretions, take such action as in its sole discretion it thinks
               fit to enforce the Security;

          (e)  shall be  entitled  to carry out all  dealings  with the  Finance
               Parties  through  the  Agent,  to give to the Agent any notice or
               other  communication  required  to be given by the Trustee to the
               Finance Parties and to rely on a certificate from the Agent as to
               the amount owed to any of the Finance Parties or by any Obligor;

          (f)  may  place  (at the  cost  of the  Obligors)  any of the  Finance
               Documents and any other documents relating to the Security in any
               safe  custody  selected  by the  Trustee  or with  any  financial
               institution, any company whose business includes the safe custody
               of  documents  or any  firm of  lawyers  of good  repute  and the
               Trustee  shall not be  responsible  for,  or  required  to insure
               against, any loss incurred in connection with that deposit;

          (g)  may  accept  without  enquiry,   and  shall  not  be  obliged  to
               investigate,  such  right and title as each of the  Obligors  may
               have to any of the Charged  Property  and shall not be liable for
               or bound to require any Obligor to remedy any defect in its right
               or title; and

          (h)  may refrain from doing  anything which in its opinion will or may
               be contrary to any relevant  law,  directive or regulation of any
               jurisdiction  which would or might otherwise  render it liable to
               any person,  and the  Trustee  may do  anything  which is, in its
               opinion,  necessary  to comply  with any such law,  directive  or
               regulation.

26.12     Responsibility for documentation
          Neither the Agent nor any Joint Lead Arranger nor the Trustee:

          (a)  is responsible for the adequacy,  accuracy and/or completeness of
               any information  (whether oral or written) supplied by the Agent,
               any Joint Lead Arranger,  an Obligor or any other person given in
               or in connection with any Finance Document; or

                                      -61-

<PAGE>

          (b)  is  responsible  for  the  legality,   validity,   effectiveness,
               adequacy or  enforceability  of any Finance Document or any other
               agreement, arrangement or document entered into, made or executed
               in anticipation of or in connection with any Finance Document.

26.13     Exclusion of liability
          (a)  Without limiting  paragraph (b) below,  neither the Agent nor the
               Trustee  will be liable  for any  action  taken by it under or in
               connection with any Finance  Document,  unless directly caused by
               its gross negligence or wilful misconduct.

          (b)  No Party may take any proceedings  against any officer,  employee
               or agent of the Agent or the  Trustee  in respect of any claim it
               might have  against the Agent or the Trustee or in respect of any
               act or omission of any kind by that officer, employee or agent in
               relation to any Finance  Document  and any  officer,  employee or
               agent of the Agent or the  Trustee may rely on this  Clause.  Any
               third  party  referred  to in this  paragraph  (b) may  enjoy the
               benefit of and enforce the terms of this  paragraph in accordance
               with the  provisions of the Contracts  (Rights of Third  Parties)
               Act 1999.

          (c)  Neither  the Agent  nor the  Trustee  will not be liable  for any
               delay (or any related  consequences) in crediting an account with
               an amount required under the Finance  Documents to be paid by the
               Agent if the  Agent  has  taken  all  necessary  steps as soon as
               reasonably   practicable  to  comply  with  the   regulations  or
               operating  procedures  of any  recognised  clearing or settlement
               system used by the Agent for that purpose.

26.14     Trustee's Exclusions
          The Trustee shall not be liable for any failure to:

          (a)  require the deposit  with it of any deed or document  certifying,
               representing or  constituting  the title of any Obligor to any of
               the Charged Property;

          (b)  obtain any licence, consent or other authority for the execution,
               delivery, legality, validity,  enforceability or admissibility in
               evidence of any of the Finance Documents or the Security;

          (c)  register, file or record or otherwise protect any of the Security
               (or the  priority of any of the  Security)  under any  applicable
               laws in any  jurisdiction  or to give notice to any person of the
               execution of any of the Finance Documents or of the Security;

          (d)  take,  or to require any of the  Obligors  to take,  any steps to
               perfect its title to any of the Charged Property or to render the
               Security  effective  or to secure the  creation of any  ancillary
               Encumbrance under the laws of any jurisdiction; or

          (e)  require any further assurances in relation to any of the Security
               Documents.

26.15     Lenders' indemnity to the Agent and the Trustee
          Each Lender shall (in proportion to its share of the Total Commitments
          or, if the Total  Commitments are then zero, to its share of the Total
          Commitments  immediately  prior to

                                      -62-

<PAGE>

          their reduction to zero)  indemnify the Agent and the Trustee,  within
          three  Business  Days of demand,  against any cost,  loss or liability
          incurred by the Agent and the Trustee (otherwise than by reason of the
          Agent or the  Trustee's  gross  negligence  or wilful  misconduct)  in
          acting as Agent or Trustee  under the  Finance  Documents  (unless the
          Agent or  Trustee  has been  reimbursed  by an Obligor  pursuant  to a
          Finance Document).

26.16     Resignation of the Agent and the Trustee
          (a)  The Agent  and/or the  Trustee  may resign and appoint one of its
               Affiliates  acting  through  an office in the  United  Kingdom as
               successor by giving notice to the Lenders and the SVIIT.

          (b)  Alternatively  the Agent  and/or the Trustee may resign by giving
               notice to the  Lenders  and  SVIIT,  in which  case the  Majority
               Lenders (after  consultation  with SVIIT) may appoint a successor
               Agent and/or Trustee.

          (c)  If the  Majority  Lenders  have not  appointed a successor  Agent
               and/or the Trustee in accordance  with paragraph (b) above within
               30 days after notice of resignation  was given,  the Agent and/or
               Trustee (after  consultation  with SVIIT) may appoint a successor
               Agent  and/or  Trustee  (acting  through  an office in the United
               Kingdom).

          (d)  The  retiring  Agent or  Trustee  shall,  at its own  cost,  make
               available to the  successor  Agent or Trustee such  documents and
               records and provide such  assistance  as the  successor  Agent or
               Trustee may reasonably request for the purposes of performing its
               functions as Agent or Trustee under the Finance Documents (as the
               case may be).

          (e)  The  Agent's  or  Trustee's  resignation  notice  shall only take
               effect upon the appointment of a successor.

          (f)  Upon  the  appointment  of a  successor,  the  retiring  Agent or
               Trustee  shall be  discharged  from  any  further  obligation  in
               respect of the Finance Documents but shall remain entitled to the
               benefit of this  Clause 26. Its  successor  and each of the other
               Parties  shall  have  the same  rights  and  obligations  amongst
               themselves  as they would have had if such  successor had been an
               original Party.

          (g)  After  consultation  with SVIIT,  the  Majority  Lenders  may, by
               notice  to the  Agent or the  Trustee,  require  it to  resign in
               accordance with paragraph (b) above. In this event,  the Agent or
               the Trustee shall resign in accordance with paragraph (b) above.

26.17    Delegation and Additional Trustees
         The Trustee may, at any time:

          (a)  delegate by power of attorney or  otherwise to any person for any
               period,  all or any of the rights,  powers and discretions vested
               in it by any of the Finance  Documents and such delegation may be
               made  upon  such  terms and  conditions  (including  the power to
               sub-delegate) and subject to such restrictions as the Trustee may
               think fit in the interest of the Finance Parties and it shall not
               be bound to supervise,  or be in any way responsible for any loss
               incurred by reason
                                      -63-

<PAGE>

               of any  misconduct or default on the part of any such delegate or
               sub-delegate; and

          (b)  appoint (and subsequently remove) any person to act as a separate
               trustee or as a  co-trustee  jointly  with it (a) if it considers
               such appointment to be in the interests of the Finance Parties or
               (b) for the  purposes of  conforming  to any legal  requirements,
               restrictions or conditions which the Trustee deems to be relevant
               or  (c)  for   obtaining  or  enforcing   any  judgement  in  any
               jurisdiction,  and the  Trustee  shall give  prior  notice to the
               Obligors  and the Agent of any such  appointment.  Any  person so
               appointed  (subject  to the terms of this  Agreement)  shall have
               such  rights,   powers  and  discretions   (not  exceeding  those
               conferred on the Trustee by this  Agreement)  and such duties and
               obligations  as are  conferred  or imposed by the  instrument  of
               appointment.  The  remuneration  the  Trustee may pay to any such
               person,  and any costs and  expenses  incurred  by such person in
               performing its functions  pursuant to that appointment shall, for
               the purposes of this Agreement,  be treated as costs and expenses
               incurred by the Trustee.

26.18     Business with the Group
          The Agent, any Joint Lead Arranger and the Trustee may accept deposits
          from,  lend  money to and  generally  engage in any kind of banking or
          other business with any member of the Group.

26.19     Insurance by Trustee
          The  Trustee  shall not be under any  obligation  to insure any of the
          Charged  Property,  to  require  any  other  person  to  maintain  any
          insurance or to verify any obligation to arrange or maintain insurance
          contained  in  the  Finance  Documents.   The  Trustee  shall  not  be
          responsible  for any loss  which may be  suffered  by any  person as a
          result of the lack of or inadequacy of any such  insurance.  Where the
          Trustee is named on any insurance policy as an insured party, it shall
          not be  responsible  for any loss which may be  suffered by reason of,
          directly  or  indirectly,  its  failure to notify the  insurers of any
          material  fact  relating to the risk  assumed by such  insurers or any
          other  information  of any kind,  unless any Finance  Party shall have
          requested it to do so in writing and the Trustee  shall have failed to
          do so within fourteen days after receipt of that request.

26.20     Manner of enforcement
          Each of the Obligors waives,  to the extent permitted under applicable
          law, all rights it may otherwise  have to require that the Security be
          enforced in any particular  order or manner or at any particular  time
          or that any sum received or recovered from any person, or by virtue of
          the  enforcement  of the Security or any other  encumbrance,  which is
          capable of being applied in or towards discharge of any of the Secured
          Obligations is so applied.

26.21     Winding-up of Trust and Perpetuity Period
          If the Trustee,  with the approval of the Agent,  determines  that (a)
          all of the Secured  Obligations and all other  obligations  secured by
          any of the Security Documents,  have been fully and finally discharged
          and (b) none of the  Lenders is under any  commitment,  obligation  or
          liability  (whether  actual or  contingent)  to make a Loan or provide
          other financial  accommodation  to any Obligor pursuant to the Finance
          Documents, the trusts

                                      -64-
<PAGE>

          set out in this Agreement  shall be wound up. At that time the Trustee
          shall release,  without recourse or warranty, all of the Security then
          held by it and the rights of the  Trustee  under each of the  Security
          Documents,  at which time each of the Trustee,  the Agent, the Lenders
          and the Obligors shall be released from its  obligations in respect of
          these  trusts and the  Security  (save for those  which arose prior to
          such  winding-up).  The  perpetuity  period  under  the  rule  against
          perpetuities,  if applicable to this Agreement, shall be the period of
          eighty years from the date of this Agreement.

26.22     Confidentiality
          (a)  In  acting as agent for the  Finance  Parties,  the Agent and the
               Trustee shall be regarded as acting through their agency or trust
               divisions (as the case may be) which shall be treated as separate
               entities from any other of its divisions or departments.

          (b)  If information  is received by another  division or department of
               the Agent or the Trustee,  it may be treated as  confidential  to
               that  division or  department  and the Agent or the Trustee shall
               not be deemed to have notice of it.

          (c)  Notwithstanding  any other  provision of any Finance  Document to
               the  contrary,  neither the Agent nor any Joint Lead Arranger nor
               the Trustee  are obliged to disclose to any other  person (i) any
               confidential  information  or (ii) any other  information  if the
               disclosure would or might in its reasonable  opinion constitute a
               breach of any law or a breach of a fiduciary duty.

26.23     Relationship with the Lenders

          (a)  The Agent and the  Trustee  may  treat  each  Lender as a Lender,
               entitled to payments  under this Agreement and acting through its
               Facility  Office  unless  it has  received  not  less  than  five
               Business  Days prior  notice from that Lender to the  contrary in
               accordance with the terms of this Agreement.

          (b)  Each  Lender  shall  supply  the Agent and the  Trustee  with any
               information  required  by the  Agent or the  Trustee  in order to
               calculate  the  Mandatory  Cost in  accordance  with  Schedule  4
               (Mandatory Cost formulae).

26.24     Credit appraisal by the Lenders
          Without  affecting the  responsibility  of any Obligor for information
          supplied  by it or on  its  behalf  in  connection  with  any  Finance
          Document,  each Lender  confirms to the Agent and the Trustee and each
          Joint Lead Arranger that it has been,  and will continue to be, solely
          responsible for making its own independent appraisal and investigation
          of all risks arising under or in connection with any Finance  Document
          including but not limited to:

          (a)  the financial condition,  status and nature of each member of the
               Group;

          (b)  the legality, validity, effectiveness, adequacy or enforceability
               of any Finance Document and any other  agreement,  arrangement or
               document entered into, made or executed in anticipation of, under
               or in connection with any Finance Document;

          (c)  whether  that Lender has  recourse,  and the nature and extent of
               that recourse,  against any Party or any of its respective assets
               under  or  in   connection   with  any

                                      -65-

<PAGE>

               Finance  Document,  the transactions  contemplated by the Finance
               Documents or any other agreement, arrangement or document entered
               into, made or executed in anticipation of, under or in connection
               with any Finance Document; and

          (d)  the adequacy,  accuracy  and/or  completeness  of any information
               provided  by the Agent,  the  Trustee,  any Party or by any other
               person  under or in  connection  with any Finance  Document,  the
               transactions  contemplated by the Finance  Documents or any other
               agreement, arrangement or document entered into, made or executed
               in  anticipation  of,  under or in  connection  with any  Finance
               Document.

26.25     Lenders' tax status confirmation
          Each  Lender  confirms  in favour of the Agent,  the  Trustee  and the
          Obligors  on the date of this  Agreement  or,  in the case of a Lender
          which  becomes a Party  pursuant to a transfer or  assignment,  on the
          date on which the relevant  transfer or assignment  becomes  effective
          that either:

          (a)  it is not resident for Tax purposes in the United  Kingdom and is
               beneficially  entitled  to its  share of the Loan and  associated
               interest; or

          (b)  it is a bank as defined  for the  purposes  of section 349 of the
               Taxes Act and is  beneficially  entitled to its share of the Loan
               and associated interest,

          and each  Lender  shall  promptly  notify the Agent and the Trustee if
          there is any change in its position from that set out above.

26.26     Reference Banks
          If a  Reference  Bank (or, if a  Reference  Bank is not a Lender,  the
          Lender of which it is an Affiliate)  ceases to be a Lender,  the Agent
          shall  (in  consultation  with  SVIIT)  appoint  another  Lender or an
          Affiliate of a Lender to replace that Reference Bank.

27.       CONDUCT OF BUSINESS BY THE FINANCE PARTIES

          No provision of this Agreement will:

          (a)  interfere  with the right of any  Finance  Party to  arrange  its
               affairs (Tax or otherwise) in whatever manner it thinks fit;

          (b)  oblige any  Finance  Party to  investigate  or claim any  credit,
               relief,  remission  or  repayment  available to it or the extent,
               order and manner of any claim; or

          (c)  oblige any Finance Party to disclose any information  relating to
               its affairs (Tax or otherwise) or any  computations in respect of
               Tax.
                                      -66-

<PAGE>

28.       SHARING AMONG THE LENDERS

28.1      Payments to Lenders
          If a Lender (a  "Recovering  Lender")  receives or recovers any amount
          from an  Obligor  other than in  accordance  with  Clause 29  (Payment
          mechanics)  and applies that amount to a payment due under the Finance
          Documents then:

          (a)  the Recovering  Lender shall,  within three Business Days, notify
               details of the receipt or recovery, to the Agent;

          (b)  the Agent shall  determine  whether the receipt or recovery is in
               excess of the amount the  Recovering  Lender would have been paid
               had the  receipt or recovery  been  received or made by the Agent
               and distributed in accordance with Clause 29 (Payment mechanics),
               without  taking  account of any Tax which would be imposed on the
               Agent in relation to the receipt, recovery or distribution; and

          (c)  the Recovering Lender shall, within three Business Days of demand
               by the Agent, pay to the Agent an amount (the "Sharing  Payment")
               equal to such receipt or recovery less any amount which the Agent
               determines may be retained by the Recovering  Lender as its share
               of any  payment  to be  made,  in  accordance  with  Clause  29.5
               (Partial payments).

28.2      Redistribution of payments
          The Agent shall  treat the  Sharing  Payment as if it had been paid by
          the relevant  Obligor and  distribute  it between the Finance  Parties
          (other  than the  Recovering  Lender) in  accordance  with Clause 29.5
          (Partial payments).

28.3      Recovering Lender's rights
          (a)  On a distribution by the Agent under Clause 28.2  (Redistribution
               of  payments),  the  Recovering  Lender will be subrogated to the
               rights  of  the  Finance   Parties   which  have  shared  in  the
               redistribution.

          (b)  If and to the extent  that the  Recovering  Lender is not able to
               rely on its  rights  under  paragraph  (a)  above,  the  relevant
               Obligor shall be liable to the Recovering Lender for a debt equal
               to the Sharing Payment which is immediately due and payable.

28.4      Reversal of redistribution
          If  any  part  of the  Sharing  Payment  received  or  recovered  by a
          Recovering  Lender becomes  repayable and is repaid by that Recovering
          Lender, then:

          (a)  each Lender which has  received a share of the  relevant  Sharing
               Payment  pursuant to Clause  28.2  (Redistribution  of  payments)
               shall, upon request of the Agent, pay to the Agent for account of
               that  Recovering  Lender  an  amount  equal  to its  share of the
               Sharing  Payment  (together  with an  amount as is  necessary  to
               reimburse  that  Recovering  Lender  for  its  proportion  of any
               interest on the Sharing Payment which that  Recovering  Lender is
               required to pay); and

                                      -67-

<PAGE>

          (b)  that Recovering  Lender's rights of subrogation in respect of any
               reimbursement shall be cancelled and the relevant Obligor will be
               liable to the reimbursing Lender for the amount so reimbursed.

28.5      Exceptions
          (a)  This Clause 28 shall not apply to the extent that the  Recovering
               Lender  would not,  after  making any  payment  pursuant  to this
               Clause,  have a valid and enforceable  claim against the relevant
               Obligor.

          (b)  A Recovering Lender is not obliged to share with any other Lender
               any amount which the Recovering  Lender has received or recovered
               as a result of taking legal or arbitration proceedings, if:

               (i)  it notified  the other  Lenders of the legal or  arbitration
                    proceedings; and

               (ii) the other Lender had an  opportunity to participate in those
                    legal or arbitration  proceedings  but did not do so as soon
                    as reasonably  practicable having received notice or did not
                    take separate legal or arbitration proceedings.

                                      -68-

<PAGE>



                                   SECTION 11
                                 ADMINISTRATION

29.       PAYMENT MECHANICS

29.1      Payments to the Agent
          (a)  On each date on which an Obligor or a Lender is  required to make
               a payment under a Finance Document,  that Obligor or Lender shall
               make  the  same   available  to  the  Agent  (unless  a  contrary
               indication  appears in a Finance  Document)  for value on the due
               date at the  time and in such  funds  specified  by the  Agent as
               being customary at the time for settlement of transactions in the
               relevant currency in the place of payment.

          (b)  Payment shall be made to such account in the principal  financial
               centre of the country of that  currency (or, in relation to euro,
               in a principal  financial centre in a Participating  Member State
               or London) with such bank as the Agent specifies.

29.2      Distributions by the Agent
          Each  payment  received by the Agent under the Finance  Documents  for
          another  Party  shall,  subject to Clause  29.3  (Distributions  to an
          Obligor) and Clause 29.4  (Clawback) be made available by the Agent as
          soon as  practicable  after  receipt to the Party  entitled to receive
          payment in  accordance  with this  Agreement (in the case of a Lender,
          for the account of its Facility Office), to such account as that Party
          may notify to the Agent by not less than five  Business  Days'  notice
          with a bank in the principal  financial  centre of the country of that
          currency (or, in relation to euro, in the principal  financial  centre
          of a Participating Member State or London).

29.3      Distributions to an Obligor
          The Agent may (with the consent of the Obligor or in  accordance  with
          Clause 30 (Set-off))  apply any amount received by it for that Obligor
          in or towards  payment (on the date and in the  currency  and funds of
          receipt)  of any  amount  due from  that  Obligor  under  the  Finance
          Documents  or in or towards  purchase of any amount of any currency to
          be so applied.

29.4      Clawback
          (a)  Where  a sum  is to be  paid  to  the  Agent  under  the  Finance
               Documents for another Party, the Agent is not obliged to pay that
               sum to that other  Party (or to enter into or perform any related
               exchange  contract)  until it has been able to  establish  to its
               satisfaction that it has actually received that sum.

          (b)  If the Agent pays an amount to another  Party and it proves to be
               the case that the Agent had not  actually  received  that amount,
               then the  Party  to whom  that  amount  (or the  proceeds  of any
               related exchange  contract) was paid by the Agent shall on demand
               refund  the same to the  Agent  together  with  interest  on that
               amount  from the date of  payment  to the date of  receipt by the
               Agent, calculated by the Agent to reflect its cost of funds.

29.5      Partial payments
          (a)  If the Agent receives a payment that is insufficient to discharge
               all the  amounts  then due and  payable by an  Obligor  under the
               Finance Documents, the Agent

                                      -69-

<PAGE>

               shall apply that payment  towards the obligations of that Obligor
               under the Finance Documents in the following order:

               (i)  first,  in or towards  payment pro rata of any unpaid  fees,
                    costs and  expenses of the Agent,  the Trustee and the Joint
                    Lead Arrangers under the Finance Documents;

               (ii) secondly,  in or  towards  payment  pro rata of any  accrued
                    interest or commission due but unpaid under this Agreement;

               (iii)thirdly,  in or towards  payment  pro rata of any  principal
                    due but unpaid under this Agreement; and

               (iv) fourthly,  in or towards  payment  pro rata of any other sum
                    due but unpaid under the Finance Documents.

          (b)  The Agent shall, if so directed by the Majority Lenders, vary the
               order set out in paragraphs (a)(ii) to (a)(iv) above.

          (c)  Paragraphs (a) and (b) above will override any appropriation made
               by an Obligor.

29.6      No set-off by Obligors
          All  payments  to be made by an Obligor  under the  Finance  Documents
          shall be  calculated  and be made  without  (and free and clear of any
          deduction for) set-off or counterclaim.

29.7      Business Days
          (a)  Any  payment  which  is due to be  made  on a day  that  is not a
               Business  Day shall be made on the next  Business Day in the same
               calendar  month (if there is one) or the  preceding  Business Day
               (if there is not).

          (b)  During any extension of the due date for payment of any principal
               or an Unpaid Sum under this Agreement  interest is payable on the
               principal at the rate payable on the original due date.

29.8      Currency of account
          (a)  Subject to paragraphs (b) to (e) below,  the Base Currency is the
               currency  of account  and payment for any sum due from an Obligor
               under any Finance Document.

          (b)  A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid
               Sum shall be made in the  currency  in which  that Loan or Unpaid
               Sum is denominated on its due date.

          (c)  Each  payment of interest  shall be made in the currency in which
               the  sum  in  respect  of  which  the  interest  is  payable  was
               denominated when that interest accrued.

          (d)  Each payment in respect of costs, expenses or Taxes shall be made
               in the  currency  in which  the  costs,  expenses  or  Taxes  are
               incurred.
                                      -70-

<PAGE>

          (e)  Any amount  expressed to be payable in a currency  other than the
               Base Currency shall be paid in that other currency.

          (f)  For the purpose of or pending the discharge of any of the Secured
               Obligations  the  Trustee  may  convert  any moneys  received  or
               recovered by it from one currency to another, at the spot rate at
               which the Trustee is able to purchase  the  currency in which the
               Secured  Obligations  are  due  with  the  amount  received.  The
               obligations  of any Obligor to pay in the due currency shall only
               be  satisfied  to the  extent of the  amount of the due  currency
               purchased after deducting the costs of conversion.

29.9      Change of currency
          (a)  Unless otherwise  prohibited by law, if more than one currency or
               currency unit are at the same time recognised by the central bank
               of any country as the lawful currency of that country, then:

               (i)  any   reference  in  the  Finance   Documents  to,  and  any
                    obligations  arising  under the  Finance  Documents  in, the
                    currency of that country shall be  translated  into, or paid
                    in, the currency or currency unit of that country designated
                    by the Agent (after consultation with SVIIT); and

               (ii) any  translation  from  one  currency  or  currency  unit to
                    another shall be at the official rate of exchange recognised
                    by the central bank for the  conversion  of that currency or
                    currency  unit  into the  other,  rounded  up or down by the
                    Agent (acting reasonably).

          (b)  If a change in any currency of a country  occurs,  this Agreement
               will,  to the  extent  the  Agent  (acting  reasonably  and after
               consultation with SVIIT) specifies to be necessary, be amended to
               comply  with  any  generally  accepted   conventions  and  market
               practice  in the  Relevant  Interbank  Market  and  otherwise  to
               reflect the change in currency.

29.10     Application of Proceeds by Trustee
          All moneys from time to time  received or  recovered by the Trustee in
          connection  with the  realisation or enforcement of all or any part of
          the  Security  shall be held by the  Trustee on trust to apply them at
          such  times as the  Trustee  sees  fit,  to the  extent  permitted  by
          applicable  law (subject to the  provisions  of this  Clause),  in the
          following order of priority:

          (a)  in discharging  any sums owing to the Trustee (in its capacity as
               trustee), any Receiver or any Delegate;

          (b)  in  payment  to  the  Agent,  on  behalf  of  the  Lenders,   for
               application  towards the discharge of all sums due and payable by
               any Obligor  under any of the Finance  Documents in the order set
               out in Clause 29.5 above;

          (c)  if none of the Obligors is under any further actual or contingent
               liability under any Finance Document, in payment to any person to
               whom the Trustee is obliged to pay in  priority  to any  Obligor;
               and
                                      -71-
<PAGE>

          (d)  the balance, if any, in payment to the relevant Obligor.

29.11     Investment of Proceeds by Trustee
          Prior to the application of the proceeds of the Security in accordance
          with Clause  29.10  (Application  of Proceeds by Trustee)  the Trustee
          may,  at its  discretion,  hold  all or part of those  proceeds  in an
          interest bearing suspense or impersonal  account(s) in the name of the
          Trustee or Agent with such financial  institution  (including  itself)
          for so long  as the  Trustee  shall  think  fit  (the  interest  being
          credited to the relevant account) pending the application from time to
          time of those monies at the Trustee's  discretion  in accordance  with
          the provisions of this Clause.

29.12     Permitted Deductions by Trustee
          The  Trustee  shall be  entitled  (a) to set  aside by way of  reserve
          amounts  required to meet and (b) to make and pay, any  deductions and
          withholdings  (on account of Taxes or otherwise) which it is or may be
          required  by any  applicable  law to make  from  any  distribution  or
          payment  made by it under this  Agreement,  and to pay all Taxes which
          may be assessed against it in respect of any of the Charged  Property,
          or as a  consequence  of  performing  its duties,  or by virtue of its
          capacity as Trustee  under any of the Finance  Documents  or otherwise
          (other than in connection  with its  remuneration  for  performing its
          duties under this Agreement).

29.13     Discharge of Secured Obligations
          Each of the Obligors agrees that the Secured Obligations shall only be
          discharged  to the  extent of the  receipts  by or  recoveries  of the
          Trustee pursuant to the enforcement of the Security. Any payment to be
          made in respect of the Secured  Obligations by the Trustee may be made
          to the Agent and any payment so made shall be a good  discharge to the
          extent of such payment, to the Trustee.

29.14     Sums received by Obligors
          If any of the Obligors receives any sum which,  pursuant to any of the
          Finance  Documents,  should  have been paid to the  Trustee,  that sum
          shall be held by that  Obligor  on trust  for the  Lenders  and  shall
          promptly be paid to the Trustee for  application  in  accordance  with
          this Clause.

30.       SET-OFF

          A Finance Party may, whilst an Event of Default is continuing, set off
          any matured obligation due from an Obligor under the Finance Documents
          (to the extent  beneficially  owned by that Finance Party) against any
          matured  obligation  owed  by that  Finance  Party  to  that  Obligor,
          regardless  of the place of  payment,  booking  branch or  currency of
          either obligation. If the obligations are in different currencies, the
          Finance  Party  may  convert  either  obligation  at a market  rate of
          exchange  in its  usual  course of  business  for the  purpose  of the
          set-off.

31.       NOTICES

31.1      Communications in writing
          Any  communication  to be made under or in connection with the Finance
          Documents shall be made in writing and, unless otherwise  stated,  may
          be made by fax, letter or telex.

                                      -72-
<PAGE>

31.2      Addresses
          The  address,  fax  number and telex  number  (and the  department  or
          officer,  if any, for whose attention the communication is to be made)
          of  each  Party  for  any  communication  or  document  to be  made or
          delivered under or in connection with the Finance Documents is:

          (a)  in the case of each Obligor, that identified with its name below;

          (b)  in the case of each Lender, that notified in writing to the Agent
               on or prior to the date on which it becomes a Party;

          (c)  in the case of the Agent,  that  identified  with its name below;
               and

          (d)  in the case of the Trustee, that identified with its name below,

          or any substitute address,  fax number,  telex number or department or
          officer  as the Party may notify to the Agent (or the Agent may notify
          to the other  Parties,  if a change is made by the  Agent) by not less
          than five Business Days' notice.

31.3      Delivery

          (a)  Any  communication or document made or delivered by one person to
               another under or in connection  with the Finance  Documents  will
               only be effective:

               (i)  if by way of fax, when received in legible form; or

               (ii) if by way of letter,  when it has been left at the  relevant
                    address or two  Business  Days after being  deposited in the
                    post postage prepaid in an envelope  addressed to it at that
                    address; or

               (iii)if by way of  telex,  when  despatched,  but only if, at the
                    time of transmission,  the correct answerback appears at the
                    start and at the end of the sender's copy of the notice;

          and, if a particular department or officer is specified as part of its
          address details provided under Clause 31.2  (Addresses),  if addressed
          to that department or officer.

          (b)  Any  communication  or  document to be made or  delivered  to the
               Agent  or the  Trustee  will  be  effective  only  when  actually
               received  by the  Agent or the  Trustee  and  then  only if it is
               expressly  marked for the attention of the  department or officer
               identified with the Agent's or Trustee's  signature below (or any
               substitute  department  or officer as the Agent or Trustee  shall
               specify for this purpose).

          (c)  All  notices  from or to an  Obligor  shall be sent  through  the
               Agent.

          (d)  Any  communication  or  document  made or  delivered  to SVIIT in
               accordance  with this  Clause will be deemed to have been made or
               delivered to each of the Obligors.

                                      -73-
<PAGE>

31.4      Notification of address, fax number and telex number
          Promptly upon receipt of  notification  of an address,  fax number and
          telex number or change of address, fax number or telex number pursuant
          to Clause 31.2 (Addresses) or changing its own address,  fax number or
          telex number, the Agent shall notify the other Parties.

31.5      English language

          (a)  Any notice given under or in connection with any Finance Document
               must be in English.

          (b)  All other  documents  provided  under or in  connection  with any
               Finance Document must be:

               (i)  in English; or

               (ii) if  not  in  English,  and  if so  required  by  the  Agent,
                    accompanied by a certified English  translation and, in this
                    case,  the  English  translation  will  prevail  unless  the
                    document is a  constitutional,  statutory or other  official
                    document.

32.       CALCULATIONS AND CERTIFICATES

32.1      Accounts
          In any  litigation  or  arbitration  proceedings  arising out of or in
          connection with a Finance  Document,  the entries made in the accounts
          maintained by a Finance Party are prima facie  evidence of the matters
          to which they relate.

32.2      Certificates and Determinations
          Any  certification  or  determination  by a Finance Party of a rate or
          amount under any Finance  Document is, in the absence of proven error,
          conclusive evidence of the matters to which it relates.

32.3      Day count convention
          Any interest, commission or fee accruing under a Finance Document will
          accrue  from day to day and is  calculated  on the basis of the actual
          number of days  elapsed  and a year of 360 days or, in any case  where
          the practice in the Relevant  Interbank Market differs,  in accordance
          with that market practice.

33.       PARTIAL INVALIDITY

          If, at any time, any provision of the Finance  Documents is or becomes
          illegal,  invalid or unenforceable in any respect under any law of any
          jurisdiction,  neither the legality, validity or enforceability of the
          remaining  provisions nor the legality,  validity or enforceability of
          such provision under the law of any other jurisdiction will in any way
          be affected or impaired.

34.       REMEDIES AND WAIVERS

          No failure to exercise,  nor any delay in  exercising,  on the part of
          any Finance  Party,  any right or remedy  under the Finance  Documents
          shall operate as a waiver, nor shall any single or partial exercise of
          any right or remedy  prevent  any  further  or other  exercise  or

                                      -74-
<PAGE>

          the  exercise  of any other right or remedy.  The rights and  remedies
          provided in this  Agreement  are  cumulative  and not exclusive of any
          rights or remedies provided by law.

35.       AMENDMENTS AND WAIVERS

35.1      Required consents

          (a)  Subject  to  Clause  35.2  (Exceptions)  any term of the  Finance
               Documents  may be amended or waived  only with the consent of the
               Majority Lenders (such consent not to be unreasonably withheld or
               delayed) and the  Obligors and any such  amendment or waiver will
               be binding on all Parties.

          (b)  The  Agent  may  effect,  on behalf  of any  Finance  Party,  any
               amendment or waiver permitted by this Clause.

35.2      Exceptions

          (a)  An  amendment  or waiver that has the effect of changing or which
               relates to:

               (i)    the   definition   of  "Majority   Lenders"  in  Clause
                      1.1 (Definitions);

               (ii)   an  extension to the date of payment of any amount under
                      the Finance Documents;

               (iii)  a  reduction  in the Margin or the amount of any  payment
                      of principal, interest, fees or commission payable;

               (iv)   an increase in Commitment;

               (v)    a change to a Borrower or a Guarantor;

               (vi)   any provision  which  expressly  requires the consent of
                      all the Lenders;

               (vii)  Clause  2.2  (Lenders'  rights and  obligations),  Clause
                      24 (Changes to the Lenders) or this Clause 35; or

               (viii) any release of the security constituted by the Debentures,

               shall not be made without the prior consent of all the Lenders.

          (b)  An amendment or waiver which relates to the rights or obligations
               of the  Agent or any  Joint  Lead  Arranger  may not be  effected
               without the consent of the Agent or the Joint Lead Arrangers.

35.3      Amendments by Trustee
          Unless  the  provisions  of any  Finance  Document  expressly  provide
          otherwise, the Trustee may, if authorised by a Lender, amend the terms
          of, waive any of the  requirements of, or grant consents under, any of
          the Security  Documents,  any such amendment,  waiver or consent being
          binding on all the parties to this Agreement provided that

          (a)  the prior  consent of all of the Lenders is required to authorise
               any  amendment  of any Security  Document  which would affect the
               nature  or the scope of the  Charged  Property  or the  manner in
               which proceeds of enforcement are distributed; and

                                      -75-

<PAGE>

          (b)  no  waiver  or  amendment   may  impose  any  new  or  additional
               obligations on any person without the consent of that person.

35.4      Releases by Trustee
          Upon a disposal of any of the  Charged  Property  (a)  pursuant to the
          enforcement  of the  Security  by a Receiver  or the Trustee or (b) if
          such disposal is permitted  under the Finance  Documents,  the Trustee
          shall (at the cost of the  Obligor)  release  that  property  from the
          Security  and is  authorised  to  execute,  without  the  need for any
          further  authority  from the  Lenders,  any release of the Security or
          other  claim  over  that  asset  and  to  issue  any  certificates  of
          non-crystallisation  of  floating  charges  that  may be  required  or
          desirable.

36.       COUNTERPARTS
          Each Finance  Document may be executed in any number of  counterparts,

          and this has the same effect as if the signatures on the  counterparts
          were on a single copy of the Finance Document.

37.       TRUSTEE

          The Finance Parties agree that Barings  (Guernsey) Limited is entering
          into this  Agreement in its capacity as trustee of the Platinum  Trust
          and not in its  personal  capacity  and with the  intent (so far as it
          lawfully  can or may) of binding  any other  person for the time being
          filling the office of trustee of the Platinum Trust in its capacity as
          such  trustee,  but not further or  otherwise  or, with respect to any
          person (including Barings  (Guernsey)  Limited) who has been a trustee
          of the Platinum Trust, at any time after any such person has ceased to
          be  such a  trustee.  The  Finance  Parties  further  agree  that  the
          liability of the Platinum Trust  hereunder is limited to the extent of
          the Trust Assets from time to time, and that nothing in this Agreement
          shall oblige Barings (Guernsey) Limited (or any other person to become
          trustee of Platinum Trust in its place) to make any payment out of any
          assets which may from time to time be held or owned by it (or any such
          other person as aforesaid) which are not part of the Trust Assets.

                                      -76-

<PAGE>


                                   SECTION 12
                          GOVERNING LAW AND ENFORCEMENT

38.       GOVERNING LAW

          This Agreement is governed by English law.

39.       ENFORCEMENT

39.1      Jurisdiction of English courts

          (a)  The courts of England have exclusive  jurisdiction  to settle any
               dispute  arising  out of or in  connection  with  this  Agreement
               (including  a  dispute  regarding  the  existence,   validity  or
               termination of this Agreement) (a "Dispute").

          (b)  The  Parties  agree  that  the  courts  of  England  are the most
               appropriate   and  convenient   courts  to  settle  Disputes  and
               accordingly no Party will argue to the contrary.

          (c)  This Clause 39.1 is for the benefit of the Finance  Parties only.
               As a result,  no Finance  Party  shall be  prevented  from taking
               proceedings  relating  to a  Dispute  in any  other  courts  with
               jurisdiction.  To the extent allowed by law, the Finance  Parties
               may take concurrent proceedings in any number of jurisdictions.

39.2      Service of process
          Without  prejudice  to any other  mode of  service  allowed  under any
          relevant law, the Platinum Trust:

          (a)  irrevocably appoints SVIIT as its agent for service of process in
               relation  to  any  proceedings   before  the  English  courts  in
               connection with any Finance Document and SVIIT hereby irrevocably
               accepts such appointment; and

          (b)  agrees  that  failure by a process  agent to notify the  Platinum
               Trust  of  the  process  will  not  invalidate  the   proceedings
               concerned.

This Agreement has been entered into on the date stated at the beginning of this
Agreement.


                                      -77-

<PAGE>

                                   SCHEDULE 1
                              THE ORIGINAL LENDERS


Name of Original Lender                                   Commitment
The Governor and Company of the Bank of Scotland          EUR142,500,000
The Royal Bank of Scotland plc                            EUR142,500,000



                                      -78-

<PAGE>

                                   SCHEDULE 2
                              CONDITIONS PRECEDENT


1.        Original Obligors

          (a)  A copy of the constitutional documents of each Obligor.

          (b)  A copy  of a  resolution  of the  board  of  directors  (and,  if
               relevant, a committee of its board of directors) of SVIIT:

               (i)  approving  the terms of, and the  transactions  contemplated
                    by,  the  Finance  Documents  to  which  it is a  party  and
                    resolving that it execute the Finance  Documents to which it
                    is a party;

               (ii) authorising  a  specified  person or persons to execute  the
                    Finance Documents to which it is a party on its behalf; and

               (iii)authorising  a specified  person or persons,  on its behalf,
                    to  sign  and/or   despatch   all   documents   and  notices
                    (including,  if  relevant,  any  Utilisation  Request) to be
                    signed and/or  despatched by it under or in connection  with
                    the Finance Documents to which it is a party.

          (c)  A copy of a  resolution  of the board of  directors  of  Schroder
               Venture Managers (Guernsey) Limited:

               (i)  approving  the terms of, and the  transactions  contemplated
                    by, the Finance  Documents to which the Platinum  Trust is a
                    party and resolving that it execute such Finance Documents;

               (ii) authorising  a  specified  person or persons to execute  the
                    Finance  Documents to which the  Platinum  Trust is a party;
                    and

               (iii)authorising  a specified  person or persons on behalf of the
                    Platinum  Trust to sign and/or  dispatch all  documents  and
                    notices (including, if relevant, any Utilisation Request) to
                    be signed and/or  dispatched by the Platinum  Trust under or
                    in  connection  with the Finance  Documents to which it is a
                    party.

          (d)  A specimen  of the  signature  of each person  authorised  by the
               resolution referred to in paragraph (b) or paragraph (c) above.

          (e)  A  certificate  of each  Obligor  (signed,  as  applicable,  by a
               director of SVIIT or Barings (Guernsey)  Limited) confirming that
               borrowing or guaranteeing,  as appropriate, the Total Commitments
               would not cause any  borrowing,  guaranteeing  or  similar  limit
               binding on any Obligor to be exceeded.

          (f)  A certificate of an authorised  signatory of the relevant Obligor
               certifying  that each copy  document  relating to it specified in
               this Schedule 2 is correct, complete and in full force and effect
               as at a date no earlier than the date of this Agreement.

                                      -79-

<PAGE>

2.        Legal opinions

          (a)  A legal  opinion of Clifford  Chance LLP,  legal  advisers to the
               Arranger  and the  Agent in  England,  substantially  in the form
               distributed  to  the  Original   Lender  prior  to  signing  this
               Agreement.

          (b)  A legal  opinion of Carey  Langlois  in  relation  to the laws of
               Guernsey,  substantially  in the form distributed to the Original
               Lender prior to signing this Agreement.

3.        Other documents and evidence

          (a)  Duly executed copies of the Debentures.

          (b)  A copy of any other  Authorisation or other document,  opinion or
               assurance  which the Agent considers to be necessary or desirable
               (if it has notified the SVIIT accordingly) in connection with the
               entry into and  performance of the  transactions  contemplated by
               any Finance  Document or for the validity and  enforceability  of
               any Finance Document.

          (c)  The Original Financial Statements of each Original Obligor.

          (d)  Evidence  that the  fees,  costs and  expenses  then due from the
               Obligors  pursuant  to Clause 12 (Fees)  and Clause 17 (Costs and
               expenses) have been paid or will be paid by the first Utilisation
               Date.

          (e)  Evidence   satisfactory   to  the   Agent   that   the   existing
               EUR140,000,000  facility  provided  by The Royal Bank of Scotland
               plc pursuant to a facility  agreement dated 24 April 1998 will be
               repaid (if drawn) and cancelled in full by no later than the date
               of  the  first   Utilisation   under  this   Agreement  and  that
               simultaneously  therewith  all  security  granted  in  connection
               therewith will be released.

                                      -80-

<PAGE>

                                   SCHEDULE 3
                                    REQUESTS


                               Utilisation Request

From:    [Borrower]

To:      The Royal Bank of Scotland plc

Dated:

Dear Sirs

   Schroder Ventures International Investment Trust plc and the Platinum Trust
                        EUR285,000,000 Facility Agreement
           dated 16 March 2001 as amended and restated on 16 June 2003
                           (the "Facility Agreement")

1.      We wish to borrow a Loan on the following terms:

        Proposed Utilisation Date:         [     ]  (or,  if  that  is  not  a
                                           Business Day, the next Business Day)

        Currency of Loan:                  [     ]

        Amount:                            [     ]  or, if less, the Available
                                           Facility

        Interest Period:                   [     ]

2.      We confirm  that each  condition  specified  in Clause 4.2 (Further
        conditions  precedent)  is satisfied on the date of this Utilisation
        Request.

3.      The proceeds of this Loan should be credited to [account].

4.      This Utilisation Request is irrevocable.

                                Yours faithfully



                            ........................
                            authorised signatory for
                           [name of relevant Borrower]


                                      -81-

<PAGE>


                                   SCHEDULE 4
                             MANDATORY COST FORMULA

1.   The  Mandatory  Cost is an  addition  to the  interest  rate to  compensate
     Lenders for the cost of compliance with (a) the requirements of the Bank of
     England  and/or the Financial  Services  Authority (or, in either case, any
     other  authority  which  replaces all or any of its  functions)  or (b) the
     requirements of the European Central Bank.

2.   On  the  first  day  of  each  Interest  Period  (or as  soon  as  possible
     thereafter) the Agent shall  calculate,  as a percentage  rate, a rate (the
     "Additional Cost Rate") for each Lender,  in accordance with the paragraphs
     set out below.  The  Mandatory  Cost will be  calculated  by the Agent as a
     weighted  average  of the  Lenders'  Additional  Cost  Rates  (weighted  in
     proportion to the percentage  participation  of each Lender in the relevant
     Loan) and will be expressed as a percentage rate per annum.

3.   The Additional Cost Rate for any Lender lending from a Facility Office in a
     Participating  Member State will be the percentage  notified by that Lender
     to the Agent.  This  percentage  will be  certified  by that  Lender in its
     notice  to  the  Agent  to be its  reasonable  determination  of  the  cost
     (expressed as a percentage of that Lender's participation in all Loans made
     from  that  Facility   Office)  of  complying  with  the  minimum   reserve
     requirements  of the  European  Central  Bank in respect of loans made from
     that Facility Office.

4.   The Additional  Cost Rate for any Lender lending from a Facility  Office in
     the United Kingdom will be calculated by the Agent as follows:

     (a)  in relation to a sterling Loan:

                           AB + C(B - D )+ E x 0.01
                           ________________________ per cent. per annum

                                  100 - (A + C)

     (b)  in relation to a Loan in any currency other than sterling:

                               E x 0.01
                               ________  per cent. per annum.

                                 300

     Where:

     A    is the  percentage of Eligible  Liabilities  (assuming  these to be in
          excess of any stated  minimum)  which that Lender is from time to time
          required to maintain as an interest  free cash ratio  deposit with the
          Bank of England to comply with cash ratio requirements.

     B    is the  percentage  rate of  interest  (excluding  the  Margin and the
          Mandatory Cost and, if the Loan is an Unpaid Sum, the additional  rate
          of  interest  specified  in  paragraph  (a)  of  Clause  9.3  (Default
          Interest) payable for the relevant Interest Period on the Loan.

                                      -82-


<PAGE>

     C    is the percentage (if any) of Eligible  Liabilities  which that Lender
          is required from time to time to maintain as interest  bearing Special
          Deposits with the Bank of England.

     D    is the percentage rate per annum payable by the Bank of England to the
          Agent on interest bearing Special Deposits.

     E    is designed to compensate  Lenders for amounts  payable under the Fees
          Rules and is  calculated by the Agent as being the average of the most
          recent rates of charge  supplied by the  Reference  Banks to the Agent
          pursuant   to   paragraph  7  below  and   expressed   in  pounds  per
          GBP1,000,000.

5.   For the purposes of this Schedule:

     (a)  "Eligible  Liabilities" and "Special Deposits" have the meanings given
          to them from time to time under or pursuant to the Bank of England Act
          1998 or (as may be appropriate) by the Bank of England;

     (b)  "Fees  Rules"  means the rules on periodic  fees  contained in the FSA
          Supervision  Manual or such other law or regulation as may be in force
          from time to time in respect of the payment of fees for the acceptance
          of deposits;

     (c)  "Fee Tariffs" means the fee tariffs  specified in the Fees Rules under
          the activity group A.1 Deposit acceptors  (ignoring any minimum fee or
          zero rated fee  required  pursuant  to the Fees Rules but taking  into
          account any applicable discount rate); and

     (d)  "Tariff  Base" has the meaning  given to it in, and will be calculated
          in accordance with, the Fees Rules.

6.   In application of the above formulae, A, B, C and D will be included in the
     formulae as percentages  (i.e. 5 per cent.  will be included in the formula
     as 5 and not as 0.05). A negative  result  obtained by subtracting D from B
     shall be taken as zero.  The  resulting  figures  shall be  rounded to four
     decimal places.

7.   If  requested  by  the  Agent,  each  Reference  Bank  shall,  as  soon  as
     practicable after publication by the Financial Services  Authority,  supply
     to the  Agent,  the rate of charge  payable by that  Reference  Bank to the
     Financial  Services  Authority pursuant to the Fees Rules in respect of the
     relevant financial year of the Financial Services Authority (calculated for
     this purpose by that Reference Bank as being the average of the Fee Tariffs
     applicable to that Reference Bank for that financial year) and expressed in
     pounds per GBP1,000,0000 of the Tariff Base of that Reference Bank.

8.   Each  Lender  shall  supply any  information  required by the Agent for the
     purpose of calculating its Additional Cost Rate. In particular, but without
     limitation,  each Lender shall supply the following information on or prior
     to the date on which it becomes a Lender:

     (a)  the jurisdiction of its Facility Office; and

     (b)  any other  information that the Agent may reasonably  require for such
          purpose.

                                      -83-

<PAGE>

     Each  Lender  shall  promptly  notify  the  Agent  of  any  change  to  the
     information provided by it pursuant to this paragraph.

9.   The  percentages  of each  Lender for the  purpose of A and C above and the
     rates of charge of each  Reference Bank for the purpose of E above shall be
     determined by the Agent based upon the information  supplied to it pursuant
     to  paragraphs 7 and 8 above and on the  assumption  that,  unless a Lender
     notifies the Agent to the contrary,  each Lender's  obligations in relation
     to cash ratio  deposits  and  Special  Deposits  are the same as those of a
     typical bank from its jurisdiction of incorporation  with a Facility Office
     in the same jurisdiction as its Facility Office.

10.  The Agent  shall  have no  liability  to any  person if such  determination
     results in an  Additional  Cost Rate which  over or under  compensates  any
     Lender and shall be entitled to assume that the information provided by any
     Lender or Reference  Bank  pursuant to  paragraphs 3, 7 and 8 above is true
     and correct in all respects.

11.  The Agent shall  distribute the additional  amounts received as a result of
     the Mandatory Cost to the Lenders on the basis of the Additional  Cost Rate
     for each Lender based on the  information  provided by each Lender and each
     Reference Bank pursuant to paragraphs 3, 7 and 8 above.

12.  Any  determination  by the Agent pursuant to this Schedule in relation to a
     formula,  the Mandatory Cost, an Additional Cost Rate or any amount payable
     to a Lender shall,  in the absence of manifest  error,  be  conclusive  and
     binding on all Parties.

13.  The Agent  may from time to time,  after  consultation  with  SVIIT and the
     Lenders,  determine  and notify to all  Parties  any  amendments  which are
     required to be made to this  Schedule in order to comply with any change in
     law,  regulation or any requirements  from time to time imposed by the Bank
     of England,  the Financial  Services Authority or the European Central Bank
     (or, in any case,  any other  authority  which  replaces  all or any of its
     functions)  and any such  determination  shall,  in the absence of manifest
     error, be conclusive and binding on all Parties.



                                      -84-

<PAGE>


                                   SCHEDULE 5
                          FORM OF TRANSFER CERTIFICATES


                                     Part I

To:      The Royal Bank of Scotland as Agent

From:    [The Existing Lender] (the "Existing Lender") and [The New Lender]
         (the "New Lender")

Dated:

   Schroder Ventures International Investment Trust plc and the Platinum Trust
                        EUR285,000,000 Facility Agreement
           dated 16 March 2001 as amended and restated on 16 June 2003
                           (the "Facility Agreement")

1.   We refer to Clause 24.5 (Procedure for transfer):

     (a)  The Existing  Lender and the New Lender  agree to the Existing  Lender
          and  the  New  Lender  transferring  by  novation  all or  part of the
          Existing Lender's  Commitment,  rights and obligations  referred to in
          the Schedule in accordance with Clause 24.5 (Procedure for transfer).

     (b)  The proposed Transfer Date is [     ].

     (c)  The Facility Office and address,  fax number and attention details for
          notices of the New Lender for the purposes of Clause 31.2  (Addresses)
          are set out in the Schedule.

2.   The New Lender  expressly  acknowledges  the  limitations  on the  Existing
     Lender's   obligations  set  out  in  paragraph   24.4(c)  of  Clause  24.4
     (Limitation of responsibility of Existing Lenders).

3.   This Transfer Certificate is governed by English law.


                                  THE SCHEDULE

               Commitment/rights and obligations to be transferred

                            [insert relevant details]
   [Facility Office address, fax number and attention details for notices and
                         account details for payments,]



       [Existing Lender]                    [New Lender]
       By:                                  By:

                                      -85-

<PAGE>

This  Transfer  Certificate  is  accepted by the Agent and the  Transfer  Date
is  confirmed  as [       ].

[Agent]

By:

                                      -86-

<PAGE>


                                     Part II
                         LMA Transfer Certificate (Par)

BANK:                                                         Date:

TRANSFEREE:

This  Transfer  Certificate  is entered  into  pursuant  to (i) the  agreement
(the  "Sale  Agreement") evidenced by the Confirmation dated
between the Bank and the Transferee (acting directly or through their respective
agents) and (ii) the Credit Agreement.

On the  Transfer  Date,  the  transfer by way of  novation  from the Bank to the
Transferee on the terms set out herein and in the Credit  Agreement shall become
effective subject to:-

     (i)  the Sale  Agreement and the terms and conditions  incorporated  in the
          Sale Agreement;

     (ii) the terms and conditions annexed hereto; and

     (iii) the Schedule annexed hereto,

all of which are incorporated herein by reference.

The Bank                                           The Transferee
[            ]                                     [               ]
By:                                                By:

                                      -87-

<PAGE>



                                  The Schedule

<TABLE>
<CAPTION>

<S>                                                             <C>
Credit Agreement Details:
Borrower(s):                                                    _________________________________________
Credit Agreement Dated                                          _________________________________________
Guarantor(s):                                                   _________________________________________
Agent Bank:                                                     (  )No   (  ) Yes(specify)_______________
Security:                                                       _________________________________________
Total Facility Amount:                                          _________________________________________
Governing Law:                                                  _________________________________________
Additional Information:                                         _________________________________________

Transfer Details:
Name of Tranche Facility:                                       _________________     __________________
Nature (Revolving, Term, Acceptances
   Guarantee/Letter of Credit, Other):                          _________________     __________________
Final Maturity:                                                 _________________     __________________
Participation Transferred
Commitment transferred 1                                        _________________     __________________
      Drawn Amount (details below):1                            _________________     __________________
      Undrawn Amount:1                                          _________________     __________________
Settlement Date:                                                _________________________________________
Details of outstanding Credits1
      Specify in respect of each Credit:
      Transferred Portion (amount):                             _________________
      Tranche/Facility:                                         _________________
      Nature:                                                   (  ) Term  (  ) Revolver (  ) Acceptance (  ) Guarantee/Letter of
                                                                Credit  (  ) Other (specify) _________________
      (  )  Details of other Credits are set out on the
            attached sheet

Administration Details
Bank's Receiving Account:                                       ________________________________
Transferee's Receiving Account:                                 ________________________________

Addresses
Bank                                                            Transferee
[                                ]                              [                                   ]
Address:                                                        Address:
Telephone:                                                      Telephone:
Facsimile:                                                      Facsimile:
Telex:                                                          Telex:
Attn/Ref                                                        Attn/Ref

-----------------------------------------------------------------------------
1 As at the date of the Transfer Certificate

</TABLE>


                                      -88-

<PAGE>


                              TERMS AND CONDITIONS

These  are the Terms  and  Conditions  applicable  to the  transfer  certificate
including the Schedule  thereto (the "Transfer  Certificate")  to which they are
annexed.

1.        Interpretation

          In these Terms and  Conditions  words and  expressions  shall  (unless
          otherwise  expressly defined herein) bear the meaning given to them in
          the Transfer Certificate, the Credit Agreement or the Sale Agreement.

2.        Transfer

          The Bank requests the Transferee to accept and procure the transfer by
          novation of all or a part (as applicable) of such participation of the
          Bank under the Credit  Agreement as is set out in the relevant part of
          the Transfer Certificate under the heading "Participation Transferred"
          (the  "Purchased   Assets")  by  counter-signing  and  delivering  the
          Transfer  Certificate  to the Agent at its  address for the service of
          notice  specified in the Credit  Agreement.  On the Transfer  Date the
          Transferee shall pay to the Bank the Settlement Amount as specified in
          the pricing letter between the Bank and the Transferee  dated the date
          of the Transfer Certificate  (adjusted,  if applicable,  in accordance
          with the Sale  Agreement)  and  completion  of the transfer  will take
          place.

3.        Effectiveness of Transfer

          The  Transferee  hereby  requests  the  Agent to accept  the  Transfer
          Certificate  as being  delivered to the Agent  pursuant to and for the
          purposes of the Credit  Agreement  so as to take effect in  accordance
          with the terms of the Credit Agreement on the Transfer Date or on such
          later date as may be determined in accordance with the terms thereof.

4.        Transferee's Undertaking

          The Transferee  hereby undertakes with the Agent and the Bank and each
          of the other parties to the Credit  Documentation that it will perform
          in accordance with its terms all those  obligations which by the terms
          thereof  will  be  assumed  by  it  after  delivery  of  the  Transfer
          Certificate to the Agent and  satisfaction  of the conditions (if any)
          subject to which the Transfer Certificate is to take effect.

5.        Payments

5.1       Place
          All  payments  by  either  party  to  the  other  under  the  Transfer
          Certificate  shall  be made to the  Receiving  Account  of that  other
          party.  Each party may designate a different  account as its Receiving
          Account  for  payment by giving the other not less than five  Business
          Days notice before the due date for payment.

5.2       Funds
          Payments under the Transfer  Certificate shall be made in the currency
          in which the amount is  denominated  for value on the due date at such
          times and in such funds as are customary at the time for settlement of
          transactions in that currency.

                                      -89-

<PAGE>

6.        The Agent

          The Agent  shall  not be  required  to  concern  itself  with the Sale
          Agreement  and may rely on the  Transfer  Certificate  without  taking
          account of the provisions of such agreement.

7.        Assignment of Rights

          The  Transfer  Certificate  shall be  binding  upon  and  enure to the
          benefit  of  each  party  and its  successors  and  permitted  assigns
          provided  that  neither  party  may  assign  or  transfer  its  rights
          thereunder without the prior written consent of the other party.

8.        Governing Law and Jurisdiction

          The Transfer Certificate (including,  without limitation,  these Terms
          and Conditions)  shall be governed by and construed in accordance with
          the laws of  England,  and the  parties  submit  to the  non-exclusive
          jurisdiction of the English courts.

          Each party irrevocably  appoints the person described as process agent
          (if any)  specified  in the Sale  Agreement  to  receive on its behalf
          service of any action,  suit or other  proceedings in connection  with
          the Transfer  Certificate.  If any person  appointed as process  agent
          ceases to act for any reason the  appointing  party  shall  notify the
          other party and shall promptly  appoint  another  person  incorporated
          within England and Wales to act as its process agent.

                                      -90-


<PAGE>

                                   SCHEDULE 6
                         FORM OF COMPLIANCE CERTIFICATE


To:      The Royal Bank of Scotland plc as Agent

From:    Schroder Ventures International Investment Trust plc

Dated:

Dear Sirs

   Schroder Ventures International Investment Trust plc and the Platinum Trust
                        EUR285,000,000 Facility Agreement
           dated 16 March 2001 as amended and restated on 16 June 2003
                           (the "Facility Agreement")

1.        We refer to the Facility Agreement.  This is a Compliance Certificate.

2.        We confirm that:

          (a)  Consolidated  Gross Borrowings are [ ] and Consolidated  Adjusted
               Investment  Assets  are  [ ].  Consequently,  Consolidated  Gross
               Borrowings are [ ]% of Consolidated  Adjusted  Investment  Assets
               and SVIIT is [in compliance with/in breach of] Clause 21.2 of the
               Facility Agreement; and

          (b)  Consolidated  Gross Borrowings of Barings  (Guernsey)  Limited as
               trustee of the Platinum  Trust are [ ] and the Total  Commitments
               are currently [ ]. Consequently, Consolidated Gross Borrowings of
               Barings  (Guernsey)  Limited as trustee of the Platinum Trust are
               []% of Total  Commitments  and  SVIIT is [in  compliance  with/in
               breach of] Clause 21.2 of the Facility Agreement.

3.        Calculations

          The figures referred to in paragraph 2 above are shown in the attached
          financial statements.

4.        Valuations

          [The  portfolio  valuation  referred to in Clause  20.1(c) is [ ]/[The
          portfolio valuation referred to in Clause 21.4 is [ ]].

5.        [We confirm that no Default is continuing.] *

Signed:       -----------------------
              Chief Financial Officer
              Of
              Schroder Ventures International
              Investment Trust plc
Signed:       -----------------------
              Secretary

-----------------------------------------------------------------------------
*   If this statement cannot be made, the certificate should identify any
    Default that is continuing and the steps, if any, being taken to remedy it.


                                      -91-

<PAGE>

              Of
              Schroder Ventures International
              Investment Trust plc


                                      -92-
<PAGE>


                                   SCHEDULE 7

                     LMA FORM OF CONFIDENTIALITY UNDERTAKING


                       LMA CONFIDENTIALITY LETTER (SELLER)

                  [Letterhead of Seller/Seller's agent/broker]

To:

============================================
                                             [insert name of Potential
                                             Purchaser/Purchaser's agent/broker]
============================================


Re:      The Agreement
============================================
Borrowers:
Date:
Amount:
Agent:
============================================


Dear Sirs

We understand  that you are considering  [acquiring]/[arranging  the acquisition
of] an interest in the Agreement (the  "Acquisition").  In  consideration  of us
agreeing to make  available to you certain  information,  by your signature of a
copy of this letter you agree as follows:

1.   Confidentiality  Undertaking  You  undertake  (a) to keep the  Confidential
     Information  confidential  and  not to  disclose  it to  anyone  except  as
     provided  for by  paragraph  2 below  and to ensure  that the  Confidential
     Information is protected  with security  measures and a degree of care that
     would  apply  to  your  own  confidential  information,   (b)  to  use  the
     Confidential  Information  only for the Permitted  Purpose,  (c) to use all
     reasonable  endeavours  to  ensure  that  any  person  to whom you pass any
     Confidential  Information  (unless  disclosed  under  paragraph 2(c) below)
     acknowledges  and complies  with the  provisions  of this letter as if that
     person were also a party to it, and (d) not to make enquiries of any member
     of the Group or any of their officers, directors, employees or professional
     advisers relating directly or indirectly to the Acquisition.

2.   Permitted   Disclosure   We  agree  that  you  may  disclose   Confidential
     Information:

     (a)  to  members  of the  Purchaser  Group and their  officers,  directors,
          employees and  professional  advisers to the extent  necessary for the
          Permitted  Purpose  and to any  auditors  of members of the  Purchaser
          Group;

     (b)  subject to the  requirements  of the  Agreement,  to any person to (or
          through)  whom you assign or transfer  (or may  potentially  assign or
          transfer) all or any of the rights, benefits and obligations which you
          may acquire  under the  Agreement or with (or through)  whom you enter
          into (or may potentially enter into) any

                                      -93-

<PAGE>

          sub-participation in relation to, or any other transaction under which
          payments  are  to be  made  by  reference  to,  the  Agreement  or the
          Borrowers  or any  member  of the  Group  so long as that  person  has
          delivered a letter to you in equivalent form to this letter; and

     (c)  (i) where requested or required by any court of competent jurisdiction
          or any competent  judicial,  governmental,  supervisory  or regulatory
          body,  (ii) where required by the rules of any stock exchange on which
          the shares or other  securities of any member of the  Purchaser  Group
          are listed or (iii) where  required by the laws or  regulations of any
          country  with  jurisdiction  over the  affairs  of any  member  of the
          Purchaser Group.

3.   Notification  of  Required  or  Unauthorised  Disclosure  You agree (to the
     extent  permitted  by law) to  inform us of the full  circumstances  of any
     disclosure  under  paragraph2(c)  or upon becoming aware that  Confidential
     Information has been disclosed in breach of this letter.

4.   Return  of  Copies If we so  request  in  writing,  you  shall  return  all
     Confidential  Information  supplied to you by us and destroy or permanently
     erase  all  copies  of  Confidential  Information  made  by you and use all
     reasonable  endeavours  to ensure that anyone to whom you have supplied any
     Confidential  Information  destroys or permanently erases such Confidential
     Information  and any copies  made by them,  in each case save to the extent
     that you or the  recipients  are  required to retain any such  Confidential
     Information by any  applicable  law, rule or regulation or by any competent
     judicial,  governmental,  supervisory  or regulatory  body or in accordance
     with  internal  policy,  or where  the  Confidential  Information  has been
     disclosed under paragraph2(c) above.

5.   Continuing  Obligations  The obligations in this letter are continuing and,
     in  particular,  shall  survive  the  termination  of  any  discussions  or
     negotiations between you and us. Notwithstanding the previous sentence, the
     obligations  in this  letter  shall  cease (a) if you  become a party to or
     otherwise acquire (by assignment or sub-participation) an interest,  direct
     or indirect,  in the Agreement or (b) twelve months after you have returned
     all  Confidential  Information  supplied  to  you by us  and  destroyed  or
     permanently  erased  all  copies of  Confidential  Information  made by you
     (other than any such  Confidential  Information  or copies  which have been
     disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which,
     pursuant  to  paragraph  4  above,  are  not  required  to be  returned  or
     destroyed).

6.   No  Representation;  Consequences of Breach,  etc You acknowledge and agree
     that:

     (a)  neither we, [nor our principal] nor any member of the Group nor any of
          our or  their  respective  officers,  employees  or  advisers  (each a
          "Relevant Person") (i) make any representation or warranty, express or
          implied,  as to, or  assume  any  responsibility  for,  the  accuracy,
          reliability or completeness of any of the Confidential  Information or
          any other information supplied by us or the assumptions on which it is
          based or (ii) shall be under any  obligation  to update or correct any
          inaccuracy in the Confidential Information or any other

                                      -94-

<PAGE>


          information  supplied by us or be otherwise liable to you or any other
          person  in  respect  to  the  Confidential  Information  or  any  such
          information; and

          (b)  we [or our  principal] or members of the Group may be irreparably
               harmed by the breach of the terms  hereof and  damages may not be
               an  adequate  remedy;  each  Relevant  Person  may be  granted an
               injunction or specific  performance  for any threatened or actual
               breach of the provisions of this letter by you.

7.   No Waiver;  Amendments,  etc This  letter  sets out the full extent of your
     obligations of  confidentiality  owed to us in relation to the  information
     the subject of this letter.  No failure or delay in  exercising  any right,
     power or privilege  hereunder will operate as a waiver thereof nor will any
     single or partial  exercise of any right,  power or privilege  preclude any
     further  exercise  thereof or the  exercise  of any other  right,  power or
     privileges  hereunder.  The  terms  of this  letter  and  your  obligations
     hereunder may only be amended or modified by written agreement between us.

8.   Inside  Information  You acknowledge  that some or all of the  Confidential
     Information is or may be  price-sensitive  information  and that the use of
     such  information may be regulated or prohibited by applicable  legislation
     relating to insider  dealing and you undertake not to use any  Confidential
     Information for any unlawful purpose.

9.   Nature of Undertakings The undertakings  given by you under this letter are
     given to us and (without  implying any fiduciary  obligations  on our part)
     are also given for the benefit of [our  principal,]  the Borrowers and each
     other member of the Group.

10.  Third party rights

     (a)  Subject to paragraph 6 and paragraph 9 the terms of this letter may be
          enforced  and relied upon only by you and us and the  operation of the
          Contracts (Rights of Third Parties) Act 1999 is excluded.

     (b)  Notwithstanding  any  provisions  of this letter,  the parties to this
          letter do not require the consent of any Relevant Person or any member
          of the Group to rescind or vary this letter at any time.

11.  Governing  Law  and  Jurisdiction  This  letter  (including  the  agreement
     constituted by your  acknowledgement of its terms) shall be governed by and
     construed in accordance  with the laws of England and the parties submit to
     the non-exclusive jurisdiction of the English courts.

12.  Definitions In this letter  (including the  acknowledgement  set out below)
     terms  defined  in  the  Agreement  shall,  unless  the  context  otherwise
     requires, have the same meaning and:

     "Confidential Information" means any information relating to the Borrowers,
     the Group,  the Agreement  and/or the Acquisition  provided to you by us or
     any  of  our  affiliates  or  advisers,  in  whatever  form,  and  includes
     information given orally and any document, electronic file or any other way
     of  representing or recording  information  which contains or is derived or
     copied  from  such  information  but  excludes  information  that (a) is or
     becomes public  knowledge  other than as a direct or indirect result of any
     breach  of  this  letter  or (b)  is  known  by you  before  the  date  the
     information  is disclosed to

                                      -95-

<PAGE>

     you by us or any of our  affiliates or advisers or is lawfully  obtained by
     you thereafter,  other than from a source which is connected with the Group
     and which,  in either case, as far as you are aware,  has not been obtained
     in  violation  of,  and is not  otherwise  subject  to, any  obligation  of
     confidentiality;

     "Group" means the Borrowers and each of their respective  holding companies
     and subsidiaries  and each subsidiary of each of its holding  companies (as
     each such term is defined in the Companies Act 1985);

     "Permitted  Purpose" means subject to the terms of this letter,  passing on
     information to a prospective  purchaser for the purpose of considering  and
     evaluating whether to enter into the Acquisition; and

     "Purchaser   Group"  means  you,   each  of  your  holding   companies  and
     subsidiaries and each subsidiary of each of your holding companies (as each
     such term is defined in the Companies Act 1985).

     Please acknowledge your agreement to the above by signing and returning the
     enclosed copy.

     Yours faithfully

     ................................

     For and on behalf of
     [Seller/Seller's agent/broker]

     To:       [Seller]
               [Seller's agent/broker]
               The Borrowers and each other member of the Group


     We acknowledge and agree to the above:

     ................................

     For and on behalf of
     [Potential Purchaser/Purchaser's agent/broker]

                                      -96-

<PAGE>


                                   SCHEDULE 8
                                   TIMETABLES


<TABLE>
<CAPTION>

                                                   Loans in euro         Loans in             Loans in other
                                                   or dollars            sterling             currencies
<S>                                                     <C>                  <C>                    <C>
Agent notifies the relevant Borrower if a                -                    -                     U-4
currency is approved as an Optional
Currency in accordance with Clause 4.3
(Conditions relating to Optional
Currencies)

Delivery of a duly completed Utilisation                U-3                  U-1                    U-3
Request (Clause 5.1 (Delivery of a
Utilisation Request)                                  9.30am                9.30am                9.30am

Agent determines (in relation to a                                           U-1                    U-3
Utilisation) the Base Currency Amount of
the Loan, if required under Clause 5.4                   -                   noon                  noon
(Lenders' participation)

Agent notifies the Lenders of the Loan in               U-3                  U-1                    U-3
accordance with Clause 5.4 (Lenders'
participation)                                        3.00pm                3.00pm                3.00pm

Agent receives a notification from a                                         U-1                    U-3
Lender under Clause 6.2 (Unavailability of
a currency)                                              -                  5.00pm                5.00pm


Agent gives notice in accordance with                                         U                     U-2
Clause 6.2 (Unavailability of a currency)                -                  9.30am                9.30am

LIBOR or EURIBOR is fixed                 Quotation Day as of          Quotation Day        Quotation Day as
                                          11:00 a.m. London time       as of 11:00 a.m.     of 11:00 a.m.
                                          in respect of LIBOR and
                                          as of 11.00 a.m.
                                          Brussels time in
                                          respect of EURIBOR

</TABLE>

"U" = date of utilisation

"U - X" = X Business Days prior to date of utilisation

                                      -97-

<PAGE>



                                   SIGNATURES

The Borrowers

SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc

By:



BARINGS (GUERNSEY) LIMITED as trustee of the PLATINUM TRUST

By:



The Guarantors

BARINGS (GUERNSEY) LIMITED as trustee of the PLATINUM TRUST

By:



SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc

By:



The Arranger

THE ROYAL BANK OF SCOTLAND PLC

By:

Address:      Corporate Banking Office - Loans Administration
              2.5 Devonshire Square
              London EC2M 4BB

Fax:          020 7615 7673



The Agent

THE ROYAL BANK OF SCOTLAND PLC

By:

Address:      Corporate Banking Office - Loans Administration
              2.5 Devonshire Square
              London EC2M 4BB

Fax:          020 7615 7673


                                      -98-

<PAGE>

The Trustee

THE ROYAL BANK OF SCOTLAND PLC

By:

Address:      Corporate Banking Office - Loans Administration
              2.5 Devonshire Square
              London EC2M 4BB

Fax:          020 7615 7673



The Original Lender

THE ROYAL BANK OF SCOTLAND PLC

By:

Address:      Corporate Banking Office - Loans Administration
              2.5 Devonshire Square
              London EC2M 4BB

Fax:          020 7615 7673




                                      -99-


<PAGE>


                                   SIGNATURES

The Obligors

SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC

By:           ANDREW WILLIAMS



BARINGS (GUERNSEY) LIMITED as trustee of the PLATINUM TRUST

By:           JEFFREY BURTON

              STEPHEN WATTS



The Joint Lead Arrangers

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

By:           LESLIE TENNANT



THE ROYAL BANK OF SCOTLAND PLC

By:           JOHN HARE



The Trustee

THE ROYAL BANK OF SCOTLAND PLC

By:           JOHN HARE



The Agent

THE ROYAL BANK OF SCOTLAND PLC

By:           JOHN HARE



The Original Lenders

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

By:           LESLIE TENNANT

                                     -100-
<PAGE>



THE ROYAL BANK OF SCOTLAND PLC

By:           ANTHONY GILIKER


                                     -101-

<PAGE>



------------
EXHIBIT 4.14
------------





                              Dated 3 October 2003





                         SCHRODER VENTURES INTERNATIONAL
                              INVESTMENT TRUST PLC

                                       and

                           J.P. MORGAN SECURITIES LTD.








                               PLACEMENT AGREEMENT
                                   relating to
               Ordinary shares of nominal value 100 pence each in
              Schroder Ventures International Investment Trust plc



                                   Linklaters
                                  Ref: SRRE/BJD




<PAGE>


This Placement Agreement is made on 3 October 2003 between:

(1)  SCHRODER   VENTURES   INTERNATIONAL   INVESTMENT   TRUST   PLC,  a  company
     incorporated in England and Wales whose registered  office is at 31 Gresham
     Street, London EC2V 7QA (the "Issuer"); and

(2)  J.P. MORGAN  SECURITIES LTD. whose registered office is at 125 London Wall,
     London EC2Y 5AJ ("J.P. Morgan").

Whereas

(A)  The Issuer has an authorised share capital of  GBP150,000,000  comprised of
     150,000,000 ordinary shares of nominal value 100 pence each (the "Shares").

(B)  The Issuer  proposes to issue either Shares or, if the parties so determine
     in accordance with Clause 1.7,  Convertible Bonds (as defined below) at the
     Placement  Price (as defined below) in a placement (the  "Placement") to be
     made pursuant to the terms of this Agreement.

     "Convertible  Bonds" means convertible bonds issued by and convertible into
     the Shares of the Issuer on terms to be agreed  between the Issuer and J.P.
     Morgan  which  comply  with the  provisions  of any credit  facilities  and
     security documents of the Issuer provided that the initial conversion price
     per Share shall be not less than the Net Asset Value (as defined below).

(C)  On the terms and subject to the  conditions  referred to in this  Agreement
     the Issuer  has  agreed to issue to  subscribers  procured  by  J.P.Morgan,
     failing  which  to  J.P.Morgan,   and  J.P.Morgan  has  agreed  to  procure
     subscribers (which may include J.P.Morgan or one or more of its affiliates)
     for,  failing which to subscribe  itself,  the Placement Shares (as defined
     below) at the Placement Price.

(D)  Documents  which are  described as being in the "agreed form" are documents
     in the  forms of those  which  have  been  initialled  for the  purpose  of
     identification  by Linklaters (on behalf of J.P.  Morgan) and Slaughter and
     May (on behalf of the  Issuer),  with such  changes as  J.P.Morgan  and the
     Issuer may agree.

(E)  In this  Agreement  the term  "affiliate"  means in  relation to any person
     (save  where used in the  context of the U.S.  Securities  Act of 1933,  as
     amended (the "U.S. Securities Act"), any subsidiary undertaking, associated
     undertaking or parent  undertaking of that person and any other  subsidiary
     undertaking of that parent undertaking.

It is agreed as follows:

1    The Placement

1.1  Issue and Pricing: Subject to Clause 1.2, the number of Placement Shares to
     be issued shall not exceed 10 per cent.  of the issued share capital of the
     Issuer on the Pricing Date (as defined below).

     The  "Placement  Price"  shall,  subject  to Clause  1.2,  be the price per
     Placement  Share notified to the Issuer by J.P. Morgan on the Pricing Date,
     provided that:

     (i)  the  Placement  Price per Share in respect of  Placement  Shares to be
          subscribed by  subscribers  procured by J.P.  Morgan shall be not less
          than the higher of (a) the Net Asset Value on the Pricing Date and (b)
          that price which represents a 5 per cent

                                      -1-
<PAGE>

          discount to the middle market price of the Shares on the Official List
          (as defined below) on the Pricing Date;

     (ii) the  Placement  Price per Share in respect of  Placement  Shares to be
          subscribed  by J.P.  Morgan shall be not less than the Net Asset Value
          on the Pricing Date (the "Minimum Price"); and

     (iii)in either case,  the aggregate  Placement  Price in respect of all the
          Placement Shares before expenses shall,  subject as provided in Clause
          1.2 below,  be not less than the  sterling  equivalent  on the Pricing
          Date of  Euro60million  (as  reasonably  determined by J.P.  Morgan in
          consultation with the Issuer).

     "Net Asset Value"  means the  published  fully  diluted net asset value per
     Share of the  Issuer  as at 30 June  2003 as so  amended  by  notice by the
     Issuer to J.P.  Morgan in  writing  on or before  the  Pricing  Date in the
     circumstances  provided in Clause 1.2 and  rounded up to the nearest  whole
     number of pence per Share  (being,  as at the date of this  Agreement,  445
     pence per Share).

1.2  Adjustment of NAV:

     (i)  If the Issuer is required to notify a Regulatory  Information  Service
          (as defined in the Listing Rules (as defined  below)) on or before the
          Pricing Date that its net asset value per Share has been  increased or
          reduced, the Net Asset Value shall be amended accordingly and shall be
          the fully  diluted  net asset  value  per  Share as  notified  to such
          Regulatory Information Service.

     (ii) If there is such a change  in  national  or  international  financial,
          political  or  economic  conditions  or  currency  exchange  rates  or
          exchange  controls as would  require the Issuer to notify a Regulatory
          Information  Service  (as  defined in the  Listing  Rules (as  defined
          below))  following the Pricing Date and prior to the relevant  Closing
          Date that its Net Asset  Value  has been  reduced  as a result of such
          change, the Net Asset Value shall be reduced  accordingly and shall be
          the fully  diluted  net asset  value  per  Share as  notified  to such
          Regulatory  Information  Service and  J.P.Morgan  shall be entitled by
          written notice to the Issuer given prior to the Closing Date to reduce
          the Placement Price to reflect such reduction in the Net Asset Value.

     (iii)If following any  reduction of the Net Asset Value or Placement  Price
          in  accordance  with  the  above  provisions  the  minimum   aggregate
          Placement  Price  referred to in Clause  1.1(iii) above divided by the
          Placement  Price (or Minimum Price if no Placement  Price is notified)
          would  require the Issuer (in any one issue,  or a series of issues in
          connection with a single  transaction,  or series of transactions that
          is  regarded by the UKLA as a single  transaction  and deemed a single
          issue) to issue Placement Shares equal to or exceeding 10 per cent. of
          the  issued  share  capital of the Issuer on the  Closing  Date,  such
          maximum  number of Placement  Shares shall be issued and subscribed on
          the terms of this  Agreement  as would not be equal to or in excess of
          10 per cent.  of the issued share capital of the Issuer on the Closing
          Date.

     In the event  paragraph  (iii)  above or the proviso to the  definition  of
     Closing Date  applies,  the Issuer and J.P.  Morgan  shall  discuss in good
     faith for a period of five Business Days beginning on the relevant  Closing
     Date whether the Issuer shall (a) publish listing particulars (the "Listing
     Particulars")  to enable the Issuer  properly  to issue and J.P.  Morgan to
     procure  subscribers for,  failing which itself to subscribe,  such further
     number of

                                      -2-

<PAGE>


     Shares (the  "Shortfall  Shares") at the Placement  Price as will result in
     the Issuer  receiving an aggregate  Placement  Price before  expenses (when
     aggregated with the proceeds of all previous  allotments of Shares pursuant
     to this Agreement) of not less than the sterling  equivalent on the Pricing
     Date of Euro60million or (b) issue the Shortfall Shares in one issue, or if
     necessary  a series of  issues,  (in such  manner as does not  require  the
     publication of Listing Particulars) to subscribers procured by J.P. Morgan,
     failing which to J.P.  Morgan,  on Closing Dates agreed between the parties
     or, in default of such agreement,  on 17 November 2003 and, if necessary in
     order to ensure the Issuer receives the minimum  aggregate  Placement Price
     referred to in Clause 1.1.(iii),  15 December 2003 at the Minimum Price. In
     default of such agreement within such period, paragraph (b) shall apply.

1.3  Agreement to issue:  Subject to and in  accordance  with the  provisions of
     this Agreement, the Issuer agrees to allot the relevant Placement Shares on
     the   relevant   Closing   Date  and   J.P.Morgan   on  the  basis  of  the
     representations,  warranties and  undertakings  herein contained but on the
     terms and  subject  to the  conditions  herein  stated  agrees  to  procure
     subscribers (which may include J.P.Morgan or one or more of its affiliates)
     for, or failing  which to subscribe,  the Placement  Shares at the relevant
     Placement Price on the relevant Closing Date.

     The "Closing Date" will, subject as provided in Clause 1.2, be such date or
     dates as are agreed between J.P. Morgan and the Issuer which, other than in
     respect  of the  Shortfall  Shares,  is  expected  to be the  Business  Day
     following the date of the general  meeting of  shareholders  referred to in
     Clause 5.1.3 below at which the approvals  described  are obtained,  but in
     default of agreement  between the parties shall be 17 November 2003 and the
     Placement  Shares shall be such number of Shares which when  multiplied  by
     the Minimum Price equals Euro 60 million  provided that if on such date the
     minimum  aggregate  Placement  Price  referred to in Clause  1.1(iii) above
     would  require  the  Issuer  (in any one  issue,  or a series  of issues in
     connection with a single  transaction,  or series of  transactions  that is
     regarded by the UKLA as a single  transaction and deemed a single issue) to
     issue  Placement  Shares  which,  when  aggregated  (where  it is proper to
     aggregate  under the Listing  Rules) with the Placement  Shares  previously
     allotted,  equal to or exceed 10 per cent.  of the issued share  capital of
     the Issuer on the Closing  Date,  such maximum  number of Placement  Shares
     shall be issued and subscribed on the terms of this Agreement as would when
     aggregated  (where it is proper to aggregate  under the Listing Rules) with
     the Placement Shares previously allotted not be equal to or in excess of 10
     per cent. of the issued share capital of the Issuer on the relevant Closing
     Date.

     The last  Closing Date shall,  unless the parties  otherwise  agree,  be 15
     December 2003.

     "Business Day" means a day on which  commercial  banks and foreign exchange
     markets are open for business in London.

     The "Pricing Date" shall, subject as provided in Clause 1.2, mean each date
     on which  J.P.  Morgan  gives  notice to the  Issuer in writing in the form
     attached as Schedule 1 hereto  confirming  the number  and/or amount of the
     Shares to be allotted (the "Placement Shares",  which term shall, where the
     context so admits,  include the Shortfall  Shares) and the Placement  Price
     and  Closing  Date in respect  thereof,  which shall be not less than three
     Business  Days after the relevant  Pricing Date. If no such notice is given
     on or before 12  November  2003 the  Pricing  Date shall be deemed to be 12
     November 2003 or, in relation to a Closing Date of 15 December 2003,  shall
     be deemed to be 10 December 2003 and the Minimum Price shall apply.

                                      -3-

<PAGE>

1.4  Allocation:  Subject  to  Clause 3,  J.P.Morgan  shall be  entitled  in its
     absolute  discretion  to  determine  the  basis of  allocations  under  the
     Placement,  including  (without  limitation)  allocation  to  J.P.Morgan or
     subscribers procured by J.P.Morgan,  of Placement Shares provided that J.P.
     Morgan will not make any allocation  which would,  to the knowledge of J.P.
     Morgan,  result in a breach of the Articles of Association of the Issuer (a
     copy of which has been  supplied  to and read by J.P.  Morgan) or trigger a
     mandatory  bid under Rule 9 of the City Code on Takeovers  and Mergers (the
     "Code").  J.P.  Morgan  undertakes,  save to the  extent  that it may do so
     pursuant  to any  exemption  under  the  Listing  Rules,  not  to  allocate
     Placement  Shares to any person which the Issuer  notifies J.P. Morgan is a
     related  party  (within  the  meaning of Chapter 11 of the  Listing  Rules)
     without  the prior  consent  of the  Issuer  and for these  purposes  Aegon
     Aandelenfonds   N.V.  and  Schroders  plc,  their   respective   subsidiary
     undertakings and parent undertakings and fellow subsidiary  undertakings of
     such  parent  undertakings  and Van Nierop  Maatschappijbelegging  shall be
     treated as related parties.

1.5  Appointment of Agent:  The Issuer hereby  appoints J.P. Morgan as its agent
     for the purpose of carrying out the Placement and arranging  subscribers of
     Placement  Shares on behalf of the  Issuer  and J.P.  Morgan  accepts  this
     appointment.

1.6  Confirmation:  The Issuer  confirms that the  appointment  under Clause 1.5
     confers on J.P. Morgan all powers,  authorities  and discretions  which are
     necessary  for,  or  reasonably  incidental  to,  the  carrying  out of the
     Placement  and shall  ratify  and  confirm  everything  which  J.P.  Morgan
     lawfully and properly does in carrying out or exercising such  appointment,
     powers, authorities and discretions pursuant to this Agreement.

1.7  Convertible Bonds: On receipt of notice from J.P. Morgan, the Issuer agrees
     that it will  negotiate  in good faith  with a view to issuing  Convertible
     Bonds for which J.P.  Morgan will be the sole arranger,  on terms including
     as to interest,  maturity  and  conversion  price to be agreed  between the
     parties.  For the  avoidance  of  doubt,  the  Issuer  shall  be  under  no
     obligation to issue  Convertible  Bonds or enter into any agreement or make
     any commitment for this purpose.

2    Confidentiality

     Each of J.P.  Morgan  and the Issuer (in such  capacity,  the  "Recipient")
     agrees and  undertakes  with the other (in such capacity,  the  "Provider")
     that:

     (i)  all Confidential  Information (as defined below) and the fact that the
          Recipient has requested or received  Confidential  Information will be
          kept  confidential  by  the  Recipient,  and  its  employees,  agents,
          advisers and  representatives  (collectively,  "Representatives")  and
          shall not, without prior written consent of the Provider, be disclosed
          by the Recipient.  The Confidential  Information  shall not be used by
          the Recipient or its Representatives other than in connection with the
          Placement. The Recipient agrees to reveal the Confidential Information
          only  to  the  Recipient's   Representatives  who  need  to  know  the
          Confidential  Information  for the purpose of the  Placement  and who,
          prior to receipt of any  Confidential  Information,  shall agree (such
          agreement being confirmed by the Recipient) to be bound by obligations
          of  confidentiality  to the Provider on the same terms as contained in
          this Agreement.  The Recipient hereby agrees to be responsible for any
          breach of this agreement by its Representatives.

                                      -4-

<PAGE>

     (ii) The Confidential  Information  will, if capable of being returned,  be
          returned  to the  Provider  immediately  upon the  Provider's  request
          without  the  retention  of any copies  thereof.  That  portion of the
          Confidential  Information which consists of or is incorporated (either
          fully or  partially)  into  analyses,  compilations,  studies or other
          documents  prepared by the Recipient and its  Representatives  will be
          destroyed.   The  Recipient  will  supply  written  evidence  of  such
          destruction upon request.

     (iii)In the  event  that the  Recipient  or  anyone  to whom the  Recipient
          transmits  the  Confidential  Information  pursuant to this  Agreement
          becomes  legally   compelled  to  disclose  any  of  the  Confidential
          Information,  the Recipient  will provide the Provider with  immediate
          notice before such Confidential  Information is disclosed, so that the
          Provider  may seek a  protective  order or  other  appropriate  remedy
          without prejudice to the Provider's remedies under this Agreement.  If
          such protective  order or other remedy is not obtained,  the Recipient
          will furnish only that portion of the Confidential  Information  which
          the  Recipient  is advised  by  written  opinion of counsel is legally
          required   (such  opinion  being   disclosed  to  the  Provider  where
          requested)  and  will  exercise  reasonable  endeavours  to  help  the
          Provider  obtain a protective  order or other reliable  assurance that
          confidential   treatment   will  be  accorded   to  the   Confidential
          Information.

     (iv) In  this  agreement,   "Confidential   Information"   shall  mean  all
          information,  analyses,  compilations,  studies,  documents  or  other
          material (whether communicated orally, in written form or other media)
          obtained by the Recipient from the Provider or any of their respective
          Representatives  in connection  with the Placement,  together with any
          analyses,  compilations,  studies, documents or other material written
          or otherwise prepared by the Recipient or its  Representatives,  which
          reflects or incorporates such information, provided that "Confidential
          Information" and the prohibition in Clause 2(i) on disclosing the fact
          that the Recipient has requested or received Confidential  Information
          shall not include and shall not prohibit disclosure of:

          (a)  information  or material  which at the time of its disclosure is,
               or which thereafter becomes (other than as a result of any act or
               default by the  Recipient  or its  Representatives),  part of the
               public domain;

          (b)  information  or material  which the Recipient can show was in the
               Recipient's  possession,  or the possession of one or more of the
               Recipient's  affiliated  companies  or  entities,  at the time of
               disclosure and was not acquired  directly or indirectly,  under a
               confidentiality obligation;

          (c)  information  or  material  which the  Recipient  is  required  to
               disclose as a result of any law or  regulation  binding  upon it,
               the Listing  Rules or the Code or as  required by any  regulatory
               body or listing authority having  jurisdiction over it, including
               without limitation the UKLA and the Stock Exchange; and

          (d)  disclosure  to Schroders  plc of a final proof of this  Agreement
               (excluding  details of the  commissions  and fees  referred to in
               Clause 8).

3    Agreements by J.P. Morgan

3.1  J.P. Morgan  acknowledges  that the Placement Shares have not been and will
     not be registered  under the U.S.  Securities Act and may not be offered or
     sold within the United States or to, or for the account or benefit of, U.S.
     persons except in accordance  with


                                      -5-

<PAGE>

     Regulation S under the U.S.  Securities Act ("Regulation S") or pursuant to
     an exemption from the registration requirements of the Securities Act. J.P.
     Morgan  represents  that it has offered  and sold,  and agrees that it will
     offer and sell Placement Shares  constituting part of its allotment only in
     accordance  with Rule 903 of  Regulation  S.  Accordingly,  neither it, its
     affiliates  nor any persons  acting on its or their  behalf have engaged or
     will engage in any directed  selling  efforts with respect to the Placement
     Shares.  J.P. Morgan  represents that it has not entered and agrees that it
     will not enter into any contractual  arrangement  with any distributor with
     respect to the distribution or delivery of the Placement Shares, except for
     any agreement where such  distributor  acknowledges and agrees that (a) the
     Placement Shares may not be offered or sold within the United States or to,
     or for the account or benefit  of, U.S.  persons and (b) it has offered and
     sold and will offer and sell Placement  Shares only in accordance with Rule
     903 of Regulation S.

     Terms used in this  paragraph have the meanings given to them by Regulation
     S.

     3.1.1     Neither J.P.  Morgan nor any of its  affiliates,  in their
               capacity  as agents of the  Issuer,  nor anyone  acting on its or
               their behalf in such  capacity,  has engaged in or will engage in
               activities that could reasonably be expected, or are intended, to
               condition the United States market with respect to any Securities
               of the Issuer,  other than "short-term  paper" within the meaning
               of  Section   3(c)(1)(A)  of  the  Investment  Company  Act  (the
               "Relevant Securities");

     3.1.2     J.P.  Morgan and its  affiliates,  in their capacity as agents of
               the Issuer, have not engaged in and will not engage in activities
               that could reasonably be expected, or are intended, to facilitate
               secondary market trading in the United States with respect to the
               Relevant Securities.

3.2  J.P. Morgan represents and agrees that:

     3.2.1     it has not  offered or sold and will not offer or sell any Shares
               to persons in the United Kingdom prior to admission of the Shares
               to listing in accordance  with Part VI of the Financial  Services
               and  Markets  Act 2000  (the  "FSMA"),  except to  persons  whose
               ordinary activities involve them in acquiring,  holding, managing
               or  disposing  of  investments  (as  principal  or agent) for the
               purposes of their businesses or otherwise in circumstances  which
               have not  resulted  and will not result in an offer to the public
               in the United  Kingdom within the meaning of the Public Offers of
               Securities Regulations 1995 or the FSMA;

     3.2.2     it has complied and will comply with all applicable provisions of
               the FSMA with  respect to anything  done by it in relation to the
               Shares in, from or otherwise involving the United Kingdom; and

     3.2.3     it has only  communicated or caused to be  communicated  and will
               only  communicate or cause to be  communicated  any invitation or
               inducement to engage in investment  activity  (within the meaning
               of section 21 of the FSMA) received by it in connection  with the
               issue or sale of any  Shares in  circumstances  in which  section
               21(1) of the FSMA does not apply to the Issuer.

3.3  J.P. Morgan  represents and agrees that no action has been or will be taken
     by it that constitutes a public offer or would, or is intended to, permit a
     public offer of the Shares or  possession or  distribution  of any offering
     material in relation thereto in any country or jurisdiction  where any such
     action for that purpose is required.  Accordingly,  J.P. Morgan agrees that
     it will not, directly or indirectly, offer or sell any Shares or distribute
     or publish

                                      -6-

<PAGE>


     any offering circular,  prospectus,  form of application,  advertisement or
     other document or information in any country or  jurisdiction  except under
     circumstances  that will result in compliance in all material respects with
     any applicable  laws and  regulations  relating to offers of Shares and all
     offers and sales of Shares by it will be made on the same terms.

4    Representations and Warranties

4.1  The Issuer  represents  and  warrants on the date of this  Agreement to and
     with J.P. Morgan as set forth in Schedule 2 Part A. The representations and
     warranties  in Schedule 2 Part B shall be deemed  made and  repeated by the
     Issuer on and as at each Closing Date.

4.2  For the purpose of Clause 4.1:

     4.2.1     where a  representation  or warranty is expressed in terms of the
               knowledge, belief or awareness of the Issuer, the Issuer shall be
               considered to have  knowledge  only of all those matters of which
               the  executive  directors of the Issuer have actual  knowledge or
               which would have been  discovered by them having made  reasonable
               enquiries within the senior management team of the Issuer; and

     4.2.2     the representations and warranties shall remain in full force and
               effect  notwithstanding  the completion of the  subscription  and
               purchase of the Placement Shares, the completion of the Placement
               and  all  other   matters   and   arrangements   referred  to  or
               contemplated by this Agreement.

4.3  The Issuer  undertakes to J.P.Morgan to promptly give notice to J.P. Morgan
     of any  breach  of  the  representations,  warranties  or  undertakings  or
     circumstances  giving  rise  to a claim  under  any of the  indemnities  as
     contained in, or given pursuant to, this Clause 4 or any other provision of
     this Agreement,  or of the occurrence of any Specified Event which comes to
     its  knowledge  prior to the  Closing  Date and take  such  steps as may be
     reasonably requested by J.P. Morgan to publicise the same.

4.4  "Specified  Event" means any event  occurring or matter arising on or after
     the date hereof which if it had  occurred or arisen  before the date hereof
     would have rendered any of the  representations or warranties  contained in
     Schedule 2 Part B untrue, inaccurate or misleading in any respect.

5    Covenants of the Issuer

5.1  General Covenants

     5.1.1     No  stabilisation  or  manipulation:  Neither  the Issuer nor any
               person  acting  on its  behalf  (save  that the  Issuer  makes no
               covenant in respect of J.P.  Morgan or its  affiliates or persons
               acting on its or their behalf) will take, directly or indirectly,
               any action  which is  designed to or which  might  reasonably  be
               expected  to cause or result in  stabilisation  in  violation  of
               applicable laws or manipulation of the price of securities of the
               Issuer.

     5.1.2     Lock-up:  The Issuer will not,  without the prior written consent
               of J.P.  Morgan,  during the period  beginning on the date hereof
               and  ending  on the  date  of  announcement  of  its  preliminary
               statement of annual  results for the year ended 31 December  2003
               (the "Lock-up Period"),  (a)issue,  offer,  lend,  pledge,  sell,
               contract  to sell or  issue,  sell  any  option  or  contract  to
               purchase, purchase any option or contract to sell or issue, grant
               any option,  right or warrant to  purchase,  lend,  or  otherwise
               transfer or dispose of, directly or indirectly, any Shares

                                      -7-

<PAGE>

               or any Shares convertible into or exercisable or exchangeable for
               Shares or (b)enter  into any swap or other  agreement by which it
               transfers,  in whole or in part, any of the economic consequences
               of ownership of Shares, or (c)publicly  announce any intention to
               enter into any transaction described in (a) or (b) above, whether
               any  such  transaction  described  in (a) or (b)  above  is to be
               settled by  delivery of Shares or such other  Shares,  in cash or
               otherwise.  The foregoing  undertaking  shall not apply to (i)the
               issue and offer by the Issuer of the  Placement  Shares  (and any
               related announcements), (ii)the issue by the Issuer of any Shares
               upon the exercise of an option or warrant or the  conversion of a
               security  outstanding  on the  date of this  Agreement  which  is
               described in the Issuer's  Annual Report for the six months ended
               31  December  2002 or of which J.P.  Morgan  has been  advised in
               writing (iii) the  announcement of, the entry into by the Issuer,
               the exercise of its rights in relation to and the  performance of
               its obligations under, the Schroders Agreement (as defined below)
               (and related  announcements)  provided  that a copy of the agreed
               form of Schroders Agreement (excluding details of commissions and
               fees) has been supplied to J.P.  Morgan prior to the date hereof,
               and (iv) the grant of options  in  respect  of up to one  million
               Shares in  aggregate  pursuant to the  Issuer's  Executive  Share
               Option Plan 2001 (and with the prior consent of J.P. Morgan, such
               consent not to be unreasonably  withheld,  the issue of Shares in
               respect thereof and related announcements).  The Issuer will also
               procure  that no  director  of the Issuer  enters into any action
               described  in  paragraphs  (a) to (c) above  during  the  Lock-up
               Period in relation  to Shares  legally or  beneficially  owned by
               such director on the first day of the Lock-up Period other than a
               dealing in  exceptional  circumstances  under  paragraph 9 of the
               Model Code (as defined in the Listing Rules) of which J.P. Morgan
               is given prior notice. In addition, the Issuer shall procure that
               the  Chairman  of the  Issuer  undertakes  in  writing  by way of
               comfort in the agreed form (if such  undertaking  has not already
               been provided)  that he will not approve any directors'  dealings
               under the Model  Code  during  the  Lock-up  Period  other than a
               dealing in  exceptional  circumstances  under  paragraph 9 of the
               Model Code of which J.P. Morgan is given prior notice.

     5.1.3     Circular to Shareholders:  The Issuer shall publish a circular to
               its shareholders as soon as reasonably  practicable following the
               date on which Permira Europe 3 announces its final closing but in
               any event not later than 15 October  2003  containing  details of
               the  proposed  issue of the  Placement  Shares and  convening  an
               extraordinary  general meeting under the minimum statutory notice
               period  permissible to increase its authorised share capital,  to
               grant the  directors of the Issuer  authority to issue  Placement
               Shares and to  disapply  pre-emption  rights in  relation to such
               issue.  Prior to or immediately upon publication of such circular
               the Issuer will publish a press release announcing the Placement.
               In the event that the  approvals  sought at such meeting from the
               shareholders  of the  Issuer  are not  given  at the  first  such
               meeting, the Issuer shall convene one or more further meetings of
               its shareholders for that purpose.

               In the event that Shortfall Shares are to be issued in accordance
               with Clause 1.2, the Issuer shall if necessary publish a circular
               to shareholders  containing  details of the proposed issue of the
               relevant Shortfall Shares and convening an extraordinary  general
               meeting under the minimum statutory notice period  permissible to
               increase its authorised share capital,  to grant the directors of
               the Issuer authority to issue Shares and to disapply  pre-emption
               rights in relation to such issue. The Issuer will

                                      -8-

<PAGE>

               at the request of J.P. Morgan publish a press release  announcing
               the placement of the Shortfall Shares.

     5.1.4     Commitments  and  arrangements:  The  Issuer  undertakes  to J.P.
               Morgan that between the date hereof and up to and  including  the
               date falling five  Business  Days after the last Closing Date, it
               shall not without prior  consultation  with and without the prior
               written  consent of J.P.  Morgan (which shall not be unreasonably
               withheld or delayed), enter into or procure, or permit the Issuer
               or any Group  Company  (as  defined in Schedule 2) to enter into,
               any  commitment  or agreement  which would  materially  adversely
               affect the Placement save for any commitment, agreement or matter
               which relates to:

               (a)  the  transactions  relating to P123 (C.I.)  Limited and P123
                    Limited  (together,  or each,  "P123") as  described  in, or
                    contemplated by, the Offering  Circular dated September 2003
                    as amended from time to time;

               (b)  the arrangements between P123 and any Group Company relating
                    to the funding (equity and debt) of P123 and the transfer of
                    limited  partnership  interests  between  P123  and a  Group
                    Company;

               (c)  a commitment by a Group Company to the Japan Fund IV;

               (d)  an  agreement  on   substantially   similar  terms  as  this
                    Agreement with Schroders plc including further  arrangements
                    relating to P123 (the "Schroders Agreement"); and

               (e)  the  securitisation  of a portfolio  of limited  partnership
                    interests by the Issuer in a transaction in which the Issuer
                    may make an equity investment up to EUR40 million.

     5.1.5     Announcements:  Save as expressly required  hereunder,  by law or
               regulation or the rules,  practices and  procedures  laid down by
               the London  Stock  Exchange  plc (the  "Stock  Exchange")  or the
               Financial  Services  Authority in its capacity as United  Kingdom
               Listing Authority (the "UKLA"), or any other competent regulatory
               authority,  or in  connection  with those  matters  summarised in
               paragraphs (a) to (e) inclusive of Clause 5.1.4, the Issuer shall
               not make or despatch any public announcement or communication:

               (i)  concerning the Issuer and/or the Group Companies (as defined
                    in Schedule 2) which is or would be reasonably  likely to be
                    material  in  relation  to the  Placement  between  the date
                    hereof  and  up to  and  including  the  date  falling  five
                    Business  Days after the last  Closing  Date  without  first
                    consulting J.P. Morgan as to the content,  timing and manner
                    of making or despatch thereof; or

               (ii) in  connection  with  the  Placement  which  is or  would be
                    reasonably   likely  to  be  material  in  relation  to  the
                    Placement  between the date  hereof and up to and  including
                    the date falling five  Business  Days after the last Closing
                    Date  without the consent of J.P.  Morgan as to the content,
                    timing  and  manner  of  making or  despatch  thereof  (such
                    consent not to be unreasonably  withheld or delayed) and the
                    Issuer will take into account all reasonable requirements of
                    J.P. Morgan in relation thereto.

                                      -9-

<PAGE>

     5.1.6     Directed  Selling  Efforts:  Neither  the  Issuer  nor any of its
               affiliates (as defined in Rule 405 under the Securities Act), nor
               any person acting on its or their behalf (other than J.P.  Morgan
               and its  affiliates  in  respect  of which  the  Issuer  makes no
               covenant)  will  engage in any  "directed  selling  efforts"  (as
               defined in Regulation S) with respect to the Shares.

     5.1.7     Non-integration: Neither the Issuer nor any of its affiliates (as
               defined in Rule 501(b) of Regulation D), nor any person acting on
               its or their behalf (other than J.P.  Morgan and its  affiliates,
               in respect of which the Issuer makes no covenant) will,  directly
               or indirectly,  make offers or sales of any security,  or solicit
               offers  to  buy,  or  otherwise  negotiate  in  respect  of,  any
               security, under circumstances that would require the registration
               of the Shares under the U.S. Securities Act.

     5.1.8     Admission:  The Issuer will cause  applications to be made to the
               UKLA and the Stock  Exchange for Admission (as defined below) and
               the Issuer  undertakes to provide such  information,  supply such
               documents,  pay such fees, give such undertakings and do all such
               acts and things as may reasonably be required to enable Admission
               and such  listing to become  effective  on or before the relevant
               Closing Date.

     5.1.9     Declaration: The Issuer shall procure that:

               (i)  a duly executed  declaration in the form set out in Schedule
                    6 of the Listing Rules is delivered to the UKLA prior to the
                    date  which  is  five   Business  Days  after  the  date  of
                    Admission; and

               (ii) all  such   information   and   documents   (signed  by  the
                    appropriate   person  where  so  required)  as  J.P.  Morgan
                    reasonably   requires   to  enable  it  to   discharge   its
                    obligations  hereunder or pursuant to or in connection  with
                    the issue of the  Placement  Shares or as may be required to
                    comply  with the  requirements  of the FSA,  the UKLA or the
                    Stock  Exchange shall be  communicated  or delivered to J.P.
                    Morgan.

               "Admission" means the admission of the relevant  Placement Shares
               to the Official List and by the Stock  Exchange to trading on the
               Stock  Exchange by the making of an  announcement  in  accordance
               with paragraph 7.1 of the Listing Rules.

               "Listing  Rules"  means  the  Listing  Rules  of  the  FSA in its
               capacity as UKLA pursuant to the FSMA;

               "Official List" means the list maintained by the UKLA.

     5.1.10    The Issuer will pay any stamp, issue, transfer,  registration, or
               other  documentary  taxes  and  duties,  including  interest  and
               penalties,  payable on or in connection either with the execution
               and  delivery  of  this  Agreement  or the  offering  and/or  the
               delivery  of  the  Placement  Shares  as  provided  hereunder  to
               subscribers of the Placement Shares procured by J.P. Morgan or to
               J.P.  Morgan save for any such taxes or duties arising in respect
               of the issue of Placement Shares (i) to, or to a nominee or agent
               for, a person providing a clearance  service within Section 96 of
               the  Finance  Act 1986 of the United  Kingdom or (ii) to, or to a
               nominee or agent  for, a person  whose  business  is or  includes
               issuing depository  receipts within Section 93 of the Finance Act
               1986 of the United Kingdom.

                                      -10-

<PAGE>

6    Conditions Precedent

6.1  The  obligations of J.P.  Morgan to subscribe  Placement  Shares under this
     Agreement are subject to the following conditions precedent:

     6.1.1     Representations   and   warranties:   the   representations   and
               warranties on the part of the Issuer contained in Schedule 2 Part
               B of this  Agreement  being true and accurate in every respect on
               and as of each Closing Date;

     6.1.2     Compliance:  the Issuer having complied in all material  respects
               with this  Agreement and satisfied all the conditions on its part
               under this  Agreement to be performed or satisfied on or prior to
               each Closing Date;

     6.1.3     Receipt of documents:  J.P. Morgan having received on or prior to
               each Closing Date:

               (i)  certified  copies of  minutes  of a meeting  of the board of
                    directors (or committee thereof) of the Issuer approving and
                    authorising  the execution by the Issuer of this  Agreement,
                    the  declaration  described  in  Clause  5.1.9  and  for the
                    allotment of the relevant  Placement Shares conditional upon
                    Admission  and  of  the  resolution  of  each  extraordinary
                    general  meeting  of  shareholders  contemplated  by  Clause
                    5.1.3;

               (ii) a  certified  copy of the  constitutional  documents  of the
                    Issuer; and

               (iii)undertaking  of the  Chairman  of the Issuer  referred to in
                    Clause 5.1.2 ;

     6.1.4     Opinions etc: on or prior to each Closing Date, there having been
               delivered  to J.P.  Morgan the  following  in form and  substance
               satisfactory to it:

               (i)  an opinion  dated each  Closing Date (in the agreed form) of
                    Linklaters,  legal advisers to J.P. Morgan as to English law
                    (provided that J.P. Morgan will use reasonable endeavours to
                    procure that  Linklaters give such opinion and, in the event
                    that  Linklaters do not give such opinion,  such opinion may
                    be  given  by  such  other  firm  of  legal  advisers  as is
                    reasonably acceptable to J.P. Morgan);

               (ii) a  certificate,  dated each Closing Date in the form set out
                    in Schedule 3 hereto and signed by a duly authorised officer
                    of the Issuer; and

     6.1.5     Listing:  the UKLA having  agreed to list the relevant  Placement
               Shares and the Stock Exchange having agreed to admit the relevant
               Placement Shares for trading.

6.2  The Issuer  undertakes  to use all  reasonable  endeavours  to procure  the
     fulfilment of the  conditions  set out in Clause 6.1 by the times and dates
     stated  therein and  undertakes  to provide such  information,  supply such
     documents,  pay such fees, give such  undertakings and do all such acts and
     things as may in each case  reasonably  be required to enable  Admission to
     become effective on or before the Closing Date.

6.3  J.P.  Morgan may at its discretion  waive  compliance with the whole or any
     part of this Clause 6 (other than Clause 6.1.5)  (provided  always that any
     such waiver as aforesaid  shall be without  prejudice to its right to elect
     to treat any  further  or other  breach,  failure or event  referred  to in
     Clause 12 as releasing and  discharging it under this Clause 6 or Clause 12
     from its obligations to subscribe for the Placement Shares).

                                      -11-

<PAGE>

6.4  If any of the  conditions  set out in this  Clause 6 is not  fulfilled,  or
     waived by J.P. Morgan,  by the time and/or date specified  therein (or such
     later time  and/or  date as the  Issuer and  J.P.Morgan  may  agree),  this
     Agreement,  shall cease and terminate and no party to this Agreement  shall
     have any  claim  against  any  other  party to this  Agreement  for  costs,
     damages, compensation or otherwise except that:

     6.4.1     such termination shall be without prejudice to any accrued rights
               or obligations of any party under this Agreement;

     6.4.2     the Issuer  shall pay the Fee and  expenses  (but,  other than in
               respect of Placement Shares issued prior to such termination, not
               commissions) to the extent specified in Clauses 8 and 9; and

     6.4.3     the  provisions of Clauses 10, 13, 14 and 15 shall remain in full
               force and effect.

7    Closing

     7.1.1     The Issuer shall,  as directed by J.P.  Morgan by 9 a.m.  (London
               time) on each Closing  Date,  arrange that each of the  Placement
               Shares to be allotted on such  Closing  Date will be credited (in
               so far as CREST is  functioning  so as to enable such  action) by
               11.00 a.m. on such Closing  Date,  subject only (if Admission has
               not occurred by such time) to Admission  occurring not later than
               11.00 a.m. (London time) on such Closing Date, to the CREST stock
               account of J.P.  Morgan or such CREST  accounts of the placees as
               J.P. Morgan directs.

     7.1.2     Following  satisfaction  of the  conditions  in  Clause 6 and the
               preceding  provisions  of  this  Clause,  and the  Issuer  having
               complied with its obligations under this Agreement,  J.P. Morgan,
               shall pay, for value not later than 11.00 a.m.  (London  time) on
               the Closing  Date to such  sterling  account as the Issuer  shall
               have specified to J.P.  Morgan not later than the second Business
               Day prior to the Closing  Date,  an amount equal to the aggregate
               Placement  Price in respect of the Placement  Shares to be issued
               on the Closing Date (net of commissions and all applicable  stamp
               duty,  amounts  in respect of VAT and  expenses  permitted  to be
               withheld from such proceeds in accordance with this Agreement).

     7.1.3     Following the payment of proceeds  pursuant to Clause 7.1.2,  the
               Issuer  shall   procure  that  its   registrars   effect   prompt
               registration  of the Placees in the Issuer's  register of members
               as holders of the  Placement  Shares  without  charge and, in the
               case  of  Placees   who  elect  to  hold   Placement   Shares  as
               certificated  Shares,  deliver to those persons  definitive share
               certificates  in their  respective  names on or before  the tenth
               Business Day following the Closing Date.

     7.1.4     "CREST"  means the system of paperless  settlement  of trades and
               the holding of uncertificated shares administered by CRESTCo.

     7.1.5     "CRESTCo" means CRESTCo Limited, a company incorporated under the
               laws of England and Wales.

     7.1.6     "Uncertificated  Shares" means those Placement  Shares which will
               be  in  uncertificated   form  pursuant  to  the   Uncertificated
               Securities Regulations 2001.

8    Commissions

8.1  In consideration of the obligations  undertaken herein by J.P. Morgan,  the
     Issuer will pay it:


                                      -12-

<PAGE>

     (i)  an underwriting  commission of 2 per cent. of the aggregate  Placement
          Price in respect of any Closing  Date,  up to an  aggregate  Placement
          Price of Euro 60 million in respect of all Closing Dates;

     (ii) a selling  commission of 1 per cent.  (or, at the option of the Issuer
          in its  complete  discretion,  such  higher  percentage  up to 1.5 per
          cent.) of the  aggregate  Placement  Price in respect  of any  Closing
          Date, up to an aggregate Placement Price of Euro 60 million in respect
          of all Closing Dates;

     (iii)a combined  underwriting and selling commission of 3 per cent. (or, at
          the  option of the  Issuer in its  complete  discretion,  such  higher
          percentage  up to 3.5  per  cent.)  of the  portion  of the  aggregate
          Placement  Price in respect of all Closing  Dates in excess of Euro 60
          million;

     (iv) a further  commission of 1/8 per cent. of such amount by which Euro 60
          million  exceeds  the  aggregate  Placement  Price in  respect  of all
          Placement  Shares  subscribed  on or prior to 30 October 2003 for each
          additional  period or part thereof of seven days  following 30 October
          2003 up to and including  the final  Closing Date or, if earlier,  the
          date when J.P. Morgan's obligations  hereunder are terminated or lapse
          or otherwise cease to be capable of becoming unconditional; and

     (v)  a fee equal to Euro 350,000 (the "Fee").

     Such  commissions and Fee (along with any amounts referred to in Clause 11)
     shall be deducted from the  subscription  moneys for the  Placement  Shares
     payable (in the case of the Fee, on the first  Closing  Date) to the Issuer
     by J.P. Morgan as provided in Clause 7.

8.2  Payment  of the  amounts  referred  to in  Clause  8.1 shall be made on the
     relevant Closing Date in accordance with Clause 7.

9    Costs and Expenses

9.1  In addition to the  commissions  referred to in Clause 8.1, the Issuer will
     bear  and pay all  other  expenses  incidental  to the  performance  of the
     obligations of the Issuer hereunder including, without limitation:

     9.1.1     the  fees,  disbursements  and  expenses  of the  Issuer's  legal
               advisers and the Issuer's agents and other advisers;

     9.1.2     all the expenses in connection with the  preparation,  production
               and printing of the  Placement  Shares,  this  Agreement  and any
               other document relating to the Placement;

     9.1.3     the cost of  application  to the UKLA and the Stock  Exchange for
               listing and trading of the Placement  Shares and the  maintenance
               thereof, and all expenses incidental thereto;

     9.1.4     the costs and expenses of any advertising agreed by the Issuer in
               connection with the Placement;

     9.1.5     the costs of the initial  delivery  and  distribution  (including
               transportation, packaging and insurance) of the Placement Shares;

     and the Issuer shall  forthwith  upon demand by J.P.  Morgan  reimburse the
     amount of any such expenses incurred by J.P. Morgan.

                                      -13-

<PAGE>

9.2  The Issuer will forthwith  upon demand  reimburse the costs and expenses of
     J.P. Morgan and each of its affiliates  incurred on behalf of the Issuer in
     connection  with the issue and offer of the  Placement  Shares,  including,
     without limitation,  the fees and expenses of J.P. Morgan's legal and other
     advisers  and  all  travelling,   telecommunications,   postage  and  other
     out-of-pocket  expenses up to a maximum of  GBP80,000  (plus any amounts in
     respect of VAT on such fees and expenses as referred to in Clause 11).

9.3  All  payments  by the  Issuer  under  this  Agreement  (including,  without
     limitation,  under  Clauses  8 and 9)  shall  be paid  without  set-off  or
     counterclaim,  and free and clear of and without  deduction or  withholding
     for or on account of, any present or future taxes, levies,  imposts, funds,
     duties,  fees,  assessments or other charges of whatever  nature,  imposed,
     levied,   collected,   withheld  or  assessed  by  any  governmental  body,
     department,  agency or other political subdivision or taxing authority, and
     all  interest,  penalties  or  similar  liabilities  with  respect  thereto
     ("Taxes")  save as may be required by law. If any Taxes are required by law
     to be deducted or withheld in connection with any such payment,  the Issuer
     will  increase the amount paid so that the amount of such payment  received
     by the payee is such  amount as the payee  would have  received  if no such
     deduction or withholding had been made.

10   Indemnification

10.1 The Issuer (for this purpose an "Indemnifying  Person")  undertakes to J.P.
     Morgan that if J.P. Morgan or any of its subsidiaries and affiliates or any
     person who  controls  J.P.  Morgan  within the meaning of Section 15 of the
     U.S.  Securities Act or Section 20 of the Securities Exchange Act or any of
     their respective representatives, directors, officers, employees and agents
     (each an  "Indemnified  Person") incurs any losses,  liabilities,  damages,
     costs,  claims,  charges or  expenses,  or  demands,  or actions in respect
     thereof,  including, but not limited to, all legal fees, costs and expenses
     together  with an amount equal to any  applicable  taxes thereon other than
     VAT (which shall be dealt with in accordance with Clause 11) (each a "Loss"
     and  together,  "Losses")  which  arises  out  of,  in  relation  to  or in
     connection with:

     10.1.1    any  breach  or  alleged  breach  by  the  Issuer  of  any of its
               representations,    warranties,   undertakings,   covenants   and
               agreements  contained  in, or deemed to be made pursuant to, this
               Agreement;

     10.1.2    any untrue  statement or alleged  untrue  statement of a material
               fact contained in any Listing Particulars published by the Issuer
               in relation to the  Placement  Shares or any  omission or alleged
               omission to state therein a material  fact  necessary to make the
               statements therein not misleading;

     whenever  arising,  the  Indemnifying  Person shall pay to the  Indemnified
     Person on demand an amount equal to such Losses and all costs,  charges and
     expenses which it or any Indemnified  Person may pay or incur in connection
     with investigating, disputing or defending any such action or claim as such
     costs, charges and expenses are incurred.  This undertaking to make payment
     will be in  addition to any  liability  which the  Indemnifying  Person may
     otherwise have.

10.2 Separate Obligations: The above indemnities shall constitute obligations of
     the Indemnifying Person separate and independent from its obligations under
     other  provisions  of this  Agreement and shall apply  irrespective  of any
     indulgence  granted by any other party from time to time and shall continue
     in full force and effect notwithstanding the judgment or

                                      -14-

<PAGE>


     filing of any proof or proofs in any bankruptcy,  insolvency or liquidation
     of the  Indemnifying  Person  for a  liquidated  sum or sums in  respect of
     amounts due under this Agreement (other than this Clause).

10.3 Conduct of Claims: If any claim, demand or action is brought or asserted in
     respect of which an Indemnified Person is entitled to be indemnified by the
     Indemnifying Person under Clause 10.1 (a "Claim"), the following provisions
     shall apply:

     (a)  Each  Indemnified  Person shall give prompt notice to the Indemnifying
          Person (but failure to do so shall not relieve the Indemnifying Person
          from liability);

     (b)  The  Indemnified  Person shall  procure that the  Indemnifying  Person
          shall,  subject to Clause  10.4,  be entitled to assume the defence of
          the relevant Claim including the retention of legal advisers  approved
          by each  Indemnified  Person  (such  approval  of the  choice of legal
          advisers not to be unreasonably  withheld or delayed),  subject to the
          payment by the Indemnifying  Person of all legal and other expenses of
          such defence;

     (c)  If the Indemnifying  Person assumes the defence of the relevant Claim,
          each   Indemnified   Person  shall  have  the  right  to  information,
          consultation and representation concerning the development and defence
          of any litigation or threatened litigation; and

     (d)  If the Indemnifying  Person assumes the defence of the relevant Claim,
          each  Indemnified  Person shall be entitled to retain  separate  legal
          advisers  and to  participate  in such  defence but the legal or other
          expenses  incurred in so doing shall,  subject to Clause 10.4 be borne
          by  such  Indemnified  Person,  unless  the  Indemnifying  Person  has
          specifically authorised such retention or participation.

10.4 Conduct of Indemnified Person:  Notwithstanding Clause 10.3, an Indemnified
     Person may retain separate legal advisers in each relevant jurisdiction and
     direct the defence of the relevant Claim and the Indemnifying  Person shall
     reimburse  such  Indemnified  Person  for any  legal or other  expenses  so
     incurred if:

     (a)  The  Indemnifying  Person (having assumed such defence) fails properly
          to make such  defence or to retain  for such  purpose  legal  advisers
          approved by such Indemnified Person;

     (b)  The Indemnifying Person has not assumed the defence of such Claim;

     (c)  Such  Indemnified  Person has  concluded in good faith that the use of
          any legal advisers chosen by the Indemnifying Person to represent such
          Indemnified  Person may present such legal advisers with a conflict of
          interest; or

     (d)  The  actual or  potential  defendants  in, or targets  of,  such claim
          include both the Indemnifying  Person and such Indemnified  Person and
          such Indemnified Person has concluded that there may be legal defences
          available  to it  which  are  different  from or  additional  to those
          available to the Indemnified Person.

10.5 Settlement:  The  Indemnifying  Person shall not, without the prior written
     consent of each  Indemnified  Person (such  consent not to be  unreasonably
     withheld  or  delayed)  settle or  compromise,  or  consent to the entry of
     judgement with respect to, any pending or threatened Claim (irrespective of
     whether any Indemnified  Person is an actual or potential  defendant in, or
     target of,  such  Claim)  unless  such  settlement,  compromise  or consent
     includes  an  unconditional  release of each  Indemnified  Person  from all
     liability  arising out


                                      -15-

<PAGE>

     of the matters which are the subject of such Claim. The Indemnifying Person
     shall  not  be  liable  to pay  any  amount  under  this  Clause  10 to any
     Indemnified Person where the relevant Claim has been settled or compromised
     without its prior  written  consent,  such  consent not to be  unreasonably
     withheld or delayed.

10.6 Enforcement of Rights:  Each Indemnified  Person shall have the right under
     the Contracts (Rights of Third Parties) Act 1999 (which shall apply to this
     Agreement  only to the extent  provided in this Clause 10.6) to enforce its
     rights against the Indemnifying  Person under this Clause 10 provided that,
     save to the  extent  notified  in writing  by J.P.  Morgan to the  relevant
     Indemnified  Person in relation to an  Indemnified  Person  connected to it
     J.P. Morgan (without  obligation)  will have the sole conduct of any action
     to enforce such rights on behalf of the relevant  Indemnified  Person. Save
     as provided in this Clause 10.6, Indemnified Persons other than J.P. Morgan
     will  not  be  entitled  directly  to  enforce  their  rights  against  the
     Indemnifying  Person under this Agreement,  under the Contracts  (Rights of
     Third  Parties) Act 1999 or  otherwise.  J.P.  Morgan and the  Indemnifying
     Person  may  agree to  terminate  this  Agreement  or vary any of its terms
     without the  consent of any  Indemnified  Persons and J.P.  Morgan will not
     have any  responsibility to any Indemnified  Person under or as a result of
     this Agreement.

10.7 Indemnified   Person:  No  Indemnified  Person  shall  be  entitled  to  be
     indemnified  in respect of Losses in its  capacity as agent or under Clause
     10.1 to the extent that:  (i) they are finally  judicially  determined by a
     court of competent  jurisdiction  to have arisen as a direct  result of the
     negligence, bad faith or wilful default of such Indemnified Person; or

     (ii) such Losses are suffered or incurred by such  Indemnified  Person as a
          result of its having been required to subscribe  for Placement  Shares
          pursuant  to Clause 1 unless  such Losses are caused by or result from
          or are  attributable to or would not have arisen but for (in each case
          directly or indirectly) any breach by any  Indemnifying  Person of any
          of  its  obligations  under  this  Agreement  or  any  breach  of  any
          representations,  warranties and undertakings contained in or given by
          the Issuer pursuant to this Agreement.

11   VAT

11.1 Where a sum is paid or reimbursed to J.P. Morgan or any Indemnified  Person
     by the  Issuer in  respect of any cost or  expenses  of J.P.  Morgan or the
     relevant  Indemnified Person and that cost or expense includes an amount in
     respect of VAT (the "VAT  Element")  the Issuer shall pay an amount to J.P.
     Morgan or the relevant  Indemnified Person by reference to the VAT Element,
     which shall be determined as follows:

     11.1.1    to the extent that any payment or reimbursement is, or is treated
               under Section 47(3) of the Value Added Tax Act 1994 as being,  in
               respect of any supply of goods or services to J.P.  Morgan or the
               relevant Indemnified Person, a sum equal to the proportion of the
               VAT Element that J.P. Morgan or the relevant  Indemnified  Person
               certifies as representing irrecoverable input tax in the hands of
               J.P. Morgan or the relevant Indemnified Person; and

     11.1.2    to the  extent  that  any such  payment  or  reimbursement  is in
               respect of a  disbursement  made by J.P.  Morgan or the  relevant
               Indemnified  Person as agent for the Issuer and is not covered by
               Clause  11.1.1,  such  amount  as  equals  the  whole of that VAT
               Element.

                                      -16-

<PAGE>

11.2 Where a sum equal to the VAT Element has been  reimbursed to J.P. Morgan or
     any Indemnified  Person pursuant to Clause 11.1.2 above, J.P. Morgan or the
     relevant Indemnified Person shall use its reasonable  endeavours to provide
     the  Issuer  with an  appropriate  VAT  invoice in respect of the supply to
     which the payment or reimbursement  relates, being a VAT invoice naming the
     Issuer as the  recipient of the supply and issued by the person  making the
     supply.

11.3 If any payment to J.P. Morgan under this Agreement relates to the making by
     J.P.  Morgan of any supply of goods or services  to the Issuer,  the Issuer
     shall pay to J.P. Morgan,  in addition to the amounts  otherwise payable by
     the Issuer to J.P.  Morgan  pursuant to this Agreement and at the same time
     as those amounts are payable,  an amount equal to the VAT chargeable on any
     such  supply,  against  production  by J.P.  Morgan of an  appropriate  tax
     invoice in respect of the supply to which the payment relates.

12   Termination

12.1 J.P.  Morgan may by written notice to the Issuer given at any time prior to
     allotment of the Placement  Shares on the relevant  Closing Date  terminate
     this Agreement if:

     12.1.1    there  was  on  the  date  of  this  Agreement  a  breach  of the
               representations and warranties contained in Schedule 2 Part A and
               given  pursuant  to  Clause 4 or there  has been a breach  by the
               Issuer of any of the representations,  warranties or undertakings
               respectively contained in Schedule 2 Part B and given pursuant to
               Clause 4 or any of the  agreements  or covenants  contained in or
               given  pursuant  to  Clause 5 or of any other  provision  of this
               Agreement    (other   than,   save   as   provided   above,   the
               representations  and  warranties  contained in Schedule 2 Part A)
               binding on it which is material in the context of the  Placement;
               or

     12.1.2    the extraordinary  general meeting of shareholders referred to in
               Clause  5.1.3  (or any  meeting  subsequently  convened  for such
               purpose)  does not approve the  matters  described  therein on or
               before 8 December 2003; or

     12.1.3    any  of  the  conditions  specified  in  Clause  6 has  not  been
               satisfied or waived by J.P. Morgan.

12.2 In the event that this  Agreement is terminated  pursuant to the provisions
     of this  Clause,  no party  shall be under  any  liability  to any other in
     respect  of this  Agreement  and no party to this  Agreement  will have any
     claim  against  any  other  party to this  Agreement  for  costs,  damages,
     compensation or otherwise except that:

     12.2.1    such termination shall be without prejudice to any accrued rights
               or obligations of any party under this Agreement; and

     12.2.2    the Issuer  shall pay the  expenses  to the extent  specified  in
               Clause 9 and any Fee and  commissions  in  respect  of  Placement
               Shares allotted and subscribed prior to such termination to which
               J.P. Morgan's rights have accrued under Clause 8;

     the  provisions of Clauses 10, 13, 14 and 15 shall remain in full force and
     effect.

13   Notices

13.1 All  communications  to be given  hereunder shall be delivered in person or
     sent by letter,  facsimile  transmission  or telephone  (but in the case of
     notification  by  telephone  with  subsequent  confirmation  by  letter  or
     facsimile) addressed, in the case of notification to:


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<PAGE>


     13.1.1    to the Issuer:  addressed to it at 31 Gresham Street, London EC2V
               7QA,  Fax No.:  020 7658 3538  marked  for the  attention  of the
               Company  Secretary  and  copied  to  Schroder  Ventures  (London)
               Limited,  Burleigh House,  357 Strand,  London WC2R 0HS, Fax No.:
               020 7240 5346 marked for the attention of the Legal Director;

     13.1.2    to J.P. Morgan:  addressed to it at J.P. Morgan  Securities Ltd.,
               10  Aldermanbury,  London  EC2V  7RF;  Facsimile:  020 7325  8168
               Attention Syndicate Desk;

13.2 Any communication so sent by letter shall take effect at the time of actual
     delivery,  and any  communication so sent by facsimile  transmission  shall
     take  effect  upon  acknowledgement  of  receipt  by  the  recipient.   Any
     communication to be delivered to any party under this Agreement which is to
     be sent by facsimile transmission will be written legal evidence.

14   General

14.1 Successors

     The obligations of the Issuer to J.P. Morgan shall be binding  respectively
     on their successors.

14.2 Release, compromise etc.

     Any liability to any party under this  Agreement may in whole or in part be
     released,  compounded or compromised and time or indulgence may be given by
     that party in its  absolute  discretion  as regards  any person  under such
     liability  without in any way  prejudicing or affecting that party's rights
     against any other  person  under the same or a similar  liability,  whether
     joint and several or otherwise.

14.3 Delay and waiver

     No failure of any party to exercise, and no delay by it in exercising,  any
     right,  power or remedy in connection with this Agreement will operate as a
     waiver thereof,  nor will any single or partial  exercise of any such right
     preclude any other or further exercise of such right or the exercise of any
     other right.  The rights  provided in this Agreement are cumulative and not
     exclusive of any other rights (whether  provided by law or otherwise).  Any
     express waiver of any breach of this Agreement shall not be deemed a waiver
     of any subsequent breach.

14.4 No agency

     Each  of  the  parties  hereto   acknowledges  that  the   representations,
     warranties  and  undertakings  given by the  Issuer  contained  in or given
     pursuant to Clauses 4 and 5 and the  indemnity  contained in Clause 10 are,
     save as provided  herein,  given to J.P. Morgan for itself and not to it as
     agent of,  trustee for or  otherwise  for the  benefit of any other  person
     including (without limitation) any person who may subscribe or purchase any
     of the Placement Shares.

14.5 Counterparts

     This Agreement may be entered into in any number of counterparts and by the
     parties to it on separate counterparts,  each of which when so executed and
     delivered  shall be an original,  but all the  counterparts  shall together
     constitute one and the same instrument.

                                      -18-

<PAGE>

14.6 Variation

     No variation  of this  Agreement  shall be effective  unless in writing and
     signed by or on behalf of each of the parties.

14.7 Further Assurance

     At any time after the date of this  Agreement  each party shall,  and shall
     use all  reasonable  endeavours to procure that any  necessary  third party
     shall,  at the cost of that party  execute such  documents and do such acts
     and things as the other  party may  reasonably  require  for the purpose of
     giving full effect to all the  provisions of this  Agreement by which he or
     it is bound.

14.8 Illegality etc.

     If any provision in this Agreement shall be held to be illegal,  invalid or
     unenforceable,  in whole or in part,  under any  enactment  or rule of law,
     such  provision  or part shall to that extent be deemed not to form part of
     this  Agreement  but  the  legality,  validity  and  enforceability  of the
     remainder of this Agreement shall not be affected.

14.9 Survival of Representations, Warranties and Obligations

     The representations,  warranties, agreements,  undertakings,  covenants and
     indemnities herein shall continue in full force and effect  notwithstanding
     completion  of the Placement or any  investigation  made by or on behalf of
     J.P. Morgan or any of its representatives,  directors,  officers, agents or
     employees or any of them.

14.10 Contracts (Rights of Third Parties) Act 1999

     A  person  who is not a party to this  Agreement  has no  right  under  the
     Contracts  (Rights of Third  Parties)  Act 1999 to enforce any term of this
     Agreement  except and to the extent (if any) that this Agreement  expressly
     provides for such Act to apply to any of its terms.

15   Governing Law and Jurisdiction

15.1 This  Agreement  shall be  governed by and  construed  in  accordance  with
     English law.

15.2 The  courts of England  are to have  exclusive  jurisdiction  to settle any
     disputes  which may arise out of or in connection  with this Agreement and,
     accordingly,  any  legal  action  or  proceedings  arising  out  of  or  in
     connection  with this  Agreement  ("Proceedings")  may be  brought  in such
     courts.  The parties  irrevocably  submit to the exclusive  jurisdiction of
     such courts and waive any objection to  Proceedings  in such courts whether
     on the  ground of venue or on the  ground  that the  Proceedings  have been
     brought in an inconvenient forum.

     In witness  whereof this  Agreement  has been entered on the date stated at
     the beginning.

     SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC

     By:





     J.P. MORGAN SECURITIES LTD.

     By:

                                      -19-



<PAGE>

                                   Schedule 1
                              Form of Notification

               [On the letterhead of J.P. Morgan Securities Ltd.]





                                                                    Date  2003

To:

Schroder Ventures International Investment Trust plc
31 Gresham Street
London
EC2V 7QA

For the attention of the Company Secretary



cc: Schroder Ventures (London) Limited
Burleigh House
357 Strand
London
WC2R 0HS

Attention:

We hereby give notice that we have procured  subscribers for * Placement  Shares
at a  Placement  Price of * pence per share  (being  the Net Asset  Value)  [and
subscribed  * Placement  Shares at the Minimum  Price] and that the Closing Date
for the above-mentioned Placement Shares will be * 2003.

Closing will take place in accordance with the terms of the Placement  Agreement
dated * October  2003.  Terms  defined  therein will have the same meanings when
used in this letter.

Yours faithfully







J.P. Morgan Securities Ltd.


                                      -20-

<PAGE>

                                   Schedule 2
                         Representations and Warranties


                                     Part A

The Issuer makes the  following  representations  and  warranties on the date of
this Agreement:

1    Disclosure:  all press  releases  and  announcements  made by the Issuer in
     relation to the Placement and the  transaction the subject of the Schroders
     Agreement and the circular to shareholders referred to in Clause 5.1.4, all
     as modified or supplemented  by any subsequent  release or circular did not
     as of their  respective  dates and do not, as such releases,  announcements
     and circular may have been modified,  supplemented or superseded by further
     releases,  announcements  or circulars issued by a Group Company contain an
     untrue  statement  of a material  fact nor do they omit to state a material
     fact  necessary in order to make the  statements  therein,  in light of the
     circumstances  under  which  they were made,  true;  and the  opinions  and
     intentions expressed therein were and are honestly held;

2    Incorporation:  each  of  the  Issuer  and  each  of its  subsidiaries  and
     subsidiary  undertakings (any such undertaking being a "Group Company", and
     all such  undertakings  together with the Issuer being the "Group") is duly
     incorporated   and  validly  existing  under  the  laws  of  its  place  of
     incorporation  and  has  full  corporate  power  and  authority  to own its
     properties  and  conduct  its  business  and is  lawfully  qualified  to do
     business in those jurisdictions in which business is conducted by it;

3    Due  authorisation:  this Agreement has been duly authorised,  executed and
     delivered  by  the  Issuer  and  constitutes   valid  and  legally  binding
     obligations of the Issuer enforceable in accordance with its terms, subject
     to the laws of bankruptcy  and other  similar laws  affecting the rights of
     creditors and save as  contemplated in this Agreement no action or activity
     is required to be taken,  fulfilled or done (including  without  limitation
     the  obtaining  of any  consent  or  licence or the making of any filing or
     registration)  by the Issuer  for the issue of the  Placement  Shares,  the
     carrying out of the other  transactions  contemplated  by this Agreement or
     the  compliance  by the Issuer  with the terms of this  Agreement  save for
     actions  or  activity  arising  out of  actions  taken  by J.P.  Morgan  in
     accordance with this Agreement;

4    Issuer's  share  capital:  the  Placement  Shares  have been or will on the
     Closing Date be duly and validly  authorised by the Issuer and, when issued
     and paid for in the manner  contemplated by this  Agreement,  the Placement
     Shares will be duly and validly  issued and  fully-paid  and will rank pari
     passu with each other and all other  shares of the Issuer of the same class
     and the  Placement  Shares  will be free and clear of all  liens,  charges,
     pledges,  encumbrances,  security  interests,  claims  and  (save as arises
     pursuant to this  Agreement  or any related  agreement in relation to share
     lock-up   arrangements)   other  third  party  rights;  and  there  are  no
     restrictions  on transfers of the Placement  Shares save as provided in the
     Articles of Association of the Issuer;

5    Issued Shares:  the Issuer had as at 30 June 2003,  150,000,000  authorised
     and  102,391,012  issued  Shares;  and  there  are  no  outstanding  Shares
     convertible  into or  exchangeable  for, or warrants,  rights or options to
     purchase from the Issuer, or subscribe for, or obligations of the Issuer to
     issue or sell,  or  pre-emptive  or other  rights to  subscribe or acquire,
     Shares other than as described  in the Issuer's  Annual  Report for the six
     months

                                      -21-

<PAGE>

     ended 31  December  2002 or as  disclosed  to J.P.  Morgan in writing or as
     arise under the  Schroders  Agreement and since 30 June 2003 there has been
     no further issue of Shares;

6    Non public  information:  The Issuer is not aware of any non-public fact or
     circumstance  that, if made public,  would be  reasonably  likely to have a
     material  adverse effect on the market price of the Shares or on the Issuer
     or the Group;

7    Consents: Save as contemplated by this Agreement all consents,  clearances,
     approvals,  authorisations,  orders,  registrations or qualifications of or
     with any court,  governmental  agency or  regulatory  body  required by the
     Issuer for or in connection with:

     (i)  the issue and distribution of the Placement Shares; and

     (ii) all other transactions contemplated by this Agreement,

     have  been  obtained  and are in full  force and  effect  save for any such
     consent  necessitated  by actions taken by J.P.  Morgan in accordance  with
     this Agreement;

8    No conflicts:  neither the issue of the Placement Shares,  nor the Issuer's
     compliance with the terms hereof or effecting any transactions contemplated
     herein:

     (i)  conflicts  with  or  results  in a  breach  of  any of  the  terms  or
          provisions of, or  constitutes a default under,  or will result in the
          creation or imposition of any lien,  charge,  pledge,  encumbrance  or
          other  security  interest upon any property or assets of the Issuer or
          any other Group Company pursuant to (a) the memorandum and articles of
          association of the Issuer or the equivalent  constitutional  documents
          of any Group  Company or (b) any  indenture,  trust deed,  mortgage or
          other agreement or instrument to which the Issuer or any Group Company
          is a party or by which it or any of its assets are bound to the extent
          material in the context of the Placement; or

     (ii) infringes any existing  applicable law, rule,  regulation,  judgement,
          order, authorisation or decree of any government, governmental body or
          court, domestic or foreign, having jurisdiction over the Issuer or any
          other  Group  Company or any of the  properties  or assets of any such
          company and which, in any such case, is material in the context of the
          Placement

9    No material adverse change:  since 31 December 2002 (the "Issuer's Accounts
     Date") save as  disclosed in the  Issuer's  Interim  Results for the period
     ending  30 June  2003,  so far as the  Issuer  is aware  there  has been no
     development  or  event  which  has had or is  reasonably  likely  to have a
     material adverse effect on the financial condition,  prospects, or business
     ("Material Adverse Effect") of the Group;

10   Financial  Information:  The consolidated  balance sheet of the Group as at
     the Issuer's Accounts Date and the consolidated  profit and loss account of
     the Group and  cash-flow  statement  for the period  ended at the  Issuer's
     Accounts Date, each appearing in the Issuer's  published  audited financial
     statements  for the six months ended on the Issuer's  Accounts  Date,  were
     prepared in accordance with the  requirements of English law (except as may
     be set out therein) and with accounting  principles  generally  accepted in
     the United  Kingdom and they give a true and fair view of the  consolidated
     financial  condition of the Issuer as at the Issuer's  Accounts Date and of
     the results of its  operations in respect of the period for which they were
     prepared;

11   Section  842 : The Issuer  has been  approved  by the Inland  Revenue as an
     investment  trust for the  purposes of Section  842 Income and  Corporation
     Taxes Act 1988 ("Section


                                      -22-

<PAGE>


     842") in relation to its  accounting  period  ending 30 June 2001,  and has
     since then  conducted  itself  with a view to, and intends in the future to
     conduct  itself with a view to, being  approved by the Inland Revenue as an
     investment trust for the purposes of Section 842;

12   Litigation:  except as  disclosed  in writing to J.P.  Morgan,  neither the
     Issuer  nor any  Group  Company  is or has been  involved  in any  legal or
     arbitration proceedings,  nor, so far as the Issuer is aware, are there any
     legal or arbitration proceedings pending or threatened involving the Issuer
     or any such  subsidiary  which may  have,  or have had in the  previous  12
     months,  a significant  effect on the financial  position of the Issuer and
     its subsidiaries, or which would materially adversely affect the ability of
     the Issuer to perform its  obligations  under this  Agreement  or which are
     otherwise material in the context of the Placement;

13   Licences:  except as disclosed in writing to J.P. Morgan the Issuer has all
     licences,   permits,   authorisations,   approvals  and  orders  and  other
     concessions  of  and  from  all  regulatory  authorities  and  governmental
     agencies and bodies that are necessary to conduct its business except where
     failure to do so would not have a Material Adverse Effect;

14   Listing  Rules:  the Issuer is in compliance in all material  respects with
     the Listing Rules, including with regard to any related party transactions;

15   Compliance  with  Laws:  each of the  Issuer  and any Group  Company  is in
     compliance with applicable laws,  bye-laws and regulations  material in the
     context of the  Placement  and is not in material  breach of any such laws,
     bye-laws and  regulations,  where such references to regulations  includes,
     without limitation, applicable money laundering regulations;

16   Substantial  U.S.  market  interest:  the Issuer is a "foreign  issuer" and
     reasonably believes that there is no "substantial U.S. market interest" (as
     such  respective  terms are defined in  Regulation  S) in the Shares or any
     securities of the Issuer of the same class as the Shares;

17   Non-integration:  neither the Issuer nor any of its  affiliates (as defined
     in Rule  501(b) of  Regulation  D), nor any  person  acting on its or their
     behalf (other than J.P. Morgan and its affiliates,  in respect of which the
     Issuer makes no representation  or warranty),  has, directly or indirectly,
     made  offers or sales of any  security,  or  solicited  offers  to buy,  or
     otherwise negotiated in respect of, any security,  under circumstances that
     would require the registration of the Shares under the U.S. Securities Act;

18   Directed selling efforts:  neither the Issuer nor any of its affiliates (as
     defined in Rule 405 under the Securities  Act) nor any person acting on its
     or their behalf (other than J.P. Morgan and its  affiliates,  in respect of
     which the Issuer makes no  representation  or warranty)  has engaged in any
     directed  selling  efforts  (as  defined  in  Regulation  S under  the U.S.
     Securities Act) with respect to the Placement Shares;

19   Investment  Company Act: the Issuer is not, and after giving  effect to the
     offering and sale of the Placement  Shares in accordance with the terms and
     provisions of this Agreement and the  application  of the proceeds  thereof
     will  not be,  an  "investment  company"  as such  term is  defined  in the
     Investment Company Act.

                                      -23-


<PAGE>


                                   Schedule 2
                                     Part B

The Issuer makes the  following  representation  and  warranties on each Closing
Date:

1    Disclosure:  all press  releases  and  announcements  made by the Issuer in
     relation to the Placement and the  transaction the subject of the Schroders
     Agreement and the circular to shareholders referred to in Clause 5.1.4, all
     as modified or supplemented  by any subsequent  release or circular did not
     as of their  respective  dates and do not, as such releases,  announcements
     and circular may have been modified,  supplemented or superseded by further
     releases,  announcements  or circulars issued by a Group Company contain an
     untrue  statement  of a material  fact nor do they omit to state a material
     fact  necessary in order to make the  statements  therein,  in light of the
     circumstances  under  which  they were made,  true;  and the  opinions  and
     intentions expressed therein were and are honestly held;

2    Incorporation:  each  of  the  Issuer  and  each  of its  subsidiaries  and
     subsidiary  undertakings (any such undertaking being a "Group Company", and
     all such  undertakings  together with the Issuer being the "Group") is duly
     incorporated   and  validly  existing  under  the  laws  of  its  place  of
     incorporation  and  has  full  corporate  power  and  authority  to own its
     properties  and  conduct  its  business  and is  lawfully  qualified  to do
     business in those jurisdictions in which business is conducted by it;

3    Due  authorisation:  this Agreement has been duly authorised,  executed and
     delivered  by  the  Issuer  and  constitutes   valid  and  legally  binding
     obligations of the Issuer enforceable in accordance with its terms, subject
     to the laws of bankruptcy  and other  similar laws  affecting the rights of
     creditors and save as  contemplated in this Agreement no action or activity
     is required to be taken,  fulfilled or done (including  without  limitation
     the  obtaining  of any  consent  or  licence or the making of any filing or
     registration)  by the Issuer  for the issue of the  Placement  Shares,  the
     carrying out of the other  transactions  contemplated  by this Agreement or
     the  compliance  by the Issuer  with the terms of this  Agreement  save for
     actions  or  activity  arising  out of  actions  taken  by J.P.  Morgan  in
     accordance with this Agreement;

4    Issuer's  share  capital:  the  Placement  Shares  have been or will on the
     Closing Date be duly and validly  authorised by the Issuer and, when issued
     and paid for in the manner  contemplated by this  Agreement,  the Placement
     Shares will be duly and validly  issued and  fully-paid  and will rank pari
     passu with each other and all other  shares of the Issuer of the same class
     and the  Placement  Shares  will be free and clear of all  liens,  charges,
     pledges,  encumbrances,  security  interests,  claims  and  (save as arises
     pursuant to this  Agreement  or any related  agreement in relation to share
     lock-up   arrangements)   other  third  party  rights;  and  there  are  no
     restrictions  on transfers of the Placement  Shares save as provided in the
     Articles of Association of the Issuer;

5    Issued Shares:  the Issuer had as at 30 June 2003,  150,000,000  authorised
     and  102,391,012  issued  Shares;  and  there  are  no  outstanding  Shares
     convertible  into or  exchangeable  for, or warrants,  rights or options to
     purchase from the Issuer, or subscribe for, or obligations of the Issuer to
     issue or sell,  or  pre-emptive  or other  rights to  subscribe or acquire,
     Shares other than as described  in the Issuer's  Annual  Report for the six
     months ended 31 December 2002 or as disclosed to J.P.  Morgan in writing or
     as  arises  under  the  Schroders  Agreement  and  since  the  date of this
     Agreement there has been no further issues of Shares,  save for such issues
     as are permitted under Clause 5.1.2 and of which J.P. Morgan is given prior
     notification   where   reasonably   practicable   (and,  where  such  prior
     notification  is not  reasonably  practicable,  as notified to J.P.  Morgan
     promptly thereafter);

                                      -24-

<PAGE>

6    Consents: Save as contemplated by this Agreement all consents,  clearances,
     approvals,  authorisations,  orders,  registrations or qualifications of or
     with any court,  governmental  agency or  regulatory  body  required by the
     Issuer for or in connection with:

     (i)  the issue and distribution of the Placement Shares; and

     (ii) all other transactions contemplated by this Agreement,

          have been  obtained and are in full force and effect save for any such
          consent  necessitated  by actions  taken by J.P.  Morgan in accordance
          with this Agreement;

7    Non public  information:  The Issuer is not aware of any non-public fact or
     circumstance  that, if made public,  would be  reasonably  likely to have a
     material  adverse effect on the market price of the Shares or on the Issuer
     or the Group;

8    Section  842 : The Issuer  has been  approved  by the Inland  Revenue as an
     investment  trust  for the  purposes  of  Section  842 in  relation  to its
     accounting  period ending 30 June 2001, and has since then conducted itself
     with a view to, and intends in the future to conduct itself with a view to,
     being  approved  by the  Inland  Revenue  as an  investment  trust  for the
     purposes of Section 842;

9    Listing  Rules:  the Issuer is in compliance in all material  respects with
     the Listing Rules, including with regard to any related party transactions;

10   Compliance  with  Laws:  each of the  Issuer  and any Group  Company  is in
     compliance with applicable laws,  bye-laws and regulations  material in the
     context of the  Placement  and is not in material  breach of any such laws,
     bye-laws and  regulations,  where such references to regulations  includes,
     without limitation, applicable money laundering regulations.

11   Substantial  U.S.  market  interest:  the Issuer is a "foreign  issuer" and
     reasonably believes that there is no "substantial U.S. market interest" (as
     such  respective  terms are defined in  Regulation  S) in the Shares or any
     securities of the Issuer of the same class as the Shares;

12   Non-integration:  neither the Issuer nor any of its  affiliates (as defined
     in Rule  501(b) of  Regulation  D), nor any  person  acting on its or their
     behalf (other than J.P.  Morgan and its  affiliates in respect of which the
     Issuer makes no representation  or warranty),  has, directly or indirectly,
     made  offers or sales of any  security,  or  solicited  offers  to buy,  or
     otherwise negotiated in respect of, any security,  under circumstances that
     would require the registration of the Shares under the U.S. Securities Act.

13   Directed selling efforts:  neither the Issuer nor any of its affiliates (as
     defined in Rule 405 under the Securities  Act) nor any person acting on its
     or their behalf  (other than J.P.  Morgan and its  affiliates in respect of
     which the Issuer makes no  representation  or warranty)  has engaged in any
     directed  selling  efforts  (as  defined  in  Regulation  S under  the U.S.
     Securities Act) with respect to the Placement Shares;

14   Investment  Company Act: the Issuer is not, and after giving  effect to the
     offering and sale of the Placement  Shares in accordance with the terms and
     provisions of this Agreement

                                      -25-

<PAGE>


     and the  application  of the proceeds  thereof will not be, an  "investment
     company" as such term is defined in the Investment Company Act.

                                      -26-

<PAGE>


                                   Schedule 3
                   Certificate from the Issuer to J.P. Morgan
                           [Letterhead of the Issuer]

J.P. Morgan Securities Ltd.
125 London Wall
London
EC2Y 5AJ


                                                                       * 2003

Dear Sir or Madam:


Placement of Securities in Schroder Ventures International Investment Trust plc

We refer to the Placement  Agreement dated [?] 2003, between you and us in which
a draft of this letter appears as Schedule 3 (the "Placement Agreement").  Words
and  expressions  defined  in the  Placement  Agreement  have the same  meanings
herein.

We, Schroder  Ventures  International  Investment Trust plc, certify that, as at
the date of this letter:

(i)  we have complied with our obligations  under the Placement  Agreement which
     fall to be performed on or before today;

(ii) none of the  representations,  warranties or undertakings given by us under
     the Placement  Agreement has been breached or is unfulfilled or was untrue,
     inaccurate  or  misleading  when  made  and  none of such  representations,
     warranties or  undertakings  would be breached or unfulfilled or be untrue,
     inaccurate or  misleading  were it to be repeated by reference to the facts
     and circumstances subsisting at the date hereof.

Yours faithfully









SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC

By:



                                      -27-


<PAGE>

------------
EXHIBIT 10.1
------------



Schroder Ventures International Investment Trust plc


Report and Accounts 2003


Investment Objective

SVIIT's  principal  investment  objective is to achieve capital  appreciation by
investing  primarily in an  international  portfolio of buy-out and  development
capital funds, which are managed or advised by Permira or Schroder Ventures.

To complement  this  investment  objective and create capital and income streams
for the Company,  its fund advisory business  structures,  markets,  manages and
advises  products for investment in private  equity,  and in public equity using
private equity techniques.


www.sviit.co.uk                                         Report and Accounts 2003


Contents

                                                                         Page
Directors and Advisers                                                      2
Financial Highlights and Historical Record                                  3
Chairman and CEO's Statement                                                4
Portfolio Review                                                            6
Twenty Largest Underlying Companies                                        13
List of Investments                                                        18
Report of the Directors                                                    22
Statement of Directors' Responsibilities                                   25
Corporate Governance                                                       26
Remuneration Report                                                        29
Independent Auditors' Report                                               32
Consolidated Statement of Total Return                                     33
Company Statement of Total Return                                          34
Balance Sheets                                                             35
Consolidated Cash Flow Statement                                           36
Notes to the Accounts                                                      37
Consolidated Statement of Total Return (translated into euros - unaudited) 55
Balance Sheets (translated into euros - unaudited)                         56
Consolidated Cash Flow Statement (translated into euros - unaudited)       57
Company Summary                                                            58
Information for Shareholders                                               60
Notice and Agenda                                                          61
Glossary                                                                   64

                                       1

Directors and Advisers


DIRECTORS

John McLachlan  (Chairman)  (aged 61) was appointed as a Director of the Company
on 12 February 1996. He retired as Group Investment Director of United Assurance
Group plc in August 1999. He is non-executive  Chairman of Invesco Income Growth
Trust plc and a non-executive Director of a number of other companies.

Nicholas Ferguson (Chief Executive) (aged 55) was appointed as a Director of the
Company on  12 February  1996.  He is  Chairman of  Schroder  Ventures  (London)
Limited and was formerly  Chairman of Schroder  Ventures and instrumental in its
development since 1984.

John Govett (aged 60) was  appointed as a Director of the Company on 12 February
1996 and is a non-executive Director of Derby Trust plc, Peel Hotels plc and Rio
Tinto Pension Investments Limited.

Anthony  Habgood  (aged 57) was  appointed  as a Director  of the  Company on 12
February 1996 and is Chairman of Bunzl plc.

Edgar Koning (aged 51) was appointed as a Director of the Company on 12 February
1996 and is Executive Vice  President with AEGON  Nederland N.V. He joined AEGON
in 1981 and has held various senior management positions in the Group.

Denis  Raeburn  (aged 59) was  appointed as a Director of the Company on 25 June
2001 and was  Managing  Director of the asset  management  company  Global Asset
Management (GAM) between 1986 and 1999.

Andrew Williams (Executive) (aged 51) was appointed as a Director of the Company
on 3 May 2002. He is Chief Executive of Schroder  Ventures  (London) Limited and
Managing Principal of Schroder Ventures North America Inc.

Full details of the Committees of the Board can be found on pages 26 and 27.

Nicholas Ferguson and Andrew Williams are the only executive Directors of the
Company.


Head Office
Burleigh House
357 Strand
London WC2R 0HS
Telephone 020 7010 8900

From May 2004
111 Strand
London WC2R 0AG
Telephone 020 7010 8900

Secretary and Registered Office
Schroder Investment Management Limited
31 Gresham Street
London EC2V 7QA
Telephone 020 7658 6000

ADVISORS
Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF

Bankers
The Royal Bank of Scotland plc
Corporate Banking Office
5-10 Great Tower Street
London EC3P 3HX

Registrar for Ordinary Shares
Lloyds TSB Registrars Scotland
PO Box 28448
Finance House
Orchard Brae
Edinburgh EH4 1WQ
Telephone 0870 601 5366

Registrar for Subordinated
Convertible Bonds
J P Morgan Chase Bank
Trinity Tower
9 Thomas More Street
London E1N 1YT

Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY

Stockbrokers
UBS Warburg
1 Finsbury Avenue
London EC2M 2PP

                                       2

Financial Highlights and Historical Record

                               5 YEAR PERFORMANCE
<TABLE>
<CAPTION>

                                                                          SVIIT                       FTSE ALL     FTSE WORLD
                                                                    Share price       SVIIT NAV    SHARE INDEX    INDEX (GBP)
<S>                                                                          <C>            <C>            <C>            <C>
December 1999                                                                 -               -              -              -
April 1999                                                                    -               -              -              -
August 1999                                                                   -               -              -              -
December 1999                                                                 -               -              -              -
April 2000                                                                    -               -              -              -
December 2000                                                                 -               -              -              -
April 2001                                                                    -               -              -              -
August 2001                                                                   -               -              -              -
December 2001                                                                 -               -              -              -
April 2002                                                                    -               -              -              -
August 2002                                                                   -               -              -              -
December 2002                                                                 -               -              -              -
April 2003                                                                    -               -              -              -
August 2003                                                                   -               -              -              -
December 2003                                                                 -               -              -              -
Source: Datastream
</TABLE>


FINANCIAL HIGHLIGHTS FOR THE YEAR TO 31 DECEMBER 2003
<TABLE>
<CAPTION>

                                                                          31 December 2003  31 December 2002         Change %
<S>                                                                                   <C>                <C>              <C>
Total assets1 (GBP'000)                                                            615,145           502,746            22.4%
Total debt2 (GBP'000)                                                               87,619            39,201
Shareholders' funds7 (GBP'000)                                                     526,618           463,192            13.7%
Market capitalisation (GBP'000)                                                    545,250           387,587            40.7%
Shares in issue ('000)                                                             112,655           102,266

Net asset value per share - diluted                                                 458.7p            445.8p             2.9%
Share price                                                                         484.0p            379.0p            27.7%
Share price premium/(discount)                                                        5.5%           (15.0)%

Dividends per share                                                                    Nil               Nil
Total expense ratio6                                                                  1.1%             1.3%+
2011 Convertible bonds price total return*                                           19.5%              2.3%
2013 Convertible bonds price total return**                                           9.8%                 -
</TABLE>


+ For the six month period ended 31 December 2002, Group costs have been
  annualised.
* Bond price total return estimates for the six months to 31 December 2002
  values the bonds at Par at 30 June 2002 as the Bonds were not listed until
  8 July 2002.
Source: Schroders.
**Bond price total return estimates for the eight months to 31 December 2003,
  in respect of initial issue, at Par, on 20 May 2003.
Source: Schroders.


HISTORICAL RECORD TO 31 DECEMBER/30 JUNE*

<TABLE>
<CAPTION>

                                                                                          Diluted
                                                                      Shareholders'     net asset      Price of   Share price
                                                                              funds     value per      ordinary      premium/
                                                         Total assets1      GBP'000         share        shares    (discount)
                                                               GBP'000                      pence         pence             %
<S>                                                                <C>          <C>           <C>           <C>           <C>
2003 (December)                                                615,145      526,618         458.7         484.0           5.5
2002 (December)                                                502,746      463,192         445.8         379.0        (15.0)
2002 (June)                                                    462,613      423,087         412.3         354.5        (14.0)
2001 (June)                                                    417,260      416,872         407.6         393.0         (3.6)
2000 (June)                                                    461,615      461,125         450.9         461.5           2.4
1999 (June)                                                    333,630      322,485         325.9         262.5        (19.5)
1998 (June)                                                    230,822      219,730         215.1         182.0        (15.4)
1997 (June)                                                    207,655      182,548         189.2         174.5         (7.8)
1996 (launched 23 May 1996)                                    240,733      186,493         193.3         200.0           3.5
</TABLE>



HISTORICAL RECORD TO 31 DECEMBER/30 JUNE*

<TABLE>
<CAPTION>

                                                                          Potential                             Group running
                                                                Actual      gearing      Earnings     Dividends        costs5
                                                        gearing ratio3       ratio4         pence         pence       GBP'000
<S>                                                                <C>          <C>           <C>            <C>          <C>
2003 (December)                                                   1.08         1.17        (5.32)           Nil         7,642
2002 (December)                                                   1.04         1.09        (2.14)           Nil         4,065
2002 (June)                                                       1.00         1.09        (1.52)           Nil         7,231
2001 (June)                                                       0.92         1.00          2.60          1.80         1,434
2000 (June)                                                       0.70         1.00          4.68          3.80         1,052
1999 (June)                                                       0.67         1.03          2.35          1.50           878
1998 (June)                                                       0.73         1.05          2.06          1.30           664
1997 (June)                                                       0.76         1.13          1.58          1.92           728
1996 (launched 23 May 1996)                                       0.71         1.29           N/A           N/A           N/A
</TABLE>


*The Company changed its financial year-end from 30 June to 31 December,
 effective from 31 December 2002.


Notes:
1.Total assets:        Total assets less current liabilities (excluding loans).
2.Total debt:          Comprises convertible bonds of GBP87.6m (2002: GBP39.2m)
                       and loans of nil (2002: nil).
3.Actual gearing ratio:Total assets (less cash and money market instruments)
                       divided by shareholders' funds.
4.Potential gearing    Total assets divided by shareholders' funds.
  ratio:
5.Group running costs: Group operating costs excluding interest payable and
                       similar charges.
6.Total expense ratio: Group operating costs excluding interest payable
                       expressed as a percentage of average shareholders'
                       funds.
7.Capital changes:     2003: Issue of 10,239,100 shares and conversion of
                       GBP0.6m nominal of 2011 bonds into 150,375 ordinary
                       shares.
                       2000: 'B' bonds fully converted into 3,299,380 ordinary
                             shares.
                       1999: Buy-back of 3,204,171 shares for cancellation.
                       1998: 'A' bonds fully converted into 5,683,236 ordinary
                             shares.

                                       3

Chairman and CEO's Statement

We are pleased to announce an  encouraging  set of results,  despite a difficult
operating environment,  with fully diluted net assets per share increasing by 3%
to 458.7p (GBP526.6 million).


PORTFOLIO PERFORMANCE
Against a backdrop of  continued  economic  uncertainty,  conflict in the Middle
East and a weakening US$, the portfolio of companies  continues to perform well,
generating  cash and repaying  debt, in spite of a slight  decrease in portfolio
company earnings in aggregate.

The  portfolio is sensitive to currency  fluctuations,  which have affected both
valuations  and  individual  company  earnings.  In  terms  of  valuations,  the
portfolio has benefited from the strengthening of the euro against sterling over
the year,  despite a weakening US$. On the other hand, the  depreciating US$ has
impacted a number of SVIIT's portfolio company earnings, particularly those with
euro costs and US$ sales.  Despite this, cash generation and debt repayment,  in
addition  to an  increase  in  comparable  EBIT  multiples,  has meant  that the
majority of the portfolio  valuations have remained  relatively  robust in local
currency terms.

SVIIT has  reported  compound  annual  growth in net  assets per share over five
years of 10%,  which  compares to negative  compound  annual returns of the FTSE
All-Share and FTSE World Index of (4%) and (3%) respectively.


NEW FUND COMMITMENTS
Permira Europe III
As announced in the December 2003  Newssheet,  SVIIT increased its commitment to
Permira Europe III to EUR508 million at the fund's final closing.

P123
P123 had a final close in December 2003,  having received  commitments from
external investors of EUR167 million. SVIIT transferred EUR105 million of assets
in Permira  Europe I and II to P123 in return for a 38% holding in the  company.
Therefore,  at its final closing P123 had EUR105 million of secondary  assets in
Permira Europe I and II and an uncalled  commitment of EUR367 million to Permira
Europe III.


CAPITAL RAISINGS

In what was a  difficult  fund  raising  environment,  especially  in the public
markets, SVIIT raised a total of GBP96.9 million of new capital during the year;
GBP49 million  through a placement  of  convertible  bonds in May and August and
GBP47.9 million  from an equity  placing in  October.  The  proceeds  from these
capital  raisings  will be used to continue our strategy of investing in buy-out
and development capital funds managed or advised by Permira or Schroder Ventures
and for general corporate purposes.


NEW NAME
SVIIT has grown  significantly  since it was  launched  in May 1996 and is now a
FTSE 250 company and one of the largest  investment  trusts listed on the London
Stock Exchange.  This, coupled with the growth of SVIIT's fund advisory business
and the fact that the  Schroders'  name is not our own, has  highlighted  to the
Board the need for SVIIT to create its own name,  better reflecting its business
activities  and  independence.  Accordingly,  we  will  be  seeking  shareholder
approval at the  forthcoming AGM to re-name the Company as SVG Capital plc, with
the advisory businesses re-naming to SVG Advisers.

As  SVG  Capital  plc,  we  will  continue  our  investment  strategy,  and  the
relationships with Schroders,  Permira and the Schroder Ventures'  international
association  remain as before.  Subject to  performance,  SVIIT will continue to
invest in the  buy-out  and  development  capital  funds  managed  or advised by
Permira and Schroder  Ventures.  Our advisory  businesses  will continue to work
closely with  Schroders as the investment  adviser to both the Schroder  Private
Equity  Fund  of  Funds  I and  II.  Schroders  and  its  clients  remain  major
shareholders in SVIIT.


OPERATING REVIEW
It is almost three years since the launch of the fund advisory  business  within
SVIIT  and we are  pleased  with  progress  to  date.  The  business  has  grown
successfully  both in terms of revenues  and funds under  management  and we now
have 24 employees.

We started  the fund  advisory  business in 2001 and the  difficult  fundraising
market  that ensued in the  following  three  years  required  the team to react
quickly to new  challenges  and  initiatives.  The  private  equity  side of the
business currently advises four products,  with combined third party funds under
management of over EUR800  million,  with a further two products  expected to be
launched  this year.  The public equity  business,  which we started just over a
year ago, has successfully  launched two products with combined  commitments and
assets in excess of GBP55 million.  Although early days, the performance of both
the private and public equity products has been good.

                                       4
Private Equity
The Schroder  Private Equity Fund of Funds II is scheduled to have a final close
in April 2004.  To date,  the fund of funds has received  commitments  of EUR147
million and we hope to achieve the target of EUR200-EUR250  million at its final
close next month.  Through the use of its  warehouse  facility the fund of funds
has already made  commitments  of EUR95 million to seven private equity funds in
the US and Europe.

Public Equity
The Strategic  Recovery Fund had a final close at GBP15 million in January 2004.
The fund will invest in lowly valued  publicly  quoted  companies  using private
equity  techniques and where the potential for strategic change can be seen. The
fund  will aim to  invest in five to seven  companies  operating  in a number of
industries and geographic areas.

The SVIIT UK Focus Fund, the Dublin listed OEIC that was launched in August last
year had net assets of  GBP26 million at 31 December 2003 and has since grown to
over  GBP40 million.  The fund now has 25  investments  and has  produced  a 16%
return since its launch.


NEW BVCA GUIDELINES
In August 2003, the British Venture  Capital  Association  (BVCA)  published new
valuation   guidelines  for  private  equity.  The  31 December  2003  portfolio
valuation was performed in accordance with these new guidelines and there was no
material impact on the overall valuation of the portfolio.


ANNUAL GENERAL MEETINGS
An Annual General Meeting will be held at 12.00pm on 29 April 2004 at 31 Gresham
Street,  London, EC2V 7QA and will, as in previous years, include a presentation
on the activities of the Company.


BOARD CHANGES
Andrew Sykes will step down from the Board of the Company on 31 March 2004.  The
Directors  would like to thank Andrew for his major  contribution to the Company
since his appointment.


OUTLOOK
On the investment  side, the environment  continues to show signs of improvement
as  conglomerates  continue to be under pressure to restore  balance sheets over
leveraged by  acquisitions  in the late 1990s.  Relatively low interest rates in
Europe,  although likely to increase over the medium term,  remain supportive of
current investment activity.

There is clear improvement in the environment for exits, with increased activity
in the capital markets and signs of renewed  interest by trade  participants for
strategic assets. We are cautiously  optimistic that if the improved environment
for exits  continues  it will have a  positive  impact on SVIIT's  portfolio  of
companies during the year.



John McLachlan
Chairman



Nicholas Ferguson
Chief Executive
26 March 2004

                                       5

Portfolio Review for the year ended 31 December 2003

The analysis of SVIIT's  portfolio at 31 December  2003 reflects the transfer of
assets to P123 and the analysis has been  pro-rated as if P123 were in existence
at 31 December 2002.


SUMMARY

In the year to 31  December  2003,  SVIIT's  fully  diluted net assets per share
increased by 3% to 458.7p (GBP526.6 million)  (December 2002: GBP463.2 million -
445.8p per share fully diluted).

In a difficult operating  environment,  SVIIT's portfolio of companies continues
to  perform  well,  generating  cash  and  repaying  debt,  in spite of a slight
decrease in portfolio  company earnings in aggregate.  In addition,  many of the
portfolio  company  valuations  have benefited from the rally in public markets,
which  has  had a  positive  impact  on the  overall  EBIT  multiples  used  for
valuations, particularly in the semi-conductor sector.

The  portfolio is sensitive to currency  fluctuations,  which have affected both
valuations  and  individual  company  earnings.  The  overall  valuation  of the
portfolio has benefited from the strengthening of the euro against sterling over
the year, despite a weakening US$. Conversely, the depreciating US$ has impacted
a number of SVIIT's  portfolio company  earnings,  particularly  those with euro
costs and US$ sales. In spite of this,  cash  generation and debt repayment,  in
addition  to an  increase  in  comparable  EBIT  multiples,  has meant  that the
majority of the portfolio  valuations have remained  relatively  robust in local
currency terms.

The   largest   change  in   valuation   in  the  year  was  the   write-up   of
austriamicrosystems,  which has been  written-up  to  GBP26.7 million  (December
2002: GBP14.1 million). Whilst still valued at 30% below original cost (in local
currency),  earnings  have  improved and the company has  benefited  from a more
favourable operating environment.

The other major change in valuation  over the year was Travelodge & Little Chef,
which has moved from a cost to an EBIT valuation for the first time and has been
written-down   on  an  EBIT   basis   to   GBP45.3   million   (December   2002:
GBP51.8 million).  A difficult  operating  environment,  especially in the first
half of 2003 has meant that  Travelodge's  revenues  and  earnings  growth  were
slightly  behind  expectations,  while cash  generation  remained on target.  At
Little  Chef,  a new  management  team has been  recruited  which is focusing on
improving the  performance of the business in the short term and the development
of a medium term strategy.

Memec,  which  was  written-down  in June  2003  due to  lower  comparable  EBIT
multiples and the negative impact of the US$ on its valuation,  has been written
back up to GBP53.6 million (December 2002: GBP50.4 million). Memec has benefited
from an improved operating environment, in addition to an increase in comparable
EBIT multiples used for the valuation.

Excluding  the  sale of the  dental  manufacturing  business  of  Sirona  Dental
Systems,  which was  executed  in  November,  but is subject to the  approval of
anti-trust  authorities  (which was granted in February  2004),  SVIIT  received
distributions of GBP30.2 million  during the year at an average premium of 36.7%
to December 2002 valuations.

Since  inception,  SVIIT has  reported  an  average  uplift on  realisations  to
previous valuations of approximately 45%.

Calls payable during the year were GBP110.7 million, weighted towards the second
half of the year.

51% of the  portfolio  is  valued  on an  earnings  basis,  of which 8% has been
written-down on an earnings basis (Travelodge & Little Chef), bringing the total
percentage of the portfolio  valued below cost to 18% (December 2002:  12%). The
percentage of the  portfolio  valued on a quoted basis has increased to 8%, as a
result of the increase in the  share-prices  of a number of the Asian  portfolio
companies.  The  remainder  of the  portfolio  is valued  at cost  (21%) or on a
Third-Party basis (10%).

The sector,  geographical and stage profile of the portfolio remains  relatively
unchanged.  The  Twenty  Largest  Underlying  Companies  represent  67%  of  the
portfolio (135 companies in total).


FUND TRANSACTIONS
New Investments
15 new and 29  follow-on  investments  were  made in the  year,  with a total of
GBP110.7 million of calls paid. Of the 15 new  investments,  five feature in the
Twenty Largest Underlying  Companies:  SEAT Pagine Gialle,  Premiere,  Inmarsat,
Holmes Place and Rodenstock.

The largest new  investment,  SEAT Pagine  Gialle,  is a telephone  directories,
business  information and directory  assistance  company which demerged from the
internet,  television  and business  publishing  arm of SEAT in August 2003. The
company has significant market share in Italy, the UK and Germany and is Italy's
leading yellow pages and telephone directory publisher.  The investment was made
through an initial acquisition of Telecom Italia's stake and a subsequent public
tender offer for the company, which is listed on the Milan Stock Exchange. Funds
advised by Permira own approximately 16% of the share capital of the company, of
which SVIIT's share of the investment is valued at  GBP35.6 million  (cost).  In
recent  years,  substantial  management  time and  resource  had been devoted to
dealing with a series of  acquisitions  and the  resulting  management of a more
diversified  group.  Since the  investment  in August  2003,  a new CEO has been
appointed and the management team are focused on operational improvements within
the company's core directories business.

                                       6

Premiere is the leading Pay-TV  operator in Germany and Austria.  Fund's advised
by Permira  invested in Premiere to fund the  restructuring  of the  loss-making
company until break-even. The main objectives for reaching profitability for the
company are growing  subscribers,  increasing  revenue per subscriber and strict
cost control.  The new management team have reduced costs,  and subscribers have
increased from 2.6 million to 2.9 million.  Increased  revenue per subscriber is
in-line with budget and the 'churn' rate has been reduced. In the second half of
2003, the new CEO exercised his option to co-invest  alongside Permira,  thereby
reducing the fund's investment in the company.  As a result,  SVIIT's investment
in Premiere has reduced to GBP14.3 million from GBP16.8 million.

In October  2003,  funds  advised by Permira and Apax Partners made an offer for
the share  capital of  Inmarsat,  which was  finalised  in December  2003.  As a
leading provider of global mobile satellite communication services, Inmarsat has
been designing, implementing and operating satellite networks for over 23 years.
The company's  services  include voice,  fax,  intranet and internet  access and
other data services used by  multinational  corporations,  government  agencies,
media and international aid organisations and other users in the maritime,  land
and aeronautical sectors. SVIIT's share of this investment is GBP13.4 million*.

Holmes Place is one of Europe's  leading premium health club operators and funds
advised by Bridgepoint and Permira  invested in the company in July 2003.  Since
the  investment,  the new  management  team has  been  focused  on  implementing
operational  improvements,  financial  controls and  delivering on the company's
existing pipeline of 18 new clubs over the next two years. SVIIT's share of this
investment is GBP13.0 million.

Rodenstock  is  the  leading  German   manufacturer  of  ophthalmic  lenses  for
spectacles.  Funds advised by Permira invested in the company in September 2003.
The core management  team of the company  remains  unchanged and, in addition to
increasing the Rodenstock brand awareness in international  markets, are focused
on cost control and improving sales and  profitability  of the company.  SVIIT's
share of this investment is GBP8.3 million.

Realisations
After a three-year hiatus, the last quarter of 2003 saw some signs
of an improvement in exit activity with renewed interest from trade participants
for strategic assets and an increase in activity in capital markets.

Excluding  the  realisation  of the  manufacturing  division  of  Sirona  Dental
Systems,  which was  executed  in  November,  but is subject to the  approval of
anti-trust authorities (granted in February 2004), a total of GBP30.2 million of
distributions  were received  during the year at an average  premium of 36.7% to
December 2002 values.

Since  inception,  SVIIT has  reported  an  average  uplift on  realisations  to
previous valuations of approximately 45%.

The two most substantial realisations announced during the year were the partial
realisation of Sirona Dental Systems and the full realisation of TFL.

The sale of dental  equipment  division of Sirona Dental Systems was executed in
November  2003,  at a 23% premium to the June 2003 value.  The net value of this
partial  realisation  for SVIIT was GBP21.2  million,  of which SVIIT expects to
receive net proceeds of GBP17.8  million,  with the remainder  being held within
P123 for reinvestment in Permira Europe III.

In  addition  to Sirona,  funds  advised by Permira  sold TFL,  the  supplier of
speciality chemicals to the leather processing  industry.  The net value of this
realisation for SVIIT was GBP11.3 million,  a 22% uplift to the June 2003 value.
SVIIT received  proceeds of GBP10.7  million from this sale, the remainder being
held within P123 for reinvestment in Permira Europe III.

- --------
* Not included in the GBP110.7 million of calls paid during the year.


                                       7

Significant realisations during the year include:

                                              31 December
                                                     2002
                                   Proceeds     Valuation
Company                             GBP'000       GBP'000
Sirona Dental Systems*             **17,800     ***14,635
TFL                                  10,682        #6,562
Palini & Bertoli                      3,624         2,338


*   SVIIT expects to receive proceeds from the partial
    realisation of Sirona Dental Systems in March 2004.
**  Proceeds of the partial realisation
***      Value for the entire investment in Sirona
    Dental Systems at December 2002. A follow-on
    investment of GBP2.5 million was made in May 2003.
#   A follow-on investment of GBP0.7 million was made in
    April 2003.

Since  December  2003,  funds advised by Permira have realised  their  remaining
investment  in Sirona  through  the sale of its  dental  distribution  business,
demedis, together with the mail order house for dental consumables,  Euro Dental
Holdings.  The net value of these realisations for SVIIT is GBP11.7 million,  of
which SVIIT expects to receive  proceeds of GBP9.6 million,  the remainder being
held within P123 for  reinvestment  in Permira  Europe III. The  realisation  of
demedis  increases  the total uplift to the June 2003  valuation  for the entire
investment  in  Sirona  Dental  Systems  to 28%.  The  uplift  to the June  2003
valuation  for Euro Dental  Holdings is 58%. The sale of these two  companies is
subject to the necessary regulatory approvals.

Valuation Changes
There have been a number of changes in  valuations  in the year.  The three most
significant  write-ups were  austriamicrosystems,  Strides Arcolab and EEMS. The
most significant write-down was Travelodge & Little Chef.

Austriamicrosystems  has been  written-up to GBP26.7  million due to an improved
operating environment and earnings.  The company built a new manufacturing plant
soon after the initial  investment  in the  company was made in 2000,  which has
been slow to reach full  capacity.  This,  coupled with  uncertainty in its core
markets and a reduction in comparable EBIT multiples,  meant that the investment
was  written-down  to 40% of cost in June 2002. In the last year,  the operating
environment for the company has improved,  the manufacturing plant is continuing
to build-up to full  capacity  and  earnings  have  improved.  As a result,  the
company has been written-up to 70% of original cost (in local currency).

The other major change in valuation during the period was Strides Arcolab, which
was valued at GBP9.6 million at December 2003 (December 2002:  GBP4.1  million).
Strides is based in India and  manufactures a range of generic drugs and tablets
for supply to  Western  and  developing  markets.  The  company is listed on the
National  Stock  Exchange of India and the increase in its value has been driven
by a general rally in the Indian stock market and the encouraging performance of
the company.

EEMS  performs  assembly  and  test  services  for DRAM and  flash  memory  chip
manufacturers. An improved operating environment for its key customers has meant
that the company is performing  well and has been written-up for the second time
to GBP12.6 million (December 2002: GBP7.5 million).

The other  major  write-up  in the period was Euro  Dental  Holdings,  which was
realised in January 2004 and has been valued at net proceeds.

                          31 December 31 December    Change
                                 2003        2002    in the
                            Valuation   Valuation    Period
Company                       GBP'000     GBP'000   GBP'000
austriamicrosystems            26,737      14,133    12,604
Strides Arcolab                 9,625       4,136     5,489
Euro Dental                    10,880       5,414     5,466
EEMS                           12,590       7,493     5,097


Since  December  2003,  Eyetech   Pharmaceuticals   Inc.,  a  Schroder  Ventures
International  Life Sciences Fund II investment  had a successful IPO on NASDAQ.
None of SVIIT's  holding in the company was sold at the IPO and in the  December
2003  valuations  SVIIT's  investment  in Eyetech was valued at  GBP2.5 million.
Based on the closing  price of Eyetech  shares on 5 March 2004  (US$35.20),  the
value of SVIIT's  holding in the company (after the application of discounts) is
GBP10.2 million, which represents an uplift of GBP7.7 million (6 pence per share
fully diluted) to the December 2003 valuation.

Travelodge  & Little  Chef has moved  from a cost to an EBIT  valuation  for the
first  time and has  been  written-down  on an EBIT  basis  to  GBP45.3  million
(December 2002:  GBP51.8 million).  Travelodge is the second largest operator of
UK budget hotels and Little Chef is the largest roadside restaurant chain in the
UK. The operating environment in the UK budget hotels sector has been difficult,
especially  in the  first  half of 2003  where  fears  surrounding  the Iraq war
impacted the travel and tourism  industry.  The performance of Travelodge in the
second half of 2003  improved  strongly  on the first  half,  but on a full-year
basis profit growth was not sufficient to offset the impact of discounts applied
when  valuing  the  company  on an  EBIT  basis.  Travelodge  is  ahead  on cash
generation and is repaying debt early, and we expect  performance to continue to
improve as initiatives  implemented  by the new management  team move through to
the  company's  bottom-line  and the  tourism and travel  industry  picks up. At
Little  Chef,  a new  management  team has been  recruited  which is focusing on
improving the  performance of the business in the short term and the development
of a medium term strategy.

                                       8

VALUATION BASIS (BY VALUE)
The major change in the profile of the portfolio's valuation basis over the year
has been a  reduction  to 21% of the  portfolio  held at cost at  December  2003
(December  2002:  29%).  Half of the  portfolio  is valued on an earnings  basis
(51%), the majority of this (50%) on an EBIT basis, with the remaining 1% valued
on a P/E basis.

As a result of the  revaluation  of Travelodge & Little Chef,  the percentage of
the portfolio  valued below cost has increased to 18% (December 2002:  12%). The
increase in the number of companies valued on a Third Party basis is a result of
realisations such as Euro Dental and Sirona,  that have been valued at their net
proceeds.

Given the rally in public markets and the general improved operating environment
for many  industries,  on a 'like for like'  basis the average  discounted  EBIT
multiples have increased  over the year to 9.4 (December  2002:  8.1; June 2003:
7.3).

Including new entrants, such as Travelodge & Little Chef and Ferretti which have
both  moved  from a cost to an EBIT  valuation,  the  overall  weighted  average
discounted EBIT multiples used to value the portfolio was 8.6, an increase since
June 2003  (7.4) and  December  2002  (8.1).  The gross  weighted  average  EBIT
multiple was 12.0 (December 2002: 11.3; June 2003: 10.3).

            31 December 2003                31 December 2002
               % (by value)                  % (by value)
Cost                         21       Cost                   29
P/E                           1       P/E                     2
EBIT                         42       EBIT                   47
W/Down - EBIT                 8       W/Down - EBIT           1
W/Down                       10       W/Down                 12
3rd Party                    10       3rd Party               4
Quoted                        8       Quoted                  5

Under British Venture Capital Association (BVCA) valuation guidelines,
investments are normally carried at cost, less a provision if appropriate,
for at least the first 12 months after acquisition.

The average  number is  influenced  by the higher than average  discounted  EBIT
multiples  used for the valuation of the  semiconductor  companies  (17.7).  The
average  discounted  EBIT multiple for the  non-semiconductor  companies was 6.6
(December 2002: 5.4; June 2003:  5.9). The average discount applied to companies
valued on an EBIT basis has remained broadly unchanged at 30%.

The  discounted  weighted  average P/E multiple has  increased to 9.2  (December
2002: 7.7; June 2003: 9.0). The average  discount applied to quoted  investments
remains unchanged at 17% (December 2002: 16%; June 2003: 17%).


GEOGRAPHICAL & SECTOR DISTRIBUTION (BY VALUE)

                  Geographical Analysis
                                31 December   31 December
                                       2003          2002
                               % (by Value)  % (by Value)
Multinational                            30            36
Continental Europe                       30            19
UK                                       19            20
North America                            10            15
Far East/Asia Pacific                    11            10


                   Sector Analysis
                       31 December   31 December
                              2003          2002
                       % (by Value)  % (by Value)
Consumer                        29            30
Medical/Health                  21            20
Computer &
Other Electronics               22            21
Chemicals                        7            11
Industrial Products
 & Services                      7            10
Other Manufacturing              3             5
Other Services                  10             2
Construction                     1             1



The portfolio  continues to be dominated by Multinational  (30%) and Continental
European  companies  (30%),  which together  represent  almost two thirds of the
portfolio.  Due to the new investment in Holmes Place, the portfolio's weighting
to the UK remains relatively unchanged,  despite the revaluation of Travelodge &
Little Chef.  The  remainder of the portfolio is evenly split between Asia (11%)
and North America  (10%).  The slight  decrease in the  portfolio's  exposure to
North America is a result of the weakness of the US$.

                                        9

The only major change in the  portfolio's  sector  weightings  is its  increased
exposure to Other Services, a result of the investment in SEAT Pagine Gialle.


DEAL TYPE
Given its high exposure to Permira,  SVIIT's  portfolio  continues to be focused
towards  Management  Buy-Outs/Ins  (84%) with a small  exposure  to  Development
Capital (12%). SVIIT's exposure to early stage companies (4%) is almost entirely
in the life sciences sectors.


RETURN ON HOLDINGS
SVIIT's  return  on its  holdings  of  Schroder  Ventures'  and  Permira  funds,
including P123, is summarised below:

                                    Year to Six months to
                                31 December   31 December
                                       2003          2002
                                       GBPm          GBPm
Opening Valuation                     484.0         422.8
Calls Payable                         110.7         122.7
Distributions Receivable*            (59.4)       (104.5)
                              ----------------------------
                                      535.3         441.0
Increase in Value of Portfolio         25.0          43.0
                              ----------------------------
Closing Portfolio                     560.3         484.0
                              ----------------------------


  --------------------------------------------------------
* In order to maintain SVIIT's pro-rata holding in P123
  and to reflect the partly paid structure, SVIIT
  received 40% of its commitment to P123 in cash (GBP29.2
  million).



PORTFOLIO MATURITY
Whilst  still low,  the average  age of the  portfolio  is maturing  with 53% of
investments  held for more than  three  years,  47% being  held for under  three
years, of which 16% have been held for under a year.


CASH & MARKETABLE SECURITIES
At 31 December  2003,  SVIIT's gross cash balance of  GBP47.7 million  (December
2002:  GBP18.8 million) was held  principally in money market funds,  reflecting
anticipated short-term cash flows.



FUND COMMITMENTS
At 31 December 2003, SVIIT had GBP557.5  million in uncalled  commitments to ten
private  equity  funds  (December  2002:  GBP293.4 million  to nine  funds).  In
addition,  SVIIT also had a GBP7.4 million  uncalled commitment to the Strategic
Recovery Fund and a GBP29.5 million  uncalled  commitment to P123, half of which
is due in October 2004, with the remainder in October 2005. In order to maintain
SVIIT's  pro-rata  holding in P123 and reflect the partly paid structure,  SVIIT
received 40% of its commitment to P123 in cash (GBP29.2 million).


CONCLUSION
The performance of the SVIIT portfolio over the year has been  encouraging  with
fully diluted net assets per share increasing by 3%. SVIIT has reported compound
annual  growth in net assets per share  over five years of 10%,  which  compares
favourably to negative  compound  capital returns of the FTSE All-Share and FTSE
World Index of (4%) and (3%) respectively.

                                       10

On the whole,  SVIIT's  portfolio of companies  has continued to perform well in
difficult  economic and operating  environments.  Public  markets have recovered
since  their lows of March  2003 and this has had a  positive  impact on overall
EBIT  multiples used to value the  portfolio,  especially in the  semi-conductor
sector.  In addition,  there are signs of an improvement in the  environment for
exits,  with  increased  activity  in the  capital  markets and signs of renewed
interest by trade  participants  for  strategic  assets.  SVIIT's  portfolio  of
companies is well  positioned to benefit from an improved  market for investment
realisations.


Investments in Companies (GBPm)             Investments in Companies (GBPm)
               31 December 2003                           31 December 2002
Cost                                        Cost
Earnings/3rd Party                          Earnings/3rd Party
Quoted                                      Quoted
W/Down                                      W/Down



Uncalled Fund Commitments at 31 December 2003

<TABLE>
<CAPTION>

Fund                                                                                                      SVIIT Uncalled
                                                                      Amount Called      Amount Uncalled     Commitment*
                                                                   (Local Currency)     (Local Currency)     GBP million
<S>                                                                             <C>                  <C>             <C>
Permira Europe III                                                                -            EUR508.0m           357.9
Permira Europe II***                                                      EUR520.2m            EUR130.0m            91.6
The Japan Fund IV**                                                               -          YEN3,747.6m            19.5
The Japan Venture Fund III                                              YEN2,962.6m            YEN487.4m             2.5
Schroder Ventures Asia Pacific Fund                                        US$67.2m             US$41.4m            23.1
Schroder Ventures US Fund                                                  US$51.5m             US$21.7m            12.2
Schroder Canadian Buy-Out Fund II                                           C$17.0m               C$0.9m             0.4
Schroder Canadian Buy-Out Fund III                                          C$14.0m              C$36.5m            15.8
Schroder Ventures
International Life Sciences Fund II                                        US$79.7m              US$2.0m             1.2
International Life Sciences Fund III                                       US$15.4m             US$59.6m            33.3
Strategic Recovery Fund                                                           -              GBP7.4m             7.4
P123                                                                       EUR62.9m             EUR41.9m            29.5

Total                                                                                                           GBP594.4
</TABLE>



*   Based on exchange rates at 31 December 2003.
**  Based on SVIIT's commitment to the fund at its first closing, SVIIT will
    commit a further YEN1,624.5m at the fund's final close.
*** Shown after transfer of commitment to P123.

                                       11

Twenty Largest Underlying Companies

In the following  pages, we show SVIIT's twenty largest  investments by value as
at 31 December 2003. The cost of SVIIT's  Twenty  Largest  Underlying  Companies
takes into account the transfer of assets to P123.


1.  MEMEC
    (UK)


Company (GBP000's)
Cost                       48,130
Value                      53,616
Date of Acquisition      Oct 2000

Memec is a global specialist semiconductor distributor with operations in all of
the world's key technology  markets:  Europe,  the Americas,  Japan and the Asia
Pacific regions.  The valuation basis is EBITDA; the holding represents 10.2% of
SVIIT's net assets.


2.  TRAVELODGE &
    LITTLE CHEF
    (UK)


Company (GBP000's)
Cost                       51,847
Value                      45,338
Date of Acquisition      Dec 2002


Travelodge  is the  second  largest  operator  in the UK budget  hotel  sectors,
providing around 13,000 rooms in 227 hotels located around Britain.  Little Chef
is the largest  roadside  restaurant  chain in Britain  with  approximately  400
outlets.  The  valuation  basis is EBITDA;  the holding  represents  8.6% of net
assets.



3.  FERRETTI
    (ITALY)


Company (GBP000's)
Cost                       36,014
Value                      40,780
Date of Acquisition      Nov 2002


Ferretti was originally acquired by funds advised by Permira in 1998 and floated
on the Milan Stock Exchange in June 2000. At flotation Permira sold the majority
of its interest in Ferretti and has since sold its remaining holding. Since 1998
the  Ferretti  Group has  grown  organically  and  through  acquisitions  and is
currently  Europe's largest builder of luxury motor yachts.  The valuation basis
is EBITDA; the holding represents 7.7% of SVIIT's net assets.


4.  COGNIS
    (GERMANY)


Company (GBP000's)
Cost                       31,160
Value                      38,234
Date of Acquisition      Nov 2001


Cognis is a leading  world-wide  supplier  of  speciality  chemicals,  which was
carved  out from  Henkel in 1999.  The three  divisions  of the  Cognis  Group -
Oleochemicals,  Care Chemicals and Organic  Specialities - supply  international
manufacturers of detergents, cleaners and cosmetics, as well as other industrial
customers. The valuation basis is EBITDA; the holding represents 7.3% of SVIIT's
net assets.

                                       12

5.  SEAT PAGINE GIALLE
    (ITALY)


Company (GBP000's)
Cost                       35,579
Value                      35,573
Date of Acquisition   August 2003


SEAT  Pagine  Gialle,  is a  telephone  directories,  business  information  and
directory  assistance  company which demerged from the internet,  television and
business  publishing  arm of SEAT in August  2003.  The company has  significant
market share in Italy,  the UK and Germany and is Italy's  leading  yellow pages
and telephone directory publisher. The valuation basis is cost in fund currency;
the holding represents 6.8% of SVIIT's net assets.




6.  AUSTRIAMICROSYSTEMS
    (AUSTRIA)


Company (GBP000's)
Cost                       31,575
Value                      26,737
Date of Acquisition     June 2000


Austriamicrosystems  designs,  manufactures and sells  semiconductor  speciality
products,  focusing on analogue and mixed signal ASICS  (Application  - Specific
Integrated Circuits). The company serves the wireless communications, industrial
and automotive  end-customer  markets.  The valuation  basis is write-down;  the
holding represents 5.1% of SVIIT's net assets.


7.  HOGG ROBINSON
    (UK)


Company (GBP000's)
Cost                       22,178
Value                      24,716
Date of Acquisition     June 2000


Hogg  Robinson  is a  services  company  comprising  two  principal  activities:
international  business travel and outsourced  employee  benefit  services.  The
company's travel operations  include corporate travel management and e-commerce.
The employee benefit services comprise benefit  consulting,  administration  and
payment  processing.  The valuation basis is EBITDA; the holding represents 4.7%
of SVIIT's net assets.

8.  TAKKO
    (GERMANY)


Company (GBP000's)
Cost                       14,072
Value                      16,558
Date of Acquisition    March 2000


Takko is a retailer of  fashionable  "value for money"  clothing  targeting  the
young  family  and women  aged  between  25 and 40.  It runs over 520  stores in
Germany and Austria. The valuation basis is EBIT; the holding represents 3.1% of
SVIIT's net assets.

                                       13

9.  PREMIERE
    (GERMANY)


Company (GBP000's)
Cost                       13,318
Value                      14,320
Date of Acquisition      Feb 2003


Premiere is the only visible Pay-TV  operator in Germany and Austria.  It offers
exclusive premium Pay-TV content  including sports,  movies and special interest
packages  on 23 channels  as well as  Pay-per-View.  The company has roughly 2.6
million subscribers  serving both satellite and cable households.  The valuation
basis is cost in fund  currency;  the  holding  represents  2.7% of SVIIT's  net
assets.




10. INMARSAT
    (UK)


Company (GBP000's)
Cost                       13,387
Value                      13,387
Date of Acquisition      Dec 2003


As a  leading  provider  of  global  mobile  satellite  communication  services,
Inmarsat has been designing,  implementing and operating  satellite networks for
over 23 years. The company's  services include voice, fax, intranet and internet
access and other data services used by  multinational  corporations,  government
agencies,  media and  international  aid  organisations  and other  users in the
maritime,  land and  aeronautical  sectors.  The valuation basis is cost in fund
currency; the holding represents 2.5% of SVIIT's net assets.




11. HOLMES PLACE
    (UK)


Company (GBP000's)
Cost                       12,897
Value                      13,039
Date of Acquisition     July 2003


Holmes Place is one of Europe's  leading premium health club operators and funds
advised by  Bridgepoint  and Permira  invested in the company in July 2003.  The
valuation basis is cost in fund currency; the holding represents 2.5% of SVIIT's
net assets.




12. EEMS
    (ITALY)


Company (GBP000's)
Cost                        1,376
Value                      12,590
Date of Acquisition      May 1999




EEMS  performs  assembly  and  test  services  for DRAM and  Flash  memory  chip
manufacturers. It also assembles memory modules, which are used in PCs, telecoms
and the  automotive  industry.  The  valuation  basis  is  EBITDA;  the  holding
represents 2.4% of SVIIT's net assets.

                                       14

13. LEICA MICROSYSTEMS
    (GERMANY)


Company (GBP000's)
Cost                        9,972
Value                      11,455
Date of Acquisition    March 1998


Leica  manufactures  and  supplies  microscopes  and related  equipment  for the
healthcare,  research  and  semiconductor  industries.  The  company has leading
positions  in  most  of  its  markets  and a  strong  track  record  in  product
innovation.  The  valuation  basis is EBITDA;  the  holding  represents  2.2% of
SVIIT's net assets.




14. EURO DENTAL
    (GERMANY)


Company (GBP000's)
Cost                        2,905
Value                      10,880
Date of Acquisition      Jan 2000


Euro Dental is a leading mail order house for dental consumables in Germany. The
company has two  subsidiaries,  Krugg, the market leading  distributor of dental
consumables in Italy and a small start-up  company  called  Dentranet,  which is
aimed at exploiting  e-commerce  opportunities in the German dental  consumables
market.  The  valuation  basis is Third Party;  the holding  represents  2.1% of
SVIIT's net assets.






15. GRAMMER
    (GERMANY)


Company (GBP000's)
Cost                        8,476
Value                       9,985
Date of Acquisition     June 2001


Grammer  supplies  seating  equipment  to  the   automotive/commercial   vehicle
industry.    The   company    serves   three    different    segments   of   the
automotive/commercial  vehicle  industry:  automotive  equipment (mainly seating
utilities),  commercial  vehicle driver seats and commercial  vehicle  passenger
seats. The valuation basis is EBITDA; the holding represents 1.9% of net assets.




16. KIEKERT
    (GERMANY)


Company (GBP000's)
Cost                       13,357
Value                       9,852
Date of Acquisition     Sept 2000


Kiekert  produces  complete systems for all devices that open,  close,  lock and
unlock cars and has operated in this market since 1920.  Products include highly
integrated system locks as well as complex door modules.  The valuation basis is
write-down; the holding represents 1.9% of SVIIT's net assets.

                                       15



17. STRIDES
    (ASIA)


Company (GBP000's)
Cost                          861
Value                       9,625
Date of Acquisition      Dec 1997


Strides is based in India and  manufactures a range of generic drugs and tablets
for supply to Western and developing markets. The valuation basis is quoted; the
holding represents 1.8% of SVIIT's net assets.




18. PARKWAY HOLDINGS
    (SINGAPORE)


Company (GBP000's)
Cost                       19,700
Value                       8,682
Date of Acquisition      Dec 1999


Parkway  is a private  healthcare  provider  in  Singapore  with an  established
network of hospitals and clinics in Malaysia,  Indonesia and India.  The company
has the  region's  best known  brand  name and a  reputation  for  technological
leadership.  The  valuation  basis is quoted;  the  holding  represents  1.6% of
SVIIT's net assets.




19. RODENSTOCK
    (GERMANY)


Company (GBP000's)
Cost                        8,180
Value                       8,252
Date of Acquisition     June 2003


Rodenstock  is  one  of  the  world's  leading   manufacturers   of  spectacles.
Headquartered in Munich, it supplies  prescription  eyewear and sunglasses.  The
company  has  almost  6,000  employees  based  in  18  countries  and  dedicated
production sites in Germany.  The valuation basis is cost in fund currency;  the
holding represents 1.6% of SVIIT's net assets.




20. SILVERLINK
    HOLDINGS
    (ASIA)


Company (GBP000's)
Cost                        9,754
Value                       7,834
Date of Acquisition      Dec 2002


Silverlink  Holdings  is the  holding  company  for  Amanresorts,  which own and
operate a group of  high-end  luxury  resorts and spas.  Amanresorts  opened its
flagship  resort,  Amanpuri  in Phuket,  Thailand in 1988 and has since added 12
hotels in Indonesia,  the Philippines,  France, North Africa, Mexico, the United
States and French Polynesia. It now owns and/or manages 13 resorts with a number
of  them  being  regularly  voted  amongst  the top ten  hotels  worldwide.  The
valuation basis is cost in fund currency; the holding represents 1.5% of SVIIT's
net assets.

                                       16

SIRONA DENTAL
SYSTEMS GROUP
(GERMANY)


Company (GBP000's)
Cost                         15,905
Value                        31,257
Date of Acquisition        Nov 1997


Sirona  is  a  manufacturer  of  professional  dental  equipment  with  its  own
distribution network. The company is a total system provider of dental equipment
and is recognised globally for providing high quality,  technologically superior
products covering nearly the entire product range for the dental practice. Funds
advised by Permira agreed to sell part of their investment in Sirona in November
2003 and the valuation is the sum of the net proceeds received in March 2004 and
the third party valuation of the remaining  holding in Sirona  (demedis),  which
was sold in January 2004. The holding represents 5.9% of SVIIT's net assets.



Although the sale of the  manufacturing  division of Sirona  Dental  Systems was
executed  in  November  2003,  it was  subject  to the  approval  of  anti-trust
authorities, which was granted in February 2004. Therefore, at 31 December 2003,
Sirona Dental  Systems still  technically  formed part of SVIIT's Twenty Largest
Underlying Companies, although it is not included in the list above. In order to
comply  with  Chapter  21.22  (c) of the  UKLA  Listing  Rules,  key  investment
information is outlined opposite.


                                       17

List of Investments at 31 December 2003

<TABLE>
<CAPTION>

                                                                                          SVIIT's      Value of
                                                                                          Holding       SVIIT's   SVIIT's Net
                                                                  Year     Original   in the Fund       Holding        Assets
                                                                Formed Life (years)             %       GBP'000             %
<S>                                                               <C>           <C>           <C>           <C>           <C>
ASIA
Asia Pacific Trust
Formed to invest in equity and near-equity investments
in the high growth economies of the Asia Pacific
region. This trust has been in liquidation since 1998.            1990           8*           6.4           490           0.1

Asia Pacific Fund II
Established to make equity and near-equity investments
in buy-outs, buy-ins, development capital businesses
and turnarounds, principally in the Asia Pacific region
with an emphasis on Australia, China, Hong Kong, India,
Indonesia, Malaysia, Singapore and Thailand.                      1994           10          14.0        15,425           2.9

Schroder Ventures Asia Pacific Fund
Established to make equity or near equity investments
in companies that have significant exposure to the Asia
Pacific region. The fund focuses principally on
management buy-outs and buy-ins, financial acquisitions
and larger development capital opportunities.                     1999           10          29.9        27,608           5.2

Co-investments with Asia Pacific Fund ll and Schroder
Ventures Asia Pacific Fund                                                                                1,129           0.2

The Japan Venture Fund II
Formed to invest in Japanese businesses with potential
for capital growth.                                               1990          10*          13.7           615           0.1

The Japan Venture Fund III
Established to invest directly or indirectly in equity
and near equity investments in a diversified portfolio
of early stage, or development capital investments and
leveraged and management buy-outs and buy-ins
principally in Japan.                                             1997           10          20.3        14,010           2.8

- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASIA                                                                                               59,277          11.3
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       18

<TABLE>
<CAPTION>

List of Investments continued

                                                                                          SVIIT's      Value of
                                                                                          Holding       SVIIT's   SVIIT's Net
                                                                  Year      Original  in the Fund       Holding        Assets
                                                                Formed  Life (years)            %       GBP'000             %
<S>                                                                <C>           <C>          <C>           <C>           <C>
CONTINENTAL EUROPE
Permira Europe I
The first $1 billion fund raised for private equity
investment in Europe focusing on large and medium-sized
leveraged buy-out opportunities.                                  1997            10         13.5        54,235          10.4

Permira Europe II
Formed as the successor to Permira Europe I, the fund
focuses on European buy-outs and buy-ins, in addition to
growth capital investments.                                       2000            10         19.7       298,503          56.8

Permira Europe III
Formed as the successor to Permira Europe II, the fund
will focus on buy-outs/ins and growth capital investments
in European businesses or of global businesses with a
strong European presence.                                         2003            10         10.2      (2,408)+         (0.5)

P123
A fund of Permira pan-European buy-out funds, with
interests in Permira Europe I, II and III.                        2003            15         38.6        45,861           8.7

Permira France I
The fund's policy was to invest in leveraged buy-outs and
development capital businesses primarily in France. The
fund was put into liquidation in December 1999.                   1989           10*         39.8           204             -

Permira France Venture I
Formed with a policy of investing in development capital
opportunities, principally in France.                             1992           10*         19.0           106             -

Permira German Buy-Outs
Established to invest in buy-outs of companies in Germany
and some of its neighbouring countries.                           1986           10*         29.7         7,042           1.3

Permira German Buy-Outs 1992
Established to invest in a diverse portfolio of buy-outs,
buy-ins, development capital businesses and turnarounds,
principally in Germany, Austria and Switzerland.                  1991           10*         19.4         1,535           0.3

Permira Italy II
Established to make equity and near-equity investments in
buy-outs and buy-ins, including development capital
businesses, principally in Italy.                                 1993           10*         21.0         1,643           0.3

The Spanish Venture Fund
Established with a policy of investing in leveraged
buy-outs and development capital businesses in Spain.             1990           10*         23.2         1,242           0.2

- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONTINENTAL EUROPE                                                                                407,963          77.5
- ------------------------------------------------------------------------------------------------------------------------------
+ At 31 December 2003 Permira Europe IIIhad made one investment which settled in January 2004. The GBP(2.4) million is
  predominantly representative of management fees on SVIIT's commitment to the fund from its first close to 31 December 2003.
</TABLE>

                                       19

List of Investments continued


<TABLE>
<CAPTION>

                                                                                          SVIIT's      Value of
                                                                                          Holding       SVIIT's   SVIIT's Net
                                                                  Year     Original   in the Fund       Holding        Assets
                                                                Formed Life (years)             %       GBP'000             %
<S>                                                                <C>          <C>           <C>           <C>           <C>
UNITED KINGDOM
Permira UK III
Established as Permira's third buy-out fund in the
United Kingdom to invest in equity and near-equity
investments in buy-outs, buy-ins, development capital
businesses and turnarounds.                                       1993          10*          18.8        10,630           2.1

Permira UK Venture II
Established to invest in a diversified portfolio of
venture or development capital businesses and buy-outs
principally in the United Kingdom.                                1990          10*           8.7           389             -

Permira UK Venture IV
Established to follow the policies of the fully
invested Permira UK Venture III.                                  1995           10           4.2         1,964           0.4

- -----------------------------------------------------------------------------------------------------------------------------
TOTAL UNITED KINGDOM                                                                                     12,983           2.5
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       20

List of Investments continued
<TABLE>
<CAPTION>

                                                                                          SVIIT's      Value of
                                                                                          Holding       SVIIT's   SVIIT's Net
                                                                  Year     Original   in the Fund       Holding        Assets
                                                                Formed Life (years)             %       GBP'000             %
<S>                                                               <C>            <C>          <C>           <C>           <C>
NORTH AMERICA
Schroder Canadian Buy-Out Fund II
Established to invest in buy-outs and development capital
opportunities, principally in Canada.                             1994           10          22.6         6,493           1.2

Schroder Canadian Buy-Out Fund III
Established to invest principally in buy-outs, buy-ins,
leveraged build-ups and development capital opportunities in
Canada.                                                           2000           10          26.6         1,548           0.3

Co-investments with Schroder Canadian Buy-Out Funds II and
III                                                                                                       7,723           1.5

Schroder Ventures International Life Sciences Fund
Established to invest in life sciences companies principally
in the United States, the United Kingdom and Continental
Europe.                                                           1993          10*           6.8         1,937           0.4

Schroder Ventures International Life Sciences Fund II
Established as a successor to Schroder Ventures
International Life Sciences Fund, to invest in a diversified
portfolio of life sciences companies principally in the
United States and Europe. The majority of these investments
will be in early stage opportunities.                             1999           10          29.2        33,366           6.3

International Life Sciences Fund III
The successor to Schroder Ventures International Life
Sciences Fund II, established to invest in a diversified
portfolio of life sciences companies principally in the
United States and Europe. The majority of these investments
will be in early stage opportunities.                             2002           10          19.1         6,297           1.2

Schroder Ventures US Fund
Established to invest in larger development capital and
mid-size buy-outs in the US, with a particular focus on
media, telecommunications and technology sectors.                 1999           10          29.9        22,700           4.2

- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NORTH AMERICA                                                                                      80,064          15.1
- ------------------------------------------------------------------------------------------------------------------------------
Total venture fund portfolio                                                                            560,287         106.4
Money market instruments                                                                                 41,877           8.0
UK listed equity funds                                                                                    8,184           1.5
- ------------------------------------------------------------------------------------------------------------------------------
Total investment portfolio                                                                              610,348         115.9
Other assets less total liabilities                                                                    (83,730)        (15.9)
- ------------------------------------------------------------------------------------------------------------------------------
Total net assets                                                                                        526,618         100.0
- ------------------------------------------------------------------------------------------------------------------------------
*The lives of these funds have been extended.

</TABLE>

                                       21

Report of the Directors for the year ended 31 December 2003


The Directors submit their report and the audited accounts of the Company for
the year ended 31 December 2003.


COMPANY'S BUSINESS
The  Company  carries on business as an  investment  trust and is an  investment
company within the meaning of section 266 of the Companies Act 1985. In order to
obtain  exemption from capital gains tax the Company has conducted itself with a
view to being an approved  investment  trust for the  purposes of Section 842 of
the United Kingdom Income and Corporation Taxes Act 1988 (as amended).  The last
accounting  period for which the  Company  has been  treated as  approved by the
Inland Revenue as meeting the qualifying criteria for investment trust status is
the period ended 31 December 2002 and the Company has subsequently conducted its
affairs so as to enable it to continue to qualify for such approval. The Company
is not a close company for taxation purposes.

A review of the Company's business and its likely future development is given in
the Chairman and CEO's  Statement on pages 4 and 5 and the  Portfolio  Review on
pages 6 to 12.


REVENUE AND EARNINGS
The  consolidated  net revenue  deficit for the year after  expenses,  interest,
taxation and minority  interests was GBP5,531,000  (six months ended 31 December
2002:  deficit of  GBP2,185,000),  equivalent to a deficit per ordinary share of
5.32p (six months ended 31 December 2002: deficit of 2.14p).


DIVIDEND
The Company is prohibited by its Articles of Association  from  distributing  as
dividends any capital surpluses which arise from the realisation of investments.
Accordingly, any dividends paid by the Company will be funded out of its revenue
account.

The  Company's  investment  objective  is  one  of  capital  growth  and  it  is
anticipated  that returns for  shareholders  will derive primarily from capital.
The Directors do not  recommend  the payment of a final  dividend as the Company
has reported a deficit for the financial year on its revenue account.


POLICY FOR PAYMENT OF CREDITORS
It is the  policy  of the  Company  to settle  all  investment  transactions  in
accordance  with the terms and  conditions  of the relevant  markets in which it
operates.  All other expenses are paid on a timely basis in the ordinary  course
of business. The Company had no trade creditors at 31 December 2003.


PURCHASE OF SHARES For cancellation
During the year ended 31 December  2003 the  Directors did not use the authority
given to them to purchase ordinary shares for cancellation.

The total number of shares in issue on 26 March 2004 was 112,655,174  shares. To
provide  maximum  flexibility,  the  Directors  wish to renew the  authority  to
purchase  shares for  cancellation.  A resolution  authorising  the Directors to
purchase  up to 14.99% of the share  capital in issue on  26 March  2004 will be
proposed at the forthcoming  Annual General Meeting for which notice is given on
pages 61 to 62.

This  authority  will lapse at the  conclusion of the Company's  Annual  General
Meeting in 2005, unless renewed earlier.

As at 26 March 2004,  the Company held no shares in treasury.  Accordingly,  the
percentage  figures in this and other  sections of the report are all calculated
exclusive of treasury shares.

The total number of options to subscribe for ordinary  shares  outstanding at 26
March 2004 was 6,775,690,  which represented  approximately 6.0 per cent. of the
issued  ordinary share capital at that date. If the Company were to purchase the
maximum  number of  ordinary  shares  permitted  by this  resolution  and by the
existing buy back authority given on 25 April 2003 (for 15,348,412  shares) then
the options  outstanding at 26 March 2004 would represent  approximately 8.4 per
cent.  of the issued  ordinary  share  capital.  However,  the  directors do not
presently  intend to exercise the existing  authority  prior to its expiry on 29
April 2004.


ISSUE OF NEW SHARES
At the Annual  General  Meeting of the Company on 25 April  2003,  the Directors
were given powers (in  substitution  for the powers taken at the Annual  General
Meeting of the Company in November  2002) to allot  relevant  securities  and to
allot equity securities as if the pre-emption provisions in section 89(1) of the
Companies Act 1985 did not apply.  The  Directors  wish to renew these powers at
the forthcoming Annual General Meeting. Therefore,  Resolutions 7 and 8 (set out
in the notice of the Annual General  Meeting on pages 61 to 62) will be proposed
at the Annual General Meeting.

                                       22

If passed,  Resolution  7 will give the  Directors  the power to allot  relevant
securities up to an aggregate nominal amount of (a) GBP1,126,551  (equivalent to
1% of the Company's  issued ordinary share capital as at 26 March 2004 excluding
treasury shares as indicated  above) in connection with the Company's  Executive
Share  Option  Plan;  and (b)  GBP37,551,724  (equivalent  to  one-third  of the
Company's issued ordinary share capital as at 26 March 2004).

If  passed,  Resolution  8 will give the  Directors  the  power to allot  equity
securities  as if the  pre-emption  provisions in section 89(1) of the Companies
Act 1985 did not apply (a) up to an  aggregate  nominal  amount of  GBP1,126,551
(equivalent to 1% of the Company's  issued ordinary share capital as at 26 March
2004) in connection with the Company's Executive Share Option Plan; (b) pursuant
to  rights  issues  and other  pre-emptive  issues;  and (c) up to an  aggregate
nominal  amount of  GBP11,265,517  (equivalent  to 10% of the  Company's  issued
ordinary share capital as at 26 March 2004).

The  Directors  are  seeking  the  authority  referred  to in  paragraph  (c) of
Resolution 8 in order to provide flexibility in raising monies to take advantage
of opportunities  arising through the launch of new Schroder Ventures or Permira
funds, and for general corporate purposes. It is the intention of the Board that
any equity  securities  allotted  under this  authority  will be  allotted at an
effective  premium to the  estimated  net asset value per ordinary  share at the
date of pricing of the issue of the relevant equity securities.

The Directors  intend to exercise the authority  referred to in paragraph (b) of
Resolution  7  to  issue  relevant   securities  whenever  they  believe  it  is
advantageous to shareholders to do so.

The Directors  intend to exercise the authority  referred to in paragraph (a) of
Resolution 7 and paragraph (a) of  Resolution 8 to grant options under part D of
the Company's Executive Share Option Plan to individuals seconded to the Company
or its subsidiaries (which, for this purpose, includes joint ventures).  Options
granted pursuant to this authority will nevertheless count towards limits on the
number of new ordinary  shares  which may be issued  pursuant to the exercise of
options.

The authorities proposed to be taken under Resolutions 7 and 8 will lapse at the
conclusion of the  Company's  Annual  General  Meeting in 2005,  unless  renewed
earlier.


DIRECTORS
The Directors of the Company and their  beneficial  and family  interests in the
Company's share capital during the year to 31 December 2003 are given below:

                                    Ordinary Shares
                                    of GBP1.00 each
                                      At 31         At 31
                                   December      December
                                       2003          2002
Beneficial
J J McLachlan                        18,077        16,423
N E H Ferguson*                     233,284       230,000
C J Govett                           67,500        67,500
A J Habgood                          25,000        25,000
E W Koning                              Nil           Nil
D Raeburn                            60,000        60,000
A F Sykes                               Nil           Nil
A C Williams*                        13,091         9,235
Non-Beneficial
N E H Ferguson                       27,900        27,900
C J Govett                           20,000        20,000
A J Habgood                          12,500           Nil
A C Williams                            Nil         2,000

* Nicholas Ferguson and Andrew Williams have options
  over ordinary shares, details of which are given on
  page 31.

Nicholas Ferguson also holds GBP100,000 of SVIIT's GBP40,000,000 4 1/2 per cent.
subordinated  convertible  bonds 2011 and GBP500,000 of SVIIT's  GBP40,000,000
4 1/2 per cent. subordinated convertible bonds 2013.

Denis  Raeburn also holds  GBP500,000 of SVIIT's  GBP40,000,000  4 1/2 per cent.
subordinated convertible bonds 2013.

Anthony Habgood also holds  GBP200,000 of SVIIT's  GBP40,000,000 4 1/2 per cent.
subordinated convertible bonds 2013.

There had been no changes in the above holdings up until 26 March 2004.

In accordance  with the Company's  Articles of  Association,  Mr Williams and Mr
Govett  will  retire  at the  forthcoming  Annual  General  Meeting  and,  being
eligible,  offer  themselves  for  re-election.  As indicated in the  Chairman's
Statement, Mr Sykes will retire as a Director on 31 March 2004.

                                       23

The Directors do not have service contracts with the Company.  However, Nicholas
Ferguson and Andrew Williams, who are employed by Schroder Investment Management
Limited, are seconded to Schroder Ventures (London) Limited ("SVLL"). As part of
the secondment arrangements,  SVLL will reimburse Schroder Investment Management
Limited for the salary,  bonus and other  benefits  paid by Schroder  Investment
Management Limited to Nicholas Ferguson and Andrew Williams.

Nicholas Ferguson and members of his family and Andrew Williams have an interest
in the Carried Interest in respect of certain older Funds. Nicholas Ferguson and
Andrew Williams have foregone a portion of their entitlement to Carried Interest
on  existing  Funds and any  entitlement  they may have to Carried  Interest  on
future Permira or Schroder Ventures funds in return for share options granted by
the Company under the Executive Share Option Plan.  Nicholas Ferguson and Andrew
Williams also  participate  in the Schroder  Ventures  Co-Investment  Scheme and
Schroder Ventures Investments Limited.  Andrew Sykes is an executive Director of
Schroders  plc  but  will  retire  on  31 March  2004.  Nicholas  Ferguson  is a
non-executive  Director  of  Schroders  plc but will  retire on  22 April  2004.
Schroders plc's  subsidiaries  include Schroder  Investment  Management  Limited
which  receives  fees  from  the  Company  in  accordance  with  the  terms of a
secretarial  agreement and for the provision of cash management  services.  Full
details of fees paid to both  companies  can be found in Note 29 on page 52.  No
other  Director  has any  material  interest  in any  other  contract  which  is
significant to the Company's business.


DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
During the year the Company had maintained cover for its Directors and Officers,
under a directors'  and  officers'  liability  insurance  policy as permitted by
Section 310 of the Companies Act 1985 (as amended).


SUBSTANTIAL SHARE INTERESTS
At 26 March 2004 the Company had been  notified of the  following  interests  in
excess of 3 per cent. of the issued capital.

                                     Number of
                                      ordinary Percentage
                                        shares   of class
Schroders plc and its
subsidiaries:
- - non beneficial, managed for
clients                             19,335,951      17.16
- - beneficial                         7,113,449       6.31
Aegon Investment Management BV      24,603,665      21.84
Lansdowne Partners                   9,338,262       8.29
Morley Fund Management Limited       3,861,340       3.43
Morgan Stanley Securities
Limited                              3,543,595       3.15


AUDITORS
Ernst & Young LLP have  expressed  their  willingness  to  remain in office  and
resolutions  to  re-appoint  them and to  authorise  the  Directors to fix their
remuneration will be proposed at the Annual General Meeting.

Registered Office:             Registered Number: 3066856

31 Gresham Street
London
EC2V 7QA

By order of the Board
Schroder Investment Management Limited
Secretary
26 March 2004


                                       24

Statement of Directors' Responsibilities

The Directors are responsible for preparing  accounts for each financial  period
which give a true and fair view of the state of affairs  of the  Company  and of
the Group at the end of the  financial  period and of the return for the period,
and are in accordance with applicable laws and regulations.

The Directors are satisfied that the Group has adequate resources to continue in
business and accordingly that the accounts should be drawn up on a going concern
basis.  Further,  appropriate  accounting  policies,  consistently  applied  and
supported by reasonable and prudent judgements and estimates,  have been used in
the preparation of these accounts and applicable  accounting standards have been
followed.   These  policies  and  standards,  for  which  the  Directors  accept
responsibility, have been discussed with the Auditors.

The  Directors  are  responsible  for keeping  proper  accounting  records which
disclose  with  reasonable  accuracy at any time the  financial  position of the
Group and to enable them to ensure that the accounts  comply with the  Companies
Act 1985. They are also responsible for safeguarding the assets of the Group and
hence for taking  reasonable  steps for the  prevention  and detection of fraud,
error, other irregularities and non-compliance with laws and regulations.

The accounts are published on the  www.sviit.co.uk  website,  which is a website
maintained  by Schroder  Ventures  (London)  Limited  ("SVLL"),  a wholly  owned
subsidiary of the Company.  The maintenance and integrity of this website is the
responsibility of SVLL.

The accounts are also published on the  www.schroders.co.uk  website, which is a
website  maintained by Schroders.  The  maintenance and integrity of the website
maintained  by Schroders or any other  subsidiary of Schroders plc is, so far as
it relates to the Company, the responsibility of Schroders.


The work  carried  out by the  auditors  does not involve  consideration  of the
maintenance and integrity of these websites and accordingly, the auditors accept
no  responsibility  for any changes that have occurred to the accounts  shown on
the websites from this published  report and accounts.  Visitors to the websites
need  to  be  aware  that  legislation  in  the  United  Kingdom  governing  the
preparation  and  dissemination  of the accounts may differ from  legislation in
their jurisdiction.

The Directors believe that they have complied with these responsibilities.

                                       25

Corporate Governance

The Company is  committed  to the highest  standards  of  corporate  governance.
Following  the  publication  of a new  Combined  Code,  which  will apply to the
Company for the year ending 31 December  2004,  the Board has commenced a review
of all aspects of  corporate  governance.  This  includes  the work and terms of
reference of the Committees of the Board.


APPLICATION OF CODE PRINCIPLES

THE BOARD
The Board currently  consists of two executive and six non-executive  Directors.
The Board considers that John McLachlan,  John Govett,  Anthony  Habgood,  Edgar
Koning and Denis Raeburn are independent  non-executive  directors.  (see page 2
for further details).

All  Directors  are  appointed  for an initial term covering the period from the
date of their appointment until the first Annual General Meeting thereafter,  at
which they are required to stand for election,  in accordance  with the existing
Articles of Association.  Thereafter Directors retire by rotation at least every
three years.

The Board meets at least five times a year.  Matters  specifically  reserved for
decision by the full Board have been defined and are currently being re-examined
as part of the overall governance review.

A procedure has been adopted for directors,  in the furtherance of their duties,
to take  independent  professional  advice at the  expense of the  Company.  The
Directors  have  access to the  advice and  services  of the  Corporate  Company
Secretary through its appointed representative,  who is responsible to the Board
for ensuring that Board  procedures are followed and that  applicable  rules and
regulations are complied with.


PERFORMANCE  EVALUATION  As part  of its  review  of all  aspects  of  corporate
governance, the Board is establishing a framework for the on-going evaluation of
the performance of the board and its committees,  as well as the performance and
individual  contribution  of the  non-executive  directors.  The first review of
performance  will take place later in 2004 and will be led by the Chairman.  The
evaluation of the Chairman's  performance will be led by a senior  non-executive
director.


INDUCTION  AND TRAINING
When a Director is appointed he or she receives a full,
formal and tailored  induction.  In addition,  Directors  attend ad hoc seminars
appropriate to the Company's business.


BOARD COMMITTEES
The  Investment  Committee,  which as at 31 December 2003  consisted of Nicholas
Ferguson (Chairman),  John Govett, Edgar Koning, John McLachlan,  Denis Raeburn,
Andrew Sykes and Andrew Williams,  is responsible,  together with the Board, for
the day-to-day management of the Company's investment portfolio.  In particular,
the Committee is responsible for reviewing investment proposals for the Company,
for giving  investment  recommendations  to the Board and for  implementing  the
Board's decision as regards any investment.

As part of the preparations for the Company's  acquisition of Schroder  Ventures
(London)   Limited  and  Schroder   Ventures  North  America  Inc.  the  Company
established  a  Remuneration  Committee  during  the year to 30 June  2001.  The
Remuneration  Committee,  which has defined terms of reference  and duties,  is,
inter alia  responsible for making  recommendations  to the Board in relation to
the  remuneration  of the  Executive  Directors and the issuance of share option
grants under the Executive Share Option Plan established in 2001. At 31 December
2003,  the Committee was comprised of John  McLachlan  (Chairman),  John Govett,
Anthony Habgood and Denis Raeburn.

The Remuneration Committee also reviews certain contracts with service
providers.

The Company has  established  a  Nominations  Committee in  accordance  with the
recommendations of the Combined Code, to make recommendations on the appointment
of new  Directors.  At 31 December  2003, the Committee was comprised of Anthony
Habgood  (Chairman),  Nicholas Ferguson,  Edgar Koning, John McLachlan and Denis
Raeburn. A formal procedure for the appointment of new Directors is contained in
the terms of reference of the  Committee.  The  Committee  meets as necessary to
make  recommendations to the Board on the filling of Board vacancies.  In making
its recommendations, the Committee is required to ensure that the composition of
the Board is appropriately balanced in expertise and ability.

                                       26

There is an Audit  Committee  with defined terms of reference and duties.  At 31
December 2003, the Committee was comprised of John McLachlan (Chairman), Anthony
Habgood,  Edgar Koning and Denis Raeburn. The function of the Audit Committee is
to ensure that the Company  maintains  the highest  standards  of  integrity  in
financial reporting. It also meets with representatives of the Company Secretary
and receives reports on the quality and effectiveness of the accounting  records
and management information maintained on behalf of the Company.


INFORMATION FLOWS
The Chief  Executive  reports to the Board on at least a quarterly  basis and as
appropriate  on specific  matters.  Directors are provided,  on a regular basis,
with key  information on the Company's  policies,  regulatory  requirements  and
internal controls. Changes affecting directors'  responsibilities are advised to
the Board as they arise. The Board receives and considers reports regularly from
its  advisers  and ad hoc reports and  information  are supplied to the Board as
required.


RELATIONS WITH SHAREHOLDERS
The Board believes that the Annual General  Meeting  provides an effective forum
for  private   investors  to   communicate   with  the  Board,   and  encourages
participation. The Annual General Meeting is attended by members of the Board of
Directors and a presentation  is made.  There is an  opportunity  for individual
shareholders  to question the Chairmen of the Board,  the Audit  Committee,  the
Remuneration  Committee  and the  Nominations  Committee  at the Annual  General
Meeting.  The Company  announces the level of votes cast by proxy on resolutions
proposed at General Meetings.

The Board  believes that the Company's  policy of reporting to  shareholders  as
soon as possible after the Company's year end and holding the earliest  possible
Annual General Meeting is valuable. The Notice of Meeting on pages 61 to 62 sets
out the business of the meeting.


EXERCISE OF VOTING POWERS
The Company has established a voting policy in respect of its investments which,
in summary, is based on the governance recommendations of the Combined Code with
the intention of voting in accordance  with best practice  whilst  maintaining a
primary focus on financial returns.


ACCOUNTABILITY AND AUDIT
The Directors'  statement of  responsibilities  in respect of the accounts is on
page 25 and a statement of going concern is set out below.

The Independent Auditors' Report can be found on page 32.


GOING CONCERN
The  Directors  believe  that it is  appropriate  to continue to adopt the going
concern  basis in  preparing  the  accounts as the assets of the Company and the
Group consist mainly of securities that are readily realisable and, accordingly,
the  Company  and the Group have  adequate  financial  resources  to continue in
operational existence for the foreseeable future. For this reason, they continue
to adopt the going concern basis in preparing the accounts.


INTERNAL CONTROL
The Combined  Code  requires the Board to review the  effectiveness  of internal
controls.  The Board has undertaken a full review of all the aspects  covered by
the Turnbull  guidance  under which the Board is  responsible  for the Company's
system of internal control and for reviewing its effectiveness.

The  Board  has  approved  a  detailed  risk  map  that  identifies  significant
strategic,  investment-related,  operational  and  service  provider  risks  and
adopted an enhanced  monitoring  system to ensure that risk  management  and all
aspects of internal control are considered on a regular basis.

The Board has  contractually  delegated  the day to day  accounting  and company
secretarial   requirements  to  Schroder  Investment  Management  Limited.  This
contract  was entered into after full and proper  consideration  by the Board of
the quality and cost of services offered including the financial control systems
in  operation  in so far as they relate to the affairs of the  Company,  and the
contract is monitored by the Remuneration Committee.

The Board believes that the key risks  identified and the  implementation  of an
ongoing  system to identify,  evaluate and manage these risks are based upon and
relevant to the Company's business. The ongoing risk assessment,  which has been
in place  throughout  the  financial  year  and up to the  date of this  report,
includes  consideration  of the scope and  quality of the  systems  of  internal
control adopted by major service providers, and ensures regular communication of
the results of monitoring by third parties to the Board, and of the incidence of
significant control failings or weaknesses that have been identified at any time
and  the  extent  to  which  they  have  resulted  in  unforeseen   outcomes  or
contingencies  that may have a material  impact on the Company's  performance or
condition.  Although  the  Board  believes  that it has a  robust  framework  of
internal  control in place this can provide  only  reasonable  and not  absolute
assurance  against  material  financial  misstatement or loss and is designed to
manage, not eliminate, risk.

                                       27

The Board will  continue to monitor its  framework of internal  control and will
continue  to take  steps  to embed  the  system  of  internal  control  and risk
management into the operations of the Company.

The Board has agreed  that an  internal  audit  function,  for the SVIIT  Group,
should be  established  and has appointed  Deloitte & Touche LLP as its internal
auditor. The internal audit process is on-going and the findings of the internal
auditor are reported to the Audit Committee.

The Board has conducted an annual review of the  effectiveness  of the system of
internal control covering all material controls including financial, operational
and compliance controls and risk management  systems.  This assessment took into
account  issues  arising from the reports  reviewed by the Board during the year
together with any additional  information  necessary to enable the Board to take
account of all significant aspects of internal control.


STATEMENT OF COMPLIANCE
In  accordance  with the  requirements  of the  Listing  Rules of the  UKListing
Authority,  this report  outlines how the Company has applied the principles of,
and complied with, the provisions of the Combined Code published in 1998.

Except as explained below, the Company has complied throughout the year with the
best practice provisions in Section 1 of the Combined Code:

The  Board  considers  the  Chairman  to be the main  point of  contact  to whom
concerns  from  whatever  source or of whatever  nature may be conveyed.  In the
event that a shareholder does not wish to raise a concern with him, the Board is
of the view that such a  shareholder  should be free to contact any of its other
non-executive  members and it has decided that it is not appropriate to nominate
a single senior independent Director.

                                       28


Remuneration Report for the year ended 31 December 2003


INTRODUCTION

This report deals with the remuneration paid to the Directors including the
Company's  executive  Directors,  Nicholas  Ferguson,  Chief  Executive  of  the
Company,  and Andrew  Williams  for the year  ended 31  December  2003.  It also
addresses the policy for future remuneration of the Directors.

In  accordance  with the  Companies  Act 1985, a resolution to approve this
report will be put to shareholders at the Annual General Meeting.

The Remuneration Committee
(the "Committee")

The Committee's members during the year were John McLachlan  (Chairman),
John Govett and Anthony Habgood,  all considered  by  the  Board  to be
independent  non-executive  Directors.  Denis Raeburn,  also  considered  by
the  Board  to be an  independent  non-executive Director, was appointed as a
member of the Committee in December 2003.


EXECUTIVE DIRECTORS' PENSIONS*
<TABLE>
<CAPTION>


                                                                                                                        Transfer
                                                                                                                        value at
                                                                                                                     31 December
                                                                                                                   in respect of
                                                 Increase in                               Increase                     increase
                           Accrued  Increase in      accrued      Accrued     Transfer   in transfer     Transfer     in accrued
                        benefit at      accrued  benefit due   benefit at     value at     value net     value at        benefit
                       31 December  benefit due     to other  31 December  31 December of director's  31 December     (excluding
                              2002 to inflation      factors         2003         2002 contributions         2003     inflation)
                           GBP'000      GBP'000      GBP'000      GBP'000      GBP'000       GBP'000      GBP'000        GBP'000
<S>                            <C>          <C>          <C>          <C>          <C>           <C>          <C>            <C>
N E H Ferguson                 106            3            1          110        1,255           218        1,473             63
A C Williams                    83            2            4           89          808           191          999             67
</TABLE>


Transfer values are liabilities of the relevant pension fund rather than
amounts due to be paid to the executive Directors or liabilities of the Company.

CURRENT REMUNERATION*
The emoluments of the Directors in respect of the year ended 31 December 2003
were as specified below:
<TABLE>
<CAPTION>

                                                                                                          Total         Total
                                                                                                     emoluments    emoluments
                                                                                                        year to six months to
                                                                Salary     Benefits        Annual   31 December   31 December
                                                                & fees      in kind      bonus(S)          2003          2002
                                                               GBP'000      GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                <C>          <C>           <C>           <C>           <C>
Executive
N E H Ferguson                                                     339            1           421           761           467
A C Williams                                                       314            1           237           552           323
Non-Executive
J J McLachlan                                                       75            -             -            75            38
C J Govett                                                          24            -             -            24            12
A J Habgood                                                         24            -             -            24            12
E W Koning                                                          21            -             -            21            11
D Raeburn                                                           24            -             -            24            12
A F Sykes                                                           23            -             -            23            10

- ------------------------------------------------------------------------------------------------------------------------------
Aggregate emoluments                                               844            2           658         1,504           885
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(S) Bonuses include provision for amounts accrued but not paid in each year.
    Annual bonuses are awarded in respect of calendar years.
*   This represents the audited section of the Remuneration Report.

                                       29

OPTIONS HELD BY DIRECTORS OVER ORDINARY SHARES OF THE COMPANY*

The following Directors have been granted options over Ordinary Shares under
the Executive Share Option Plan:
<TABLE>
<CAPTION>

                           At 31                                           At 31
                        December     Options     Options     Options    December    Exercise
                            2002     granted   exercised      lapsed        2003       price         Exercise dates+
                                                                                            ----------------------------------
                                                                                                     Earliest          Latest
<S>                          <C>        <C>          <C>         <C>         <C>         <C>              <C>             <C>
N E H Ferguson           715,446           -           -           -     715,446     410.00p     21 June 2004    20 June 2011
                         357,724           -           -           -     357,724     410.00p     21 June 2005    20 June 2011
                         404,484           -           -           -     404,484     334.50p     5 April 2005    4 April 2012
                                     349,840           -           -     349,840     392.75p    13 March 2006   12 March 2013
A C Williams             373,983           -           -           -     373,983     410.00p     21 June 2004    20 June 2011
                         186,992           -           -           -     186,992     410.00p     21 June 2005    20 June 2011
                         272,645           -           -           -     272,645     334.50p     5 April 2005    4 April 2012
                                     239,847           -           -     239,847     392.75p    13 March 2006   12 March 2013

- --------------------------------------------------------------------------------
Total                  2,311,274     589,687           -           -   2,900,961
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

+ Options are exercisable subject to appropriate performance targets being met.
For the options that were granted in June 2001, April 2002 and March and
October 2003, the target is for growth in the Company's net asset value per
ordinary share to exceed the growth in the Retail Prices Index plus 4% per
annum over the three years from the date of grant. If the performance target is
not satisfied on the third anniversary of the date of grant, for the options
granted in June 2001 they may be re-tested every six months over the ten year
life of the option and for the options granted in April 2002 and March and
October 2003 they may be re-tested every six months up to six years from grant.
The mid-market price of shares at 31 December 2003 was 484.0p and the range
during the year was 379.0p to 508.5p.


The  Committee  meets at least twice a year and invites  selected  executives to
attend as appropriate.

The  Committee  is  responsible  for  determining  the  remuneration  policy for
executives,  including executive Directors, of the SVIIT Group (the "Group") and
the  operation  of the  Company's  Executive  Share  Option  Plan.  Its terms of
reference  take into account the  provisions  of the Combined  Code on corporate
governance.  The Committee has  appointed  New Bridge  Street  Consultants  LLP,
independent  remuneration  consultants,  to advise it.  This firm also  provides
advice on the operation of the Company's share schemes.

The terms of  reference  of the  Committee  are  available  on request  from the
Company Secretary.

POLICY ON THE  REMUNERATION  OF THE DIRECTORS
The  Committee's  aim is to ensure that remuneration packages should attract,
retain and motivate senior executives but should avoid paying more than is
necessary for this purpose.  Basic salaries are set on this basis and the
Committee  has due regard to  competitive  market data on similar  positions in
other private equity  organisations  and financial institutions.  Information
on such market data is prepared for the  Remuneration Committee by Towers
Perrin. The Committee is sensitive to wider issues including pay and employment
conditions in the Group when setting pay levels. No executive Director of the
Company is involved in deciding his own remuneration.

Performance-related  elements  of  remuneration  form a  significant
proportion  of the total  remuneration  package of the  executive Directors.

The basic  salaries of the  executive  Directors are reviewed  annually,  having
regard to individual  performance  and comparative  data. In addition,  they are
eligible for a non-pensionable discretionary bonus which is conditional on Group
performance and the achievement of  predetermined  personal  objectives based on
the successful  implementation of the business plan and strategies agreed by the
Board.

Benefits in Kind
Benefits in kind (which are not  pensionable)  relate to the provision of health
insurance and life assurance cover.

External Appointments
The  Company  permits  executive  Directors  of the  Company  to accept  limited
non-executive directorships and other similar appointments,  it being recognised
that  such  appointments   increase  their  commercial  knowledge  and  business
experience  to the  general  benefit  of the  Company.  Fees  earned  from  such
directorships may be retained by the executive Directors.

Service Contracts
Neither of the executive Directors has a service contract with the Company. They
are employed by Schroder Investment Management Limited (SIM) and are seconded to
the Group.  Their  contracts  with SIM provide for  6 months'  notice and do not
include liquidated damages provisions. Mr. Ferguson's and Mr William's contracts
are dated 1 March 2004. Mr Ferguson qualifies for continuous  employment from 22
September  1980  and  Mr Williams   qualifies  for  continuous  employment  from
7 November  1983.  It is the  Company's  policy to have  regard to the duty of a
departing  executive Director to mitigate his loss when determining the level of
any termination payment.

                                       30

NON-EXECUTIVE DIRECTORS

The  non-executive  Directors  have a letter of  appointment  with the  Company.
Remuneration  paid to  non-executive  Directors is  determined  by the Board and
reviewed  each  year.  When  considering  remuneration  levels  the  Board  will
consider,  amongst other things,  industry  practice and contribution to various
committees and time spent on the business of the Company.

Pension Arrangements
The  following  figures,  prepared in  accordance  with UK  legislation  and the
Listing Rules of the UKListing Authority,  apply to Nicholas Ferguson and Andrew
Williams  in  respect of the year ended 31  December  2003,  for which they were
executive  Directors of the  Company.  No pension  contributions  are payable by
either executive Director.

SHARE OPTIONS

So as to link a significant  proportion of their  remuneration  to the long term
stock market  performance of the Company and to the achievement of predetermined
financial targets,  the interests of the Company's executive Directors and other
executives of the Group are aligned with  shareholders  through the operation of
the  Company's  Executive  Share  Option  Plan,  which  was  introduced  at  the
Extraordinary General Meeting held on 3 May 2001.

Options will be granted  regularly to qualifying  employees and secondees of the
Group and the Committee  will  determine  grant levels,  taking into account the
development of the business and individual performance.

All  options are granted at around the  prevailing  market  price at the time of
grant.

The Committee  intends to continue to set  appropriately  demanding  performance
targets on the exercise of options.  For options  granted in 2004, the target is
for growth in the  Company's  net asset value per  ordinary  share to exceed the
growth in the Retail Prices Index ("RPI") plus 4% per annum over the three years
from the date of grant. If the performance  target is not satisfied on the third
anniversary  of the date of grant it may be re-tested  every six months over the
six years  following  grant.  This target is  consistent  with the target set in
2003, and it is anticipated,  will continue to be utilised as a target in future
years.

It is not  anticipated  that the value of shares  under  options  granted in any
financial year will, other than in exceptional  circumstances,  exceed two times
an individual's remuneration.

The  performance  of the net asset  value of the  Company has been chosen as the
target  in order  to align  the  interests  of  executive  Directors  and  other
executives of the Group with shareholders' interests.

External advisers will, from 2004, confirm the performance criteria calculations
for the Committee.

To the extent that the  performance  target has been met,  options are  normally
exercisable from three years from grant.

PERFORMANCE GRAPH

The  Companies  Act 1985  requires  this report to include a  performance  graph
comparing the Company's total shareholder return  performance  against that of a
broad equity market index. For this purpose,  the Committee has decided that the
FTSE All-Share  Index is the most  appropriate  available  index for comparative
purposes  because it is the principal  index in which the  Company's  shares are
quoted.

Source: Datastream

On behalf of the Board
John McLachlan
Chairman, Remuneration Committee
26 March 2004


                                       31

Independent Auditors' Report
To the Members of Schroder Ventures International Investment Trust plc


We have audited the Group's  accounts for the year ended  31 December 2003 which
comprise the Consolidated  Statement of Total Return, Company Statement of Total
Return,  Consolidated  Balance Sheet,  Company Balance Sheet,  Consolidated Cash
Flow Statement and the related notes 1 to 30.  These accounts have been prepared
on the basis of the  accounting  policies set out therein.  We have also audited
the  information  in the  Directors'  Remuneration  Report that is  described as
having been audited.

This report is made solely to the  Company's  members,  as a body, in accordance
with Section 235 of the Companies Act 1985.  Our audit work has been  undertaken
so that we might state to the Company's members those matters we are required to
state to them in an auditors'  report and for no other  purpose.  To the fullest
extent  permitted  by law, we do not accept or assume  responsibility  to anyone
other than the Company and the Company's  members as a body, for our audit work,
for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The directors'  responsibilities for preparing the Annual Report, the Directors'
Remuneration  Report and the  accounts  in  accordance  with  applicable  United
Kingdom law and accounting  standards are set out in the Statement of Directors'
Responsibilities.

Our  responsibility  is to audit  the  accounts  and the part of the  Directors'
Remuneration   Report  in  accordance   with  relevant   legal  and   regulatory
requirements,  United  Kingdom  Auditing  Standards and the Listing Rules of the
Financial  Services  Authority.

We report to you our  opinion as to whether the accounts  give a true and fair
view and whether the accounts and the part of the Directors'  Remuneration
Report to be audited  have been  properly  prepared in accordance  with the
Companies  Act  1985.  We also  report  to you if,  in our opinion, the Report
of the Directors is not consistent with the accounts, if the Company has not
kept proper accounting  records, if we have not received all the information
and  explanations  we  require  for our  audit,  or if  information
specified by law or the Listing  Rules  regarding  directors'  remuneration  and
transactions  with the Group is not  disclosed.

We review whether the Corporate Governance Statement reflects the Company's
compliance with the seven provisions of the  Combined  Code  specified  for our
review by the Listing  Rules,  and we report if it does not.  We are not
required  to  consider  whether  the Board's statements on internal control
cover all risks and controls,  or form an opinion on the  effectiveness of the
Company's  corporate  governance  procedures or its risk and control procedures.

We read other information contained in the Annual Report and consider whether it
is consistent with the audited accounts.  This other  information  comprises the
Report of the Directors,  unaudited part of the Directors'  Remuneration Report,
Chairman  and  CEO's  Statement,   Portfolio  Review  and  Corporate  Governance
Statement. We consider the implications for our report if we become aware of any
apparent  misstatements  or material  inconsistencies  with  the  accounts.  Our
responsibilities do not extend to any other information.

BASIS OF AUDIT OPINION

We conducted  our audit in accordance  with United  Kingdom  Auditing  Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis,  of evidence  relevant to the amounts and disclosures in the accounts and
the part of the Directors'  Remuneration  Report to be audited. It also includes
an assessment of the significant  estimates and judgements made by the directors
in the preparation of the accounts,  and of whether the accounting  policies are
appropriate to the Group's  circumstances,  consistently  applied and adequately
disclosed.

We  planned  and  performed  our audit so as to obtain all the  information  and
explanations  which  we  considered  necessary  in  order  to  provide  us  with
sufficient evidence to give reasonable  assurance that the accounts and the part
of the  Directors'  Remuneration  Report to be  audited  are free from  material
misstatement, whether caused by fraud or other irregularity or error. In forming
our opinion we also  evaluated  the  overall  adequacy  of the  presentation  of
information in the accounts and the part of the Directors'  Remuneration  Report
to be audited.

OPINION

In our opinion:

- -     the  accounts  give a true and fair view of the state of affairs of the
      Company and of the Group as at  31 December  2003 and of the total return
      of the group for the year then ended; and
- -     the accounts and the part of the  Directors'  Remuneration  Report to be
      audited have been properly  prepared in accordance  with the Companies
      Act 1985.


Ernst & Young LLP
Registered Auditor
London
26 March 2004

                                       32

<TABLE>
<CAPTION>

Consolidated Statement of Total Return
(Incorporating the revenue account)


                                                            For the year ended                   For the six months ended
                                                            31 December 2003                        31 December 2002
                                                 Revenue       Capital        Total       Revenue       Capital         Total
                                         Notes   GBP'000       GBP'000      GBP'000       GBP'000       GBP'000       GBP'000
<S>                                        <C>       <C>           <C>          <C>           <C>           <C>           <C>
Realised gains on investments               11         -        10,894       10,894             -        57,997        57,997
Unrealised gains/(losses) on
investments                                 11         -        15,128       15,128             -      (15,420)      (15,420)

- ------------------------------------------------------------------------------------------------------------------------------
Gains on investments                                   -        26,022       26,022             -        42,577        42,577
Foreign exchange gains/(losses) on
non-cash balances                                      -           938          938             -         (901)         (901)
Foreign exchange gains/(losses) on
cash balances                                        178         (630)        (452)          (17)           591           574
Income                                       2     6,857             -        6,857         3,385             -         3,385
Expenses                                  3/23   (7,642)       (3,357)     (10,999)       (4,065)             -       (4,065)

- ------------------------------------------------------------------------------------------------------------------------------
Net (deficit)/return before finance
costs and taxation                                 (607)        22,973       22,366         (697)        42,267        41,570
Interest payable and similar charges         6   (5,106)             -      (5,106)       (1,523)             -       (1,523)

- ------------------------------------------------------------------------------------------------------------------------------
Net (deficit)/return on ordinary
activities before taxation                       (5,713)        22,973       17,260       (2,220)        42,267        40,047
Tax on ordinary activities                   7       182             -          182            36             -            36

- ------------------------------------------------------------------------------------------------------------------------------
(Deficit)/return on ordinary
activities after tax for the period              (5,531)        22,973       17,442       (2,184)        42,267        40,083
Minority interest - equity                             -          (66)         (66)           (1)            23            22

- ------------------------------------------------------------------------------------------------------------------------------
(Deficit)/return on ordinary
activities after tax and minority
interest for the period attributable
to equity shareholders                           (5,531)        22,907       17,376       (2,185)        42,290        40,105
Dividends                                    8         -             -            -             -             -             -

- ------------------------------------------------------------------------------------------------------------------------------
Transfer (from)/to reserves                      (5,531)        22,907       17,376       (2,185)        42,290        40,105

- ------------------------------------------------------------------------------------------------------------------------------
Return per ordinary share                    9   (5.32)p        22.02p       16.70p       (2.14)p        41.35p        39.21p
Return per ordinary share - diluted          9   (5.32)p                                  (2.14)p
</TABLE>


The notes on pages 37 to 54 form an integral part of these accounts.

The revenue column of this  statement is the  consolidated  profit and loss
account of the Group.  All revenue and capital items in the above statement
derive from continuing operations. No operations were discontinued in the year.


                                       33

Company Statement of Total Return
(incorporating the Revenue Account)
<TABLE>
<CAPTION>


                                                           For the year ended                     For the six months ended
                                                            31 December 2003                          31 December 2002
                                                 Revenue       Capital        Total       Revenue       Capital         Total
                                     Notes       GBP'000       GBP'000      GBP'000       GBP'000       GBP'000       GBP'000
<S>                                    <C>           <C>           <C>          <C>           <C>           <C>           <C>
Realised gains on investments           11             -        10,255       10,255             -        57,969        57,969
Unrealised gains/(losses) on
investments                             11             -        15,717       15,717             -      (15,300)      (15,300)

- ------------------------------------------------------------------------------------------------------------------------------
Gains on investments                                   -        25,972       25,972             -        42,669        42,669
Foreign exchange gains/(losses) on
non-cash balances                                      -           938          938             -         (901)         (901)
Foreign exchange (losses)/gains on
cash balances                                          -         (599)        (599)             -           629           629
Income                                   2         1,144             -        1,144           521             -           521
Expenses                              3/23       (1,154)       (3,357)      (4,511)         (755)             -         (755)

- ------------------------------------------------------------------------------------------------------------------------------
Net (deficit)/return before
finance costs and taxation                          (10)        22,954       22,944         (234)        42,397        42,163
Interest payable and similar
charges                                  6       (5,106)             -      (5,106)       (1,522)             -       (1,522)

- ------------------------------------------------------------------------------------------------------------------------------
Net (deficit)/return on ordinary
activities before taxation                       (5,116)        22,954       17,838       (1,756)        42,397        40,641
Tax on ordinary activities               7           138             -          138           (1)             -           (1)

- ------------------------------------------------------------------------------------------------------------------------------
(Deficit)/return on ordinary
activities after tax for the period              (4,978)        22,954       17,976       (1,757)        42,397        40,640
Dividends                                8             -             -            -             -             -             -

- ------------------------------------------------------------------------------------------------------------------------------
Transfer (from)/to reserves                      (4,978)        22,954       17,976       (1,757)        42,397        40,640

- ------------------------------------------------------------------------------------------------------------------------------
Return per ordinary share                9       (4.79)p        22.07p       17.28p       (1.72)p        41.46p        39.74p
Return per ordinary share - diluted      9       (4.79)p                                  (1.72)p
</TABLE>


The notes on pages 37 to 54 form an integral part of these accounts.

The revenue column of this  statement is the Company's  profit and loss account.
All revenue and capital items in the above  statement derive from continuing
operations. No operations were discontinued in the year.

                                       34

Balance Sheets
<TABLE>
<CAPTION>

                                                                        At 31 December 2003               At 31 December 2002
                                                                        Group       Company                Group      Company
                                                          Notes       GBP'000       GBP'000              GBP'000      GBP'000
<S>                                                         <C>           <C>           <C>                  <C>          <C>
TANGIBLE FIXED ASSETS                                        10           399             -                  282            -
- ------------------------------------------------------------------------------------------------------------------------------
                                                                          399             -                  282            -
- ------------------------------------------------------------------------------------------------------------------------------
FIXED ASSET INVESTMENTS
Venture funds and co-investments                             11       560,287       530,794              483,959      459,043
UK listed equity funds                                       11         8,184         8,184                    -            -
Money market instruments                                     11        41,877        41,877               13,911       13,911
Investment in subsidiaries                                   13             -        35,538                    -       28,920

- ------------------------------------------------------------------------------------------------------------------------------
                                                                      610,348       616,393              497,870      501,874
- ------------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Debtors                                                      14         6,718         3,190                4,490        1,364
Cash at bank                                                            5,791           610                4,887        1,031

- ------------------------------------------------------------------------------------------------------------------------------
                                                                       12,509         3,800                9,377        2,395
- ------------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Creditors: amounts falling due within one year               15         8,111         4,297                4,783          817
- ------------------------------------------------------------------------------------------------------------------------------
NET CURRENT ASSETS/(LIABILITIES)                                        4,398         (497)                4,594        1,578
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES                                 615,145       615,896              502,746      503,452
Creditors: amounts falling due after more than one year      16        88,108        87,619               39,201       39,201
Minority interest - non-equity                                            100             -                  100            -
Minority interest - equity                                                319             -                  253            -

- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS                                                            526,618       528,277              463,192      464,251
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL AND RESERVES
Called up share capital                                      19       112,655       112,655              102,266      102,266
Share premium account                                        20        43,114        43,114                7,453        7,453
Capital redemption reserve                                   21         3,204         3,204                3,204        3,204
Share purchase reserve                                       22        92,054        92,054               92,054       92,054
Capital reserves                                             23       281,902       282,034              258,995      259,080
Revenue reserve                                              24       (6,311)       (4,784)                (780)          194
- ------------------------------------------------------------------------------------------------------------------------------
EQUITY SHAREHOLDERS' FUNDS                                   25       526,618      528,277               463,192      464,251
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value per ordinary share         - undiluted       26        467.5p       468.9p                452.9p       454.0p
                                           - diluted         26        458.7p       460.0p                445.8p       446.7p
</TABLE>


The accounts were approved by the Board of Directors on 26 March 2004 and
signed on behalf of the Board by:

John J. McLachlan
Nicholas E. H. Ferguson
Directors

The notes on pages 37 to 54 form an integral part of these accounts.

                                       35

Consolidated Cash Flow Statement
<TABLE>
<CAPTION>


                                                                                                           For the six months
                                                                                      For the year ended                ended
                                                                                        31 December 2003     31 December 2002
                                                                              Notes              GBP'000              GBP'000
<S>                                                                             <C>                  <C>                  <C>
OPERATING ACTIVITIES
Income received on investments                                                                       931                  440
Bank interest received                                                                               424                  228
Investment advisory fee income received                                                            4,442                1,857
Administrative expenses paid                                                                     (8,068)              (2,433)

- ------------------------------------------------------------------------------------------------------------------------------
Net cash (outflow)/inflow from operating activities                              27              (2,271)                   92
- ------------------------------------------------------------------------------------------------------------------------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                                                                    (2,808)              (1,801)
Loan facility finance costs                                                                      (2,361)                (634)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash outflow from returns on investments and servicing of finance                            (5,169)              (2,435)
- ------------------------------------------------------------------------------------------------------------------------------
TAXATION
Income tax recovered                                                                                 131                    -
Overseas tax suffered                                                                                (8)                 (24)
- ------------------------------------------------------------------------------------------------------------------------------
Total tax recovered/(paid)                                                                           123                 (24)
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of money market instruments                                                           (100,720)            (127,797)
Purchase of UK listed equity investments                                                         (7,477)                    -
Purchase of tangible fixed assets                                                                  (221)                 (34)
Sale of money market instruments                                                                  73,052              144,494
Calls paid                                                                                     (110,737)            (122,677)
Capital distributions received                                                                    59,426              104,510
- ------------------------------------------------------------------------------------------------------------------------------
Net cash outflow from capital expenditure and financial investment                              (86,677)              (1,504)
- -----------------------------------------------------------------------------------------------------------------------------
EQUITY DIVIDENDS PAID
Dividends                                                                                              -                    -
- ------------------------------------------------------------------------------------------------------------------------------
Total dividends paid                                                                                   -                    -
- ------------------------------------------------------------------------------------------------------------------------------
FINANCING
Drawdown from loan facility                                                      15               39,996               25,110
Repayment of loan facility                                                       15             (39,028)             (26,011)
Proceeds from ordinary share placing                                             19               47,919                    -
Issue and listing costs of ordinary shares                                                       (2,448)                    -
Proceeds from convertible bond issue                                             16               49,797                    -
Issue and listing costs of convertible bonds                                                       (886)                (218)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from financing                                                          95,350              (1,119)
- ------------------------------------------------------------------------------------------------------------------------------
NET CASH INFLOW/(OUTFLOW)                                                                          1,356              (4,990)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>



RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>

                                                                                                           For the six months
                                                                                      For the year ended                ended
                                                                                        31 December 2003      31December 2002
                                                                               Note              GBP'000              GBP'000
<S>                                                                             <C>                  <C>                  <C>
Increase/(decrease) in cash during the period                                                      1,356              (4,990)
Exchange (loss)/gain on cash balances                                                              (452)                  574
Increase in convertible bonds                                                                   (48,418)                 (49)
- ------------------------------------------------------------------------------------------------------------------------------
Change in net debt                                                                              (47,514)              (4,465)
- ------------------------------------------------------------------------------------------------------------------------------
Net debt at the beginning of the period                                                         (34,314)             (29,849)
- ------------------------------------------------------------------------------------------------------------------------------
Net debt at the end of the period                                                28             (81,828)             (34,314)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

The notes on pages 37 to 54 form an integral part of these accounts.

                                       36

Notes to the Accounts



1.  ACCOUNTING POLICIES
      A summary of the more important accounting policies is set out below:

   a) These accounts have been prepared under the historical  cost  convention
      modified to include  certain investments at valuation, and in accordance
      with  accounting  standards  applicable  in the United  Kingdom and the
      Statement  of  Recommended  Practice "Financial  Statements of Investment
      Trust  Companies".  The  accounting  policies used to prepare the
      accounts have no material variations from generally accepted accounting
      principles in the United States and those required by SEC Regulation S-X.

   b) Tangible fixed assets

      The Group's tangible fixed assets which include  telecommunications,
      leasehold improvements,  office equipment and computers are included at
      cost and are  depreciated  over their useful lives on a straight line
      basis at rates varying  between 20% and 33% per annum.

   c) Fixed asset investments

      Equity share investments,  fixed income and loan investments,  interests
      in partnerships and unit trusts, together with interests in any
      associated  undertakings  and the  investments  in the various  Schroder
      Ventures and Permira funds,  will be regarded as financial fixed assets
      as they are held for long term investment purposes.  The treatment of
      associated  undertakings in the same way as other fixed asset investments
      is in accordance with Financial Reporting Standard 9.

   d) Valuation of investments

      The Company's  investments  in the various  Schroder  Ventures and
      Permira funds are valued by the Directors at the balance sheet date by
      valuing the underlying  investments  comprising  the portfolios of the
      Schroder  Ventures and Permira funds in accordance with the valuation
      policies set out below,  as adjusted,  where  appropriate,  for other
      assets and  liabilities of the Schroder Ventures and Permira  funds.  The
      valuation  policies of the Company are  consistent  with the current
      guidelines  issued by the British  Venture  Capital Association ("BVCA"),
      which came into effect on 1 August 2003. In accordance  with these
      guidelines where, in an exceptional case, the strict  application of the
      valuation  policies set out below, would not, in the opinion of the
      Directors,  result in a fair value  being  ascribed  to an  investment,
      the  Directors  may adopt an  alternative  valuation  in accordance with
      the overriding BVCA principle that the value should be a fair one.

      Carried interest and management fees

      For the purpose of valuing the Company's  holdings in the various
      Schroder  Ventures and Permira funds,  management  fees due to Schroder
      Ventures or Permira will be accounted for on the accruals  basis.  An
      estimate of Carried  Interest,  the allocation to Schroder  Ventures or
      Permira of 20% of the  profits  arising in each Fund  calculated  by
      reference  to the  valuations  of the underlying investments,  will be
      deducted from the values of the Company's holdings.  Disclosed valuations
      of individual investee companies will, by necessity, be shown before
      deduction of Carried Interest.

   e) Income and capital gains recognition

      The  Company's  income and  capital  gains are  expected to be derived
      primarily  from  future  distributions  in respect of its holdings in
      Schroder  Ventures or Permira funds.  The Company will account for such
      distributions by reference to the underlying source of the distribution.

      Revenue  distributions  receivable  by the Company  which arise from
      dividends,  interest and other  revenue  items  through the Schroder
      Ventures  and Permira  funds will be credited to the  Company's  revenue
      account  when such income  distributions  are declared.  Investment
      income arising from directly held  investments of the Company will, in
      the case of dividends,  be included as revenue in the period in which
      they go  ex-dividend,  and,  in the case of  interest  income  which,
      together  with  interest payable and all other revenue expenses, will be
      treated on an accruals basis.

      Realised profits on capital  distributions  receivable by the Company
      which arise from the realisation of investments  within the Schroder
      Ventures and Permira funds will be credited to the Company's capital
      reserve when they are declared.

                                       37

   f) Foreign currencies

      Transactions  denominated in foreign  currencies will be translated at
      the exchange rate at the date of the  transaction.  Assets and
      liabilities  recorded in foreign  currencies will be translated into
      sterling at exchange rates at the date of the accounts. Exchange
      differences  arising from the  re-translation  of the opening net
      investments will be taken to reserves and reported in the Consolidated
      and the Company's Statement of Total Return.

      Foreign  subsidiary  financial  statements  are  translated  into
      sterling  using the  closing  rate  method  with all  exchange
      differences  taken to  reserves  and  reported  in the  Consolidated
      Statement  of Total  Return.  All  other  foreign  exchange differences
      will be included as an exchange gain or loss in capital reserve or in the
      revenue  account  depending on whether the gain or loss is of a capital
      or revenue nature respectively.

   g) Finance costs

      All finance costs are charged directly to revenue.

   h) Taxation

      Deferred  tax is provided  in  accordance  with FRS19 on all timing
      differences  that have  originated  but not  reversed by the balance
      sheet date. Deferred tax assets are only recognised to the extent that
      they are recoverable.


  i)  Basis of consolidation

      The Consolidated  Statement of Total Return and Balance Sheet include the
      financial  statements of the company and its subsidiary undertakings
      made up to the balance  sheet date using the purchase  method.  Goodwill
      arising on  consolidation  is written off against  reserves on
      acquisition.  In the Company's  accounts,  investments in subsidiary
      undertakings  are stated in accordance with the policies outlined under
      (c) above.

  j)  Capital reserves

      Capital Reserve - Realised

      The following are accounted for in this reserve:

    - gains and losses on the  realisation  of  investments  calculated by
      reference to their  carrying  value at the previous  balance
      sheet date.

    - realised exchange differences of a capital nature.

    - Other expenses of a capital nature.

      Capital Reserve - Unrealised.

      The following are accounted for in this reserve:

    - increases and decreases in the revaluation of investments held at the
      year end.

    - unrealised exchange differences of a capital nature

    - exchange differences arising on consolidation.

                                       38

2.  INCOME
<TABLE>
<CAPTION>
                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Income from money market instruments                                      454          454           267          267
    Income from venture funds and co-investments                              564          564           153          153
    Interest receivable and similar income                                    401          126           249          101
    Income from investment advisory services                                5,438            -         2,716            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                            6,857        1,144         3,385          521
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    Income arises mainly from UK assets or operations.

3.  EXPENSES
<TABLE>
<CAPTION>
                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Fees payable to Schroder Investment
    Management Limited (note 29)                                              322          322           192          192
    Directors' remuneration                                                 1,504          191           885           95
    Staff costs (note 4)                                                    3,773            -         1,746            -
    Depreciation (note 10)                                                    100            -            45            -
    General expenses                                                        1,893          605         1,146          428
    Auditors' remuneration:
    - audit                                                                    40           30            28           19
    - non-audit*                                                               10            6            23           21
    ----------------------------------------------------------------------------------------------------------------------
                                                                            7,642        1,154         4,065          755
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    *Fees for non-audit  services  relate  primarily to the  preparation and
     filing of returns with the US Securities and Exchange Commission.

4.  STAFF COSTS
<TABLE>
<CAPTION>
                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Salaries and other remuneration                                         2,924            -         1,401            -
    Social security costs                                                     442            -           237            -
    Pension costs (note 5)                                                    407            -           108            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                            3,773            -         1,746            -
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    The Company has no employees. The average number of employees employed by
    subsidiary undertakings was:
<TABLE>
<CAPTION>

                                                                                                     For the  For the six
                                                                                                  year ended months ended
                                                                                                 31 December  31 December
                                                                                                        2003         2002
                                                                                                       Group        Group
                                                                                                     GBP'000      GBP'000
    <S>                                                                                                  <C>          <C>
    Full-time employees                                                                                   20           20
    Seconded staff                                                                                         4            4
    ----------------------------------------------------------------------------------------------------------------------
                                                                                                          24           24
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       39

5.  PENSION COSTS
<TABLE>
<CAPTION>

The charge for pension costs comprises:

                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Defined benefit schemes                                                   172            -            29            -
    Money purchase schemes                                                    235            -            79            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                              407            -           108            -
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    The Group does not participate in a SVIIT Group pension scheme. Costs in
    respect of defined  benefit  schemes relate to payments due to the
    Schroders  Retirement Benefits  Scheme  ("the  Scheme") in respect of four
    employees,  including  the Company's  executive  Directors,  seconded from
    Schroder  Investment  Management Limited  to  Schroder  Ventures  (London)
    Limited  ("SVLL"),   a  wholly  owned subsidiary of the Company.  SVLL and
    the Scheme's  trustees,  taking advice from the independent actuaries,
    agree the contributions.

    In accordance with FRS 17, the scheme is accounted for as a defined
    contribution  scheme on the basis that the Group is unable to identify its
    share of the  underlying  assets and  liabilities  of the Scheme at the
    balance sheet date. Further  details of the Scheme can be found in the
    Annual Report and Accounts of Schroders  plc. In  particular,  the
    Scheme had 612 active  members in the defined  benefit  section at
    31 December 2003 and the accounts of Schroders plc disclosed a net pension
    deficit in respect of the Scheme of  GBP20.1 million,  calculated under
    FRS 17 based on interim valuations prepared by independent qualified
    actuaries.

6.  INTEREST PAYABLE AND SIMILAR CHARGES
<TABLE>
<CAPTION>
                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Convertible bond interest                                               3,050        3,050           900          900
    Amortisation of convertible bond premium,
    issue and listing costs                                                    95           95            45           45
    Loan facility finance costs                                             1,961        1,961           577          577
    Other interest                                                              -            -             1            -

    ----------------------------------------------------------------------------------------------------------------------
                                                                            5,106        5,106         1,523        1,522
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       40

7.  TAXATION
    (a) The (credit)/charge for taxation for the period is made up as follows:
<TABLE>
<CAPTION>

                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Current tax
    Corporation tax                                                             -            -             -            -
    Double taxation relief                                                      -            -             -            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                                -            -             -            -
    Income tax suffered by the venture funds                                  (9)          (9)             -            -
    Overseas tax                                                                1            1             8            1
    Prior year adjustment                                                   (174)        (130)          (44)            -
    ----------------------------------------------------------------------------------------------------------------------
    Total current tax (note 7(b))                                           (182)        (138)          (36)            1
    ----------------------------------------------------------------------------------------------------------------------

    Deferred Tax
    Deferred tax - prior year adjustment                                        -            -             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Total deferred tax                                                          -            -             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Total tax (credit)/charge                                               (182)        (138)          (36)            1
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>



    There are no profits chargeable to corporation tax in the current period.
    Excess management expenses relating to the venture fund  investments  are
    available to set against any taxable  income of the Company.  These excess
    management expenses  are  included  within the  investments  in venture
    funds in the  balance  sheet of the Company and are not reflected in the
    Company's revenue account.  If in a future year in relation to the venture
    fund investments,  income exceeds  expenses,  the  taxation  charge to the
    Company's  revenue  account  will include tax on this excess with a
    suitable note by way of explanation.

    (b) Factors affecting current tax charge for the period:

    The tax  assessed  for the period is lower than the standard  rate of
    corporation  tax in the UK for a large  company  (30%).  The differences
    are explained below:
<TABLE>
<CAPTION>

                                                                                                     For the      For the
                                                                          For the      For the    six months   six months
                                                                       year ended   year ended         ended        ended
                                                                      31 December  31 December   31 December  31 December
                                                                             2003         2003          2002         2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Deficit on ordinary activities before taxation                        (5,713)      (5,116)       (2,220)      (1,756)
    Corporation tax at 30%                                                (1,714)      (1,535)         (666)        (527)

    Effects of:
    Overseas taxation written off                                               1            1             8            1
    Non deductible expenses                                                    17            5             8            4
    Unutilised current period expenses carried forward                      1,700        1,530           625          460
    Other timing differences                                                    -            -            61           63
    Income tax recoverable on venture fund investments                        (9)          (9)             -            -
    Income of subsidiary not taxable                                          (3)            -          (28)            -
    Prior year adjustment - corporation tax                                 (174)        (130)          (44)            -
    ----------------------------------------------------------------------------------------------------------------------
    Current tax (credit)/charge for the period (Note 7(a))                  (182)        (138)          (36)            1
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       41

7.  TAXATION continued
     (c) Factors affecting future tax charges:
    The Group currently has and expects to generate  surplus tax losses. A
    deferred tax asset in respect of these surplus losses is not recognised
    because their utilisation is considered unlikely in the foreseeable future.


8.  DIVIDENDS
    No dividend has been proposed in respect of the current financial year.
    Similarly,  no dividend was declared in respect of the six months ended
    31 December 2002.


9.  RETURN PER ORDINARY SHARE
<TABLE>
<CAPTION>

                                                    For the year ended                   For the six months ended
                                                     31 December 2003                        31 December 2002
                                               Revenue       Capital        Total       Revenue      Capital        Total
    <S>                                            <C>           <C>          <C>           <C>          <C>          <C>
    Group
    ----------------------------------------------------------------------------------------------------------------------
    Return per ordinary share  - basic         (5.32)p        22.02p       16.70p       (2.14)p       41.35p       39.21p
                               - diluted       (5.32)p                                  (2.14)p
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>


    The basic revenue  return per ordinary  share is based on the net deficit
    on ordinary  activities  after taxation and minority  interests of
    GBP5,531,000  (six months ended 31 December  2002:  deficit of
    GBP2,185,000)  and on  104,018,459 ordinary  shares (six months ended
    31 December  2002:  102,265,699)  being the weighted  average  number of
    shares in issue during the year.

    The capital  return per  ordinary  share is based on the net return for the
    year of  GBP22,907,000  (six  months  ended 31 December  2002:  return of
    GBP42,290,000)  and on 104,018,459  ordinary  shares (six months ended
    31 December 2002: 102,265,699) being the weighted average number of shares
    in issue during the year.

<TABLE>
<CAPTION>

                                                    For the year ended                   For the six months ended
                                                     31 December 2003                        31 December 2002
                                               Revenue       Capital        Total       Revenue      Capital        Total
    <S>                                            <C>           <C>          <C>           <C>          <C>          <C>
    Company
    ----------------------------------------------------------------------------------------------------------------------
    Return per ordinary share  - basic         (4.79)p        22.07p       17.28p       (1.72)p       41.46p       39.74p
                               - diluted       (4.79)p                                  (1.72)p
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>


    The basic revenue  return per ordinary  share is based on the net deficit
    on ordinary  activities  after  taxation of GBP4,978,000 (six months ended
    31 December 2002: deficit of GBP1,757,000) and on 104,018,459  ordinary
    shares (six months ended 31 December 2002: 102,265,699) being the weighted
    average number of shares in issue during the year.

    The capital  return per  ordinary  share is based on the net return for the
    year of  GBP22,954,000  (six  months  ended 31 December  2002:  return of
    GBP42,397,000)  and on 104,018,459  ordinary  shares (six months ended
    31 December 2002: 102,265,699) being the weighted average number of shares
    in issue during the year.

    The  diluted  revenue  returns  per  ordinary  share for the year  ended
    31  December  2003 have been  calculated  in accordance  with FRS 14 under
    which the convertible  bonds (note 16) are regarded as dilutive if, on
    conversion,  the increased returns  attributable to equity  shareholders
    arising from the interest saved (less taxation),  divided by the  increased
    weighted  average  number of  shares,  are less than the basic  returns
    per  ordinary  share.  These calculations  assume that  conversion  of
    dilutive  potential  ordinary  shares takes place on 1 January  2003, at an
    exercise price of 399p for the 2011 Bonds and 480p for the 2013 Bonds. As
    there are revenue  losses,  the convertible bonds do not have a dilutive
    effect on revenue returns in either period.

    The diluted  revenue  returns per ordinary  share have also been calculated
    assuming the exercise of all  potential dilutive  ordinary  shares  arising
    from the share options in issue (see note 19). As there are revenue losses,
    the options do not have a dilutive effect on revenue returns in either
    period.

                                       42

10. TANGIBLE FIXED ASSETS (GROUP)
<TABLE>
<CAPTION>

                                                                                                    Telecom-
                                                                                                 munications
                                                                        Leasehold     Computer    and office
                                                                     Improvements    equipment     equipment        Total
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Cost
    At 1 January 2003                                                         150          142            99          391
    Additions                                                                   1          217             3          221
    Disposals                                                                   -          (2)             -          (2)
    Exchange translation adjustments                                          (1)          (4)           (2)          (7)
    ----------------------------------------------------------------------------------------------------------------------
    At 31 December 2003                                                       150          353           100          603
    ----------------------------------------------------------------------------------------------------------------------
    Depreciation
    At 1 January 2003                                                          35           53            21          109
    Charge for the period                                                      30           50            20          100
    Disposals                                                                   -          (1)             -          (1)
    Exchange translation                                                        -          (3)           (1)          (4)
    ----------------------------------------------------------------------------------------------------------------------
    At 31 December 2003                                                        65           99            40          204
    ----------------------------------------------------------------------------------------------------------------------
    Net book value
    At 31 December 2003                                                        85          254            60          399
    ----------------------------------------------------------------------------------------------------------------------
    At 1 January 2003                                                         115           89            78          282
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>


11. INVESTMENTS
    (a) Group
<TABLE>
<CAPTION>

                                                                Venture funds and    UK listed  Money market        Total
                                                                   co-investments equity funds   instruments    portfolio
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Cost at 1 January 2003                                                595,021            -        13,875      608,896
    Unrealised (loss)/gain at 1 January 2003                            (111,062)            -            36    (111,026)
    ----------------------------------------------------------------------------------------------------------------------
    Valuation at 1 January 2003                                           483,959            -        13,911      497,870
    Calls and purchases payable                                           110,737        8,015       100,720      219,472
    Distributions and sales receivable                                   (59,426)        (538)      (73,052)    (133,016)
    Realised gain/(loss)                                                   10,985          143         (234)       10,894
    Unrealised gain                                                        14,032          564           532       15,128
    ----------------------------------------------------------------------------------------------------------------------
    Valuation at 31 December 2003                                         560,287        8,184        41,877      610,348
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    Distributions of GBP538,000 in respect of UK listed equity funds are
    in-specie transfers to the SVIIT UK Focus Fund.


                                       43

11. INVESTMENTS continued
    Gains on investments
<TABLE>
<CAPTION>
                                                                                                                  For the
                                                                                                For the year   six months
                                                                                                       ended        ended
                                                                                                 31 December  31 December
                                                                                                        2003         2002
                                                                                                     GBP'000      GBP'000
    <S>                                                                                                  <C>          <C>
    Realised gain on investments based on historical cost                                              1,342       89,641
    Amounts recognised as unrealised previously                                                        9,552     (31,644)
    ----------------------------------------------------------------------------------------------------------------------
    Realised gain based on carrying value at previous balance sheet date                              10,894       57,997
    Net movement in unrealised gains/(losses)                                                         15,128     (15,420)
    ----------------------------------------------------------------------------------------------------------------------
    Total gains on investments                                                                        26,022       42,577
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>


    (b) Company
<TABLE>
<CAPTION>

                                                                Venture funds and    UK listed  Money market        Total
                                                                   co-investments equity funds   instruments    portfolio
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Cost at 1 January 2003                                                559,992            -        13,875      573,867
    Unrealised (loss)/gain at 1 January 2003                            (100,949)            -            36    (100,913)
    ----------------------------------------------------------------------------------------------------------------------
    Valuation at 1 January 2003                                           459,043            -        13,911      472,954
    Calls and purchases payable                                           110,643        8,015       100,720      219,378
    Distributions and sales receivable                                   (57,341)        (538)      (73,052)    (130,931)
    Realised gain/(loss)                                                   10,346          143         (234)       10,255
    Unrealised gain                                                         8,103          564           532        9,199
    ----------------------------------------------------------------------------------------------------------------------
    Valuation at 31 December 2003                                         530,794        8,184        41,877      580,855
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    Gains on investments
<TABLE>
<CAPTION>

                                                                                                                  For the
                                                                                                For the year   six months
                                                                                                       ended        ended
                                                                                                 31 December  31 December
                                                                                                        2003         2002
                                                                                                     GBP'000      GBP'000
    <S>                                                                                                  <C>          <C>
    Realised gain on investments based on historical cost                                                526       90,231
    Amounts recognised as unrealised previously                                                        9,729     (32,262)
    ----------------------------------------------------------------------------------------------------------------------
    Realised gain based on carrying value at previous balance sheet date                              10,255       57,969
    Net movement in unrealised gains/(losses)                                                          9,199     (13,160)
    ----------------------------------------------------------------------------------------------------------------------
    Total gains on investments                                                                        19,454       44,809
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    Total gains of GBP25,972,000 shown in the Statement of Total Return also
    include gains on subsidiaries  during the year of GBP6,518,000.

                                       44

12. GEOGRAPHICAL ANALYSIS OF INVESTMENTS
<TABLE>
<CAPTION>

                                                                            31 December 2003           31 December 2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Venture funds and co-investments
    Europe
    United Kingdom                                                         12,983       12,442        13,344       12,603
    France                                                                    310          310           488          488
    Germany                                                                 8,577        3,662         8,496        4,229
    Italy                                                                   1,643        1,643         1,642        1,642
    Spain                                                                   1,242        1,242           930          930
    Pan Europe                                                            396,191      395,965       315,253      315,083
    ----------------------------------------------------------------------------------------------------------------------
    Total Europe                                                          420,946      415,264       340,153      334,975
    ----------------------------------------------------------------------------------------------------------------------
    Asia
    Asia Pacific                                                           44,652       27,588        37,800       26,192
    Japan                                                                  14,625        7,919        15,918        7,835
    ----------------------------------------------------------------------------------------------------------------------
    Total Asia                                                             59,277       35,507        53,718       34,027
    ----------------------------------------------------------------------------------------------------------------------
    North America
    Canada                                                                 15,764       15,764        26,524       26,524
    United States*                                                         64,300       64,259        63,564       63,517
    ----------------------------------------------------------------------------------------------------------------------
    Total Americas                                                         80,064       80,023        90,088       90,041
    ----------------------------------------------------------------------------------------------------------------------
    Total venture funds and co-investments                                560,287      530,794       483,959      459,043
    ----------------------------------------------------------------------------------------------------------------------
    UK listed equity funds
    SVIIT UK Focus Fund                                                     8,184        8,184             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Total UK listed equity funds                                            8,184        8,184             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Money market instruments
    Sterling denominated                                                    9,960        9,960        10,000       10,000
    Euro denominated                                                       31,917       31,917         3,911        3,911
    ----------------------------------------------------------------------------------------------------------------------
    Total money market investments                                         41,877       41,877        13,911       13,911
    ----------------------------------------------------------------------------------------------------------------------
    Total Investment Portfolio                                            610,348      580,855       497,870      472,954

    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    * Schroder Ventures  International  Life Sciences Funds I and II and
      International  Life Sciences Fund III have been included within the
      United States.

    All venture funds held by the Group are unlisted.  However,  some of the
    underlying companies held within those funds are listed.  Included in the
    value of total venture funds and  co-investments of GBP560,287,000 are
    listed  investments amounting to GBP43,500,000 (31 December 2002:
    GBP26,081,000).

    Significant Interests In Investment Funds

    Details of investments  in which the Company or Group has an interest of
    10% or more of any class of share/units  are detailed in the list of
    investments  on pages 18 to 21. All of these venture funds are managed or
    advised by Permira or Schroder Ventures.

    In addition,  as at 31 December  2003,  SVIIT had a 47.9% interest in the
    SVIIT UK Focus Fund, a  Dublin-listed  OEIC managed by SVIIT Investment
    Managers Limited.

                                       45

13. INVESTMENTS IN SUBSIDIARIES
<TABLE>
<CAPTION>

                                                                                                                  For the
                                                                                               For the year    six months
                                                                                                      ended         ended
                                                                                                31 December   31 December
                                                                                                       2003          2002
                                                                                                    Company       Company
                                                                                                    GBP'000       GBP'000
    <S>                                                                                                 <C>           <C>
    Cost at the beginning of the period                                                              27,012        25,512
    Capital injection                                                                                   100         1,500
    ----------------------------------------------------------------------------------------------------------------------
    Cost at the end of the period                                                                    27,112        27,012
    Net unrealised gain on investment                                                                 8,426         1,908
    ----------------------------------------------------------------------------------------------------------------------
    Market value at the end of the period                                                            35,538        28,920
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    The Platinum  Trust is included in the Company's  balance sheet at its fair
    value of  GBP32,438,000  (31 December 2002: GBP25,920,000).  Schroder
    Ventures  (London)  Limited  ("SVLL") is included at cost of GBP3,000,000
    (31 December  2002: GBP3,000,000).  SVIIT Investment  Managers  Limited is
    included at cost of GBP100,000 (31 December 2002:  Nil).  Schroder
    Ventures North America Inc. and Schroder Ventures Boston Inc. are wholly
    owned subsidiaries of SVLL.

    Subsidiary undertakings at 31 December 2003:
<TABLE>
<CAPTION>


                                                                                                             Net revenue/
                                                                                                                (deficit)
                                                                                                                    after
                                                                                                     Capital  tax for the
                                                 Country of                 Number and                   and         year
                                               registration,                  class of           reserves at        ended
                                              incorporation               shares/units   Group   31 December  31 December
                                                        and                held by the holding          2003         2003
                                                  operation                      Group       %       GBP'000      GBP'000
    <S>                                                 <C>                        <C>     <C>           <C>          <C>
    Company and business
    The Platinum Trust (unit trust)                Guernsey        23,112,'A' units(1)      99)
    - investment                                                      900 'B' units(1)      90)       32,856           17
    Schroder Ventures (London) Limited
    - advisory and administration services                          3,000,000 Ordinary
                                                         UK                  Shares(2)     100         1,362        (570)
    Schroder Ventures North America Inc
    - broker/dealer.                                     US     3,000 Common Shares(3)     100           251           14
    Schroder Ventures Boston Inc.
    - investment advisor                                 US       100 Common Shares(4)     100             -            -
    SVIIT Investment Managers Limited
    - investment manager                                 UK 100,000 Ordinary Shares(5)     100           100            -
</TABLE>

    (1) On termination of The Platinum Trust,  the 'B' units  (non-equity) are
        entitled to a return of the original amount subscribed. The 'A' units
        (equity) are entitled to the remaining net assets.
    (2) The Company  acquired 100 ordinary GBP1 shares in Schroder  Ventures
        (London)  Limited ("SVLL") for GBP100 on 18 June 2001. On 26 June 2001,
        SVLL issued 749,900 ordinary GBP1 shares to the Company for GBP749,900.
        On 22 April 2002, SVLL issued a further  750,000  ordinary GBP1 shares
        to the Company for  GBP750,000.  On  19 December  2002,  SVLL issued a
        further 1,500,000 ordinary GBP1 shares to the Company for GBP1,500,000.
    (3) Schroder  Ventures  North America Inc.  ("SVNA") is a subsidiary  of
        SVLL.  SVLL acquired SVNA on 18 June 2001 for $50,000 and made a
        further capital injection of $250,000 in the year ended 30 June 2002.
    (4) Schroder Ventures Boston Inc. ("SVBI") is also a subsidiary of SVLL.
        SVBI commenced  operations on 1 January 2003. SVLL acquired 100 common
        $1 shares for $100 on 13 December 2002.
    (5) The Company  acquired  100  ordinary  GBP1 shares in SVIIT  Investment
        Managers  Limited  ("SVIIT  IM") for GBP100 on 16 October 2002. On
        16 May 2003, SVIIT IM issued 99,900 ordinary GBP1 shares to the Company
        for GBP99,900.

                                       46

14. DEBTORS
<TABLE>
<CAPTION>

                                                                            31 December 2003           31 December 2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Amounts falling due within one year:
    Interest receivable                                                       107          104            45           43
    Prepayments and other debtors                                           2,151        3,086         1,950        1,321
    Accrued investment advisory fee income                                  4,460            -         2,495            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                            6,718        3,190         4,490        1,364
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>

                                                                            31 December 2003           31 December 2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    Interest payable and similar charges                                      442          442           219          219
    Other creditors and accruals                                            7,669        3,855         4,564          598
    ----------------------------------------------------------------------------------------------------------------------
                                                                            8,111        4,297         4,783          817
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    The Group has in place a  multicurrency  revolving  loan facility of
    EUR285 million with the Royal Bank of Scotland and HBOS replacing the
    previous facility of EUR225 million.  During the year, the Company borrowed
    EUR56.8 million under this facility. The loans were fully repaid by
    31 December 2003.

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>

                                                                            31 December 2003           31 December 2002
                                                                            Group      Company         Group      Company
                                                                          GBP'000      GBP'000       GBP'000      GBP'000
    <S>                                                                       <C>          <C>           <C>          <C>
    4.5% Subordinated Convertible Bonds 2011                               39,400       39,400        40,000       40,000
    Unamortised issue and listing costs                                     (698)        (698)         (799)        (799)
    ----------------------------------------------------------------------------------------------------------------------
                                                                           38,702       38,702        39,201       39,201
    ----------------------------------------------------------------------------------------------------------------------
    4.5% Subordinated Convertible Bonds 2013                               49,000       49,000             -            -
    Unamortised premium, issue and listing costs                             (83)         (83)             -            -
    ----------------------------------------------------------------------------------------------------------------------
                                                                           48,917       48,917             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Deferred staff compensation                                               489            -             -            -
    ----------------------------------------------------------------------------------------------------------------------
    Total creditors due after more than one year                           88,108       87,619        39,201       39,201
    ----------------------------------------------------------------------------------------------------------------------
</TABLE>

    Creditors due after more than one year comprise GBP39.4 million nominal of
    4.5% subordinated  convertible  bonds,  which mature on 21 November 2011.
    These bonds are convertible,  at any time, into ordinary shares at a
    conversion price of 399p per share.  During the year, GBP0.6 million
    nominal of bonds were converted into 150,375 new ordinary shares.

    On 21 May 2003, the Company issued GBP40 million  nominal of 4.5%
    subordinated  convertible  bonds due 21 May 2013 to investors.  As these
    bonds were unlisted on the date their terms were fixed, there was no market
    price available. These bonds are convertible,  at any time, into ordinary
    shares at a conversion price of 480p per share.

    On 16 and 18 July 2003 and 7 August 2003, the Company issued a further
    GBP9 million nominal of 4.5%  subordinated  convertible  bonds due
    21 May 2013 to investors. The market price on these dates, was 108p, 108p
    and 114p, respectively.  These bonds are convertible, at any time, into
    ordinary shares at a conversion price of 480p per share.

    In accordance  with FRS 4 "Capital  Instruments",  issue costs and premium
    are charged to the revenue  account over the term of the capital instrument.

    FRS 13  requires  disclosure  of the fair value of debt.  The  convertible
    bonds are listed on the London  Stock  Exchange.  On 31 December 2003, the
    closing  bid-offer  spread was 114.9375p to 115.0625p for the 2011 bonds
    and 106.9375p to 107.0625p for the 2013 bonds.  This equates to a fair
    valuation range of GBP45.3 - GBP45.3 million  for the 2011 bonds and
    GBP52.4 - GBP52.5 million  for the 2013
    bonds in issue.

                                       47

17. CONTINGENT LIABILITIES
    The Company  guarantees  any  drawings  taken out by Platinum  Trust under
    the EUR285 million  loan  facility  with the Royal Bank of Scotland plc and
    HBOS plc (GBP200.8  million,  translated at the balance sheet date).  To
    date,  Platinum  Trust has made no drawings under the facility.


18. CAPITAL COMMITMENTS
    At 31 December 2003, the Group had uncalled commitments to its Fund
    investments as follows:
<TABLE>
<CAPTION>

                                                                                                   Uncalled
                                                                                                 commitment     Uncalled
                                                                                                     (local  commitment*
                                                                                                  currency)         GBPm
    <S>                                                                                                 <C>          <C>
    International Life Sciences Fund III                                                             $59.6m         33.3
    Permira Europe II                                                                             EUR130.0m         91.6
    Permira Europe III                                                                            EUR508.0m        357.9
    P123                                                                                           EUR41.9m         29.5
    Schroder Canadian Buy-Out Fund II                                                                 $0.9m          0.4
    Schroder Canadian Buy-Out Fund III                                                               $36.5m         15.8
    Schroder Ventures Asia Pacific Fund                                                              $41.9m         23.1
    Schroder Ventures International Life Sciences Fund II                                             $2.0m          1.2
    Schroder Ventures US Fund                                                                        $21.7m         12.2
    The Japan Venture Fund III                                                                    YEN487.4m          2.5
    The Japan Venture Fund IV**                                                                 YEN3,747.6m         19.5
    The Strategic Recovery Fund                                                                     GBP7.4m          7.4
    ---------------------------------------------------------------------------------------------------------------------
    Total                                                                                                          594.4
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

    *based on exchange rates at 31 December 2003.
    **based on the Company's commitment to the fund at its first closing in
      December 2003. The Company intends to commit a further YEN1,624.5m at the
      fund's final close in 2004.

    The total  commitments  shown above include GBP1.1m in relation to Funds
    held by Platinum  Trust and EUR0.1m in relation to SVLL. P123 commitments
    represent uncalled amounts due for ordinary shares.

19. SHARE CAPITAL
<TABLE>
<CAPTION>

                                                                              31 December 2003          31 December 2002
                                                                             Group      Company         Group    Company
                                                                           GBP'000      GBP'000       GBP'000    GBP'000
    <S>                                                                        <C>          <C>            <C>       <C>
    Authorised:
    200,000,000 (2002: 150,000,000) shares of GBP1.00 each                 200,000      200,000       150,000    150,000
    ---------------------------------------------------------------------------------------------------------------------
    Allotted, Called Up and Fully Paid:
    Opening balance of 102,265,699 shares of GBP1.00 each                  102,266      102,266       102,266    102,266
    Issue of ordinary shares on conversion of bonds                            150          150             -          -
    Placing of new ordinary shares                                          10,239       10,239             -          -
    ---------------------------------------------------------------------------------------------------------------------
    Closing balance of 112,655,174 shares of GBP1.00 each                  112,655      112,655       102,266    102,266
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Issue of Shares
    On 9 January 2003, the Company issued 125,313 ordinary shares on conversion
    of GBP500,000  nominal of the 2011 convertible  bonds. On 10 November 2003,
    the Company issued 25,062 ordinary shares on conversion of GBP100,000
    nominal of the 2011 convertible bonds.

    An Extraordinary  General Meeting of the Company was held on 31 October
    2003.  Shareholders  approved an increase of GBP50 million to the
    authorised share capital,  from GBP150 million to GBP200 million, and the
    allotment of equity securities up to an aggregate nominal amount of
    GBP12,798,876.  The Directors  utilised this authority to issue 10,239,100
    ordinary shares on 7 October 2003 (at GBP4.68 per share) by way of an
    underwritten placing by J.P. Morgan Securities Limited.

                                       48

19. SHARE CAPITAL continued
    Options Over Ordinary Shares
    During the year,  1,284,156  options were granted (six months ended
    31 December 2002:  none). No options were exercised  during the year and
    88,923  lapsed.  At 31  December  2003,  5,448,596  (2002:  4,253,363)
    options to  subscribe  for  ordinary  shares  were outstanding, as detailed
    below:

<TABLE>
<CAPTION>

                                                                                               31 December   31 December
                                                                                    Exercise          2003          2002
                                                                                       price        Number        Number
    Issue date                                                                     per share      in issue      in issue
    <S>                                                                                  <C>           <C>           <C>
    June 2001                                                                        410.00p     2,813,407     2,813,407
    June 2001                                                                        405.50p        28,359        28,359
    April 2002                                                                       335.00p        14,476        34,774
    April 2002                                                                       334.50p     1,333,476     1,376,823
    March 2003                                                                       397.50p        18,616             -
    March 2003                                                                       392.75p     1,183,570             -
    October 2003                                                                     493.00p        56,692             -
    ---------------------------------------------------------------------------------------------------------------------
                                                                                                 5,448,596     4,253,363
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Further details of options over the Company's  shares granted to the
    executive  Directors are given in the  Remuneration  Report on
    pages 29 to 31.


20. SHARE PREMIUM ACCOUNT
<TABLE>
<CAPTION>
                                                                           31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    Balance brought forward                                               7,453        7,453         7,453         7,453
    Premium on shares issued on conversion of bonds                         438          438             -             -
    Premium on issue of shares via placing                               35,223       35,223             -             -

    ---------------------------------------------------------------------------------------------------------------------
    Balance carried forward                                              43,114       43,114         7,453         7,453
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

21. CAPITAL REDEMPTION RESERVE
<TABLE>
<CAPTION>

                                                                           31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    ---------------------------------------------------------------------------------------------------------------------
    Balance brought forward and carried forward                           3,204        3,204         3,204         3,204
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

22. SHARE PURCHASE RESERVE
<TABLE>
<CAPTION>
                                                                          31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    ---------------------------------------------------------------------------------------------------------------------
    Balance brought forward and carried forward                          92,054       92,054        92,054        92,054

    ---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       49

23. CAPITAL RESERVES
<TABLE>
<CAPTION>

                                                                         For the year ended      For the six months ended
                                                                          31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    Realised gains brought forward                                      370,079      358,092       280,716       268,133
    Realised gains on venture fund distributions                         10,985       10,346        58,425        58,397
    Realised gains on sale of listed equities                               143          143             -             -
    Transfer on disposal                                                (9,364)      (9,768)        31,644        32,262
    Expenses charged to capital*                                        (3,357)      (3,357)             -             -
    Realised exchange (losses)/gains on currency balances                 (599)        (599)           623           629
    Realised exchange gains/(losses) on non-currency balances               938          938         (901)         (901)
    Realised exchange losses on sale of money market instruments          (234)        (234)         (428)         (428)
    ---------------------------------------------------------------------------------------------------------------------
    Realised gains carried forward                                      368,591      355,561       370,079       358,092
    ---------------------------------------------------------------------------------------------------------------------

    Unrealised losses brought forward                                 (111,084)     (99,012)      (64,011)      (51,450)
    Decrease/(Increase) in unrealised losses on venture funds            14,032        8,103      (15,456)      (13,196)
    Increase in unrealised gains on listed equities                         564          564             -             -
    Transfer on disposal                                                  9,364        9,768      (31,644)      (32,262)
    Increase/(decrease) in unrealised gains on subsidiary
    undertakings                                                              -        6,518             -       (2,140)
    Increase in unrealised exchange gains on money market
    instruments                                                             532          532            36            36
    Exchange losses on consolidation                                       (31)            -          (32)             -
    Minority interest - equity                                             (66)            -            23             -
    ---------------------------------------------------------------------------------------------------------------------
    Unrealised losses carried forward                                  (86,689)     (73,527)     (111,084)      (99,012)
    ---------------------------------------------------------------------------------------------------------------------
    Balance carried forward                                             281,902      282,034       258,995       259,080
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

    *Expenses charged to capital represent one off costs incurred on the
     establishment of P123.



24. REVENUE RESERVE
<TABLE>
<CAPTION>
                                                                         For the year ended      For the six months ended
                                                                          31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    Balance brought forward                                               (780)          194         1,405         1,951
    Transfer to revenue account                                         (5,531)      (4,978)       (2,185)       (1,757)

    ---------------------------------------------------------------------------------------------------------------------
    Balance carried forward                                             (6,311)      (4,784)         (780)           194
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       50





25. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

<TABLE>
<CAPTION>
                                                                         For the year ended      For the six months ended
                                                                          31 December 2003            31 December 2002
                                                                          Group      Company         Group       Company
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    Deficit attributable to equity shareholders                         (5,531)      (4,978)       (2,185)       (1,757)
    Dividends                                                                 -            -             -             -
    ---------------------------------------------------------------------------------------------------------------------
    Deficit on revenue account                                          (5,531)      (4,978)       (2,185)       (1,757)
    Non-distributable capital gain for the period                        22,907       22,954        42,290        42,397
    Share issue on conversion of 2011 bonds                                 150          150             -             -
    Share premium on conversion of 2011 bonds                               438          438             -             -
    Share issue on placing of new shares                                 10,239       10,239             -             -
    Share premium on placing of new shares                               35,223       35,223             -             -
    ---------------------------------------------------------------------------------------------------------------------
    Net addition to shareholders' funds                                  63,426       64,026        40,105        40,640
    Shareholders' funds brought forward                                 463,192      464,251       423,087       423,611
    ---------------------------------------------------------------------------------------------------------------------
    Shareholders' funds carried forward                                 526,618      528,277       463,192       464,251
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

26. NET ASSET VALUE PER ORDINARY SHARE
    Calculation of the net asset values per share are based on Group net assets
    of GBP526,618,000 (31 December 2002: GBP463,192,000), Company net assets of
    GBP528,277,000  (31  December  2002:  GBP464,251,000)  and  on  112,655,174
    (31 December 2002: 102,265,699) ordinary shares in issue at the year end.

    The Group and Company  diluted net asset values per share assume the GBP39.4
    million 2011 convertible bonds are converted at the balance sheet date at an
    exercise  price  of 399p  into  9,874,687  new  shares  (31  December  2002:
    10,025,062 new shares).  The GBP49.0 million 2013 convertible  bonds are not
    dilutive as their exercise price of 480p exceeds the Company's undiluted net
    asset value per share at the year end.

    The Group and Company  diluted  net asset  values per share also assume that
    share  options  (note 19) with a strike price lower than the  undiluted  net
    asset value per share are  exercised at the balance  sheet date.  This would
    result  in the  issue  of  5,391,904  ordinary  shares  (31  December  2002:
    4,253,363)   for   consideration   of   GBP20,881,000   (31 December   2002:
    GBP16,372,000).

    Therefore,  the  calculation  of the diluted net asset  values per share are
    based  on  Group   net   assets   of   GBP586,899,000   (31 December   2002:
    GBP519,564,000),  Company net assets of  GBP588,558,000  (31 December  2002:
    GBP520,623,000)  and on  127,921,765  ordinary  shares  (31  December  2002:
    116,544,124) in issue at the year end.


27. RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOW)/INFLOW FROM
    OPERATING ACTIVITIES

<TABLE>
<CAPTION>
                                                                                                                 For the
                                                                                              For the year    six months
                                                                                                     ended         ended
                                                                                               31 December   31 December
                                                                                                      2003          2002
                                                                                                     Group         Group
                                                                                                   GBP'000       GBP'000
    <S>                                                                                                <C>           <C>
    Net deficit before finance costs and taxation                                                    (607)         (697)
    Foreign exchange losses/(gains) credited to the revenue account                                  (178)            17
    Increase in accrued income                                                                     (1,059)         (861)
    Increase in debtors                                                                              (813)          (24)
    Increase in creditors                                                                              386         1,657
    ---------------------------------------------------------------------------------------------------------------------
    Net cash (outflow)/inflow from operating activities                                            (2,271)            92
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       51

<PAGE>

28. ANALYSIS OF CHANGES IN NET DEBT

<TABLE>
<CAPTION>

                                    At                                 At          At                                 At
                             1 January   Exchange             31 December      1 July    Exchange            31 December
                                  2003       Loss   Cash Flow        2003        2002        Gain  Cash Flow        2002
                               GBP'000    GBP'000     GBP'000     GBP'000     GBP'000     GBP'000    GBP'000     GBP'000
    <S>                            <C>        <C>         <C>         <C>         <C>         <C>        <C>         <C>
    Cash at bank                 4,887      (452)       1,356       5,791       9,303         574    (4,990)       4,887
    Debt due:
    Within one year                  -          -           -           -           -           -          -           -
    After more than one
    year                      (39,201)          -    (48,418)    (87,619)    (39,152)           -       (49)    (39,201)
    ---------------------------------------------------------------------------------------------------------------------
    Net debt                  (34,314)      (452)    (47,062)    (81,828)    (29,849)         574    (5,039)    (34,314)
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

29. RELATED PARTY TRANSACTIONS
    The Company has appointed Schroder Investment  Management Limited ("SIM"), a
    wholly owned subsidiary of Schroders plc, to provide company secretarial and
    administrative  services. Under the terms of this agreement, SIM is entitled
    to receive an annual fee equal to the greater of GBP75,000 or the  aggregate
    of (i) 0.12% per annum of the first GBP50 million of net assets,  (ii) 0.06%
    per annum of the next GBP50  million  of such net assets and (iii)  0.04% of
    the  remaining net assets.  The agreement is subject to a four-month  notice
    period.  The total  fees,  including  VAT,  paid or payable to SIM for these
    services  in respect of the year to 31  December  2003 was  GBP280,000  (six
    months to 31 December 2002: GBP144,000), of which GBP146,000 was outstanding
    at the balance sheet date. In addition,  SIM receives fees for the provision
    of taxation  services to the Company.  The total fees paid or payable to SIM
    for these  services in respect of the year to 31 December 2003 was GBP22,000
    (six months to 31 December 2002: GBP11,000), all of which was outstanding at
    the balance sheet date.

    In consideration for its management of the Company's money market portfolio,
    SIM  receives a fee based on the average  value of the  Company's  month-end
    cash and money market portfolio,  excluding funds managed by SIM, calculated
    at the rate of 0.10% per annum on the first GBP75  million of assets,  0.05%
    on the next GBP75 million and 0.03% thereafter,  subject to a minimum fee of
    GBP20,000  per annum.  The total fees,  including  VAT,  paid or payable for
    these services in respect of the year to 31 December 2003 was GBP20,000 (six
    months to 31 December 2002:  GBP18,000);  of which GBP10,000 was outstanding
    at the balance sheet date. At 31 December 2003,  SVIIT held an investment of
    GBP9.96 million in the Schroder Offshore Cash Fund and GBP31.92 million in a
    Royal Bank of Scotland International euro Money Market Fund.

    SIM has also facilitated  investment trust dealing services.  The total cost
    to the Company of this service,  payable to Lloyds TSB  Registrars,  for the
    year to 31 December  2003 was  GBP12,000  (six  months to 31 December  2002:
    GBP12,000).

    On 22 April 2002,  Schroders  Ventures (London) Limited  ("SVLL"),  a wholly
    owned  subsidiary of Schroder  Ventures  International  Investment Trust plc
    ("SVIIT"),  assigned a debt in respect  of a future  revenue  stream of GBP1
    million due from Schroder Investment  Management (Ireland) Limited ("SIMIL")
    to SVIIT for  consideration  of GBP1  million.  At the beginning of the year
    under review, GBP662,000 remained outstanding which was repaid in full by 29
    October  2003.  On 8 May 2003,  SVLL assigned a further debt in respect of a
    future  revenue  stream  for  EUR2.28  million  due from  SIML to SVIIT  for
    consideration of EUR2.28 million. At the balance sheet date EUR1,972,000 was
    outstanding.

    For the purposes of monitoring  the funds and  investments as shown on pages
    18 to 21, John  McLachlan and Nicholas  Ferguson are members of the Advisory
    Committees  of certain of the Schroder  Ventures' and Permira funds in which
    the Company invests.

    Nicholas  Ferguson  and  members of his family and Andrew  Williams  have an
    interest  in the  Carried  Interest  in respect of certain  Funds.  With the
    introduction  of the  Executive  Share  Option  Plan in May  2001,  Nicholas
    Ferguson  and  Andrew  Williams  gave up a portion of their  entitlement  to
    Carried  Interest on  existing  Funds and any  entitlement  they may have to
    Carried Interest on future Schroder  Ventures or Permira funds in return for
    share options  granted by the Company under the Executive Share Option Plan.
    Nicholas  Ferguson  and Andrew  Williams  also  participate  in the Schroder
    Ventures Co-Investment Scheme and Schroder Ventures Investments Limited.

                                       52



30. RISK

    The  following  disclosures  relating  to the risks faced by the company are
    provided in accordance with Financial  Reporting  Standard 13,  "Derivatives
    and other financial instruments disclosures".

    Financial instruments and risk profile
    The  Company's  principal   investment   objective  is  to  achieve  capital
    appreciation by investing primarily in an international portfolio of buy-out
    and  development  capital  funds,  which are  managed or advised by Schroder
    Ventures or Permira.  These investments are typically illiquid. In addition,
    the Company holds money market instruments, cash and short-term deposits and
    various  items such as debtors and  creditors  that arise  directly from its
    operations.  These financial  instruments  held by the Company are generally
    liquid.

    The holding of securities,  investing  activities  and associated  financing
    undertaken  pursuant to this  objective  involves  certain  inherent  risks.
    Events may occur that would  result in either a reduction  in the  Company's
    net assets or a reduction of revenue profits available for dividend.

    As an investment trust, the Company invests in securities for the long term.
    The Company has not taken out any derivatives contracts to date.

    Currency risk
    The Company is exposed to currency risk  directly  since the majority of its
    assets  and  liabilities  are  denominated  in  foreign  currency  and their
    sterling  value  can be  significantly  affected  by  movements  in  foreign
    exchange rates. The Company does not normally hedge against foreign currency
    movements affecting the value of its investments,  but takes account of this
    risk when making investment decisions.  The Company does have a EUR285m loan
    facility which, if drawn,  would act as a hedge against the currency risk on
    the value of its euro-denominated assets.

    Financial assets of the Group

<TABLE>
<CAPTION>

                                                                       Floating        Fixed  Non-interest
                                                                           Rate         Rate       Bearing         Total
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    <S>                                                                     <C>          <C>           <C>           <C>
    Currency denomination of assets at 31 December 2003:
    Sterling                                                             15,680            -        26,430        42,110
    Euro                                                                 31,943            -       409,415       441,358
    US dollar                                                                29            -       108,952       108,981
    Japanese yen                                                              -            -        14,625        14,625
    Canadian dollar                                                          16            -        15,767        15,783
    ---------------------------------------------------------------------------------------------------------------------
                                                                         47,668            -       575,189       622,857
    ---------------------------------------------------------------------------------------------------------------------


                                                                       Floating        Fixed  Non-interest
                                                                           Rate         Rate       Bearing         Total
                                                                        GBP'000      GBP'000       GBP'000       GBP'000
    Currency denomination of assets at 31 December 2002:
    Sterling                                                             14,765            -        17,834        32,599
    Euro                                                                  3,989            -       326,809       330,798
    US dollar                                                                31            -       101,364       101,395
    Japanese yen                                                              -            -        15,918        15,918
    Canadian dollar                                                          13            -        26,524        26,537
    ---------------------------------------------------------------------------------------------------------------------
                                                                         18,798            -       488,449       507,247
    ---------------------------------------------------------------------------------------------------------------------
</TABLE>

    Floating rate assets consist of short-term  deposits and money market funds.
    Non-interest  bearing  assets  represent the Funds and  co-investments,  and
    other short-term debtors. The Company did not hold any fixed rate assets.

                                       53



30. RISK CONTINUED

    Financial liabilities of the Group
    The Company  issued  GBP40.0  million  nominal of 10 year 4.5%  subordinated
    convertible  bonds in November 2001, of which GBP0.5m  nominal was converted
    into  ordinary  shares on 9 January 2003 and GBP0.1m  nominal was  converted
    into  ordinary  shares on 10 November  2003.  The  Company  issued a further
    GBP49.0 million nominal of 10 year 4.5%  subordinated  convertible  bonds in
    the current  year.  The Company  does not have any other  borrowings  at the
    balance sheet date, although it does have in place a loan facility of EUR285
    million with The Royal Bank of Scotland plc and HBOS plc.

    The main risk arising from the Company's financial  instruments is valuation
    risk.  The  Board  reviews  and  agrees  policy  for  managing  this risk as
    summarised below. This policy has remained substantially unchanged since the
    launch of the Company.

    Interest rate risk
    The  Company's  revenue will be affected by changes in  prevailing  interest
    rates since the majority of its income derives from money market instruments
    and bank deposit  interest.  It also pays interest on short-term  loans that
    may be taken out from time to time.  The effect of interest  rate changes on
    the valuation of investments and debt forms part of valuation risk, which is
    considered separately below.

    Valuation risk
    The Company's  exposure to valuation risk comprises  mainly movements in the
    value of its  underlying  investments.  A breakdown of the Fund portfolio is
    given  on pages  18 to 21 and a  detailed  analysis  of the  twenty  largest
    underlying  companies  is given on pages 13 to 17.  In  accordance  with the
    Company's  accounting  policies,  set out on pages 37 and 38, all underlying
    investments  are valued by the  Directors  in  accordance  with the  current
    guidelines  issued by the  British  Venture  Capital  Association  ("BVCA"),
    adopting the overriding  BVCA principle that the value should be a fair one.
    The  Company  does  not  hedge  against  movements  in the  value  of  these
    investments.  Uncertainty  arises  as a  result  of  future  changes  in the
    valuation of the Company's underlying investments, the majority of which are
    unquoted,  and the effect changes in exchange rates may have in the sterling
    value of these  investments.  Development Stage Equity Investments and Early
    Stage Equity  Investments,  by their nature,  involve  uncertainty as to the
    ultimate  value likely to be realised on the disposal of those  investments,
    particularly  as their  unquoted  nature  means that a ready  market may not
    exist for them.

    The Company's  sensitivity  to valuation risk will be affected by changes in
    levels of borrowing and liquidity,  as approved by the Board. At 31 December
    2003,  a 10%  movement  in the  valuation  of the  Group's  Fund  portfolio,
    including UK listed equity funds, and co-investments would result in a 10.8%
    change in net asset value per share.

    The Directors believe that the diversified nature of the Company's portfolio
    and the number of underlying  investments in the Funds significantly reduces
    the risks  normally  associated  with making  investments in the buy-out and
    development capital markets.

    Holdings risk
    In certain  circumstances,  the Company may wish to transfer its holdings in
    particular  Funds.  In a  majority  of the Funds in which the  Company  will
    invest,  the general  partner,  trustee or manager has the  ultimate  right,
    similar to that  exercisable by a board of a private  company,  to refuse to
    register  the  transfer of an  interest.  While the Company has no reason to
    believe that any request for the  transfer of an interest  would be refused,
    it is of  course  conceivable  that  the  general  partner's,  trustee's  or
    manager's overriding fiduciary duty could result in its refusing to register
    a particular transfer proposed by the Company.

    If as a consequence  of a failure to pay a call, the Company is treated as a
    defaulting  investor  under the  relevant  Fund,  it will suffer a resultant
    dilution in interest and possibly the compulsory sale of its interest.

    Commitment risk
    The nature of investing in buy-out and  development  capital  funds  entails
    making  significant  financial  commitments,  as  shown  in note  18.  At 31
    December 2003, the Group had  significant  uncalled  commitments of GBP594.4
    million,  compared to its consolidated net assets of GBP526.6 million. It is
    anticipated  that  over  the  longer-term,   and  in  normal  circumstances,
    commitments  would be financed by distributions  received on the realisation
    of existing  investments.  In addition,  the Group has a EUR285 million loan
    facility  that  could be  drawn on to meet  commitments  as they  fall  due.
    However,  a residual risk remains that the Group could be unable to meet its
    future commitments in full.

                                       54

<PAGE>


Consolidated Statement of Total Return - in Euros
(translated into euros - unaudited)

<TABLE>
<CAPTION>

                                                For the year ended                   For the six months ended
                                                  31 December 2003                         31 December 2002
                                            Revenue       Capital         Total      Revenue       Capital         Total
                                            EUR'000       EUR'000       EUR'000      EUR'000       EUR'000       EUR'000
<S>                                             <C>           <C>           <C>          <C>           <C>           <C>
Realised gains on investments                     -        15,794        15,794            -        91,003        91,003
Unrealised gains/(losses) on
investments                                       -        21,931        21,931            -      (24,196)      (24,196)
- -------------------------------------------------------------------------------------------------------------------------
Gains on investments                              -        37,725        37,725            -        66,807        66,807
Foreign exchange gains/(losses) on
non cash balances                                 -         1,360         1,360            -       (1,414)       (1,414)
Foreign exchange gains/(losses) on
cash balances                                   258         (913)         (655)         (27)           928           901
Income                                        9,940             -         9,940        5,312             -         5,312
Expenses                                   (11,079)       (4,867)      (15,946)      (6,378)             -       (6,378)
- -------------------------------------------------------------------------------------------------------------------------
Net (deficit)/return before finance           (881)        33,305        32,424      (1,093)        66,321        65,228
costs and taxation
Interest payable and similar charges        (7,402)             -       (7,402)      (2,390)             -       (2,390)
Net (deficit)/return on ordinary
activities before taxation                  (8,283)        33,305        25,022      (3,483)        66,321        62,838
Tax on ordinary activities                      264             -           264           56             -            56
- -------------------------------------------------------------------------------------------------------------------------
(Deficit)/return on ordinary                (8,019)        33,305        25,286      (3,427)        66,321        62,894
activities after tax for the period
Minority interest - equity                        -          (96)          (96)          (2)            36            34
- -------------------------------------------------------------------------------------------------------------------------
(Deficit)/return on ordinary                (8,019)        33,209        25,190      (3,429)        66,357        62,928
activities after tax and minority
interest for the period attributable
to equity shareholders
Dividends                                         -             -             -            -             -             -
- -------------------------------------------------------------------------------------------------------------------------
                                            (8,019)        33,209        25,190      (3,429)        66,357        62,928
Exchange gain/(loss) on translation             259      (30,484)      (30,225)           62       (3,468)       (3,406)
- -------------------------------------------------------------------------------------------------------------------------
Transfer (from)/to reserves                 (7,760)         2,725       (5,035)      (3,367)        62,889        59,522
- -------------------------------------------------------------------------------------------------------------------------
Return per ordinary share                 EUR(0.08)       EUR0.32       EUR0.24    EUR(0.03)       EUR0.65       EUR0.62


</TABLE>

The information on pages 55 to 57 is for illustrative purposes and does not form
part of the  audited  financial  statements.  The returns for the year have been
translated  into euros at an average rate of GBP1:  EUR1.4497  (six months ended
31 December 2002: GBP1: EUR1.5691).

                                       55
<PAGE>


Balance Sheets - in Euros
(translated into euros - unaudited)

<TABLE>
<CAPTION>

                                                           At 31 December 2003                      At 31 December 2002
                                                           Group       Company                       Group      Company
                                                         EUR'000       EUR'000                     EUR'000      EUR'000
<S>                                                          <C>           <C>                         <C>          <C>
TANGIBLE FIXED ASSETS                                        566             -                         433            -
- ------------------------------------------------------------------------------------------------------------------------
                                                             566             -                         433            -
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENTS
Venture funds and co-investments                         795,159       753,303                     742,490      704,264
UK listed equity funds                                    11,615        11,615                           -            -
Money market instruments                                  59,432        59,432                      21,342       21,342
Investment in subsidiaries                                     -        50,436                           -       44,369
- ------------------------------------------------------------------------------------------------------------------------
                                                         866,206       874,786                     763,832      769,975
- ------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Debtors                                                    9,534         4,527                       6,887        2,091
Cash at bank                                               8,219           866                       7,498        1,582
- ------------------------------------------------------------------------------------------------------------------------
                                                          17,753         5,393                      14,385        3,673
- ------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Creditors: amounts falling due within one year            11,511         6,099                       7,338        1,252
- ------------------------------------------------------------------------------------------------------------------------
NET CURRENT ASSETS/(LIABILITIES)                           6,242         (706)                       7,047        2,421
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES                    873,014       874,080                     771,312      772,396
Creditors: amounts falling due after more than           125,043       124,349                      60,142       60,142
one year
Minority interest - non-equity                               142             -                         153            -
Minority interest - equity                                   453             -                         388            -
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS                                               747,376       749,731                     710,629      712,254
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL AND RESERVES
Called up share capital                                  159,880       159,880                     156,896      156,896
Share premium account                                     61,187        61,187                      11,434       11,434
Capital redemption reserve                                 4,547         4,547                       4,916        4,916
Share purchase reserve                                   130,643       130,643                     141,229      141,229
Capital reserve                                          400,076       400,263                     397,351      397,481
Revenue reserve                                          (8,957)       (6,789)                     (1,197)          298
- ------------------------------------------------------------------------------------------------------------------------
EQUITY SHAREHOLDERS' FUNDS                               747,376       749,731                     710,629      712,254
- ------------------------------------------------------------------------------------------------------------------------
Net asset value per ordinary share                       EUR6.63                                   EUR6.95
</TABLE>

The information on pages 55 to 57 is for illustrative purposes and does not form
part of the audited  financial  statements.  The consolidated  balance sheet has
been translated into euros at a rate of GBP1: EUR1.4192 (31 December 2002: GBP1:
EUR1.5342), being the closing exchange rate on the balance sheet date.

                                       56



Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)

<TABLE>
<CAPTION>

                                                                                                     For the six months
                                                                                 For the year ended               ended
                                                                                   31 December 2003    31 December 2002
                                                                                            EUR'000             EUR'000
<S>                                                                                             <C>                 <C>
OPERATING ACTIVITIES
Income received on investments                                                                1,350                 690
Bank interest received                                                                          615                 358
Investment advisory fee income received                                                       6,440               2,914
Administrative expenses paid                                                               (11,697)             (3,818)
- ------------------------------------------------------------------------------------------------------------------------
Net cash (outflow)/inflow from operating activities                                         (3,292)                 144
- ------------------------------------------------------------------------------------------------------------------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                                                               (4,071)             (2,826)
Loan facility finance costs                                                                 (3,423)               (995)
- ------------------------------------------------------------------------------------------------------------------------
Net cash outflow from returns on investments and servicing of finance                       (7,494)             (3,821)
- ------------------------------------------------------------------------------------------------------------------------
TAXATION
Income tax recovered                                                                            190                   -
Overseas tax suffered                                                                          (12)                (38)
- ------------------------------------------------------------------------------------------------------------------------
Total tax recovered/(paid)                                                                      178                (38)
- ------------------------------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of money market instruments                                                      (146,018)           (200,526)
Purchase of UK listed equity investments                                                   (10,840)                   -
Purchase of tangible fixed assets                                                             (320)                (53)
Sale of money market instruments                                                            105,907             226,726
Calls paid                                                                                (160,541)           (192,493)
Capital distributions received                                                               86,153             163,987
- ------------------------------------------------------------------------------------------------------------------------
Net cash outflow from capital expenditure and financial investment                        (125,659)             (2,359)
- ------------------------------------------------------------------------------------------------------------------------
EQUITY DIVIDENDS PAID
Dividends                                                                                         -                   -
- ------------------------------------------------------------------------------------------------------------------------
Total dividends paid                                                                              -                   -
- ------------------------------------------------------------------------------------------------------------------------
FINANCING
Drawdown from loan facility                                                                  57,984              39,400
Repayment of loan facility                                                                 (56,581)            (40,814)
Proceeds from ordinary share placing                                                         69,470                   -
Issue and listing costs of ordinary shares                                                  (3,549)                   -
Proceeds from convertible bond issue                                                         72,193                   -
Issue and listing costs of convertible bonds                                                (1,284)               (342)
- ------------------------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from financing                                                    138,233             (1,756)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH INFLOW/(OUTFLOW)                                                                     1,966             (7,830)
- ------------------------------------------------------------------------------------------------------------------------

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
                                                                                                     For the six months
                                                                                 For the year ended               ended
                                                                                   31 December 2002    31 December 2002
                                                                                            EUR'000             EUR'000
Increase/(decrease) in cash during the period                                                 1,966             (7,830)
Exchange (loss)/gain on cash balances                                                         (655)                 901
Exchange movement on translation                                                              (590)                 434
Increase in convertible bonds                                                              (64,207)                (80)
- ------------------------------------------------------------------------------------------------------------------------
Change in net debt                                                                         (63,486)             (6,575)
Net debt at the beginning of the period                                                    (52,644)            (46,069)
- ------------------------------------------------------------------------------------------------------------------------
Net debt at the end of the period                                                         (116,130)            (52,644)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

The information on pages 55 to 57 is for illustrative purposes and does not form
part of the audited financial statements.  The cash flows for the year have been
translated  into euros at an average rate of GBP1:  EUR1.4497  (six months ended
31 December 2002: GBP1: EUR1.5691).

                                       57




Company Summary

THE COMPANY
Schroder Ventures  International  Investment Trust plc carries on business as an
investment  trust and it is listed on the London Stock  Exchange.  The Company's
principal  investment  objective is to achieve capital appreciation by investing
primarily  in an  international  portfolio  of buy-out and  development  capital
funds,  which are  managed  or  advised by  Permira  or  Schroder  Ventures.  To
complement this  investment  objective and create capital and income streams for
the Company, its fund advisory business structures, markets, manages and advises
products for  investment in private  equity,  and in public equity using private
equity techniques.

Investment trust companies are able to switch investments  without liability for
capital gains tax. This, together with the advantages of professional management
and spread of risk, makes investment trusts a valuable investment medium.

In order to obtain  exemption from capital gains tax the Company conducts itself
with a view to being an approved  investment  trust for the  purposes of Section
842 of the United  Kingdom Income and  Corporation  Taxes Act 1988 (as amended).
The Company is not a close company for taxation purposes.


INFORMATION FOR SHAREHOLDERS
The Company's shares and Subordinated Convertible bonds are listed on the London
Stock Exchange.  The stock exchange code for the shares is SVI and for the bonds
are SVIC and SVIE.  The price of the  shares  is quoted  daily in the  Financial
Times, The Daily Telegraph and The Times.

Real time share  information  for the Shares is  available on the FT Cityline by
dialling: 0906 843 1432. Calls are charged at 60p per minute at all times.

The net asset value is calculated at 30 June and 31 December each year following
an  extensive  valuation   procedure.   Due  to  the  nature  of  the  Company's
investments,  it is not  practicable  to publish  the net asset  value on a more
frequent basis.

A  factsheet  containing   information  including  the  diversification  of  the
portfolio and the Company's  largest  investments is published  quarterly and is
available on request from the Secretary.


WEB SITE
The  Company's  dedicated  Web Site may be  found at  www.sviit.co.uk.  The site
contains  details of all press  releases  published by the Company,  share price
information,  copies of the Annual  Report and Accounts  and Interim  Report and
Accounts, and a Newssheet which incorporates information on recent transactions,
a  comprehensive  analysis  of  the  Company's  Portfolio  and  detailed  market
commentary. The News sheet is distributed to the shareholders of the Company.


CAPITAL GAINS TAX INFORMATION
For the  2004/2005  tax year,  the annual  capital  gains (after  adjusting  for
indexation  and taper  relief)  of  private  individuals  in excess of  GBP8,200
(2003/2004: GBP7,900) are assessed for capital gains tax.

Capital  gains on shares  disposed of by  individuals  may be eligible for taper
relief.  The taper reduces the amount of a chargeable gain according to how long
the asset has been held for periods after 5 April 1998.

Where shares were  acquired  before 6 April 1998,  the capital gain will also be
reduced  by  indexation  allowance  for the  period  up to April  1998,  but not
thereafter.

For the benefit of those  shareholders  who acquired  their holdings in exchange
for their interests in Schroder  Ventures'  funds,  the acquisition  cost of the
shares for capital gains tax purposes based upon initial dealings on 23 May 1996
was as follows:

Each ordinary share of GBP1: 191.50p.

The acquisition cost of the Subordinated Convertible bonds for capital gains tax
purposes  based upon the  original  purchase  price,  at initial  issue,  was as
follows:

Each  4  1/2%  Subordinated   Convertible  Bond  of  GBP100,000  nominal  value:
GBP100,000.



                                       58


SCHRODER INVESTMENT TRUST DEALING SERVICE
The Schroder  Investment  Trust Dealing  Service  provides a convenient and cost
effective means of investing in the ordinary shares of the Company.  The Service
offers investors:

- -     a regular investment option from a minimum of GBP50 per month

- -     a lump sum investment option from a minimum of GBP1,000

- -     daily dealing

- -     competitive charges

- -     the option to reinvest income.

Other  investment  trusts which are available  through this service are Schroder
AsiaPacific  Fund plc,  Schroder  Income Growth Fund plc,  Schroder Japan Growth
Fund plc,  Schroder Split Investment Fund plc,  Schroder Split ZDP plc, Schroder
UK Growth  Fund plc,  Schroder  UK Mid and Small Cap Fund plc and  International
Biotechnology Trust plc.


INDIVIDUAL SAVINGS ACCOUNT - SCHRODER MAXI ISA PLAN
The Schroder ISA offers investors:

- -   lump sum investments in the ordinary shares of the Company from a minimum
      of GBP1,000 to a maximum of GBP7,000 in the current tax year

- -   a regular investment option from a minimum of GBP50 per month

- -   competitive charges

- -   the option to reinvest income

- -   the option to include other trusts.

If you would  like  further  information  about the  Schroder  Investment  Trust
Dealing  Service or the Schroder Maxi ISA,  please  contact the Secretary of the
Company at 31 Gresham Street, London EC2V 7QA or call Schroder Investor Services
on freephone 0800 718 777.

REGISTRAR SERVICES
Communications  with  shareholders  are mailed to the address  held on the share
register. Any notifications and enquiries relating to registered share holdings,
including  a change of address or other  amendment  should be directed to Lloyds
TSB Registrars Scotland at PO Box 28448,  Finance House, Orchard Brae, Edinburgh
EH4 1WQ.  The helpline  telephone  number of Lloyds TSB  Registrars  is 0870 601
5366.

Lloyds  TSB  Registrars  Scotland  maintain  a  web-based  enquiry  service  for
shareholders.   Currently  the   "Shareview"   site  (address   below)  contains
information available on public registers. Shareholders will be invited to enter
their name,  shareholder  reference  (account  number) and post code and will be
able to view information on their own holding.

Visit www.shareview.co.uk for more details.

JP Morgan Chase Bank act as Registrar for the  Subordinated  Convertible  bonds.
Any  notifications  and enquiries  relating to  Subordinated  Convertible  Bonds
should be directed to JP Morgan Chase Bank, Trinity Tower, 9 Thomas More Street,
London E1N 1YT.


                                       59





Information for Shareholders


FINANCIAL CALENDAR
31 December               Company's year end

March                     Preliminary results for the financial year announced

March                     Annual Report published

April                     Annual General Meeting

September                 Interim Results announced

October                   Interim Report published




ANALYSIS OF REGISTER OF SHAREHOLDERS
                                                                          Shares
                                                                               %
At 31 December 2003
% of issued shares held by:
Private individuals                                                         0.98
Banks and Nominee Companies*                                               73.78
Pension Funds and Insurance Companies                                       0.60
Other Institutions                                                         24.64
- ------------------------------------------------------------------------------
                                                                          100.00
- ------------------------------------------------------------------------------

Total number of registered holders                                         1,105
*Some of the nominee company holdings include a large number of private
individuals.

                                       60




Notice of Agenda

NOTICE is hereby  given  that the eighth  Annual  General  Meeting  of  Schroder
Ventures  International  Investment  Trust plc  will be held  at  12.00  noon on
Thursday 29 April 2004 at 31 Gresham  Street,  London EC2V 7QA, to consider and,
if thought fit, pass the following resolutions, of which resolutions 1 to 7 will
be proposed as Ordinary  Resolutions and resolutions 8 to 10 will be proposed as
Special Resolutions:

1.  That the  Report of the  Directors  and the  Accounts  for the year ended 31
    December 2003 be adopted.

2.  That the Directors'  Remuneration Report for the year ended 31 December 2003
    be approved.

3.  That Mr Andrew Williams be re-elected as a Director of the Company.

4.  That Mr John Govett be re-elected as a Director of the Company.

5.  That Ernst & Young LLP be re-appointed as Auditors of the Company.

6.  That the Board be authorised to agree the Auditors' remuneration.

7.  That,  in  substitution  for the authority  granted at the Company's  Annual
    General Meeting held on 25 April 2003, the Board be and is hereby  generally
    and  unconditionally  authorised  to  exercise  all powers of the Company to
    allot relevant securities (within the meaning of Section 80 of the Companies
    Act 1985):

    (a) up to an aggregate  nominal amount of GBP1,126,551  (equivalent to 1 per
        cent. of the issued ordinary share capital of the Company as at 26 March
        2004) in connection with the Schroder Ventures International  Investment
        Trust plc Executive Share Option Plan 2001; and

    (b) up to an  aggregate  nominal  amount  of  GBP37,551,724  (equivalent  to
        one-third of the issued  ordinary  share capital of the Company as at 26
        March 2004),

    which  authority  shall expire at the  conclusion of the next Annual General
    Meeting  of the  Company  after  the  passing  of  this  resolution  (unless
    previously  revoked or varied by the Company in general  meeting)  save that
    the Company may before such expiry make an offer or agreement which would or
    might require  relevant  securities to be allotted after such expiry and the
    Board  may  allot  relevant  securities  in  pursuance  of such an  offer or
    agreement as if the authority conferred hereby had not expired.

8.  That,  in  substitution  for the authority  granted at the Company's  Annual
    General Meeting held on 25 April 2003, the Board be and is hereby empowered,
    pursuant to Section 95 of the Companies Act 1985, to allot equity securities
    (within the meaning of Section 94 of the said Act) for cash, pursuant to the
    authority  conferred by resolution 7 above, as if sub-section (1) of Section
    89 of the said Act did not apply to any such  allotment,  PROVIDED THAT this
    power shall be limited to:

    (a) the allotment of equity  securities up to an aggregate nominal amount of
        GBP1,126,551  (equivalent  to 1 per cent. of the issued  ordinary  share
        capital  of the  Company  as at 26 March  2004) in  connection  with the
        Schroder  Ventures  International  Investment  Trust plc Executive Share
        Option Plan 2001;

    (b) the allotment of equity  securities  in connection  with a rights issue,
        open  offer  or any  other  pre-emptive  offer  in  favour  of  ordinary
        shareholders  where the equity securities  respectively  attributable to
        the interests of such ordinary  shareholders  on a fixed record date are
        proportionate  (as  nearly  as  may  be) to the  respective  numbers  of
        ordinary  shares  held by them  (subject  to such  exclusions  or  other
        arrangements  as the Board may deem  necessary or expedient to deal with
        fractional  entitlements or legal or practical  problems  arising in any
        overseas  territory,  the  requirements  of any regulatory body or stock
        exchange or any other matter whatsoever); and

    (c) the allotment  (otherwise  than pursuant to  sub-paragraphs  (a) and (b)
        above)  of  equity  securities  up to an  aggregate  nominal  amount  of
        GBP11,265,517  (equivalent to 10 per cent. of the issued  ordinary share
        capital of the Company as at 26 March 2004),

                                       61


        and shall expire at the conclusion of the next Annual General Meeting of
        the Company after the passing of this resolution,  save that the Company
        may before such expiry make an offer or  agreement  which would or might
        require equity securities to be allotted after such expiry and the Board
        may allot equity  securities  in pursuance of such an offer or agreement
        as if the power conferred hereby had not expired.

9.  That the Company be and is hereby generally and  unconditionally  authorised
    in  accordance  with  Section 166 of the  Companies  Act 1985 to make market
    purchases  (within  the  meaning of Section 163 of the said Act) of ordinary
    shares of GBP1.00  each in the capital of the Company  ("Shares"),  provided
    that:

    (a) the maximum number of Shares hereby  authorised to be purchased shall be
        16,887,010  (equivalent to 14.99 per  cent. of the issued ordinary share
        capital of the Company as at 26 March 2004);

    (b) the minimum price which may be paid for a Share is GBP1.00;

    (c) the maximum  price  which may be paid for a Share is an amount  equal to
        105 per cent. of the average of the middle market quotations for a Share
        taken from the London Stock  Exchange  Daily  Official List for the five
        business  days  immediately  preceding  the day on  which  the  Share is
        purchased;

    (d) purchases may only be made pursuant to this  authority if the Shares are
        (at the date of the  proposed  purchase)  trading  on the  London  Stock
        Exchange at a discount to the net asset value;


    (e) the authority  hereby  conferred  shall expire at the  conclusion of the
        next Annual  General  Meeting of the  Company  after the passing of this
        resolution unless such authority is renewed prior to such time; and

    (f) the Company may make a contract to purchase  Shares under the  authority
        hereby conferred prior to the expiry of such authority which will or may
        be executed  wholly or partly after the expiration of such authority and
        may make a purchase of Shares pursuant to any such contract.

10. That the name of the Company be changed to SVG Capital plc.



Registered Office:
31 Gresham Street
London EC2V 7QA

By Order of the Board
Schroder Investment Management Limited
Secretary

31 March 2004

                                       62




NOTES
An ordinary  shareholder  entitled to attend and vote at the meeting is entitled
to appoint  one or more  proxies  to attend and  (insofar  as  permitted  by the
Company's Articles of Association) to vote instead of him.

Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the
Company has specified that only those Shareholders registered in the Register of
Members of the Company at 6.00 p.m. on 27 April 2004 shall be entitled to attend
and vote at the meeting in respect of the number of Shares  registered  in their
name at that time.  Changes to the  Register  of Members  after 6.00 p.m.  on 27
April 2004 shall be disregarded in determining the right of any person to attend
and vote at the meeting.

A proxy  need  not be a  member.  A form  of  proxy  is  enclosed  for  ordinary
shareholders which should be completed and returned to the Company's  registrar,
Lloyds TSB Registrars,  The Causeway,  Worthing,  West Sussex BN99 6LE not later
than 48 hours  before the time fixed for the  meeting.  Completion  of the proxy
will not preclude an ordinary shareholder from attending and voting in person.

Shareholders   who  prefer  to   register   the   appointment   of  their  proxy
electronically  via the  internet can do so through the  registrars'  website at
www.sharevote.co.uk  where full  instructions are given. The personal  reference
number, card ID and account number printed on the proxy form will be required. A
proxy appointment made  electronically  will not be valid if sent to any address
other than those provided or if received after 12 noon on 27 April 2004.  Please
note that any  communication  found to  contain  a  computer  virus  will not be
accepted.

In accordance  with the  requirements  of the Companies Act 1985, a statement of
all  transactions of each Director and of his family  interests in the shares of
the Company will be available for inspection by any member of the Company at the
registered  office of the Company,  31 Gresham  Street,  London EC2V 7QA, during
normal  business hours on any weekday  (Saturdays,  Sundays and public  holidays
excepted) and by any person  attending the Annual  General  Meeting,  during the
continuance  of the Meeting.  None of the  Directors  have a contract of service
with the Company.

Profiles of each of the Directors  offering  themselves for  re-election  are on
page 2 of this report.

CREST  members  who  wish to  appoint  a proxy  or  proxies  through  the  CREST
electronic  proxy  appointment  service may do so for the Annual General Meeting
and any  adjournment(s)  thereof by using the procedures  described in the CREST
Manual. CREST Personal Members or other CREST sponsored members, and those CREST
members who have appointed a voting service  provider(s),  should refer to their
CREST  sponsor  or  voting  service  provider(s),  who  will be able to take the
appropriate action on their behalf.

In order for a proxy  appointment or instruction made using the CREST service to
be valid, the appropriate  CREST message (a 'CREST Proxy  Instruction')  must be
properly  authenticated  in accordance  with CRESTCo's  specifications  and must
contain the  information  required  for such  instructions,  as described in the
CREST Manual. The message,  regardless of whether it constitutes the appointment
of a proxy or to an amendment to the instruction given to a previously appointed
proxy must,  in order to be valid,  be  transmitted  so as to be received by the
issuer's  agent (ID 7RA01) by the latest time for receipt of proxy  appointments
specified above.  For this purpose,  the time of receipt will be taken to be the
time (as  determined  by the time  stamp  applied  to the  message  by the CREST
Applications  Host)from which the issuer's agent is able to retrieve the message
by  enquiry  to CREST in the  manner  prescribed  by CREST.  After this time any
change of instructions to proxies appointed through CREST should be communicated
to the appointee through other means.

CREST members and,  where  applicable,  their CREST  sponsors or voting  service
providers should note that CRESTCo does not make available special procedures in
CREST for any particular  messages.  Normal system timings and limitations  will
therefore apply in relation to the input of CREST Proxy Instructions.  It is the
responsibility of the CREST member concerned to take (or, if the CREST member is
a CREST  personal  member or sponsored  member or has appointed a voting service
provider(s),  to procure that his CREST  sponsor or voting  service  provider(s)
take(s))  such  action  as  shall be  necessary  to  ensure  that a  message  is
transmitted  by  means  of the  CREST  system  by an  particular  time.  In this
connection,  CREST members and, where applicable, their CREST sponsors or voting
service  providers are referred,  in particular,  to those sections of the CREST
Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy  Instruction in the circumstances
set out in  regulation  35(5)(a) of the  Uncertificated  Securities  Regulations
2001.

                                       63




Glossary

INVESTMENT STAGES:
Early Stage
- -   Seed
    Financing  provided  to allow a business  concept to be  developed,  perhaps
    involving  production  of  prototypes  and  additional  research,  prior  to
    bringing a product to market.

- -   Start-up
    Financing  provided  to  companies  for the use in product  development  and
    initial  marketing.  Companies  may be in the process of being set up or may
    have been in  business  for a short  time,  but have not sold their  product
    commercially.

- -   Other early stage
    Financing provided to companies that have completed the product  development
    stage and require  further funds to initiate  commercial  manufacturing  and
    sales. They will not yet be generating profit.

Late Stage
- -   Expansion Financing
    Capital provided for the growth and expansion of a company which is breaking
    even or even  trading  profitably.  Funds may be used to  finance  increased
    production capacity, market or product development and/or provide additional
    working  capital.  Capital  provided  for  turn-around  situations  is  also
    included in this category.

- -   Management Buy-Out (MBO)
    Funds  provided to enable  current  operating  management  and  investors to
    acquire an existing business.

- -   Management Buy-In (MBI)
    Funds  provided  to enable a manager or group of managers  from  outside the
    company to buy into the company.

Follow-on investment
A company which has previously received venture capital.

Secondary purchase
Purchase of existing  shares in a company from another  venture capital firm, or
from other shareholders.

Public to Private
Purchase of the share capital of a company  quoted on a stock  exchange with the
intention of de-listing the company and taking it private.

General Terms
Carried interest  ("carry"):  Carried interest or simply "carry"  represents the
share of a private  equity fund's  profit  (usually 20%) that will accrue to the
general partners.

Committed funds (or "raised funds" or "committed capital"): Capital committed by
investors.  This will be requested or "drawn down" by private equity managers on
a  deal-by-deal  basis.  This amount is different  from  invested  funds for two
reasons.  Firstly,  most  partnerships  will invest only  between 80% and 95% of
committed funds.  Second,  one has to deduct the annual  management fee which is
supposed to cover the cost of operation of a fund.

Distributions: Payments to investors after the realisation of investments of the
partnership.  Divestments  (or  realisations  or exits):  Exits of  investments,
usually via a trade sale or an IPO (Initial Public Offering) on a stock market.

Draw  downs:  Payments  to the  partnership  by  investors  in order to  finance
investments. Funds are drawn down from investors on a deal-by-deal basis.

Fund of funds:  Private  equity  funds  whose  principal  activity  consists  of
investing in other private equity funds. Investors in funds of funds can thereby
increase their level of diversification.

Gearing, debt/equity ratio or leverage
The level of a company's borrowings as a percentage of shareholder funds.
Hurdle rate:  Arrangement  that caps the downside risk for investors.  It allows
investors to get preferential  access to the profits of the partnership.  In the
absence of reaching the hurdle return, general partners will not receive a share
of the profit  (carried  interest).  A hurdle rate of 10% means that the private
equity  fund needs to achieve a return of at least 10%  before the  profits  are
shared according to the carried interest arrangement.

Limited partnership:  Most private equity firms structure their funds as limited
partnerships.  Investors  represent  the limited  partners  and  private  equity
managers the general partners.

Realisation: the sale of an investment.

Secondary market: The secondary market enables  institutional  investors to sell
their stakes in a private equity partnership before it is wound up.

Trade sale: Sale of the equity share of an investee  company to another company.
Turnaround:  A loss making company which can be successfully  transformed into a
profit maker.

                                       64


www.sviit.co.uk


Registered Office                         Head Office
31 Gresham Street                         Burleigh House
London EC2V 7QA                           357 Strand
                                          London WC2R 0HS


Telephone 020 7658 3206                   Telephone 020 7010 8900
Fax 020 7658 3538                         Fax 020 7240 5346



<PAGE>




------------
EXHIBIT 10.4
------------

COMPANY'S BUSINESS

The  Company  carries on business as an  investment  trust and is an  investment
company within the meaning of section 266 of the Companies Act 1985. In order to
obtain  exemption from capital gains tax the Company has conducted itself with a
view to being an approved  investment  trust for the  purposes of Section 842 of
the United Kingdom Income and Corporation Taxes Act 1988 (as amended).  The last
accounting  period for which the  Company  has been  treated as  approved by the
Inland Revenue as meeting the qualifying criteria for investment trust status is
the year  ended 30 June 1999 and the  Company  has  subsequently  conducted  its
affairs so as to enable it to  continue  to  qualify  for such  approval.  Under
Corporate Tax Self Assessment,  which applies to accounting periods ending on or
after 2 July 1999,  the  Inland  Revenue  is no longer  obliged to give  written
confirmation that approval has been granted.  The Company is not a close company
for taxation purposes.

A review of the Company's business and its likely future development is given in
the Chairman's  Statement on page 4, Chief Executive's  Review on page 6 and the
Portfolio Review on page 7.

REVENUE AND EARNINGS

The net  revenue  return for the year after  expenses,  interest,  taxation  and
minority interests was GBP2,655,000 (2000: GBP4,729,000), equivalent to a return
per ordinary share of 2.60p (2000: 4.68p).

DIVIDEND

The Company is prohibited by its Articles of Association  from  distributing  as
dividends any capital surpluses which arise from the realisation of investments.
Accordingly, any dividends paid by the Company will be funded out of its revenue
account.

The  Company's  investment  objective  is  one  of  capital  growth  and  it  is
anticipated  that returns for  shareholders  will derive primarily from capital.
However,  the Directors  recommend the payment of a final dividend of 1.80 pence
per share (2000:  3.80 pence) in order to meet the  requirements  to ensure that
the Company  continues  to qualify as an  investment  trust.  This  distribution
leaves a balance of GBP814,000 to be  transferred  to the  consolidated  revenue
reserve.

POLICY FOR PAYMENT OF CREDITORS

It is the  policy  of the  Company  to settle  all  investment  transactions  in
accordance  with the terms and  conditions  of the relevant  markets in which it
operates.  All other expenses are paid on a timely basis in the ordinary  course
of business. The Company had no trade creditors at 30 June 2001.

PURCHASE OF SHARES FOR CANCELLATION

<PAGE>

During the year ended 30 June 2001 the Directors did not use the authority given
to them to purchase ordinary shares for cancellation.

The total number of shares in issue on 14 September 2001 was 102,265,699 shares.
The Directors wish to renew the authority to purchase shares for cancellation. A
resolution  authorising  the  Directors  to  purchase  up to 14.99% of the share
capital in issue on 14 September 2001 will be proposed at the forthcoming Annual
General Meeting for which notice is given on pages 55 and 56.

This authority will lapse at the conclusion of the Company's Annual General
Meeting in 2002, unless renewed earlier.

ISSUE OF NEW SHARES

At the Extraordinary General Meeting of the Company on 3 May 2001, the Directors
were given powers (in  substitution  for the powers taken at the Annual  General
Meeting of the Company in December  2000) to allot  relevant  securities  and to
allot equity securities as if the pre-emption provisions in section 89(1) of the
Companies Act 1985 did not apply.  The  Directors  wish to renew these powers at
the forthcoming Annual General Meeting. Therefore, Resolutions 9 and 10 (set out
in the notice of the Annual General  Meeting on page 55) will be proposed at the
Annual General Meeting.

If passed,  Resolution  9 will give the  Directors  the power to allot  relevant
securities up to an aggregate nominal amount of (a) GBP1,022,656  (equivalent to
1 per cent. of the Company's  issued  ordinary  share capital as at 14 September
2001) in connection  with the  Company's  Executive  Share Option Plan;  and (b)
GBP34,088,566  (equivalent to one-third of the Company's  issued  ordinary share
capital as at 14 September 2001).

If  passed,  Resolution  10 will give the  Directors  the power to allot  equity
securities  as if the  pre-emption  provisions in section 89(1) of the Companies
Act 1985 did not apply (a) up to an  aggregate  nominal  amount of  GBP1,022,656
(equivalent to 1 per cent. of the Company's  issued ordinary share capital as at
14 September 2001) in connection with the Company's Executive Share Option Plan;
(b) pursuant to rights  issues and other  pre-emptive  issues;  and (c) up to an
aggregate  nominal  amount of  GBP10,226,569  (equivalent to 10 per cent. of the
Company's issued ordinary share capital as at 14 September 2001).

The  Directors  are  seeking  the  authority  referred  to in  paragraph  (c) of
Resolution  10 in  order  to  provide  flexibility  in  raising  monies  to take
advantage of opportunities  arising through the launch of new Schroder Ventures'
funds.  It is the  intention  of the Board that any equity  securities  allotted
under this authority  will be allotted at an effective  premium to the estimated
net asset  value per  ordinary  share at the date of pricing of the issue of the
relevant equity securities.

The Directors  intend to exercise the authority  referred to in paragraph (b) of
Resolution 9 to issue relevant  securities to investors whenever they believe it
is advantageous both to

<PAGE>

those investors and to the existing shareholders to do so.

The Directors  intend to exercise the authority  referred to in paragraph (a) of
Resolution 9 and paragraph (a) of Resolution 10 to grant options under part D of
the Company's Executive Share Option Plan to individuals seconded to the Company
or its subsidiaries (which, for this purpose, includes joint ventures).  Options
granted pursuant to this authority will nevertheless count towards limits on the
number of new ordinary  shares  which may be issued  pursuant to the exercise of
options.

The  authorities  proposed to be taken under  Resolutions 9 and 10 will lapse at
the conclusion of the Company's  Annual General Meeting in 2002,  unless renewed
earlier.

OVERVIEW

In  the  year  to  30  June  2001,  net  assets  decreased  by  9.6%,  primarily
attributable to the Company's  quoted  portfolio,  with the prices of its quoted
stocks falling an average of 47% in the year.

Highlights from the year include:

     *    Net asset  value per share  decreased  by 9.6% to 407.6p  (June  2000:
          450.9 pence)

     *    Write-up of Sirona Dental Systems and XYMAX

     *    Strong  deal-flow  and  considerable  changes  to the  Twenty  Largest
          Underlying Companies

     *    Acquisition of Schroder  Ventures  (London) Limited and its subsidiary
          Schroder Ventures North America Inc.

     *    Compound annual growth rate of 16.1% in net assets per share over five
          years

PORTFOLIO ACTIVITY

The fall of 9.6% in net  assets  in the year to 30 June  2001  is,  in  relative
market  terms,  a reasonable  result and compares to a fall of 14.8% in the FTSE
World Index over the same period.

Deal-flow in the period was  reasonably  strong,  albeit at a slower pace in the
second half of the year, with 25 new  investments and GBP155.4  million of calls
being paid. There has been  considerable  change to the Company's Twenty Largest
Underlying  Companies,  with seven new  investments  and one previously  held at
cost, but written up for the first time.

Exit  opportunities  have been  delayed by weaker  public  markets  and  general
economic  slowdown and options  available for private equity managers to realise
their investments have been reduced.  SVIIT's  portfolio is relatively  immature
and this,  coupled with the economic  climate,  has resulted in a slower rate of
realisations than in previous periods.

<PAGE>

As is the Company's normal practice, all portfolio company valuations at 30 June
2001 have been  substantiated  by extensive due diligence  into relevant  market
conditions and sector  comparables.  The Board is comfortable that any necessary
adjustments  to  underlying  company  valuations  have  been  made  and that the
portfolio continues to be valued on a consistent and conservative basis.

OVERVIEW

In the year to 30 June 2001,  SVIIT's net assets  decreased  by 9.6% to GBP416.9
million - 407.6p per share (June 2000: GBP461.1 million - 450.9p per share). The
fall in net  assets is  largely  attributable  to  adverse  movements  in quoted
markets,  with the prices of SVIIT's  quoted stocks falling an average of 47% in
the year.  This high average fall in prices of SVIIT's quoted stocks has largely
been driven by AU System and Parkway  Holdings,  whose prices have fallen by 80%
and 40% respectively since June 2000.

Of the  GBP416.9  million  of net  assets,  GBP387.0  million  was  held in fund
investments (June 2000:  GBP327.2 million) and GBP29.9 million was held directly
in cash and marketable  securities  (net of  liabilities)  (June 2000:  GBP133.9
million).

The fall in value of the quoted portfolio has been partly offset by write-ups in
the underlying  portfolio.  XYMAX  (formerly  Recruit  Building  Management),  a
Japanese property management company,  has been written up on a P/E basis from a
cost of GBP1.6 million to a value of GBP9.9 million. In addition,  Sirona Dental
Systems,  which was written-down in December 1999, has been written back up on a
P/E basis following better underlying performance from the company.

Overall,   deal-flow  during  the  year  was  reasonably  strong,  with  25  new
investments  being made and total calls payable of GBP155.4  million (June 2000:
GBP162.3  million).  Weaker public markets have  increased  deal-flow to private
equity  houses as companies and  corporate  sellers look to the financial  buyer
rather  than  public  markets  for  funding.  However,  pricing  of  many of the
transactions is yet to reflect the correction in public market valuations, hence
the number of  completed  deals in the second  half of the year  showed a marked
decrease  to the first  half,  with  GBP52.9  million of calls  being paid since
December 2000.

Uncertainty in public markets has delayed exit opportunities and this, coupled
with the relative youth of SVIIT's portfolio, has meant that realisations during
the year were at a slower pace than in previous periods, with a total of GBP51.9
million distributions received from realisations during the year (June 2000:
GBP187.8 million).

Since  June 2000  there have been  considerable  changes  in the Twenty  Largest
Underlying  Companies,  with seven new  investments  and one previously  held at
cost,  but  written  up for the first  time.  In the light of  declining  public
markets  and  general  economic  slow-down  since  the  year-end,  the  specific
valuations  of all  companies  held at cost,  including  new  investments,  have
undergone extensive due diligence before inclusion in the June

<PAGE>

2001 portfolio  valuation.  At 30 June 2001, 58% of SVIIT's portfolio and 64% of
the Twenty Largest Underlying  Companies were valued at cost (June 2000: 43% and
44%).

SVIIT's geographic  exposure  continues to be well diversified.  The portfolio's
exposure to  Continental  Europe has decreased  over the year to 28% (June 2000:
49%),  whilst its  exposure to  International  has  increased to 30% (June 2000:
13%), mainly attributable to new investments such as Memec, Kiekert and Grammer.

The portfolio  comprises holdings in all 24 of Schroder Ventures' funds,  giving
an  underlying  portfolio of 151 companies in 18 countries  world-wide.  A small
number of large  investments  constitute  the  majority of the  portfolio,  with
SVIIT's Twenty Largest Underlying  Companies  representing 74% of the total fund
investments (June 2000: 70%).

SVIIT has reported a compound net asset per share growth of 16.1% per annum over
five years.

FUND TRANSACTIONS

The number of underlying  companies  held by funds advised by Schroder  Ventures
decreased from 155 to 151 in the period.

Overall,  deal-flow in the period was reasonably  strong with 25 new investments
in the year,  albeit at a slower pace in the second half of the year.  It is not
anticipated that this slower pace will continue,  as vendor valuations adjust to
reflect the correction in public markets.

Seven  of the new  investments  are  among  SVIIT's  Twenty  Largest  Underlying
Companies:  Memec (International);  Homebase (UK); Kiekert  (International);  AP
Plasman  (Canada);  Grammer  (International);  Twinwood  (Asia) and Matra  Plast
(Canada).  These new  investments  represent  31% of net  assets  and,  with the
exception of Twinwood, which is listed on the Singapore Stock Exchange, are held
at cost.

The  largest of the new  investments,  Memec,  represents  13.36% of net assets.
Memec, a global  specialist  semiconductor  distributor  was acquired in October
2000.  Since the acquisition of Memec,  the  semiconductor  industry,  which has
grown  at a  compound  annual  growth  rate of 17%  since  the  1950s,  but,  is
characterised  by a regular  cycle,  has  experienced  a  slow-down  in  growth.
Although  Memec has been affected by this  slow-down,  the  fundamentals  of the
business remain robust.

As mentioned in the December  2000  Interim  Report,  funds  advised by Schroder
Ventures  led the GBP1 billion  buy-out of the  Homebase  DIY  business  from J.
Sainsbury plc. SVIIT's share of this investment is GBP19.5 million, representing
4.67% of net assets.

Funds  advised by  Schroder  Ventures  have made a public  tender  offer for the
majority of the equity in Grammer AG. Grammer, a seating equipment manufacturer,
headquartered

<PAGE>

in Germany,  supplies  seating  equipment to the  automotive/commercial  vehicle
industry. SVIIT's share of this investment is GBP9.7 million, representing 2.32%
of net assets.

Funds  advised by Schroder  Ventures  have  invested in a supplier of speciality
chemicals to the leather  processing  industry.  TFL  (Together for Leather) was
established  in 1996 as a  joint  venture  between  two of the  world's  leading
chemical  companies.  The company,  with six  production  sites  worldwide,  has
positioned  itself as a supplier of a full  product  range for all stages of the
leather production process.  SVIIT's share of this investment is GBP4.3 million,
representing 1.04% of net assets.

Since the year-end,  funds advised by Schroder Ventures have led the $31 million
buy-out of Market Place Media (MPM) from CTN Media Group,  Inc.  MPM,  with 2000
revenues of $47 million,  is a leading media  placement and  promotions  company
targeting niche markets. Headquartered in Santa Barbara, California, its clients
are major US  advertising  agencies and  advertisers  to which it provides media
consulting services. SVIIT's share of this investment will be approximately GBP3
million.

As mentioned  above,  adverse  movements in SVIIT's  quoted  portfolio have been
partly  off-set  by uplifts in the value of  portfolio  companies,  the two most
significant are:

XYMAX - funds advised by Schroder Ventures backed the buy-out of XYMAX (formerly
Recruit Building  Management) a Japanese property  management company in January
2000. XYMAX was one of the first Japanese  buy-outs  financed by private equity.
It is hoped that many more buy-out  opportunities  will arise, as enthusiasm for
the  emerging  buyout  market  in  Japan  increases  and  buy-outs  begin  to be
recognised by Japanese management as a potential funding alternative.

Sirona Dental  Systems - Sirona Dental Systems was written down in December 1999
due to market conditions and difficult  restructuring in the business.  Sirona's
management has now successfully  implemented the separation of the manufacturing
and  distribution  businesses,  and  conditions in the German dental market have
become more favourable; hence the company has been written up on a P/E basis.

                30 June 2001   30 June 2000      Change in
                   Valuation      Valuation           Year
Company              GBP'000        GBP'000        GBP'000

XYMAX                  9,898          1,601          8,297
Sirona Dental Systems 16,036         10,678          5,358

Volatility  in  public  markets  has  delayed  exit  opportunities  and  options
available for private equity managers to realize  investments  have been clearly
reduced.  This,  coupled with SVIIT's  relatively  young  portfolio  (76% of the
portfolio  is under three years old,  and 34% has been bought  since July 2000),
has  meant  that  realisations  during  the year  were at a slower  pace than in
previous periods,  with a total of GBP51.9 million  distributions  received from
realisations during the year (June 2000: GBP187.8 million).

<PAGE>

SVIIT's share of major realisations by the funds during the year included:

               Realisation    30 June 2000
                     Value       Valuation             Cost
Company          GBP'000**         GBP'000         GBP'000*

Ferretti             6,073           4,093              148
Single               2,709           2,227              472
* costs and valuations as at 30 June 2000 have been pro rated to reflect the
residual holding
** valuation and realisation proceeds are shown after the deduction of carried
interest

There have been some write-downs in the portfolio during the year. These have
included:

                   30 June 2001       30 June 2000         Change in
                      Valuation          Valuation              Year
Company                 GBP'000            GBP'000           GBP'000

AU System                 2,389            *15,159            12,770
Parkway Holdings          7,580           **15,865             8,285
Takko                    12,170             18,014             5,844
* the valuation of AU System as at 30 June 2000 has been pro rated to reflect
the residual holding
** June 2000 valuation of Parkway Holdings has been pro rated to reflect a
follow-on investment

The falls in value of AU System  and  Parkway  Holdings  reflect  falls in their
listed share  prices.  Whilst the fall in AU System's  share price  represents a
write-down  of GBP12.7  million  in the  period,  SVIIT has  received a total of
GBP66.8 million in proceeds from the transaction (AU System, Across Wireless and
iD2 Technologies) against an attributable cost of GBP5.6 million.

The write down of Takko, a German discount  clothing  retailer,  follows a lower
than expected increase in net sales. The Continental European discount retailing
industry has been affected by unusual  weather  conditions  throughout  2000 and
2001, and a softening of private  consumption.  The store expansion strategy has
continued on plan.

EEMS, a provider of test  services  for DRAM and Flash memory chip  manufacture,
was written up at December 2000 to GBP19.9 million.  Given the slowdown in sales
in the  semiconductor  industry  generally,  EEMS has been  written back down to
GBP11.2  million,  a level  similar  to that at June  2000,  hence  year-on-year
remains unchanged and compares to a cost of GBP1.7 million.

PORTFOLIO PERFORMANCE

<PAGE>

Distributions from realisations of GBP51.9 million stood at an average premium
of 11.8% to the 30 June 2000 valuations.

Calls payable during the year amounted to GBP155.4 million to fund 25 new and 36
follow-on investments.

Since the year-end, SVIIT has paid calls of approximately GBP5.6 million.

SVIIT's return on its holdings of Schroder Ventures' funds is summarised below;

                         June 2001                June 2000
Year ended                    GBPm                     GBPm
Opening Valuation            327.2                    226.4
Calls Paid                   155.4                    162.3
Distributions Received       (51.9)                  (187.8)
                            ______                   _______
                             430.7                    200.9
(Decrease)/Increase in
Value of Portfolio           (43.7)                   126.3
                            ______                   _______
Closing Portfolio            387.0                    327.2
                            ______                   _______

CASH AND MARKETABLE SECURITIES

At 30 June 2001,  SVIIT's  gross cash  balance of GBP32.0  million  (June  2000:
GBP136.6  million) was held  principally in a portfolio of short-dated  treasury
bills, reflecting anticipated short-term cash flows.

The  overall  performance  of  sterling  during the year  resulted  in a loss on
exchange on cash and marketable securities of GBP0.8 million.

SUBSTANTIAL SHARE INTERESTS

At 14 September 2001 the Company had been notified of the following interests in
excess of 3 per cent. of the issued capital.

                                                Number of     Percentage
                                          ordinary shares       of class

Schroders plc and its subsidiaries:
    - non beneficial, managed for clients      16,749,599         16.38
    - beneficial                               13,113,449         12.82
Aegon Aandelenfonds NV                         19,378,665         18.95
The Equitable Life Assurance Society            4,650,000          4.55
British Aerospace Pension Fund                  4,425,000          4.33
BBC Pension Trust Limited*                      4,384,554          4.29
The Prudential Insurance Company of America     4,248,355          4.15
<PAGE>

*This  interest is also  counted in the  non-beneficial,  managed  for  clients,
interest of Schroders plc and its subsidiaries listed above.


<PAGE>


------------
EXHIBIT 10.5
------------


OVERVIEW

In the six months to 31  December  2001,  net assets  decreased  by 2.8%,  which
compares to a fall in the FTSE World Index of 10.5% in sterling terms.

Highlights from the period include:

*    Net assets per share decreased by 2.8% to 396.3p (June 2001: 407.6p)

*    Write-up of Homebase from a cost of GBP20.0 million to GBP30.5 million

*    Investment in Cognis, the speciality chemicals group

*    Issue of GBP40 million convertible bonds

*    Compound  annual  growth  rate in net  assets of 15.8% per annum  over five
     years.

PORTFOLIO ACTIVITY

The number of completed  transactions has declined over the period. This is more
a reflection of vendor pricing  together with the uncertainty over visibility of
corporate earnings, than deal-flow.

An already  slowing global economy was further  exacerbated by the tragic events
in the United States in September and exit opportunities  continue to be delayed
by uncertain economic conditions, volatile public markets and reduced merger and
acquisition  activity.  As a result,  realizations  during the period  were at a
slower pace than in  previous  periods and this trend is expected to continue in
the near term.

All  valuations  at 31 December  2001 have been  substantiated  by extensive due
diligence into relevant market  conditions and sector  comparables and the Board
is comfortable that any necessary  adjustments to underlying  company valuations
have been  made.  The  portfolio  continues  to be valued  on a  consistent  and
conservative basis.

OPERATING REVIEW

The first of these third party  investment  products was launched with Schroders
plc in September 2001, the Schroder Private Equity Fund of Funds,  listed on the
Dublin  Stock  Exchange,  which had a first  closing in December  2001 at EUR172
million. With three share classes, each with differential minimum investment and
pricing,  the fund of funds has been structured to meet the requirements of both
small and large institutions and high net worth investors.

Commitments of EUR160  million have already been made to 12 venture  capital and
buy-out funds, based in Europe, USA and Asia, which at 31 December 2001 were, in
aggregate,  17.4% drawn down. The fund of funds expects to have a final close in
June 2002.

The team  continues to advise the Board on its  assessment of future  investment
opportunities and the  implementation of the Company's  investment  strategy for
its

<PAGE>

portfolio of private  equity  funds,  in addition to managing the Company's
marketing, public and investor relations programmes.

The team also provides  services to Schroders plc and Schroder  Ventures,  which
continue as planned.

All the key objectives for the first 12 months were met.

MARKET COMMENTARY

Deal-flow and Realisations
The six months to 31  December  2001 have seen  economic  uncertainty,  unstable
public  markets  and weak  merger and  acquisition  activity,  all of which have
affected private equity portfolios globally and made exits difficult.

In the  short  term,  2002 is  forecast  to be a good  year for  private  equity
investing,  particularly  for those  funds  that have  capital  to invest  and a
limited overhang of troubled  portfolio  companies.  As companies focus on their
core  businesses,  the trend for  corporate  restructuring  should  continue  to
provide for increased deal-flow.

Fundraising
Approximately  US$99 billion1 was raised for private equity investment in the US
in 2001,  a 42% drop on 2000,  although  still above levels  raised in 1999.  In
Europe,  approximately  EUR37 billion2 was raised, a 5% decrease on funds raised
in 2000 and driven  predominantly by the raising of a relatively small number of
large European buy-out funds in the first half of the year.

OVERVIEW

In the six months to 31 December 2001,  SVIIT's net assets  decreased by 2.8% to
GBP405.3  million - 396.3p per share (June 2001:  GBP416.9  million - 407.6p per
share) which compares to a fall in the FTSE World Index of 10.5%.

This small decrease in net assets  reflects  chiefly some declines in valuations
of  portfolio  companies  in the  electronics  sector,  but has been  offset  by
write-ups, principally in the retail sector, with Homebase being written up from
a cost of GBP20.0 million to a value of GBP30.5 million.


With  the  exception  of the  life  sciences  sector,  the  level  of  completed
transactions  during the period has declined with only 11 new investments and 34
follow-on  investments  made since June 2001 (of which eight new investments and
14 follow-on  investments were in the life sciences sector). In the medium term,
the level of activity is expected to increase as vendors begin to revise pricing
expectations and over-leveraged  companies

--------
1 Source:  Private Equity Analyst.
2 Source:  Initiative Europe.

<PAGE>

are forced to sell assets in order to raise capital.  Total calls payable during
the period were GBP53.7 million (six months to December 2000:  GBP102.6 million;
12 months to June 2001: GBP155.4 million).

Global  economic   slowdown,   reduced  merger  and  acquisition   activity  and
uncertainty in public markets continue to delay exit opportunities. Realisations
during the period were at a slower pace than in previous  periods,  with a total
of GBP15.8 million  distributions  received from realizations  during the period
(six months to December 2000:  GBP38.7 million;  12 months to June 2001: GBP51.9
million).

There are just two changes in the Twenty Largest Underlying Companies since June
2001; one new investment, Cognis and one investment, Together for Leather (TFL),
which  was  held at  June  2001,  but is new to the  Twenty  Largest  Underlying
Companies.

With the maturing of the portfolio and the resulting  revaluation of a number of
the portfolio companies, only 21% of the portfolio and 19% of the Twenty Largest
Underlying Companies, by value, are held at cost (June 2001: 58% and 64%).

The portfolio's  International  weighting has increased to 35% (June 2001: 30%),
reflecting  the  international  nature of many of the European led  investments,
such as Memec, Cognis and Grammer. Consequently, SVIIT's exposure to Continental
Europe has continued to decrease,  now  representing 23% (June 2001: 28%) of the
portfolio.

Of the GBP405.3 million of net assets (June 2001:  GBP416.9  million),  GBP413.2
million was held in fund  investments  (June 2001:  GBP387.0  million)  less net
liabilities of GBP7.9 million.

The  portfolio  comprises  holdings in all 24 of Schroder  Ventures  and Permira
funds,  giving  an  underlying  portfolio  of  153  companies  in  18  countries
world-wide.  SVIIT's Twenty Largest Underlying  Companies  represents 77% of the
total fund investments (June 2001: 74%).

SVIIT has reported a compound net asset per share growth of 15.8% per annum over
five years.

FUND TRANSACTIONS

The number of underlying  companies  held by funds advised by Schroder  Ventures
and Permira decreased from 155 to 153.

Whilst  deal-flow  in the  period was  strong,  with the  exception  of the life
sciences  sector only a small number of  transactions  were  completed.  The low
level of new investments is mainly a result of high vendor pricing  expectations
and uncertainty  over prospective  corporate  earnings.  As vendor  expectations
adjust to mirror  corrections in public markets,  corporate earnings become less
uncertain and illiquid  companies  begin to realise assets in an effort to raise
capital, it is anticipated that the level of activity will increase.

<PAGE>

The major new investment since June 2001 was the speciality  chemicals business,
Cognis, representing 8.14% of net assets.

Cognis was the chemicals products business of Henkel and is a leading world-wide
supplier of speciality  chemicals  which was carved out from Henkel in 1999. The
three divisions of the Cognis Group - Oleochemicals,  Care Chemicals and Organic
Specialities - supply  international  manufacturers of detergents,  cleaners and
cosmetics, as well as other industrial customers.

Cognis,  which has its principal operation in Germany, has 9,100 employees in 50
countries and generated  sales of EUR3.2 billion in 2000,  accounting for 23% of
Henkel Group's total annual sales.

The most significant write-up during the period was Homebase.

Homebase,  is a leading  retailer of "Do it Yourself"  products in the UK. Funds
advised by Permira  invested in the buy-out of Homebase  from  Sainsbury  plc in
March 2001.  Since the  acquisition,  the company has performed ahead of budget,
mainly  driven  by  significant  restructuring  of  its  main  operations  and a
repositioning of the business.

                           31 Dec 2001               30 June 2001    Change in
                           Valuation                 Valuation       Period
         Company           GBP'000                   GBP'000         GBP'000
         -------           ----------                ------------    ---------
         Homebase          30,522                    20,009           10,513

Global  economic  slow-down,   reduced  merger  and  acquisition   activity  and
volatility in public markets have delayed exit  opportunities  and  realisations
during the  period  were at a slower  pace as a result,  with a total of GBP15.8
million of distributions received.

In December 2001,  Teleca, a publicly quoted Swedish telecoms group announced an
all share  offer for AU System,  which  completed  in February  2002.  Since the
period end,  funds  advised by Permira have realised 57% of their holding in the
enlarged  company and SVIIT's share of this  realization was GBP1.6 million,  an
uplift of 34% to the December 2001 valuation.

There have been some write-downs in the portfolio during the period.  These have
included:

                                    31 Dec 2001        30 June 2001  Change in
                                    Valuation          Valuation     Period
         Company                    GBP'000            GBP'000       GBP'000
         -------                    ----------         ------------  ---------
         Austriamicrosystems        28,253             37,128        8,875
         (formerly AMS)

         EEMS                       8,395              11,242       2,847

<PAGE>

Austriamicrosystems  continues  to perform  well and both  revenue  and  profits
increased in the year ended 31 December  2001.  The company has recently built a
new manufacturing plant, which started production at the beginning of this year.
The investment in this new plant has caused the debt/equity ratio to rise whilst
the  visibility  in the markets that the company  operates in is currently  very
limited, hence the valuation of the company has been written down by 25%.

EEMS,  which  was  acquired  in May 1999  (SVIIT's  proportionate  cost:  GBP1.7
million),  has been  written  down  from its June  2001  valuation  due to lower
performance, in line with the semiconductor market.

PORTFOLIO PERFORMANCE

Distributions from realisations of GBP15.8 million were at an average premium of
43.2% to the 30 June 2001 valuations.

Calls payable during the period  amounted to GBP53.7  million to fund 11 new and
34 follow-on investments.

Since the period-end SVIIT has paid calls of approximately GBP6.7 million.

SVIIT's  return on its  holdings of  Schroder  Ventures'  and  Permira  funds is
summarised below:

                                             Six months ended       Year ended
                                             31 December 2001       30 June 2001
                                             GBPm                   GBPm

         Opening valuation                   387.0                  327.2

         Calls payable                        53.7                  155.4

         Distributions receivable            (15.8)                 (51.9)

                                             424.9                  430.7

         Decrease in value of portfolio      (11.7)                 (43.7)

         Closing portfolio (gross)           413.2                  387.0


<PAGE>



------------
EXHIBIT 12.1
------------




                                                                  Exhibit 12.1

                                  CERTIFICATION

I, Nicholas  Ferguson,  the Chief Executive  Officer of SVG Capital plc, certify
that:

1.  I have reviewed this annual report on Form 20-F of SVG Capital plc;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the company as of,
and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing
and maintaining  disclosure  controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the company and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that  material  information  relating to the company,  including its
     consolidated  subsidiaries,  is made  known to us by  others  within  those
     entities,  particularly  during the  period in which  this  report is being
     prepared;

     b) [Omitted  pursuant to  "Management's  Reports on Internal  Control  Over
     Financial  Reporting  and  Certification  of  Disclosure  in  Exchange  Act
     Periodic Reports," SEC Release No.33-8238 (June5, 2003)];

     c) Evaluated the  effectiveness  of the company's  disclosure  controls and
     procedures  and  presented  in  this  report  our  conclusions   about  the
     effectiveness of the disclosure  controls and procedures,  as of the end of
     the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the  company's  internal  control
     over  financial  reporting  that occurred  during the period covered by the
     annual report that has  materially  affected,  or is  reasonably  likely to
     materially affect, the company's internal control over financial reporting;
     and

5. The company's other  certifying  officer and I have  disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
company's  auditors and the audit  committee of the company's board of directors
(or persons performing the equivalent functions):

     a) All significant  deficiencies  and material  weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to  adversely  affect the  company's  ability  to  record,  process,
     summarize and report financial information; and

     b) Any fraud,  whether or not material,  that involves  management or other
     employees who have a significant  role in the  company's  internal  control
     over financial reporting.

                                                    /s/ Nicholas Ferguson
                                                        Nicholas Ferguson
                                                        Chief Executive Officer

                                       F1
<PAGE>


Date: July 9, 2004
                                       F2
<PAGE>


------------
EXHIBIT 12.2
------------


                                                                   Exhibit 12.2

                                  CERTIFICATION

I,  Christopher  Morris,  the  Principal  Financial  Officer of SVG Capital plc,
certify that:

1.  I have reviewed this annual report on Form 20-F of SVG Capital plc;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the company as of,
and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing
and maintaining  disclosure  controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the company and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that  material  information  relating to the company,  including its
     consolidated  subsidiaries,  is made  known to us by  others  within  those
     entities,  particularly  during the  period in which  this  report is being
     prepared;

     b) [Omitted  pursuant to  "Management's  Reports on Internal  Control  Over
     Financial  Reporting  and  Certification  of  Disclosure  in  Exchange  Act
     Periodic Reports," SEC Release No.33-8238 (June5, 2003)];

     c) Evaluated the  effectiveness  of the company's  disclosure  controls and
     procedures  and  presented  in  this  report  our  conclusions   about  the
     effectiveness of the disclosure  controls and procedures,  as of the end of
     the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the  company's  internal  control
     over  financial  reporting  that occurred  during the period covered by the
     annual report that has  materially  affected,  or is  reasonably  likely to
     materially affect, the company's internal control over financial reporting;
     and

5. The company's other  certifying  officer and I have  disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
company's  auditors and the audit  committee of the company's board of directors
(or persons performing the equivalent functions):

     a) All significant  deficiencies  and material  weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to  adversely  affect the  company's  ability  to  record,  process,
     summarize and report financial information; and

     b) Any fraud,  whether or not material,  that involves  management or other
     employees who have a significant  role in the  company's  internal  control
     over financial reporting.

                                               /s/ Christopher Morris
                                                   Christopher Morris
                                                   Principal Financial Officer


                                       F3

<PAGE>

Date: July 9, 2004

                                       F4

<PAGE>



------------
EXHIBIT 13.1
------------



                                                                    Exhibit 13.1





                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned,  Nicholas Ferguson,  the Chief Executive Officer of SVG Capital
plc (the  "Company"),  has executed this  certification  in connection  with the
filing with the  Securities  and Exchange  Commission  of the  Company's  Annual
Report on Form 20-F for the Fiscal Year ended December 31, 2003 (the  "Report").
The undersigned hereby certifies that:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934, as amended; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

                                                    /s/ Nicholas Ferguson
                                                        Nicholas Ferguson
                                                        Chief Executive Officer


Date: July 9, 2004

                                       F5


<PAGE>


------------
EXHIBIT 13.2
------------


                                                                   Exhibit 13.2


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned,  Christopher  Morris,  the Principal  Financial  Officer of SVG
Capital plc (the "Company"),  has executed this certification in connection with
the filing with the Securities and Exchange  Commission of the Company's  Annual
Report on Form 20-F for the Fiscal Year ended December 31, 2003 (the  "Report").
The undersigned hereby certifies that:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934, as amended; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.



                                               /s/ Christopher Morris
                                                   Christopher Morris
                                                   Principal Financial Officer


Date: July 9, 2004



                                       F6

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