SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F
(Mark One)
[ ]           REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (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 June 30, 2002
                                       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

              Schroder Ventures International Investment Trust plc
             (Exact name of Registrant as specified in its charter)
                                England and Wales
                         (Jurisdiction of incorporation)

                                31 Gresham Street
                            London, EC2V 7QA England

        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:

Title of each class:          Name of each U.S. exchange on which registered:
  Ordinary Shares                                  None*

     * The Ordinary Shares are listed on the Official List of the Financial
Services Authority (in its capacity as U.K. Listing Authority) and admitted
to trading on the London Stock Exchange plc.

     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. 102,265,699

     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




              Schroder Ventures International Investment Trust plc
                           Annual Report on Form 20-F
                           for the fiscal year ended
                                 June 30, 2002

                               TABLE OF CONTENTS


Item                                                               Page No.

PART I.....................................................................5

Item 1.      Identity of Directors, Senior Management and Advisers.........5

Item 2.      Offer Statistics and Expected Timetable.......................5

Item 3.      Key Information...............................................5

Selected Financial Data....................................................5

Capitalization and Indebtedness............................................7

Reasons for the Offer and Use of Proceeds..................................7

Risk Factors...............................................................8

Item 4.     Information on Schroder Ventures International Investment
Trust plc.................................................................10

History and Development of the Company....................................10

Business Overview.........................................................12

Organizational Structure..................................................23

Property, Plants and Equipment............................................25

Item 5.     Operating and Financial Review and Prospects..................25

Operating Results.........................................................25

Liquidity and Capital Resources...........................................26

Research and Development, Patents and Licenses, etc.......................31

Trend Information.........................................................31

Item 6.     Directors, Senior Management and Employees....................31

Directors and Senior Management...........................................31

Compensation..............................................................32

Director Practices........................................................35

Employees.................................................................37

Share Ownership...........................................................37

Item 7.     Major Shareholders and Related Party Transactions.............37

Major Shareholders........................................................37

Related Party Transactions................................................38

Interests of Experts and Counsel..........................................39

Item 8.     Financial Information.........................................39

Consolidated Statements and Other Financial Information...................39

Significant Changes.......................................................39

Item 9.     The Offer and Listing.........................................39

Plan of Distribution......................................................41

Markets...................................................................41

Selling Shareholders......................................................41

Dilution..................................................................41

Expenses of the Issue.....................................................41

Item 10.    Additional Information........................................41

Share Capital.............................................................41

Memorandum and Articles of Association of Schroder Ventures
International Investment Trust plc........................................42

Material Contracts........................................................47

Exchange Controls.........................................................50

Taxation..................................................................51

Dividends and Paying Agents...............................................58

Statement by Experts......................................................58

Documents on Display......................................................58

Subsidiary Information....................................................58

Item 11.    Quantitative and Qualitative Disclosures About................58

Item 12     Description of Securities other than Equity Securities........58



                                      - 3 -


PART II...................................................................59

Item 13.    Defaults, Dividend Arrearages and Delinquencies...............59

Item 14.    Material Modifications to the Rights of Security..............59

Item 15.    Controls and Procedures.......................................59

Item 16.    [Reserved]....................................................59

PART III..................................................................60

Item 17.    Financial Statements..........................................60

Item 18.    Financial Statements..........................................60

Item 19.    Exhibits......................................................60



                                     - 4 -



     Unless otherwise indicated herein, all information in this annual report
is presented as of June 30, 2002. Amounts expressed in pounds (GBP) are in
United Kingdom pounds sterling. Amounts expressed in (euro) are in European
Monetary Union euros. 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 December 18, 2002 was
$1.60 and the Noon Buying Rate for European Monetary Union euros in New York
City expressed in U.S. Dollars per euro1.00 (rounded to the nearest cent) on
December 18, 2002 was $1.03. The United Kingdom terms "accounting period,"
"realization," and "shares in issue" are used interchangeably in this report
with the synonymous, respective United States terms "fiscal year,"
"disposition" and "shares outstanding."

                                     PART I

     This Form 20-F constitutes the annual report of Schroder Ventures
International Investment Trust plc (the "Company"). Unless the context
requires otherwise, the term "Company" includes Schroder Ventures
International Investment Trust 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"), Schroder Ventures (London)
Limited ("SVLL") and Schroder Ventures North America, Inc. ("SVNA").

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 years ended June
30, 2000, 2001 and 2002 and at June 30, 2001 and 2002 is derived from the
audited consolidated financial statements included elsewhere in this Form
20-F. The selected financial information for the years ended June 30, 1998
and 1999 and at June 30, 1998, 1999 and 2000 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 years ended June 30, 2001 and 2002, includes
SVLL and SVNA.


                                    - 5 -


<TABLE>
<CAPTION>

                                           Year Ended June 30
                               1998     1999         2000        2001      2002
<S>                             <C>      <C>         <C>          <C>       <C>
                                 (in GBP thousands, except per share data)
Operating Data
Total Revenues1               4,686    3,613        6,123       5,616     7,674
Administrative Expenses         562      668        1,106       2,235     7,293
Interest payable and
similar charges               1,317      976          468         583     1,832
Net Return/(Deficit)
After Taxation                2,056    2,349        4,729       2,655   (1,555)
Basic Earnings per
Ordinary Share                2.06p    2.35p        4.68p       2.60p  (1.52)p2


                                              As at June 30
                               1998     1999         2000        2001      2002
Balance Sheet Data
Total Assets                233,512  360,571      466,702     422,007   466,970
Current
Liabilities                   2,690   26,941        5,087       4,747     4,357
Long-Term Debt               10,753   10,753            0           0    39,152
Minority Interest               339      392          490         388       374
Net Assets                  219,730  322,485      461,125     416,872   423,087
Net Asset Value per
Ordinary Share.......        215.1p   325.9p       450.9p      407.6p    413.7p
Capital Stock
(excluding long-term
debt and redeemable
preferred stock).....       219,730  322,485      461,125     416,872   423,087
Number of Ordinary
Shares outstanding as
adjusted to reflect
Changes in capital...       102,170   98,966      102,266     102,266   102,266

</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.

     Distributions receivable by the Company which arise from dividends,
interest and other revenue items through the Funds will be credited to the
Company's revenue account when the 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 become ex-dividend, and, in the case of interest income,
interest payable and all other revenue expenses, will be treated on an
accrual basis.

2    The basic earnings per ordinary share is based on (i) the net deficit on
ordinary activities after interest payable and taxation of GBP1,555,000 and
(ii) 102,265,699 Ordinary Shares being the weighted average number of
shares in issue during the year ended June 30, 2002.

Dividend per Share Information

     For the fiscal year ended June 30, 2002, 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 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 June 30, 2002.
The following table presents a complete summary of dividends per share stated
in both pounds sterling and U.S. dollars. The amounts in dollars are based on
the exchange rates at each respective payment date.



                                     - 6 -


<TABLE>
<CAPTION>

Payment Date        Sterling    U.S. Dollars
<S>                 <C>         <C>
December 3, 1997    1.92p       $0.0323
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
November 26, 2002   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 December 18, 2002 was $1.60.

     (b) The table below sets forth, for the periods indicated the high and
low Exchange Rates for each period (through November 29, 2002).

<TABLE>
<CAPTION>

Last Six Months                       High    Low
<S>                                   <C>      <C>
June...............................   $1.53   $1.46
July...............................   $1.59   $1.52
August.............................   $1.57   $1.52
September..........................   $1.56   $1.54
October............................   $1.58   $1.55
November...........................   $1.59   $1.54
</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 Period 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

</TABLE>

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.



                                     - 7 -


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
Financial Services Authority (the "Official List") in its capacity as the
United Kingdom Listing Authority ("UKLA") and admitted to trading on the
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, 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 Schroder Ventures or Permira, an association of independent
entities providing management advisory or consultancy services to buy-out and
development capital funds. Pursuant to statutory requirements governing U.K.
investment trusts and the rules of the UKLA, 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. In addition, the Funds
generally do not maintain a controlling interest in investee companies. As a
result, the Directors have no control over the investment decisions made by
the managers of individual investee companies. 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.



                                     - 8 -


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 could require it to refuse to register a
particular transfer 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
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.

     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 Investment Returns

     Past performance is not necessarily a guide to the future. 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.



                                     - 9 -


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 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 United Kingdom 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 SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC

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 succeeded to the business of the company originally
known as Schroder Ventures International Investment Trust plc through a
restructuring in which the Company became the successor registrant.

     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 (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 SVLL and SVNA. SVLL and SVNA each became subsidiaries of the
Company at that time. The Company acquired SVLL from Schroder Ventures
Limited for GBP100, and assumed responsibility for the costs and received the
benefit of the income streams of SVLL from January 1, 2001. SVLL then
acquired SVNA, 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 a further $28,553 in respect of an
increase in required capital for regulatory reasons. Subsequently, on June
26, 2001, April 10, 2002 and December 18, 2002, the Company subscribed for
749,900, 750,000 and 1,500,000 Ordinary Shares of GBP1 each, respectively, in
SVLL.



                                     - 10 -


     The acquisition of SVLL and SVNA allows the Company to provide the
following specialist financial advisory services:

     (i)     Provision of services to the Schroder Group: The team advises and
             provides services on the structure, launch, identification of
             investment opportunities and performance of a private equity fund
             of funds that was launched by the Schroder Group in September of
             2001. The fund of funds had a final closing on June 14, 2002 with
             subscriptions totaling euro242,354,631 received. The team also
             provides services to members of the Schroder Group to assist them
             in their obligations and duties as general partners or managers to
             the Funds.
     (ii)    Provision of services to Schroder Ventures or Permira: The team is
             responsible for the provision of a number of services, as required,
             to Schroder Ventures or Permira and the Funds, namely fundraising,
             marketing, legal, financial reporting and monitoring services.

     For more information regarding the acquisition of SVLL and SVNA, 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 41/2% Subordinated
Convertible Bonds due 2011 (the "Bonds"). The Bonds are convertible, at the
option of the holders of the Bonds, into Ordinary Shares at a price of 399p
per Ordinary Share. The Bonds are listed on the Official List and were
admitted to trading on the LSE on July 5, 2002.

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 Burleigh
House, 357 Strand, London WC2R 0HS, England.



                                     - 11 -


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 address the growing recognition of private equity in
investment portfolios, the Company is committed to designing and advising
third-party products for investment in private equity.

     The Directors intend to manage the affairs of the Company so that it
will continue to satisfy the current conditions for approval by the Inland
Revenue as an investment trust under Section 842 of the Income and
Corporation Taxes Act 1988 ("Section 842"). See "Item 10. Additional
Information - Taxation." The section titled "Company's Business" in the
Report of the Directors on Page 21 of the Company's Report and Accounts 2002
(the "Report and Accounts") is incorporated herein by reference.

Investment Portfolio

     Investment in the Funds. The Company's investment portfolio at June 30,
2002 consisted of interests in 23 Funds, which for purposes of this annual
report includes various co-investments, and will continue to consist
primarily of interests in these Funds and similar funds offered in the future
by Schroder Ventures or Permira. Of these Funds, 17 were mature and six 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 June 30, 2002,
the number of business enterprises in which the Funds held investments was
151. 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. The Fund in
question will then terminate. Currently, the Permira Italy I Fund is in the
process of being dissolved and, once its assets have been liquidated, will
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
the Advisory Committee.



                                     - 12 -


     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 of the UKLA (the "Listing Rules") impose certain investment
diversification requirements. A list of the Company's investments at June 30,
2002 is set forth at Pages 17 through 20 of 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 9 of the Report and
Accounts, incorporated herein by reference, provide 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 which would have a
materially adverse effect on the Company.

Future Investments

     Consistent with its investment policy, the Company may invest in
Schroder Ventures or Permira funds launched in the future. The Directors will
consider each such investment on its merits and may decline to invest if it
determines 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.

     The Company may acquire further interests in existing Funds in the
secondary market if the Directors believe it appropriate and if it can do so
on acceptable terms. The Company does not intend to acquire further interests
in any Fund if that would result in the Company's acquiring control of that
Fund.



                                     - 13 -


     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 June 30, 2002, the Company
held co-investments totaling GBP15.8 million and representing 3.7% of 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 June 30,
2002, the Company's gross cash balance of GBP40.3 million was held principally
in a portfolio of short-dated treasury bills. 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 June 30, 2002, the Company's investment portfolio consisted of
interests in each of the 23 Funds, which for purposes of this annual report
includes various co-investments. The "List of Investments" table on Pages 17
through 20 of the Report and Accounts, which is incorporated herein by
reference, presents summary information, as of June 30, 2002, 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 June 30, 2002, no underlying "investee company" (a company in
which one of the Funds has invested) comprised more than 14.10% by value of
the Company's net assets. The "Twenty Largest Underlying Companies" table on
Pages 12 through 16 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 June 30, 2002, 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.



                                     - 14 -


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, Schroder Ventures or Permira 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 the existing
cash resources of the Company, from the facilities available under the
euro225,000,000 Revolving Credit Facility Agreement (the "Facility
Agreement") dated March 16, 2001 between the Company, Barings (Guernsey)
Limited and the Royal Bank of Scotland plc and 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 Company's Facility Agreement.



                                     - 15 -


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 December 1995 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 valuation policies are consistent with the current
guidelines issued by the British Venture Capital Association (the "BVCA"). In
accordance with these guidelines where, in an exceptional case, the
application of the valuation policies set forth 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. The
valuation policies that the Company has followed and currently intends to
follow are outlined below.

     Quoted Investments. All investments listed on recognized stock exchanges
are valued at the quoted mid-market price at the balance sheet date. If an
investment is subject to restrictions affecting its disposition, or if the
holding is significant in relation to the issued share capital, a discount of
generally between 0% and 50% to that price will be applied.

     Unquoted Equity Investments. Early Stage Equity Investments (in general,
investments in an investee company that are made to allow the investee
company to develop a business concept or to commence or continue product
development and initial marketing, or to permit the investee company to
initiate commercial manufacturing and sales of a developed product) are
valued at cost unless one of the following applies:



                                     - 16 -


     (i)     Performance indicates that there has been a permanent and
             significant diminution in the valuation of the investment. If this
             is the case, provisions in incremental tranches of 25% of original
             cost will be made.

     (ii)    A significant transaction involving an independent third party at
             arm's length values the investment at a materially different value;
             or

     All unquoted investments, including investments in management buy-outs
and buy-ins, which are not Early Stage Equity Investments ("Development Stage
Equity Investments") are valued at cost, or cost less a provision, for at
least one year unless the basis of valuation is unsustainable. Thereafter,
they will be valued as follows:

     (i)     where available, either on the basis of a significant transaction
             by an independent third party in the equity of the investee company
             or an independent third party valuation of the equity;

     (ii)    where a significant portion of the assets are held in real
             property, on the basis of discounted net asset values;

     (iii)   where the investee company is performing significantly below
             expectations, at cost less provisions in incremental tranches of
             25%; or

     (iv)    where the investee company is profitable and performing
             satisfactorily, on the basis of earnings (see (a), below)
             capitalized at an appropriate price-earnings multiple (see b,
             below), provided that

             (a) the earnings of the investee company will be based on the
                 latest audited accounts or management accounts where
                 appropriate, and

             (b) the price-earnings multiple:

                   * will take into account the capital and debt structure of
                     the investee company,

                   * will be based on either comparable company or industry
                     sector multiples taken from the relevant stock exchange,
                     and

                   * will be subject to a minimum discount of 25% to reflect the
                     illiquidity of the investment and the approximate nature of
                     a valuation based on earnings unless early realization is
                     expected, in which case a smaller discount is applied.

     Unquoted Loan Stock and Preference Shares. Loan stock and preference shares
will be valued at cost plus any accrued interest and redemption premia less any
provisions in incremental tranches of 25% in cases where the investee company is
performing significantly below expectations.



                                     - 17 -


     Valuation of the Portfolio at June 30, 2002. The valuations of the
Company's holdings were based on the value of the underlying assets of the
Funds as of June 30, 2002, 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 June 30, 2002, these combined entities had 11
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
June 30, 2002, 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 June 30, 2002 are summarized in the table below.


<TABLE>
<CAPTION>
                            Number of    Total Committed   Location of Advisers
      Region           Schroder Funds      Capital (GBP
                                               Millions)
<S>                               <C>               <C>             <C>

Continental Europe                  9            3,015.5  France,Germany, Italy,
                                                          Spain
Asia                                5              671.7  Hong Kong, India,
                                                          Japan, Singapore
North America /                     6              626.8  Canada, United States,
International (Life Sciences)                             United Kingdom
United Kingdom                      3              335.9  United Kingdom
                                   23            4,649.9

</TABLE>


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.



                                     - 18 -


     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.

     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.

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

     Co-Investment by Schroder Ventures Executives. When a new Fund is
offered, executives of Schroder Ventures (which in the past included
executives of the Company) 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 (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 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.



                                     - 19 -


     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.

     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
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
the Fund should make an investment, further Calls are made to the investors
for payment of part or all of the outstanding committed capital. The
committed capital of a Fund is typically called within five years. 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 at a discount of up to
25% of their value and/or in that investor's existing interests in the 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.



                                     - 20 -


     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.

     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.



                                     - 21 -


     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
preferential drawing right 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.

     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 reflect those payable to other directors on the
relevant boards.

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.


                                     - 22 -

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 Financial Services Authority 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. The Listing Rules contain extensive provisions dealing
with, among other matters, the announcement of information to the Financial
Services Authority and the LSE and to shareholders of the Company,
transactions entered into by the Company and Directors' responsibilities.

C.   Organizational Structure

The Trust

     The Trust is a Guernsey unit trust in which the Company owns
approximately 99% of the ordinary units and 90% of the B units, and is
accordingly treated as a subsidiary of the Company. The remaining units are
owned by Schroder Investments (Bermuda) Limited. The principal purpose of the
Trust is to invest in unit trusts, limited partnerships or companies
comprising Funds with the objective of participating in venture capital and
buy-out opportunities. The trustee of the Trust, which may be removed by the
holders of the ordinary units, is Barings (Guernsey) Limited (the "Trustee").



                                     - 23 -


     In each of its fiscal years, the Trust generally will distribute to the
unitholders income in excess of any expenses of the Trust that have been paid
out of such income (provided that the manager of the Trust is entitled to
defer until the following fiscal year the distribution of any such income
which cannot conveniently or equitably be distributed until such time). The
income will first be distributed to holders of the B units, in proportion to
their ownership of the B units, until such holders have received an amount
equal to LIBOR on the amount subscribed for each unit, with the remainder
distributed to the holders of ordinary units in proportion to their ownership
of ordinary units. In contrast, any distribution of (i) the Trust's assets,
(ii) the proceeds of any sale, redemption or other disposition of the Trust's
assets or (iii) capital receipts derived from its investments, shall be
distributed to the holders of the ordinary units in proportion to their
ownership of ordinary units except in the event of the dissolution or
termination of the Trust.

     Except in the case of the incapacitation, resignation or removal of the
manager of the Trust and the failure of the holders of the ordinary units to
agree on a successor manager, or in other specified events, the Trust may not
be dissolved or wound up prior to April 30, 2006. Further, the Trust is
prohibited from distributing (i) its assets, (ii) the proceeds of any sale,
redemption or other disposition of its investments, and (iii) any capital
receipts in respect of its investments, until April 30, 2006.

     The Trust will terminate on the earlier of April 30, 2006 or written
notice from the Trustee to the unitholders upon the occurrence of certain
specified events. Upon dissolution or termination of the Trust, the Trust's
assets may be distributed in kind, or sold and the proceeds thereof
distributed, to each holder of B units in the amount of GBP1,000 per unit, with
any remaining assets or proceeds distributed to the holders of ordinary units
in proportion to their ownership of ordinary units.

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, SVLL, 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.



                                     - 24 -


D.   Property, Plants and Equipment

     Schroder Ventures International Investment Trust plc does not own or
lease any real property. Schroder Ventures International Investment Trust
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. Schroder Ventures International Investment Trust plc's
principal place of business and head office is maintained at Burleigh House,
357 Strand, London WC2R 0HS England.

Item 5.     OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     The "Portfolio Activity," "Schroder Ventures (London) Limited and Schroder
Ventures North America Inc.," "Board," "Convertible Bond," "Change of
Year-End," "Outlook" and "Recent Events" 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 11 of the Report and Accounts, are incorporated
herein by reference.

A.   Operating Results

Year Ended June 30, 2002 Compared to 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
the 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 Report and Accounts, as well as the "Portfolio Activity" sections of
the "Chairman and CEO's Statement" on Page 4 of the Report and Accounts, the
"Overview" and "Fund Transactions" sections of the "Portfolio Review" on Page
6, the "Portfolio Performance" section of the "Portfolio Review" on Page 10
and the "Cash and Marketable Securities" section of the "Portfolio Review" on
page 11 of the Report and Accounts, are incorporated herein by reference.

     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 2001, as well as the "Overview" and "Portfolio
Activity" sections of the "Chairman's Statement" on Page 4 of the Report and
Accounts 2001, the "Overview" and "Fund Transactions" sections of "Portfolio
Review" on Page 7, the "Portfolio Performance" section of "Portfolio Review"
on Page 9 and the "Cash and Marketable Securities" section of the Portfolio
Review on page 12 of the Report and Accounts 2001, are incorporated herein by
reference.



                                     - 25 -


Year Ended June 30, 2001 Compared to Year Ended June 30, 2000

     During the year ended June 30, 2001, the Company received notices of
Calls aggregating approximately GBP155.4 million, compared to notices of Calls
during the year ended June 30, 2000 aggregating approximately GBP162.3 million,
and received proceeds from dispositions of underlying investments of the
Funds of approximately GBP51.9 million, compared to proceeds of approximately
GBP187.8 million during the year ended June 30, 2000. Uncalled commitments to
Schroder Ventures' Funds decreased from approximately GBP580.7 million as of
June 30, 2000 to approximately GBP456.3 million as of June 30, 2001.

     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 2001, as well as the "Overview" and "Portfolio
Activity" sections of the "Chairman's Statement" on Page 4 of the Report and
Accounts 2001, the "Overview" and "Fund Transactions" sections of "Portfolio
Review" on Page 7, the "Portfolio Performance" section of "Portfolio Review"
on Page 9 and the "Cash and Marketable Securities" section of the Portfolio
Review on page 12 of the Report and Accounts2001, are incorporated herein by
reference.

     The "Company's Business," "Revenue and Earnings," "Dividend," "Policy
for Payment of Creditors," "Purchase of Shares for Cancellation," and "Issues
of New Shares" sections of the "Report of the Directors" on Pages 23 and 24
of the Report and Accounts 2000, as well as the "Overview" and "Realisations"
sections of the "Chairman's Statement" on Page 4 of the Report and Accounts
2000, and the "Overview" and "Cashflow" sections of "Portfolio Review" on
Page 6 and the "SVIIT Portfolio Performance" section of "Portfolio Review" on
Page 10 of the Report and Accounts 2000, are incorporated herein by
reference.

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, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. 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 Activity," "Schroder Ventures (London) Limited and
Schroder Ventures North America Inc.," "Board," "Convertible Bond," "Change
of Year-End," "Outlook" and "Recent Events" 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 11 of the Report and Accounts, are
incorporated herein by reference.



                                     - 26 -


Commitments and Contingencies

     Costs Relating to Enlargement of the Company's Operations. The costs of
acquisition of SVLL and SVNA (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 SVLL 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. SVLL together with SVNA 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.

     Fund Commitments. The Company's uncalled commitments to the Funds
decreased from approximately GBP456.3 million as of June 30, 2001 to
approximately GBP403.2 million as of June 30, 2002. Permira Europe II and the
Schroder Ventures US Fund both had final closings during fiscal year 2001 on
October 20, 2000 and September 29, 2000, respectively, and are now 41.0% and
62.2% drawn-down, respectively. The Schroder Canadian Buy-Out Fund III had a
final closing of C$190 million in fiscal year 2001 on June 28, 2001 and is
27.75% drawn down. The Company's commitment to this fund at its final closing
was C$50.5 million.

     Calls. As of June 30, 2002, the Company had uncalled Fund commitments of
GBP403.2 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 distributions from its
holdings in the Funds.

     For the fiscal year ended June 30, 2002, the Company received proceeds
from dispositions of underlying investments in the Funds of approximately
GBP49.0 million, which together with existing cash resources of the Company
were sufficient to satisfy notices of Calls aggregating GBP77.5 million
received during such period.

     On September 30, 2002, it was announced that, following the successful
offer by Funds advised by Permira for the ordinary shares of Ferretti SpA,
the Italian luxury motor yacht group currently listed on the Milan Stock
Exchange, the Company, through its interest in Permira Funds, has invested in
Ferretti SpA, which will be taken private. Ferretti was originally acquired
by Funds advised by Permira in 1998 and floated on the Milan Stock Exchange
in June 2000. At that time, Permira sold the majority of its interest in
Ferretti and has since sold its remaining holdings. Since 1998, the Ferretti
Group has grown organically and through acquisitions and is currently
Europe's largest builder of luxury motor yachts. The Company's share of this
investment will be approximately GBP36 million, representing 8.5% of its net
assets as of June 30, 2002.



                                     - 27 -


     On November 21, 2002, the Company announced that it had been advised
that a Fund in which it invests has signed an agreement to sell its majority
stake in Homebase to GUS plc. If the transaction is completed on the terms
set forth in the purchase and sale agreement, the Company's net cash
consideration from this disposition will be approximately GBP95 million,
representing a premium of approximately GBP58 million to the June 30, 2002
valuation. This gain would add approximately 57p to the Company's net asset
value per share. In March 2001, Permira backed the buy-out of Homebase from J
Sainsbury plc. In April 2002, Homebase underwent a recapitalization, as a
result of which it returned the majority of the cost of the investment to
investors, and as of June 2002, Homebase was valued at GBP36.8 million.
Assuming the transaction is completed on the terms set forth in the purchase
and sale agreement, the Company will have received proceeds from its
investment, including the proceeds from the recapitalization, of
approximately GBP109 million, compared to a total cost of GBP20 million. The
transaction is subject to review by the Office of Fair Trading, and there can
be no assurance that the proposed transaction will be approved in its current
form.

     On December 18, 2002, Schroder Ventures International Investment Trust plc
announced that Funds advised by Permira had entered into an agreement to
acquire Travelodge and Little Chef, the roadside hotel and restaurant chains,
from Compass Group PLC. The Company's share of the investment will be
approximately GBP55 million. Travelodge is the U.K.'s second-largest budget
hotel company, with more than 12,000 rooms located in key roadside and urban
locations in the U.K. Little Chef is the U.K.'s leading roadside restaurant
business with 368 outlets on major trunk roads, in addition to outlets on
Compass Group's Moto sites. Both represent two of the leading brands in the
U.K. hospitality industry. Permira intends to develop both businesses
extensively over the next few years. Completion of the sale is conditional
only upon regulatory clearance from the European Commission and is expected
to take place by the end of January 2003.

     Share Repurchases. At the Annual General Meeting of the Company held on
November 22, 2001, the Company was authorized to purchase up to 15,329,628
Ordinary Shares (representing 14.99% of the Ordinary Shares in issue as of
September 14, 2001). 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.  During the year ended June 30, 2002, the authority was not
utilized and the authority was renewed by special resolution at the November
26, 2002 Annual General Meeting.

Potential Sources of Capital

     Convertible Bond Issuance. On November 21, 2001, the Company issued,
through a private placement, GBP40 million of unlisted convertible bonds with
an annual coupon of 4.5%, due in 2011. The bonds are convertible into fully
paid Ordinary Shares at a conversion price of 399p (as adjusted following the
publication of the Report and Accounts).  The Company may redeem some or all
of the Bonds at their principal amount together with accrued interest if



                                     - 28 -


     * at any time on or after November 21, 2004, the average of the market
       price of the Ordinary Shares over a 20-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 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, any holder of the Bonds may, prior to the redemption, elect in
writing to the Company to convert any Bonds that are subject to the redemption
notice.

     The Bonds were admitted to the Official List and to trading on the LSE's
market for listed securities on July 5, 2002. The "Convertible Bond" section
on Page 4 of the "Chairman and CEO's Statement" 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 March 16, 2001, the Company, Barings (Guernsey)
Limited, as trustee of the Trust and the Royal Bank of Scotland plc (the
"Bank") entered into a new facility agreement (the "Facility Agreement") to
permit borrowings of up to euro225 million (approximately GBP146 million as of
June 30, 2002). The Facility Agreement is available for a five-year period,
and may be extended for additional 12-month periods. 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 fee of approximately GBP687,000 for the fiscal year ended
June 30, 2002. The Company also paid an arrangement fee of GBP146,000 to extend
the Facility Agreement to March 16, 2007.

     The Facility Agreement is a multi-currency revolving loan facility with
an available aggregate principal amount of up to euro225 million
(approximately GBP146 million as of June 30, 2002). 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, and a margin of 0.75% annually (or 1% annually if
any Default (as defined in the Facility Agreement) has occurred or is
continuing or if Consolidated Gross Borrowings (as defined in the Facility
Agreement) exceed 20% of Consolidated Adjusted Investment Assets (as defined
in the Facility Agreement)). 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.



                                     - 29 -


     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 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 June 30, 2002, there were no amounts outstanding under the
Facility Agreement.

     See "Item 10. - Other Information - Material Contracts."

Issues of New Shares

     At the November 22, 2001 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 November 26, 2002 Annual General Meeting:

     1. To issue relevant securities up to an aggregate nominal amount of (a)
        GBP1,022,656 (equivalent to 1% of the Company's issued ordinary share
        capital as of October 1, 2002) in connection with the Company's
        Executive Share Option Plan 2001; and (b) GBP34,088,566 (equivalent to
        one-third of the Company's issued ordinary share capital as of October
        1, 2002), 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 GBP1,022,656 (equivalent to 1% of the Company's issued
        ordinary share capital as of October 1, 2002) 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 GBP10,226,569 (equivalent to 10% of the Company's issued
        ordinary share capital as of October 1, 2002).

     The "Issue of New Shares" section on Pages 21 and 22 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 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.



                                     - 30 -


     In the absence of unforeseen circumstances, the Directors expect to
distribute sufficient dividends from revenue profits to shareholders in
accordance with this policy each year. The Company's final dividend of 1.80
pence per Ordinary Share for the year ended June 30, 2001 was paid on
November 26, 2001 to shareholders of record as of November 2, 2001. The
Directors have not recommended the payment of a final dividend for the year
ended June 30, 2002, as the Company has reported a deficit for the year on
its revenue account.

     The "Dividend" section on page 21 of the Report and Accounts is
incorporated herein by reference.

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,
investments, proposed operations and required cash distributions to the
holders of the Ordinary Shares. See "Item 10. Additional Information -
Taxation - Dividend Policy."

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.

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

None.

D.   Trend Information

     The "Outlook" and "Recent Events" 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 11 of the Report and Accounts, are incorporated
herein by reference.

Item 6.     DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.   Directors and Senior Management

     The following table presents the number of Ordinary Shares beneficially
owned by each Director or their families as of June 30, 2002:



                                     - 31 -

<TABLE>
<CAPTION>
               Name of Director               Ordinary Shares
                                             Beneficially Owned
                <S>                                  <C>
               J.J. McLachlan                       15,827
               N.E.H. Ferguson                     202,900
               C.J. Govett                          87,500
               A.J. Habgood                         25,000
               E.W. Koning                            0
               D. Raeburn                           60,000
               A.F. Sykes                             0
               A.C. Williams                        11,235

               Total                               402,462

</TABLE>


     The description of the Directors under the heading "Directors" on Page
22 of the Report and Accounts is 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 June 30, 2002:

<TABLE>
<CAPTION>
               Name of Director              Compensation Received
                     <S>                                 <C>
               J.J. McLachlan                       GBP75,000
               N.E.H. Ferguson (Executive)          GBP823,000
               C.J. Govett                          GBP24,000
               A.J. Habgood                         GBP24,000
               E.W. Koning                          GBP20,000
               D. Raeburn                           GBP22,000
               I.P. Sedgwick                        GBP17,000*
               A.F. Sykes                           GBP4,000**
               A.C. Williams (Executive)           GBP101,000**

               Total                               GBP1,110,000
</TABLE>

               *Peter Sedgwick resigned as a Director on May 3, 2002
               **Messrs. Sykes and Williams were appointed Directors on May 3,
               2002.


The "Policy on the Remuneration of the Executive Directors" and the "Current
Remuneration" sections on Pages 27 and 28 of the Report and Accounts are
incorporated herein by reference. The total compensation (excluding pension
contributions) paid to the Directors for the period from July 1, 2001 through
June 30, 2002 was GBP1,110,000. 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.



                                     - 32 -


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 June 30, 2002, 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 GBP246,000, of which GBP126,000 was outstanding at June 30, 2002. 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 investment trust dealing
services to the Company. Total fees paid or payable for such services during
the fiscal year ended June 30, 2002 totaled GBP21,000. Schroder Investment
Management Limited also provides taxation services to the Company. Total fees
payable for such services during the fiscal year ended June 30, 2002 totaled
GBP22,000, all of which was outstanding as of such date.

     Beginning April 18, 2000, the management of the Company's fixed interest
portfolio was delegated from J. Henry Schroder & Co. Limited ("JHS") to
Schroder Investment Management (UK) Limited. Schroder Investment Management
(UK) Limited is entitled to receive a fee 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,



                                     - 33 -


     * 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 June 30, 2002 was GBP25,000, of which GBP10,000 was outstanding as of June
30, 2002.

Compensation of Officers and Employees

     The Directors have appointed Nicholas Ferguson as Chief Executive
Officer and Andrew Williams as an Executive Director. Schroder Ventures
International Investment Trust plc currently has no other Executive officers
or employees (other than the company secretary) and it is anticipated that
Schroder Ventures International Investment Trust plc will have no other
employees or officers (other than the company secretary) in the future. As of
June 30, 2002, the Company's subsidiaries, SVLL and SVNA, 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 Schroder Ventures International
Investment Trust 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.



                                     - 34 -


     The following table presents information with respect to option grants
to Directors of the Company under the Plan as of June 30, 2002:

<TABLE>
<CAPTION>
              Director           Shares Underlying         Grant Date     Exercise Price      Earliest       Latest Exercise
                                     Options                                                Exercise Date         Date
<S>                                     <C>                    <C>             <C>              <C>               <C>
N.E.H. Ferguson..................    715,446              June 21, 2001     410.0p         June 21, 2004      June 20, 2011
N.E.H. Ferguson..................    357,724              June 21, 2001     410.0p         June 21, 2005      June 20, 2011
N.E.H. Ferguson..................    404,484              April 5, 2002     334.5p         April 5, 2005      April 4, 2012
A.C. Williams.....................   373,983              June 21, 2001     410.0p         June 21, 2004      June 20, 2011
A.C. Williams.....................   186,992              June 21, 2001     410.0p         June 21, 2005      June 20, 2011
A.C. Williams.....................   272,645              April 5, 2002     334.5p         April 5, 2005      April 4, 2012

</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 on Pages 27 and 28 of the Report and
Accounts is incorporated herein by reference.

C.   Director 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. John Govett, Anthony Habgood and Edgar Koning retired at
the Company's Annual General Meeting on November 26, 2002 and were reelected.
The Directors appointed Andrew Sykes as a non-executive Director, and Andrew
Williams as an Executive Director, on May 3, 2002. In accordance with the
Company's Articles of Association, the election of Messrs. Sykes and Williams
as Directors was approved at the November 26, 2002 Annual General Meeting.
Peter Sedgwick resigned as a Director on May 3, 2002.



                                     - 35 -


     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. Schroder Ventures
International Investment Trust plc currently has no other officers or
employees (other than the company secretary) and it is anticipated that
Schroder Ventures International Investment Trust 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 SVLL 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, Andrew Sykes 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. The audit committee is responsible for ensuring that the Company
maintains the highest standards of integrity, financial reporting and
internal control. 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 remuneration committee is composed of John McLachlan (Chairman),
John Govett and Anthony Habgood, all of whom are independent Directors. 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.



                                     - 36 -


     The "Directors" section of the "Report of the Directors" on Page 22 of
the Report and Accounts and the "Board Committees" section of the "Corporate
Governance" section on Pages 24 and 25 of the Report and Accounts are
incorporated herein by reference.

D.   Employees

     See "Compensation of Officers and Employees," above.

E.   Share Ownership

     See "Executive Share Option Plan," above.

     The description of the share ownership of the Directors of the Company
under the heading "Directors" in the "Report of the Directors" on Page 22 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 June 30, 2002 consisted of
102,265,699 Ordinary Shares, par value GBP1 each, all of which were fully paid
as of June 30, 2002. Each Ordinary Share has the same voting rights as every
other Ordinary Share.

     The table entitled "Substantial Share Interests" on Page 22 of the
Report and Accounts, which lists owners of in excess of 3% of the Ordinary
Shares as of October 1, 2002, is incorporated herein by reference.

     As of June 30, 2002, the Directors and their families were the
beneficial owners of an aggregate of 402,462 Ordinary Shares or approximately
0.39% of all Ordinary Shares outstanding as of such date. Nicholas Ferguson
and Andrew Williams have also been granted options representing 2,311,274
Ordinary Shares or 2.26% of the total number of Ordinary Shares outstanding
as of June 30, 2002. 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

     The tables included in the sections entitled "Substantial Share
Interests" on Page 22 of the Report and Accounts, Page 23 of the Report and
Accounts 2001 and Page 24 of the Report and Accounts 2000, each of which
lists owners of in excess of 3% of the Ordinary Shares, are incorporated
herein by reference.



                                     - 37 -


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 22 of the Report and
Accounts is incorporated herein by reference.

     As of June 30, 2002, Metropolitan Life Insurance Company, or Met Life,
owned Bonds valued at GBP20 million. Because Met Life has the right to convert
the Bonds into Ordinary Shares at 399p per Ordinary Share, 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, it would own
approximately 5,012,531 Ordinary Shares, or approximately 5% of the total
number of Ordinary Shares outstanding assuming the conversion of the Met Life
Bonds.

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.

     Nicholas Ferguson, a Director and the Company's Chief Executive Officer,
is also the Chairman of the Board of SVLL, a wholly owned subsidiary of the
Company. Andrew Williams, a Director, is Chief Executive Officer of SVLL.
Andrew Sykes, a Director, is also Chairman of Schroder & Co. and a Director
of Schroders plc.

     Nicholas Ferguson and Andrew Williams, who are employed by Schroder
Investment Management Limited, are seconded to 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. 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 also is a non-executive director of Schroders plc and,
along with John McLachlan, represents 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 Funds 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.



                                     - 38 -


C.   Interests of Experts and Counsel

     Not applicable to this Form 20-F.

Item 8.     FINANCIAL INFORMATION

A.   Consolidated Statements and Other Financial Information

     The Consolidated Statement of Total Return, Balance Sheets, Consolidated
Cash Flow Statement, and the accompanying Notes on Pages 30 through 51 of the
Report and Accounts provide detailed financial information regarding the
Company, and are shown in Item 17, including a reconciliation in note 30 of
the significant differences between U.K. GAAP and U.S. GAAP, applicable to
the Company.

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. The Directors are of the
opinion that the outcome of the inquiry should have no bearing on the
Company's relationship with Permira or on the Company's financial position.

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.



                                     - 39 -


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:

     Five Most Recent Fiscal Years

<TABLE>
<CAPTION>
                                       Year Ended,
                                          June 30
                         1998       1999     2000     2001     2002
  <S>                     <C>        <C>      <C>      <C>      <C>
High Market price      190.0p     292.5p   462.0p   533.0p   393.0
Low Market Price       149.0p     149.0p   255.0p   380.5p   296.5

</TABLE>


     Two Most Recent Fiscal Years
<TABLE>
<CAPTION>
                     High Market Price   Low Market Price
   <S>                     <C>                <C>
Fiscal Year 2001        533.0p             380.5p
First Quarter           533.0p             459.5p
Second Quarter          519.5p             482.5p
Third Quarter           486.5p             382.5p
Fourth Quarter          417.5p             380.5p
Fiscal Year 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

</TABLE>


     Most Recent Six Months

<TABLE>
<CAPTION>
                     High Market Price   Low Market Price
   <S>                      <C>               <C>
June                    372.0p             354.0p
July                    355.0p             284.5p
August                  305.5p             298.0p
September               317.5p             293.0p
October                 311.0p             277.0p
November                357.0p             306.0p

</TABLE>


                                     - 40 -


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.

F.   Expenses of the Issue

Not applicable to this Form 20-F.

Item 10.    ADDITIONAL INFORMATION

All portions of Item 10 other than Items 10. B-E and H are inapplicable to
this Form 20-F.

A.   Share Capital

Not applicable to this Form 20-F.



                                     - 41 -


B.   Memorandum and Articles of Association of Schroder Ventures
International Investment Trust 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 Schroder Ventures
International Investment Trust 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 therefor 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.



                                     - 42 -


     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


                                     - 43 -



     * 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).



                                     - 44 -


     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.



                                     - 45 -


     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.



                                     - 46 -


     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.

     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

The Deposit Agreement

     The Company and The Bank of New York entered into a Deposit Agreement
dated November 30, 2000 (the "Deposit Agreement") pursuant to which The Bank
of New York agreed to act as Depositary and custodian in connection with the
EDRs. The Company has agreed to pay The Bank of New York a fee of euro10,000
per annum in connection with the performance of its functions under the
Deposit Agreement.

     The Deposit Agreement provides that the EDRs will be in registered form
with the register located outside the United Kingdom. At the same time as
entering into the Deposit Agreement, the Company entered into a deed poll in
favor of holders of EDRs, agreeing to allow holders of EDRs to enforce
certain provisions of the Deposit Agreement directly, if the Company itself
fails to perform those obligations.



                                     - 47 -


Acquisition Agreements for SVLL and SVNA

     Pursuant to the share purchase agreement dated March 16, 2001 between
Schroder Ventures Limited as seller and the Company as purchaser, and
following receipt of shareholder approval and authorization by the Investment
Management Regulatory Organisation, or IMRO, the Company acquired SVLL for
GBP100 in cash. Pursuant to the share purchase agreement, all of the costs of
SVLL that relate to the period from January 1, 2001 were borne by the
Company. The Company also agreed to discharge the liability of SVLL to
Schroders plc in respect of the reimbursement of all amounts paid by
Schroders plc in respect of the liabilities of SVLL for the period from
January 1, 2001. All income stream benefits accruing to SVLL since January 1,
2001 are for the benefit of the Company.

     Pursuant to the stock purchase agreement dated April 5, 2001 between
Schroder Venture Managers Inc. as seller and SVLL as purchaser, SVLL acquired
SVNA for $50,000 in cash. The agreement is governed by New York law.

Services agreements

     SVLL entered into services agreements, each dated March 16, 2001, on the
same terms except for the fees payable, with Schroder Ventures K.K. (Japan),
Schroder Capital Partners Limited (Asia), Schroders & Associates Canada Inc.
(Canada), Schroder Ventures Life Sciences Advisers Limited (Life Sciences)
and Schroder Venture Partners LLC (U.S.). Pursuant to these agreements, SVLL
will provide certain services to the recipient of the services in respect of
existing funds and the next new fund to be launched by the recipient. SVLL
agreed that for a specified period it will not without the recipient's
consent be involved in advising on the raising of private equity funds for
third-party managers or advisers except funds for other Schroder Ventures
entities or funds of funds and that it will not solicit investments from any
investor in any Schroder Ventures' fund advised by the recipient at the date
of the agreement unless for the purposes of their investing in any other
Schroder Ventures' fund. SVLL also agreed that throughout the term of the
services agreement it will not be involved in raising for the Company or SVLL
in the territory of the recipient a buy-out, venture capital or development
capital fund which could compete with any Schroder Ventures' funds which are
advised by the recipient. The consideration payable by the recipient for the
services consists of a transition fee and an advisory fee. The transition fee
is a fixed annual sum and the amount of the advisory fee depends on the
capital commitments made to the fund. The provisions on termination depend,
inter alia, on when, and if, a new fund is launched.

     The Company and SVLL entered into a services agreement dated March 16,
2001 with Schroder Ventures Europe BV ("SVE") pursuant to which SVLL will
provide certain services to SVE in respect of funds advised by SVE. The
Company agreed that for a specified period it will not without SVE's consent
be involved in the raising of funds or money for any person which could
compete with SVE or the other Schroder Ventures entities referred to in the
paragraph above or with any fund advised by such entities except funds for
such persons or funds of funds and that it will not solicit investments from
investors in any Schroder Ventures' fund advised by SVE at the date of the
agreement unless for the purposes of their investing in any other Schroder
Ventures' fund. The consideration paid by SVE for the services was a fee of
$1,000,000. If SVLL is to provide services to SVE after December 31, 2001, it
will do so on terms to be set out in a new agreement between the parties.



                                     - 48 -


     SVLL entered into a services agreement dated March 16, 2001 with
Schroder Ventures Limited ("SVL") whereby SVLL will provide administrative
services to SVL. The consideration to be paid by SVL will be determined by
reference to an agreed annual budget, with the budget for the first year of
the agreement being $350,000. The scope of services and the budget for
subsequent years will be agreed between SVLL and SVL on an annual basis.
Subject to the annual agreement of the scope of work and the fees, the
agreement will continue until December 31, 2003.

     SVLL entered into a services agreement dated March 16, 2001 with
Schroder Ventures Investments Limited ("SVIL") whereby SVLL will provide
administrative services to SVIL. The consideration to be paid by SVIL will be
determined by reference to an agreed annual budget, with the budget for the
first year of the agreement being GBP140,000. The fee amount and services to be
provided in future years will be agreed on an annual basis between SVLL and
SVIL. Subject to the annual agreement of the scope of work and the fees, the
agreement will continue until December 31, 2003.

     SVLL entered into a services agreement dated March 14, 2001 with
Schroders plc to provide advisory services to Schroders plc and those of its
subsidiaries that have general partner, investment management or advisory
duties to Schroder Ventures' funds. The consideration to be paid for the
first year of the agreement is GBP300,000. The fee amount and services to be
provided in future years will be agreed on an annual basis between SVLL and
Schroders plc. Subject to the annual agreement of the scope of work and the
fees, the agreement will continue until December 31, 2003.

     Pursuant to an agreement dated March 14, 2001 (the "Fund of Funds
Agreement") between SVLL and Schroder Investment Management (Ireland) Limited
("SIM(I)"), SVLL will provide investment advice to SIM(I) in connection with
the establishment of a private equity fund of funds. SIM(I) appointed SVLL as
investment adviser to the fund of funds pursuant to an investment advisory
agreement entered into on January 17, 2002. SVLL will be reimbursed for the
time costs and expenses in structuring the fund of funds from income earned
from the fund for the first three years by SIM(I) as investment manager. SVLL
has agreed that, provided it is appointed adviser to subsequent Schroders
funds of funds, for a specified period it will not without SIM(I)'s consent
provide advisory services to competitors of Schroders plc or its affiliates
operating in the same geographical market as them. SVLL is paid an advisory
fee calculated on a time-spent basis, subject to a cap of one-half of the
management fees earned by SIM(I) from the fund of funds. The investment
advisory agreement continues for an indefinite period but is terminable on,
inter alia, default or unremedied poor performance, illegality of performance
and termination of SIM(I)'s appointment as investment manager to the fund of
funds. Subject to certain restrictions, the investment advisory agreement is
also terminable on six months' notice by SIM(I) if at any time prior to
December 31, 2005 Solomon Owayda and/or Andrew Williams ceases to provide the
advisory services on behalf of SVLL and no suitable replacement is approved
by SIM(I) within 19 weeks of the date he or they ceased to provide such
advisory services.



                                     - 49 -


     Pursuant to an agreement dated June 12, 2002 between SIM(I) and SVLL, SVLL
will provide investment advice to Schroder Cumulative Private Equity Funds, a
feeder fund into the fund of funds. For as long as the feeder fund's only
investment is the fund of funds, SVLL is not entitled to any fees for its
investment advice. In all other respects, the investment advisory agreement
is on the same terms as the fund of funds investment advisory agreement.

Facility Agreement

     The Company and Barings (Guernsey) Limited, as trustee of the Platinum
Trust, as borrowers and guarantors entered into a facility agreement dated
March 16, 2001 (the "Facility Agreement") with The Royal Bank of Scotland plc
as arranger, agent, security trustee and original lender in respect of a
syndicated multicurrency revolving credit facility for a maximum of
euro225,000,000 for a minimum term of five years. Loans under the facility
bear interest at the rate of LIBOR or, in relation to any loan in euro,
EURIBOR, plus mandatory costs (if any) and a margin of 0.75% per annum (or 1%
per annum if any Default (as defined in the Facility Agreement) has occurred
or is continuing or if Consolidated Gross Borrowings (as defined in the
Facility Agreement) exceed 20% of Consolidated Adjusted Investment Assets (as
defined in the Facility Agreement)). The terms of the Facility Agreement
include a guarantee given by each borrower of the other borrower's
obligations.

     Both the Company and Barings (Guernsey) Limited also each executed 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.

     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 June 30,
2002.

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.



                                     - 50 -


     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.

     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

     The "Investment Trust Status" discussion below has been reviewed and
approved by Slaughter and May, U.K. tax counsel to the Company. Slaughter and
May has not rendered an opinion to the Company on these matters. The
discussion set forth under "Tax Treaty Between the United Kingdom and the
United States" and "U.S. Taxation" has been prepared by Shaw Pittman, U.S.
tax counsel to the Company. Shaw Pittman has not rendered an opinion to the
Company on these matters.

     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:



                                     - 51 -


     (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.

     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."



                                     - 52 -


     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.



                                     - 53 -


     U.S. investors (other than U.S. corporations controlling, directly or
indirectly, 10% or more of the voting stock of the Company) that receive
dividends from the Ordinary Shares are entitled to a payment from the Inland
Revenue of an amount equal to the amount, if any, by which (i) the tax credit
to which a U.K. resident individual would have been entitled had he received
the dividend (the "U.K. tax credit"), exceeds (ii) a notional withholding tax
of 11.11% of the aggregate amount of the dividend and the tax credit. Because
the U.K. tax credit available under U.K. law is currently one-ninth (11.11%)
of the cash dividend paid by the Company, the U.K. tax credit is equal to the
notional withholding tax, and therefore no amount is payable by Inland
Revenue to such a U.S. investor. For U.S. federal income tax purposes, such a
U.S. investor may elect either (i) to report, as a taxable dividend, the sum
of the cash dividend received and the U.K. tax credit, and claim (subject to
the limitations provided under U.S. tax law) a foreign tax credit for the
notional 15% withholding tax (up to the amount of the U.K. tax credit) or
(ii) to report as a taxable dividend only the cash dividend received. The
procedures for claiming a credit are outlined in U.S. Internal Revenue
Service Revenue Procedure 2000-13, 2000 - 6 I.R.B., 515. An eligible U.S.
investor may elect to be treated as receiving the amount due under the Treaty
without affirmatively making a claim to the U.K. Inland Revenue. To do so,
the U.S. investor must complete an Internal Revenue Service Form 8833
(Treaty-Based Return Position Disclosure) and file such Form with the
investor's U.S. federal income tax return.

     Under the Treaty, a U.S. corporation that is a U.S. resident for
purposes of the Treaty and that controls, directly or indirectly, 10% or more
of the voting stock of the Company is generally entitled to a payment from
the Inland Revenue of an amount equal to one-half of the U.K. tax credit
referred to above, less a withholding tax of 5% of the aggregate amount of
the dividend and the one-half tax credit. At the current U.K. tax credit
rate, these rules result in a repayment to the U.S. corporation of 0.28% of
the cash dividend. A U.S. corporation claiming the repayment must report, as
taxable dividend income, the sum of the cash dividend and the tax credit, and
may claim (subject to the limitations provided under U.S. tax law) a foreign
tax credit for the notional 5% withholding tax.

     If treaty relief is unavailable, or a valid treaty claim is not made, no
U.K. withholding tax will apply to payments of dividends on Ordinary Shares,
but the dividends will not be accompanied by any tax credit.

     On July 24, 2001, the United States and United Kingdom signed a new
double tax treaty (the "New Treaty"), which has not yet been ratified by both
parties. Under the terms of the New Treaty, U.S. investors would not be
entitled to any payment from the Inland Revenue with respect to dividends on
the Ordinary Shares. The New Treaty would allow the United Kingdom to impose
a withholding tax on dividends paid to U.S investors, although no such
withholding tax is currently imposed under U.K. law. The relevant provisions
of the New Treaty are scheduled to take effect as of the first day of the
second month following the ratification of the New Treaty by both countries.

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.



                                     - 54 -


     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 British pounds for a different amount will be U.S. source
ordinary income or loss.

     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 will
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.



                                     - 55 -


     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 a security for a loan will be treated as having disposed of such Ordinary
Shares.



                                     - 56 -


     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 30.5% but is scheduled to decline to 28% by 2006. 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.



                                     - 57 -


F.   Dividends and Paying Agents

Not applicable to this Form 20-F.

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 50-51 of the
Report and Accounts is incorporated herein by reference.

Item 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable to this Form 20-F.



                                     - 58 -


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) Not applicable as reference period ended prior to August 29, 2002.

(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)


                                     - 59 -


                                    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 years ended
     30 June 2002, 2001 and 2000 ..................................F2
     Consolidated balance sheets at
     30 June 2002 and 2001 ........................................F3
     Consolidated cash flow statements for the years ended
     30 June 2002, 2001 and 2000 ..................................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 Number                        Exhibit Name
<S>                                        <C>                     <C>
1.1                            Memorandum of Association            *
1.2                            Articles of Association, as          *
                               adopted on December 5, 2000
2.1                            Registrar and Paying Agency   Filed herewith
                               Agreement, dated November
                               21, 2001, between the
                               Company, The Law Debenture
                               Trust Corporation p.l.c.
                               and J.P. Morgan Chase Bank.
2.2                            Listing Particulars, dated    Filed herewith
                               July 2, 2002
2.3                            Trust Deed, dated November    Filed herewith
                               21, 2001, between the
                               Company and The Law
                               Debenture Trust Corporation
                               p.l.c.
4.1                            Deposit Agreement, dated            **
                               November 30, 2000, between
                               the Company and The Bank of
                               New York
4.2                            Share Purchase Agreement,           **
                               dated March 16, 2001,
                               between the Company and
                               Schroder Ventures Limited
4.3                            Stock Purchase Agreement            **
                               dated April 5, 2001 between
                               Schroder Venture Managers
                               Inc. and Schroder Ventures
                               (London) Limited
4.4                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Ventures K.K. (Japan)
4.5                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Capital Partners Limited
                               (Asia)


                                     - 60 -


4.6                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroders &
                               Associates Canada Inc.
                               (Canada)
4.7                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Ventures Life Sciences
                               Advisers Limited (Life
                               Sciences)
4.8                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Venture Partners LLC (U.S.)
4.9                            Services Agreement, dated           **
                               March 16, 2001, among the
                               Company, Schroder Ventures
                               (London) Limited and
                               Schroder Ventures Europe BV
4.10                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroder
                               Ventures Limited
4.11                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroder
                               Ventures Investments Limited
4.12                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroders plc
4.13                           Fund of Funds Agreement,            **
                               dated March 16, 2001,
                               between Schroder Ventures
                               (London) Limited and
                               Schroder Investment
                               Management (Ireland) Limited
4.14                           Facility Agreement, dated           **
                               March 16, 2001, between the
                               Company and Barings
                               (Guernsey) Limited and the
                               Royal Bank of Scotland plc
4.15                           The Executive Share Option          **
                               Plan
4.16                           Investment Advisory           Filed herewith
                               Agreement, dated January
                               17, 2002, between Schroder
                               Ventures (London) Limited
                               and Schroder Investment
                               Management (Ireland) Limited
4.17                           Investment Advisory           Filed herewith
                               Agreement, dated June 12,
                               2002, between Schroder
                               Ventures (London) Limited
                               and Schroder Investment
                               Management (Ireland) Limited
8.1                            List of Subsidiaries of the         **
                               Company
10.1                           The Company's 2002 Report     Filed herewith
                               and Accounts
10.2                           The Company's 2001 Report     Filed herewith
                               and Accounts
10.3                           The Company's 2000 Report     Filed herewith
                               and Accounts
</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


                                     - 61 -


                                   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.

                   SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc
                   (Registrant)

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


Date: December 18, 2002



                                 CERTIFICATIONS

I, Nicholas Ferguson, certify that:

     1. I have reviewed this annual report on Form 20-F of Schroder Ventures
International Investment Trust plc;

     2. Based on my knowledge, this annual 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 annual report; and

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

Date: December 18, 2002               /s/ NICHOLAS FERGUSON___________
                                      Nicholas Ferguson
                                      Chief Executive Officer

I, Christopher Morris, certify that:

     1. I have reviewed this annual report on Form 20-F of Schroder Ventures
International Investment Trust plc;

     2. Based on my knowledge, this annual 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 annual report; and

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.

Date: December 18, 2002               /s/ CHRISTOPHER MORRIS___________
                                      Christopher Morris
                                      Principal Financial Officer


                                     - 63 -


                    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
Schroder Ventures International Investment Trust 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
period ending June 30, 2002 (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; and

     (2)     the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

Date: December 18, 2002               /s/ NICHOLAS FERGUSON_______
                                      Nicholas Ferguson
                                      Chief Executive Officer

                    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
Schroder Ventures International Investment Trust 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
period ending June 30, 2002 (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; and

     (2)     the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.

Date: December 18, 2002               /s/ CHRISTOPHER MORRIS_______
                                      Christopher Morris
                                      Principal Financial Officer



                                     - 64 -


                                                Commission file number 0-27336

                                 Exhibit Index

<TABLE>
<CAPTION>
Exhibit Number                         Exhibit Name
 <S>                                        <C>                    <C>
1.1                            Memorandum of Association            *
1.2                            Articles of Association, as          *
                               adopted on December 5, 2000
2.1                            Registrar and Paying Agency   Filed herewith
                               Agreement, dated November
                               21, 2001, between the
                               Company, The Law Debenture
                               Trust Corporation p.l.c.
                               and J.P. Morgan Chase Bank.
2.2                            Listing Particulars, dated    Filed herewith
                               July 2, 2002
2.3                            Trust Deed, dated November    Filed herewith
                               21, 2001, between the
                               Company and The Law
                               Debenture Trust Corporation
                               p.l.c.
4.1                            Deposit Agreement, dated            **
                               November 30, 2000, between
                               the Company and The Bank of
                               New York
4.2                            Share Purchase Agreement,           **
                               dated March 16, 2001,
                               between the Company and
                               Schroder Ventures Limited
4.3                            Stock Purchase Agreement            **
                               dated April 5, 2001 between
                               Schroder Venture Managers
                               Inc. and Schroder Ventures
                               (London) Limited
4.4                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Ventures K.K. (Japan)
4.5                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Capital Partners Limited
                               (Asia)
4.6                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroders &
                               Associates Canada Inc.
                               (Canada)
4.7                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Ventures Life Sciences
                               Advisers Limited (Life
                               Sciences)
4.8                            Services Agreement, dated           **
                               March 16, 2001, between the
                               Company and Schroder
                               Venture Partners LLC (U.S.)
4.9                            Services Agreement, dated           **
                               March 16, 2001, among the
                               Company, Schroder Ventures
                               (London) Limited and
                               Schroder Ventures Europe BV
4.10                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroder
                               Ventures Limited
4.11                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroder
                               Ventures Investments Limited
4.12                           Services Agreement, dated           **
                               March 16, 2001, between
                               Schroder Ventures (London)
                               Limited and Schroders plc
4.13                           Fund of Funds Agreement,            **
                               dated March 16, 2001,
                               between Schroder Ventures
                               (London) Limited and
                               Schroder Investment
                               Management (Ireland) Limited
4.14                           Facility Agreement, dated           **
                               March 16, 2001, between the
                               Company and Barings
                               (Guernsey) Limited and the
                               Royal Bank of Scotland plc
4.15                           The Executive Share Option          **
                               Plan
4.16                           Investment Advisory           Filed herewith
                               Agreement, dated January
                               17, 2002, between Schroder
                               Ventures (London) Limited
                               and Schroder Investment
                               Management (Ireland) Limited


                                     - 65 -


4.17                           Investment Advisory           Filed herewith
                               Agreement, dated June 12,
                               2002, between Schroder
                               Ventures (London) Limited
                               and Schroder Investment
                               Management (Ireland) Limited
8.1                            List of Subsidiaries of the         **
                               Company
10.1                           The Company's 2002 Report     Filed herewith
                               and Accounts
10.2                           The Company's 2001 Report     Filed herewith
                               and Accounts
10.3                           The Company's 2000 Report     Filed herewith
                               and Accounts

</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


                                     - 66 -



Schroder Ventures International Investment Trust plc
REPORT OF INDEPENDENT AUDITORS

To: The Directors
    Schroder Ventures International Investment Trust plc

We have audited the consolidated balance sheets of Schroder Ventures
International Investment Trust plc as at June 30, 2002 and 2001, and the
related consolidated statements of total return and cash flows for each of
the three years in the period ended June 30, 2002. 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 United States generally accepted auditing standards. 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 Schroder Ventures
International Investment Trust plc at June 30, 2002 and 2001, and its
consolidated total return and its consolidated cash flows for each of the
three years in the period ended June 30, 2002 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).


Ernst & Young LLP
Registered Auditor
London, England

October 7, 2002



                                       F1


Shroder Ventures International Investment Trust plc

CONSOLIDATED STATEMENT OF TOTAL RETURN
(Incorporating The Revenue Account)

<TABLE>
<CAPTION>
                               For the year ended June 30      For the year ended June 30      For the year ended June 30 2000
                                          2002                            2001
                     Notes     Revenue    Capital     Total    Revenue    Capital      Total        Revenue    Capital     Total
                                GBP000     GBP000    GBP000     GBP000     GBP000     GBP000         GBP000     GBP000    GBP000
 <S>                  <C>          <C>        <C>       <C>        <C>        <C>       <C>            <C>        <C>        <C>

Realised gains on
investments            12            -     11,914    11,914          -      4,774      4,774              -     86,386    86,386
Unrealised
(losses)/gains on
investments            12            -    (4,202)   (4,202)          -   (49,190)   (49,190)              -     41,175    41,175
Gains/(losses) on
investments                          -      7,712     7,712          -   (44,416)   (44,416)              -    127,561   127,561
Foreign exchange
gains/(losses) on
currency balances                    3         42        45          -      (755)      (755)              -      (415)     (415)
Income                  2        7,674          -     7,674      5,616          -      5,616          6,123          -     6,123
Expenses                3      (7,293)          -   (7,293)    (2,235)          -    (2,235)        (1,106)        (3)   (1,109)
Net
return/(deficit)
before finance
costs and taxation                 384      7,754     8,138      3,381   (45,171)   (41,790)          5,017    127,143   132,160
Interest payable
and similar charges     7      (1,832)          -   (1,832)      (583)          -      (583)          (468)          -     (468)
Net return
/(deficit) on
ordinary
activities before
taxation                       (1,448)      7,754     6,306      2,798   (45,171)   (42,373)          4,549    127,143   131,692
Tax on ordinary
activities              8        (105)          -     (105)      (141)          -      (141)            180          -       180
Return/(deficit)
on ordinary
activities after
tax for the year               (1,553)      7,754     6,201      2,657   (45,171)   (42,514)          4,729    127,143   131,872
Minority interest
- equity                           (2)         16        14        (2)        104        102              -       (99)      (99)
Return/(deficit)
on ordinary
activities after
tax and minority
interest for the
year attributable
to equity
shareholders (1)               (1,555)      7,770     6,215      2,655   (45,067)   (42,412)          4,729    127,044   131,773
Dividends :
No final dividend
(2001: 1.80p;
2000: 3.80p per
ordinary share)         9            -          -         -    (1,841)          -    (1,841)        (3,886)          -   (3,886)
Surplus/(deficit)
transferred
(from)/to reserves             (1,555)      7,770     6,215        814   (45,067)   (44,253)            843    127,044   127,887
Return per
ordinary share         10      (1.52)p      7.60p     6.08p      2.60p   (44.07)p   (41.47)p          4.68p    125.87p   130.55p
Return per
ordinary share -
diluted                10      (1.52)p      7.60p     6.08p      2.60p   (44.07)p   (41.47)p          4.68p    125.87p   130.55p

</TABLE>


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. The results for the years' ended June 30,
2001 onwards include the acquisition of Schroder Ventures (London) Limited
and Schroder Ventures North America Inc. 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


Schroder Ventures International Investment Trust plc

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                    At June 30    At June 30
                                                          2002          2001
                                           Notes        GBP000        GBP000
<S>                                         <C>            <C>           <C>

TANGIBLE FIXED ASSETS                         11           296             -
                                                           296             -

FIXED ASSET INVESTMENTS
Funds and co-investments                   12/13       422,823       387,030
Fixed interest investments                 12/13        31,000        24,853
                                                       453,823       411,883

CURRENT ASSETS
Debtors                                       14         3,548         2,933
Cash at bank and short-term deposits                     9,303         7,191
                                                        12,851        10,124

CURRENT LIABILITIES
Creditors: amounts falling due within
one year                                      15         4,357         4,747
NET CURRENT ASSETS                                       8,494         5,377

TOTAL ASSETS LESS CURRENT LIABILITIES                  462,613       417,260

Creditors: amounts falling due after
more than one year                            16        39,152             -

Minority interest - non-equity                             100           100
Minority interest - equity                                 274           288

NET ASSETS                                             423,087       416,872

CAPITAL AND RESERVES
Called up share capital                       18       102,266       102,266
Share premium account                         19         7,453         7,453
Capital redemption reserve                    20         3,204         3,204
Share purchase reserve                        21        92,054        92,054
Capital reserve                               22       216,705       208,935
Revenue reserve                               23         1,405         2,960

EQUITY SHAREHOLDERS' FUNDS (1)                24       423,087       416,872

Net asset value per ordinary share            25        413.7p        407.6p
                             - undiluted
                             - diluted        25        412.3p        407.6p

</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



                                       F3


Schroder Ventures International Investment Trust plc

CONSOLIDATED CASH FLOW STATEMENTS

<TABLE>
<CAPTION>
                                  For the year   For the year   For the year
                                         ended          ended          ended
                                 June 30, 2002        June 30,       June 30,
                                                         2001           2000
                        Note            GBP000         GBP000         GBP000
   <S>                   <C>              <C>            <C>            <C>

OPERATING ACTIVITIES
Income received from
investments                              1,567          5,623          5,127
Bank interest received                     454            570            364
Investment advisory
fee income received                      5,047             35              -
Administrative
expenses                               (7,279)        (2,417)          (772)

Net cash
(outflow)/inflow from
operating activities      26             (211)          3,811          4,719

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                -          (224)           (63)
Loan facility costs                      (550)        (1,046)          (199)
Convertible bond interest paid               -              -          (376)

Net cash outflow from returns on
investments and servicing of finance     (550)        (1,270)           (638)

TAXATION
UK tax recovered                             -            339            521
Overseas tax suffered                    (117)          (154)              -

Total tax (paid)/recovered               (117)            185            521

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of fixed
interest securities                  (316,731)      (351,516)      (756,631)
Purchase of subsidiaries                     -           (36)              -
Purchase of tangible
fixed assets                             (311)              -              -
Sale of fixed
interest securities                    311,001        452,217        706,525
Calls paid                            (77,474)      (156,024)      (161,666)
Capital distributions received          48,976         53,647        186,082

Net cash outflow from capital
expenditure and financial investment  (34,539)        (1,712)       (25,690)

EQUITY DIVIDENDS PAID
Dividends                              (1,841)        (4,182)        (1,484)

Total dividends paid                   (1,841)        (4,182)        (1,484)

FINANCING
Proceeds from convertible bond issue    40,000              -              -
Issue and listing costs of
convertible bonds                        (675)              -              -
Capital expenses paid                        -              -            (3)

Net cash inflow/(outflow) from
financing                               39,325              -            (3)

NET CASH INFLOW/(OUTFLOW)                2,067        (3,168)       (22,575)

</TABLE>


                                       F4


Schroder Ventures International Investment Trust plc

CONSOLIDATED CASH FLOW STATEMENTS (continued)



RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/ FUNDS

<TABLE>
<CAPTION>
                                   For the year       For the   For the year
                                                         year
                                          ended         ended          ended
                                        June 30,      June 30,       June 30,
                                           2002          2001           2000
                            Note         GBP000        GBP000         GBP000
<S>                         <C>            <C>           <C>            <C>

Increase/(decrease) in
cash during the year                      2,067       (3,168)       (22,575)
Cash acquired on
purchase of subsidiaries                      -           834              -
Realised exchange
gains/(losses) on
currency balances                            45         (755)          (415)
Debt converted into
equity                                        -             -         10,753
Increase in convertible bonds          (39,152)             -              -

Change in net (debt)/funds             (37,040)       (3,089)       (12,237)

Net funds at the beginning of the
year                                      7,191        10,280         22,517

Net (debt)/funds at the
end of the year               28       (29,849)         7,191         10,280

</TABLE>

The significant differences between the cash flow statements presented
above and that required under US generally accepted accounting principles
are set out in note 30.

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



                                       F5


Schroder Ventures International Investment Trust plc

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".

     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 per cent and 33 per cent 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"). 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.

     Quoted investments
     All investments listed on recognised stock exchanges are valued at the
     quoted mid-market price at the balance sheet date. If an investment is
     subject to restrictions affecting its disposal, or if the holding is
     significant in relation to the issued share capital, a discount of
     generally between 0 per cent and 50 per cent to that price will be applied.

     Unquoted equity investments
     (i)     All Early Stage Equity investments are valued at cost unless one of
             the following applies:

             (1) Performance indicates that there has been a permanent and
             significant diminution in the valuation of the investment. If this
             is the case, provisions in incremental tranches of 25 per cent of
             original cost will be made; or

             (2) A significant transaction involving an independent third party
             at arm's-length values the investment at a materially different
             value.

     (ii)    All Development Stage Equity investments are valued at cost, or
             cost less a provision, for at least one year unless this basis of
             valuation is unsustainable.

     Thereafter, they will be valued as follows:

             (1) Where available, either on the basis of a significant
             transaction by an independent third party in the equity of the
             investee company or an independent third party valuation of the
             equity; or

             (2) Where a significant portion of the assets are held in real
             property on the basis of discounted net asset values; or


                                       F6


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


1.   ACCOUNTING POLICIES (continued)

             (3) Where the investee company is performing significantly below
             expectations, at cost less provisions in incremental tranches
             of 25 per cent; or

             (4) Where the company is profitable and performing satisfactorily,
             on the basis of earnings

             (A) Capitalised at an appropriate price-earnings multiple (B):

             (A) The earnings of the investee company will be based on the
             latest audited accounts or management accounts where appropriate;
             and

             (B) The price-earnings multiple:

             - Will take into account the capital and debt structure of the
             investee company

             - Will be based on either comparable company or industry multiples
             taken from the relevant stock exchange

             - Will be subject to a minimum discount of 25 per cent to reflect
             risk, the illiquidity of the investment and the approximate nature
             of a valuation based on earnings unless early realisation is
             expected in which case a smaller discount will be applied.

     Unquoted loan stock and preference shares
     Loan stock and preference shares will be valued at cost plus any accrued
     interest and redemption premia less, in cases where the investee company is
     performing significantly below expectations, any provisions in incremental
     tranches of 25 per cent.

     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 per cent. 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' or 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.


                                       F7


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)



1.   ACCOUNTING POLICIES (continued)

     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 a consolidated statement of total return. Foreign subsidiary
     financial statements are translated into reporting currency 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 recognised to the extent that they are recoverable. The
     adoption of FRS19 has had no impact on current or prior years' results.

     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, with the exception of
     Schroder Ventures North America Inc ("SVNA") which has a balance sheet date
     of December 31. In respect of SVNA, audited financial statements to
     December 31, 2001, together with management accounts covering the remaining
     6 months, have been used in preparing the consolidated financial
     statements. 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.

     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.



                                       F8


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)

<TABLE>
<CAPTION>
2.   INCOME
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>            <C>           <C>

Income from fixed interest securities        767         3,564         5,235
Dividends                                    770         1,403           456
Interest receivable and similar
income                                       452           541           432
Income from investment advisory
services                                   5,685           108             -

                                           7,674         5,616         6,123

</TABLE>


<TABLE>
<CAPTION>
3.   EXPENSES
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>            <C>          <C>

Fees payable to Schroder
Investment Management Ltd (note 28)          293           345           378
Directors' remuneration (note 4)           1,110           149            85
Staff costs (note 5)                       4,258            93             -
Depreciation                                  65             -             -
General expenses                           1,416           438           340
Enlargement of operations costs               62           840             -
EDR listing and issue costs                    -           230           259
Auditors' remuneration
- audit                                       74            31            26
- non-audit *                                 15           109            18

                                           7,293         2,235         1,106
</TABLE>


* In addition, fees for non-audit services (June 30, 2002) include GBP 21,000 in
respect of the issue of convertible bonds are payable. These will be amortised
over 10 years along with other issue costs (note 16). Certain costs, primarily
loan facility costs (note 7), have been reclassified from last year's accounts,
as considered more appropriate.



                                       F9


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)

<TABLE>
<CAPTION>

4.   DIRECTORS' REMUNERATION
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>           <C>            <C>

JJ McLachlan                                  75            50            25
NEH Ferguson                                 823            15            10
CJ Govett                                     24            18            10
AJ Habgood                                    24            18            10
EW Koning                                     20            17            10
D Raeburn                                     22             1             -
IP Sedgwick (resigned 3 May 2002)             17            15            10
J Strangfeld                                   -            15            10
AF Sykes (appointed 3 May 2002)                4             -             -
AC Williams (appointed 3 May 2002)           101             -             -

                                           1,110           149            85
</TABLE>

The amounts shown above do not include any payments or rights to pensions.
Further details on Directors' emoluments are contained in the Remuneration
Report within the attached  June 30, 2002 Report and Accounts. As shown above,
Nicholas Ferguson is the highest paid director.


<TABLE>
<CAPTION>
5.   STAFF COSTS
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>           <C>           <C>

Salaries and other remuneration            3,491            80             -
Social security costs                        409             6             -
Pension costs (note 6)                       358             7             -

                                           4,258            93             -
</TABLE>


                                      F10


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


5.   STAFF COSTS (continued)

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

<TABLE>
<CAPTION>
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          Number        Number        Number
<S>                                         <C>           <C>           <C>

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

                                              21            16            -
</TABLE>


6.   PENSION COSTS
<TABLE>
<CAPTION>
The charge for pension costs             For the       For the      For the
comprises:                            year ended    year ended   year ended
                                         June 30       June 30      June 30
                                            2002          2001         2000
                                          GBP000        GBP000       GBP000
<S>                                        <C>            <C>          <C>

Defined benefit schemes                       52             1            -
Money purchase schemes                       306             6            -

                                             358             7            -

</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 4 employees,
including the Company's executive directors, seconded from Schroder
Investment Management Limited to Schroder Ventures (London) Limited
("SVLL"), a wholly owned subsidiary of SVIIT. 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 858 active
members at December 31, 2001, and the accounts of Schroders plc disclosed a
net pension asset less prepayment in respect of the Scheme of GBP38.4million,
calculated under FRS 17 based on interim valuations prepared by independent
qualified actuaries.



                                      F11


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued


7.   INTEREST PAYABLE AND SIMILAR CHARGES
<TABLE>
<CAPTION>
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>           <C>            <C>

Convertible bond interest                  1,100             -           188
Convertible bond - amortisation of
issue costs                                   45             -             -
Loan facility costs                          687           359           217
Other interest                                 -           224            63

                                           1,832           583           468

</TABLE>

Loan facility costs were included as expenses in prior years' accounts but are
more appropriately described as finance costs and therefore included as part of
interest payable and similar charges.



8.   TAXATION

(a) The charge for taxation for the year is made up as follows:

<TABLE>
<CAPTION>
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                          <C>           <C>           <C>

Current Tax
Corporation tax                                -             -            34
Less: relief for overseas tax                  -             -          (34)

                                               -             -             -
Overseas tax                                 133           141            41
Prior year adjustment                       (64)             -         (221)

Total current tax (note 8(b))                 69           141         (180)

Deferred Tax
Deferred tax - prior year adjustment          36             -             -

Total deferred tax                            36             -             -

Total tax charge/(benefit)                   105           141         (180)

</TABLE>


There are no profits chargeable to corporation tax in the current year.
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.



                                      F12


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


8.   TAXATION (continued)
(b) Factors affecting current tax charge for the year:
<TABLE>
<CAPTION>
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                         <C>            <C>           <C>

(Deficit)/return before taxation         (1,448)         2,798         4,549

Corporation tax at 30%                     (434)           839         1,365

Effects of:

Overseas taxation written off                133           141            41
Overseas tax claimed as an expense          (86)             -          (34)
Non deductible expenses                       54           366            97
Non assessable income                          -             -           (5)
Taxable dividend credited to
capital                                      274             -             -
Unutilised current year expenses
carried forward                              250             -             -
Venture funds expenses utilised
in year                                        -       (1,135)       (1,416)
Income of subsidiary not taxable            (58)          (70)           (7)
Prior year adjustment -
corporation tax                             (64)             -         (221)

Current tax charge for the year
(note 8(a))                                   69           141         (180)

</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 recognised because their
utilisation is considered unlikely in the foreseeable future.


9.   DIVIDENDS
<TABLE>
<CAPTION>
                                         For the       For the       For the
                                      year ended    year ended    year ended
                                         June 30       June 30       June 30
                                            2002          2001          2000
                                          GBP000        GBP000        GBP000
<S>                                          <C>          <C>           <C>

No final dividend (2001 : 1.80p;
2000 : 3.80p) per share                        -         1,841         3,886

</TABLE>


Prior years' final dividends are based on 102,265,699 ordinary shares in issue.



                                      F13


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


10.  RETURN PER ORDINARY SHARE

<TABLE>
<CAPTION>
                     For the year ended June 30, 2002    For the year ended June 30, 2001     For the year ended June 30, 2000
<S>                         <C>        <C>       <C>        <C>          <C>         <C>         <C>          <C>         <C>
GROUP                    Revenue     Capital    Total     Revenue      Capital      Total       Revenue      Capital     Total

Return per ordinary
share                   (1.521)p      7.598p   6.077p      2.596p     (44.069)p   (41.473)p      4.680p     125.870p   130.550p
Return per ordinary
share - fully diluted   (1.520)p      7.596p   6.076p      2.596p     (44.069)p   (41.473)p      4.680p     125.870p   130.550p

</TABLE>


The basic revenue return per ordinary share is based on the net deficit on
ordinary activities after taxation and minority interest of GBP1,555,000
(2001: return of GBP2,655,000; 2000: return of GBP4,729,000) and on 102,265,699
ordinary shares (2001: 102,265,699; 2000: 100,931,523) 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 GBP7,770,000 (2001:
deficit of GBP45,067,000; 2000: surplus of GBP127,044,000) and on 102,265,699
ordinary shares (2001: 102,265,699; 2000: 100,931,523) being the weighted
average number of shares in issue during the year.

The diluted returns per ordinary share for the year ended June 30, 2002
have been calculated in accordance with FRS14 under which the GBP40 million
4.5% 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 November 21, 2001, the date the bonds were issued at an
exercise price of 410p. Based on the average fair value for the Company's
shares of 340.8p for the period November 21, 2001 to June 30, 2002 there
are no potential dilutive ordinary shares in respect of the convertible
bonds.

The diluted 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). On this basis, the weighted average
number of options exercisable during the year would have been 18,087,
resulting in an increased weighted average number of shares of 102,283,786
used for calculating the diluted returns.

Diluted returns have not been calculated for the years' ended June 30, 2001
and 2000, 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 their exercise price exceeded the fair value of the Company's
shares, calculated in accordance with FRS 14, and the options were
therefore not dilutive.


                                      F14


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


11.  TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
                                                           Telecom-
                                                        munications
                              Leasehold     Computer     and Office
                           improvements    equipment      equipment    Total
                                 GBP000       GBP000         GBP000   GBP000
<S>                                <C>          <C>              <C>      <C>
Cost
At July 1, 2001                       -            -              -        -
Additions                           144          127             88      359
Disposals                             -            -              -        -
Exchange translation
adjustments                           -            1              1        2

At June 30, 2002                    144          128             89      361

Depreciation
At July 1, 2001                       -            -              -        -
Charge for the year                  23           32             10       65
Disposals                             -            -              -        -
Exchange translation
adjustments                           -            -              -        -

At June 30, 2002                     23           32             10       65

Net Book Value
At June 30, 2002                    121           96             79      296

At July 1, 2001                       -            -              -        -

</TABLE>



12.  INVESTMENTS
<TABLE>
<CAPTION>
                                     For the year ended June 30, 2002
                             Venture funds and   Fixed interest        Total
                                co-investments        portfolio    portfolio
                                     portfolio
                                        GBP000           GBP000       GBP000
<S>                                        <C>              <C>          <C>
Cost brought forward                   438,230           24,916      463,146
Unrealised loss brought
forward                               (51,200)             (63)     (51,263)

Valuation at the
beginning of the year                  387,030           24,853      411,883
Calls and purchases
payable                                 77,474          316,731      394,205
Distributions and sales
receivable                            (48,976)        (311,001)    (359,977)
Realised gain for the
year                                    11,553              361       11,914
Unrealised (loss)/gain
for the year                           (4,258)               56      (4,202)

Valuation carried forward              422,823           31,000      453,823

</TABLE>



                                      F15



Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


12.  INVESTMENTS (continued)
<TABLE>
<CAPTION>
                                     For the year ended June 30, 2001
                             Venture funds and   Fixed interest        Total
                                co-investments        portfolio    portfolio
                                     portfolio
                                        GBP000           GBP000       GBP000
<S>                                       <C>               <C>          <C>
Cost brought forward                   294,775          123,585      418,360
Unrealised gain brought
forward                                 32,435            2,724       35,159

Valuation at the
beginning of the year                  327,210          126,309      453,519
Calls and purchases
payable                                155,371          351,516      506,887
Distributions and sales
receivable                            (51,889)        (452,218)    (504,107)
Realised gain/(loss) for
the year                                 5,465            (691)        4,774
Unrealised loss for the
year                                  (49,127)             (63)     (49,190)

Valuation at end of the
year                                   387,030           24,853      411,883

</TABLE>


<TABLE>
<CAPTION>
                                     For the year ended June 30, 2000
                             Venture funds and   Fixed interest        Total
                                co-investments        portfolio    portfolio
                                     portfolio
                                        GBP000           GBP000       GBP000
<S>                                       <C>               <C>          <C>
Cost brought forward                   192,058           83,968      276,026
Unrealised gain brought
forward                                 34,310               99       34,409

Valuation at the
beginning of the year                  226,368           84,067      310,435
Calls and purchases
payable                                162,320          731,579      893,899
Distributions and sales
receivable                           (187,838)        (690,538)    (878,376)
Realised gain/(loss) for
the year                                87,909          (1,523)       86,386
Unrealised gain for the
year                                    38,451            2,724       41,175

Valuation at end of the
year                                   327,210          126,309      453,519

</TABLE>



Gains on investments
<TABLE>
<CAPTION>
                              For the year     For the year     For the year
                                     ended            ended            ended
                             June 30, 2002    June 30, 2001    June 30, 2000
<S>                                <C>             <C>               <C>
Realised gain on
investments based on
historical cost                     20,418           42,006          126,810
Less: amounts recognised
as unrealised in
previous year                      (8,504)         (37,232)         (40,424)

Realised gain based on
carrying value at previous
balance sheet date                  11,914            4,774           86,386
Net movement in
unrealised gains                   (4,202)         (49,190)           41,175

Total (losses)/gains on
investments                          7,712         (44,416)          127,561

</TABLE>



                                      F16


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS
<TABLE>
<CAPTION>
                                        At June 30, 2002    At June 30, 2001
                                                  GBP000              GBP000
<S>                                                  <C>                 <C>
Funds and co-investments
Europe
United Kingdom                                    14,996              16,892
France                                               655               2,427
Germany                                            7,480              10,122
Italy                                              1,863               4,995
Spain                                                797               1,994
Pan Europe                                       259,737             209,470

Total Europe                                     285,528             245,900

Asia Pacific                                      29,712              30,700
Japan                                                                 21,700

Total Asia                                        46,570              52,400

Canada                                            26,065              31,710
United States*                                    64,660              57,020

Total Americas                                    90,725              88,730

Total Funds and co-investments                   422,823             387,030

</TABLE>


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

All 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
Funds and co-investments of GBP422,823,000 (2001: GBP387,030,000) are listed
investments amounting to GBP38,700,000 (2001:GBP46,100,000).


<TABLE>
<CAPTION>
                                      At June 30, 2002    At June 30, 2001
                                                GBP000              GBP000
<S>                                               <C>                  <C>
Fixed Interest Investments
Sterling denominated                             7,884               2,222
Euro denominated                                14,457              12,300
US dollar denominated                            8,659              10,331

Total Fixed Interest Investments                31,000              24,853

Total Investment Portfolio                     453,823             411,883

</TABLE>



                                      F17


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)

Significant interests in investment funds
Details of investments in which the Group has an interest of 10% or more of
any class of share/units are detailed in the list of investments below. All
of these funds are managed or advised by Schroder Ventures or Permira.

<TABLE>
<CAPTION>
                                    Original    SVIIT's   Value of    SVIIT's
                            Year        Life    Holding    SVIIT's        Net
                          formed     (years)     in the    Holding     Assets
                                                   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      1,159        0.3

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     11,482        2.7

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     15,670        3.7

Co-investments with Asia
Pacific Fund II and
Schroder Ventures Asia
Pacific Fund                                                 1,201        0.3

The Japan Venture Fund II
Formed to invest in
Japanese businesses
with potential for capital
growth.                     1990         10*       13.7      3,189        0.8

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     13,869        3.3

Total Asia                                                  46,570       11.1

</TABLE>



                                      F18



Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
                                    Original    SVIIT's   Value of    SVIIT's
                            Year        Life    Holding    SVIIT's        Net
                          formed     (years)     in the    Holding     Assets
                                                   fund
                                                      %     GBP000          %
<S>                         <C>         <C>        <C>        <C>        <C>
CONTINENTAL EUROPE

Permira Europe I
The first $1 billion
fund raised for
equity
investment in Europe
focusing on large
and medium-sized
leveraged buy-out
opportunities.              1997          10       22.0     69,096       16.3

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       22.7    190,641       45.1

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        492        0.1

Permira France
Venture I
Formed with a
policy of investing
in development
capital
opportunities,
principally in France.      1992          10       19.0        163        0.0

Permira German
Buy-Outs
Established to invest
in buy-outs of
companies in Germany
and some of it's
neighbouring countries.     1986         10*       29.7      5,089        1.2

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      2,391        0.6

Permira Italy I
Established to
invest in buy-outs
and
development capital
businesses,
principally in Italy.       1988         10*       33.2          -        0.0

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      1,863        0.4

The Spanish Venture
Fund
Established with a
policy of investing
in leveraged
buy-outs and
development
capital businesses
in Spain.                   1990         10*       23.2        797        0.2

Total Continental Europe                                   270,532       63.9

</TABLE>


Along with the related funds, Schroder Ventures Europe changed its name to
Permira with effect from November 12, 2001.



                                      F19


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
                                    Original    SVIIT's   Value of    SVIIT's
                            Year        Life    Holding    SVIIT's        Net
                          formed     (years)     in the    Holding     Assets
                                                   fund
                                                      %     GBP000          %
<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     12,059        2.9

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        662        0.2

Permira UK Venture IV
Established to follow the
policies of the fully
invested Permira UK III.    1995          10        4.2      2,275        0.5

Total United Kingdom                                        14,996        3.6

</TABLE>

Along with the related funds, Schroder Ventures Europe changed its name to
Permira with effect from November 12, 2001.


<TABLE>
<CAPTION>
<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      7,440        1.8

Schroder Canadian
Buy-Out Fund III
Established to invest
in buy-outs, buy-ins,
leveraged build-ups
and development
capital opportunities
in Canada.                  2000          10       26.6      4,032        0.9

Co-investments with
Schroder Canadian
Buy-out Funds II and III                                    14,593        3.4

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      2,014        0.5

</TABLE>


                                      F20



Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


13.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS (continued)

<TABLE>
<CAPTION>
                                    Original    SVIIT's   Value of    SVIIT's
                            Year        Life    Holding    SVIIT's        Net
                          formed     (years)     in the    Holding     Assets
                                                   fund
                                                      %     GBP000          %
<S>                          <C>         <C>        <C>       <C>          <C>
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     37,084        8.8

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       29.9      1,269        0.3

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       30.0     24,293        5.7

Total North America                                         90,725       21.4

Total fund portfolio                                       422,823      100.0

Fixed interest investments                                  31,000        7.3

                                                           453,823      107.3

Current assets less total liabilities                     (30,736)      (7.3)

Total net assets                                           423,087      100.0

</TABLE>


* The lives of these funds have been extended.

Note:     Permira France II, Permira UK Venture I Extension and Schroder US
Venture Fund terminated during the year and are therefore excluded from the
list of investments.



                                      F21


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


14.  DEBTORS
Amounts falling due within one year:
<TABLE>
<CAPTION>

                                           At June 30    At June 30
                                                 2002          2001
                                               GBP000        GBP000
<S>                                              <C>             <C>
Accrued investment advisory fee income          1,613         2,051
Interest receivable                                43            75
Prepayments and other debtors                   1,892           771
Deferred tax                                        -            36

                                                3,548         2,933
</TABLE>


15.  CREDITORS
Amounts falling due within one year
<TABLE>
<CAPTION>
                                        At June 30    At June 30
                                              2002          2001
                                            GBP000        GBP000
<S>                                           <C>           <C>
Other creditors and accruals                 4,357         2,906
Proposed final dividend                          -         1,841

                                             4,357         4,747

</TABLE>

The group has in place a multicurrency revolving loan facility of euro 225
million with the royal bank of scotland. No drawdowns have been made under
the facility during the year (2001: nil).



16.  CREDITORS
Amounts falling due after more than one year
<TABLE>
<CAPTION>
                                                  At June 30    At June 30
                                                        2002          2001
                                                      GBP000        GBP000
<S>                                                    <C>              <C>
4.5% Subordinated Convertible Bonds 2011              40,000             -
Unamortised issue and listing costs (note 30)          (848)             -

                                                      39,152             -

</TABLE>


Creditors due after more than one year comprise GBP40 million nominal of 4.5%
subordinated convertible bonds which mature on November 20, 2011. These bonds
are convertible, at any time, into ordinary shares at an initial conversion
price of 410p per share. However, the terms of the bonds provide that the
conversion price is subject to adjustment 21 days after the publication of
the 2002 annual report and accounts by the amount that the net asset value
per ordinary share falls below 407p at either December 31, 2001 or June 30,
2002, rounded down to the nearest penny. As a result, 21 days after the
publication of this annual report and accounts, the conversion price of the
bonds will be 399p, based on the NAV at December 31, 2001.

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

FRS13 requires disclosure of the fair value of debt. The convertible bonds
were not listed on June 30, 2002 and therefore a quoted market value is not
available at the balance sheet date. The bonds obtained a listing on the
London Stock Exchange on July 5, 2002 with UBS Warburg and Dresdner Kleinwort
Wasserstein ("DKW") appointed as market makers. On July 8, 2002 DKW were
quoting a bid-offer spread of GBP1 to GBP2. This equates to a fair valuation
range of GBP40-80 million for the bonds in issue.



                                      F22


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


17.  CAPITAL COMMITMENTS
<TABLE>
<CAPTION>
                                                       Amount       Uncalled
                                                     uncalled    commitment*
                                             (local currency)    GBP million
<S>                                                   <C>               <C>
International Life Sciences Fund III**                $ 42.0m           27.5
Permira Europe I                                    euro 6.9m            4.4
Permira Europe II                                 euro 442.5m          286.7
Schroder Canadian Buy-Out Fund II                     C$ 0.9m            0.4
Schroder Canadian Buy-Out Fund III                   C$ 36.5m           15.7
Schroder Ventures Asia Pacific Fund***                $ 58.4m           38.3
Schroder Ventures International Life
Sciences Fund II                                      $ 12.3m            8.1
Schroder Ventures US Fund                             $ 27.7m           18.2
The Japan Venture Fund III                           Y 711.6m            3.9

Total                                                                  403.2

</TABLE>

* Based on exchange rates at June 30, 2002.
** Based on amount committed to first close (US$44.2 million), Following the
second closing of the fund after the year-end, SVIIT has committed US$75
million in total.
*** Commitments to this fund have been reduced by 20%.





18.  SHARE CAPITAL
<TABLE>
<CAPTION>
                              For the year     For the year     For the year
                                     ended            ended            ended
                             June 30, 2002    June 30, 2001    June 30, 2000
                                    GBP000           GBP000           GBP000
<S>                                   <C>             <C>             <C>
Authorised:
150,000,000 shares of
GBP1.00 each                       150,000          150,000          150,000
Allotted, called up and
fully paid:
Opening balance of
102,265,699 (2001:
102,265,699;
2000 : 98,966,319)
shares of GBP1.00 each             102,266          102,266           98,966
Issued on conversion of 'B' bonds        -                -            3,300

Closing balance of 102,265,699
(2001 : 102,265,699;
2000 : 102,265,699) shares
of GBP1.00 each                    102,266          102,266          102,266


</TABLE>

                                      F23



Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


18.  SHARE CAPITAL (continued)

Options over ordinary shares
During the year ended June 30, 2002 options over 1,411,597 shares were
granted. No options were exercised during the year and none lapsed. At June
30, 2002, 4,253,363 (2001: 2,841,766; 2000: Nil) options to subscribe for
ordinary shares were outstanding :

<TABLE>
<CAPTION>
Issue date      Exercise price    June 30 2002    June 30 2001  June 30 2000
                     per share          Number          Number        Number
<S>                     <C>               <C>              <C>         <C>
June 2001               410.0p       2,813,407       2,813,407             -
June 2001               405.5p          28,359          28,359             -
April 2002              335.0p          34,774               -             -
April 2002              334.5p       1,376,823               -             -

                                     4,253,363       2,841,766             -

</TABLE>


19.  SHARE PREMIUM ACCOUNT
<TABLE>
<CAPTION>
                                For the year     For the year     For the year
                                       ended            ended            ended
                               June 30, 2002    June 30, 2001    June 30, 2000
                                      GBP000           GBP000           GBP000
<S>                                    <C>            <C>              <C>
Balance brought forward                7,453            7,453                -
Premium on conversion of
'B' bonds                                  -                -            7,453

Balance carried forward                7,453            7,453            7,453

</TABLE>


20.  CAPITAL REDEMPTION RESERVE
<TABLE>
<CAPTION>
                               For the year     For the year     For the year
                                      ended            ended            ended
                              June 30, 2002    June 30, 2001    June 30, 2000
                                     GBP000           GBP000           GBP000
<S>                                   <C>               <C>              <C>
Balance brought forward
and carried forward                   3,204            3,204            3,204

</TABLE>


21.  SHARE PURCHASE RESERVE
<TABLE>
<CAPTION>
                              For the year     For the year     For the year
                                     ended            ended            ended
                             June 30, 2002    June 30, 2001    June 30, 2000
                                    GBP000           GBP000           GBP000

Balance brought forward
<S>                                 <C>              <C>              <C>
and carried forward                 92,054           92,054           92,054

</TABLE>


                                      F24


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued)


22.  CAPITAL RESERVE
<TABLE>
<CAPTION>
                               For the year     For the year    For the year
                                      ended            ended           ended
                              June 30, 2002    June 30, 2001   June 30, 2000
                                     GBP000           GBP000          GBP000
<S>                                    <C>              <C>             <C>
Realised gains brought
forward                             260,256          219,005          80,093
Realised gains on venture
fund distributions                   11,553            5,465          87,909
Transfer on disposal                  8,504           37,232          52,944
Other realised losses                     -                -             (3)
Realised gains/(losses)
on currency balances                     42            (755)           (415)
Realised exchange
gains/(losses) on sale of
fixed interest securities               361            (691)         (1,523)

Realised gains carried
forward                             280,716          260,256         219,005

Unrealised (losses)/gains
brought forward                    (51,321)           34,997          46,865
(Decrease)/increase in
unrealised gains on
venture funds                       (4,258)         (49,127)          38,451
Transfer on disposal
Increase/(decrease) in
unrealised exchange gains
on fixed interest                   (8,504)         (37,232)        (52,944)
securities                               56             (63)           2,724
Minority interest - equity               16              104            (99)

Unrealised (losses)/gains
carried forward                    (64,011)         (51,321)          34,997

Balance carried forward             216,705          208,935         254,002

</TABLE>


23.  REVENUE RESERVE
<TABLE>
<CAPTION>
                              For the year     For the year     For the year
                                     ended            ended            ended
                             June 30, 2002    June 30, 2001    June 30, 2000
                                    GBP000           GBP000           GBP000
<S>                                    <C>             <C>               <C>
Balance brought forward              2,960            2,146            1,303
Transfer (to)/from revenue account (1,555)              814              843

Balance carried forward              1,405            2,960            2,146

</TABLE>


                                      F25

NOTES TO THE ACCOUNTS (continued)

24.  RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
                                 For the year    For the year   For the year
                                        ended           ended          ended
                                June 30, 2002   June 30, 2001        June 30,
                                                                        2000
                                       GBP000          GBP000         GBP000
<S>                                        <C>            <C>            <C>
(Deficit)/return
attributable to equity
shareholders                          (1,555)           2,655          4,729
Dividends                                   -         (1,841)        (3,886)

                                      (1,555)             814            843

Non-distributable capital
gain/(loss) for the year                7,770        (45,067)        127,044
Shares issued on conversion
of 'B' bonds                                -               -          3,300
Share premium on conversion
of 'B' bonds                                -               -          7,453

Net addition to/(reduction
of) shareholders' funds                 6,215        (44,253)        138,640
Shareholders' funds brought
forward                               416,872         461,125        322,485

Shareholders' funds carried
forward                               423,087         416,872        461,125

</TABLE>


25.  NET ASSET VALUE PER ORDINARY SHARE

Calculation of the net asset values per share are based on Group net assets
of GBP423,087,000 (2001: GBP416,872,000) and on 102,265,699 (2001: 102,265,699)
ordinary shares in issue at the year end.

The Group diluted net asset values per share assume the GBP40 million
convertible bonds are converted at the balance sheet date at an exercise
price of 410p into 9,756,097 new shares.

The Group diluted net asset values per share also assume that share options
with a strike price lower than the undiluted net asset value per share are
exercised at the balance sheet date. This results in the issue of an
additional 4,253,363 ordinary shares (note 18) for consideration of
GBP16,371,930.

The calculation of the diluted net asset values per share are based on Group
net assets of GBP479,459,000 and on 116,275,159 ordinary shares in issue at
year end. For information, as described in note 16, the conversion price of
the bonds will be adjusted downwards from 410p to 399p with effect from 21
days after publication of this annual report and accounts. Had the diluted
net asset value per share assumed the GBP40 million convertible bonds are
converted at the balance sheet date at an exercise price of 399p into
10,025,062 new shares, it would have resulted in diluted net asset values per
share of 411.1p for the Group.

The exercise price of the options granted on June 21, 2001 exceeded the basic
net asset value per share at June 30, 2001. As a result diluted net asset
values per share at June 30, 2001 exceeded basic net asset values per share
and are therefore not dilutive. Also as the share options were first granted
on June 21, 2001, they have no impact on calculations in prior years. In
addition, the convertible bonds were not issued until November 2001 and
therefore also have no impact on prior years calculations.



                                      F26


Schroder Ventures International Investment Trust plc

NOTES TO THE ACCOUNTS (continued


26.  RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
     ACTIVITIES

<TABLE>
<CAPTION>
                                  For the year   For the year   For the year
                                         ended          ended          ended
                                 June 30, 2002        June 30,       June 30,
                                                         2001           2000
                                        GBP000         GBP000         GBP000
<S>                                        <C>           <C>            <C>
Net return before finance
costs and taxation                         384          3,381          5,017
Foreign exchange gains
credited to the revenue account            (3)              -              -
(Increase)/decrease in accrued
income                                   (604)            686          (632)
(Increase)/decrease in debtors            (15)             31              4
Increase/(decrease) in
creditors                                   27          (287)            330

Net cash (outflow)/inflow
from operating activities                (211)          3,811          4,719

</TABLE>



                                      F27



NOTES TO THE ACCOUNTS (continued)

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

<TABLE>
<CAPTION>


                 Exchange                               Cash Exchange                                   Exchange
                    gain/                           acquired    gain/                                      gain/
               At  (loss)               At      At        re   (loss)                At      At    Debt   (loss)                At
           1 July      on    Cash  30 June  1 July   Subsid-       on     Cash  30 June   1 July  Conver      on     Cash   30 June
             2001    cash    flow     2002    2000    iaries     cash     flow     2001     1999   -sion    cash     flow      2000
           GBP000  GBP000  GBP000   GBP000  GBP000    GBP000   GBP000   GBP000   GBP000   GBP000   GBP000  GBP000   GBP000   GBP000
<S>         <C>     <C>     <C>      <C>     <C>       <C>      <C>      <C>      <C>      <C>      <C>     <C>      <C>     <C>
Cash at
Bank        1,093   (104)     738    1,727      48       834    (755)      966    1,093       42        -   (415)      421       48

Short-
term
deposits    6,098     149   1,329    7,576  10,232         -        -  (4,134)    6,098   33,228        -       -  (22,996)  10,232

            7,191      45   2,067    9,303  10,280       834    (755)  (3,168)    7,191   33,270        -   (415)  (22,575)  10,280
Debt due:

Within one
year            -       -       -        -       -         -        -        -        -        -        -      -        -         -

After more
than
one year        -       - (39,152) (39,152)       -        -        -        -        -   10,753        -      -        -         -

Net         7,191      45 (37,085) (29,849)  10,280      834    (755)  (3,168)    7,191   22,517   10,753  (415)   (22,575)  10,280
(debt)
/funds

</TABLE>


                                      F28

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 4 month notice period. The total fees,
including  VAT, paid or payable to SIM for these services in respect of the year
to June 30, 2002 were GBP246,000 (2001: GBP267,000;  2000: GBP257,000), of which
GBP126,000 (2001: GBP132,000; 2000: GBP139,000) was outstanding at the year end.
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 June 30, 2002 was GBP22,000 (2001: Nil; 2000: Nil), all of which was
outstanding at the year end.

In consideration  for its management of the Company's fixed interest  portfolio,
Schroder Investment  Management (UK) Limited receives a fee 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% 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 to  June  30,  2002  were  GBP25,000  (2001:
GBP78,000;  2000:  GBP121,000),  of  which  GBP10,000  (2001:  GBP43,000;  2000:
GBP30,000) was outstanding at the year end.

SIM has also provided investment trust dealing services. The total cost to
the Company for this service, payable to Lloyds TSB Registrars, for the year
to June 30, 2002 was GBP21,000 (2001: GBP11,000; 2000: GBP2,000).

On April 22, 2002, Schroders Ventures (London) Limited, a wholly owned
subsidiary of Schroder Ventures International Investment Trust plc ("SVIIT"),
assigned a debt in respect of a future revenue stream of GBP1million due from
Schroder Investment Management (Ireland) Limited to SVIIT for a consideration
of GBP1 million.

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. 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.



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 treasury bills, cash and short-term deposits and various

                                      F29

NOTES TO THE ACCOUNTS (continued)


items such as debtors and creditors that arise directly from its operations.
These financial instruments held by the Company are generally liquid.

                                      F30

NOTES TO THE ACCOUNTS (continued)


29.  RISK (continued)

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.

Interest rate risk

The Company's revenue will be affected by changes in prevailing interest
rates since the majority of its income derives from treasury bills and bank
deposit interest. The effect of interest rate changes on the valuation of
investments forms part of valuation risk, which is considered separately
below.


Financial assets of the Group

<TABLE>
<CAPTION>
                                  Floating    Fixed    Non-interest     Total
                                      Rate     rate         bearing
                                    GBP000   GBP000          GBP000    GBP000
  Currency denomination of
  assets at June 30, 2002:
  <S>                                 <C>     <C>            <C>      <C>
  Sterling                            5,896    7,884          18,544    32,324
  Euro                                3,274   14,457         270,532   288,263
  US dollar                             128    8,659          94,172   102,959
  Japanese yen                            -        -          17,058    17,058
  Canadian dollar                         5        -          26,065    26,070
                                      9,303   31,000         426,371   466,674

  Currency denomination of
  assets at June 30, 2001:

  Sterling                            6,940    2,222          19,825    28,987
  Euro                                   17   12,300         229,008   241,325
  US dollar                             229   10,331          87,720    98,280
  Japanese yen                            -        -          21,700    21,700
  Canadian dollar                         5        -          31,710    31,715
                                      7,191   24,853         389,963   422,007

</TABLE>

                                       F31

NOTES TO THE ACCOUNTS (continued)

29.     RISK (continued)

The floating rate assets consist of short-term deposits. The non-interest
bearing assets represent the venture fund portfolio. 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:

Fixed rate financial assets
<TABLE>
<CAPTION>

                            June 30, 2002                  June 30, 2001
                       Weighted      Weighted           Weighted      Weighted
                        average       average            average       average
                       interest     period on           interest     period on
                           rate    which rate               rate    which rate
                                     is based                         is based

  <S>                     <C>         <C>                  <C>         <C>
  Euro                    3.00%       30 days              4.26%       58 days
  US dollars              1.50%       23 days              3.43%       68 days
  Sterling                3.16%       24 days              4.56%       45 days
</TABLE>


Financial liabilities of the Group

The Company issued GBP40 million nominal of 10 year 4.5% subordinated
convertible bonds in November 2001. The Company does not have any other
borrowings at year end, although it does have in place a loan facility of
euro225 million with the Royal Bank of Scotland 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.

Valuation risk

The Company's exposure to valuation risk comprises mainly movements in the
value of its underlying investments. A breakdown of the venture fund
portfolio is given in note 13 (and a detailed analysis of the twenty largest
underlying companies is given in the June 30, 2002 Report and Accounts). In
accordance with the Company's accounting policies, 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 des 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 June 30,
2002, a 10% movement in the valuation of the Group's venture fund portfolio
would have resulted in a 11% 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.

                                      F32

NOTES TO THE ACCOUNTS (continued)

29.     RISK (continued)

Holding risk

In certain circumstances, SVIIT may wish to transfer its holdings in
particular Funds. In a majority of the Funds in which SVIIT 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 SVIIT 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.

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 summarised below:

Dividends

Under UK GAAP, dividends are provided for in the year in respect of which
they are proposed or declared. Under US GAAP, dividends are only provided in
the period in which they are declared.

Unamortised issue and listing costs

Under UK GAAP, unamortised issue costs can be disclosed net against the
liability that they relate to. Under US GAAP, unamortised costs are shown as
an asset.

The following is a summary of the significant adjustments to shareholders'
funds which would be required if US GAAP were to be applied instead of UK
GAAP:

Shareholders' funds
<TABLE>
<CAPTION>

                                                       Year ended June 30
                                                     2002      2001      2000
                                                   GBP000    GBP000    GBP000
  <S>                                              <C>       <C>       <C>
  Shareholders' funds as reported in
  the consolidated balance sheet
  under UK GAAP                                    423,087   416,872   461,125

  Adjustments:

  Current liabilities - Proposed dividend                -     1,841     3,886

  Shareholders' equity as adjusted                 423,087   418,713   465,011
  to accord with US GAAP

</TABLE>

                                      F33

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 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.

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

<TABLE>
<CAPTION>

                                                     Year ended June 30
                                                     2002      2001       2000
                                                   GBP000    GBP000     GBP000

  <S>                                               <C>       <C>        <C>
  Cash (outflow)/inflow from                        (878)     2,726      4,602
  operating activities
  Cash (outflow)/inflow on                       (34,539)     (878)   (25,690)
  investing activities
  Cash inflow/(outflow) from                       37,484   (4,182)    (1,487)
  financing activities

  Increase/(decrease) in cash and                   2,067   (2,334)   (22,575)
  cash equivalents
  Exchange gain/(loss) on cash balances                45     (755)      (415)
  Cash and cash equivalents:
  At July 1                                         7,191    10,280     33,270
  At June 30                                        9,303     7,191     10,280

</TABLE>

                                      F34








<PAGE>




Exhibit 2.1     Registrar and Paying Agency Agreement, dated November 21, 2001,
                between the Company, The Law Debenture Trust Corporation p.l.c.
                and J.P. Morgan Chase Bank.


THIS AGREEMENT is made on 21st November, 2001 BETWEEN:

(1)  SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc whose registered
     office is at 31 Gresham Street, London EC2V 7QA (the "Issuer");

(2)  THE LAW DEBENTURE TRUST  CORPORATION  p.l.c.  whose registered office is at
     Fifth  floor,  100 Wood  Street,  London  EC2V 7EX  (the  "Trustee",  which
     expression  shall include any other trustee for the time being of the Trust
     Deed referred to below); and

(3)  JPMORGAN  CHASE BANK acting  through its office at Trinity  Tower, 9 Thomas
     Street,  London E1W 1YT as registrar,  conversion  agent transfer agent and
     paying agent (the "Registrar", which expression shall, wherever the context
     so admits include any successor registrar, conversion agent, transfer agent
     or paying agent for the time being so appointed).

WHEREAS:

(A)  The  Issuer  proposes  to  issue  up  to   GBP40,000,000   41/2  per  cent.
     Subordinated  Convertible  Bonds due 2011 (the  "Bonds")  convertible  into
     ordinary shares in the Issuer ("Ordinary Shares").

(B)  The Bonds will be issued in  registered  form in amounts of  GBP100,000  or
     integral multiples thereof without Coupons attached.

(C)  The Bonds will be constituted by a trust deed dated 21st November, 2001 and
     made between the Issuer and the Trustee  (the "Trust  Deed") and are issued
     subject  to the  conditions  (the  "Conditions")  contained  in the  second
     schedule to the Trust Deed.


IT IS AGREED as follows:

1.     DEFINITIONS

Terms defined or construed in the Conditions or the Trust Deed shall, unless
the context otherwise requires, have the same meanings when used herein.
Reference herein to amounts payable in respect of the Bonds shall include all
redemption moneys, net proceeds of sale of Relevant Bonds pursuant to
Condition 13.5 and/or interest expressed to be payable in respect thereof
pursuant to the Conditions.


  "Business Day"         means any day (other than a Saturday or a Sunday) on
                         which commercial banks and foreign exchange markets
                         are open for business in London;

                                       2

  "Conversion Notice"    means a notice of conversion substantially in the
                         form for the time being current and which shall
                         initially be in the form appearing in Schedule 1;

References in this Agreement to Clauses and Schedules shall be construed as
references to the Clauses of and Schedules to this Agreement.

2.     APPOINTMENT

     Upon and subject to the terms of this Agreement, the Issuer hereby appoints
     the  Registrar as its  registrar,  conversion  agent,  transfer agent and
     paying agent in  respect of the Bonds in accordance with the Trust Deed and
     the Conditions, at its office specified above, and the Registrar hereby
     accepts such appointment. Except in Clause 17 and elsewhere where the
     context otherwise requires, references hereafter in this Agreement to the
     Registrar are to it acting solely through such specified office.

3.     ISSUE OF BONDS

3.1  The Issuer  authorises and instructs the Registrar to complete and issue or
     cause to be issued  the Bonds and any Bonds to be issued  from time to time
     in replacement of any lost, stolen or destroyed, mutilated or defaced Bonds
     in accordance with Clause 9.

4.     PAYMENT

4.1  The Issuer will by 11.00 a.m. London time on each date on which any payment
     in respect of the Bonds becomes due,  transfer to the Registrar such amount
     as may be required  for the  purposes  of such  payment.  The Issuer  shall
     confirm to the  Registrar  not later than  11.00  a.m.  London  time on the
     second Business Day immediately  prior to the due date for any such payment
     that  such  transfer  will be  made.  In this  Clause,  the date on which a
     payment in respect of the Bonds  becomes  due means the first date on which
     the holder of a Bond could claim the relevant payment under the Conditions.

4.2  The Registrar will forthwith  notify by facsimile  transmission the Trustee
     and the Issuer if it has not by the due date for any payment due in respect
     of the Bonds received the full amount so payable on such date or it has not
     on the relevant  Business Day  received  the  confirmation  from the Issuer
     referred to in Clause 4.1.

4.3  The Registrar  will,  subject to and in accordance with the Conditions (and
     subject to receipt of the relevant funds from the Company), pay or cause to
     be paid on behalf of the  Issuer on and after  each due date  therefor  the
     amounts due in respect of the Bonds.  Subject as  aforesaid,  the Registrar
     shall  make  payment  in  respect  of each  Bond  in  accordance  with  the
     Conditions to the registered holder thereof.

                                       3

4.4  If the  Registrar  has not  received  by the due  date for any  payment  in
     respect of the Bonds the full amount payable on such date but receives such
     full amount later it will forthwith:-

     (A)   so notify the Trustee; and

     (B)   upon request by the Trustee give notice to the Bondholders in
           accordance with the Conditions that it has received such full amount.

4.5  All sums payable to the Registrar hereunder will be paid in pounds sterling
     in immediately available funds to such account and with such bank in London
     as the Registrar may from time to time notify to the Issuer.

4.6  The Registrar  may deal with moneys paid to it under this  Agreement in the
     same manner as other moneys paid to it as a banker by its customers  except
     that (1) it may not exercise any lien, right of set-off or similar claim in
     respect of them and (2) it shall not be liable to any  person for  interest
     on any sums held by it under this Agreement.

4.7  Payment of only part of the amount payable in respect of a Bond may only be
     made at the  direction  of the Trustee  (except as a result of deduction of
     tax as permitted by the  Conditions)  and, if it is made,  the Registrar to
     whom the Bond is presented  shall procure that such Bond is endorsed with a
     memorandum of the amount paid and the date of payment.

4.8  All payments to be made by the  Registrar  hereunder  shall be made without
     charging any commission or fee to the Bondholders.

4.9  The Registrar will supply to the Issuer within one month after each date on
     which any  payment in respect of the Bonds is due (or,  as the case may be,
     after any later date upon which the relevant  payment has been made in full
     as  contemplated by Clause 4.3) a list of all Bonds, if any, in relation to
     which any tax or other duty,  assessment  or  governmental  charge is to be
     deducted or withheld  specifying the amounts of the relevant  deductions or
     withholdings.  The Issuer will pay to the relevant tax authorities any such
     tax, duty, assessment or charge which has been so deducted or withheld. The
     Registrar  will  supply  to the  Issuer  such  other  information  or  copy
     documents  relating to such  deductions or  withholdings  as the Issuer may
     reasonably request and will, so far as reasonably practicable,  provide any
     information or copy documents  referred to in this Clause 4.9 to the Issuer
     within such  period as will  enable the Issuer to comply with any  relevant
     statutory  requirement  provided that if such period is less than one month
     the Issuer shall notify the Registrar of the length of such period.

                                       4

5.     REPAYMENT

     Forthwith  upon any  Bond  being  deposited  with  the  Registrar  upon the
     exercise of a Conversion Right or being redeemed by the Issuer or being
     purchased and cancelled,  before the final date for redemption or any claim
     for the payment of principal or interest  becoming  prescribed  pursuant to
     the Conditions,  the Registrar shall repay to the Issuer any amount held by
     the  Registrar  in respect of such Bond (or such claim as the case may be).
     Notwithstanding  the foregoing,  the Registrar shall not be obliged to make
     any  repayment  to the  Issuer  so long as any  amounts  which  under  this
     Agreement  should have been paid to or to the order of the Registrar by the
     Issuer shall remain unpaid. The Registrar shall not, however,  be otherwise
     required or entitled to repay any sums received by it under this Agreement.

6.     CONVERSION

6.1  Promptly  upon  request  from time to time,  the Issuer  will  provide  the
     Registrar  with copies of the form of Conversion  Notice for the time being
     current.

6.2  Subject as provided herein and in the Conditions,  Bondholders may exercise
     Conversion  Rights by delivering  to the specified  office of the Registrar
     during its usual business  hours,  a duly  completed and signed  Conversion
     Notice (the form of which shall be furnished upon request to any Bondholder
     by the Registrar and which shall contain a statement  that Ordinary  Shares
     will not be  available  for issue (a) to, or to a nominee  for,  Euroclear,
     Clearstream,  Luxembourg or any other person providing a clearance  service
     within Section 96 of the Finance Act 1986 of the United Kingdom or (b) to a
     person,  or nominee or agent for a person,  whose  business  is or includes
     issuing  depositary  receipts  within Section 93 of the Finance Act 1986 of
     the United  Kingdom) in each case, at any time prior to the "abolition day"
     as defined in Section 111(l) of the Finance Act 1990 of the United Kingdom)
     and the Registrar shall:

     (A)     accept delivery on behalf of the Issuer of such duly completed and
             signed Conversion Notice;


                                       5

    (B)     check (provided  that the Issuer has provided all relevant
             information to enable it to do so) that the exercise of the
             Conversion Right covered by the Conversion Notice in question would
             not result in the person acquiring the Ordinary Shares on
             conversion becoming obliged to make an offer for the
             Issuer under Rule 9 of the City Code on Takeovers and Mergers; and

     (C)     require, as a condition precedent to an exercise of Conversion
             Rights by or on behalf of a Bondholder (i) compliance by the
             Bondholder with any applicable  fiscal or other laws or regulations
             as provided in the  Conditions, and (ii) that such Bondholder pays
             (a) all taxes and, capital,  stamp, issue and registration  duties
             (if any) arising on  conversion in respect  thereof  (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 such  conversion)  and (b) all,
             if any,  taxes  arising by  reference  to any disposal  or  deemed
             disposal  of a Bond in  connection  with  such  conversion
             provided  that no other  charge  shall be made and in  particular
             no charges in respect of the  despatch of  certificates  for
             Ordinary  Shares (if any) to the person(s)  entitled  thereto
             (unless,  at the request of the person(s)  entitled thereto,  they
             are to be sent otherwise than by ordinary mail,  uninsured and at
             the risk of such person(s)).

6.3          (A)     Upon the conditions referred to in Clause 6.2 being
                     fulfilled, the relevant Conversion Notice shall be
                     completed, and held subject to Clause 6.2, by the
                     Registrar; and

             (B)     If the condition in Clause 6.2(C) shall not be satisfied
                     then the Registrar shall promptly so notify the Issuer and
                     the Bondholder in question and return such Bonds as shall
                     have been delivered pursuant to Clause 6.2 by
                     uninsured ordinary mail to the address of the Bondholder
                     in question as set out in the Conversion Notice and the
                     Conversion Notice in question shall be of no effect.

6.4  Immediately  upon the conditions  being fulfilled in accordance with Clause
     6.2, the Registrar shall:

     (A)     notify the Issuer of:

             (i)     the principal amount of any Bond being converted (or where
                     only part of such principal amount is required to be
                     converted, that part of such principal amount) and, in
                     either case, the name and address of such Bondholder;

                                       6

            (ii)     the Conversion Date in respect of such conversion;

           (iii)     the number of Ordinary Shares to be issued and the
                     Conversion Price;

            (iv)     the name(s) and address(es) of the person(s) in whose
                     name(s) the Ordinary Shares are to be registered showing
                     against each such name the number of Ordinary Shares to be
                     registered in that person's name and the address to which
                     the certificates for Ordinary Shares (if any) are to be
                     despatched in accordance with the Conversion Notice; and

             (v)     confirmation that an indemnity (and security if applicable)
                     has been obtained where appropriate;

     (B)     despatch as soon as practicable and in any event within five days
             after satisfaction by the Bondholder of all conditions precedent to
             conversion to the Issuer the Conversion Notice duly completed
             pursuant to Clause 6.3(A) and documentation relating to any
             indemnity.

6.5  The Issuer shall,  whenever there is an adjustment to the Conversion  Price
     pursuant to the  Conditions,  forthwith  advise the  Registrar  of both the
     previous and the new Conversion  Price (with a brief statement of the facts
     requiring  such  adjustment)  and the date as from which the new Conversion
     Price has become or will become effective.

6.6  The  Issuer  undertakes  to comply  with the  Conditions  with  respect  to
     conversion  of the Bonds and  (where so  required  in  accordance  with the
     Conditions) to cause  certificates  for Ordinary  Shares to be delivered in
     satisfaction of Conversion  Rights in accordance with the provisions hereof
     and the Conditions.

6.7  Each Conversion Notice and each facsimile transmission sent in respect of a
     Conversion  Notice  pursuant to the foregoing  provisions of this Clause by
     the Registrar shall indicate the  identification  code "REG" and shall bear
     the lowest  number  previously  unused by the  Registrar in the sequence of
     whole numerals  starting from one and continuing in uninterrupted  sequence
     upwards, for identification.  All confirmatory or subsequent communications
     (regardless  of the identity of the sender or the  recipient  thereof) with
     regard to such  Conversion  Notice shall bear the same  identifying  serial
     number as well as the identification code of the Registrar.


                                       7

7.     TRUSTEE

7.1  At any time after an Event of Default or a  Potential  Event of Default has
     occurred, the Trustee may:

     (A)     by notice in writing to the Issuer and the Registrar, require the
             Registrar, until notified by the Trustee to the contrary, so far
             as permitted by any applicable law:-

             (i)     to act thereafter as Registrar of the Trustee in relation
                     to payments to be made by or on behalf of the Trustee
                     under the provisions of the Trust Deed mutatis mutandis
                     on the terms of this Agreement (save that the Trustee's
                     liability under any provision hereof for the
                     indemnification or out-of-pocket expenses of the Registrar
                     shall be limited to the amounts for the time being
                     held by the Trustee on the trusts of the Trust Deed
                     relating to the Bonds and available for this purpose) and
                     thereafter to hold all Bonds and all sums, documents and
                     records held by them in respect of Bonds to the order of
                     the Trustee; or

            (ii)     to deliver all Bonds and all moneys, documents and records
                     held by them in respect of Bonds to the Trustee or as the
                     Trustee directs in such notice provided that such notice
                     shall be deemed not to apply to any documents or records
                     which the Registrar is obliged not to release by any law
                     or regulation; and/or

     (B)     by notice in writing to the Issuer, require the Issuer to make all
             subsequent payments in respect of the Bonds to or to the order of
             the Trustee and not to the Registrar.

7.2  The Issuer shall forthwith notify the Registrar of any change in the person
     or persons comprising the Trustee.

8.   CANCELLATION, DESTRUCTION AND RECORDS

8.1  The  Registrar  shall cancel all those Bonds that have been (i) redeemed or
     converted,  (ii)  purchased by or on behalf of the Issuer or any Subsidiary
     of the Issuer or any person acting in concert with them and surrendered for
     cancellation  or  (iii)  which,  being  mutilated  or  defaced,  have  been
     surrendered  and  replaced  pursuant to the  Conditions  and a  certificate
     stating:

     (A)     the aggregate principal amount of Bonds which have been redeemed or
             converted;


                                       8

     (B)     the serial numbers of such Bonds in definitive form;

     (C)     the aggregate amount of interest paid (and the due dates of such
             payments) on the Bonds;

     (D)     the aggregate principal amount of Bonds (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 Bonds in definitive form; and

     (E)     the aggregate principal amounts of Bonds which have been so
             exchanged or surrendered and replaced and the serial numbers of
             such Securities in definitive form;

     shall be given to the Trustee and the Issuer by the Registrar 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 Bonds or
     payment of interest thereon and of cancellation of the relative Bonds.

8.2  The  Registrar  shall keep a full and  complete  record of all Bonds 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  Bonds  issued in  substitution  for lost,  stolen,  mutilated,
     defaced or  destroyed  Bonds and shall make such  records  available to the
     Trustee at all reasonable times.

8.3  Unless otherwise previously  instructed by the Issuer and subject to Clause
     7 the Registrar shall within 3 months of the delivery of the certificate to
     the Issuer and the Trustee pursuant to sub-clause 8.1 destroy the cancelled
     Bonds (if any) in its  possession  and  furnish  each of the Issuer and the
     Trustee with a destruction  certificate which shall list the serial numbers
     and denominations of the Bonds in numerical sequence.

9.   ISSUE OF REPLACEMENT BONDS AND COUPONS

9.1  The Registrar  shall,  subject to and in accordance with the Conditions and
     the  provisions  of this Clause and Clause 8 above,  issue any  replacement
     Bonds in place of Bonds which have been lost, stolen, mutilated, defaced or
     destroyed.


                                       9

9.2  The  Registrar  shall not issue any  replacement  Bonds  except  subject to
     applicable  laws and stock exchange  requirements  and unless and until the
     applicant therefor shall have:

     (A)     paid such expenses, taxes and duties (including the fees and costs
             of the Registrar) as may be incurred in connection therewith;

     (B)     (in the case of a lost, stolen, mutilated, defaced or destroyed
             Bond) furnished the Registrar with such evidence (including
             evidence as to the serial number of the Bond in question) and such
             indemnity as the Issuer may reasonably require in respect thereof;
             and

     (C)     surrendered to the Registrar any mutilated or defaced Bond to be
             replaced.

9.3  The Registrar shall, on the issue of any replacement Bond, forthwith inform
     the Issuer and the Trustee of the serial  number of such  replacement  Bond
     issued and the serial number of the Bond in place of which such replacement
     Bond has been issued.

9.4  Whenever  any Bond  alleged  to have  been  lost,  stolen or  destroyed  in
     replacement  for which a new Bond has been issued shall be presented to the
     Registrar  for  redemption,  payment  or  conversion  the  Registrar  shall
     immediately  send  notice  thereof  to the  Issuer  and  the  Trustee.  The
     Registrar shall,  after consultation with the Issuer take appropriate steps
     (subject to being indemnified to its reasonable satisfaction as to cost) to
     recover the amount  covered by the indemnity with respect to such allegedly
     lost, stolen or destroyed Bond and upon the recovery thereof shall (subject
     as aforesaid) forthwith account to the Issuer for the amount so collected.

10.  NOTICES IN RESPECT OF THE BONDS

10.1 On behalf of and at the expense of the Issuer,  the Registrar shall arrange
     for the  publication  of all notices (in a form  approved by the Issuer and
     the Trustee)  required to be given to  Bondholders  in accordance  with the
     Conditions.

10.2 The Registrar shall promptly send to the Issuer and the Trustee four copies
     of the form of every notice given to  Bondholders  in  accordance  with the
     Conditions.


                                       10

11.  DUTIES OF THE REGISTRAR

11.1 The Registrar  shall, in accordance with the Conditions and the Articles of
     Association of the Issuer,  so long as any Bond is outstanding  perform the
     usual and normal duties of a Registrar in respect of the Bonds and, without
     limitation, shall:-

     (A)     maintain at its specified office in London a register (the
             "Register") of the holders of the Bonds which shall show (1) the
             amounts and serial numbers of the Bonds, (2) the dates of issue of
             all Bonds, (3) all subsequent transfers, conversions and changes of
             ownership thereof, (4) the names and addresses of the holders of
             the Bonds, (5) all cancellations of Bonds, whether by reason of
             their purchase, replacement, redemption, conversion or otherwise,
             and (6) all the serial numbers of replacements of
             Bonds (subject, where appropriate, in the case of (5) above, to
             notification thereof to the Registrar as provided herein). The
             Trustee and the holders of the Bonds or any of them and any person
             authorised by it or any of them may at all reasonable times during
             office hours inspect the register and take copies of or extracts
             from it. 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;

     (B)     make available for inspection by the Bondholders at its specific
             office, the Trust Deed, the Registrar and Paying Agency Agreement,
             and the then latest audited balance sheets and profit and loss
             accounts (consolidated if applicable) of the Issuer;

     (C)     register and effect all transfers of Bonds;

     (D)     receive any document in relation to, or affecting the title to, any
             of the Bonds including all forms of transfer, Conversion Notices,
             probates, letters of administration and powers of attorney;

     (E)     make mailing addresses available for dispatch of company
             communications to the Bondholders;

     (F)     (if applicable) receive, register and act upon Bondholders'
             interest payment and conversion instructions;

     (G)     (if applicable) prepare and despatch up to two interest or other
             distributions per year in respect of each holding;


                                       11

     (H)     deal (to the extent that the Registrar considers itself competent)
             with routine correspondence with Bondholders, their agents, the
             London Stock Exchange, CRESTCo Limited and the Registrar of
             Companies;

     (I)     prepare, seal and despatch certificates upon registration of
             transfers, where necessary, and also dealing with the issue of
             duplicate certificates in the place of certificates alleged to be
             lost or destroyed;

     (J)     arrange for proofing and printing of stationery for the above;

     (K)     notify the Issuer upon receipt by the Registrar of certain
             categories of transfers previously specified and agreed in writing
             between the Issuer and the Registrar;

     (L)     liaise with the Issuer and the registrar of the Ordinary Shares in
             respect of conversions of Bonds or the exercise of subscription
             rights and administer the repayment, redemption or purchase of
             Bonds;

     (M)     maintain proper records of the details of all documents as
             aforesaid received by it and maintain records of such other
             information as the Issuer may reasonably request from it in writing
             so as to enable the Issuer to comply with any applicable statutory
             requirements;

     (N)     prepare all such lists of holders of the Bonds as may be required
             by the Issuer, the Trustee or any person authorised by either of
             them;

     (O)     subject to local laws and regulations at all reasonable times
             during office hours make the Register and any other documents
             required by the Conditions to be available for inspection
             available to the Issuer and the Trustee, or any person authorised
             by either of them or any holder of a Bond for inspection and, at
             the expense of such person, for the taking of copies thereof or
             extracts therefrom;

     (P)     comply with the proper and reasonable requests of the Issuer and
             the Trustee with respect to the maintenance of the Register and
             give to the Trustee such information with respect thereto as may be
             reasonably required by them for the proper performance of its
             respective duties under this Agreement and the Trust Deed;


                                       12

     (Q)     forthwith, and in any event within seven London Business Days (or
             such longer period as may be required to comply with any applicable
             fiscal or other regulations) of receipt of the request for transfer
             of Bonds in the form approved (for the time being) by the Trustee
             issue, upon receipt by it of Bonds for transfer, duly dated and
             completed Bonds in the name of the registered holders thereof and
             deliver such Bonds by uninsured mail at its specified office or
             (at the risk of such registered holders and in accordance
             with the Conditions) send such Bonds to such address as the
             registered holders may specify in the relevant request for
             transfer; and

     (R)     not effect any such exchange or transfer as is referred to in this
             Clause unless the requirements of Conditions 13.2 and 13.3 are
             fulfilled.

11.2 The Registrar  shall maintain in safe custody all Bonds  delivered to it by
     the  Issuer  hereunder  and shall  ensure  that  Bonds are  issued  only in
     accordance  with the Trust Deed,  the Conditions and the provisions of this
     Agreement.

12.  REGULATIONS FOR TRANSFERS OF BONDS

12.1 Subject as provided below,  the Issuer may from time to time agree with the
     Trustee and the Registrar  reasonable  regulations  to apply in addition to
     the  Conditions  to govern the  conversion,  transfer and  registration  of
     Bonds.  The  initial  regulations,  which  shall  apply  until  amended  in
     accordance  with the Trust Deed, are set forth in Schedule 2. The Registrar
     agrees to comply with such regulations as amended from time to time.

12.2 The Issuer shall as soon as  reasonably  practicable  at the request of the
     Registrar  cause a  sufficient  quantity  of  additional  blank Bonds to be
     available, upon request, to the Registrar to effect transfers of Bonds.

13.  DOCUMENTS AND FORMS

     The Registrar shall be responsible for printing:-

     (A)     such quantity of blank Bonds as the Registrar may reasonably
             require to enable the  Registrar to despatch  Bonds in amounts of
             GBP100,000 or integral  multiples thereof to the persons entitled
             thereto,  provided that such Bonds shall only be despatched to
             those persons who have delivered to, or to the order of, the Issuer
             a certificate substantially in the form set out in Schedule
             3 hereto;


                                       13

     (B)     sufficient copies of all documents required by the Conditions to be
             obtainable or available for inspection at the specified office of
             the Registrar who will procure that such copies of documents which
             are so obtainable shall be available at its specified office for
             examination by Bondholders and that copies thereof will be
             furnished to Bondholders upon request; and

     (C)     in the event of a meeting of Bondholders being called, proxy forms
             together with instructions from the Issuer approved by the Trustee
             as to the manner of completing, dealing with and recording the
             issue of such forms.

14.  INDEMNITIES

14.1 The Issuer shall indemnify the Registrar against any loss, liability, cost,
     claim, action, demand or expense (including, but not limited to, all costs,
     charges and  expenses  paid or  incurred  in  disputing  or  defending  the
     foregoing)  which it may incur or which may be made  against it as a result
     of or in connection  with its appointment or the exercise of its powers and
     performance of its duties hereunder  (including,  without  prejudice to the
     generality  of the  foregoing,  any  liability  in  respect of payment of a
     cheque drawn by the  Registrar  where such cheque is collected or sued upon
     or an attempt at collection is made after the amount in respect of which it
     is paid shall have been  returned to the Issuer  pursuant  to Clause  4.1),
     except  for such as may  result  from the breach by it of the terms of this
     Agreement or from its own wilful  default,  negligence or bad faith or that
     of its officers, employees or agents.

14.2 The Registrar shall indemnify the Issuer against any loss, liability, cost,
     claim, action, demand or expense (including, but not limited to, all costs,
     charges and  expenses  paid or  incurred  in  disputing  or  defending  the
     foregoing)  which the Issuer may incur or which may be made against  either
     of them as a result  of the  breach by the  Registrar  of the terms of this
     Agreement  or its wilful  default,  negligence  or bad faith or that of its
     officers, employees, or agents.

15.  GENERAL

15.1 In the  event of a  meeting  of  Bondholders,  the  Registrar  shall act as
     provided in the Conditions and the Trust Deed.

15.2 Subject as otherwise  provided  herein,  the Registrar shall act solely for
     and as agent of the  Issuer and shall not have any  obligations  towards or
     relationship of agency or trust for any Bondholder and shall be responsible
     only for the  performance of the duties and obligations  expressly  imposed
     upon it herein.


                                       14

15.3 The  Registrar  shall not exercise any right of set-off or lien against the
     Issuer,  the  Trustee  or the  holder of any Bond in  respect of any moneys
     payable to or by it under the terms of this Agreement.

15.4 The  Registrar  shall be protected  and shall incur no liability  for or in
     respect of any action taken, omitted or suffered by it in reliance upon any
     instruction, request or order from the Issuer or in reliance upon any Bond,
     notice, resolution,  direction, consent, certificate,  affidavit, statement
     or other paper or document  reasonably  believed by it to be genuine and to
     have been delivered, signed or sent by the proper party or parties.

15.5 Neither the Registrar,  nor its officers,  directors and employees shall be
     precluded from acquiring, holding or dealing with any Bond or from engaging
     or being interested in any contract or other financial or other transaction
     with  the  Issuer  or any of its  subsidiaries  or from  acting  on,  or as
     depositary,  trustee or agent for, any committee or body of  Bondholders or
     other  obligations of the Issuer or any of its subsidiaries as freely as if
     it were not the Registrar  hereunder and in no event  whatsoever  shall the
     Registrar  be liable to  account to the  Issuer or any  Bondholder  for any
     profit made or fees or commissions received in connection therewith.

16.  CHANGES IN REGISTRAR

16.1 The Issuer may at any time with the prior  written  consent of the  Trustee
     (such consent not to be unreasonably withheld or delayed):-

     (A)     appoint another Registrar; and/or

     (B)     vary or terminate the appointment of the Registrar by giving to the
             Registrar whose appointment is to be varied or terminated not less
             than 60 days' written notice to that effect, which notice shall
             expire not less than 30 days before or after any due date for any
             payment in respect of Bonds provided that termination may take
             immediate effect in case of insolvency of the Registrar,

     Provided that, subject to Clause 16.3(D), there will at all times be a
     Registrar with a specified office in the United Kingdom or such other place
     as the Trustee may approve.


                                       15

16.2 Subject to Clause 16.3 and the prior  written  consent of the Trustee (such
     consent not to be  unreasonably  withheld or delayed),  the  Registrar  may
     resign its  appointment  hereunder  at any time by giving to the Issuer and
     the Trustee not less than 60 days'  written  notice to that  effect,  which
     notice  shall expire not less than 30 days before or after any due date for
     any payment in respect of Bonds.

16.3 Notwithstanding the foregoing sub-clauses:

     (A)     no resignation by or (subject to Clause 16.3(D)) termination of the
             appointment of the Registrar shall take effect until a replacement
             Registrar approved by the Trustee has been appointed on terms
             approved in writing by the Trustee (such approval, in either case,
             not to be unreasonably withheld or delayed). If however ten days
             before the expiry of the notice period referred to in Clause 16.2
             above the Issuer has not appointed a replacement Registrar, the
             resigning Registrar may select a replacement Registrar which
             shall be a bank of international reputation with experience of
             performing such a role and which upon the expiry of the
             aforementioned notice period (but only if the Trustee approves
             such selection) the Issuer shall appoint as Registrar unless in the
             meantime the Issuer shall have appointed a replacement Registrar
             approved by the Trustee as aforesaid;

     (B)     no resignation by, or subject to Clause 16.3(D), termination of the
             appointment of, the Registrar shall take effect if as a result of
             such resignation or termination the proviso to Clause 16.1 would
             not be satisfied;

     (C)     no appointment or termination of the appointment of the Registrar
             shall take effect unless and until notice thereof shall have been
             given to the Bondholders where required by, and in accordance with,
             the Conditions; and

     (D)     notwithstanding any other provision of this Clause 16, the
             appointment of the Registrar shall forthwith terminate if the
             Registrar becomes incapable of acting, is adjudged bankrupt or
             insolvent, files a voluntary petition in bankruptcy, makes an
             assignment for the benefit of its creditors, consents to the
             appointment of (or there is appointed) a receiver, administrator
             or other similar official of all or a substantial part of its
             property or assets or admits in writing its inability to pay or
             meet its debts as they mature or suspends payment thereof, or if a
             resolution is passed or an order made for the winding up or
             dissolution of the Registrar or any analogous event under any
             applicable law.


                                       16

16.4 If the  appointment of the Registrar  hereunder  terminates,  the Registrar
     shall,  on the date on which  such  termination  takes  effect,  pay to the
     successor  Registrar  any amount held by it for payment in respect of Bonds
     and pay to the  Issuer any  amounts  held by it due to the Issuer and shall
     deliver to the successor  Registrar all records maintained by it concerning
     the Bonds and all Conversion Notices and Bonds held by it.

16.5 Upon the execution by the Issuer,  the Trustee and any successor  Registrar
     of an instrument  effecting the  appointment of such  successor  Registrar,
     such  successor   Registrar  shall,   without  any  further  act,  deed  or
     conveyance,  become vested with all the authority,  rights, powers, trusts,
     immunities,  duties and obligations of such predecessor with like effect as
     if originally named as Registrar herein and such predecessor,  upon payment
     to it of the pro  rata  proportion  of its  annual  administration  fee and
     disbursements  then unpaid,  shall  thereupon  become  obliged to transfer,
     deliver and pay over,  and such  successor  Registrar  shall be entitled to
     receive,  all moneys,  records,  Bonds and Conversion  Notices held by such
     predecessor as Registrar hereunder.

16.6 Any corporation into which the Registrar may be merged,  or any corporation
     with which the Registrar may be  consolidated,  shall on the date when such
     merger or consolidation  becomes effective,  and to the extent permitted by
     applicable law, become the successor Registrar under this Agreement without
     the  execution or filing of any paper or any further act on the part of the
     parties hereto, unless otherwise required by the Issuer or the Trustee, and
     after the said  effective  date all  references  in this  Agreement  to the
     Registrar shall be deemed to be references to such  corporation.  Notice of
     any such merger or consolidation shall forthwith be given to the Issuer and
     the Trustee.

16.7 The  Issuer  shall,  not less  than 21 nor more  than 30 days  prior to the
     termination of the  appointment of the Registrar,  the appointment of a new
     Registrar or the  resignation of the Registrar  taking effect,  give to the
     Bondholders notice thereof in accordance with Condition 12.1.

16.8 If the Registrar  shall  determine to change its specified  office it shall
     give to the Issuer and the  Trustee  written  notice of such  determination
     giving the  address of the new  specified  office and  stating  the date on
     which such change is to take  effect,  which date shall not be less than 75
     days  after the date of such  notice  if such  change  would  result in the
     proviso to Clause 16.1 not being  satisfied,  provided  that no such notice
     shall take effect within the period of 30 days before or after any due date
     for any payment in respect of Bonds.  The Issuer shall within 30 days after
     receipt of such notice (unless the appointment is to terminate  pursuant to
     clauses  16.1,  15.2 or 15.3 on or prior to the date of such change) at the
     expense of the Registrar give to the Bondholders  notice in accordance with
     the  Conditions  of such  change and of the  address  of the new  specified
     office.


                                       17

17.  CONFIDENTIALITY

     Any information regarding the Issuer's register of Bondholders or otherwise
     relating  to their  affairs,  which may be acquired  by the  Registrar,  in
     connection with the  performance of its duties as registrar,  paying agent,
     transfer  agent or  conversion  agent,  will be treated by it as secret and
     confidential and will not be disclosed by it except:

     (A)     to employees, agents and sub-contractors instructed by the
             Registrar in connection with the proper performance of its services
             as Registrar and who require such information for the performance
             of their duties; or

     (B)     as may be required by law or by a competent regulatory or
             government authority; or

     (C)     with the consent of the Issuer; or

     (D)     insofar as the information shall have become known to the Registrar
             other than in its capacity as Registrar, or as it shall have
             entered the public domain, other than as a result of a breach of
             this Agreement by the Registrar.

18.  FEES AND EXPENSES

     The Issuer shall pay to the Registrar such commissions in respect of its
     services as Registrar  under this  Agreement as shall be agreed between the
     Issuer and the Registrar.

                                       18


19.  NOTICES AND COMMUNICATIONS

19.1 Any notice,  demand,  certificate or other  document  required to be given,
     made or  served  hereunder  to any of the  parties  hereto  shall be in the
     English language and shall be given, made or served by hand-delivering  the
     same or by  sending  the same by  facsimile  copier or other  instantaneous
     electronic method of written communication as follows:


    The Issuer:       Schroder Ventures International Investment Trust plc
                      31 Gresham Street
                      London
                      EC2V 7QA
    Fax:              020 7658 3538
    Attention:        The Company Secretary
    And copied to:    Schroder Ventures (London) Limited
                      357 Strand
                      London
                      WC2R 0HS
    Fax:              020 7240 5346
    Attention:        Legal Director
    The Trustee:      The Law Debenture Trust Corporation p.l.c.
                      Fifth floor
                      100 Wood Street
                      London
                      EC2V 7EX
    Fax:              020 7696 5261
    Attention:        The Manager, Trust Management
    The Registrar     JPMorgan Chase Bank
                      Trinity Tower
                      9 Thomas More Street
                      London E1W 1YT
    Fax:              01202 34 7438/7945
    Attention:        Manager, Institutional Trust Services

     Any notice given as provided in this sub-clause shall be deemed to have
     been given upon receipt and, if received after 4.50pm it shall be deemed
     to have been given on the next Business Day.

19.2 All  communications  relating to this  Agreement  between  the Issuer,  the
     Trustee and the Registrar shall, save as otherwise herein provided, be made
     through the Registrar.

20.  AMENDMENTS

     This Agreement may be amended only by an agreement in writing between the
     parties hereto.

21.  COUNTERPARTS

21.1 This  Agreement  may be executed in any number of  counterparts  and by the
     parties on different  counterparts,  but shall not be effective  until each
     party has executed at least one counterpart.

21.2 Each counterpart shall constitute an original of this Agreement but all the
     counterparts shall together constitute one and the same agreement.


                                       19

22.  GOVERNING LAW

     This Agreement shall be governed by and construed in accordance with
     English law. In relation to any legal action or proceedings arising out of
     or in connection with this Agreement ("Proceedings"), each of the parties
     hereto irrevocably submits to the jurisdiction of the courts of England and
     waives any objection to Proceedings in such courts whether on the grounds
     that the Proceedings have been brought in an inconvenient forum or
     otherwise.  These submissions are made for the benefit of each of the
     parties  hereto and shall not limit the right of any of them to take
     Proceedings in any other court of competent jurisdiction outside the
     contracting states, as defined in Section 1(3) of the Civil Jurisdiction
     and Judgments Act 1982, nor shall the taking of Proceedings in any court of
     competent jurisdiction preclude any of them from taking Proceedings in any
     other court of competent jurisdiction (whether concurrently or not).
     Nothing in this Agreement shall affect the right to serve process in any
     other manner permitted by law.



                                       20

     AS WITNESS the hands of the duly authorised representatives of the parties
     hereto the day and year first above written.

     Schroder Ventures International Investment Trust plc

     By:     John McLachlan


     The Law Debenture Trust Corporation p.l.c.

     By:     Julian Mason-Jebb
             C. Rakestrow


     JPMorgan Chase Bank

     By:     Andrew Dellow




                                       21


                                   SCHEDULE 1
                               CONVERSION NOTICE

              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC

      41/2 per cent. Subordinated Convertible Bonds due 2011 (the "Bonds")

                      convertible into Ordinary Shares of
              Schroder Ventures International Investment Trust plc

To: SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
c/o:
(

Attention: )

(
Attention: )/


Attention: )*


1.   I/We*,  the  undersigned,  being the  holder(s)  of those Bonds of Schroder
     Ventures  International  Investment  Trust plc (the  "Issuer") of which the
     serial  number(s)  is/are detailed in numerical  order in the  Consolidated
     Listing Form hereby  irrevocably  elect to convert such Bonds in accordance
     with the  Conditions of the Bonds into Ordinary  Shares of GBP1 each in the
     Issuer ("Ordinary Shares").

2.   I/We*:

2.1  request that the Ordinary  Shares to be issued on  conversion  of the Bonds
     mentioned  above be  registered in the name(s) of the person(s) who is/are*
     named in sub-paragraph 2.3 below (see Note 1)

2.2  request  that the  Share  Certificate(s)  referred  to below be  despatched
     (subject to any applicable laws or regulations)  uninsured by ordinary post
     at my/our* risk to (see Note 2):
     ............................................................

     ...........................................................



                                       22


2.3  request  that  the   Certificate(s)   for  the  Ordinary   Shares   ("Share
     Certificate(s)")  (if any are to be issued on conversion in accordance with
     the Conditions) should be prepared as follows:

       Full Forenames and Surname         Full Forenames and Surname

1.     Mr/Mrs/Miss...................     3.   Mr/Mrs/Miss..................
       Address.......................          Address......................
       ..............................          .............................
       ..............................          .............................

       No. of Ordinary Shares to be            No. of Ordinary Shares to be
       registered:...................          registered:..................


2.     Mr/Mrs/Miss...................     4.   Mr/Mrs/Miss.................
       Address.......................          Address.....................
       ..............................          ............................
       ..............................          ............................

       No. of Ordinary Shares to be            No. of Ordinary Shares to be
       registered:...................          registered:.................

       Dated:......................( )         Signature:..................

       (See Note 3)                            PRINT NAME(S)

     .................................

     .................................
     Address


                                       23

N.B.
(i)     The holder(s) of the Bonds mentioned above must pay (a) all taxes and
        capital, stamp, issue and registration duties (if any) 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 the Ordinary Shares on such conversion) and (b) all, if
        any, taxes arising by reference to any disposal or deemed disposal of a
        Bond in connection with such conversion.

(ii)    Ordinary Shares to be issued upon conversion will not be available
        for issue (a) to, or to a nominee for, Euroclear, Clearstream,
        Luxembourg or any other person providing a clearance service within
        Section 96 of the Finance Act 1986 of the United Kingdom or (b) to a
        person or nominee or agent for a person, whose business is or includes
        issuing depositary receipts within Section 93 of the Finance Act 1986
        of the United Kingdom, in each case, at any time prior to the
        "abolition day" as defined in Section 111(l) of the Finance Act 1990 of
        the United Kingdom.

(iii)   The exercise of a Conversion Right is subject to any applicable
        fiscal or other laws or regulations applicable in the jurisdiction where
        the office of the Registrar is located.


        * Delete as applicable


                                       24

TO BE COMPLETED BY THE REGISTRAR
1.     Date of Deposit:....................................................

2.     Taxes and capital, stamp, issue and registration duties payable by the
       Bondholder: ...................................................

3.     Number of Ordinary Shares to be issued:..............................

4.     Date by which the Share Certificate (if any) is to be despatched (See
       Note 4):......................

5.     Amount of interest due on Conversion (if any):.......................


NOTES
1.     If it is desired to nominate a person or persons other than the holder
       of the Bond(s) specified above as the allottee(s) of the Ordinary Shares
       to be issued on conversion of such Bond(s) that person or those persons
       must have consented to the Ordinary Shares being registered in its/their
       name(s).

2.     If this is not completed, the Share Certificate will (subject to any
       applicable laws or regulations) be despatched to the first address
       inserted in paragraph 2.3.

3.     A corporation should sign under hand by an authorised official who
       must state his/her capacity and print the name of the relevant
       corporation. Also:

       (i)  the signature to this  Conversion  Notice must  correspond with the
            name of the registered holder as it appears on the face of the
            relevant Bond; or

       (ii) a  representative  of the Bondholder  should state the capacity in
            which he signs e.g. executor; or

       (iii)the signature of the person effecting a conversion 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; and

       (iv) in the case of joint holders all joint holders must sign this
            Conversion Notice.


4.     Share Certificates (if certificates for Ordinary Shares are, on the
       Conversion Date, generally being issued) will normally be despatched not
       later than one month after the Conversion Date, as more fully set out in
       the Conditions.

                                       25

5.     Fractions of a Share will not be issued on conversion and no cash
       adjustment will be made. However, if the Conversion Right in respect of
       more than one Bond is exercised at any one time such that Ordinary Shares
       to be issued in respect thereof on conversion are to be registered in the
       same name, the number of such Ordinary Shares to be issued in respect
       thereof shall be calculated on the basis of the aggregate principal
       amount of the Bonds being so converted.


                                       26

_____________________________________________________________________________


                      CONSOLIDATED LISTING FORM FOR BONDS
______________________________________________________________________________

Serial Numbers of Bonds attached hereto
Number of Bonds
______________________________________________________________________________

From                              To




______________________________________________________________________________

Total Number of Bonds attached
hereto                                        ____________________


                                       27


                                   SCHEDULE 2
        REGULATIONS CONCERNING THE CONVERSION, TRANSFER AND REGISTRATION
                                    OF BONDS

1.   Each Bond shall be in an amount of GBP100,000 or an integral multiple
     thereof.

2.   The Bonds are transferable in amounts and integral  multiples of GBP100,000
     by  execution  of the  form of  transfer  endorsed  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.

3.   The Bond to be transferred must be delivered for registration to the office
     of the  Registrar  together  with  the  transfer  certificate  in the  form
     attached in Schedule 5 to the Trust Deed in respect  thereof duly  executed
     by the  transferor  and the  transferee  and,  where the  transferee  as 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 attached in Schedule 6 to the Trust Deed
     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 Bond and his  identity,  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
     Bond 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.

4.   The executors or  administrators  of a deceased  holder of Bonds (not being
     one of several  joint  holders) and in the case of the death of one or more
     of joint  holders the survivor or survivors of such joint  holders shall be
     the only  persons  recognised  by the  Issuer as  having  any title to such
     Bonds.

                                       28


5.   Any  person  becoming  entitled  to Bonds in  consequence  of the  death or
     bankruptcy  of the holder of such Bonds 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 Bonds or,
     subject to the  preceding  paragraphs  as to transfer,  may  transfer  such
     Bonds.  The Issuer and the Registrar may retain any amount payable upon the
     Bonds to which any  person is so  entitled  until such  person  shall be so
     registered or shall duly transfer the Bonds.

6.   Unless otherwise  requested by him and agreed by the Issuer,  the holder of
     Bonds in  registered  form shall be  entitled  to receive  only one Bond in
     respect of his holding.

7.   The joint  holders of a Bond shall be  entitled to one Bond only in respect
     of their joint holding which shall,  except where they otherwise direct, be
     delivered to the joint  holder whose name appears  first in the Register in
     respect of the joint holding.

8.   Where a holder of a Bond has transferred part only of his holding comprised
     therein there shall be delivered to him a Bond in respect of the balance of
     such holding.

9.   The  Issuer  and the  Registrar  shall,  save in the  case of the  issue of
     replacement  Bonds,  make no charge to the holders for the  registration of
     any holding of Bonds or any transfer of Bonds or for the issue of any Bonds
     or for the delivery of Bonds at the specified office of the Registrar or by
     uninsured  post to the  address  specified  by the  holder.  If any  holder
     entitled to receive a Bond  wishes to have it  delivered  to him  otherwise
     than at the specified office of the Registrar,  such delivery shall be made
     upon his written  request to the  Registrar,  at his risk and (except where
     sent by  uninsured  post to the  address  specified  by the  holder) at his
     expense.

10.  The  Registrar  shall  within seven  London  business  days of a request to
     effect  a  transfer  of a Bond  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 Bond in respect of the
     Bond  transferred.  In the case of a  transfer  of part  only of the  Bonds
     represented  by a Bond,  a new Bond in respect  of the  balance of the Bond
     transferred will be so delivered to the transferor.



                                       29

                                   SCHEDULE 3
           CERTIFICATE TO BE GIVEN BY SUBSCRIBERS OF BONDS AT CLOSING

              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
   GBP40,000,000 41/2 per cent. Subordinated Convertible Bonds due 2011 (the
                                    "Bonds")

This is to certify that:-

     With effect from the date hereof GBPY principal amount of the
above-captioned Bonds subscribed by us and to be delivered in registered form
shall initially be owned by a person that (i) is not, nor is it a nominee
for, Euroclear, Clearstream, Luxembourg or any other person providing a
clearance service within Section 96 of the Finance Act 1986 of the United
Kingdom and (ii) is not, nor is it a nominee or agent for a person whose
business is or includes issuing depositary receipts within Section 93 of the
Finance Act 1986 of the United Kingdom.

Dated: (         )

By:

(Name of person giving certificate)
As, or as agent for, the beneficial owner(s)
of the Bonds to which this
certificate relates.

CD013400171_2.doc




                                    CONTENTS
                                                                     Page

1.       DEFINITIONS                                                 1

2.       APPOINTMENT                                                 2

3.       ISSUE OF BONDS                                              2

4.       PAYMENT                                                     2

5.       REPAYMENT                                                   3

6.       CONVERSION                                                  4

7.       TRUSTEE                                                     6

8.       CANCELLATION, DESTRUCTION AND RECORDS                       7

9.       ISSUE OF REPLACEMENT BONDS AND COUPONS                      8

10.      NOTICES IN RESPECT OF THE BONDS                             8

11.      DUTIES OF THE REGISTRAR                                     8

12.      REGULATIONS FOR TRANSFERS OF BONDS                         10

13.      DOCUMENTS AND FORMS                                        11

14.      INDEMNITIES                                                11

15.      GENERAL                                                    12

16.      CHANGES IN REGISTRAR                                       12

17.      CONFIDENTIALITY                                            14

18.      FEES AND EXPENSES                                          15

19.      NOTICES AND COMMUNICATIONS                                 15

20.      AMENDMENTS                                                 16

21.      COUNTERPARTS                                               16

22.      GOVERNING LAW                                              16

SCHEDULE 1 CONVERSION NOTICE                                        18

SCHEDULE 2 REGULATIONS CONCERNING THE CONVERSION, TRANSFER
 AND REGISTRATION OF BONDS                                          23

SCHEDULE 3 CERTIFICATE TO BE GIVEN BY SUBSCRIBERS OF
 BONDS AT CLOSING                                                   25









                                                                CONFORMED COPY

                           Dated 21st November, 2001

              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc

                                    - and -

                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                                    - and -

                              JPMORGAN CHASE BANK


        ________________________________________________________________

                     REGISTRAR AND PAYING AGENCY AGREEMENT
                                  relating to

                  Issue of up to GBP40,000,000 41/2 per cent.
                    Subordinated Convertible Bonds due 2011
        ________________________________________________________________



                               Slaughter and May,
                             35 Basinghall Street,
                               London, EC2V 5DB.
                                  Ref: DTF/NGG
                                  CD013400171



<PAGE>

Exhibit 2.2     Listing Particulars, dated July 2, 2002


LISTING PARTICULARS 2 July 2002

These Listing Particulars are given in compliance with the Listing Rules made
under Section 74 of the Financial Services and Markets Act 2000 (the "FSMA")
by the UK Listing Authority for the purpose of giving information with regard
to Schroder Ventures International Investment Trust plc (the "Issuer", the
"Company" or "SVIIT"), the Bonds and the Issuer and its subsidiaries taken as
a whole (the "Group"). Unless previously redeemed, converted or purchased and
cancelled, each Bond is convertible, at the option of the Bondholder, until
the close of business on 14 November 2011 for fully paid Ordinary Shares at
an initial conversion price of 410p, subject to adjustment as set out under
"Terms and Conditions of the Bonds - Conversion" below.

The Issuer accepts responsibility for the information contained in these
Listing Particulars and to the best of the knowledge and belief of the Issuer
(which has taken all reasonable care to ensure that such is the case) such
information is in accordance with the facts and does not omit anything likely
to affect the import of such information. Any reference in this document to
Listing Particulars means this document excluding all information
incorporated by reference. The Issuer has confirmed that any information
incorporated by reference, including any such information to which readers of
this document are expressly referred, has not been and does not need to be
included in the Listing Particulars to satisfy the requirements of the FSMA
or the Listing Rules. The Issuer believes that none of the information
incorporated therein by reference conflicts in any material respect with the
information included in the Listing Particulars.

A copy of this document has been delivered to the Registrar of Companies in
England and Wales as required by Section 83 of the FSMA.

Application has been made for the Bonds to be admitted to the Official List
of the UK Listing Authority and for the Bonds to be admitted to trading on
the market for listed securities of the London Stock Exchange plc.

                        Schroder Ventures International
                              Investment Trust plc

    (Incorporated as a public limited company in England and Wales under the
               Companies Act 1985 with registered number 3066856)

   Admission of GBP40,000,000 41 2 per cent. Subordinated Convertible Bonds due
   2011 (the "Bonds") to the Official List of the UK Listing Authority and to
               trading on the market for listed securities of the
                           London Stock Exchange plc

The Bonds have not been, and will not be, registered under the Securities
Act. Subject to certain exceptions, the Bonds may not be offered, sold or
delivered within the United States or to U.S. persons. For a description of
certain further restrictions on the offer and sale of the Bonds and on the
distribution of this document, see "Subscription and Sale" below.

These Listing Particulars do not constitute an offer of, or an invitation by
or on behalf of the Issuer, to subscribe for or purchase any of the Bonds.
The distribution of these Listing Particulars and the offering of the Bonds
in certain jurisdictions may be restricted by law. Persons into whose
possession these Listing Particulars come are required by the Issuer to
inform themselves about and to observe any such restrictions. For a
description of certain further restrictions on the offer and sale of the
Bonds and on the distribution of these Listing Particulars, see "Subscription
and Sale" below.

No person is authorised to give any information or to make any representation
not contained in these Listing Particulars and any information or
representation not so contained must not be relied upon as having been
authorised by or on behalf of the Issuer. The delivery of these Listing
Particulars shall not, under any circumstance, constitute a representation
that there has been no change or development likely to involve a change in
the condition (financial or otherwise) of the Issuer since the date hereof or
create any implication that the information contained herein is correct as of
any date subsequent to the date hereof or the date as of which that
information is stated herein to be given.

Unless otherwise specified or the context requires, references to "GBP",
"pounds" and "pence" are to the lawful currency of the United Kingdom.


                                    CONTENTS



                                                                          Page

  Directors, Secretary and Advisers                                        3
  PART I                            - SUMMARY OF THE TERMS OF THE          4
                                      BONDS
  PART II                           - Information on SVIIT                 6
  PART III                          - Information on Schroder Ventures    18
                                      or permira funds
  PART IV                           - TERMS AND CONDITIONS OF THE         22
                                      BONDS
  PART V                            - Financial Information of SVIIT
                                        Interim Financial Statements      38
                                        Annual Audited Financial          43
                                         Statements
                                        Notes to the Accounts             46
  PART VI                           - SUBSCRIPTION AND SALE               58
  PART VII                          - CERTAIN UNITED KINGDOM TAX          60
                                      CONSIDERATIONS
  PART VIII                         - General Information                 64
  Definitions                                                             78


                                       2




              SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST PLC
                       DIRECTORS, SECRETARY AND ADVISERS


  Directors                              John James McLachlan, Chairman
                                         Nicholas Eustace Haddon Ferguson,
                                         Chief Executive
                                         Clement John Govett LVO
                                         Anthony John Habgood
                                         Edgar Willem Koning
                                         Denis Raeburn
                                         Andrew Francis Sykes
                                         Andrew Christopher Williams

                                         all of 31 Gresham Street, London
                                         EC2V 7QA and all of whom, other than
                                         Nicholas Ferguson and Andrew
                                         Williams, are non-executive
                                         directors of SVIIT

  Registered office                      31 Gresham Street
                                         London EC2V 7QA

  Principal place of business            Burleigh House
                                         357 Strand
                                         London WC2R 0HS

  Secretary                              Schroder Investment Management
                                         Limited
                                         31 Gresham Street
                                         London EC2V 7QA

  Authorised Adviser                     UBS Warburg
                                         1 Finsbury Avenue
                                         London EC2M 2PP

  Trustee for the Bondholders            The Law Debenture Trust Corporation
                                         p.l.c.
                                         Fifth Floor
                                         100 Wood Street
                                         London EC2V 7EX

  Registrar, Conversion Agent and        JPMorgan Chase Bank
  Paying Agent for the Bonds             Trinity Tower
                                         9 Thomas More Street
                                         London E1W 1YT

  Registrars for the Ordinary Shares     Lloyds TSB Registrars Scotland
                                         PO Box 28448
                                         Finance House
                                         Orchard Brae
                                         Edinburgh EH4 1WQ

  Solicitors to the Company              Slaughter and May
                                         One Bunhill Row
                                         London EC1Y 8YY

  Solicitors to the Trustee              Allen & Overy
                                         One New Change
                                         London EC4M 9QQ

  Auditors                               Ernst & Young
                                         Rolls House
                                         7 Rolls Buildings
                                         Fetter Lane
                                         London EC4A 1NH

  Bankers                                The Royal Bank of Scotland plc
                                         Corporate Banking Office
                                         5-18 Great Tower Street
                                         London EC3P 3HT


                                       3


                   PART I - SUMMARY OF THE TERMS OF THE BONDS

The following is a summary of the terms of the Bonds. Capitalised terms used
but not defined herein shall, unless the context otherwise requires or
permits, have the meanings given to them in "Terms and Conditions of the
Bonds" set out in Part IV of these Listing Particulars.


  Issuer                                Schroder Ventures International
                                        Investment Trust plc.

  Issue                                 GBP40,000,000 41 2 per cent.
                                        subordinated convertible bonds due
                                        2011, convertible into fully paid
                                        Ordinary Shares of the Company.

  Form, denomination and title          The Bonds are in registered form,
                                        serially numbered, in denominations
                                        of GBP100,000 and integral multiples.

  Interest                              41 2 per cent. coupon payable
                                        annually or, if redeemed prior to the
                                        end of an interest period, payable
                                        pro rata for that period.

  Status of the Bonds                   The Bonds constitute direct and
                                        unsecured obligations of the Issuer,
                                        subordinated as referred to below and
                                        ranking pari passu without any
                                        preference amongst themselves. Rights
                                        and claims of the Bondholders will,
                                        in the event of the winding up of the
                                        Issuer, be subordinated in right of
                                        payment to the liabilities of the
                                        Issuer under the facility agreement
                                        with The Royal Bank of Scotland plc.

  Conversion                            The Bonds are convertible at any time
                                        on or after the date of issue of such
                                        Bonds, being 21 November 2001 and up
                                        to the close of business on the
                                        seventh calendar day before the date
                                        fixed for redemption of the Bonds.
                                        The Bonds are convertible into
                                        Ordinary Shares of the Company at a
                                        price per Ordinary Share of 410p (the
                                        "Conversion Price"), which is subject
                                        to adjustment as provided in
                                        "Adjustment to Conversion Price"
                                        below.

  Adjustment to the Conversion Price    In addition to the customary
                                        adjustments, if:

                                        1.   the net asset value per Ordinary
                                        Share as at 31 December 2001 as
                                        published in the interim report and
                                        accounts of the Issuer for the six
                                        month period ending 31 December 2001
                                        (the "December NAV") is less than
                                        407p; or

                                        2.     the net asset value per
                                        Ordinary Share as at 30 June 2002 as
                                        published in the annual report and
                                        accounts of the Issuer for the year
                                        ended 30 June 2002 (the "June NAV")
                                        is less than 407p;

                                        the Conversion Price shall be reduced
                                        with effect from 21 days after
                                        publication of the said annual report
                                        and accounts for the year ended 30
                                        June 2002 by the greater of:

                                        (i)     the difference between 407p
                                        and the June NAV; or

                                        (ii)     the difference between 407p
                                        and the December NAV.*

  *The December NAV was 396.3p.

  Ordinary Shares                       Ordinary Shares allotted on
                                        conversion of the Bonds will be fully
                                        paid ordinary shares of the Company
                                        having, at the date hereof, a nominal
                                        value of GBP1 each and will rank pari
                                        passu with fully paid Ordinary Shares
                                        in issue on the conversion date.

  Final Redemption                      Unless previously redeemed, converted
                                        or purchased and cancelled, the Bonds
                                        will be redeemed on 21 November 2011
                                        at their principal amount.

                                       4

  Optional Redemption                   The Issuer may, on giving not less
                                        than 21 days' notice (which notice
                                        shall include the date fixed for such
                                        redemption (the "Exercise Date")) to
                                        the Bondholders, redeem some (pro
                                        rata but rounded up to the nearest
                                        GBP100,000) or all of the Bonds at
                                        their principal amount together with
                                        interest accrued to the date of
                                        redemption if:

                                        (a)          at any time on or after
                                        21 November 2004 the average of the
                                        market price over a 20 day trading
                                        period of the Ordinary Shares is
                                        equal to or greater than 130 per
                                        cent. of the Conversion Price; or

                                        (b)          at any time 85 per cent.
                                        or more (determined by reference to
                                        the principal amount) of the Bonds
                                        issued shall have been converted,
                                        redeemed or purchased and cancelled.

                                        Following any redemption notice by
                                        the Issuer, the Bondholder may, prior
                                        to the Exercise Date, elect in
                                        writing to the Issuer to convert its
                                        Bonds being the subject of the
                                        redemption notice.

  Taxation                              All payments made in respect of the
                                        Bonds will be made without
                                        withholding or deduction of, or on
                                        account of, any Taxes unless such
                                        withholding or deduction is required
                                        by law. In the event that any such
                                        withholding or deduction is required
                                        from any payment, such payment will
                                        be made net of such Taxes. The Issuer
                                        will not be obliged to gross up on
                                        account of any such Taxes.

  Governing Law of the Bonds            English.

  Listing and Trading                   The Issuer has applied for the Bonds
                                        to be admitted to the Official List
                                        and application has been made to the
                                        London Stock Exchange for the Bonds
                                        to be admitted to trading on the
                                        London Stock Exchange's market for
                                        listed securities.

  Trustee                               The Law Debenture Trust Corporation
                                        p.l.c.

  Registrars                            JPMorgan Chase Bank.


                                       5


                         PART II - INFORMATION ON SVIIT

1.          Background, investment objective and policy

SVIIT is an investment trust whose Ordinary Shares are listed on the Official
List and admitted to trading on the London Stock Exchange.

SVIlT'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 (formerly
Schroder Ventures Europe) ("the Funds", as listed in Table 2 on page 9).

At 31 December 2001, SVIIT had Uncalled Commitments of GBP404.9 million and its
consolidated net assets had grown from GBP187 million in May 1996, when it
listed, to GBP405.3 million. SVIIT has reported a compound growth rate in
consolidated net assets per share of 15.8 per cent. per annum over five years.

To complement this investment objective and address the growing recognition
of private equity in investment portfolios, SVIIT is committed to the design
and marketing of third party funds of funds products for investment in
private equity.

To facilitate this, in June 2001, following approval by SVIIT's Shareholders,
SVIIT acquired SVLL and SVNA providing it with a team of 14 professionals to
expand its operations, including building a specialist financial advisory
business primarily by undertaking the following activities:

(a)       Provision of services to the Schroder Group

          The team is advising and providing services on the structure,
          launch, identification of investment opportunities and performance of
          a private equity fund of funds that was launched by the Schroder
          Group in September 2001. The fund of funds had a final closing on 14
          June 2002 with subscriptions totalling euro242,354,631 received.

          The team also provides services to members of the Schroder Group to
          assist them in their obligations and duties as general partners or
          managers to the Funds.

(b)       Provision of services to Schroder Ventures or Permira

          The team is responsible for the provision of a number of services,
          as required, to Schroder Ventures or Permira and the Funds, namely
          fundraising, marketing, legal, financial reporting and monitoring
          services.

In addition, the team advises and assists the Board in its assessment of future
opportunities, implements SVIIT's investment strategy and is responsible for the
day-to-day monitoring of SVIIT's investment portfolio. The team also advises on
and manages SVIIT's investor reporting, public and investor relations and
marketing activities.

The Directors expect that any returns for Shareholders will continue to
derive primarily from the capital appreciation of Ordinary Shares rather than
from dividend income.

(a)          Investment approach

As at 31 December 2001, SVIIT had holdings in all 24 of the Funds with a
combined committed capital of GBP4.5 billion. Of these Funds, 18 were mature
and 6 immature. Through these Funds, SVIIT had an underlying portfolio of 153
companies worldwide. Each Fund has a specialised investment policy which
generally can only be changed with the prior approval of investors in the
Fund. The manner of obtaining such approval depends on the precise
constitution of the relevant Fund and is described in paragraph 2 of Part III
of this document.

A mature Fund is one that has completed its investment period (typically five
years from the final closing date of the respective Fund) and is therefore
restricted from making investments in new companies. An immature Fund is one
that is yet to complete its investment period and therefore SVIIT may have
commitments to pay future Calls in respect of its Holdings. SVIIT intends to
meet such Calls primarily from the proceeds of future distributions received
by it from the Funds or from cash resources or borrowings.

When considering new investments, the Directors intend to maintain an
appropriate spread of investments within SVIIT's portfolio at all times. To
this end, the Directors will have regard to the geographical and industrial
distribution of SVIIT's underlying portfolio, the number and size of SVIIT's
investments and the investment objectives of new Funds.

                                       6


Future investments

Consistent with its investment policy, SVIIT may invest in funds launched in
the future by Schroder Ventures or Permira. The Directors will consider each
such investment on its merits and may decline to invest if it is not suitable
for SVIIT's portfolio. SVIIT's investment in a new fund will be limited to a
maximum of 30 per cent. of the total committed capital of that fund or such
higher amount as may be agreed with Schroder Ventures or Permira. SVIIT will
invest on terms at least as favourable as other investors, subject to any
alteration which may be appropriate for SVIIT in accordance with the
investment restrictions set out in (b) below.

SVIIT may acquire further Holdings in existing Funds in the secondary market
if the Directors believe it appropriate and if terms acceptable to SVIIT for
their acquisition can be agreed. SVIIT does not intend to acquire further
Holdings in any Fund that would result in its acquiring control of that Fund.

Should specific investment opportunities arise for SVIIT, it may co-invest
alongside one or more Funds. Such opportunities arise principally where a
proposed investment in an investee company exceeds the capacity of the
relevant Fund. When considering a co-investment opportunity, SVIIT's total
aggregate participation in a single underlying company, from investment in
the Funds and in such co-investments will be limited to a maximum of five per
cent. of its consolidated net assets, with the total of all such
co-investments being limited to 10 per cent. The calculation of these
percentages will be made at the time each such co-investment is made. This
restriction is subject to change and is regularly reviewed by the Board. Any
co-investment by SVIIT will be on an arm's-length basis on substantially the
same terms as the relevant Fund, or on such better terms as can be agreed. At
31 December 2001, SVIIT held co-investments totalling GBP15.3 million and
representing 3.8percent. of net assets.

The Directors may also invest in alternative listed or unlisted companies or
other entities with exposure to buy-out and development capital markets. In
addition, the Directors 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 31December 2001, SVIIT's gross cash
balance of GBP32.5 million was held principally in a portfolio of short dated
treasury bills. The Directors also have the power to enter into transactions
involving synthetic or traded derivative instruments over a range of
different underlying securities and currencies. It is intended this power may
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 SVIIT may invest.

(b)          Investment restrictions

Investment trust status for tax purposes

The Directors have in the past managed, and intend to continue to manage, the
affairs of SVIIT so that it should 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. Satisfying this condition will mean, inter alia, that SVIIT will
not be able to acquire shares or securities in any one company if such shares
or securities (taken together) would represent more than 15 per cent. of
SVIIT's investments by value at the time of acquisition. For this purpose,
unit trust schemes will be treated as companies and units therein as shares
of such companies. There are also special rules under which all of SVIIT's
holdings in its 51 per cent. subsidiary companies, as defined for tax
purposes, will be aggregated and treated as a holding in one company for the
purposes of this test. Further, if SVIIT's interest in a company increases
due to further investment in that company (including further investment in
the same company by different funds or co-investment), the whole of such
interest will be treated as having been acquired at the time of the increased
investment for the purposes of satisfying the above condition.

The Listing Rules

In addition, the Listing Rules independently require an adequate spread of
investments to be maintained. For this purpose, SVIIT's interest in an
underlying investee company of the Funds cannot exceed 20 per cent. of
SVIIT's gross assets by value at the time of acquisition.

For the purposes of determining the above percentage interest for the Listing
Rules, SVIIT's interest in an underlying investee company is calculated,
where applicable, by aggregating all of SVIIT's interests in investments in
that company irrespective of the Fund through which SVIIT has that interest.
If SVIIT's interest in an underlying investee company increases due to
further investment in that company, the whole of such interest will be
treated as having been acquired at the time of the increased investment.


                                       7



Arrangements for compliance with investment restrictions

At 31 December 2001, SVIIT's portfolio included a spread of investments in 18
mature and 6 immature Funds, which together held investments in 153
companies. On the basis of the valuations of SVIIT's investments at 31
December 2001, SVIIT's largest interest in an underlying investee company
accounted for 13.88 per cent. of SVIIT's net assets. To ensure that SVIIT
maintains an adequate spread of investments for both sets of investment
restrictions, SVIIT will receive prior notification from Schroder Ventures or
Permira of any proposed investment in excess of specified thresholds, so that
it can assess the impact of the proposed investment on its spread of
underlying investments for the purposes of the Listing Rules or the
investment restrictions relevant for Section 842.

SVIIT will only make new investments in future funds either where the
Directors are satisfied that the investment restrictions set out above cannot
be breached or where appropriate opt-out mechanisms can be agreed with the
relevant fund, whereby SVIIT can decline to invest without penalty in order
to ensure compliance with these restrictions. In making other investments,
the Directors intend to ensure, where necessary, that similar opt-out
mechanisms are available to SVIIT and that it will not hold interests in any
fund which would enable it to control that fund. SVIIT will not take legal or
management control and will not be actively involved in the management of the
limited partnerships or unit trusts in which it will be invested or of the
underlying investee companies.

The Directors believe that the spread of SVIIT's present portfolio of
investments will satisfy the relevant requirements under the above investment
restrictions and they intend to manage the affairs of SVIIT so that it
continues to satisfy these requirements.

(c)          Borrowing facility and policy

The Directors expect to meet SVIIT's commitments to pay future Calls in
respect of its Holdings in immature Funds from the existing cash resources of
SVIIT, from the facilities available under the Facility Agreement and from
the proceeds of distributions from its Holdings. Such distributions are
expected to be principally the net proceeds of realisations of investments
held by Funds. The timing of future realisations and the dates of future
Calls are necessarily uncertain. The Directors are also able to draw on a
five year multi-currency revolving credit facility of up to euro225 million
with The Royal Bank of Scotland plc to enable the SVIIT Group to meet its
commitments to pay future Calls. In addition, the Directors may use this
borrowing facility to make new investments or for general corporate purposes.

(d)          Foreign exchange

The Funds are denominated in a number of currencies. The Directors have not
entered into foreign exchange contracts to hedge SVIIT's expected liabilities
or expected receipts in these currencies. The Directors have no current
intention to enter into such contracts but have the power to do so if they
deem it appropriate.


2.          Information on the SVIIT Portfolio

(a)         The SVIIT portfolio by geographic area

SVIIT has a broad geographic spread of investments in the Funds. Table 1 sets
out the geographic spread of SVIIT's interests in underlying portfolio
companies as at 31 December 2001. The analysis is based upon SVIIT's share of
the gross values of underlying portfolio companies. This excludes any cash or
liquid assets held by the respective Funds in which SVIIT has invested. It
should be noted that the geographic spreads may change as individual
investments change in value or are realised and the immature Funds become
fully invested.


                                       8



Table 1: SVIIT's portfolio companies by geographic area at 31 December 2001

<TABLE>
<CAPTION>

  Geographic area                    Value of SVIIT's            Percentage of
                                         interests in            Portfolio (%)
                                 underlying portfolio
                                      companies GBP(m)

<S>                                              <C>                      <C>
  Continental Europe                             99.5                     23.3
  United Kingdom                                 63.4                     14.8
  Far East/Asia Pacific                          45.5                     10.6
  North America                                  68.2                     16.0
  International                                 150.9                     35.3
  Total                                         427.5                    100.0
  Cash, liquid assets and                      (14.3)
  allowances for Carried
  Interest in the Funds
  Total fund portfolio                          413.2

</TABLE>


Notes:

1.   The analysis is based upon estimates carried out by Schroder
     Ventures or Permira as to the markets served by the underlying portfolio
     companies in which the Funds are invested at 31 December 2001.

2.   The remainder of net assets comprises net current assets and
     fixed interest securities.

(b)  The SVIIT portfolio by Fund

Table 2 below gives information on the underlying Funds in which SVIIT held
investments at 31 December 2001, separated between mature and immature Funds.
This table sets out the amount of capital committed to and uncalled by each
Fund and the remaining value of the Funds based on the valuations used for
the purpose of SVIIT's most recent unaudited financial statements.


                                       9


<TABLE>
<CAPTION>

Table 2: SVIIT's portfolio by Fund at 31 December 2001


  Fund                   Year     Total Fund   GBP(m)        SVIIT's      Total       SVIIT's   Value of    Holding as
                      Formed     Commitments                uncalled     called    commitment    SVIIT's    percentage
                                       Local              commitment    capital          (%)     holding    of SVIIT's
                                   Currency                   (GBPm)        (%)                   in Fund      NAV (%)
                                                                                                  (GBPm)

<S>                      <C>          <C>         <C>           <C>          <C>          <C>         <C>           <C>
  Mature                 1986       DM139.2m      43.5             -        100          29.7        5.6           1.4
  Permira German
  Buy-Outs*
  Permira Italy I*       1988    Lire 95.0bn      30.0             -        100          33.2        0.0           0.0
  Schroder US            1988       US$34.2m      23.4             -        100          14.6        0.0           0.0
  Venture Fund*
  Permira France I*      1989       FF640.0m      59.7             -        100          39.8        0.5           0.1
  The Japan              1990       Yen7.0bn      36.7             -        100          13.7        3.5           0.9
  Venture Fund II*
  Permira UK             1990       GBP76.5m      76.5             -        100           8.7        0.8           0.2
  Venture III*
  Asia Pacific           1990      US$145.2m      99.6             -        100           6.4        1.2           0.3
  Trust+*
  The Spanish            1990     Ptas 4.1bn      14.9             -        100          23.2        2.3           0.6
  Venture Fund*
  Permira UK             1991        GBP9.9m       9.9             -        100          18.7        0.0           0.0
  Venture I Extension++
  Permira German         1992       DM234.6m      73.5             -        100          19.4        2.3           0.6
  Buy-Outs 1992
  Permira France         1992       FF309.0m      28.8             -        100          19.0        0.2           0.0
  Venture I
  Schroder               1993     US$ 100.0m      68.7             -        100           6.8        2.4           0.6
  Ventures
  International
  Life Sciences Fund
  Permira Italy II       1993   Lire 106.2bn      33.5             -        100          21.0        2.1           0.5
  Permira UK III         1993      GBP148.8m     148.8             -        100          18.8       12.4           3.1
  Asia Pacific           1994      US$225.0m     154.6             -        100          14.0       10.9           2.7
  Fund II
  Schroder               1994        C$79.1m      34.0           0.4       95.0          22.6        6.8           1.7
  Canadian
  Buy-Out Fund II
  Permira UK             1995      GBP110.7m     110.7           0.3       94.0           4.2        2.5           0.6
  Venture IV
  Permira Europe I       1997    Euro 890.0m     544.5          16.2       86.5          22.0       61.8          15.2
  Immature               1997     Yen 17.0bn      89.1           4.4       75.7          20.3       18.5           4.6
  The Japan
  Venture Fund III
  Schroder               1999      US$280.0m     192.4          10.4       81.5          29.2       39.8           9.8
  Ventures
  International
  Life Sciences Fund II
  Schroder               1999      US$453.1m     311.3          62.4       33.0          29.9       14.6           3.6
  Ventures Asia
  Pacific Fund
  Schroder               1999      US$244.4m     167.9          24.2       51.8          30.0       21.6           5.3
  Ventures US Fund
  Permira Europe II      2000      Euro3.3bn   2,018.8         270.7       41.0          22.7      182.8          45.1
  Schroder               2000       C$189.6m      81.6          15.9       27.0          26.6        5.3           1.3
  Ventures Canadian
  Buy-Out Fund III
  Total                                        4,452.4         404.9                               397.9          98.2


  Co-investments made alongside Schroder Canadian Buy-Out Fund II, Schroder Canadian Buy-Out        15.3           3.8
  Fund III and Schroder Ventures Asia Pacific Fund
                                                                                                   413.2         102.0
</TABLE>

                                       10

The value of SVIIT's Holdings includes all assets, liabilities and any
provision for Carried Interest held at fund level.
The original life of the Funds is 10 years, unless specified.

*          The lives of these Funds have been extended past their original
           life to allow an orderly realisation of the remaining portfolio.
+          Original life: 8 years.
++         Original life: 9 years.


Notes:

1.          An investee company may appear in more than one Fund's portfolio
            of investments.
2.          The committed capital of Permira UK Venture I Extension
            represents distributions received of GBP9.9 million.
3.          Holdings in the Funds are actual as at 31 December 2001 and do
            not include any prior capital distributions made by the Funds.
4.          Since 31 December 2001, SVIIT has committed to International Life
            Sciences Fund III as further detailed on page 13 of this document.


(c)         The SVIIT portfolio by industry sector

SVIIT's underlying portfolio of investments is diversified by industrial
sector as well as geographically. As an illustration of this spread, Table 3
shows the split by sector at 31 December 2001, net of any current assets held
by the Funds. This split may change significantly as investments are realised
and the immature Funds become fully invested.



Table 3: The SVIIT portfolio by industry sector at 31 December 2001

<TABLE>
<CAPTION>

  Industry Sector                     Value of SVIIT's   Proportion of SVIIT's
                                interest in underlying                     NAV
                                   portfolio companies
                                                (GBPm)                     (%)
<S>                                               <C>                     <C>
  Consumer related                                76.6                    18.9
  Medical/ Healthcare related                     98.5                    24.3
  Computer and other                             123.2                    30.4
  electronics
  Chemicals                                       38.9                     9.6
  Industrial products and                         44.0                    10.9
  services
  Other manufacturing                             23.6                     5.8
  Other services                                  16.2                     4.0
  Transportation                                   0.6                     0.0
  Construction                                     5.9                     1.5
  Total                                          427.5                   105.4
  Cash, liquid assets and                       (14.3)                   (3.4)
  allowances for Carried
  Interest in the Funds
  Total fund portfolio                           413.2                   102.0

</TABLE>


This analysis is based on SVIIT's share of the gross values of underlying
portfolio companies and excludes any other assets, liabilities and provisions
for Carried Interest held at fund level.


(d)          Substantial investments

On the basis of the valuations calculated as described in the accounting
policies set out in Part V of this document, the ten largest interests of
SVIIT in the underlying investments of the Funds at 31 December 2001 are set
out in Table 4. The aggregate value of these investments (before a deduction
of an estimate of Carried Interest) represents 58.8 per cent. of the value of
SVIIT's portfolio (which is stated after a deduction for an estimate of
Carried Interest). Details of the accounting policies of SVIIT are set out on
pages 46 to 48 of Part V of this document.

                                       11


Table 4: Ten largest interests of SVIIT in underlying Funds investments at 31
December 2001

Unless otherwise stated, all figures in Table 4 refer to SVIIT's holding in
the particular company and have been extracted, where relevant, from the
latest audited financial statements of the underlying investments.


<TABLE>
<CAPTION>

  Memec (UK)
  Type of                  Fund's       Fund's     Value of investment     Income   Earnings(1)         Net   Value of
  investment           holding in      cost of                 GBP'000   received       GBP'000   assets(2)    SVIIT's
                      the company   investment                            GBP'000                   GBP'000   interest
                              (%)      GBP'000                                                                 GBP'000

<S>                          <C>        <C>                     <C>             <C>      <C>        <C>         <C>
  Ordinary shares            66.3       19,892                  19,892          0        62,890     423,957     56,273
  Consortium                 80.6       55,378                  55,378
  loans
  Mezzanine deep             80.6       71,991                  71,991
  discount bonds
  Deep discount              80.6      105,262                 105,262
  bonds
  Total                                252,523                 252,523

</TABLE>

  (1)EBITDA.

  (2)Net assets include shareholder loans which are part provided by
     the Funds.

  Memec is a global specialist semi-conductor distributor with operations in
  all of the world's key technology markets: Europe, the Americas, Japan and
  the Asia Pacific region. In 1999 the company had sales of $1.8 billion and
  2,300 employees based in 40 countries.

  The investment was made in October 2000 and is held by Permira Europe II,
  Schroder Ventures US Fund and Permira UK Venture IV as follows:

<TABLE>
<CAPTION>

                         Ordinary   Consortium    Mezzanine   Deep discount bonds
                         shares %      loans %         deep                     %
                                                   discount
                                                    bonds %
<S>                          <C>          <C>          <C>                   <C>
  Permira Europe             56.0         68.1         68.1                  68.1
  II
  Permira UK                  4.1          4.9          4.9                   4.9
  Venture IV
  Schroder                    6.2          7.6          7.6                   7.6
  Ventures US
  Fund
  Total                      66.3         80.6         80.6                  80.6

</TABLE>

  Memec represents 13.9 per cent. of SVIIT's consolidated net assets and as
  such is subject to additional disclosure requirements as given below.

  Registered office  Memec Group Holdings Limited, 17 Thame Park Road,
                     Thame, Oxon OX9 3UQ
  Activity           Semiconductor
                     Distribution
  Issued Capital     $38,354,000
  Reserves           ($2,466,000)
  Loss after tax     ($23,379,000)
  on ordinary activities


                                       12


<TABLE>
<CAPTION>

  COGNIS (Germany)
  Type of investment      Fund's    Fund's cost        Value of          Income     Earnings*         Net     Value of
                         holding             of      investment        received      GBP'000      assets*      SVIIT's
                          in the     investment         GBP'000         GBP'000                  GBP'000      interest
                         company        GBP'000                                                                GBP'000
                             (%)
<S>                         <C>           <C>             <C>                 <C>         <C>         <C>         <C>
  Ordinary shares           46.3          6,676           6,676               0           N/A         N/A       32,989
  Convertible               48.5         37,837          37,837
  preferred equity
  certificate
  Preferred equity          48.5         97,930          97,930
  certificate
  Total                                 142,443         142,443

</TABLE>

  *There have been no audited accounts issued subsequent to the
   acquisition date.

  Cognis is the chemicals products business of Henkel and 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 investment was made in November 2001, and is held by Permira
  Europe II and Schroder Ventures International Life Sciences Fund
  II as follows:


<TABLE>
<CAPTION>
                                       Ordinary     Convertible       Preferred
                                       shares %       preferred          equity
                                                         equity   certificate %
                                                  certificate %
<S>                                        <C>             <C>             <C>
  Permira Europe II                        42.5            44.7            44.7
  Schroder Ventures                         3.8             3.8             3.8
  International Life Sciences
  Fund II
  Total                                    46.3            48.5            48.5

</TABLE>



<TABLE>
<CAPTION>


  Homebase (UK)
  Type of                Fund's     Fund's cost        Value of        Income      Earnings*          Net     Value of
  investment         holding in   of investment      investment      received        GBP'000      assets*      SVIIT's
                            the         GBP'000         GBP'000       GBP'000                     GBP'000     interest
                    company (%)                                                                                GBP'000
<S>                        <C>            <C>            <C>                <C>         <C>           <C>         <C>
  Ordinary shares          66.0           2,633          49,825             0            N/A          N/A       30,522
  Deep discount            76.3          84,473          84,473
  bonds
  Total                                  87,106         134,298
</TABLE>

 *Year end is 31 March 2002 - final accounts have not been issued to date.

  Homebase is a retailer of DIY ("Do it Yourself") products in the UK. The
  brand is particularly strong at the "softer" end of the market - which
  includes home accessories, decorative and gardening products. Homebase
  operates nearly 300 stores across the UK and Eire.
  The investment was made in March 2001, and is held by Permira Europe II.

                                       13


<TABLE>
<CAPTION>


  Austriamicrosystems
  (Austria)
  Type of investment          Fund's    Fund's cost      Value of           Income    Earnings*        Net    Value of
                             holding             of    investment         received      GBP'000    assets*     SVIIT's
                              in the     investment       GBP'000          GBP'000                 GBP'000    interest
                             company        GBP'000                                                            GBP'000
                                 (%)
<S>                             <C>               <C>           <C>              <C>        <C>        <C>        <C>
  Ordinary shares               91.9              0             0                0          N/A        N/A      28,253
  Preference shares             95.0            290           218
  Shareholders' loan            95.0        166,752       125,064
  Total                                     167,042       125,282
</TABLE>

  *Consolidated numbers for AMS Holding do not yet exist as it was
   incorporated in June 2001 and the first financial year is to 30 June 2002.

  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 investment was made in June 2000, and is held by Permira Europe I and
  Permira Europe II as follows:

<TABLE>
<CAPTION>

                                           Ordinary    Preference    Shareholders'
                                           shares %      shares %           loan %
<S>                                            <C>           <C>              <C>
  Permira Europe I                             23.2          24.0             24.0
  Permira Europe II                            68.7          71.0             71.0
  Total                                        91.9          95.0             95.0

</TABLE>

<TABLE>
<CAPTION>

  Hogg Robinson
  (UK)
  Type of investment      Fund's    Fund's cost       Value of       Income     Earnings(1)           Net     Value of
                         holding             of     investment     received         GBP'000     assets(2)      SVIIT's
                          in the     investment        GBP'000      GBP'000                       GBP'000     interest
                         company        GBP'000                                                                GBP'000
                             (%)
<S>                         <C>           <C>            <C>            <C>           <C>          <C>           <C>
  Ordinary shares           57.5          2,228          2,228          N/A          37,379       153,475       23,368
  Preference shares         68.9         32,766         32,766
  Loan notes                57.5         67,827         67,827
  Total                                 102,821        102,821
</TABLE>


  (1)EBITDA.
  (2)Net assets include shareholder loans which are part provided by the
     Funds.

  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 investment was made in June 2000, and is held by Permira Europe II.

                                       14


<TABLE>
<CAPTION>

  Leica
  Microsystems
  (Germany)
  Type of investment      Fund's    Fund's cost       Value of       Income     Earnings(1)           Net     Value of
                         holding             of     investment     received         GBP'000     assets(2)      SVIIT's
                          in the     investment        GBP'000      GBP'000                       GBP'000     interest
                         company        GBP'000                                                                GBP'000
                             (%)
<S>                         <C>             <C>         <C>               <C>        <C>           <C>          <C>
  Ordinary shares           84.6            376         36,335            0          45,180        84,516       18,117
  Preference shares         95.0         12,057         12,057
  Loan notes                87.4         52,396         52,396
  Total                                  64,829        100,788
</TABLE>

  (1)EBITDA.
  (2)Net assets include shareholder loans which are part provided by the
     Funds.

  Leica manufactures and supplies microscopes and related equipment for the
  healthcare, research and semi-conductor industries.
  The company has leading positions in most of its markets and a strong track
  record in product innovation.
  The investment was made in March 1998, and is held by Permira European
  Fund, Permira UK III, Schroder Ventures International Life Sciences Fund
  and Asia Pacific Fund II as follows:

<TABLE>
<CAPTION>

                                       Ordinary     Preference   Loan notes
                                       shares %       shares %            %
<S>                                        <C>            <C>          <C>
  Permira Europe I                         46.7           52.7         48.5
  Permira UK III                           15.0           16.6         15.3
  Schroder Ventures                         6.5            7.3          6.7
  International Life Sciences
  Fund
  Asia Pacific Fund II                     16.4           18.4         16.9
  Total                                    84.6           95.0         87.4

</TABLE>

                                       15


<TABLE>
<CAPTION>

  Sirona Dental
  Systems Group
  (Germany)
  Type of investment        Fund's     Fund's cost       Value of       Income     Earnings(1)        Net     Value of
                        holding in   of investment     investment     received         GBP'000     assets      SVIIT's
                               the         GBP'000        GBP'000      GBP'000                    GBP'000     interest
                       company (%)                                                                             GBP'000
<S>                           <C>           <C>            <C>               <C>        <C>        <C>          <C>
  Ordinary shares             85.0          27,507         33,787            0          32,634     50,486       17,095
  Preference shares           93.1          51,423         51,423
  Total                                     78,930         85,210
</TABLE>

  (1)EBITDA.

  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.
  The company continues to restructure.
  The investment was made in November 1997, and is held by Permira Europe I,
  Permira German Buy-Outs 1992, Permira UK III, Permira UK Venture III,
  Permira UK Venture IV and Schroder Ventures International Life Sciences
  Fund as follows:

<TABLE>
<CAPTION>

                                          Ordinary     Preference
                                          shares %       shares %
<S>                                           <C>            <C>
  Permira Europe I                            61.0           67.9
  Permira German Buy-Outs 1992                 5.1            5.4
  Permira UK Venture III                       1.7            1.8
  Permira UK Venture IV                        3.9            4.1
  Permira UK III                              10.2           10.7
  Schroder Ventures International              3.1            3.2
  Life Sciences Fund
  Total                                       85.0           93.1

</TABLE>



<TABLE>
<CAPTION>

  Kiekert
  (Germany)
  Type of               Fund's     Fund's cost        Value of       Income     Earnings(1)           Net     Value of
  investment        holding in   of investment      investment     received         GBP'000     assets(2)      SVIIT's
                           the         GBP'000         GBP'000      GBP'000                       GBP'000     interest
                   company (%)                                                                                 GBP'000
<S>                       <C>           <C>             <C>               <C>        <C>          <C>           <C>
  Ordinary shares         59.7          21,108          21,108            0          58,327       140,923       13,579
  Loan notes              56.9          38,639          38,639
  Total                                 59,747          59,747
</TABLE>

  (1)EBITDA
  (2)Net assets include shareholder loans which are part provided by the
     Funds.

  Kiekert is a supplier of locking systems for the automotive industry world
  wide. It has operated in this market since 1920.
  The investment was made in September 2000, and is held by Permira Europe II.

                                       16



<TABLE>
<CAPTION>

  Takko
  (Germany)
  Type of               Fund's     Fund's cost        Value of       Income     Earnings(1)           Net     Value of
  investment        holding in   of investment      investment     received         GBP'000     assets(2)      SVIIT's
                           the         GBP'000         GBP'000      GBP'000                       GBP'000     interest
                   company (%)                                                                                 GBP'000
<S>                       <C>           <C>             <C>               <C>        <C>           <C>          <C>
  Ordinary shares         64.5          24,111          16,877            0          34,755        71,488       12,393
  Loan notes              79.6          56,282          39,397
  Total                                 80,393          56,274

</TABLE>

  (1)EBITDA.
  (2)Net assets include shareholder loans which are part provided by the
     Funds.

  Takko is a retailer of fashionable "value for money" clothing targeting
  young family and women aged between 25 and 40. It runs over 520 stores in
  Germany and Austria.
  The investment was made in March 2000, and is held by Permira Europe I.


<TABLE>
<CAPTION>


  XYMAX (Japan)
  Type of                 Fund's     Fund's cost        Value of        Income     Earnings(1)        Net     Value of
  investment          holding in   of investment      investment      received         GBP'000     assets      SVIIT's
                             the         GBP'000         GBP'000       GBP'000                    GBP'000     interest
                     company (%)                                                                               GBP'000
<S>                         <C>            <C>            <C>                <C>        <C>        <C>          <C>
  Ordinary shares           10.9           8,237          51,557             0          18,197     29,553       10,467
</TABLE>

  (1)EBITDA.

  XYMAX is a property management company managing over 250 office buildings
  mainly in the Tokyo and Osaka metropolitan area. XYMAX provides services to
  two different market segments: the sub-leasing market for small to medium
  sized building owners, and the property management market for institutional
  real estate investors.
  The investment was made in January 2000, and is held by The Japan Venture
  Fund III.

(e)  Material Developments since 31 December 2001

Peter Sedgwick stepped down from the Board with effect from 3 May 2002,
having been a Director of SVIIT since its listing in May 1996. Andrew Sykes
and Andrew Williams were appointed Directors of SVIIT on the same date and
their details are listed below.

On 5 April 2002, 1,411,597 options over shares were granted under the
Executive Share Option Plan to qualifying participants. Of these options over
shares, 1,376,823 were granted at a price of GBP3.345 per share and 34,774 were
granted at a price of GBP3.35 per share. Further details of options granted are
set out in paragraphs 2(e) and 3(a) of Part VIII of this document.

On 21 March 2002, International Life Sciences Fund III, which is advised by
Schroder Ventures Life Sciences, had a first closing with capital commitments
of US$147.2 million from limited partners. SVIIT has agreed, in principle, to
commit up to US$75 million to this new fund of which US$44.2 million was
committed at first closing. The fund is scheduled to have a final closing
before March 2003, by which time SVIIT may increase its commitment.

On 3 April 2002, Funds in which SVIIT invests announced a re-capitalisation
of Homebase and as a result Permira has been able to return the majority of
the cost of the acquisition to investors. Accordingly, SVIIT received
approximately GBP14 million from this re-capitalisation. The valuation of
Homebase, which was written up on a P/E basis from a cost of GBP20 million to
GBP30.5 million at 31 December 2001 remains the same. Adjusting for this return
of capital, the value of SVIIT's holding in Homebase is approximately GBP16.5
million, against an attributable cost of GBP6 million.

On 10 June 2002, it was announced that the Japan Venture Fund III had
realised the majority of its holding in XYMAX, a property management company
in Japan. SVIIT received approximately GBP9.5 million from this single
realisation, representing approximately 50 per cent. of its total commitment
to the Fund. The partial realisation of XYMAX valued SVIIT's total holding in
the company, before the realisation, at GBP14.4 million, an uplift of GBP3.9
million to the December 2001 valuation and GBP12.6 million to cost.


3.   Directors and management structure

Details of the Directors, all of whom, other than Nicholas Ferguson and
Andrew Williams, are non-executive, are set out below.



  John McLachlan       Aged 59. Retired as Group Investment Director of
  Chairman             United Assurance Group plc in August 1999. He is a
                       non-executive director of Invesco Income Growth Trust
                       Plc, House of Fraser Trustees 1994 Limited, Iceland
                       Foods Pension Scheme and Falcon Property Trust Limited.

  Nicholas Ferguson    Aged 53. Chairman of SVLL. He was Chairman of Schroder
  Chief Executive      Ventures and instrumental in its development since
                       1984. He has a degree in Economics from Edinburgh
                       University and an MBA from Harvard University, where
                       he was a Baker Scholar. He first joined the Schroder
                       Group in 1971 and is a non-executive director of
                       Schroders plc.

  John Govett          Aged 58. Retired as a director of Schroders plc in
                       April 1998, where he had been Schroder Group Managing
                       Director, investment management, and Chairman of
                       Schroder Investment Management Limited. He joined the
                       Schroder Group in 1969 after obtaining a law degree
                       from Oxford University and qualifying as a chartered
                       accountant at Price Waterhouse. He is a non-executive
                       director of Derby Trust p.l.c., Schroder Emerging
                       Countries Fund plc, Rio Tinto Pension Investments
                       Limited and Peel Hotels plc.

  Anthony Habgood      Aged 55. A graduate of Cambridge University and
                       Carnegie Mellon University. He was a director of The
                       Boston Consulting Group from 1977 to 1986. He was then
                       appointed a director of Tootal Group PLC, subsequently
                       becoming its chief executive until the company was
                       taken over in 1991. He is Chairman of Bunzlplc.

  Edgar Koning         Aged 49. Executive Vice-President with AEGON Nederland
                       N.V. He has a degree in business engineering and
                       administration from the Technical University of
                       Eindhoven. He joined AEGON in 1981 and has held
                       various senior management positions in the group.

  Denis Raeburn        Aged 58. Managing Director of the asset management
                       company Global Asset Management from 1986 to 2001. He
                       was Chairman of Cellcom Limited from 1984 to 2000 and
                       Managing Director of Sologlas AG from 1974 to 1983.
                       Prior to this, he was Deputy Managing Director of Sage
                       Holdings Limited. He has a Bachelor of Commerce from
                       the University of Witwatersrand and an MBA from the
                       University of Cape Town.

  Andrew Sykes         Aged 44. Director of Schroders plc and Chairman of
                       Schroder & Co. with responsibility for Schroders plc's
                       Private Equity, Property and Structured Products
                       businesses. He is a member of the Group Management
                       Committee and is on the Investment Committee of the
                       Schroder Private Equity Fund of Funds, which is
                       advised by Schroder Ventures (London) Limited, SVIIT's
                       operating subsidiary.

  Andrew Williams      Aged 50.Chief Executive of Schroder Ventures (London)
                       Limited and Managing Principal of Schroder Ventures
                       North America Inc. He joined Schroder Ventures in 1995
                       as Managing Director of Schroder Ventures Holdings
                       Limited and is a director of Schroder Private Equity
                       Funds plc and a member of the Investment Committee for
                       the Schroder Private Equity Fund of Funds.


Both the Listing Rules and the Articles of Association require that the Board
comprises a majority of Directors, including the Chairman, who are
independent of Schroder Ventures and the Schroder Group, as defined in the
Articles of Association which are summarised in paragraph 5 of Part VIII of
this document. 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 Board requires a simple majority vote;
however, a majority of the Directors voting in favour of the decision must be
independent Directors.

                                       18


SVIIT intends to continue to comply with the principles of good governance
and the code of best practice prepared by the Committee on Corporate
Governance published in June 1998 (the "Combined Code"). Certain committees
have been established by the Board to assist it in the management of SVIIT.
The investment committee, which consists of a majority of independent
Directors, assists the Board in monitoring SVIIT's portfolio. This committee
is responsible for reviewing investment proposals for SVIIT, for giving
investment recommendations to the Board and forimplementing the Board's
decision as regards any investment. The committee has also considered ad hoc
matters as appropriate. The SVLL team is responsible for monitoring and
providing advice on investments to the committee.

The Board has also established an audit committee with formally delegated
duties and responsibilities, which is comprised entirely of independent
Directors. The audit committee was established with a view to ensuring that
SVIIT maintains the highest standards of integrity, financial reporting and
internal control. It also meets with representatives of Schroder Ventures or
Permira and the company secretary and receives reports on the quality and
effectiveness of the accounting records and management information maintained
on behalf of SVIIT.

A nominations committee was established on 13 September 1999 pursuant to
recommendations of the Combined Code, to make recommendations on the
appointment of new Directors. A formal procedure for the appointment of new
Directors is contained in the terms of reference of this committee.

The Board established a remuneration committee on 5 December 2000 which is,
inter alia, responsible for establishing the remuneration of the Chief
Executive and granting share options under the Executive Share Option Plan.

The total number of employees of, or persons seconded by SIM to, the SVIIT
Group is currently 21. SVIIT has no employees. SVLL currently has 13
employees and 4 secondees from SIM (three of whom are Directors) and SVNA has
4 employees. On completion of the acquisitions of SVLL and SVNA on 18 June
2001, the number of persons employed by, or seconded by SIM to, the SVIIT
Group was 16. Prior to that date, the SVIIT Group had no employees or
secondees.


4.   Secretary, administration services and registrar

SVIIT has appointed SIM to provide company secretarial, accounting and
administrative services. Under the terms of the agreement, SIM is entitled to
receive an annual fee equal to the greater of GBP75,000 or the aggregate of (i)
0.12 per cent. per annum of the first GBP50 million of net assets, (ii) 0.06
per cent. per annum of the next GBP50 million of such net assets and (iii) 0.04
per cent. of the remaining net assets. The agreement is subject to a
four-month notice period.

SIM is responsible for monitoring SVIIT's compliance with the conditions for
approval by the Inland Revenue as an investment trust for tax purposes and
with the Listing Rules.

SIM has delegated to SIM (UK) the provision of certain cash and currency
management facilities. SIM(UK) receives remuneration for its services at a
current rate of 0.10 per cent. per annum on cash balances up to GBP75 million,
0.05 per cent. per annum on the next GBP75 million and 0.03 per cent.
thereafter subject to a minimum fee of GBP20,000. Under the terms of the
secretarial agreement, SIM remains responsible for the cash management
services provided by SIM (UK).

Lloyds TSB Registrars Scotland, of PO Box 28448, Finance House, Orchard Brae,
Edinburgh EH4 1WQ, is the registrar of SVIIT, responsible for maintaining the
register of Ordinary Shareholders. JPMorgan Chase Bank of Trinity Tower, 9
Thomas More Street, London E1W 1YT, is responsible for maintaining the
register of Bondholders.


5.   Role and remuneration of Schroder Ventures or Permira

Certain Schroder Ventures or Permira entities advise the Funds in which SVIIT
invests. These entities have undertaken to provide such information or
services as are within their power and which are reasonably required to
enable the Directors to manage the affairs of SVIIT and to enable the company
secretary to perform its duties or that has been requested by the Directors
or the company secretary to enable the company secretary to monitor SVIIT's
ability to satisfy the conditions for approval as an investment trust under
Section 842.

Distributions from the Funds to SVIIT and to other investors in the Funds in
respect of their Holdings will be after deduction or allocation of the
appropriate remuneration due to Schroder Ventures or Permira. Details of this
entitlement to remuneration is set out in paragraph 5 of Part III of this
document.

                                       19


6.   Investment trust status

In order to obtain exemption from corporation tax on chargeable gains SVIIT
conducts itself with a view to being an approved investment trust for the
purposes of Section 842.

The current conditions for a company to be approved by the Inland Revenue as
an investment trust for tax purposes are set out in Section 842. Approval as
an investment trust is obtained retrospectively for an accounting period and
such approval is only obtained if the relevant conditions are satisfied
throughout that accounting period. As is the case with all companies which
are approved as investment trusts, there can be no guarantee in advance that
retrospective approval for any accounting period will be given.

The last accounting period for which SVIIT has been treated as approved by
the Inland Revenue as an investment trust is the accounting period ended on
30 June 2000. SVIIT has subsequently conducted its affairs so as to enable it
to qualify for approval as an investment trust and expects to obtain approval
from the Inland Revenue as an investment trust for subsequent accounting
periods. In the event that SVIIT is not approved as an investment trust in
respect of any accounting period, there would be no direct tax consequences
for investors in SVIIT. The consequences for SVIIT itself would be that it
would be liable for corporation tax on its chargeable gains.

SVIIT will not be liable to corporation tax on chargeable gains in respect of
any accounting period for which it is approved as an investment trust as
described above. The income of SVIIT will be subject to corporation tax in
each of its accounting periods. Certain of SVIIT's investments are held via
Delaware limited partnerships. As long as the Inland Revenue maintains its
current view, SVIIT's disposal of any Holdings held via a Delaware limited
partnership should be treated as giving rise to proceeds of a capital nature.
However, it is possible that, as a result of a change in such view, SVIIT
could be treated as receiving income (rather than capital proceeds) when it
realises any of its Holdings held via a Delaware limited partnership.


7.   Income and capital gains recognition

SVIIT's income will continue to be derived mainly from shares and securities
(that is, eligible investment income as defined in Section 842). A
significant proportion of SVIIT's capital gains are derived from
distributions in respect of its Holdings in the Funds. SVIIT accounts for
such distributions by reference to the underlying source of the distribution.
The Directors expect that future distributions to SVIIT in respect of its
Holdings will be principally the net proceeds of realisations of investments
held by the Funds and, therefore, will be treated as capital gains rather
than income.

Distributions receivable by SVIIT which arise from dividends, interest and
other revenue items through the Funds will be credited to SVIIT's revenue
account when such income distributions are declared. Investment income
arising from directly held investments of SVIIT 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 and
interest payable, be treated on an accruals basis.

The proceeds, net of costs, from any realisations of SVIIT's investments,
including distributions to it in respect of its Holdings which arise from
realisations of investments held via the Funds, will be credited, when
declared, to a non-distributable capital reserve.


8.          Dividend policy

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

In the absence of unforeseen circumstances, the Directors would expect to
distribute any dividends to Shareholders in accordance with this policy each
year. SVIIT's final dividend for the year ended 30 June 2001 was 1.80p per
share and was paid on 26 November 2001 to Shareholders on the register as at
2November 2001.

                                       20


9.   Future developments

The Directors have confidence in the long term future of SVIIT, based on the
size and diversity of its portfolio, the nature of the Funds and their track
record, and the prospects for the buy-out and development capital markets.
The Directors believe that the diversified nature of SVIIT's portfolio and
the number of underlying investments in the Funds significantly reduce the
risks normally associated with making investments in the buy-out and
development capital markets.

                                       21




          PART III - INFORMATION ON SCHRODER VENTURES OR PERMIRA FUNDS

1.          Background

Members of the Schroder Group established Schroder Ventures in 1983, which
has since developed into an international association of independent
entities. At 31 December 2001, these combined independent entities had 11
offices world-wide, providing 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. At 31 December 2001 Schroder
Ventures or Permira advised a total of 24 buy-out and development capital
funds with combined commitments of GBP4.5 billion.

The geographical spread of the Funds and their advisers as at 31 December
2001 is summarised below in Table 5.


Table 5: Geographic Location at 31 December 2001

<TABLE>
<CAPTION>

  Region                                     Number of Funds      Total Committed Capital         Location of Advisers
                                                                               GBPmillion
<S>                                                        <C>                        <C>             <C>
  Asia                                                     5                          691     Hong Kong, India, Japan,
                                                                                                             Singapore
  Continental Europe                                       9                        2,847      France, Germany, Italy,
                                                                                                                 Spain
  North America/International (Life                        6                          568       Canada, United States,
  Sciences)                                                                                             United Kingdom
  United Kingdom                                           4                          346               United Kingdom
  Total                                                   24                        4,452
</TABLE>


2.          Operation of the Funds

Operation

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 reorganisation or financial restructuring of the investment.
Schroder Ventures or Permira work closely with the investee company
throughout the life of the investment to assist it in achieving its full
potential and to seek to maximise 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 unauthorised 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.

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 1 January 2000. For Funds launched after 1 January 2000,
entities connected with Schroder Ventures Limited act as general partner or
manager.

                                       22


The general partner or manager is responsible for the day-to-day management
of the Fund and takes 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.

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

Advisory committees

Each Fund has an advisory committee which comprises a majority of
representatives of Investors in the Fund. 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, provided that the
recommendations of the advisory committee in respect of such matters are
recommendations only and the Fund's general partner or manager is not
required to follow those recommendations. The advisory committee is not
responsible for taking investment decisions. In some Funds, advisory
committee approval is required for certain actions of the general partner or
manager.

Investment policies

Despite the increasing globalisation 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 Fund has its own investment
policies to achieve this. These policies are agreed with Investors at the
time of the formation of the Fund and cannot be changed without the consent
of Investors. To the extent that the Fund consists of several entities, the
consent of each component entity is required before the investment policies
can be changed. In some cases, however, Fund consent is measured by reference
to Investors' consent according to capital committed across the whole Fund.
Normally, a limited partnership can only change its investment policy with
the consent of Investors holding at least 75 per cent. of its committed
capital (and in certain cases with the consent of the general partner) and a
unit trust can only change its investment policies with the sanction of 75
per cent. 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 per cent. in nominal value of units in
addition to, or instead of, this sanction.

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 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. Both Schroder
Ventures International Life Sciences Fund and Schroder Ventures International
Life Sciences Fund II, which are industry-specific, are diversified between
the United States andEurope.

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 the management to review, refine and implement the
exit plan. Investments by the Funds in investee companies are typically
realised 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 realise
significant cash returns from the disposal of investments for several years
from the Fund's inception.


Calls

Typically, an Investor in a Fund commits to subscribe a certain amount of
capital to the Fund in return for units in unit trusts or interests in
limited partnerships constituting the relevant Fund.

                                       23


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 the Fund should make an investment, further Calls are made to the
Investors for payment of part or all of the outstanding committed capital.
The committed capital of a Fund is typically called within five years.

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 at a discount of
up to 25 per cent. of their value and/or in that Investor's existing
interests in the Fund being diluted by up to 25 per cent. In the case of a
unit trust, it could result in the units in respect of 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 realised or income from an investment is received, the
capital realised or income received, after payment of expenses and Carried
Interest (where appropriate) in accordance with the terms of the Fund, is
generally distributed to the Investors in proportion to their Holdings. In
certain limited circumstances, which may vary between Funds, capital
realisations can be reinvested by the Fund. Investors generally receive
distributions (principally the proceeds of capital realisations) both before
and after the Fund becomes fully called. The end of the life of a Fund may be
extended for a specified period to enable an orderly realisation of the
Fund's investments. Alternatively, the Fund's investments could be
distributed by way of a dividend in specie. Extension of the life of a Fund
usually requires the consent of Investors holding, in total, interests of at
least 75 per cent. in that Fund. If, towards the end of any such extension,
there are still unrealised investments in the Fund, Investors may agree
either to a further extension or a distribution in specie 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 per
cent. approval from all Investors (including SVIIT 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 the Fund.
These restrictions ensure that each Fund continues to be run solely for the
benefit of all Investors equally. As SVIIT will not control any Fund, it 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 order to achieve diversity of risk, the Funds are restricted in the size
of the investments which they can make. In addition, those Funds which are
currently partly called, and therefore have further investment capacity, are
usually prohibited from investing in property and other buy-out or
development capital funds.


3.   Profile of the Funds

A profile of each of the 24 Funds in which SVIIT was invested at 31 December
2001, including the value of SVIIT's residual holding (excluding prior
distributions) and the percentage of SVIIT's net asset value represented by
each such holding, is given in Table 2 on page 9. All of the Funds have an
original life of ten years unless otherwise stated. Further information on
the historical performance of these Funds is given below.
Details of SVIIT's portfolio and SVIIT's investment in certain underlying
portfolio companies, net of other costs and liabilities held at Fund level
are given in section 2 of Part II of this document.


4.   Performance of the Funds

A measure of the historical performance of the funds advised by Schroder
Ventures or Permira can be seen from a comparison of the weighted net IRR of
the mature funds with the comparable weighted country stock market IRR. The
methodology used in calculating IRRs for such funds is consistent with the
British Venture Capital Association Guidelines. The bases for determining
such IRRs are set out below. IRRs have not been included for the immature
Funds as all cash outflows for investments occur in the early years of a fund
and significant returns are usually generated only after a reasonable period
of investment.

The aggregated weighted net IRR of the 23 mature funds advised by Schroder
Ventures or Permira established since 1985 was 21.0 per cent. per annum at 31
December 2001 excluding Asia Pacific Trust, a fund which has not been managed
by an affiliate of Schroders plc from inception. The comparable weighted
country stock market IRR (with dividends reinvested) was 11.7 per cent. per
annum. The nature of investment in unquoted companies means that the range of
returns achieved on individual underlying portfolio companies is wide.



                                       24


Among the most successful investments realised to date are: Charles Vogele
(Germany), Across Wireless (Europe), Mitel Corporation (Canada), Singulus
(Europe), Incyte Pharmaceuticals (U.S.) and JDL (Japan).

It should be noted that past performance is not necessarily a guide to the
future and the value of investments can go down as well as up. IRRs for
individual funds may vary significantly.

Notes:
1.   The weighted IRRs of mature funds advised by Schroder Ventures or Permira
     since 1985 are calculated on the basis of actual distributions to and
     receipts from investors in those funds up to 31 December 2001 and the value
     to such investors of the remaining portfolio as at that date, less an
     estimate of Carried Interest.
2.   All returns are stated before any taxation that may be payable by
     Investors.
3.   All foreign currencies have been translated on 31 December 2001 at the
     exchange rates set out on page 80 of this document.


5.   Remuneration

The entitlement to remuneration is agreed with all Investors at the formation
of each Fund and is embodied in its constitution. The remuneration takes the
form of management fees, Carried Interest and, in some cases, fees payable by
the 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
documents constituting the Fund. In some Funds, there is a preferential
drawing right instead of a management fee but, for ease of reference, both
are referred to as management fees in this document.


Carried Interest

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 per cent. of the profits arising in each Fund. In some Funds
performance hurdles must be met before 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 IRR
for Investors, which is generally in the range of 5 per cent. to 12 per cent.
Profit for the purpose of determining 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, Carried Interest is calculated as 20 per cent.
           of all subsequent distributions; or

     (ii)  upon the realisation of an investee company, the IRR based on either
           the disposal of that company or all companies realised to date will
           be calculated. An allocation of Carried Interest is calculated as 20
           per cent. 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 per cent. of the profit
distributed to Investors.

All distributions from the Funds are after allocation of any Carried Interest
(where appropriate) in accordance with the terms of the Fund. Distributions
to SVIIT, in respect of its Holdings, will be on the same basis as
distributions to other Investors.


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 reflect
those payable to other directors on the relevant boards.


                                       25


                  Part IV - Terms and Conditions of the Bonds

The following is the text of the terms and conditions of the Bonds which are
endorsed on each Bond.

The GBP40,000,000 41/2 per cent. Subordinated Convertible Bonds due 2011 (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 21 November 2001 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 written resolution of a duly appointed committee of the Board of
Directors of the Issuer dated 19 November 2001 and a resolution of the Board
of Directors of the Issuer dated 13 November 2001. 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 21 November 2001
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 21 November 2001 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.

3.    Interest

3.1   Rate of interest

      The Bonds bear interest from (and including) 21 November 2001 (the
      "Closing Date") at the rate of41 2 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) in arrear on 21 November in each year (an "Interest Payment
      Date").

      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).


                                       26


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 (after as
      well 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
      November 2011 (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,
            and including, the date fixed for redemption if:

            (i)    at any time on or after 21 November 2004, the Average Closing
                   Price is equal to or greater than 130 per cent. of the
                   Conversion Price; or
            (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 from 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, and
            including, 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.


                                       27


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 410p 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
            days before the due date of redemption of the relevant Bonds. The
            period from the due date hereof to such date 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.

      (B)   If the Ordinary Shares are then a participating security in a
            relevant system, unless The Uncertificated Securities Regulations
            1995 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 this document. 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.


                                       28


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:

                    (1)    the net asset value per Ordinary Share as at 31
                           December 2001 as published in the interim report and
                           accounts of the Issuer for the 6 month period ending
                           31 December 2001 (the "December NAV") is less than
                           407p; or

                    (2)    the net asset value per Ordinary Share as at 30 June
                           2002 as published in the annual report and accounts
                           of the Issuer for the year ending 30 June 2002 (the
                           "June NAV") is less than 407p;

                    the Conversion Price shall be reduced with effect from the
                    date which is 21 days after publication of the said annual
                    report  and accounts for the year ending 30 June 2002 by the
                    greater of:

                    (a)    the difference between 407p and the June NAV; and
                    (b)    the difference between 407p and the December NAV.

             (ii)   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.

             (iii)  If and whenever the Issuer shall issue (otherwise than
                    pursuant to Condition 5.3(A)(vii) or to any of the
                    transactions described in Condition 5.3(A)(iv) and Condition
                    5.3(A)(viii) 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.

             (iv)   (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)(vii) 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.


                                       29


                    (b)     If and whenever the rights of conversion or exchange
                            or subscription attached to any such securities as
                            are referred to in section (iv) of this Condition
                            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).

             (v)    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.

             (vi)   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)(v) 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.

             (vii)  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).

                                       30


             (viii) 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)(vii) 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:

                                              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).

             (ix)  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.

             (x)   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)(iii) and 5.3(A)(iv)(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

            (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.


                                       31


      (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)(v) to 5.3(A)(viii)
            inclusive of this Condition or any such issue as is mentioned in
            Condition 5.3(A)(iii) or 5.3(A)(iv)(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)(iii), 5.3(A)(iv)(a) and 5.3(A)(v)), before
            the date that the Capital Distribution is actually made (in the case
            of Condition 5.3(A)(vi)) or before the date on which the issue or
            grant is made (in the case of Condition 5.3(A)(viii)), 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)(ii)).

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.

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.
             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.


                                       32


      (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, Clearstream Luxembourg,
      Depository and Clearing Centre or any other person providing a clearance
      service within the meaning of section 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 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.

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).


                                       33


6.   Stock Exchange listing

6.1  The Issuer may, but will have no obligation to, list the Bonds on any
     Recognised Stock Exchange. 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.


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.


                                       34


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.

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 Trinity Tower, 9 Thomas More Street,
     London E1W 2YT (or such other place in the United Kingdom 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 the United Kingdom or such other place as the
     Trustee may approve. 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.


                                       35


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 7 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. (For further details, see "Selling
     Restrictions" on page 58 of this document.)

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.

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 U.S. 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 U.S. Securities and 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.


                                       36


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

      (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, and including, 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 has 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.

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.


                                       37


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. 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 U.S.
      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.

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(o) 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:


                                       38


     (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

     (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.


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.


                                       39



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.


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 30 June 2001 as shown in the audited
                    consolidated accounts of the Issuer and its subsidiaries; or


                                       40


            (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;

     "Closing Price" for any day shall mean the mean of the quotations
     of an Ordinary Share on that day as derived from 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 (I)(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)(iii), 5.3(A)(iv), 5.3(A)(vi), 5.3(A)(vii) or 5.3(A)(viii) 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;

     "Senior Liabilities" means the Liabilities of the Issuer to the
     Royal Bank of Scotland plc under the facility agreement dated 16 March 2001
     between the Issuer, Barings (Guernsey) Limited and the Royal Bank of
     Scotland plc;

     "Stock Exchange" has the meaning given in the Trust Deed;

     "Subsidiary" means each subsidiary for the time being of the
     Issuer; and

     "subsidiary" has the meaning ascribed to it under Section 736 of
     the Companies Act 1985.

                                       41


                    PART V - FINANCIAL INFORMATION OF SVIIT

INTERIM FINANCIAL STATEMENTS

Set out below is certain financial information of SVIIT. This has been
extracted without material adjustment from the unaudited interim financial
statements of SVIIT for the six months ended 31 December 2001.


  References to page numbers in this section of Part V are to SVIIT's Interim
                                  Report 2001.

                     Consolidated Statement of Total Return
                      (incorporating the Revenue Account)

<TABLE>
<CAPTION>

                       For the period 1 July 2001 to    For the period 1 July 2000 to       For the year ended 30 June
                            31 December 2001                 31 December 2000                                   2001
                        Revenue    Capital      Total    Revenue    Capital      Total   Revenue    Capital      Total
                        GBP'000    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>        <C>
  Realised gains on          -      5,077      5,077          -      5,932       5,932         -     4,774       4,774
  investments

  Unrealised losses          -    (16,756)  (16,756)          -   (20,374)    (20,374)         -  (49,190)    (49,190)
  on investments

  Losses on                  -    (11,679)  (11,679)          -   (14,442)    (14,442)         -  (44,416)    (44,416)
  investments

  Exchange                 26         (94)      (68)          -      (880)       (880)         -     (755)       (755)
  gains/(losses)

  Income (note 2)       4,681           -      4,681      4,349          -       4,349     5,616         -       5,616

  Administrative      (4,131)           -    (4,131)      (768)          -       (768)   (2,594)         -     (2,594)
  expenses (note 3)

  Net                     576    (11,773)   (11,197)      3,581   (15,322)    (11,741)     3,022  (45,171)    (42,149)
  return/(deficit)
  before finance
  costs and
  taxation

  Finance costs         (276)           -      (276)      (104)          -       (104)     (224)         -       (224)

  Net                     300    (11,773)   (11,473)      3,477   (15,322)    (11,845)     2,798   (45,171)   (42,373)
  return/(deficit)
  on ordinary
  activities before
  taxation

  Tax on ordinary       (122)           -      (122)      (139)          -       (139)     (141)         -       (141)
  activities

  Return/(deficit)        178    (11,773)   (11,595)      3,338   (15,322)    (11,984)     2,657   (45,171)   (42,514)
  on ordinary
  activities after
  tax for the
  period

  Minority interest       (1)          20         19        (1)         67          66       (2)        104        102
  - equity

  Return/(deficit)        177    (11,753)   (11,576)      3,337   (15,255)    (11,918)     2,655   (45,067)   (42,412)
  on ordinary
  activities after
  tax and minority
  interest for the
  period attributable to
  equity shareholders

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

  Surplus/(deficit)       177     (11,753)   (11,576)    3,337     (15,255)   (11,918)     814     (45,067)   (44,253)
  on ordinary
  activities
  transferred to
  reserves

  Return/(deficit)      0.17p     (11.49)p   (11.32)p    3.26p     (14.92)p   (11.66)p   2.60p     (44.07)p   (41.47)p
  per ordinary
  share (note 4)

</TABLE>

The notes on pages 22 and 23 form an integral part of these accounts.

                                       42

<TABLE>
<CAPTION>

Balance Sheets


                                                              31 December 2001                   30 June 2001
                                                                  Group         Company          Group         Company
                                                                GBP'000         GBP'000        GBP'000         GBP'000
  <S>                                                               <C>             <C>            <C>              <C>
  Tangible fixed assets
  Office furniture and equipment                                    301               -              -               -
                                                                    301               -              -               -
  Fixed asset investments
  Venture funds                                                 413,220         391,269        387,030         362,859
  Fixed interest securities                                      24,484          24,484         24,853          24,853
  Investment in subsidiaries                                          -          28,293              -          30,194
  Fixed assets                                                  437,704         444,046        411,883         417,906
  Current assets
  Debtors                                                         2,677             704          2,933             808
  Cash at bank and on deposit                                     7,958             531          7,191             449
                                                                 10,635           1,235         10,124           1,257
  Current liabilities
  Creditors: amounts falling due within one year                (3,632)           (733)        (4,747)         (2,291)
  Net current assets/(liabilities)                                7,003             502          5,377         (1,034)
  Total assets less current liabilities                         445,008         444,548        417,260         416,872
  Creditors: amounts falling due after one year                (39,343)        (39,343)              -               -
  (note 6)
  Minority interest - non-equity                                  (100)               -          (100)               -
  Minority interest - equity                                      (269)               -          (288)               -
  Net assets                                                    405,296         405,205        416,872         416,872
  Capital and reserves
  Called up share capital                                       102,266         102,266        102,266         102,266
  Share premium account                                           7,453           7,453          7,453           7,453
  Share purchase reserve                                         92,054          92,054         92,054          92,054
  Capital redemption reserve                                      3,204           3,204          3,204           3,204
  Capital reserve                                               197,182         197,059        208,935         208,707
  Revenue reserve                                                 3,137           3,169          2,960           3,188
  Equity shareholders' funds                                    405,296         405,205        416,872         416,872
  Net asset value per ordinary share (note 7)                    396.3p                         407.6p

</TABLE>

The notes on pages 22 and 23 form an integral part of these accounts.

                                       43

<TABLE>
<CAPTION>

Consolidated Cashflow Statement


                                                     For the period 1 July 2001 to       For the period 1 July 2000 to
                                                                  31 December 2001                    31 December 2000
                                                                           GBP'000                             GBP'000
<S>                                                                          <C>                                 <C>
  Operating activities
  Cash received from investments                                             1,182                               4,501
  Interest received                                                            227                                 367
  Administrative fee income received                                         3,468                                   -
  Administrative expenses                                                  (3,626)                               (994)
  Net cash inflow from operating activities                                  1,251                               3,874
  Return on investments and servicing of
  finance
  Interest paid                                                               (64)                               (104)
  Net cash outflow from investments and                                       (64)                               (104)
  servicing of finance
  Taxation
  Tax (paid)/recovered                                                       (122)                                 203
  Total tax (paid)/recovered                                                 (122)                                 203
  Capital expenditure and financial
  investment
  Purchase of fixed interest securities                                  (101,752)                           (216,884)
  Purchase of subsidiaries                                                       -                                   -
  Purchase of tangible fixed assets                                          (310)                                   -
  Sale of fixed interest investments                                       102,165                             281,706
  Calls paid and secondary units purchased                                (53,697)                           (103,281)
  Capital distributions received                                            15,784                              40,042
  Net cash (outflow)/inflow from capital                                  (37,810)                               1,583
  expenditure and financial investment
  Equity dividends paid
  Dividends                                                                (1,841)                             (3,886)
  Total dividends paid                                                     (1,841)                             (3,886)
  Financing
  Proceeds from convertible bond issue                                      40,000                                   -
  Issue costs paid of convertible bonds                                      (579)                                   -
  Net cash inflow from financing                                            39,421                                   -
  Net cash inflow/(outflow)                                                    835                               1,670
  Reconciliation of net cash flow to movement
  in net (debt)/funds
  Increase/(decrease) in cash during the                                       835                               1,670
  period/year
  Realised exchange losses                                                    (68)                               (880)
  Cash acquired on purchase of subsidiaries                                      -                                   -
  Net increase in convertible bonds                                       (39,343)                                   -
  Change in net (debt)/funds                                              (38,576)                                 790
  Net funds at the beginning of the                                          7,191                              10,280
  period/year

                                       44

  Net (debt)/funds at the end of the                                      (31,385)                              11,070
  period/year

</TABLE>

The notes on pages 22 and 23 form an integral part of these accounts.

                                       45

Notes to the Accounts

1.   The revenue column of the Consolidated Statement of Total Return
     is the consolidated profit and loss account of the Group. The Company has
     not presented its own revenue account but, as permitted by section 230 of
     the Companies Act 1985, will disclose information supplementing the revenue
     account as specified in paragraphs 52 to 57 of Schedule 4 of the Companies
     Act 1985.


2.          Income

<TABLE>
<CAPTION>

                               For the period 1 July 2001 to    For the period 1 July 2000 to     For the year ended
                                      31 December 2001                 31 December 2000              30 June 2001
                                   Group         Company            Group         Company         Group        Company
                                 GBP'000         GBP'000          GBP'000         GBP'000       GBP'000        GBP'000
<S>                                  <C>             <C>            <C>             <C>           <C>            <C>
  Income from fixed                  394             394            2,553           2,553         3,564          3,564
  interest securities
  Income from                        764             764            1,479           1,479         1,403          1,403
  distributions
  Income from                      3,231               -                -               -           108              -
  administration
  services
  Other income                       292              65              317             198           541            252
                                   4,681           1,223            4,349           4,230         5,616          5,219

</TABLE>


3.          Administrative expenses

<TABLE>
<CAPTION>

                          For the period 1 July 2001 to    For the period 1 July 2000 to   For the year ended 30 June
                                31 December 2001                 31 December 2000                     2001
                                   Group         Company            Group         Company         Group        Company
                                 GBP'000         GBP'000          GBP'000         GBP'000       GBP'000        GBP'000
<S>                                  <C>             <C>              <C>             <C>           <C>            <C>
  Secretarial and                    141             141              193             193           376            376
  administration fees
  Bank loan facility                 340             340              108             108           359            359
  fees
  Directors' fees                     94              94               53              53           149            149
  Staff costs                      2,790               -                -               -            93              -
  EDR costs                            -               -              162             162           230            230
  Enlargement of                      62              62                -               -           840            840
  operations costs
  Auditors'
  remuneration
  - Audit                             24              14               23              20            31             24
  - Non-audit                          9               9                9               9           109            109
  General expenses                   671             190              220             199           407            343
                                   4,131             850              768             744         2,594          2,430
</TABLE>



4.   Basic return per ordinary share is based on the net return on
     ordinary activities after interest payable, taxation and minority interest
     of GBP177,000 (period ended 31 December 2000: GBP3,337,000, year ended 30
     June 2001: GBP2,655,000) and on 102,265,699 (period ended 31 December 2000:
     102,265,699, year ended 30 June 2001: 102,265,699) Ordinary Shares, being
     the weighted average number of Ordinary Shares in issue during the period.

     The capital return per ordinary share is based on the net deficit
     for the period of GBP11,753,000 (and on a deficit for the period ended 31
     December 2000: GBP15,255,000, and a deficit for the year ended 30 June
     2001: GBP45,067,000) and on 102,265,699 (period ended 31 December 2000:
     102,265,699 and year ended 30 June 2001: 102,265,699) Ordinary Shares,
     being the weighted average number of Ordinary Shares in issue during the
     period.

                                       46

     During the period the average market price of the Company's shares
     was lower than the conversion price of the November 2011 4.5% convertible
     bonds and the exercise price of share options in issue. Accordingly, any
     conversion of the bonds or exercise of options would not have a dilutive
     effect and therefore diluted returns are not shown.

5.   The Company has a euro225 million loan facility with the Royal
     Bank of Scotland plc. No drawings have been made under this facility.

6.   Creditors due after more than one year comprise GBP40,000,000
     nominal of 4.5% subordinated convertible bonds which mature on 21 November
     2011. These bonds are convertible, at any time, into ordinary shares at an
     initial conversion price of 410p per share, subject to adjustment by the
     amount that the NAV falls below 407p at either 31 December 2001 or 30 June
     2002 (whichever is the greater). However, this adjustment only takes effect
     after the publication of the June 2002 NAV. A notional conversion price of
     399.3p is based on the December 2001 NAV.


<TABLE>
<CAPTION>

                                                As at 31 December 2001   As at 31 December 2000   As at 30 June 2001
                                                               GBP'000                  GBP'000              GBP'000
    <S>                                                           <C>                       <C>                  <C>
    4.5% Subordinated Convertible Bonds 2011                    40,000                        -                    -
    Unamortised issue costs                                      (657)                        -                    -
    Long-term liabilities                                       39,343                        -                    -

</TABLE>

     In accordance with FRS 4 "Capital instruments", issue costs are
     charged to the revenue account over the term of the capital instrument.

7.   Calculation of the net asset value per share is based on
     102,265,699 Ordinary Shares in issue as at 31 December 2001 (as at 31
     December 2000: 102,265,699 and at 30 June 2001: 102,265,699).

     Diluted net asset value per share is not shown as there would be no
     dilutive effect at the relevant balance sheet dates from either conversion
     of the bonds in issue or exercise of share options granted in June 2001.

8.   In June 2001, the Company acquired Schroder Ventures (London)
     Limited and its subsidiary Schroder Ventures North America Inc.

9.   The half yearly figures are non-statutory accounts and are
     unaudited. The abridged balance sheet, revenue statement and abridged cash
     flow statement for the year ended 30 June 2001 are extracts from the latest
     published accounts. A copy of the published accounts for that year has been
     delivered to the Registrar of Companies. The report of the auditors on
     those accounts was unqualified and did not contain a statement under
     section 237(2) or (3) of the Companies Act 1985. The half yearly figures
     have been prepared using the same accounting policies as those adopted in
     preparing the latest published accounts.


                                       47

ANNUAL AUDITED FINANCIAL STATEMENTS

Further financial information of SVIIT is set out below. This has been
extracted without material adjustment from the Audited Financial Statements
of SVIIT for the years ended 30 June 2001, 30 June 2000 and 30 June 1999.
Statutory accounts for the years ended 30 June 2001, 30 June 2000 and 30 June
1999 have been delivered to the Registrar of Companies. The auditors have
reported on these accounts. Their reports were unqualified and did not
contain a statement under sections 237(2) (accounting records or returns
inadequate or accounts not agreeing with records and returns) or 237(3)
(failure to obtain necessary information and explanation) of the Companies
Act. The Balance Sheets and Notes to the Accounts set out in this Part V are
prepared on a consolidated basis.

References to page numbers in this section of Part V are to pages in SVIIT's
Report and Accounts 2001.

<TABLE>
<CAPTION>

                     Consolidated Statement of Total Return
                      (incorporating the Revenue Account)


                           For the year ended 30 June 2001  For the year ended 30 June 2000 For the year ended 30 June 1999
                           Revenue    Capital    Total      Revenue   Capital   Total     Revenue   Capital   Total
                  Notes    GBP'000    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>       <C>       <C>
  Realised gains     9      -         4,774      4,774      -         86,485    86,485    -         54,392    54,392
  on investments
  Unrealised         9      -         (49,190)   (49,190)   -         41,076    41,076    -         52,445    52,445
  (losses)/gains
  on investments
  (Losses)/gains            -         (44,416)   (44,416)   -         127,561   127,561   -         106,837   106,837
  on investments
  Foreign exchange   1(f)   -         (755)      (755)      -         (415)     (415)     -         167       167
  (losses)/ gains
  on currency
  balances
  Income*            2      5,616     -          5,616      6,123     -         6,123     3,613     -         3,613
  Expenses           3      (2,594)   -          (2,594)    (1,323)   (3)       (1,326)   (878)     -         (878)
  Net                       3,022     (45,171)   (42,149)   4,800     127,143   131,943   2,735     107,004   109,739
  return/(deficit)
  before finance
  costs and
  taxation
  Interest payable   5      (224)     -          (224)      (251)     -         (251)     (766)     -         (766)
  Net                       2,798     (45,171)   (42,373)   4,549     127,143   131,692   1,969     107,004   108,973
  return/(deficit)
  on ordinary
  activities
  before taxation
  Tax on ordinary    6      (141)     -          (141)      180       -         180       380       -         380
  activities
  Return/(deficit)          2,657     (45,171)   (42,514)   4,729     127,143   131,872   2,349     107,004   109,353
  on ordinary
  activities after
  tax for the year
  Minority                  (2)       104        102        -         (99)      (99)      (5)       (48)      (53)
  interest -
  equity
  Return/(deficit)          2,655     (45,067)   (42,412)   4,729     127,044   131,773   2,344     106,956   109,300
  on ordinary
  activities after
  tax and minority
  interest for the
  year
  attributable to
  equity
  shareholders
  Dividends          7      (1,841)   -          (1,841)    (3,886)   -         (3,886)   (1,484)   -         (1,484)
  Final dividend
  of 1.80p (2000:
  3.80p; 1999:
  1.50p) per
  ordinary share
  Surplus/(deficit)         814       (45,067)   (44,253)   843       127,044   127,887   860       106,956   107,816
  transferred
  to/(from)
  reserves
  Return per         8      2.60p     (44.07)p   (41.47)p   4.68p     125.87p   130.55p   2.35p     107.26p   109.61p
  Ordinary Share

</TABLE>


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 and include acquisitions as detailed in
note 11. No operations were discontinued in the year.

The notes on pages 34 to 48 form an integral part of these accounts.

* For the year ended 30 June 1999, this comprises income from treasury bills
  of GBP2,993,000 and other income of GBP620,000.


                                       48


Balance Sheets

<TABLE>
<CAPTION>

                                              At 30 June 2001             At 30 June 2000              At 30 June 1999
                                              Group   Company             Group   Company             Group    Company
                            Notes           GBP'000   GBP'000           GBP'000   GBP'000           GBP'000    GBP'000
<S>                             <C>         <C>       <C>               <C>       <C>               <C>        <C>
  Investments
  Venture funds and             9           387,030   362,859           327,210   290,805           226,368    196,978
  co-investments
  Fixed interest                9            24,853    24,853           126,309   126,309            84,067     84,067
  investments
  Investment in                11                 -    30,194                 -    39,539                 -     29,778
  subsidiaries
                                            411,883   417,906           453,519   456,653           310,435    310,823
  Current assets
  Debtors                      12             2,933       808             2,903     1,144            16,866     16,863
  Cash at bank                                1,093        16                48        44                42         35
  Short-term deposits                         6,098       433            10,232     8,362            33,228     32,446
                                             10,124     1,257            13,183     9,550            50,136     49,344
  Current liabilities
  Creditors: amounts        13(a)             4,747     2,291             5,087     5,078            26,941     26,929
  falling due within one
  year
  Net current assets                          5,377   (1,034)             8,096     4,472            23,195     22,415
  Total assets less                         417,260   416,872           461,615   461,125           333,630    333,238
  current liabilities
  Creditors: amounts        13(b)                 -         -                 -         -          (10,753)   (10,753)
  falling due after more
  than one year
  (including convertible
  bonds)
  Minority interest -                         (100)         -             (100)         -             (100)          -
  non-equity
  Minority interest -                         (288)         -             (390)         -             (292)          -
  equity
  Net assets                                416,872   416,872           461,125   461,125           322,485    322,485
  Capital and reserves
  Called up share capital      16           102,266   102,266           102,266   102,266            98,966     98,966
  Share premium account        17             7,453     7,453             7,453     7,453                 -          -
  Capital redemption           18             3,204     3,204             3,204     3,204             3,204      3,204
  reserve
  Share purchase reserve       19            92,054    92,054            92,054    92,054            92,054     92,054
  Capital reserve              20           208,935   208,707           254,002   253,543           126,958    126,475
  Revenue reserve              21             2,960     3,188             2,146     2,605             1,303      1,786
  Equity shareholders'         22           416,872   416,872           461,125   461,125           322,485    322,485
  funds
  Net asset value per          23            407.6p                      450.9p                      325.9p
  ordinary share
</TABLE>


The notes on pages 34 to 48 form an integral part of these accounts.

                                       49

Consolidated Cashflow Statement
<TABLE>
<CAPTION>


                                                          For the year ended   For the year ended   For the year ended
                                                                30 June 2001         30 June 2000         30 June 1999
                                                   Note              GBP'000              GBP'000              GBP'000
<S>                                                 <C>                 <C>                  <C>                  <C>
  Operating activities
  Income received from investments                                     5,623                5,127                3,122
  Bank interest received                                                 570                  364                  654
  Administration fee income received                                      35                    -                    -
  Administrative expenses                                            (3,463)                (971)              (1,020)
  Net cash inflow from operating activities          24                2,765                4,520                2,756
  Returns on investments and servicing of
  finance
  Interest paid                                                        (224)                 (63)                 (13)
  Convertible bond interest paid                                           -                (376)                (753)
  Net cash outflow from returns on investments                         (224)                (439)                (766)
  and servicing of finance
  Taxation
  UK tax recovered/(paid)                                                339                  521                (322)
  Withholding tax paid                                                 (141)                    -                    -
  Foreign tax paid                                                      (13)                    -                    -
  Total tax recovered/(paid)                                             185                  521                (322)
  Capital expenditure and financial investment
  Purchase of fixed interest securities                            (351,516)            (756,631)            (493,844)
  Purchase of subsidiaries                                              (36)                    -                    -
  Sale of fixed interest securities                                  452,217              706,525              485,857
  Calls paid                                                       (156,024)            (161,666)             (49,721)
  Capital distributions received                                      53,647              186,082               80,930
  Net cash (outflow)/inflow from capital                             (1,712)             (25,690)               23,222
  expenditure and financial investment
  Equity dividends paid
  Dividends                                                          (4,182)              (1,484)              (1,287)
  Total dividends paid                                               (4,182)              (1,484)              (1,287)
  Financing
  Realised exchange (losses)/gains on currency                             -                (415)                  167
  balances
  Shares purchased for cancellation                                        -                    -              (4,983)
  Capital expenses                                                         -                  (3)                 (58)
  Repayment of loan facility                                               -                    -                    -
  Stamp duty                                                               -                    -                 (25)
  Net cash outflow from financing                                          -                (418)              (4,899)
  Net cash (outflow)/inflow                                          (3,168)             (22,990)               18,704
</TABLE>

                                       50


Reconciliation of net cashflow to movement in net funds

<TABLE>
<CAPTION>


                                                         For the year ended   For the year ended   For the year ended
                                                               30 June 2001         30 June 2000         30 June 1999
                                                  Note              GBP'000              GBP'000              GBP'000
<S>                                                <C>               <C>                 <C>                    <C>
   (Decrease)/increase in cash during the year                      (3,168)             (22,990)               18,704
   Cash acquired on purchase of subsidiaries                            834                    -                    -
   Exchange loss on currency balances                                 (755)                    -                    -
   Debt converted into equity                                             -               10,753                    -
   Change in net funds                                              (3,089)             (12,237)               18,704
   Net funds at the beginning of the year                            10,280               22,517                3,813
   Net funds at the end of the year                 25                7,191               10,280               22,517

</TABLE>


The notes on pages 34 to 48 form an integral part of these accounts.

                                       51


                             NOTES TO THE ACCOUNTS

The principal accounting policies of SVIIT for the years ended 30 June 1999,
30 June 2000 and 30 June 2001 are set out below. These have been extracted
without material adjustment from the Company's audited accounts for the year
ended 30 June 2001.


1.   Accounting policies of SVIIT

(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)  Company revenue account
The Company will not present its own revenue account but, as permitted by
section 230 of the Companies Act 1985, will disclose information
supplementing the revenue account as specified in paragraphs 52 to 57 of
Schedule 4 of the Companies Act 1985.

(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 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 funds are valued
by the Directors at the balance sheet date by valuing the underlying
investments comprising the portfolios of the Schroder Ventures Funds in
accordance with the valuation policies set out below, as adjusted, where
appropriate, for other assets and liabilities of the Schroder Ventures funds.
The valuation policies of the Company are consistent with the current
guidelines issued by the British Venture Capital Association ("BVCA"). 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.

Quoted investments

All investments listed on recognised stock exchanges are valued at the quoted
mid-market price at the balance sheet date. If an investment is subject to
restrictions affecting its disposal, or if the holding is significant in
relation to the issued share capital, a discount of generally between 0 per
cent. and 50 per cent. to that price will be applied.

Unquoted equity investments

(i)  All Early Stage Equity investments are valued at cost unless one
     of the following applies:
     (1)  performance indicates that there has been a permanent
          and significant diminution in the valuation of the investment. If this
          is the case, provisions in incremental tranches of 25percent. of
          original cost will be made; or

    (2)   a significant transaction involving an independent
          third party at arm's length values the investment at a materially
          different value.

(ii) All Development Stage Equity investments are valued at cost, or
     cost less a provision, for at least one year unless this basis of valuation
     is unsustainable.

     Thereafter, they will be valued as follows:
     (1)  where available, either on the basis of a significant
          transaction by an independent third party in the equity of the
          investee company or an independent third party valuation of the
          equity; or

     (2)  where a significant portion of the assets are held in
          real property on the basis of discounted net asset values; or

                                       52


     (3)  where the investee company is performing significantly
          below expectations, at cost less provisions in incremental tranches of
          25 per cent.; or

     (4)  where the company is profitable and performing
          satisfactorily, (A) on the basis of earnings (B)capitalised at an
          appropriate price-earnings multiple:
          (A)          the earnings of the investee company will be
                       based on the latest audited accounts or management
                       accounts where appropriate; and
          (B)          the price-earnings multiple:
                       -          will take into account the capital
                                  and debt structure of the investee company
                       -          will be based on either comparable
                                  company or industry sector multiples taken
                                  from the relevant stock exchange
                       -          will be subject to a minimum
                                  discount of 25 per cent. to reflect risk, the
                                  illiquidity of the investment
                                  and the approximate nature of a valuation
                                  based on earnings unless early
                                  realisation is expected in which case a
                                  smaller discount will be applied.


Unquoted loan stock and preference shares

Loan stock and preference shares will be valued at cost plus any accrued
interest and redemption premia less, in cases where the investee company is
performing significantly below expectations, any provisions in incremental
tranches of 25 per cent.

Carried Interest and management fees

For the purpose of valuing the Company's holdings in the various Schroder
Ventures funds, management fees due to Schroder Ventures will be accounted
for on the accruals basis. An estimate of Carried Interest, the allocation to
Schroder Ventures of 20 per cent. 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
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 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 funds
will be credited to the Company's capital reserve when they are declared.

(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 a 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)  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. 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 (d) above.

                                       53


(i)  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.


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.



2.   Income

<TABLE>
<CAPTION>

                                                  For the              For the
                                               year ended           year ended
                                                  30 June              30 June
                                                     2001                 2000
                                                    Group                Group
                                                  GBP'000              GBP'000
<S>                                                   <C>                  <C>
Income from fixed interest securities               3,564                5,235
Dividends                                           1,403                  456
Interest receivable and similar income                541                  432
Income from administration services                   108                    -

                                                    5,616                6,123

</TABLE>



3.   Expenses

<TABLE>
<CAPTION>

                                                  For the              For the
                                               year ended           year ended
                                                  30 June              30 June
                                                     2001                 2000
                                                    Group                Group
                                                  GBP'000              GBP'000
<S>                                                   <C>                  <C>
Administration and secretarial fees                   376                  378
Bank loan facility fees                               359                  217
Staff costs                                            93                    -
Directors' remuneration                               149                   85
General expenses                                      407                  340
Enlargement of operations costs                       840                    -
EDR listing costs                                     230                  259
Auditors' remuneration
- audit                                                31                   26
- non-audit*                                          109                   18
                                                    2,594                1,323

</TABLE>

*Fees for non-audit services include GBP90,000 in respect of the enlargement of
operations, (2000: Include GBP12,000 in respect of the EDR listing).


                                       54




4.    Directors' remuneration

<TABLE>
<CAPTION>


                    For the year    For the year  For the year    For the year
                   ended 30 June        ended 30      ended 30   ended 30 June
                      2001 Group       June 2001     June 2000    2000 Company
                         GBP'000         Company Group GBP'000         GBP'000
<S>                          <C>             <C>           <C>             <C>
J J McLachlan                 50              50            25              25
N E H Ferguson                15               5            10              10
C J Govett                    18              18            10              10
A J Habgood                   18              18            10              10
E W Koning                    17              17            10              10
D Raeburn                      1               1             -               -
I P Sedgwick                  15              15            10              10
J Strangfeld                  15              15            10              10
                             149             139            85              85

</TABLE>

Details on Directors' emoluments are contained in the separate Remuneration
Report on pages 28 and 29.



5.    Interest payable

<TABLE>
<CAPTION>
                                              For the              For the
                                           year ended           year ended
                                              30 June              30 June
                                                 2001                 2000
                                                Group                Group
                                              GBP'000              GBP'000
<S>                                               <C>                  <C>
Convertible bond interest                           -                  188
Other interest                                    224                   63
                                                  224                  251


</TABLE>



6.    Taxation

The charge for taxation on the net surplus of revenue for the year is made up
as follows:

<TABLE>
<CAPTION>
                                                  For the              For the
                                               year ended           year ended
                                                  30 June              30 June
                                                     2001                 2000
                                                    Group                Group
                                                  GBP'000              GBP'000
<S>                                                   <C>                  <C>
Corporation tax                                         -                   34
Less: relief for overseas tax                           -                 (34)
                                                        -                    -
Overseas tax                                          141                   41
Tax over-provided in the previous years                 -                (221)

                                                      141                (180)
 </TABLE>

                                       55


There are no profits chargeable to corporation tax in the current year
because 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. The amount of GBPNil (2000: GBP221,000) credited as an
adjustment to prior year's tax charges relates to similar excess management
expenses which reduce the Company's profits chargeable to corporation tax
provided in earlier years.

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.




7.    Dividends
<TABLE>
<CAPTION>

                                                For the              For the
                                             year ended           year ended
                                                30 June              30 June
                                                   2001                 2000
                                                  Group                Group
                                                GBP'000              GBP'000
<S>                                                 <C>                  <C>
Final dividend of 1.80p (2000:                    1,841                3,886
3.80p) pershare

</TABLE>

The final dividend is based on 102,265,699 (2000: 102,265,699) ordinary
shares in issue and will be paid to shareholders on 26 November 2001, subject
to their approval at the Annual General Meeting.




8.    Return per Ordinary Share
<TABLE>
<CAPTION>

                                     For the year ended 30 June 2001   For the year ended 30 June 2000

                                      Revenue    Capital      Total     Revenue   Capital     Total
<S>                                       <C>        <C>        <C>         <C>       <C>       <C>
Return per ordinary share               2.60p   (44.07)p   (41.47)p       4.68p   125.87p   130.55p


</TABLE>

The basic revenue return per ordinary share is based on the net return on
ordinary activities after interest payable, taxation and minority interest of
GBP2,655,000 (2000: GBP4,729,000) and on 102,265,699 ordinary shares (2000:
100,931,523) being the weighted average number of shares in issue during the
year.

The capital return per ordinary share is based on the net deficit for the
year of GBP45,067,000 (2000: surplus of GBP127,044,000) and on 102,265,699
ordinary shares (2000: 100,931,523) being the weighted average number of
shares in issue during the year.


9.    Investments (Group)
<TABLE>
<CAPTION>

                             2001 Schroder       2001 Fixed       2001 Total
                       Ventures' Funds and         Interest        Portfolio
                            Co-Investments        Portfolio
                                   GBP'000          GBP'000          GBP'000
<S>                                    <C>              <C>              <C>
Cost brought forward               294,775          123,585          418,360
Unrealised gain brought forward     32,435            2,724           35,159
Valuation at the
beginning of the year              327,210          126,309          453,519
Calls and purchases payable        155,371          351,516          506,887



Distributions and
sales receivable                  (51,889)        (452,218)        (504,107)
Realised gain/(loss)                 5,465            (691)            4,774
Unrealised loss                   (49,127)             (63)         (49,190)
Valuation carried forward          387,030           24,853          411,883

</TABLE>

                                       56



Gains on investments
<TABLE>
<CAPTION>

                                 For the year ended 30   For the year ended 30
                                             June 2001               June 2000
                                               GBP'000                 GBP'000
<S>                                                <C>                     <C>
Realised gain on
investments based on
historical cost                                 42,006                 126,810
Less: amounts recognised as
unrealised in previous year                   (37,232)                (40,325)
Realised gain based on
carrying value at previous
balance sheet date                               4,774                  86,485
Net movement in unrealised (losses)/gains     (49,190)                  41,076
Total (losses)/gains on investments           (44,416)                 127,561


</TABLE>




10.    Geographical analysis of investments
<TABLE>
<CAPTION>

                                At 30 June 2001            At 30 June 2000
                                  Group   Company            Group   Company
                                GBP'000   GBP'000          GBP'000   GBP'000
<S>                                 <C>       <C>              <C>       <C>
Schroder Ventures
Funds and
Co-Investments
Europe
United Kingdom                   16,892    15,795           22,340    20,237
France                            2,427     2,427            5,825     5,825
Germany                          10,122     5,415           15,031     8,974
Italy                             4,995     4,995           25,072    25,072
Spain                             1,994     1,994            2,083     2,083
Pan Europe                      209,470   209,470          151,087   151,087
Total Europe                    245,900   240,096          221,438   213,278
Asia
Asia Pacific                     30,700    16,447           39,472    15,989
Japan                            21,700    17,586           14,226     9,464
Total Asia                       52,400    34,033           53,698    25,453
North America
Canada                           31,710    31,710           16,002    16,002
United States*                   57,020    57,020           36,072    36,072
Total Americas                   88,730    88,730           52,074    52,074
Total Venture Funds             387,030   362,859          327,210   290,805
and Co-Investments

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

Included in the value of Total Ventures Funds and Co-Investments of GBP387.0m
are listed investments amounting to GBP46.1m.


Fixed Interest Investments
Sterling denominated              2,222     2,222           32,332    32,332
Euro denominated                 12,300    12,300           60,624    60,624
US dollar denominated            10,331    10,331           33,353    33,353
Total Fixed Interest Investments 24,853    24,853          126,309   126,309
Total Investment Portfolio      411,883   387,712          453,519   417,114

</TABLE>


                                       57



Significant interests in Investment Funds

Details of investments in which the Company or Group has an interest of 10
per cent. or more of any class of share/units are detailed in the list of
investments on pages 18 to 21. All of these funds are managed or advised by
Schroder Ventures.



11.    Investments in Subsidiaries
<TABLE>
<CAPTION>

                                For the year ended 30   For the year ended 30
                                    June 2001 Company       June 2000 Company
                                              GBP'000                 GBP'000
<S>                                               <C>                     <C>
Cost at the beginning of the year              24,012                  24,012
Acquisitions at cost                                -                       -
Capital injection                                 750                       -
Cost at the end of the year                    24,762                  24,012
Net unrealised gain on investment               5,432                  15,527
Market value at the end of the year            30,194                  39,539


</TABLE>





Subsidiary undertakings at 30 June 2001:
<TABLE>
<CAPTION>


                      Country of     Number and     Group    Capital       Net
                   registration,       class of   holding        and   revenue
                   incorporation   shares/units         %   reserves     after
                   and operation    held by the                at 30   tax for
                                          Group                 June       the
                                                                2001      year
                                                             GBP'000     ended
                                                                       30 June
                                                                          2001
                                                                       GBP'000
<S>                          <C>            <C>       <C>        <C>       <C>
Company and
business
Platinum
Trust (unit             Guernsey     23,112,000        99     29,828       233
trust)                             'A' units(1)
                                    900,000 'B'        90
                                       units(1)
Schroder
Ventures
(London)                     UK         750,000       100        751      -(4)
Limited                                Ordinary
                                      Shares(2)
- advisory
and
administration
services
Schroder
Ventures
North America
Inc.                        US     500 Common        100         56      -(4)
                                     Shares(3)
- broker/dealer

(1)    On termination of the 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.

(3)    Schroder Ventures North America Inc. ("SVNA") is a subsidiary of SVLL.
       SVLL acquired SVNA on 18 June 2001 for $50,000 and subsequently paid the
       Schroder Group a further $28,553 in respect of an increase in required
       capital for regulatory reasons.

(4)    For the 12 days from 18 June 2001.

</TABLE>

                                       58


12.   Debtors
<TABLE>
<CAPTION>

                                          2001      2001    2000      2000
                                         Group   Company   Group   Company
                                       GBP'000   GBP'000 GBP'000   GBP'000
<S>                                        <C>       <C>     <C>       <C>
Amounts falling due within one year:
Deferred tax                                18         -       -         -
Venture fund distributions receivable        -         -   1,758         -
Interest receivable                         75        71     761       760
Prepayments and other debtors              757       737      42        42
Advance corporation tax recoverable          -         -     322       322
Corporation tax recoverable                  -         -      20        20
Accrued administration fee income        2,051         -       -         -
Other                                       32         -       -         -
                                         2,933       808   2,903     1,144

</TABLE>

13.    Creditors

<TABLE>
<CAPTION>
                                         2001        2001      2000        2000
                                        Group     Company     Group     Company
                                      GBP'000     GBP'000   GBP'000     GBP'000
<S>                                       <C>         <C>       <C>         <C>
Amounts falling due within one year:
Other creditors and accruals            2,906         450       547         538
Proposed final dividend                 1,841       1,841     3,886       3,886
Venture Fund calls payable                  -           -       654         654
                                        4,747       2,291     5,087       5,078


</TABLE>

The Group has in place a multicurrency revolving loan facility of euro225
million which replaced the previous euro140 million facility. No drawdowns
have been made under either facility during the year (2000: euroNil).


14.    Contingent Liabilities

The Company guarantees any drawings taken out by Platinum Trust under the
euro225 million loan facility (GBP135.4m, translated at the balance sheet
date). At 30 June 2001, euroNil was drawn under the facility (2000: euroNil).


                                       59



15.    Capital Commitments

At 30 June 2001, the Company had uncalled commitments to its venture fund
investments as follows:

<TABLE>
<CAPTION>
                                    Uncalled commitment   Uncalled commitment*
                                       (local currency)                   GBPm
<S>                                                 <C>                    <C>
Schroder Ventures European Fund               euro26.4m                   15.9
Schroder Ventures European Fund II           euro499.5m                  300.7
Schroder Ventures International Life
Sciences Fund II                                 $29.4m                   20.9
Schroder Ventures US Fund                        $40.0m                   28.4
Schroder Ventures Asia Pacific Fund              $94.1m                   67.0
The Japan Venture Fund III                   Y 1,105.5m                    6.3
Schroder Canadian Buy-Out Fund II                C$0.9m                    0.4
Schroder Canadian Buy-OutFund III               C$34.9m                   16.4
Schroder UK Venture Fund IV                     GBP0.3m                    0.3
Total                                                                GBP456.3m

*Based on exchange rates at 30 June 2001.

</TABLE>


16.    Share Capital
<TABLE>
<CAPTION>

                                          2001       2001       2000       2000
                                         Group    Company      Group    Company
                                       GBP'000    GBP'000    GBP'000    GBP'000
<S>                                        <C>        <C>        <C>        <C>
Authorised:
150,000,000 shares of GBP1.00 each     150,000    150,000    150,000    150,000
Allotted, Called Up and Fully Paid:
Opening balance of 102,265,699
(2000: 98,966,319) shares of GBP1.00
each                                   102,266    102,266     98,966     98,966
Issued on conversion of 'B' bonds            -          -      3,300      3,300
Closing balance of 102,265,699
(2000: 102,265,699) shares of GBP1.00
each                                   102,266    102,266    102,266    102,266

</TABLE>


Options over ordinary shares

Options over 2,841,766 shares were granted during the year ended 30 June
2001. No options were exercised during the year. At 30 June 2001, 2,841,766
options to subscribe for ordinary shares were outstanding:

<TABLE>
<CAPTION>

Exercise price                                       2001 Number   2000 Number
<S>                                                          <C>           <C>
410.0 pence per share                                  2,813,407             -
405.5 pence per share                                     28,359             -
                                                       2,841,766             -
</TABLE>

                                       60


17.    Share Premium Account
<TABLE>
<CAPTION>

                                       2001        2001      2000        2000
                                      Group     Company     Group     Company
                                    GBP'000     GBP'000   GBP'000     GBP'000
<S>                                     <C>         <C>       <C>         <C>
Balance brought forward               7,453       7,453         -           -
Premium on conversion of 'B' bonds        -           -     7,453       7,453
Balance carried forward               7,453       7,453     7,453       7,453

</TABLE>



18.    Capital Redemption Reserve
<TABLE>
<CAPTION>

                                            2001       2001     2000      2000
                                           Group    Company    Group   Company
                                         GBP'000    GBP'000  GBP'000   GBP'000
<S>                                          <C>        <C>      <C>       <C>
Balance brought forward and carried        3,204      3,204    3,204     3,204
forward

</TABLE>

19.    Share Purchase Reserve
<TABLE>
<CAPTION>

                                           2001       2001      2000      2000
                                          Group    Company     Group   Company
                                        GBP'000    GBP'000   GBP'000   GBP'000
<S>                                      <C>        <C>       <C>       <C>
Balance brought forward and carried      92,054     92,054    92,054    92,054
forward

</TABLE>


20.   Capital Reserve

<TABLE>
<CAPTION>

                                       2001       2001       2000       2000
                                      Group    Company      Group    Company
                                    GBP'000    GBP'000    GBP'000    GBP'000
<S>                                     <C>        <C>        <C>        <C>
Realised gains brought forward      219,005    207,129     80,093     70,393
Realised gains on venture fund
distributions                         5,465      5,256     87,909     84,215
Transfer on disposal                 37,232     37,060     52,944     54,442
Other realised losses                     -          -        (3)        (3)
Realised losses on currency
balances                              (755)      (755)      (415)      (395)
Realised exchange losses on
sale of fixed interest
securities                            (691)      (691)    (1,523)    (1,523)
Realised gains carried forward      260,256    247,999    219,005    207,129
Unrealised gains brought forward     34,997     46,414     46,865     56,082
(Decrease)/increase in
unrealised gains on venture
funds                              (49,127)   (38,488)     38,451     32,288
Transfer on disposal               (37,232)   (37,060)   (52,944)   (54,442)
(Decrease)/increase in
unrealised gains on subsidiary
undertakings                              -   (10,095)          -      9,762
(Decrease)/increase in
unrealised exchange gains on
fixed interest securities              (63)       (63)      2,724      2,724
Minority interest - equity              104          -       (99)          -
Unrealised (losses)/gains
carried forward                    (51,321)   (39,292)     34,997     46,414
                                    208,935    208,707    254,002    253,543

</TABLE>


                                       61

21.     Revenue Reserve
<TABLE>
<CAPTION>

                                   2001      2001      2000        2000
                                  Group   Company     Group     Company
                                GBP'000   GBP'000   GBP'000     GBP'000
<S>                                 <C>       <C>       <C>         <C>

Balance brought forward           2,146     2,605     1,303       1,786
Transfer from revenue account       814       583       843         819
Balance carried forward           2,960     3,188     2,146       2,605


</TABLE>

As stated in note 1(b), the Company has not presented its own revenue
account. The net revenue after tax and before dividends dealt with in the
accounts of the parent company was GBP2,424,000 (2000: GBP4,705,000).


22.   Reconciliation of Movements in Shareholders' Funds

<TABLE>
<CAPTION>
                                         2001       2001      2000      2000
                                        Group    Company     Group   Company
                                      GBP'000    GBP'000   GBP'000   GBP'000
<S>                                       <C>        <C>       <C>       <C>
Net revenue available for distribution  2,655      2,424     4,729     4,705
Dividends                             (1,841)    (1,841)   (3,886)   (3,886)
                                          814        583       843       819
Non-distributable capital
(loss)/gain for the year             (45,067)   (44,836)   127,044   127,068
Shares issued on conversion of
'B' bonds                                   -          -     3,300     3,300
Share premium on conversion of
'B' bonds                                   -          -     7,453     7,453
Net addition to shareholders'
funds                                (44,253)   (44,253)   138,640   138,640
Shareholders' funds brought
forward                               461,125    461,125   322,485   322,485
Shareholders' funds carried
forward                               416,872    416,872   461,125   461,125

</TABLE>

23.   Net Asset Value per Ordinary Share

Calculation of the net asset value per share is based on net assets of
GBP416,872,000 (2000:GBP461,125,000) and on 102,265,699 (2000: 102,265,699)
ordinary shares in issue at the year end.


24.   Reconciliation of Operating Profit to Net Cash Inflow from Operating
      Activities

<TABLE>
<CAPTION>

                                                 2001      2000      1999
                                                Group     Group     Group
                                              GBP'000   GBP'000   GBP'000
<S>                                               <C>       <C>       <C>
Net return before finance costs and taxation    3,022     4,800     2,735
(Increase)/decrease in accrued income             686     (632)       163
Decrease/(increase) in debtors                  (659)        22        30
Increase/(decrease) in creditors                (284)       330     (172)
Net cash inflow from operating activities       2,765     4,520     2,756

</TABLE>

                                       62


25.   Analysis of Changes in Net funds

<TABLE>
<CAPTION>
                   At 1 July      Exchange     Cash acquired   Cash Flow     At 30    At 1 July   Cash Flow      At 30
                        2000       loss on    on purchase of                  June         1999              June 2000
                                  currency      subsidiaries                  2001
                                  balances
                     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              48         (755)               834         966     1,093           42           6         48
Short-term deposits   10,232             -                 -     (4,134)     6,098       33,228    (22,996)     10,232

                      10,280         (755)               834     (3,168)     7,191       33,270    (22,990)     10,280
Debt due:
Within one
year                       -             -                 -           -         -            -           -          -
After more
than one year              -             -                 -           -         -     (10,753)      10,753          -
Net funds             10,280         (755)               834     (3,168)     7,191       22,517    (12,237)     10,280

</TABLE>


26.    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 cent. per annum of the first GBP50 million of net assets, (ii)
0.06 per cent. per annum of the next GBP50 million of such net assets and (iii)
0.04 per cent. of the remaining net assets. The agreement is subject to a 4
month notice period. The total fees, including VAT, paid or payable to SIM
for these services in respect of the year to 30 June 2001 was GBP267,000 (2000:
GBP257,000), of which GBP132,000 was outstanding at the year end.

Furthermore during the year SIM provided investment advice in respect of the
Company's enlargement of operations. The total fee including VAT paid or
payable for these services in respect of the ended 30 June 2001 was GBP88,000
of which GBP88,000 was outstanding at year end.

One of the Company's bankers is Schroder & Co. Limited. During the year
banking facilities provided by Schroders changed from J. Henry Schroder & Co.
Limited to Schroder & Co. Limited. The total interest received in the year to
30 June 2001 was GBP247,000 (2000: GBP325,000), and the cash balance held at 30
June 2001 was GBP433,000 (2000: GBP8,362,000).

In consideration for its management of the Company's fixed interest
portfolio, Schroder Investment Management (UK) Limited receives a fee based
on the average value of the Company's month-end cash and fixed interest
portfolio, calculated at the rate of 0.10 per cent. per annum on the first
GBP75 million of assets, 0.05 per cent. on the next GBP75 million and 0.03 per
cent. 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 30 June 2001 was GBP78,000 (2000: GBP121,000), of which GBP43,000 was
outstanding at the year end.

SIM has also provided investment trust dealing services. The total fees paid
or payable in the year to 30 June 2001 was GBP11,000 (2000: GBP2,000), of which
GBP4,000 was outstanding at the year end.

Mr J J McLachlan and Mr N E H Ferguson are members of the Advisory Committees
of certain of the Schroder Ventures' funds in which the Company invests.

Mr N E H Ferguson and members of his family have an interest in the Carried
Interest in respect of certain Schroder Ventures' funds, awarded prior to
January 2001.

                                       63


27.    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 Schroder
Ventures' buy-out and development capital funds, which are managed and
advised by Schroder Ventures. In addition, the Company holds treasury bills,
cash and short-term deposits and various items such as debtors and creditors
that arise directly from its operations. The 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.


Interest rate risk

The Company's revenue will be affected by changes in prevailing interest
rates since the majority of its income derives from treasury bills and bank
deposit interest. The effect of interest rate changes on the valuation of
investments forms part of valuation risk, which is considered separately
below.


Financial assets of the Group

<TABLE>
<CAPTION>

                     Floating Rate   Fixed Rate       Non-interest     Total
                                                           Bearing
                           GBP'000      GBP'000            GBP'000   GBP'000
<S>                            <C>          <C>                <C>       <C>

Currency
denomination of
assets as at 30
June 2001:
Sterling                     6,940        2,222             16,892    26,054
Euro                            17       12,300            229,008   241,325
US dollar                      229       10,331            119,430   129,990
Japanese Yen                     -            -             21,700    21,700
Other                            5            -                  -         5
                             7,191       24,853            387,030   419,074

</TABLE>

<TABLE>
<CAPTION>
                     Floating Rate   Fixed Rate       Non-interest     Total
                                                           Bearing
                           GBP'000      GBP'000            GBP'000   GBP'000
<S>                            <C>          <C>                <C>       <C>
Currency
denomination of
assets as at 30
June 2000:
Sterling                     2,454       32,332             22,340    57,126
Euro                         7,763       60,624            199,098   267,485
US dollar                       48       33,353             91,546   124,947
Japanese Yen                     -            -             14,226    14,226
Other                           15            -                  -        15
                            10,280      126,309            327,210   463,799

</TABLE>



                                       64

The floating rate assets consist of short-term deposits. The non-interest
bearing assets represent the venture fund portfolio and co-investments. 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:

Fixed rate financial assets
<TABLE>
<CAPTION>


                30 June 2001                    30 June 2000
                    Weighted        Weighted        Weighted        Weighted
                     average         average         average         average
               interest rate       period on   interest rate       period on
                               which rate is                   which rate is
                                       based                           based
<S>                      <C>             <C>             <C>             <C>
Euro                   4.26%         58 days           4.23%         93 days
US dollars             3.43%         68 days           6.71%         58 days
Sterling               4.56%         45 days           5.73%         73 days

</TABLE>

The Company does not have any borrowings at the year end, although it does
have in place a loan facility of euro225 million with The Royal Bank of
Scotland 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.


Valuation risk

The Company's exposure to valuation risk comprises mainly movements in the
value of its underlying investments. A breakdown of the venture 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 34 to 36, 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 30 June 2001,
a 10 per cent. movement in the valuation of the Group's venture fund
portfolio and co-investments would result in a 9 per cent. 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 Schroder Ventures' 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
Schroder Ventures' funds. In a majority of the Schroder Ventures' 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.


                                     65


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


                                       66


                        PART VI - SUBSCRIPTION AND SALE


Pursuant to subscription agreements dated 21 November 2001 (the "Subscription
Agreements"), the Subscribers agreed with the Issuer to subscribe for the
Bonds at 100 per cent. of their principal amount. Each of the Subscribers has
made certain representations and agreements with the Issuer regarding the
offer, transfer and resale of the Bonds as set out in section 2 below.

1.   Placing

Pursuant to an agreement dated 21 November 2001 (the "Placing Agreement")
between the Issuer and Dresdner Kleinwort Wasserstein (the"Placing Agent"),
the Issuer made payments to the Placing Agent totalling GBP266,758.35
(comprised of a placing fee of GBP50,000, commission calculated at 2 per cent.
of the value of the Bonds placed and amounts for out-of-pocket expenses) for
the procurement by the Placing Agent of investors to subscribe and pay for
the Bonds. The Issuer also made payments of GBP118,000 and GBP66,000 to Schroder
& Co. Limited and Schroder & Co. Bank AG, respectively, for placing fees in
respect of the Bonds.

2.    Selling restrictions

(a)   United States

The Bonds, the Ordinary Shares and the EDRs have not been and will not be
registered under the 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
certain transactions exempt from the registration requirements of the
Securities Act. The Company has registered the Ordinary Shares under the
United States Securities Exchange Act of 1934 in the United States.
Each Subscriber has represented and agreed that the Bonds 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; (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 the 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 the Bonds.

If investing on behalf of an employee benefit plan, each Subscriber has
further represented and warranted that, to the best of its knowledge:

(i)    neither the Issuer nor any of its affiliates is a fiduciary of such plan
       with respect to the Subscriber's proposed investment within the meaning
       of Section 3(21) of the Employee Retirement Income Security Act of 1974
       ("ERISA"), and

(ii)   such persons are not parties in interest or disqualified persons, as
       defined in ERISA Section 3(14) and Section 4975(e)(2) of the U.S.
       Internal Revenue Code of 1986, as amended, respectively, with respect to
       such plan, or, if they are, the following conditions are satisfied:

       (a)    the terms of the transaction are negotiated on behalf of the plan
              by, or under the general authority and direction of, a "qualified
              professional asset manager" (as defined in Section V(a) of ERISA
              Prohibited Transaction Class Exemption ("PTCE) 84-14) ("QPAM")
              that satisfies the conditions in Section I(g) of PTCE 84-14
              (relating to conviction of certain crimes), and the QPAM makes the
              decision on behalf of the plan to enter into the transaction; and


                                     67


       (b)    the Issuer is not an "affiliate" (as defined in Section V(c) of
              PTCE 84-14) ("Affiliate") of a party that has, or during the
              immediately preceding one (1) year has exercised, the authority
              either (A) to appoint or terminate the QPAM as manager of any of
              the assets of the plan; or (B) to negotiate the terms of the
              management agreement with the QPAM, including renewals or
              modifications thereof, on behalf of the plan; and

       (c)    the Issuer is not "related to" the QPAM (as defined in Section
              V(h) of PTCE 84-14); and

       (d)    the assets of the plan that are managed by the QPAM, when combined
              with the assets of other plans established or maintained by the
              same employer or Affiliate thereof or by the same employee
              organisation, and managed by the QPAM, do not represent more than
              20 per cent. of the total client assets managed by the QPAM at the
              time of the transaction.

In addition, until 40 days after the commencement of the offering of the Bonds,
an offer or sale of the Bonds within the United States by any dealer that is not
participating in the offer may violate the registration requirements of the
Securities Act.

(b)    United Kingdom

Each subscriber has represented and agreed that:

(i)    it has not offered or sold and will not offer or sell any Bonds to
       persons in the United Kingdom prior to any admission of the Bonds to
       listing in accordance with Part VI of 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;

(ii)   it has complied and will comply with all applicable provisions of the
       FSMA with respect to anything done by it in relation to the Bonds in,
       from or otherwise involving the United Kingdom; and

(iii)  it has only issued or passed on, in the United Kingdom any document
       received by it in connection with the issue of the Bonds, other than any
       document which consists of or any part of listing particulars,
       supplementary listing particulars or any other document required or
       permitted to be published by Listing Rules under Part VI of the FSMA, to
       a person who is of a kind described in Article 11(3) of the Financial
       Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or
       is a person to whom the document may otherwise lawfully be issued or
       passed on.

Each Subscriber has also certified that the Bonds subscribed  by them will
initially be owned by a person that (i) is not, nor is it a nominee for,
Euroclear, Clearstream, Luxembourg or any other person providing a clearance
service within Section 96 of the Finance Act 1986 of the United Kingdom and
(ii) is not, nor is it a nominee or agent for a person whose business is or
includes issuing depositary receipts within Section 93 of the Finance Act
1986 of the United Kingdom.


General

The Issuer makes no representation that the Bonds may at any time lawfully be
sold in compliance with any applicable registration or other requirements in
any jurisdiction, or pursuant to any exemption available thereunder, or
assumes any responsibility for facilitating any such sale.


                                       68


              PART VII - CERTAIN UNITED KINGDOM TAX CONSIDERATIONS


The comments below are of a general nature based on current United Kingdom
law and practice. They do not necessarily apply where the income is deemed
for tax purposes to be the income of any other person. They relate only to
the position of persons who are the absolute beneficial owners of their Bonds
and may not apply to certain classes of persons such as dealers or persons
who are connected with the Company within the meaning of Section 839 of the
Income and Corporation Taxes Act 1988 or sub-section 87(3) of the Finance Act
1996. They assume that the Bonds will be listed on a recognised stock
exchange within the meaning of Section 841 of the Income and Corporation
Taxes Act 1988 before any payment of interest is made on the Bonds. Any
Bondholders who are in doubt as to their personal tax position should consult
their professional advisers.


1.    Interest

While the Bonds continue to be listed on a recognised stock exchange within
the meaning of Section 841 of the Income and Corporation Taxes Act 1988 (for
example, while the Bonds continue to be listed on the Official List of the
United Kingdom Listing Authority and admitted to trading on the London Stock
Exchange), payments of interest (including payments of interests made through
paying or collecting agents) may be made without withholding or deduction for
or on account of income tax.

Persons in the United Kingdom paying interest to or receiving interest on
behalf of another person may be required to provide certain information to
the United Kingdom Inland Revenue regarding the identity of the payee or
person entitled to the interest and, in certain circumstances, such
information may be exchanged with tax authorities in other countries.

If the Bonds cease to be listed on a recognised stock exchange, interest will
generally be paid under deduction of income tax at the lower rate (currently
20 per cent.). The terms and conditions of the Bonds do not provide for any
additional payments to be made in this or any other situation. Bondholders
who are not resident in the United Kingdom may, however, be able to recover
all or part of the tax deducted if there is an appropriate provision in an
applicable double tax treaty and where such a treaty applies a direction may
be given in advance by the Inland Revenue to enable the interest to be paid
without deduction of withholding tax.

The interest has a United Kingdom source and accordingly may be chargeable to
United Kingdom tax by direct assessment. Where the interest is paid without
withholding or deduction, the interest will not be assessed to United Kingdom
tax in the hands of Bondholders who are not resident in the United Kingdom,
except where such persons carry on a trade, profession or vocation in the
United Kingdom through a United Kingdom branch or agency in connection with
which the interest is received or to which the Bonds are attributable, in
which case (subject to exemptions for interest received by certain categories
of agent) tax may be levied on the United Kingdom branch or agency.

Bondholders should again note that since the terms and conditions of the
Bonds do not provide for additional payments to be made in any circumstances,
no additional payments would be made even if the Inland Revenue sought to
assess United Kingdom tax directly on the person entitled to the relevant
interest. However, exemption from or reduction of such United Kingdom tax
liability might be available under an applicable double taxation treaty.

Bondholders within the charge to United Kingdom corporation tax will be
subject to tax as income on all interest arising in respect of the Bonds. The
amount of interest to be charged to United Kingdom corporation tax in each
accounting period should be ascertained using an authorised accruals basis of
accounting.

Bondholders who are not subject to United Kingdom corporation tax but who are
subject to United Kingdom income tax will generally be subject to income tax
on interest arising in respect of the Bonds when the interest is received.

On 13 December 2001, the Council of the European Union published a revised
draft directive regarding the taxation of savings income. It is proposed that
Member States will be required to provide to the tax authorities of another
Member State details of payments of interest or other similar income paid by
a person within its jurisdiction to an individual resident in that other
Member State, subject to the right of certain Member States to opt instead
for a withholding system for a transitional period in relation to such
payments.


                                       69

2.    Disposal (including Redemption) and Conversion

(i)   Non-United Kingdom Resident Bondholders

Bondholders who are not resident or ordinarily resident for tax purposes in
the United Kingdom and who do not carry on a trade, profession or vocation in
the United Kingdom through a branch or agency to which the Bonds are
attributable are generally outside the charge to United Kingdom taxation on
chargeable gains with respect to the disposal of the Bonds or the conversion
of the Bonds into Ordinary Shares.

(ii)  Bondholders Within the Charge to United Kingdom Corporation Tax


Disposal

Although the position is not entirely free from doubt, except in respect of
amounts relating to interest on the Bonds, a Bondholder within the charge to
United Kingdom corporation tax should not be subject to tax on any profits in
respect of the Bonds as income. The Bonds will, however, be treated as
"chargeable assets" for the purposes of the United Kingdom taxation of
chargeable gains. Accordingly, a disposal of Bonds may give rise to a
chargeable gain or allowable loss.

For the purposes of the United Kingdom taxation of chargeable gains, the
consideration for any acquisition or disposal of the Bonds will be treated as
adjusted so as to exclude, on a just and reasonable basis, the amount of such
consideration which relates to interest which has accrued but has not been
paid as at the date of such acquisition or disposal.


Conversion

Conversion of the Bonds should not be treated as a disposal of the Bonds
(except for the purpose of an adjustment for accrued interest) and should not
of itself give rise to a charge to the United Kingdom taxation of chargeable
gains.


Proposed Change in Law

Bondholders within the charge to United Kingdom corporation tax should note
that the Finance Bill currently before Parliament contains proposed changes
to the legislation relating to convertible bonds. Although it is not free
from doubt, the proposed changes to the legislation should not, if
implemented in their current form, affect the statements made above but it is
possible that the form of this legislation may change prior to its enactment.
Bondholders within the charge to United Kingdom corporation tax should
consult their own tax advisors as to the effect of the proposed changes in
law.


(iii)   Other Bondholders


Disposal

A disposal of a Bond by a Bondholder resident or ordinarily resident for tax
purposes in the United Kingdom or who carries on a trade, profession or
vocation in the United Kingdom through a branch or agency to which the Bond
is attributable may give rise to a chargeable gain or allowable loss for the
purposes of the United Kingdom taxation of chargeable gains.

The provisions of the accrued income scheme contained in Chapter II Part XVII
of the Income and Corporation Taxes Act 1988 (the "accrued income scheme")
may apply on the transfer of a Bond by a Bondholder and may apply to a person
to whom the Bond is transferred. Generally, persons who are neither resident
nor ordinarily resident in the United Kingdom and dealers in securities will
not be subject to the provisions of the accrued income scheme. On a transfer
of securities with accrued interest, the accrued income scheme would normally
deem the transferor to receive an amount of income equal to the accrued
interest and deem the transferee to obtain an equivalent credit to set
against the deemed or actual interest he subsequently receives.


                                       70


Conversion

The accrued income scheme

On a conversion, interest which is deemed to have accrued since the last
interest payment date may be chargeable to United Kingdom tax as income under
the accrued income scheme even though on conversion accrued interest may not
be payable. In those circumstances an amount equal to the deemed accrued
interest may be treated for the purposes of the United Kingdom taxation of
chargeable gains as consideration given by the Bondholder for the Ordinary
Shares received on conversion.


Capital gains tax

Conversion of the Bonds should not be treated as a disposal of the Bonds
(except for the purpose of an adjustment for accrued interest) and should not
of itself give rise to a charge to the United Kingdom taxation of chargeable
gains.


3.    Dividends on Ordinary Shares

The Company will not be required to withhold tax at source when paying a
dividend on the Ordinary Shares.

A shareholder who is an individual resident (for tax purposes) in the United
Kingdom and who receives a dividend will be entitled to a tax credit equal to
one-ninth of the dividend. The individual will be taxable on the total of the
dividend and the related tax credit (the "gross dividend"), which will be
regarded as the top slice of the individual's income. The tax credit will,
however, be treated as discharging the individual's liability to income tax
in respect of the gross dividend, unless and except to the extent that the
gross dividend falls above the threshold for the higher rate of income tax,
in which case the individual will have to account for additional tax equal to
22.5 per cent. of the gross dividend (which is also equal to 25 per cent. of
the cash dividend received). A shareholder who is an individual resident (for
tax purposes) in the United Kingdom and who is not liable for income tax on
dividends received by it from the Company will not be entitled to claim
repayment of the tax credit in respect of those dividends except where the
shares are held in a Personal Equity Plan or Individual Savings Account and
the dividends are paid on or before 5 April 2004.

Other United Kingdom resident taxpayers who are not liable to United Kingdom
tax on dividends, including pension funds and charities, will not be entitled
to claim repayment of the tax credit attaching to dividends paid by the
Company, although charities will be entitled to limited compensation in lieu
of repayable tax credits in respect of dividends paid on or before 5 April
2004.

United Kingdom resident corporate shareholders will generally not be subject
to corporation tax on dividends paid by the Company. Such shareholders will
not be able to claim repayment of tax credits attaching to dividends.

A shareholder who is not resident (for tax purposes) in the United Kingdom
will not generally be able to claim repayment from the Inland Revenue of any
material part of the tax credit attaching to dividends paid by the Company. A
shareholder resident outside the United Kingdom may also be subject to
foreign taxation on dividend income under local law. A shareholder who is not
resident in the United Kingdom (for tax purposes) should consult his own tax
adviser concerning his tax liabilities on dividends received from the Company.


4.    Disposal of the Ordinary Shares

A disposal of Ordinary Shares by United Kingdom resident holders may,
depending on their circumstances, give rise to a chargeable gain or allowable
loss for the purpose of the United Kingdom taxation of chargeable gains.


5.    United Kingdom Stamp Duty and Stamp Duty Reserve Tax ("SDRT")

Except where Bonds are issued to, or to a nominee or agent for, a person
whose business is or includes issuing depositary receipts, or to, or to a
nominee or agent for, a person providing a clearance service, no United
Kingdom stamp duty or SDRT should be payable on the issue of the Bonds. No
United Kingdom stamp duty or SDRT should be payable on the redemption or
conversion of the Bonds, except where the Ordinary Shares issued on
conversion are issued to, or to a nominee or agent for, a person whose
business is or includes issuing depositary receipts, or to, or to a nominee
or agent for, a person providing a clearance service.


                                       71


The transfer on sale of Bonds or Ordinary Shares will normally be liable to
ad valorem stamp duty generally at a rate of 0.5 per cent. of the amount or
value of the consideration for the transfer rounded up to the nearest GBP5. The
purchaser normally pays the stamp duty.

An unconditional agreement to sell Bonds or Ordinary Shares will normally
give rise to a liability on the purchaser to SDRT generally at a rate of 0.5
per cent. of the amount or value of the consideration for the sale. If a duly
stamped transfer in respect of the agreement is produced within six years of
the date that the agreement is entered into or (if later) the date that it
becomes unconditional, any SDRT is repayable generally with interest, and any
unpaid SDRT is cancelled.

Under the CREST system for paperless share transfers, no stamp duty or SDRT
will arise on a transfer of Ordinary Shares into the system unless such
transfer is made for a consideration in money or money's worth, in which case
a liability to SDRT (usually at a rate of 0.5 per cent.) will arise.
Paperless transfers of Ordinary Shares within CREST will be liable to SDRT
rather than stamp duty.

The issue or transfer of Ordinary Shares or Bonds to, or to a nominee or
agent for, a person whose business is or includes issuing depository receipts
or to, or to a nominee or agent for, a person providing a clearance service,
will generally be subject to stamp duty or SDRT at 1.5 per cent. of the
amount or value of the consideration or, in certain cases, the value of the
Ordinary Shares or Bonds transferred (rounded up to the nearest GBP5 in the
case of stamp duty) unless, in the case of an issue or transfer to a
clearance service, the clearance service has made an election under Section
97A of the Finance Act 1986 which applies to the Ordinary Shares or Bonds, as
the case may be. Under Section 97A of the Finance Act 1986, clearance
services may, provided they meet certain conditions, elect for the 0.5 per
cent. rate of stamp duty or SDRT to apply to the transfer of securities
within such services instead of the 1.5 per cent. rate applying to an issue
or transfer of such securities into the clearance service.

A transfer of depository receipts should not in practice need to be stamped
provided that the depository receipts are not held on a register in the
United Kingdom and that any transfer document is executed and retained
outside the United Kingdom and will not give rise to SDRT.

If you are not resident in the United Kingdom or are subject to tax in any
other jurisdiction or if you are in any doubt as to your tax position, you
should consult an appropriate professional advisor without delay.


                                       73


                        PART VIII - GENERAL INFORMATION


1.    Incorporation

(a)   The Company was incorporated and registered in England and Wales on 12
      June 1995 under the Companies Act 1985 as a public limited company with
      registered number 3066856. It changed its name to Schroder Ventures
      International Investment Trust plc on 20 February 1996. The Company
      operates under the Companies Act 1985 and the regulations made thereunder.

(b)   The Company's registered office is 31 Gresham Street, LondonEC2V 7QA. Its
      principal place of business and head office is Burleigh House, 357 Strand,
      London WC2R 0HS.

2.    Share capital

(a)   The authorised share capital of the Company is GBP150,000,000 divided into
      150,000,000 Ordinary Shares of which 102,265,699 are presently issued and
      fully paid up. Pursuant to the terms and conditions of the GBP10,752,825
      6.25 per cent. convertible bonds 2006, conversion notices were received on
      or before 28 November 1997, the conversion date, in respect of
      GBP10,752,685 of the convertible bonds. 5,683,236 new Ordinary Shares were
      allotted to the bondholders on conversion. Following the conversion of the
      Bonds the enlarged issued share capital of the Company comprised
      102,170,490 Ordinary Shares. On 23 September 1998, the Directors exercised
      the authority given to them by shareholders to purchase 3,204,171 Ordinary
      Shares for cancellation, reducing the issued share capital to 98,966,319.
      Pursuant to the terms and conditions of the GBP10,752,685 7 per cent.
      Bonds 2006, conversion notices were received on or before 26 November,
      1999, the conversion date, in respect of all of the GBP10,752,685
      convertible bonds in issue. 3,299,380 new Ordinary Shares were allotted to
      bondholders on conversion, increasing the issued share capital to
      102,265,699.

(b)   The Ordinary Shares are in registered form and are listed on the Official
      List and traded on the London Stock Exchange.

(c)   On 21 November 2001, the Company issued GBP40,000,000 subordinated
      convertible bonds due 2011 convertible into Ordinary Shares at 410p
      subject to adjustment if the December 2001 or June 2002 net asset value
      falls. At 1 July 2002, GBP40,000,000 convertible bonds were outstanding.

(d)   At the Company's Annual General Meeting held on 22 November 2001
      resolutions were proposed and passed to:

      (i)    give the Directors power to allot relevant securities up to an
             aggregate nominal amount of (1) 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 (2) GBP35,088,566 (equivalent to one-third of the
             Company's issued ordinary share capital as at 14 September 2001);
             and

      (ii)   give the Directors the power to allot equity securities as if the
             provisions in section 89(1) of the Companies Act 1985 did not
             apply (1) 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; (2) pursuant to rights issues and
             other pre-emptive issues; and (3) 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).

(e)   Options over 2,841,766 shares were granted during the year ended 30 June
      2001. No options were exercised during the year. On 5 April 2002,
      1,411,597 options over shares were granted. At 1 July 2002, 4,253,363
      options to subscribe for ordinary shares were outstanding.

(f)   Save as disclosed in this Section 2, as at 12 June 2002 there is no
      outstanding loan capital, borrowings, indebtedness, contingent liabilities
      or guarantees of the Group.


                                       73


3.    Directors' and others' interests

(a)   The interests of the Directors (and persons connected with them within the
      meaning of section 346 of the Companies Act and the existence of which is
      known to or could with reasonable diligence be ascertained by that
      Director), all of which are beneficial (except where indicated), in the
      Ordinary Shares at the date of this document, as notified to the Company
      under the provisions of sections 324 and 328 of the Companies Act and as
      shown in the register of such interests required to be maintained under
      the provisions of section 325 of the Companies Act, are as follows:

<TABLE>
<CAPTION>

                                                          Beneficial
                                                              No. of
                                                            Ordinary
                                                              Shares
<S>                                                              <C>
J J McLachlan                                                 15,826
N E H Ferguson (beneficial)                                  175,000
N E H Ferguson (non-beneficial)                               27,900
C J Govett (beneficial)                                       67,500
C J Govett (non-beneficial)                                   20,000
A J Habgood                                                   25,000
E W Koning                                                       Nil
D Raeburn                                                     60,000
A F Sykes                                                        Nil
A C Williams (beneficial)                                      9,235
A C Williams (non-beneficial)                                  2,000

</TABLE>


     Options held by Directors over Ordinary Shares of the Company

     In addition, the following Directors have been granted options over
     Ordinary Shares under the Executive Share Option Plan:


<TABLE>
<CAPTION>

Director             Number of Options        Grant Date   Exercise Price      Earliest* Exercise      Latest* Exercise
                  Over Ordinary Shares                                                       Date                  Date
<S>                                <C>               <C>              <C>                     <C>                   <C>
N E H Ferguson                 715,446      21 June 2001             410p            21 June 2004          20 June 2011
N E H Ferguson                 357,724      21 June 2001             410p            21 June 2005          20 June 2011
N E H Ferguson                 404,484      5 April 2002           334.5p            5 April 2005          4 April 2012
A C Williams                   373,983      21 June 2001             410p            21 June 2004          20 June 2011
A C Williams                   186,992      21 June 2001             410p            21 June 2005          20 June 2011
A C Williams                   272,645      5 April 2002           334.5p            5 April 2005          4 April 2012


* options are exerciseable subject to appropriate performance targets being
  met.

</TABLE>

(b)   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 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.


                                       74


(c)   Directors' Remuneration

      The emoluments received by Directors in respect of the year ended 30 June
      2001 were as specified below:

<TABLE>
<CAPTION>

Director             Number of Options        Grant Date   Exercise Price      Earliest* Exercise      Latest* Exercise
                  Over Ordinary Shares                                                       Date                  Date
<S>                                <C>               <C>              <C>                     <C>                   <C>
N E H Ferguson                 715,446      21 June 2001             410p            21 June 2004          20 June 2011
N E H Ferguson                 357,724      21 June 2001             410p            21 June 2005          20 June 2011
N E H Ferguson                 404,484      5 April 2002           334.5p            5 April 2005          4 April 2012
A C Williams                   373,983      21 June 2001             410p            21 June 2004          20 June 2011
A C Williams                   186,992      21 June 2001             410p            21 June 2005          20 June 2011
A C Williams                   272,645      5 April 2002           334.5p            5 April 2005          4 April 2012


+ This relates to Mr Ferguson's remuneration for the period 18 June 2001 to
  30 June 2001.
* Mr Ferguson's fee for the period from 1 July 2000 to 31 December 2000 was
  paid to Schroder Ventures (London) Limited. Mr Ferguson agreed to waive his
  fees as a non-executive Director of SVIIT with effect from 1 January 2001.

</TABLE>


(d)    There are no outstanding loans or guarantees granted or provided by any
       member of the SVIIT Group to or for the benefit of any Director.

(e)    Nicholas Ferguson and members of his family and Andrew Williams have an
       interest in the Carried Interest in respect of certain Funds. Further
       details in respect of Carried Interest are set out on page 21. 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
       Investments Limited.

(f)    Save as disclosed in paragraph 3(e), no Director has, or has had, an
       interest in any transactions which are or were unusual in their nature
       and conditions or significant to the business of the Group which were
       effected by the Company during the period from 1 July 2001 to the date of
       this document, or during the year ended 30 June 2001, or during an
       earlier financial year and which remain in any respect outstanding or
       unperformed.

(g)    The Directors are aware of the following interests (within the meaning of
       Part VI of the Companies Act) which represent three per cent. or more of
       the issued share capital of the Company on 28 June2002 (being the latest
       practicable date prior to the publication of this document):

<TABLE>
<CAPTION>


Name                              Number of Ordinary    Percentage of issued
                                              Shares           share capital
<S>                                              <C>                     <C>
Schroders plc and its
subsidiaries
- non-beneficial, managed for clients     15,845,858                   15.49

- beneficial                              13,113,449                   12.82
AEGON Aandelenfonds NV                    19,378,665                   18.95
Lansdowne Partners                         5,258,162                    5.14
British Aerospace Pension Fund             4,425,000                    4.33
BBC Pension Trust Limited*                 4,384,554                    4.29

* This interest is also counted in the non-beneficial managed for clients of
Schroders plc and its subsidiaries listed above.

</TABLE>


                                       75


(h)    There are no persons who, directly or indirectly, jointly or severally,
       exercise or could exercise control over the Company.

(i)    Nicholas Ferguson, Andrew Sykes and Andrew Williams also hold
       directorships within the Schroders Group, in particular, Nicholas
       Ferguson is a non-executive director of Schroders plc and Andrew Sykes is
       an executive director of Schroders plc.

(j)    A description of the advisory committees is set out in paragraph 2 of
       Part III of this document.

(k)    SVIIT is represented on the advisory committees of the following Funds by
       either John McLachlan or Nicholas Ferguson: Permira UK III, Permira
       Europe I and II, The Japan Venture Fund III, Schroder Ventures US Fund,
       Schroder Ventures International Life Sciences Fund II, Schroder Canadian
       Buy-out Fund II and III and Schroder Ventures Asia Pacific Fund. The
       remaining Directors of the Company do not hold positions on the advisory
       committees for the Funds.

4.     Memorandum of Association

The Memorandum of Association of the Company provides that the Company's
principal object is to undertake and carry on the business of an investment
trust company. The objects of the Company are set out in full in clause 4 of
the Memorandum of Association, which is available for inspection as set out
in paragraph 9 of this Part VIII.


5.    Articles of Association

The Articles of Association contain provisions, inter alia, to the following
effect.

(a)    Voting rights

(i)    Subject to any special terms as to voting upon which any shares may be
       issued or may for the time being be held and to any other provisions of
       the Articles, every member present in person at a general meeting shall
       have one vote on a show of hands, and on a poll every member present in
       person or by proxy shall have one vote for every Ordinary Share of which
       he is the holder.

(ii)   No member shall, unless the Board decides otherwise, be entitled to vote
       at any general meeting of the Company or any separate meeting of the
       holders of any class of shares of the Company if any call or other sum
       presently payable by him in respect of those shares remains unpaid or if
       he has been served with a restriction notice after failure to provide the
       Company with information concerning interests in those shares required to
       be provided under a statutory notice.

(iii)  On any resolution to change the Company's name from a name including the
       word "Schroder" (or to amend this provision) any shares held by the
       Schroder Group shall carry three times the total number of any votes (if
       any) cast against such a resolution.

While any member of the Schroder Group holds any Ordinary Shares it may request
the company secretary to call a meeting and propose a resolution to change the
name of the Company to a name not including the word "Schroder" and the company
secretary must within twenty-one days of such request take all necessary steps
to call such a meeting to consider such a resolution and a meeting must in any
case be held not later than six weeks after such a request.

(b)    Variation of rights and alteration of capital

(i)    Subject to the provisions of the Companies Act and the Articles, all or
       any of the rights for the time being attached to any class of shares may
       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 with
       the sanction of an extraordinary resolution passed at a separate general
       meeting of the holders of those shares. The quorum requirement for such a
       separate general meeting is a person or persons holding or representing
       by proxy not less than one-third in nominal value of the issued shares of
       the class.

(ii)   The Company may by ordinary resolution:

       (1)    increase its authorised share capital by such sum to be divided
              into shares of such amounts as the resolution shall prescribe;

       (2)    consolidate and divide all or any of its share capital into shares
              of a larger amount;


                                     76


       (3)    subject to the provisions of the Companies Act, sub-divide its
              share capital into shares of a smaller amount; and

       (4)    cancel any shares which have not been taken or agreed to be taken
              by any person and diminish its authorised share capital by the
              amount of the shares so cancelled.

       Subject to the provisions of the Companies Act, the Company may by
       special resolution reduce its share capital, any capital redemption
       reserve and any share premium account in any way.

(iii)  Subject to the provisions of the Companies Act and the rights of the
       holders of any class of shares, the Company may issue any share which is
       to be redeemed or which is liable to be redeemed at the option of the
       Company or the holder and may purchase shares comprising all or any of
       its shares of any classes then in issue, including redeemable shares.

(c)    Dividends and other distributions

(i)    The Company may by ordinary resolution from time to time declare
       dividends, but no such dividends shall be payable otherwise than in
       accordance with the Companies Act or in excess of the amount recommended
       by the Board. Payment of dividends to the members shall be in accordance
       with their rights and interests in the profits available for
       distribution. Dividends shall be apportioned and paid pro rata according
       to the amounts paid up on the shares during any portion or portions of
       the period in respect of which the dividend is paid. The Board may from
       time to time pay to the members such interim dividends as appear to the
       Board to be justified by the financial position of the Company and the
       Board may also pay any dividends payable at a fixed rate at intervals
       settled by the Board whenever the financial position of the Company, in
       the opinion of the Board, justifies their payment.

(ii)   The Board may withhold payment of all or any part of any dividends
       (including shares issued in lieu of dividends) in respect of the
       Company's shares from a person with an interest of 0.25 per cent. or over
       (as defined in the Articles) in those shares or any class thereof if such
       a person has been served with a restriction notice after failure to
       provide the Company with information concerning interests in those shares
       required to be provided under a statutory notice.

(iii)  Capital profits and surpluses arising from the realisation of investments
       will not be available for distribution by way of dividend.

(iv)   Any dividend unclaimed after a period of 12 years from the date it became
       due for payment shall be forfeited and shall revert to the Company.

(v)    Upon the commencement of liquidation, the liquidator may, with the
       sanction of a special resolution of the Company and subject to the
       Companies Act, either distribute the whole or part of the Company's
       assets in kind and for that purpose determine the basis and value of the
       distribution between members or vest the whole or part of the assets in
       trustees for the benefit of the contributories as the liquidator shall
       think fit. No member is obliged to accept shares or assets subject to a
       liability.

(d)    Capital reserves

       All capital profits arising on the sale or realisation of investments and
       other capital assets in excess of the book value thereof and all other
       capital profits and unrealised appreciation of investments or other
       assets representing or in the nature of accretion to capital assets will
       either be credited to a capital reserve to be maintained by the Company
       or be applied in providing for depreciation or contingencies. Any losses
       resulting from any such dealings as aforesaid and any depreciation in
       value of capital assets will be debited to such capital reserve except in
       so far as the Board otherwise decides. All sums carried and standing to
       the capital reserve may be applied for any of the purposes to which sums
       standing to any revenue reserve are applicable, except and provided that
       no part of the capital reserve or any other monies in the nature of
       accretion to capital may be transferred to revenue account or be regarded
       or treated as profits of the Company available to be applied in paying
       dividends.

       The Board may determine whether any amount received by the Company is to
       be dealt with as income or capital or partly one and partly the other.
       The Board may also determine whether any cost or expense (including any
       costs incurred or sums expended in connection with the management of the
       assets of the Company) is to be treated as a cost or expense chargeable
       to capital or revenue account or partly one and partly the other and, to
       the extent that the Board determines that such cost or expense should be
       apportioned to capital, the Board may debit or charge the same to the
       capital reserve.


                                       77

(e)    Transfer of shares

       The shares are in registered form and may be transferred by instrument in
       writing in any usual form or in any other form which the Board may
       approve. Shares held in uncertificated form may be transferred by means
       of a relevant system as provided for in the Uncertificated Securities
       Regulations and the rules of any relevant system. The instrument of
       transfer must be executed on behalf of the transferor (in the case of a
       partly paid share, the transferee) and the transferor is deemed to remain
       the holder until the transferee's name is entered in the register. The
       Board may, in its absolute discretion, and without specifying any reason,
       refuse to register any transfer of shares which are not fully paid. The
       Board may also refuse to register any transfer of shares unless the
       instrument of transfer is lodged with the Company accompanied by the
       certificate for the shares to which it relates and such other evidence as
       the Board may reasonably require to show the right of the transferor to
       make such transfer or if the instrument of transfer is in respect of a
       transfer to joint holders where the number of joint holders to whom the
       shares are to be transferred exceeds four. The Board may only decline to
       register a transfer of a share held in uncertificated form in the
       circumstances set out in the Uncertificated Securities Regulations and
       where the number of joint holders to whom the uncertificated share is to
       be transferred exceeds four.

       The Board may (subject to the Uncertificated Securities Regulations)
       decline to register a transfer of the shares by a person with an interest
       of 0.25 per cent. or over (as defined in the Articles) in those shares or
       any class thereof if such a person has been served with a restriction
       notice after a failure to provide the Company with information concerning
       interests in those shares required to be provided under a statutory
       notice unless the transfer is shown to the Board to be pursuant to an
       arm's length transaction (as defined in the Articles).

(f)    Compulsory transfer of shares

If it shall come to the notice of the Directors that any share or shares:

(i)   are or may be owned or held directly or beneficially by any person or
      persons whose ownership or holding or continued ownership or holding of
      those shares (whether on its own or in conjunction with any other
      circumstance appearing to the Directors to be relevant) might in the sole
      and conclusive determination of the Directors cause a pecuniary or tax
      disadvantage to the Company or any other holder of shares or other
      securities of the Company; or

(ii)  are or may be owned or held directly or beneficially such that the
      aggregate number of UnitedStates 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 United States Investment
      Company Act 1940) of shares or other securities of the Company, including
      bonds (other than certain short-term securities) and who acquired
      securities of the Company from the Company 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

(iii) are or may be owned or held directly or beneficially by any person to whom
      a transfer of shares or whose ownership or holding of any shares might in
      the opinion of the Directors require registration of the Company as an
      investment company under the Investment Company Act, 1940 the Directors
      may, and:

(iv)  if it shall come to the notice of the Directors that any share or shares
      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 Company may be
      considered "plan assets" within the meaning of regulations adopted under
      ERISA the Directors shall be required to,

serve a notice (a "Transfer Notice") upon the person (or any one of such persons
where shares are registered in joint names) appearing in the register as the
holder (the "Vendor") of the share, shares or any of the shares concerned (the
"Relevant Shares") requiring the Vendor within 21 days (or such extended time as
in all the circumstances the Directors shall consider reasonable) to transfer
(and/or procure the disposal of interests in) the Relevant Shares to another
person who, in the sole and conclusive determination of the Directors, would not
fall within (i), (iii) or (iv) above and whose ownership or holding of such
share or shares would not result in the aggregate number of United States
Persons who are beneficial owners or holders of shares or other securities of
the Company (other than certain short-term securities) being 75 or more (such a
person being hereinafter called an "Eligible Transferee"). On and after the date
of such Transfer Notice, and until registration of a transfer of the Relevant
Share to  which it relates pursuant to the provisions of this paragraph or the
following paragraph, the rights and privileges attaching to the Relevant Shares
shall be suspended and not capable of exercise.



                                       78


If within 21 days after the giving of a Transfer Notice (or such extended
time as in all the circumstances the Directors shall consider reasonable) the
Transfer Notice has not been complied with to the satisfaction of the
Directors, the Company may sell the Relevant Shares on behalf of the holder
or holders thereof by instructing a member of the London Stock Exchange to
sell them in accordance with the best practice then obtaining to any Eligible
Transferee or Eligible Transferees.

The net proceeds of the sale of the Relevant Shares shall be received by the
Company, whose receipt shall be a good discharge for the purchase moneys, and
will belong to the Company and, upon their receipt,the Company will become
indebted to the former holder of, or person entitled by transmission to, the
Relevant Shares for an amount equal to the net proceeds of transfer upon
surrender by him or them of the certificate for the Relevant Shares which the
Vendor shall forthwith be obliged to deliver to the Company. No trust will be
created in respect of the debt and no interest will be payable in respect of
it and the Company 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
Company or as it thinks fit. The Company may register the transferee or
transferees as holder or holders of the Relevant Shares and issue to him or
them a certificate for the same and thereupon the transferee or transferees
shall become absolutely entitled thereto.

A person who becomes aware that his holding, directly or beneficially, of
shares will, or is likely to, fall within any of sub-paragraphs (i), (iii) or
(iv) above or, being a Private Offering Holder and a beneficial owner or
holder of shares, becomes aware that the aggregate number of Private Offering
Holders who are beneficial owners or holders of shares or other securities of
the Company (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, either transfer the shares to an Eligible Transferee or
Eligible Transferees or 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
shares to which it relates.

The Directors shall, unless any Director has reason to believe otherwise, be
entitled to assume without enquiry that none of the shares 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 holder (or any one of joint holders) of shares by notice
in writing to provide such information and evidence as they shall require
upon any matter connected with or in relation to such holder of shares. 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 share held by such
a holder or joint holder as being held in such a way as to entitle or require
them to serve a Transfer Notice in respect thereof.

The Directors shall not be required to give any reasons for any decision,
determination or declaration taken or made in accordance with these
provisions. 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 shares
by any person or that the true direct or beneficial owner or holder of any
shares was otherwise than as appeared to the Directors at the relevant date
provided that the said powers shall have been exercised in good faith.


(g)    Borrowing powers

The Directors may exercise all the powers of the Company to borrow money, and
to mortgage or charge its undertaking, property and assets and uncalled
capital, 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 Directors must restrict the borrowings of the Company
and exercise all voting and other rights or powers of control exercisable by
the Company in relation to its subsidiary undertakings so as to secure that
the aggregate principal amount from time to time outstanding of all
borrowings (as defined in the Articles) by the Company and its subsidiary
undertakings (exclusive of borrowings intragroup) shall not at any time
without the previous sanction of an ordinary resolution of the Company exceed
an amount equal to the adjusted capital and reserves (as defined in the
Articles) of the Company.


(h)    Directors

       (i)    Appointment of Director

       Directors may be appointed by the Company by ordinary resolution or
       by the Directors. A Director appointed by the Directors will hold office
       only until the next following Annual General Meeting and will not be
       taken into account in determining the Directors who are to retire by
       rotation at that meeting.



                                       79


       (ii)  Age of Directors

       No person is disqualified from being a Director or is required to vacate
       that office, by reason only of the fact that he has attained the age of
       70 years or any other age, nor is it necessary to give special notice of
       a resolution appointing or approving the appointment of such a Director.
       However, where the Directors convene any general meeting at which, to the
       knowledge of the Directors, a Director who is over the age of 70 will be
       proposed for re-appointment, the Directors will give notice of his age in
       the notice convening the meeting.

       (iii) Remuneration of Directors

       Each of the Directors shall be paid a fee at such rate as may be
       determined by the Directors provided that the total fees paid to the
       Directors (excluding amounts payable under other provisions of the
       Articles) shall not exceed GBP100,000 per annum or such higher amount as
       may from time to time be decided by ordinary resolution of the Company.
       At the Annual General Meeting in 2000, this amount was increased to
       GBP200,000 by ordinary resolution of the Company. Each Director may also
       be paid reasonable travelling, hotel and incidental expenses of attending
       meetings of the Directors, of committees of the Directors or general
       meetings of the Company or any other meeting which as a Director he is
       entitled to attend and shall be 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 goes or resides abroad for any purpose of the Company 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.

       (iv)  Executive Directors

       The Directors may from time to time appoint one or more of their body 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.

       (v)   Retirement of Directors by rotation

       At every Annual General Meeting of the Company, as nearly as possible
       one-third of the Directors who are subject to retirement by rotation will
       retire by rotation and be eligible for re-election. The Directors to
       retire will be those who have been longest in office or, in the case of
       those who were appointed or re-appointed on the same day, will be (unless
       they otherwise agree) determined bylot.

       (vi)  Restrictions on voting

       A Director shall not vote on, or be counted in the quorum in relation to,
       any resolution of theDirectors concerning his own appointment, or the
       settlement or variation of the terms or the termination of his own
       appointment, to any office or place of profit with the Company or any
       other company in which the Company is interested but, where proposals are
       under consideration concerning the appointment, or the settlement or
       variation of the terms or the termination of the appointment, of two or
       more Directors to offices or places of profit with the Company or any
       other company in which the Company is interested, a separate resolution
       may be put in relation to each Director and in that case each of the
       Directors concerned shall be entitled to vote and be counted in the
       quorum in respect of each resolution unless it concerns his own
       appointment, or the settlement or variation of the terms or the
       termination of his own appointment, or the appointment of another
       Director to an office or place of profit with a company in which the
       Company is interested and the Director seeking to vote or to be counted
       in the quorum owns one per cent. or more of it.

       A Director shall not vote on, or be counted in the quorum in relation to,
       any resolution of the Directors in respect of any contract in which he
       has an interest which (taken with any interest of any person connected
       with him) is to his knowledge a material interest and, if he shall do so,
       his vote shall not be counted, but this prohibition shall not apply to
       any resolution concerning any of the following matters:

       (1)   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 request of or for the benefit of the Company or
             any of its subsidiaries;


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       (2)   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;

       (3)   where the Company or any of its subsidiary undertakings is 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 a participant;

       (4)   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;

       (5)   any contract concerning any other company (not being a company in
             which the Director owns one per cent. or more) in which he is
             interested directly or indirectly whether as an officer,
             shareholder, creditor or otherwise howsoever;

       (6)   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
             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;

       (7)   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
             contract relates; or

       (8)   any contract for the purchase or maintenance for any Director or
             Directors of insurance against any liability.

       (vii) Directors' shareholdings

       There is no qualification fixed by the Articles for a Director to hold
       any shares in the Company.

       (viii)Directors' independence from the Schroder Group

       The majority of the Directors shall comprise persons who are independent
       of Schroder Ventures and the Schroder Group, which majority shall include
       the chairman of the Board. 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.

(i)    Indemnity of officers

Subject to the provisions of the Companies Act, the Company may indemnify any
Director or other officer against any liability and may purchase and maintain,
for any Director or other officer insurance against any liability. Every
Director or other officer shall be indemnified, and if the Directors so
determine an auditor may be indemnified, out of the assets of the Company
against any liability incurred as a director or other officer, or as auditor,
in defending any proceedings (whether civil or criminal) in which judgment is
given in his favour or in which he is acquitted or in connection with any
application under the Companies Act in which relief is granted to him by the
Court.

(j)    Untraced shareholders

The Company may sell any certificated shares in the Company on behalf of the
holder of or the person entitled to transmission to the shares after
advertising its intention to sell and waiting for three months if the shares
have been in issue for at least 12 years immediately preceding the relevant
advertisement and during that period at least three cash dividends have become
payable on them and have not been claimed or satisfied and, so far as any
Director is aware, the Company has not received any communication during the
relevant period from the holder of the shares or any person entitled to them by
transmission. Upon any such sale, the Company will become indebted to the former
holder of the shares or the person entitled to them by transmission for an
amount equal to the net proceeds of sale.


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(k)    Record date for service

Any document may be served by the Company by reference to the register as it
stands at any time not more than 15 days before the date of delivery and no
change in the register after that time shall invalidate that service. Where
any document is served on any person in respect of a share in accordance with
the Articles, no person deriving any title or interest in that share shall be
entitled to any further service of that document.


(l)    Members resident abroad

Members with registered addresses outside the United Kingdom and who give to
the Company an address outside the United Kingdom at which such notices may
be served are entitled to have notices served at that address and will be
deemed to have received notices posted to that address seven London business
days following posting of the relevant notice.


6.    Risk Factors

An investment in the Company is suitable only for sophisticated investors who
are in a position to commit funds for a considerable period of time. The past
investment performance of the Company is not necessarily a guide to the
future performance of the Company's investments. The risk factors that
potential investors should be aware of include the following:

          The Company's investments are likely to be of a long-term nature.
          Such investments may often be difficult to value and there can be no
          assurance that the Company will be able to realise its investments in
          a timely manner. In addition, the value of investments may fall as
          well as rise.

          The success of the companies in which the Company will invest could be
          adversely affected by a range of factors, including changes in
          economic conditions, interest rate movements, changes in law and
          specific developments within the company or industry in which it
          operates.

          It may take a significant period of time from the date of an
          investment before realisation of the investment can be achieved. It is
          possible that no return to investors will occur for a number of years.

          An investment in the Company may involve complex tax considerations
          which may differ for each investor. Each investor is advised to
          consult their own tax advisers.

          The success of the Company and its investments as a whole depends on
          the ability of the Company to identify, acquire and realise
          appropriate investments on attractive terms. Investors will not have
          the opportunity to evaluate the relevant financial and other
          information which will be utilised by the Company in the selection,
          structuring, monitoring and disposal of investments or otherwise to
          take part in the management of the Company and its investments.

          The Company will be competing for investments with other parties. It
          is possible that competition for appropriate investment opportunities
          may increase, which may reduce the number of opportunities available
          and adversely affect the terms upon which such investments can be
          made.

7.    Executive Share Option Plan

A summary of the terms of the Executive Share Option Plan are set out below.


General

The Executive Share Option Plan is divided into four separate parts: Part A
covers the grant of Inland Revenue approved options to employees (which will
confer certain tax reliefs on its participants), Part B covers the grant of
non-approved options to employees, Part C covers the grant of incentive stock
options to U.S. participants (which will confer certain tax reliefs on its
participants) and Part D is intended to cover the grant of options to
individuals seconded to the Company and its subsidiaries. The terms of the
options to be granted under each part are identical in all material respects
unless indicated to the contrary in this summary.

It is intended that the Board's functions under the Executive Share Option
Plan, other than administrative ones, will be discharged by the Remuneration
Committee.


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Eligibility

Employees of the Company and its subsidiaries (which, for the purposes of
Part D of the Executive Share Option Plan, is taken to include joint
ventures) and directors of such companies who are obliged to work at least 25
hours a week for any of the Company or its subsidiaries, plus 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 the
relevant legislation, will be eligible to participate in the Executive Share
Option Plan.


Grant of options

Options may be granted within the six weeks following the announcement by the
Company of its results for any period. They may also be granted at other
times which the Board considers to be sufficiently exceptional.

No options may be granted later than 10 years after the adoption of the
Executive Share Option Plan. The Remuneration Committee will formally review
the operation of the Executive Share Option Plan no later than five years
after its adoption.

No payment will be required for the grant of an option. Options are not
transferable other than where their transfer to a trust is approved by the
Remuneration Committee or following a participant's death, in which case they
may be exercised by his or her personal representatives.


Limit on Individual Participation

In any financial year of the Company in which the Remuneration Committee
decides to grant options, the aggregate exercise price of options granted to
an individual participant under the Executive Share Option Plan will not
normally exceed an amount determined by the Remuneration Committee in the
light of individual performance, the performance of the Company and market
practice. 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 aggregate market value (as at the date of grant) of shares under option
to an individual at any given moment pursuant to Part A of the Executive
Share Option Plan or any other approved executive share option scheme
established by the Company or an associated company shall not exceed GBP30,000
or such other limit as may from time to time apply under the relevant
legislation.

The aggregate market value (as at the date of grant) of Ordinary Shares in
respect of which options granted under Part C of the Executive Share Option
Plan to any individual may first become exercisable in any calendar year
shall not exceed U.S.$100,000.


Overall Limits

No options may be granted under the Executive Share Option Plan which would
cause the number of Ordinary Shares issued or issuable pursuant to options
granted during any period of 10 years under all employees' share plans
adopted by the Company to exceed 10 per cent. of the Company's issued
ordinary share capital from time to time. In particular, options may not be
granted over more than 1,500,000 Ordinary Shares under Part C of the
Executive Share Option Plan.


Exercise Price

The price per Ordinary Share payable on the exercise of an option will not be
less than the middle-market quotation for an Ordinary Share as derived from
the Daily Official List of the London Stock Exchange on the day before the
option was granted or some other day or days agreed with the Inland Revenue.
The middle-market quotation may also be averaged over any three day period
for this purpose.


Exercise of Options

An option will not normally be exercisable until three years from its grant.
Options will lapse no later than 10 years from the date granted.

For the initial share option grant, a staggered vesting schedule was
incorporated for the most senior executives of SVLL whereby, to the extent
that the performance target has been met, two-thirds of the grant will be
exercisable three years from grant, with the remaining one-third exercisable
four years from grant.


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The Remuneration Committee intends to set appropriately demanding performance
conditions on the exercise of options.

For the initial share option grant under the Executive Share Option Plan, the
Remuneration Committee has chosen a performance target broadly equivalent to
the hurdle rate attached to Carried Interest in respect of existing Funds.
The exercise of options will be subject to a performance target which
requires the percentage growth in the Company's net asset value per Ordinary
Share, as disclosed in the Annual Report and Accounts or Interim Report
(whichever is the more recent), over the performance period to be at least
equal to (a) the percentage growth in the Retail Price Index over the same
period plus (b) a percentage equal to four times the number of years in the
performance period.

If the performance target has not been fully satisfied on the third
anniversary of the date of grant, the target can be re-tested every six
months over the life of the option. The performance period in each case will
be the period from the date of grant of the options until the date at which
the performance target is being tested.

The Remuneration Committee is cognisant of current market practice whereby
companies are limiting the opportunities to re-test performance targets
attached to share options. The initial share option grant is, however,
designed to replicate so far as practicable the potential gains through
Carried Interest arrangements being forgone (as outlined above), which can
reward executives up to 12 years after the initial investment. The
Remuneration Committee therefore considers that it is appropriate to
incorporate a provision to re-test the performance target over the full 10
year life of the option. For future grants, the provision to re-test the
performance target after the initial three year performance period will be
limited to re-tests every six months up to six years from grant. For each
re-test, the base point for measuring the performance target will be fixed at
the date of grant.

Options normally lapse on cessation of employment (which is taken to include
ceasing to be a Director or on secondment). However, exercise is permitted:

(a)    following cessation of employment in certain specified circumstances and
       at the Boards discretion following cessation of employment in any other
       circumstances; or

(b)    on a reconstruction, takeover or winding-up of the Company.

In such cases the performance conditions cease to apply, except that they
continue to apply in the case of normal retirement and that the Remuneration
Committee has discretion as to how they shall continue to apply in the case of a
restructuring, takeover or winding-up but having regard to performance to the
date of such restructuring, takeover or winding-up.

The exercise of an option may be satisfied not in shares but with cash of
equivalent value.


Variation of Capital

In the event of any increase or variation of share capital, or (except in the
case of Inland Revenue approved options) of a demerger, special dividend or
any other circumstance similarly affecting options, the Board may make such
adjustments as it considers appropriate to the number of shares subject to
options and the price payable on their exercise.


Alterations to the Executive Share Option Plan

The Board may at any time alter or add to the Executive Share Option Plan in
any respect, provided that the prior approval of the Company in general
meeting is obtained for alterations or additions to the advantage of
participants to the rules governing eligibility, limits on participation,
terms of exercise, non-assignability of options and adjustments of options.
Such prior approval is not required for minor amendments for administrative
advantage, to take account of a change in legislation or to obtain or
maintain favourable tax, exchange control or regulatory treatment for
participants or group companies. Also, the above does not restrict the
ability of the Board to adjust performance conditions to take account of
supervening events (e.g. a variation of share capital).


Pensionability

No benefits received under the Executive Share Option Plan will be
pensionable.


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PAYE/NIC Elections

he Executive Share Option Plan requires the option holder to indemnify the
SVIIT Group (or his or her employer if different) in respect of any PAYE
liability. It also allows the Company to sell Ordinary Shares on the option
holder's behalf to meet this liability.

At the Remuneration Committee's discretion, the option holder may, as a
condition of grant of an option under the unapproved part of the Executive
Share Option Plan, be required to indemnify the SVIIT Group (or his or her
employer if different) in respect of any employer's national insurance
liability (or overseas equivalent) on the exercise of the option or,
alternatively, to enter into an election with his employer to pass this
liability to the option holder.


Employee Benefit Trusts

Employee Benefit Trusts were established to operate in conjunction with the
Executive Share Option Plan and any other employee share scheme operated by
the Company or its subsidiaries. This will provide the Company with
flexibility in the sourcing of Ordinary Shares for these schemes.

The trusts were constituted by trust deeds between the Company and Mourant &
Co. Trustees Limited as trustee. The trustee has the power to acquire
Ordinary Shares for the benefit of the employees and former employees of the
Company and its subsidiaries and certain of their dependants. Any Ordinary
Shares so acquired will be able to be used for the purposes of the Executive
Share Option Plan (other than Part D) or any other employee share scheme
operated by the Company or its subsidiaries.

The trustee will not, without prior Shareholders' approval, make any
acquisition of Ordinary Shares which would result in more than five per cent.
of the Company's issued ordinary share capital being held in the trusts.


Overseas Participants

Parts B and D of the Executive Share Option Plan provide that the rules of
the Executive Share Option Plan may be amended for participants outside the
UK. Options granted to such participants may be granted subject to different
terms and conditions in order to take into account local tax, exchange
control or securities laws but any Ordinary Shares made available by virtue
of such amendments must be treated as counting against any limits on
individual or overall participation in the Executive Share Option Plan. Part
C of the Executive Share Option Plan covers the grant of incentive stock
options to participants in the US which allow them to benefit from a
favourable tax regime.


8.    General

(a)   There are no legal or arbitration proceedings involving any member of the
      Group (including any proceedings which are pending or threatened of which
      the Company is aware) which may have or have had in the previous 12 months
      a significant effect on the Group's financial position.

(b)   Platinum Trust (the "Trust") is a Guernsey unit trust in which the Company
      owns approximately 99 per cent. of the ordinary units and 90 per cent. of
      the B units, and is accordingly treated as a subsidiary of the Company.
      The remaining units are owned by Schroder Investments (Bermuda) Limited.
      The principal purpose of the Trust is to invest in unit trusts, limited
      partnerships or companies comprising funds with the objective of
      participating in venture capital and buy-out opportunities. The trustee of
      the Trust is Barings (Guernsey) Limited.

(c)   A former employee of Permira's investment consultants in France has been
      placed under examination ("mis en examen") in connection with an inquiry
      being conducted in France by an investigating magistrate ("judge
      d'instruction"). It is understood that the inquiry is into circumstances
      surrounding a public offering in 1998 in shares of an investee company of
      Permira France II. The Board of SVIIT is of the opinion that the outcome
      of the inquiry should have no bearing on SVIIT's relationship with
      Permira.

(d)   There has been no significant change in the financial or trading position
      of the Group since 31 December 2001, the date of the last interim
      financial statements and there has been no material adverse change in the
      financial position or prospects of the Group since the date of its last
      published annual accounts.

(e)   Ernst & Young of Rolls House, 7 Rolls Buildings, Fetter Lane, London EC4
      1NH have audited the accounts of the Company for the years ended 30 June
      1999, 2000 and 2001. The audit report on each set of accounts was
      unqualified.


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(f)   Contracts in respect of the Bonds

      The following is a summary of the contents of each principal contract
      directly concerning the issue of the Bonds:

      (i)    the Trust Deed dated 21 November 2001 between (1) the Issuer and
             (2) the Trustee, inter alia, constituting the Bonds (and
             incorporating the Terms and Conditions and provisions governing the
             subordination and conversion thereof) and appointing the Trustee to
             act in that capacity;

      (ii)   the Registrar and Paying Agency Agreement dated 21 November 2001
             between (1) the Issuer (2) the Trustee and, (3) JPMorgan Chase
             Bank, setting out, inter alia, the terms of appointment and duties
             of JPMorgan Chase Bank (in its capacity as registrar, conversion
             agent, transfer agent and paying agent (the "Registrar"). The
             duties of the Registrar (for which it will receive fees payable by
             the Issuer) are of an administrative nature acting as agent for the
             Issuer in relation to the making of payments on the Bonds and in
             relation to conversion of the Bonds in accordance with and in order
             to give effect to the provisions of the Trust Deed;

     (iii)   the Subscription Agreements in respect of the Bonds dated 21
             November 2001 between (1) the Issuer and (2) the Subscribers, the
             principal terms of which are summarised in "Subscription and Sale";

     (iv)    the Placing Agreement dated 21 November 2001 between (1) the Issuer
             and (2) the Placing Agent, the principal terms of which are
             summarised in "Subscription and Sale"; and

     (v)     two placing letters (the "Placing Letters") dated 11 December 2001
             between (1) the Issuer and (2) Schroder & Co. Limited and (1) the
             Issuer and (2) Schroder & Co. Bank AG recording agreements by which
             each of Schroder & Co. Limited and Schroder & Co. Bank AG agreed to
             place some of the Bonds with their respective clients, in
             consideration for fees payable by the Issuer calculated at 2 per
             cent. of the value of Bonds so placed.

(g)   The listing of the Bonds on the Official List of the UK Listing Authority
      and their admission to trading on the London Stock Exchange's market for
      listed securities will be expressed in pounds sterling as a percentage of
      their nominal amount (excluding accrued interest). Transactions will
      normally be effected for settlement in pounds sterling and for delivery
      on the third business day in London after the day of the transaction. It
      is expected that such listing will be granted on or about 5 July 2002.
      Prior to official listing, dealings will be permitted by the London Stock
      Exchange in accordance with its rules.

(h)   In the event of a winding up of the Issuer, all amounts in respect of the
      Bonds paid to the Trustee by the liquidator of the Issuer in a winding up
      of the Issuer will be held by the Trustee upon trust (i) first for payment
      or satisfaction of all amounts then due and unpaid under clauses 15 and/or
      16(x) of the Trust Deed (relating to remuneration and indemnification
      of the Trustee); (ii) secondly for payment of claims of all Senior
      Liabilities (as defined in the Terms and Conditions of the Bonds) of the
      Issuer in a winding up of the Issuer to the extent that such claims are
      admitted to proof in the winding up (excluding interest accruing after
      commencement of the winding up); and (iii) thirdly as to the balance (if
      any) for payment pari passu and rateably of the amounts owing on or in
      respect of the Bonds.

9.    Documents available for inspection

Copies of the following documents or final drafts are available for inspection
during normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) up to and including 22 July 2002 at the offices of Slaughter
and May, One Bunhill Row, London EC1Y 8YY:

(a)   the Memorandum and Articles of Association of the Company;

(b)   the Subscription Agreements, the Registrar and Paying Agency Agreement,
      the Placing Agreement, the Placing Letters and the Trust Deed;

(c)   the audited consolidated financial statements of the SVIIT Group for each
      of the last two completed financial years and the interim consolidated
      financial statements of the SVIIT Group for the six months ended 31
      December 2001; and

(d)   these Listing Particulars.


                                       86


                                   DEFINITIONS


The following definitions apply throughout this document unless the context
requires otherwise:


  "Admission"                            the admission of the Bonds to the
                                         Official List and to trading on the
                                         London Stock Exchange's market for
                                         listed securities

  "Articles of Association" or           the articles of association of the
  "Articles"                             Company

  "Bondholders"                          the several persons who are for the
                                         time being holders of the Bonds

  "Calls"                                the contractual demands made by the
                                         Funds to Investors from time to time
                                         to satisfy part or all of the
                                         outstanding unpaid capital committed
                                         by Investors in relation to their
                                         Holdings in immature Funds as
                                         described on page 19

  "Carried Interest"                     the allocation of a portion of gains
                                         to individuals connected with
                                         Schroder Ventures or Permira and
                                         members of the Schroder Group
                                         derived from particular Holdings of
                                         up to 20 per cent. of profits
                                         arising in the Funds, as calculated
                                         in accordance with the terms of the
                                         relevant Fund, as described on page
                                         21

  "Closing Date"                         21 November 2001

  "Companies Act"                        the Companies Act 1985, as amended

  "CREST"                                the relevant system (as defined in
                                         the Uncertificated Securities
                                         Regulations) in respect of which
                                         CRESTCo Limited is the Operator
                                         (asdefined in the Uncertificated
                                         Securities Regulations), being a
                                         paperless settlement system enabling
                                         securities to be evidenced otherwise
                                         than by a certificate and
                                         transferred otherwise than by way of
                                         a written instrument

  "Depositary"                           The Bank of New York, 101 Barclay
                                         Street, 22nd Floor, New York 10286
                                         United States of America or its
                                         successor

  "Development Stage Equity              unquoted investments, including
  Investments"                           investments in management buy-outs
                                         and buy-ins, which are not Early
                                         Stage Investments

  "Directors" or "Board"                 the directors of the Company, whose
                                         names appear under "Directors,
                                         Secretary and Advisers" on page 3

  "Early Stage Equity Investments"       investments in new companies,
                                         including seed, start-up and other
                                         early stage investments, typically
                                         not consistently generating
                                         significant profits

  "EDRs"                                 the Company's Euro Depositary
                                         Receipts issued in December 2000

  "EDR" or "Euro Depositary Receipt"     a euro denominated certificate
                                         issued by the Depositary
                                         representing oneOrdinary Share or a
                                         multiple thereof

  "Ernst & Young"                        the UK firm of Ernst & Young, of
                                         Rolls House, 7 Rolls Buildings,
                                         Fetter Lane, London EC14 1NH

  "Executive Share Option Plan"          the Schroder Ventures International
                                         Investment Trust plc 2001 Executive
                                         Share Option Plan

  "Facility Agreement"                   the euro225,000,000 Revolving Credit
                                         Facility Agreement dated 16 March
                                         2001 between SVIIT, Barings
                                         (Guernsey) Limited and the Royal
                                         Bank of Scotland plc

  "Funds"                                funds, as listed in table 2 on page
                                         9 of this document, to which
                                         Schroder Ventures or Permira act as
                                         adviser or consultant

  "Holdings"                             units in unit trusts, interests in
                                         limited partnerships and shares in
                                         companies (and the benefit of loans
                                         associated therewith) comprising the
                                         Funds

  "Investors"                            the persons who are the registered
                                         holders of Holdings or the bearers
                                         of shares evidencing Holdings

  "IRR"                                  internal rate of return calculated
                                         on the basis described on page 20

  "listed" or "quoted"                   securities which are listed or
                                         quoted on a public stock exchange or
                                         over-the-counter market and
                                         "unlisted" or "unquoted" shall be
                                         construed accordingly

  "Listing Rules"                        the rules contained in The Listing
                                         Rules as published by the UK Listing
                                         Authority and amended from time to
                                         time

  "London Stock Exchange"                the London Stock Exchange plc

  "NASD"                                 National Association of Securities
                                         Dealers, Inc.

  "Official List"                        the official list of the UK Listing
                                         Authority

  "Ordinary Shares"                      ordinary shares of GBP1 nominal value
                                         each of SVIIT

  "Partners"                             a recognised title applied within
                                         Schroder Ventures to senior
                                         professionals, but not necessarily
                                         implying the carrying on of a
                                         business in partnership

  "Platinum Trust"                       a unit trust registered in Guernsey
                                         controlled by SVIIT, which holds
                                         certain interests in the Funds as
                                         described on page 76

  "Schroder Group"                       Schroders plc and its subsidiary
                                         undertakings and associated
                                         undertakings (within the meaning
                                         given to that expression by
                                         paragraph 20 of Schedule 4A to the
                                         Companies Act 1985) from time to
                                         time"Schroder Ventures or Permira"
                                         those independent entities being
                                         members of the Schroder Ventures
                                         international association and
                                         providing advisory or consultancy
                                         services to the Funds

  "Schroder Ventures Limited"            the company incorporated in Guernsey
                                         with registered number 32623 whose
                                         registered office is at Barfield
                                         House, St Julian's Avenue, St Peter
                                         Port, Guernsey, Channel islands

  "SEC"                                  the US Securities and Exchange
                                         Commission

  "Section 842"                          Section 842 of the Income and
                                         Corporation Taxes Act 1988

  "Securities Act"                       the United States Securities Act of
                                         1933, as amended

  "Shareholder(s)"                       holder(s) of Ordinary Shares

  "SIM"                                  Schroder Investment Management
                                         Limited
  "SIM (UK)"                             Schroder Investment Management (UK)
                                         Limited

  "Subscribers"                          the subscribers of the Bonds

  "Subscription Price"                   the amount paid to the Issuer by
                                         each Subscriber in respect of the
                                         amount of Bonds subscribed by it at
                                         an issue price equal to 100 per
                                         cent. of the principal amount thereof

  "SVIIT" or "Company"                   Schroder Ventures International
                                         Investment Trust plc

  "SVIIT Group" or "Group"               SVIIT and its subsidiary
                                         undertakings and associated
                                         undertakings (withinthe meaning
                                         given to that expression by
                                         paragraph 20 of Schedule4A to the
                                         Companies Act 1985)

  "SVLL"                                 Schroder Ventures (London) Limited,
                                         whose registered office is at
                                         Burleigh House, 357 Strand, London
                                         WC2R 0HS

  "SVNA"                                 Schroder Ventures North America
                                         Inc., whose registered office is at
                                         1013 Centre Road, Wilmington,
                                         Delaware, U.S.A.

  "UK Listing Authority"                 the Financial Services Authority
                                         acting in its capacity as the
                                         competent authority for the purposes
                                         of FSMA and in the exercise of its
                                         function in respect of the admission
                                         to the Official List otherwise than
                                         in accordance with Part VI of FSMA,
                                         including where the context so
                                         permits, any committee, employee,
                                         officer or servant to whom any
                                         function of the UK Listing Authority
                                         may for the time being be delegated

  "Uncalled Commitments"                 commitments to pay future Calls to
                                         the Funds

  "Uncertificated Securities             the Uncertificated Securities
  Regulations"                           Regulations 1995 (SI 1995 No.
                                         95/3272) as amended from time to time

  "United States"                        the United States of America, its
                                         territories and possessions, any
                                         state ofthe United States of America
                                         and the District of Columbia and all
                                         other areas subject to its
                                         jurisdiction

  "United States Person" or "US Person"  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 "US Person" in Rule
                                         902(k) under the United States
                                         Securities Act of 1933, as amended

  "U.S. Securities Laws"                 the U.S. Securities Act of 1933 (as
                                         amended) and the US Securities and
                                         Exchange Act of1934

  "VAT"                                  value added tax as provided for in
                                         The Value Added Tax Act 1994 and
                                         legislation (whether delegated or
                                         otherwise) supplemental thereto and
                                         any similar or turnover tax
                                         replacing or introduced in addition
                                         to any of the same and any
                                         equivalent thereof in any other
                                         jurisdiction.

Currency exchange rates


GBP1 = 1.4554 United States Dollars      GBP1 = 3164.92 Italian Lire ("Lire")
("US$")                                  GBP1 = 271.966 Spanish Pesetas
GBP1 = 2.3232 Canadian Dollars ("C$")    ("Ptas")
GBP1 = 3.1969 German Deutschmarks ("DM") GBP1 = 190.745 Japanese Yen ("Y")
GBP1 = 10.7219 French Francs ("FF")      GBP1 = 1.6346 Euro ("euro")

Exchange rates are the mid-market spot rates as at the close of business on
the 31 December 2001, asextracted from the London edition of the Financial
Times on 2 January 2002.


<PAGE>

Exhibit 2.3    Trust Deed, dated November 21, 2001, between the Company and
               The Law Debenture Trust Corporation p.l.c.



THIS TRUST DEED is made on 21st November, 2001 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 19th November,  2001 and a written resolution of the Board
     of  Directors  of the  Issuer  dated  13th  November,  2001 the  Issuer has
     resolved to issue  GBP40,000,000  41/2 per cent.  Subordinated  Convertible
     Bonds due 2011 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;

                                       2

     "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;

     "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

                                       3

    (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;

     "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;

                                       4

     "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;

     "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 41/2 per cent. Subordinated Convertible Bonds due 2011 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;


                                       5

    (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;

             (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;

                                       6


             (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;

                                       7

     "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;

     "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;

                                       8

     "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;

     "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.

     Words denoting 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.


                                       9

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.

     (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.

                                      10

     (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;

                                       11

        (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 (ii) 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:


                                       12

             (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).

     (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:

                                       13

             (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

     (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

                                       14

            (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 anominee or agent for (i) any person providing a clearance
            service within the meaning of Section 96 Finance Act 1986 or (ii)
            any person whose business is or includes issuing depositary receipts
            within the meaning of Section 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.

     (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.

                                       15

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;

                                       16

            (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;

                                       17

            (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);

            (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;

                                       18

            (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

                                       19

            (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.


                                       20

     (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.

     (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.

                                       21

     (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.

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.


                                       22
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 96 Finance Act 1986 or (ii) any
     person whose business is or includes issuing depositary receipts within the
     meaning of Section 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:

                                       23

     (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.


                                       24

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.

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.

                                       25

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.

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.


                                       26

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

     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.

                                       27

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.


                                       28

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.

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;


                                       29

     (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 30th June, 2002 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);

     (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;


                                       30

     (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;

     (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;

                                       31

     (xiii) promptly give to the Trustee two copies of, the 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 of the United Kingdom);

     (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;


                                       32

     (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;

     (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 references therein to the United Kingdom or any
            political sub-division or any authority therein or thereof having
            power to tax of references 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.


                                       33

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.

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.


                                       34

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 96 Finance Act 1986 or (ii) any
     person whose business is or includes issuing depositary receipts within the
     meaning of Section 93 Finance Act 1986.

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.


                                       35

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.

                                       36

     (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.

                                       37

     (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.

     (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 96 Finance Act 1986 or (ii)
            any person whose business is or includes issuing depositary
            receipts within the meaning of Section 93 Finance Act 1986.


                                       38

     (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.

     (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.


                                       39

     (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.


                                       40

     (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.


                                       41

     (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.

     (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.


                                       42

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

                                       43

     (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.

     Where any 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.

                                       44

     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.


                                       45

     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

     (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).


                                       46

     (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 references to the United
                 Kingdom of 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;

            (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.


                                       47

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.


                                       48

     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


                                       49

     (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.

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.

                                       50

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
                        357 Strand, London WC2R OHS
                        (Attention: Legal Director)
                        Facsimile No: 020 7240 5346

     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.

                                       51

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.



                                       52


                           THE FIRST SCHEDULE
                    Form of Original 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 1/2 PER CENT. SUBORDINATED CONVERTIBLE BONDS DUE 2011


     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 41/2 per cent. Subordinated Convertible Bonds due 2011
which are constituted by a Trust Deed dated 21st November, 2001 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


                                       53


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, Conversion Agent and Transfer Agent:

                            JPMorgan Chase Bank
                              Trinity Tower
                            9 Thomas More Street
                              London E1W 2YT

THIS SUBORDINATED CONVERTIBLE BOND DUE 2011, 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 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.

                                       54


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.





                             THE SECOND SCHEDULE
                   The Conditions of the Original Bonds

                     TERMS AND CONDITIONS OF THE BONDS

The GBP40,000,000 41/2 per cent. Subordinated Convertible Bonds due 2011 (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 21st November, 2001 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 written resolution of a duly appointed committee of the Board
of Directors of the Issuer dated 19th November, 2001 and a resolution of the
Board of Directors of the Issuer dated 13th November, 2001. 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 21st
November, 2001 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 21st November,
2001 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.

                                       56

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.

3.     Interest

3.1    Rate of interest

       The Bonds bear interest from (and including) 21st November, 2001 (the
       "Closing Date") at the rate of 41/2 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) in arrear on 21st November in each year (an "Interest Payment
       Date").

       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
       21st November, 2011 (the "Final Redemption Date").

                                       57

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, and
             including, the date fixed for redemption if:

             (i)  at any time on or after 21st November, 2004, the Average
                  Closing Price is equal to or greater than 130 per cent. of the
                  Conversion Price; or

            (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 from 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, and
            including, 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.


                                       58

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.

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 410p 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.


                                       59

       (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 days before the due date of redemption of the relevant Bonds.
             The period from the due date hereof to such date 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.

                                       60

       (B)   If the Ordinary Shares are then a participating security in a
             relevant system, unless The Uncertificated Securities Regulations
             1995 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 this document. 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:


                                       61

                   (1)   the net asset value per Ordinary Share as at 31st
                         December, 2001 as published in the interim report and
                         accounts of the Issuer for the 6 month period ending
                         31st December, 2001 (the "December NAV") is less than
                         407p; or

                   (2)   the net asset value per Ordinary Share as at 30th June,
                         2002 as published in the annual report and accounts of
                         the Issuer for the year ending 30th June, 2002 (the
                         "June NAV") is less than 407p;

                   the Conversion Price shall be reduced with effect from the
                   date which is 21 days after publication of the said annual
                   report and accounts for the year ending 30th June, 2002 by
                   the greater of:-

                   (a)   the difference between 407p and the June NAV; and

                   (b)   the difference between 407p and the December NAV.

             (ii)  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.

             (iii) If and whenever the Issuer shall issue (otherwise than
                   pursuant to Condition 5.3(A)(vii) or to any of the
                   transactions described in Condition 5.3(A)(iv) and Condition
                   5.3(A)(viii) 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.


                                       62

             (iv)  (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)(vii)
                         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.



                                       63

                   (b)   If and whenever the rights of conversion or exchange
                         or subscription attached to any such securities as are
                         referred to in section (iv) of this Condition 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).


                                       64

             (v)   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.

             (vi)  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)(v) 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.

             (vii) 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).


                                       65

             (viii)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)(vii) 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:-

                                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).


                                       66

             (ix)  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.

             (x)   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)(iii) and 5.3(A)(iv)(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

             (ii)  in the case of the issue of securities convertible into or
                   exchangeable for, or carrying rights of subscription for,
                   Ordinary Shares (i) 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 (ii) 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.


                                       67

       (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)(v) to 5.3(A)(viii)
             inclusive of this Condition or any such issue as is mentioned in
             Condition 5.3(A)(iii) or 5.3(A)(iv)(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)(iii), 5.3(A)(iv)(a) and 5.3(A)(v)),
             before the date that the Capital Distribution is actually made
             (in the case of Condition 5.3(A)(vi)) or before the date on which
             the issue or grant is made (in the case of Conditions 5.3(A)
             (viii)), 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)(ii)).


                                       68

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.

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.



                                       69

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. 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.

       (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.


                                       70

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
       (i) to, or to an agent or nominee for, Euroclear, Clearstream Luxembourg,
       Depository and Clearing Centre or any other person providing a clearance
       service within the meaning of section 96 of the Finance Act 1986 of the
       United Kingdom or (ii) to, or to an agent or nominee for, a person whose
       business is or includes issuing depositary receipts within the meaning
       of section 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 (a) 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
       (b) 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.



                                       71

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    The Issuer may, but will have no obligation to, list the Bonds on any
       Recognised Stock Exchange. 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.


                                       72

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.

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.


                                       73

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 (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.

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.

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.


                                       74

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

12.1   The Issuer will cause to be kept at Trinity Tower, 9 Thomas More
       Street, London E1W 2YT (or such other place in the United Kingdom 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
       the United Kingdom or such other place as the Trustee may approve. 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.


                                       75

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 7 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;



                                       76


       (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.

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.


                                       77

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

       (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,


                                       78

       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, and including, 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), (C) or (D) 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 has 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.


                                       79

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. 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.


                                       80

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.


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(o) 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:


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       (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

       (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.


                                       82

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.

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.


                                       83

16.    Contracts (Rights of Third Parties) Act 1999

16.1   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

17.1   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

18.1   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

19.1   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.


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20.    Governing Law

20.1   The Trust Deed and the Bonds are governed by, and shall be construed
       in accordance with, English law.

21.    Definitions

21.1   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 30th June, 2001 as shown in the audited
                 consolidated accounts of the Issuer and its subsidiaries; or

                                       85

           (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;

       "Closing Price" for any day shall mean the mean of the quotations of an
       Ordinary Share on that day as derived from 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)(iii), 5.3(A)(iv), 5.3(A)(vi), 5.3(A)(vii) or 5.3(A)(viii) any
       such ordinary shares which, when fully paid, will be Ordinary Shares;


                                       86

       "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;

       "Senior Liabilities" means the Liabilities of the Issuer to the Royal
       Bank of Scotland plc under the facility agreement dated 16th March, 2001
       between the Issuer, Barings (Guernsey) Limited and the Royal Bank of
       Scotland plc;

       "Stock Exchange" has the meaning given in the Trust Deed;

       "Subsidiary" means each subsidiary for the time being of the Issuer; and

       "subsidiary" has the meaning ascribed to it under Section 736 of the
       Companies Act 1985.



                         REGISTRAR AND CONVERSION AGENT

                           JP Morgan Chase Bank
                              Trinity Tower,
                             9 Thomas Street,
                              London E1W 2YT




                                       87

                               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 Trustee and the holders
       of the Registered Securities or any of them and any person authorised by
       it or any of them may at all reasonable times during office hours inspect
       the register and take copies of or extracts from it. 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 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.

4.     The Registered Securities to be transferred must be delivered (duly
       stamped, if applicable) for registration to the specified office of the
       Registrar or any Transfer Agent with the form of transfer endorsed
       thereon duly completed and executed and must be accompanied by such
       documents, evidence and information as may be required pursuant to the
       Conditions and such other evidence as the Issuer may reasonably require
       to prove the title of the transferor or his right to transfer the
       Registered Securities and, if the 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.

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.


                                       88

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
       Issuer shall require, 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 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 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 shall 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 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 post to the address
       specified by the Holder) at his expense.


                                       89

11.    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 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.



                                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:


                                       91

                         (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;

                   (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



                                       92

                   (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.

       (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.


                                       93

       (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.


                                       94

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.


                                       95

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;

       (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.


                                       96

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.

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.


                                       97

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.


                                       98

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.


                                       99

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.


                                      100

      (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.

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.


                                      101

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.

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.



                                      102

                                THE FIFTH SCHEDULE
                               Transfer Certificate

                                     REGISTRAR
                                     (address)

We, the undersigned are (a) the registered owner (the "Transferor") of GBP face
amount of 41/2 per cent. Subordinated Convertible Bonds due 2011 (the
"Bonds") represented by certificate number ( ) issued by Schroder Ventures
International Investment Trust plc (the "Issuer") and constituted by a Trust
Deed, dated 21st November, 2001, 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.

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))
whose United States Taxpayer Identification No. (if applicable) is:
___________________________________________________________________________

(IN THE CASE OF A TRANSFER OTHER THAN PURSUANT TO I.A.2 BELOW PLEASE INSERT
TAXPAYER IDENTIFICATION NO. OF TRANSFEREE)

the accompanying Bonds and all rights thereunder, hereby irrevocably
constituting and appointing ( ) attorney to transfer such Bonds on the books
of the Issuer with full power of substitution in the premises.

I.     TRANSFEROR REPRESENTATIONS

A.     United States Securities Act

In connection with this transfer of the Bonds, the undersigned Transferor
confirms that (check one):

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 (check one):

     (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

                                      104


     (b)          such transfer is being effected to the Issuer or a
                  subsidiary thereof;

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.



                                      105

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.


                                      106

21.2     II     TRANSFEREE REPRESENTATIONS

A.       United States Securities Act

The undersigned Transferee represents and warrants that (check one):

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 (check one):

         (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


                                      107

         (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.


B.     Investment Company Act

The undersigned Transferee represents and warrants that (check one):

     (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.


                                      108

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.

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.


                                      109

TRANSFER CONSENTED TO:
on behalf of the Issuer in its capacity as

Registrar pursuant to the Registrar Agreement
dated as of *.

By:               ___________________________________

Printed Name:        ___________________________________

Title:               ___________________________________

Dated:               ___________________________________




                                      110

                              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:     41/2 per cent. Subordinated Convertible Bonds due 2011 of Schroder
             Ventures International Investment Trust plc

In connection with our proposed purchase of GBP____________ face amount of
41/2% Subordinated Convertible Bonds due 2011 (the "Bonds") represented by
certificate number __________ issued by Schroder Ventures International
Investment Trust plc (the "Issuer") and constituted by a Trust Deed dated
21st November, 2001 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.



                                      111

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.


                                      112

                                          (Insert Name of Accredited Investor)

                                           By:

                                               NAME:

                                               TITLE:



                                               Dated: ____________





                                      113

  EXECUTED AS A DEED BY SCHRODER VENTURES             )
  INTERNATIONAL INVESTMENT TRUST PLC                  )     John McLachlan
  acting by a director and its secretary/ two         )     Director
  directors:                                          )
                                                      )
                                                      )     Nicholas Ferguson
                                                            Director

  THE COMMON SEAL of THE LAW DEBENTURE TRUST          )     Julian Mason-Jebb
  CORPORATION p.l.c. was affixed to this deed in      )
  the presence of:                                    )
                                                      )     Clive Rakestrow

                                          Director:        Julian Mason Jebb

                              Authorised Signatory:        Clive Rakestrow

CD013400178




                                                                CONFORMED COPY

                           DATED 21st November, 2001

            SCHRODER VENTURES INTERNATIONAL INVESTMENT TRUST plc

                                     and

                 THE LAW DEBENTURE TRUST CORPORATION p.l.c.

         ________________________________________________________

                                TRUST DEED

                               constituting
                               GBP40,000,000

         41/2 per cent. Subordinated Convertible Bonds due 2011

                  (with authority to issue further
                             bonds or notes)
        ________________________________________________________

                              For the Issuer:

                            Slaughter and May
                           35 Basinghall Street
                             London EC2V 5DB

                             For the Trustee:

                              Allen & Overy
                             One New Change
                             London EC4M 9QQ

                             CD013400178


         Contents

                                                                      Page

1.       Definitions                                                  1

2.       Covenant to Repay and to Pay Interest on Original Bonds      9

3.       Form and Issue of Original Bonds                             13

4.       Covenants in relation to Conversion Right                    13

5.       Fees, Duties and Taxes                                       18

6.       Covenant of Compliance                                       18

7.       Cancellation of Securities and Records                       19

8.       Enforcement                                                  20

9.       Action, Proceedings and Indemnification                      21

10.      Application of Moneys                                        22

11.      Notice of Payments                                           22

12.      Investment by Trustee                                        23

13.      Partial Payments                                             23

14.      Covenants by the Issuer                                      23

15.      Remuneration and Indemnification of Trustee                  27

16.      Provisions Supplemental to Trustee Act 1925 and the
          Trustee Act 2000                                            29

17.      Trustee's Liability                                          35

18.      Trustee Contracting with the Issuer                          35

19.      Waiver, Authorisation and Determination                      36

20.      Holder of Definitive Bearer Security Assumed to
          be Couponholder                                             37

21.      Substitution                                                 38

22.      Currency Indemnity                                           39

23.      New Trustee, Separate and Co-Trustees                        40

24.      Trustee's Retirement and Removal                             41

25.      Trustee's Powers to be Additional                            41

26.      Notices                                                      41

27.      Contracts (Rights of Third Parties) Act 1999                 42

28.      Governing Law                                                42

29.      Counterparts                                                 42

THE FIRST SCHEDULE Form of Original Bond Certificate                  44

THE SECOND SCHEDULE The Conditions of the Original Bonds              47

1.       Form, Denomination and Title                                 47

2.       Status and Subordination                                     47

3.       Interest                                                     48

4.       Redemption and purchase                                      48

5.       Conversion                                                   50

6.       Stock Exchange listing                                       60

7.       Payments                                                     61

8.       Events of Default and Enforcement                            61

9.       Purchase of own shares                                       62

10.      Taxation                                                     63

11.      Prescription                                                 63

12.      Registration                                                 63

13.      Transfer of Bonds                                            64

14.      Meetings of Holders, Modification, Waiver and Substitution   68

15.      Replacement of Bonds                                         70

16.      Contracts (Rights of Third Parties) Act 1999                 70

17.      Indemnification of the Trustee                               70

18.      Notices                                                      70

19.      Further issues                                               71

20.      Governing Law                                                71

21.      Definitions                                                  71

THE THIRD SCHEDULE Register and Transfer of Registered Securities     74

THE FOURTH SCHEDULE Provisions for Meetings of Holders                76

THE FIFTH SCHEDULE Transfer Certificate                               86

THE SIXTH SCHEDULE Form of Certificate from  Acquiring Institutional
 Accredited Investor                                                  92



<PAGE>

Exhibit 4.16     Investment Advisory Agreement, dated January 17, 2002,
                 between Schroder Ventures (London) Limited and Schroder
                 Investment Management (Ireland) Limited


CONFORMED COPY




                             DATED 17 January 2002




                SCHRODER INVESTMENT MANAGEMENT (IRELAND) LIMITED

                                      And

                       SCHRODER VENTURES (LONDON) LIMITED




                     _____________________________________

                         INVESTMENT ADVISORY AGREEMENT
                     _____________________________________






                               #32682v3(v2)(v1)
                        (created from e-mail CD11370051)


                                       1


THIS INVESTMENT ADVISORY AGREEMENT is made this 17th day of January 2002

BETWEEN

(1)  SCHRODER INVESTMENT  MANAGEMENT (IRELAND) LIMITED,  whose registered office
     is at IFSC  House,  International  Financial  Services  Centre,  Dublin  1,
     Ireland (registered in Ireland with No. 270382) (the "Manager"); and

(2)  SCHRODER  VENTURES  (LONDON)  LIMITED,  whose  registered  office  is at 20
     Southampton  Street,  London WC2E 7QH (registered in England and Wales with
     No. 3368611) (the "Investment Adviser").

WHEREAS

(A)  The Manager was appointed the Manager to Schroder  Private Equity Funds plc
     an umbrella  closed-ended  investment  company  registered  in Ireland with
     registered number 346388, having its registered office at IFSC House, IFSC,
     Dublin 1 (the  "Company")  pursuant to a Management  Agreement  between the
     Company  and  the  Manager  dated  14th  November,  2001  (the  "Management
     Agreement").

(B)  The Manager  wishes to engage the  Investment  Adviser  and the  Investment
     Adviser  wished to accept  the  engagement  to provide  certain  investment
     advice pursuant to the terms and conditions of this Agreement.

(C)  The Investment Adviser is regulated by the Investment Management Regulatory
     Organisation Limited ("IMRO").

WHEREBY IT IS AGREED as follows:-


1.   Definitions



     (a)     In this Agreement:


     "Act"                       means Part XIII of the Irish Companies Act,
                                 1990 as the same may be amended, supplemented
                                 or re-enacted from time to time and
                                 includes any regulations made thereunder by
                                 ministerial order and any conditions that may
                                 from time to time be imposed thereunder by the
                                 Central Bank of Ireland whether by notice or
                                 otherwise affecting the Company;

     "Affiliate                  in relation to a body corporate means any
                                 subsidiary of that body corporate, any holding
                                 company of that body corporate and
                                 all other subsidiaries and subsidiary
                                 undertakings of that holding company;

                                       2

    "Business Day"              means a day (other than a Saturday or a Sunday)
                                 on which banks are open for business (other
                                 than solely for trading and settlement in
                                 euro) in London and Dublin;

     "Fund"                      means Schroders Private Equity Fund of Funds,
                                 the first sub-fund of the Company;

     "Investment Objectives"     means the investment objectives and policies of
                                 the Fund as set out in the following:

                                 (i)     the prospectus of the Company in
                                         relation to the Fund at the date
                                         hereof together with any amendment or
                                         supplement at any time published by the
                                         Company; and

                                 (ii)    the investment guidelines determined by
                                         the board of directors of the Company
                                         from time to time and communicated in
                                         writing to the Investment Adviser.

     "Investment Ombudsman"     means the person appointed by IMRO to
                                investigate complaints referred to him directly
                                or via IMRO;

     "Proceedings"              has the meaning given in clause 17
                                (Jurisdiction);

     "Service Documents"        has the meaning given in clause 18 (Agent for
                                Service);

     "Working Hours"            means 9.30 a.m. to 5.30 p.m. on a Business Day.


     (b)     Capitalised terms not otherwise defined herein shall have the
             meaning ascribed to them in the Management Agreement; and

     (c)     The expressions "holding company", "subsidiary" and "subsidiary
             undertaking" shall have the meaning given to them in the Companies
             Act 1985 (as amended from time to time).


                                      3


2.   Appointment; Management and Administration

     (a)     The Manager hereby appoints the Investment Adviser with effect from
             14th December, 2001 being the first closing date for the Fund, and
             the Investment Adviser hereby accepts its appointment, as
             investment adviser to the Manager to research and identify
             investment opportunities for the Company in relation to the Fund
             (including opportunities in unregulated collective investment
             schemes) consistent with the Investment Objectives and advise and
             render guidance to the Manager whenever called upon to do so
             concerning the acquisition and disposal of investments and dealings
             with the Company's portfolio of assets attributable to the Fund.
             Without limiting the generality of the foregoing, the Investment
             Adviser shall:



             (i)     research and evaluate investments which appear to the
                     Investment Adviser to be appropriate for the Company, and
                     advise on such particular factors relating thereto as the
                     Investment Adviser considers appropriate for consideration
                     by the Manager;



            (ii)     recommend from time to time to the Manager the purchase,
                     acquisition or sale of particular investments and the
                     timing of, and terms upon which, such purchase, acquisition
                     or sale should be effected;



           (iii)     monitor and analyse the progress of all investments held by
                     the Company and provide written reports on a semi-annual
                     basis (or more frequently if the Manager shall so
                     reasonably requires);



            (iv)     advise the Manager concerning all actions which it appears
                     to the Investment Adviser the Manager should take in order
                     to carry into effect the Investment Objectives;



             (v)     prepare material for inclusion in the reports to be sent to
                     the investors in the Fund whenever the Manager may
                     reasonably require such material;



            (vi)      advise the Manager in relation to the exercise of all
                     rights conferred by the Company's investments;



           (vii)     negotiate suitable terms for the acquisition and disposal
                     of investments;



          (viii)     advise the Manager upon the availability and determine the
                     source of funds to be utilised by the Company;



            (ix)     advise the Manager in relation to the negotiating of such
                     borrowings as are permitted by the Company's articles of
                     association and the Act; and


                                       4

             (x)     assist in the reconciliation of records relating to the
                     investments maintained by the Company, its custodian and
                     the Manager, their respective delegates and any bankers
                     appointed to the Company.



     (b)     In carrying out its duties under this Agreement, the Investment
             Adviser shall take into account:


             (i)     the Investment Objectives, as revised from time to time by
                     amendments communicated in writing to the Investment
                     Adviser; and


            (ii)     any other matter that prudent advisers of an investment
                     portfolio should reasonably take into consideration in the
                     proper discharge of their duties.



     (c)     The provisions of this Agreement shall not confer any power or
             authority on the Investment Adviser to enter into any transaction
             or in any way to bind the Manager or to hold or effect dealings in
             the Company's assets, and in performing its obligations under this
             Agreement the Investment Adviser shall act in an advisory capacity
             only, and shall not have the power to exercise any of the executive
             functions of the Manager.



3.   Fees and Expenses

     In consideration of the services rendered by the Investment Adviser
     hereunder, the Manager (and not the Company) shall pay to the Investment
     Adviser fees, costs and expenses, in an amount and manner as are separately
     agreed upon by such parties in a separate instrument.


4.   Exculpation and Indemnification

     (a)     An Advising Party (as defined in clause 4(c) below) shall not be
             liable, responsible or accountable in damages or otherwise to the
             Manager or to any other person for any Loss incurred or suffered by
             reason of any action by the Advising Party, if such action was
             taken in Good Faith, unless the Advising Party was Culpable with
             respect to such action (as such terms are defined in clause 4(c)
             below).



     (b)     The Manager agrees to indemnify and keep indemnified the Advising
             Parties in respect of any loss, cost (including any cost of
             enforcement), liability (including any tax liability excluding
             taxes on income arising under this agreement), claim or damage
             which any Advising Party incurs or suffers arising out of or in
             connection with the proper performance by the Advising Party of
             its obligations under this agreement, unless the Advising
             Party is Culpable.



     (c)     For purposes of this Agreement:


                                      5


             (i)     An "Advising Party" shall mean the Investment Adviser, its
                     subsidiaries or any employee, officer, director or
                     shareholder of the Investment Adviser or its subsidiaries.


            (ii)     An action is taken in "Good Faith" by an Advising Party if
                     such action was taken:


                     (A)     in good faith;


                     (B)     on behalf of and in furtherance of (or not opposed
                             to) the interests of the Company (or the Advising
                             Party reasonably believed such action to be
                             on behalf of and in furtherance of (or not opposed
                             to) the interests of the Company); and



                     (C)     in a manner reasonably believed by the Advising
                             Party to be within the scope of the rights, powers,
                             authorities or discretions conferred on it
                             (directly or indirectly) by or pursuant to this
                             Agreement, by the written consent of the Manager
                             or by law.



           (iii)     A person shall be deemed "Culpable" if such person is
                     finally determined (following all appeals) by a court of
                     competent jurisdiction to be liable (or such person has
                     admitted liability) for negligence, wilful misconduct,
                     fraud or material breach of this Agreement with respect to
                     taking an act.



            (iv)     "Loss" shall mean and include any and all loss, damage,
                     cost, expense or liability.



             (v)     Reference in this clause 4 to an act or action taken by an
                     Advising Party shall be deemed to include an omission or an
                     action omitted by such Advising Party.



     (d)     Any amounts payable by the Manager pursuant to clause 14(b) shall
             be limited to amounts received by the Manager under the Management
             Agreement and such further amounts that would have been payable to
             the Manager under the Management Agreement but for the fact the
             Manager was Culpable.


5.   Interests of the Investment Adviser

     (a)     The Investment Adviser shall devote such time as shall be necessary
             to perform its obligations under this Agreement in an appropriate
             manner.


     (b)     Subject to the foregoing, each Advising Party may engage in or
             possess any interest in other business ventures of any kind, nature
             or description, independently or with others, whether such ventures
             are similar in nature or form to the Company or otherwise, provided
             that the Investment Adviser shall consult with the Manager prior to
             engaging in any otherwise permissible activity which the Investment
             Adviser reasonably believes may be competitive with the Company.

                                       6


     (c)     The Investment Adviser shall deal with any conflicts of interest
             which arise in relation to the services it provides for the Company
             in accordance with the provision of the Company's prospectus (as
             may be issued from time to time) and the requirements of the
             Central Bank of Ireland.



6.   Non-Exclusivity

     Except to the extent  provided  otherwise in this  Agreement or in the
     Management  Agreement,  this Agreement shall not prevent any Advising Party
     from acting in any capacity whatsoever for any Person on such terms as such
     Advising Party may arrange.  The  Investment  Adviser shall have no duty to
     disclose to the  Manager,  or use for the  Manager's  benefit,  any fact or
     thing if to do so would be contrary to any legal or  regulatory  obligation
     or if such  disclosure  would  contravene any of the  Investment  Adviser's
     obligations under any other agreement.


7.   Termination



     (a)  Subject to clause 7(c) below,  this  agreement  shall continue in
          force but may be terminated at any time  forthwith by written  notice
          to that effect, to the Manager, in the case of termination by the
          Investment Adviser, or to the Investment Adviser, in the case of
          termination by the Manager if:


          (i)     the performance thereof shall become illegal under the laws of
                  England or Ireland; or


          (ii)    the other party shall commit any material breach of its
                  obligations under this agreement and shall fail to make good
                  such breach, if capable of remedy, within 30 days after the
                  giving of written notice by the first party requiring it to do
                  so; or


          (iii)   the other party shall be grossly negligent with respect to its
                  duties hereunder;


          (iv)    the other party shall go into liquidation (except a voluntary
                  liquidation for the purpose of a reconstruction or
                  amalgamation of which prior notice has been given to the first
                  party and in respect of which no notice of objection has been
                  given by the first party within 14 days); or


          (v)     a receiver, administrator or similar officer is appointed over
                  any of such other party's assets;

                                       7

          (vi)    the Management Agreement is declared to be void and of no
                  further effect or is otherwise terminated in accordance with
                  its terms.



     (b)  If:


          (i)     at any time prior to 31st December, 2005, any one or both of
                  Solomon Owayda or Andrew Williams (each an "Adviser") ceases
                  to provide the advisory services on behalf of the Investment
                  Adviser and no suitable replacement for the Adviser is
                  approved by the Manager (acting in good faith) within 19 weeks
                  of the date the Adviser ceased to provide the advisory
                  services on behalf of the Investment Adviser, then the Manager
                  may terminate this Agreement by the giving of not less than
                  six months written notice to the Investment Adviser; or


          (ii)    at any time between 31st December, 2002 and 31st December,
                  2004 (the "Period") the Manager is, in good faith,
                  dissatisfied with the performance of the Investment Adviser
                  and has given notice of the causes of dissatisfaction
                  to the Investment Adviser and such causes have not been
                  remedied within 30 days of receipt of notice of such
                  dissatisfaction, the Manager may terminate this Agreement by
                  12 months written notice (which must be given within the
                  Period but may expire after the end of the Period) to the
                  Investment Adviser; or



     (c)  Subject to (d) below,  if the  Investment  Adviser or any of its
          Affiliates shall,  without  the prior  consent of the  Manager,  at
          any time until the earlier of (i) the fifth  anniversary of this
          Agreement,  and (ii) the date of termination of this agreement,
          provide any of the services  detailed in clause 2(a) of this Agreement
          to any third party being a party which is, or has an Affiliate which
          is, an investment  manager or investment  adviser to an investment
          fund operating in the same geographical  markets as Schroders
          plc or any of its Affiliates  then the Manager may terminate this
          Agreement by the giving of not less than one months  written notice to
          the Investment Adviser.


     (d)  In the event that a Fund of Funds is formed following the date of
          this Agreement, having a similar investment focus and strategy as the
          Fund, that is managed or advised by Schroders plc, Schroder Investment
          Management Limited or any of their Affiliates and the Investment
          Adviser is not appointed investment adviser to the said Fund of Funds
          then the right of termination in (c) above shall cease to apply.



     (e)  In this clause 7 "Fund of Funds" shall mean an investment fund where
          the principal investment objective of that investment fund is to
          invest in other investment funds.


                                       8


8.   Limitation of Termination Rights


     (a)  The right of the Manager to terminate the Agreement pursuant to
          clause 7(b)(i),(ii) or (iii) and 7(c) shall cease to have any effect
          on:


          (i)     the Manager ceasing to be a wholly-owned subsidiary of
                  Schroders plc without simultaneously being substituted for all
                  relevant purposes by another wholly-owned subsidiary of
                  Schroders plc;


          (ii)    any person acquiring a right (whether subject to conditions
                  or not) the exercise of which would cause the Manager to
                  cease to be a wholly-owned subsidiary of Schroders plc without
                  simultaneously being substituted for all relevant purposes by
                  another wholly-owned subsidiary of Schroders plc;



          (iii)   Schroder Investment Management Limited ("SIM") ceasing to be a
                  subsidiary of Schroders plc or any person acquiring a right
                  (whether subject to conditions or not) the exercise of which
                  would cause SIM to cease to be a subsidiary of Schroders plc
                  without simultaneously being substituted for all relevant
                  purposes by another subsidiary of Schroders plc; and


          (iv)    any person acquiring a controlling interest (as described in
                  clause 8(b)) in Schroders plc.


     (b)  For the purposes of clause 8(a)(iv) a person will acquire a
          controlling interest in Schroders plc if he and any Associated
          Person(s) directly or indirectly acquire an aggregate shareholding in
          Schroders plc which shareholding confers the right to cast 50 per cent
          or more of the total votes which may be cast at all general meetings
          of Schroder plc provided that:



          (i)     an acquisition of shares by any person in the course of or in
                  connection with a scheme of reorganisation or reconstruction
                  at the end of which the ultimate shareholders of Schroders plc
                  are substantially the same as prior thereto shall not
                  constitute the acquisition of a controlling interest; and



          (ii)    no person who is a member of the Excluded Group shall be
                  treated as acquiring a controlling interest in Schroders plc
                  by virtue of any acquiring of shares or any interest therein.



     (c)  For this purpose "Associated Persons" includes any persons who in
          relation to each other are connected persons as defined in section 839
          of the Income and Corporation Taxes Act 1988 or persons acting in
          concert within the meaning of the City Code on Takeovers and Mergers
          and "Excluded Group" means:-

                                       9


          (i)     Those persons who together with their Associated Persons
                  currently have an aggregate shareholding in Schroders plc
                  which shareholding confers a right to cast 30 per cent. or
                  more of the votes which may be cast at all general meetings;



          (ii)    The brothers, sisters, ancestors and lineal descendants
                  (including step-brothers, step-sisters and step-children and
                  adopted relatives) of those persons and their respective
                  spouses;



          (iii)   The trustees or beneficiaries of any settlement in relation to
                  which any of the persons referred to in (i) and (ii) is a
                  settlor or a beneficiary ("settlement" and "settlor" having
                  the meanings assigned to them by section 660(G) of the Income
                  and Corporation Tax Act 1988); and



          (iv)    Any company or body corporate over which any of the persons
                  referred to in (i) to (iii) has control (within the meaning
                  of section 840 of the Income and Corporation Taxes Act 1988).



9.   Complaints


     Without prejudice to any rights of termination,  all formal complaints
     should in the first instance be made in writing to the  compliance  officer
     of the  Investment  Adviser at the  address  stated in clause 10  (Notices)
     below.  In addition  the  Manager  has the right to complain  direct to the
     Investment Ombudsman.

10.  Notices


     (a)     A notice under this agreement shall only be effective if it is in
             writing. Faxes are permitted.


     (b)     Notices under this agreement shall be sent to a party at its
             address or number and for the attention of the individual set out
             below:


             Party and title of      Address                  Facsimile no.
             Individual

             Manager                 Its registered office    00353 1 670 1184
                                     from time to time

             FAO: The Company Secretary

             Investment Adviser      Its registered office    0044 207 240 5346
                                     from time to time

             FAO: The Company Secretary

             Provided  that a party may change its notice  details on giving
             notice to the other  party of the  change in  accordance  with this
             clause.  That notice shall only be effective on the date falling
             five clear Business Days after the  notification  has been received
             or such  later  date as may be specified in the notice.

                                       10

     (c)     Any notice given under this agreement shall, in the absence of
             earlier receipt, be deemed to have been duly given as follows:



             (i)     if delivered personally, on delivery;


             (ii)    if sent by first class inland post, two clear Business Days
                     after the date of posting;


             (iii)   if sent by airmail, six clear Business Days after the date
                     of posting;


             (iv)    if sent by facsimile on completion of transmission if
                     confirmation of good receipt is obtained.


     (d)     Any notice given under this agreement outside Working Hours in the
             place to which it is addressed shall be deemed not to have been
             given until the start of the next period of Working Hours in such
             place.



11.  Capacity

     The Investment  Adviser shall perform its duties as Investment Adviser
     hereunder as an  independent  contractor.  The  Investment  Adviser  hereby
     agrees  that it  shall  bear  the  sole  and  complete  responsibility  and
     liability for the employment,  conduct and control of its employees, agents
     and  contractors  and for the  injury of such  persons  or injury to others
     through the actions or omissions of such persons.  Nothing contained herein
     shall  constitute a partnership  between,  or joint venture by, the parties
     hereto.  Neither  party shall hold itself out contrary to the terms of this
     section, and neither party shall become liable for the representation,  act
     or omission of the other  contrary to the provisions  hereof.  In addition,
     the  Investment  Adviser agrees that it will not hold out the Company as an
     association or partners or joint venturers.


12.  Counterparts

     (a)     This agreement may be executed in any number of counterparts, and
             by the parties on separate counterparts, but shall not be effective
             until each party has executed at least one counterpart.


     (b)     Each counterpart shall constitute an original of this agreement,
             but all the counterparts shall together constitute but one and the
             same instrument.



13.  Contracts (Rights of Third Parties) Act 1999

     The parties to this agreement do not intend that any term of this
     agreement should be enforceable, by virtue of the Contracts (Rights of
     Third  Parties)  Act 1999,  by any  person  who is not a party to this
     agreement.

                                       11


14.  Governing Law

     This Agreement, except as otherwise noted, shall be governed by, and
     construed in accordance with, the laws of England and Wales.


15.  ADR


     (a)     If a dispute or difference arises out of this agreement, the
             parties will attempt to settle it first by negotiation between
             themselves and then by mediation in accordance with the Centre for
             Dispute Resolution (CEDR) Model Mediation Procedure (the "Model
             Procedure"). To initiate a mediation a party shall give notice in
             writing (an "ADR Notice") to the other party in accordance with the
             provisions of clause 10 (Notices), requesting a mediation
             in accordance with the Model Procedure. A copy of the ADR Notice
             should also be sent to CEDR.


     (b)     If an ADR Notice is not given prior to the commencement of
             proceedings, the party commencing proceedings must serve an ADR
             Notice on the other party(ies) to the proceedings within 21 days.


16.  Jurisdiction

     The courts of England are to have  non-exclusive  jurisdiction to
     settle  any  dispute  arising  out  of  or  in  connection  with  this
     agreement.  Any  proceeding,  suit  or  action  arising  out  of or in
     connection  with  this  agreement  ("Proceedings")  may  therefore  be
     brought in the English courts.


17.  Agent for Service


     (a)     The Manager irrevocably appoints Schroder Investment Management
             Limited of 31 Gresham Street, London EC2V 7QA to be its agent for
             the receipt of Service Documents. It agrees that any Service
             Document may be effectively served on it in connection with
             Proceedings in England and Wales by service on its agent effected
             in any manner permitted by the Civil Procedure Rules.


     (b)     If the agent at any time ceases for any reason to act as such, the
             Manager shall appoint a replacement agent having an address for
             service in England or Wales and shall notify the Investment Adviser
             of the name and address of the replacement agent. Failing such
             appointment and notification, the Investment Adviser shall be
             entitled by notice to the Manager to appoint a replacement agent to
             act on behalf of the Manager. The provisions of this clause
             applying to service on an agent apply equally to service on a
             replacement agent.



      (c)     A copy of any Service Document served on an agent shall be sent by
              post to the Manager. Failure or delay in so doing shall not
              prejudice the effectiveness of service of the Service Document.


                                       12


      (d)     "Service Document" means a claim form, application notice, order,
              judgment or other document relating to any Proceedings.


                                       13



IN WITNESS WHEREOF the parties or their duly authorised representatives have
duly executed this Agreement the day and year first above written.



SIGNED BY                          )
For and on behalf of               )          J QUIGLEY
SCHRODER INVESTMENT                )
MANAGEMENT (IRELAND)               )
LIMITED                            )



SIGNED BY                          )
For and on behalf of               )          A C WILLIAMS
SCHRODER VENTURES                  )
(LONDON) LIMITED                   )



                                       14



<PAGE>

Exhibit 4.17     Investment Advisory Agreement, dated June 12, 2002,
                 between Schroder Ventures (London) Limited and Schroder
                 Investment Management (Ireland) Limited


CONFORMED COPY


                               DATED 12 June 2002


                SCHRODER INVESTMENT MANAGEMENT (IRELAND) LIMITED

                                      And

                       SCHRODER VENTURES (LONDON) LIMITED




                     _____________________________________

                         INVESTMENT ADVISORY AGREEMENT
                     _____________________________________






                          #32682v6(v5)(v4)(v3)(v2)(v1)
                        (created from e-mail CD11370051)

                                       1



THIS INVESTMENT ADVISORY AGREEMENT is made this 12th day of June 2002

BETWEEN

(1)     SCHRODER INVESTMENT MANAGEMENT (IRELAND) LIMITED, whose registered
        office is at IFSC House, International Financial Services Centre,
        Dublin 1, Ireland (registered in Ireland with No. 270382) (the
        "Manager"); and

(2)     SCHRODER VENTURES (LONDON) LIMITED, whose registered office is at 20
        Southampton Street, London WC2E 7QH (registered in England and Wales
        with No. 3368611) (the "Investment Adviser").

WHEREAS

(A)     The Manager was appointed the Manager to Schroder Cumulative Private
        Equity Funds plc an umbrella closed-ended investment company registered
        in Ireland with registered number 346388, having its registered office
        at IFSC House, IFSC, Dublin 1 (the "Company") pursuant to a Management
        Agreement between the Company and the Manager dated even date herewith
        (the "Management Agreement").

(B)     The Manager wishes to engage the Investment Adviser and the Investment
        Adviser wished to accept the engagement to provide certain investment
        advice pursuant to the terms and conditions of this Agreement.

(C)     The Investment Adviser is regulated by the Financial Services
        Authority ("FSA").

WHEREBY IT IS AGREED as follows:-


1.     Definitions


       (a)     In this Agreement:


       "Act"                       means Part XIII of the Irish Companies Act,
                                   1990 as the same may be amended, supplemented
                                   or re-enacted from time to time and includes
                                   any regulations made thereunder by
                                   ministerial order and any conditions that may
                                   from time to time be imposed thereunder by
                                   the Central Bank of Ireland whether by notice
                                   or otherwise affecting the Company;

       "Affiliate                  in relation to a body corporate means any
                                   subsidiary of that body corporate, any
                                   holding company of that body corporate and
                                   all other subsidiaries and subsidiary
                                   undertakings of that holding company;

                                       2

       "Business Day"              means a day (other than a Saturday or a
                                   Sunday) on which banks are open for business
                                   (other than solely for trading and settlement
                                   in euro) in London and Dublin;

       "Fund"                      means Schroders Cumulative Private Equity
                                   Fund, the first sub-fund of the Company;

       "Investment Objectives"     means the investment objectives and policies
                                   of the Fund as set out in the following:

                                   (i)     the prospectus of the Company in
                                           relation to the Fund at the date
                                           hereof together with any amendment
                                           or supplement at any time published
                                           by the Company; and

                                   (ii)    the investment guidelines determined
                                           by the board of directors of
                                           the Company from time to time and
                                           communicated in writing to the
                                           Investment Adviser.

       "Financial Services         means the person appointed by the FSA
       Ombudsman"                  to investigate complaints referred to him
                                   directly or via FSA;

       "Proceedings"               has the meaning given in clause 16
                                   (Jurisdiction);

       "Service Documents"         has the meaning given in clause 17 (Agent for
                                   Service);

       "Working Hours"             means 9.30 a.m. to 5.30 p.m. on a Business
                                   Day.


       (b)     Capitalised terms not otherwise defined herein shall have the
               meaning ascribed to them in the Management Agreement; and



       (c)     The expressions "holding company", "subsidiary" and "subsidiary
               undertaking" shall have the meaning given to them in the
               Companies Act 1985 (as amended from time to time).

                                        3

2.   Appointment; Management and Administration

     (a)  The Manager hereby appoints the Investment Adviser with effect from
          the date hereof,  and the  Investment  Adviser hereby accepts its
          appointment,  as  investment  adviser to the Manager to  research  and
          identify  investment  opportunities for the Company in relation to the
          Fund (including  opportunities  in unregulated  collective  investment
          schemes)  consistent  with the  Investment  Objectives  and advise and
          render  guidance  to  the  Manager  whenever  called  upon  to  do  so
          concerning the  acquisition  and disposal of investments  and dealings
          with the  Company's  portfolio  of  assets  attributable  to the Fund.
          Without  limiting the  generality  of the  foregoing,  the  Investment
          Adviser shall:



          (i)  research  and  evaluate  investments  which  appear  to  the
               Investment  Adviser to be appropriate  for the Company,  and
               advise on such particular  factors  relating  thereto as the
               Investment Adviser Considers appropriate for consideration by the
               Manager;


         (ii)  recommend from time to time to the Manager the purchase,
               acquisition or sale of particular investments and the timing of,
               and terms upon which, such purchase, acquisition or sale should
               be effected;



         (iii) monitor and analyse the progress of all investments held by the
               Company and provide written reports on a semi-annual basis (or
               more frequently if the Manager shall so reasonably requires);



         (iv)  advise the Manager concerning all actions which it appears to the
               Investment Adviser the Manager should take in order to carry into
               effect the Investment Objectives;



         (v)   prepare material for inclusion in the reports to be sent to the
               investors in the Fund whenever the Manager may reasonably require
               such material;


         (vi)  advise the Manager in relation to the exercise of all rights
               conferred by the Company's investments;


        (vii)  negotiate suitable terms for the acquisition and disposal of
               investments;


        (viii) advise the Manager upon the availability and determine the source
               of funds to be utilised by the Company;


         (ix)  advise the Manager in relation to the negotiating of such
               borrowings as are permitted by the Company's articles of
               association and the Act; and

                                       4


          (x)  assist in the reconciliation of records relating to the
               investments maintained by the Company, its custodian and the
               Manager, their respective delegates and any bankers appointed
               to the Company.


     (b)  In carrying out its duties under this Agreement, the Investment
          Adviser shall take into account:


          (i)     the Investment Objectives, as revised from time to time by
                  amendments communicated in writing to the Investment Adviser;
                  and



          (ii)    any other matter that prudent advisers of an investment
                  portfolio should reasonably take into consideration in the
                  proper discharge of their duties.



     (c)  The provisions of this Agreement shall not confer any power or
          authority on the Investment Adviser to enter into any transaction or
          in any way to bind the Manager or to hold or effect dealings in the
          Company's assets, and in performing its obligations under this
          Agreement the Investment Adviser shall act in an advisory capacity
          only, and shall not have the power to exercise any of the executive
          functions of the Manager.

     (d)  The Investment Adviser is regulated in the United Kingdom by the FSA.
          The provisions set out in Schedule 1 to this Agreement shall be
          incorporated within this Agreement. The Investment Adviser may from
          time to time amend this Agreement by notice in writing to the Manager
          if it reasonably considers it necessary or desirable to do so to
          comply with any rule, guidance or policy from time to time issued by
          the FSA which is binding on the Investment Adviser, provided that any
          such amendments are notified in advance to the Central Bank of
          Ireland.



3.   Fees and Expenses

     In consideration of the services rendered by the Investment Adviser
     hereunder, the Manager (and not the Company) shall pay to the Investment
     Adviser fees, costs and expenses, in an amount and manner as are separately
     agreed upon by such parties in a separate instrument.



4.   Exculpation and Indemnification

     (a)     An Advising Party (as defined in clause 4(c) below) shall not be
             liable, responsible or accountable in damages or otherwise to the
             Manager or to any other person for any Loss incurred or suffered by
             reason of any action by the Advising Party, if such action was
             taken in Good Faith, unless the Advising Party was Culpable with
             respect to such action (as such terms are defined in clause 4(c)
             below).



     (b)     The Manager agrees to indemnify and keep indemnified the Advising
             Parties in respect of any loss, cost (including any cost of
             enforcement), liability (including any tax liability excluding
             taxes on income arising under this agreement), claim or damage
             which any Advising Party incurs or suffers arising out of or in
             connection with the proper performance by the Advising Party of
             its obligations under this agreement, unless the Advising
             Party is Culpable.

                                        5

     (c)     For purposes of this Agreement:


             (i)     An "Advising Party" shall mean the Investment Adviser, its
                     subsidiaries or any employee, officer, director or
                     shareholder of the Investment Adviser or its subsidiaries.


             (ii)    An action is taken in "Good Faith" by an Advising Party if
                     such action was taken:


                     (A)     in good faith;



                     (B)     on behalf of and in furtherance of (or not opposed
                             to) the interests of the Company (or the Advising
                             Party reasonably believed such action to be
                             on behalf of and in furtherance of (or not opposed
                             to) the interests of the Company); and



                     (C)     in a manner reasonably believed by the Advising
                             Party to be within the scope of the rights, powers,
                             authorities or discretions conferred on it
                             (directly or indirectly) by or pursuant to this
                             Agreement, by the written consent of the Manager or
                             by law.



             (iii)   A person shall be deemed "Culpable" if such person is
                     finally determined (following all appeals) by a court of
                     competent jurisdiction to be liable (or such person has
                     admitted liability) for negligence, wilful misconduct,
                     fraud or material breach of this Agreement with respect to
                     taking an act.


             (iv)    "Loss" shall mean and include any and all loss, damage,
                     cost, expense or liability.



             (v)     Reference in this clause 4 to an act or action taken by an
                     Advising Party shall be deemed to include an omission or an
                     action omitted by such Advising Party.



     (d)     Any amounts payable by the Manager pursuant to clause 14(b) shall
             be limited to amounts received by the Manager under the Management
             Agreement and such further amounts that would have been payable to
             the Manager under the Management Agreement but for the fact the
             Manager was Culpable.


                                       6


5.   Interests of the Investment Adviser

     (a)     The Investment Adviser shall devote such time as shall be necessary
             to perform its obligations under this Agreement in an appropriate
             manner.



     (b)     Subject to the foregoing, each Advising Party may engage in or
             possess any interest in other business ventures of any kind, nature
             or description, independently or with others, whether such ventures
             are similar in nature or form to the Company or otherwise, provided
             that the Investment Adviser shall consult with the Manager prior to
             engaging in any otherwise permissible activity which the Investment
             Adviser reasonably believes may be competitive with the Company.


     (c)     The Investment Adviser shall deal with any conflicts of interest
             which arise in relation to the services it provides for the Company
             in accordance with the provision of the Company's prospectus (as
             may be issued from time to time) and the requirements of the
             Central Bank of Ireland.


6.   Non-Exclusivity

     Except to the extent provided otherwise in this Agreement or in the
     Management  Agreement,  this Agreement shall not prevent any
     Advising  Party from acting in any  capacity  whatsoever  for any
     Person on such  terms as such  Advising  Party may  arrange.  The
     Investment Adviser shall have no duty to disclose to the Manager,
     or use for the Manager's  benefit,  any fact or thing if to do so
     would be contrary  to any legal or  regulatory  obligation  or if
     such disclosure would contravene any of the Investment  Adviser's
     obligations under any other agreement.


7.   Termination



     (a)     Subject to clause 7(c) below, this agreement shall continue in
             force but may be terminated at any time forthwith by written notice
             to that effect, to the Manager, in the case of termination by the
             Investment Adviser, or to the Investment Adviser, in the case of
             termination by the Manager if:


             (i)     the performance thereof shall become illegal under the laws
                     of England or Ireland; or


             (ii)    the other party shall commit any material breach of its
                     obligations under this agreement and shall fail to make
                     good such breach, if capable of remedy, within 30 days
                     after the giving of written notice by the first party
                     requiring it to do so; or


             (iii)   the other party shall be grossly negligent with respect to
                     its duties hereunder;



             (iv)    the other party shall go into liquidation (except a
                     voluntary liquidation for the purpose of a reconstruction
                     or amalgamation of which prior notice has been given to the
                     first party and in respect of which no notice of objection
                     has been given by the first party within 14 days); or

                                        7

             (v)     a receiver, administrator or similar officer is appointed
                     over any of such other party's assets;



             (vi)    the Management Agreement is declared to be void and of no
                     further effect or is otherwise terminated in accordance
                     with its terms.



     (b)     If:



             (i)     at any time prior to 31st December, 2005, any one or both
                     of Solomon Owayda or Andrew Williams (each an "Adviser")
                     ceases to provide the advisory services on behalf of the
                     Investment Adviser and no suitable replacement for
                     the Adviser is approved by the Manager (acting in good
                     faith) within 19 weeks of the date the Adviser ceased to
                     provide the advisory services on behalf of the Investment
                     Adviser, then the Manager may terminate this Agreement by
                     the giving of not less than six months written notice to
                     the Investment Adviser; or


             (ii)    at any time between 31st December, 2002 and 31st December,
                     2004 (the "Period") the Manager is, in good faith,
                     dissatisfied with the performance of the Investment Adviser
                     and has given notice of the causes of dissatisfaction
                     to the Investment Adviser and such causes have not been
                     remedied within 30 days of receipt of notice of such
                     dissatisfaction, the Manager may terminate
                     this Agreement by 12 months written notice (which must be
                     given within the Period but may expire after the end of
                     the Period) to the Investment Adviser; or



     (c)     Subject to (d) below, if the Investment Adviser or any of its
             Affiliates shall, without the prior consent of the Manager, at any
             time until the earlier of (i) the fifth anniversary of this
             Agreement, and (ii) the date of termination of this agreement,
             provide any of the services detailed in clause 2(a) of this
             Agreement to any third party being a party which is, or has an
             Affiliate which is, an investment manager or investment adviser to
             an investment fund operating in the same geographical markets as
             Schroders plc or any of its Affiliates then the Manager may
             terminate this Agreement by the giving of not less than one months
             written notice to the Investment Adviser.

                                        8


     (d)     In the event that a Fund of Funds is formed following the date of
             this Agreement, having a similar investment focus and strategy as
             the Fund, that is managed or advised by Schroders plc, Schroder
             Investment Management Limited or any of their Affiliates and the
             Investment Adviser is not appointed investment adviser to the said
             Fund of Funds then the right of termination in (c) above shall
             cease to apply.



      e)     In this clause 7 "Fund of Funds" shall mean an investment fund
             where the principal investment objective of that investment fund
             is to invest in other investment funds.




8.   Limitation of Termination Rights


     (a)     The right of the Manager to terminate the Agreement pursuant to
             clause 7(b)(i),(ii) or (iii) and 7(c) shall cease to have any
             effect on:



             (i)     the Manager ceasing to be a wholly-owned subsidiary of
                     Schroders plc without simultaneously being substituted for
                     all relevant purposes by another wholly-owned subsidiary of
                     Schroders plc;



             (ii)    any person acquiring a right (whether subject to conditions
                     or not) the exercise of which would cause the Manager to
                     cease to be a wholly-owned subsidiary of Schroders plc
                     without simultaneously being substituted for all
                     relevant purposes by another wholly-owned subsidiary of
                     Schroders plc;



             (iii)   Schroder Investment Management Limited ("SIM") ceasing to
                     be a subsidiary of Schroders plc or any person acquiring a
                     right (whether subject to conditions or not) the exercise
                     of which would cause SIM to cease to be a subsidiary of
                     Schroders plc without simultaneously being substituted for
                     all relevant purposes by another subsidiary of Schroders
                     plc; and



            (iv)     any person acquiring a controlling interest (as described
                     in clause 8(b)) in Schroders plc.



     (b)     For the purposes of clause 8(a)(iv) a person will acquire a
             controlling interest in Schroders plc if he and any Associated
             Person(s) directly or indirectly acquire an aggregate shareholding
             in Schroders plc which shareholding confers the right to cast 50
             per cent or more of the total votes which may be cast at all
             general meetings of Schroder plc provided that:


                                       9

             (i)     an acquisition of shares by any person in the course of or
                     in connection with a scheme of reorganisation or
                     reconstruction at the end of which the ultimate
                     shareholders of Schroders plc are substantially the same
                     as prior thereto shall not constitute the acquisition of a
                     controlling interest; and



             (ii)    no person who is a member of the Excluded Group shall be
                     treated as acquiring a controlling interest in Schroders
                     plc by virtue of any acquiring of shares or any interest
                     therein.



     (c)     For this purpose "Associated Persons" includes any persons who in
             relation to each other are connected persons as defined in section
             839 of the Income and Corporation Taxes Act 1988 or persons acting
             in concert within the meaning of the City Code on Takeovers and
             Mergers and "Excluded Group" means:-



             (i)     Those persons who together with their Associated Persons
                     currently have an aggregate shareholding in Schroders plc
                     which shareholding confers a right to cast 30 per cent. or
                     more of the votes which may be cast at all general
                     meetings;



             (ii)    The brothers, sisters, ancestors and lineal descendants
                     (including step-brothers, step-sisters and step-children
                     and adopted relatives) of those persons and their
                     respective spouses;



             (iii)   The trustees or beneficiaries of any settlement in relation
                     to which any of the persons referred to in (i) and (ii) is
                     a settlor or a beneficiary ("settlement" and "settlor"
                     having the meanings assigned to them by section 660(G) of
                     the Income and Corporation Tax Act 1988); and



             (iv)    Any company or body corporate over which any of the persons
                     referred to in (i) to (iii) has control (within the meaning
                     of section 840 of the Income and Corporation Taxes Act
                     1988).



9.   Complaints


     Without  prejudice  to any rights of  termination,  all  formal  complaints
     should in the first  instance  be  made in  writing  to the  compliance
     officer of the  Investment  Adviser at the address  stated in clause 10
     (Notices)  below.  In  addition  the  Manager has the right to complain
     direct to the Investment Ombudsman.


10.   Notices



     (a)     A notice under this agreement shall only be effective if it is in
             writing. Faxes are permitted.



     (b)     Notices under this agreement shall be sent to a party at its
             address or number and for the attention of the individual set out
             below:

                                       10


             Party and title of     Address                 Facsimile no.
             Individual

             Manager                Its registered office   00353 1 670 1184
                                    from time to time

             FAO: The Company Secretary

             Investment Adviser     Its registered office   0044 207 240 5346
                                    from time to time

             FAO: The Company Secretary

             Provided that a party may change its notice details on giving
             notice to the other party of the change in accordance with this
             clause.  That notice shall only be effective on the date falling
             five clear Business Days after the notification has been received
             or such later date as may be specified in the notice.

     (c)     Any notice given under this agreement shall, in the absence of
             earlier receipt, be deemed to have been duly given as follows:



             (i)     if delivered personally, on delivery;



             (ii)    if sent by first class inland post, two clear Business Days
                     after the date of posting;



             (iii)   if sent by airmail, six clear Business Days after the date
                     of posting;



             (iv)    if sent by facsimile on completion of transmission if
                     confirmation of good receipt is obtained.



     (d)     Any notice given under this agreement outside Working Hours in the
             place to which it is addressed shall be deemed not to have been
             given until the start of the next period of Working Hours in such
             place.



11.  Capacity

     The  Investment Adviser shall perform its duties as Investment Adviser
     hereunder as an independent  contractor.  The Investment  Adviser
     hereby agrees  that  it  shall  bear  the  sole  and   complete
     responsibility  and  liability  for the  employment,  conduct and
     control  of its  employees,  agents and  contractors  and for the
     injury of such persons or injury to others through the actions or
     omissions  of  such  persons.   Nothing  contained  herein  shall
     constitute  a  partnership  between,  or joint  venture  by,  the
     parties  hereto.  Neither party shall hold itself out contrary to
     the terms of this section,  and neither party shall become liable
     for the representation,  act or omission of the other contrary to
     the provisions hereof. In addition, the Investment Adviser agrees
     that it will  not  hold  out the  Company  as an  association  or
     partners or joint venturers.

                                       11

12.  Counterparts

     (a)     This agreement may be executed in any number of counterparts, and
             by the parties on separate counterparts, but shall not be effective
             until each party has executed at least one counterpart.



     (b)     Each counterpart shall constitute an original of this agreement,
             but all the counterparts shall together constitute but one and the
             same instrument.



13.  Contracts (Rights of Third Parties) Act 1999


     The parties to this agreement do not intend that any term of this agreement
     should be enforceable, by virtue of the Contracts (Rights of Third Parties)
     Act 1999, by any person who is not a party to this agreement.



14.  Governing Law


     This Agreement, except as otherwise noted, shall be governed by, and
     construed in accordance with, the laws of England and Wales.


15.  ADR



     (a)     If a dispute or difference arises out of this agreement, the
             parties will attempt to settle it first by negotiation between
             themselves and then by mediation in accordance with the Centre for
             Dispute Resolution (CEDR) Model Mediation Procedure (the "Model
             Procedure"). To initiate a mediation a party shall give notice in
             writing (an "ADR Notice") to the other party in accordance with the
             provisions of clause 10 (Notices), requesting a mediation
             in accordance with the Model Procedure. A copy of the ADR Notice
             should also be sent to CEDR.



     (b)     If an ADR Notice is not given prior to the commencement of
             proceedings, the party commencing proceedings must serve an ADR
             Notice on the other party(ies) to the proceedings within 21 days.



16.  Jurisdiction


     The courts of England are to have non-exclusive jurisdiction to settle any
     dispute arising out of or in connection with this agreement. Any
     proceeding, suit or action arising out of or in connection with this
     agreement ("Proceedings") may therefore be brought in the English courts.


17.  Agent for Service



     (a)     The Manager irrevocably appoints Schroder Investment Management
             Limited of 31 Gresham Street, London EC2V 7QA to be its agent for
             the receipt of Service Documents. It agrees that any Service
             Document may be effectively served on it in connection with
             Proceedings in England and Wales by service on its agent effected
             in any manner permitted by the Civil Procedure Rules.

                                       12

     (b)     If the agent at any time ceases for any reason to act as such, the
             Manager shall appoint a replacement agent having an address for
             service in England or Wales and shall notify the Investment Adviser
             of the name and address of the replacement agent. Failing such
             appointment and notification, the Investment Adviser shall be
             entitled by notice to the Manager to appoint a replacement agent
             to act on behalf of the Manager. The provisions of this clause
             applying to service on an agent apply equally to service on a
             replacement agent.



     (c)     A copy of any Service Document served on an agent shall be sent by
             post to the Manager. Failure or delay in so doing shall not
             prejudice the effectiveness of service of the Service Document.



     (d)     "Service Document" means a claim form, application notice, order,
             judgment or other document relating to any Proceedings.

                                       13




                                   SCHEDULE 1

1.     In this Schedule:

       (a)          the following words and expressions have the following
                    meanings:

       FSA          the Financial Services Authority of the United Kingdom;

       FSA Rules    the Conduct of Business Sourcebook forming part of the
                    Handbook of Rules and Guidance of the FSA as from time to
                    time in force (as varied by any waiver, dispensation or
                    guidance granted by the FSA and applicable to the
                    Investment Adviser);

Investment Policy   the Investment Objectives, a copy of which are attached
                    as Schedule 2



2.     Nothing in Section 4 of this Agreement shall exclude or restrict any
       duty or liability the Investment Adviser has to the Manager under the
       Financial Services and Markets Act 2000 of the United Kingdom and the
       regulatory system established thereunder, including the FSA Rules.

3.     The Investment Adviser is not required to provide the Manager with
       contract notes or confirmations or periodic statements or any other
       reports apart from such reports as may from time to time be required by
       the Manager under clause 2(a)(v) for this Agreement.

4.     Instructions and advice shall be given to and acknowledged by the
       Manager and the Investment Adviser orally or in writing and in each case
       by any means of communication chosen by the Manager and the Investment
       Adviser as the case may be.

5.     Except as set out in the Investment Objectives there are no
       restrictions on the amount or value of any one investment or on the
       proportion of the assets which may be constituted by any one investment
       or on the types of investment in which the Manager may invest or on the
       markets (if any) on which transactions may take place. In particular but
       without prejudice to the generality of the foregoing and subject to the
       Investment Policy and compliance with clause 6 of this Schedule:

       (a)     the Investment Adviser may exercise or refrain from exercising
               any voting or similar rights which may exist in respect of
               investments at its discretion;

       (b)     investments may be made in or through unregulated collective
               investment schemes even if such schemes are operated or advised
               by the Investment Adviser or any of its associates;

       (c)     transactions may have as a counterparty or co-investor the
               Investment Adviser or any of its associates or another client of
               any of them.

6.     The Investment Adviser shall not be required to provide any
       safeguarding, administration or custodial services. Investments shall be
       registered in the name of the Fund's custodian and certificates and other
       documents of title shall be sent directly to the Fund's custodian. The
       Manager shall ensure that the Investment Adviser is given such bank
       mandates, powers of attorney and authorities to give directions to the
       holders of investments as it may from time to time to require for the
       performance of its duties under this Agreement.

                                       14

7.     If the Manager has any complaint about the performance of the
       Investment Adviser under this Agreement that complaint should be directed
       in the first instance to the compliance officer of the Investment
       Adviser.  As an Intermediate Customer the Manager will not normally be
       entitled to complain to the Financial Ombudsman Service.

8.     An explanation of the compensation arrangements under the Financial
       Services Compensation Scheme and the extent, if any, to which they may be
       available if the Investment Adviser is unable to meet any of its
       liabilities is available on request.

                                       15

IN WITNESS WHEREOF the parties or their duly authorised representatives have
duly executed this Agreement the day and year first above written.



SIGNED BY                          )
For and on behalf of               )
SCHRODER INVESTMENT                )          V HOLMES
MANAGEMENT (IRELAND)               )
LIMITED                            )



SIGNED BY                          )
For and on behalf of               )
SCHRODER VENTURES                  )          R C MORRIS
(LONDON) LIMITED                   )

                                       16

<PAGE>

Exhibit 10.1     The Company's 2002 Report and Accounts





                            Schroder Ventures International Investment Trust plc

                                                      Report and Accounts 2002


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 managed or advised by Schroder Ventures or Permira.

To complement this investment objective and address the growing recognition
of private equity in investment portfolios, SVIIT is committed to designing
and advising third party products for investment in private equity.



www.svitt.co.uk
                                                        Report and Accounts 2002



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                                      12
  List of Investments                                                      17
  Report of the Directors                                                  21
  Statement of Directors' Responsibilities                                 23
  Corporate Governance                                                     24
  Remuneration Report                                                      27
  Independent Auditors' Report                                             29
  Consolidated Statement of Total Return                                   30
  Company Statement of Total Return                                        31
  Balance Sheets                                                           32
  Consolidated Cash Flow Statement                                         33
  Notes to the Accounts                                                    34
  Consolidated Statement of Total Return (translated into euros -          52
  unaudited)
  Balance Sheets (translated into euros - unaudited)                       53
  Consolidated Cash Flow Statement (translated into euros -                54
  unaudited)
  Company Summary                                                          55
  Information for Shareholders                                             57
  Notice and Agenda                                                        58
  Glossary                                                                 60

                                       1

Directors and Advisers

DIRECTORS

John McLachlan (Chairman) (aged 60) 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 a non-executive Director of
Invesco Income Growth Trust plc and of a number of other companies.

Nicholas Ferguson (Chief Executive) (aged 53) was appointed as a Director of
the Company on 12 February 1996. He is Chairman of Schroders Ventures
(London) Limited and was formerly Chairman of Schroder Ventures and
instrumental in its development since 1984. He is a non-executive Director of
Schroders plc.

John Govett (aged 58) was appointed as a Director of the Company on 12
February 1996 and is a non-executive Director of Derby Trust plc, Schroder
Emerging Countries Fund plc, Peel Hotels plc and Rio Tinto Pension
Investments Limited.

Anthony Habgood (aged 55) was appointed as a Director of the Company on 12
February 1996 and is Chairman of Bunzl plc.

Edgar Koning (aged 50) 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 58) 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 1991.

Andrew Sykes (aged 45) was appointed as a Director of the Company on 3 May
2002. He is a Director of Schroders plc and Chairman of Schroder &Co.
Limited, with responsibility for Schroders plc's Private Equity, Property and
Structured Products businesses.

Andrew Williams (aged 50) 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 24 and 25.

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

Secretary and Registered Office
Schroder Investment Management Limited
31 Gresham Street
London EC2V 7QA
Telephone 020 7658 6000

ADVISERS

Auditors
Ernst & Young LLP
Rolls House
7 Rolls Buildings
Fetter Lane
London EC4A 1NH

Bankers
The Royal Bank of Scotland plc
Corporate Banking Office
5-10 Great Tower Street
London EC3P 3HX

Registrars
Lloyds TSB Registrars Scotland
PO Box 28448
Finance House
Orchard Brae
Edinburgh EH4 1WQ
Telephone 0870 601 5366

Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY

Stockbrokers
UBS Warburg
1 Finsbury Avenue
London EC2M 2PP

                                       2


<TABLE>
<CAPTION>

Financial Highlights and Historical Record


                               5 YEAR PERFORMANCE

                      SVIIT Share   SVIIT NAV         FTSE ALL      FTSE WORLD
                           price                  SHARE INDEX       INDEX (GBP)

  <S>                        <C>          <C>             <C>             <C>
  June 1997                100.0        100.0           100.0           100.0
  October 1997              99.2        100.0           102.9           101.9
  February 1997             94.4        105.2           118.8           107.9
  June 1998                106.7        108.0           128.0           115.9
  October 1998              87.4        116.3           104.5            96.4
  February 1999            101.1        151.1           126.1           127.4
  June 1999                163.5        145.2           133.1           132.0
  October 1999             161.0        174.1           128.6           132.8
  February 2000            191.6        188.4           136.9           149.6
  June 2000                218.3        216.8           140.8           162.7
  October 2000             289.6        232.1           138.9           162.0
  February 2001            268.8        233.9           138.2           154.7
  June 2001                230.1        227.9           129.4           145.3
  October 2001             171.6        211.9           105.1           113.4
  February 2002            191.3        209.8           151.1           125.8
  June 2002                206.5        214.1           113.6           120.1

SOURCE: DATASTREAM
</TABLE>


<TABLE>
<CAPTION>

FINANCIAL HIGHLIGHTS TO 30 JUNE 2002


                                     30 June 2002    30 June 2001    Change %

  <S>                                       <C>             <C>           <C>
  Total assets (GBP'000)                  462,613         417,260       10.8%
  Shareholders' funds (GBP'000)           423,087         416,872        1.5%
  Market capitalisation (GBP'000)         362,532         401,904      (9.8)%
  Net asset value per share -              413.7p          407.6p        1.5%
  undiluted
  Share price                              354.5p          393.0p      (9.8)%
  Share price discount                    (14.0)%          (3.6)%
  Dividends per share                         Nil           1.80p
  Total expense ratio                        0.1%            0.1%

</TABLE>


<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE


                  Total   Shareholders'    Undiluted   Price of   Share price
                assets            funds    net asset   ordinary     premium/
               GBP'000          GBP'000    value per     shares    (discount)
                                               share      pence             %
                                               pence

  <S>            <C>              <C>            <C>        <C>          <C>
  2002         462,613          423,087        413.7      354.5        (14.0)
  2001         417,260          416,872        407.6      393.0         (3.6)
  2000         461,615          461,125        450.9      461.5           2.4
  1999         333,630          322,485        325.9      262.5        (19.5)
  1998         230,822          219,730        215.1      182.0        (15.4)
  1997         207,655          182,548        189.2      174.5         (7.8)
  1996         240,733          186,493        193.3      200.0           3.5
  (launched 23 May 1996)

</TABLE>


<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE

                   Actual      Potential    Earnings    Dividends     Cost of
                   gearing        gearing      pence        pence      running
                    ratio          ratio                                trust
                                                                      GBP'000

  <S>                <C>            <C>       <C>            <C>          <C>
  2002               1.00           1.09      (1.52)          Nil         865
  2001               0.92           1.00        2.60         1.80         910
  2000               0.70           1.00        4.68         3.80       1,052
  1999               0.67           1.03        2.35         1.50         878
  1998               0.73           1.05        2.06         1.30         664
  1997               0.76           1.13        1.58         1.92         728
  1996               0.71           1.29         N/A          N/A         N/A
  (launched 23 May 1996)

</TABLE>


  Notes:
  1. Total assets:                Total assets less current liabilities.
  2. Actual gearing ratio:        Total assets (less cash and fixed interest
                                  investments) divided by shareholders'
                                  funds.
  3. Potential gearing ratio:     Total assets divided by shareholders'
                                  funds.
  4. Cost of running trust:       Company only. Operating costs excluding
                                  interest payable and similar charges. For
                                  the year ended 30 June 2002, costs of
                                  GBP62,000 (2001: GBP1,160,000) relating to the
                                  enlargement of the Company's operations and
                                  EDR listing have been excluded.
  5. Total expense ratio:         Company only. Operating costs excluding
                                  interest payable (excludes enlargement and
                                  EDR listing costs and is net of tax relief
                                  on the remaining operating costs) expressed
                                  as a percentage of average shareholders'
                                  funds.
  6. Capital changes:             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

PORTFOLIO ACTIVITY

With global markets falling in excess of 20% and the economic and business
environment weakening, the twelve months to 30 June 2002 has been one of the
most difficult periods for investment markets in the last twenty years.

Against this uncertain market backdrop, SVIIT's performance over the year has
been robust. SVIIT has a strong underlying portfolio of companies, with good
cash generation, tight cost controls and well-structured balance sheets and
as a result the overall valuation of the portfolio has remained relatively
stable. In addition, SVIIT has benefited from positive foreign exchange
movements, especially in the latter half of the year, which have contributed
GBP6.7 million to net assets since June 2001 (GBP11.1 million since December
2001). As a result, net assets have increased by 1.5% over the year to GBP423.1
million - 413.7p per share (June 2001: GBP416.9 million - 407.6p per share).

Performance has been particularly strong in Japan and Europe, with the
partial realisation of the Japanese property management company, Xymax and
the write-up and subsequent recapitalisation of Homebase.
Homebase continues to perform well and has been written up again to GBP36.8
million.

SCHRODER VENTURES (LONDON) LIMITED AND SCHRODER VENTURES NORTH AMERICA INC.
The new business initiated before the beginning of the year when Schroder
Ventures (London) Limited ("SVLL") and Schroder Ventures North America Inc.
("SVNA") were purchased by SVIIT has met its key milestones. In very
difficult market conditions, a first private equity fund of funds of e242
million was raised as a joint venture with Schroders plc and other business
contracts have been successfully executed.

The next twelve months will see a number of new business initiatives
progressed. Later this year, together with Schroders plc, we will be
launching a second private equity fund of funds which, like its predecessor,
will be targeted at institutional and high net worth investors and again will
offer a broad exposure to top performing private equity groups globally. We
expect to launch other new products during the course of the next year.

We have for some time been reviewing the interface between the public and
private equity markets. We see considerable opportunities for profitable
investment in this area and have recruited two seasoned equity investors to
join the team and develop a value investing facility in small/mid-cap
companies, using private equity techniques. Over the next 18-24 months SVIIT
will invest up to GBP15 million (approximately 3.5% of our net assets) in
special situations where private equity techniques can be applied. If this
initiative is successful we intend raising third-party funds in due course.

BOARD
Having been a Director of SVIIT since its listing on the London Stock
Exchange in May 1996 and wishing to reduce his commitments, Peter Sedgwick
retired from the Board in May. The Directors are very grateful to Peter for
his invaluable contribution during the first six successful years of SVIIT's
existence.

Also in May, Andrew Sykes and Andrew Williams joined the Board.

Andrew Sykes is a Director of Schroders plc and Chairman of Schroder & Co.
and has responsibility for Schroders' Private Equity, Property and Structured
Products businesses. In addition, he is a member of the Group Management
Committee and is on the Investment Committee of the Schroder Private Equity
Fund of Funds.

Andrew Williams, who joined Schroder Ventures in 1995, is Chief Executive of
SVLL and Managing Principal of SVNA. He is responsible for the day to day
activities of SVLL and SVNA and is also a member of the Investment Committee
for the Schroder Private Equity Fund of Funds.

CONVERTIBLE BOND

In order to provide SVIIT with greater flexibility to commit to new private
equity funds, in November 2001 we issued GBP40 million subordinated convertible
bonds, which are convertible into fully paid ordinary shares and were listed
on the London Stock Exchange in July. The conversion price for these bonds
will be 399p (see note 27 on page 48). Based on this conversion price and
taking into the account the effect of the outstanding options over ordinary
shares, the fully diluted net asset value per share would be 411.4p (see note
27 on page 48).

                                       4

CHANGE OF YEAR-END

In order to improve administrative efficiency, particularly in relationship
to the timing of budget preparation, your Board intends to change SVIIT's
year-end from 30 June to 31 December. Therefore, a further audited report and
accounts will be produced for the six-month period to 31 December 2002,
followed by an AGM in May 2003. The next full financial year will be the year
ending 31 December 2003.

OUTLOOK

Continuing market declines and the weakening economic climate indicate that
the outlook for private equity will remain challenging, at least in the short
term. However, SVIIT has a well-structured portfolio and a strong team, based
in London and Boston, who continue to pursue new business initiatives.
Importantly, the long term performance of private equity continues to lead
investors to increase their allocation to this area, and your Company remains
well positioned to take advantage of this.

The long-term performance of SVIIT continues to be very solid; over the last
five years the compound growth of the net asset value per share has been
16.9% per annum, out-performing key quoted competitors and relative stock
market indices.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 12.00pm on 26 November 2002 at 31
Gresham Street, London, EC2V 7QA and will, as in previous years, include a
presentation on the activities of the Company.

RECENT EVENTS

Since the year-end, public markets have fallen further and whilst markets
rebounded to some extent at the beginning of August, both the public markets
and economic environment remain unsettled. The declines in public markets
will have had some impact on the value of the key comparable quoted companies
used to value the portfolio, however, since the year-end we have had no
reports of any significant changes in the earnings of the underlying
companies.


John McLachlan
Chairman


Nick Ferguson
Chief Executive

                                       5


Chairman and CEO's Statement continued

Portfolio Review

OVERVIEW

In the year to 30 June 2002, SVIIT's net assets increased by 1.5% to GBP423.1
million, equivalent to 413.7p per share (June 2001: GBP416.9 million - 407.6p
per share).

The increase is principally a product of two factors. Firstly, at the
underlying portfolio company level, cash generation leading to reduced debt
levels, as well as profit performance, has meant that the overall valuation
of the portfolio has remained stable. Secondly, SVIIT has benefited from
positive foreign exchange movements, especially in relation to the Euro,
which have contributed GBP6.7 million to net assets during the year to 30 June
2002 (GBP11.1 million since December 2001).

Whilst the overall valuation of the portfolio has remained relatively
unchanged, there have been two principal changes in specific underlying
company valuations. Austriamicrosystems, which was written-down at December
2001, has been written-down further due to a combination of lower comparable
EBIT multiples and continuing poor sales visibility in its key markets. In
addition, Homebase, which was written-up at December 2001 and subsequently
underwent a recapitalisation in April 2002 that returned the majority of the
cost of the investment to investors, has been written-up again to GBP36.8
million. The remaining attributable cost is GBP6 million.

As indicated in December 2001, the level of completed transactions has
declined compared to the same period last year, with 15 new and 44 follow-on
investments made during the year and total calls paid of GBP77.5 million (June
2001: GBP155.4 million). With public markets remaining fragile and the economic
outlook uncertain, many companies are finding themselves under increasing
pressure to sell non-core assets and we expect the level of new investments
to pick up in the next 12-18 months.

In addition to reduced investment activity, an uncertain economic outlook,
public market volatility and reduced M&A activity have also resulted in a
difficult environment for realisations. SVIIT received a total of GBP49.0
million of distributions during the year (June 2001: GBP51.9 million),
dominated by the recapitalisation of Homebase, which returned GBP14 million of
SVIIT's original cost of the investment (GBP20.0 million) and the partial
realisation of Xymax, for which SVIIT received GBP9.5 million at a 34.3%
premium to its June 2001 value.

As a function of a maturing portfolio and the reduced level of new
investments, only 17% of the portfolio is valued on a cost basis (June 2001:
58%). The proportion of the portfolio valued on an earnings basis has risen
markedly to 60%, compared to 22% in June 2001. Again, this is simply a
reflection of the overall maturity of the portfolio with a number of the
larger companies, such as Memec and Homebase, revalued from cost.

The portfolio continues to be weighted to Multinational and Continental
European companies (37% and 21% respectively) with the remainder of the
portfolio broadly split between companies based in North America, Asia and
the UK.

The composition of the Twenty Largest Underlying Companies, which represent
76% of the portfolio (June 2001: 74%), remains similar to June 2001, with
only three new entrants: Cognis, which was acquired in November 2001; TFL,
which was acquired in March 2001; and Euro Dental, which was originally
acquired in January 2000. As a result of these new entrants, Twinwood,
Thoughtworks and Matra Plast no longer form part of the Twenty Largest
Underlying Companies.

FUND TRANSACTIONS

The number of portfolio companies held by the 23 Schroder Ventures and
Permira funds in which SVIIT has invested remained constant at 151.

As noted above and indicated in December 2001, the level of completed
transactions during the year has decreased, with 15 new investments made
during the year (June 2001: 25). The decrease in the level of new investments
continued to be influenced by unrealistic pricing expectations by vendors,
coupled with difficulties in valuing target companies due to lack of
corporate earnings visibility in the face of a challenging economic climate.
It is expected that the level of new investments will pick up over the next
12-18 months as companies come under increasing pressure to raise capital
from sources other than the public capital markets.

The largest single acquisition since June 2001 is Cognis, the speciality
chemicals group, which was acquired from Henkel in November 2001 and
represents 8.18% of net assets.

                                       6



VALUATION CHANGES

There have been a number of revaluations since June 2001, with eight of the
Twenty Largest Underlying Companies and 40.8% of net assets moving from a
cost valuation to an EBIT or P/E valuation. The two most significant
revaluations are those of Memec and Homebase.

Memec, which has been valued on an EBIT basis and represents 14.10% of net
assets, is a global semiconductor distribution company. The semiconductor
industry has been adversely affected by a drop in end-user demand in many of
its key markets and the downturn has obviously affected Memec, whose revenues
and profits are lower than in previous periods. Tight cost controls and good
cash generation have enabled the company to reduce debt significantly thereby
lessening the impact of the downturn. The June 2002 valuation of GBP59.7
million is slightly above cost (a result of positive foreign exchange
movements), and is based on a discount to the average EBIT multiples of its
key quoted comparables. Since June 2002, Memec has undergone a
recapitalisation returning approximately 8% of the cost of the investment.

The most significant write-up during the year was Homebase, the UK DIY
retailer. Homebase was written-up at December 2001 and subsequently underwent
a recapitalisation in April 2002, returning the majority of the cost of the
investment to investors. The company has been written-up further on an EBIT
basis to GBP36.8 million against a remaining attributable cost of GBP6 million.
Homebase has continued to perform in-line with expectations and the valuation
is based on a discount to EBIT multiples of a basket of key comparable quoted
companies.

Another write-up during the year has been Market Place Media (MPM). MPM was
acquired in July 2001 and is a media placement and promotions company
specialising in the university, multi-cultural and military markets and is
headquartered in Santa Barbara, California. Since the year-end, SVIIT's
entire holding in MPM has been sold at a 62% premium to the December 2001
valuation, which was at cost. SVIIT has received GBP4.5 million from this sale
to date.

<TABLE>
<CAPTION>

  Company                           30 June 2002    30 June 2001    Change in
                                       Valuation       Valuation       Period
                                         GBP'000         GBP'000      GBP'000

  <S>                                       <C>              <C>         <C>
  Homebase                                36,773          *6,015       30,758
  Market Place Media                       4,741         **2,928        1,813



  *     The remaining attributable cost of the investment following the
  return of capital in April 2002

  **     Market Place Media was acquired in July 2001, hence the June
  valuation reflects cost at the time of purchase.

</TABLE>

Global economic uncertainty and volatility in public markets continues to
delay exit opportunities and whilst there were some signs of improvement in
the IPO market earlier in 2002, the fall in quoted markets since June is
likely to further delay any significant recovery in this market. That said,
although public markets remain all but closed to new issues, historically
IPOs have represented less than 50% of SVIIT's realisations with trade-sales,
and more recently recapitalisations dominating exits. During the year, SVIIT
received a total of GBP49.0 million (June 2001: GBP51.9 million) from full and
partial realisations at an average uplift of 31%.

The two most significant realisations during the year were the
recapitalisation of Homebase and the partial realisation of Xymax referred to
above.

<TABLE>
<CAPTION>

  Company                                  Proceeds     30 June 2001     Cost
                                             GBP'000       Valuation    GBP'000
                                                             GBP'000

  <S>                                            <C>             <C>      <C>
  Xymax (partial)*                             9,486           6,231    1,145

  *     Costs and valuation at 30 June 2001 has been pro-rated to reflect the
  partial realisation

</TABLE>


SVIIT's holding in Xymax, a Japanese property management company, was
partially realised via a trade sale in May. SVIIT received GBP9.5 million from
this realisation, at an uplift of 34.3% to the June 2001 valuation. SVIIT's
remaining holding in Xymax is valued on a discounted Third Party basis at
GBP5.2 million.

There has been one significant write-down in the portfolio,
Austriamicrosystems (formerly AMS).

<TABLE>
<CAPTION>

       Company                 30 June 2002    30 June 2001    Change in
                                  Valuation       Valuation       Period
                                    GBP'000         GBP'000      GBP'000

       <S>                             <C>             <C>        <C>
       Austriamicrosystems           15,958          37,128     (21,170)

</TABLE>

                                       7


Austriamicrosystems was written down by 25% in December 2001. As a result of
continuing low uncertainty in its core markets and a reduction in the EBIT
multiples of the key comparable companies used for the valuation, the company
has been written down by a further 35%.


VALUATION BASIS (BY VALUE)

As noted above, 17% of the portfolio is valued on a cost basis, compared to
58% in June 2001. The lower percentage of companies valued on a cost basis is
a reflection of a number of larger portfolio companies, such as Memec,
Kiekert and Hogg Robinson, being re-valued on a P/E or EBIT basis and fewer
new investments.

Whilst lower than June 2001, there is a marked reduction in the percentage of
the portfolio valued on a P/E basis since December 2001 (20%). The reduction
in the second half of the year is chiefly due to Homebase now being valued on
an EBIT basis following its recapitalisation and the remaining holding in
Xymax now being valued on a Third-Party basis.

The increase in companies being valued on an EBIT basis is a result of the
portfolio's maturity, with a number of companies moving from a cost to an
EBIT valuation.

The slight reduction in SVIIT's exposure to quoted stocks is partly due to
realisations, but is mainly a result of the fall in the share-prices of the
quoted portfolio, especially in Germany and Asia. The increase in companies
whose value has been written-down is as a result of the revaluation of
Austriamicrosystems.

The weighted average P/E multiple used in valuing the relevant portfolio
companies has decreased to 13.5 (June 2001: 18.1). After a range of
discounts, investments valued on a P/E basis are effectively valued at 9.9
times earnings (June 2001: 14.5), a reduction of 32%.

The weighted average EBIT multiple used in valuing the relevant portfolio
companies has increased slightly to 9.4 (June 2001: 9.1). After a range of
discounts, investments valued on an EBIT basis are effectively valued at 6.8
times earnings (June 2001: 6.8). This weighted average number is influenced
by the higher than average EBIT multiples used for the valuation of the
semiconductor companies, which represent 23% of the portfolio. The average
discounted EBIT multiple for non-semiconductor companies, which represent 40%
of the portfolio, has actually fallen from 6.7 in June 2001 to 4.9 in June
2002.

The average discount applied to quoted investments has decreased to 16% (June
2001: 21%). This reduction is principally due to the unusually high discount
that was applied to Twinwood's share price in June 2001.

<TABLE>
<CAPTION>

                      30 June 2002          30 June 2001
                      % (by Value)          % (by Value)

                   <S>              <C>                   <C>
                   Cost             17   Cost             58
                   P/E               3   P/E              10
                   EBIT             57   EBIT             12
                   3rd Party         5   3rd Party         3
                   Quoted            9   Quoted           12
                   W/Down            9   W/Down            5
</TABLE>

     Under British Venture Capital Association (BVCA) valuation guildlines,
   investments are normally carried at cost, less a provision if appropriate,
               for at least the first 12 months after acquisition.


                                       8


                GEOGRAPHICAL AND SECTOR DISTRIBUTION (BY VALUE)

                             GEOGRAPHICAL ANALYSIS

<TABLE>
<CAPTION>

                                      30 June 2002    30 June 2001
                                      % (by Value)    % (by Value)
            <S>                                 <C>             <C>
            Multinational
            (International)                     37              30
            Continental Europe                  21              28
            North America                       16              17
            UK                                  16              13
            Far East/Asia Pacific               10              12

</TABLE>

Given the global nature of the businesses of many of SVIIT's portfolio
companies, despite many of them being headquartered in Europe, the portfolio
continues to have a significant weighting to Multinational companies, now
representing 37% of the portfolio. SVIIT's combined weighting to Continental
European and Multinational companies has remained constant year on year at
58%.

SVIIT's portfolio is mainly focused on three sectors: Computer/other
electronics, Medical/health and Consumer, which together represent 70% of the
portfolio.

Over the year, the portfolio's exposure to Computer/other electronics (26% of
the portfolio) has continued to decline, driven by a combination of increased
investment in other sectors, realisations and the write-down of
Austriamicrosystems. Of the 26%, 22.9% relates to companies that produce or
distribute hardware materials (e.g. semiconductors), 1.5% to IT business to
business consultancy and 1.6% providing IT services directly to consumers.
The slight increase in SVIIT's exposure to Consumer is accounted for by the
write-up of Homebase, and the increase in its exposure to Chemicals is due to
the acquisition of Cognis.

PORTFOLIO MATURITY

The average age of the portfolio remains low, with 74% of the investments
being held for three years and under (June 2001: 76%). The tables overleaf
show the ageing of the portfolio at 30 June 2002.

DEAL TYPE

Management Buy-Outs/Ins continue to dominate the portfolio, representing 79%
of the portfolio (June 2001: 73%). The decrease in development capital to 17%
(June 2001: 23%) is mainly a result of realisations.

PORTFOLIO PERFORMANCE

Distributions from realisations of GBP49.0 million were at an average premium
of 31% to the 30 June 2001 valuations.

Calls payable during the year amounted to GBP77.5 million to fund 15 new and 44
follow-on investments.

A reconciliation of movements in SVIIT's holdings in Schroder Ventures and
Permira funds is summarised below:

<TABLE>
<CAPTION>

                                        12 months to    12 months to
                                        30 June 2002    30 June 2001
                                                GBPm            GBPm

           <S>                                  <C>             <C>
           Opening Valuation                   387.0           327.2
           Calls Payable                        77.5           155.4
           Distributions Receivable           (49.0)          (51.9)
                                               415.5           430.7
           Increase/(Decrease) in
           Value of Portfolio                    7.3          (43.7)
           Closing Portfolio                   422.8           387.0
</TABLE>


FUND COMMITMENTS

At 30 June 2002, SVIIT had total uncalled commitments of GBP403.2 million to
nine funds (June 2001: GBP456.3 million to nine funds).

<TABLE>
<CAPTION>

                                Sector Analysis


                                            30 June 2002    30 June 2001
                                           % (by Value)    % (by Value)

        <S>                                        <C>             <C>
        Computer & Other Electronics                 26              34
        Medical/Health                               24              23
        Consumer                                     20              17
        Industrial Products & Services               10              13
        Chemicals                                     9               1
        Other Manufacturing                           6               5
        Other Services                                3               3
        Construction                                  2               3
        Transportation                                0               1

</TABLE>


                                       9


<TABLE>
<CAPTION>

                      Investments in Companies (GBPm)                       Investments in Companies (GBPm)
                               30 June 2002                                         30 June 2001

                Quoted    Cost        PE/EBIT/3rd   W/Down                 Quoted     Cost       PE/EBIT/3rd   W/Down
                                           Party                                                      Party

  <S>              <C>      <C>             <C>         <C>   <C>             <C>       <C>            <C>       <C>
  1992 &           0.4       0               0.8         8   1992 &           0.4        0              0.9       9.2
  prior                                                      prior
  1993               0       0               0.2       2.1   1993               0        0              0.2       3.2
  1994               0       0               0.8         0   1994             0.3        0              0.9         0
  1995             0.1       0               1.9       2.2   1995             0.2        0              1.9       1.9
  1996             2.5     0.4               5.7       0.1   1996             4.4        0              8.8       0.1
  1997             0.2       0              25.8       4.5   1997             0.1      1.1             27.4       1.8
  1998             0.9     0.5              40.2       1.4   1998             0.7      4.9             33.6       3.3
  1999               1     1.2                16      15.3   1999             1.2      7.3             14.3      20.7
  2000            35.3    24.7             130.6       4.3   2000            14.2    174.9             13.5       6.1
  2001               0    45.2                58       0.8   2001               0     40.7                0         0
  2002               0     2.9                 0         0

</TABLE>





During the year, the International Life Sciences Fund III (ILSF III), advised
by Schroder Ventures Life Sciences had a first closing at US$147.7 million.
Since the year-end, ILSF III has had a further close at US$254 million and is
scheduled to have a final close in the first quarter of 2003. SVIIT has
committed US$75 million to this new fund.

CASH & MARKETABLE SECURITIES

At 30 June 2002, SVIIT's gross cash balance of GBP40.3 million (June 2001:
GBP32.0 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 modest gain on exchange on cash and
marketable securities of GBP0.5 million.

<TABLE>
<CAPTION>

                                  30 June 2002    30 June 2001

                 <S>                       <C>             <C>
                 Early stage/                4               4
                 start-up
                 Development                17              23
                 Buy-outs/ins               79              73

</TABLE>


CONCLUSION

A combination of a strong portfolio of companies, which are performing well
in a difficult economic and business climate, and positive foreign exchange
movements, particularly in the latter half of the year, has resulted in an
increase in net assets of 1.5%. This increase compares to a fall in the FTSE
World Index (Sterling adjusted) of 22.5% over the same period. Over five
years, SVIIT has reported compound annual growth in net assets per share of
16.9% per annum, which compares to a compound return of 1.4% per annum for
the FTSE World Index (Sterling adjusted) over the same period.

Market declines and a weakening economic climate indicate that the next
twelve months will be challenging, for both public and private equity
markets. In the short term, any marked increase in the rate of realisations
will be dependent on improved M&A activity and public market stability.
However, these conditions provide clear buying opportunities for private
equity managers and SVIIT is ideally placed to capitalise on this.


                                       10


<TABLE>
<CAPTION>

Uncalled Fund Commitments at 30 June 2002


  Fund                      Amount Called   Amount Uncalled    SVIIT Uncalled
                         (Local Currency)   (Local Currency)      Commitment*
                                                                  GBP million

  <S>                              <C>                 <C>                <C>
  Permira Europe I             euro189.1m          euro6.9m               4.4
  Permira Europe II            euro307.5m        euro442.5m             286.7
  The Japan Venture             Y2,728.4m           Y711.6m               3.9
  Fund III
  Schroder Ventures              US$50.2m          US$58.4m              38.3
  Asia Pacific Fund**
  Schroder Ventures US           US$45.5m          US$27.7m              18.2
  Fund
  Schroder Canadian               C$17.0m            C$0.9m               0.4
  Buy-Out Fund II
  Schroder Canadian               C$14.0m           C$36.5m              15.7
  Buy-Out Fund III
  Schroder Ventures              US$69.4m          US$12.3m               8.1
  International Life
  Sciences Fund II
  International Life              US$2.2m          US$42.0m              27.5
  Sciences Fund III***
  Total                                                                GBP403.2

  *     Based on exchange rates at 30 June 2002.
  **    Callable commitments to this fund have been reduced by 20%.
  ***   Based on amount committed to first close (US$44.2 million),
        following the second closing of the fund after the year-end, SVIIT has
        committed US$75 million in total.

</TABLE>


                                       11


Twenty Largest Underlying Companies

In the following pages, we show the Group's twenty largest investments by
value as at 30 June 2002
(Geographic Locations by head office)

<TABLE>
<CAPTION>

1.     MEMEC
       (UK)
Company (GBP000's)
<S>                       <C>          <C>
Cost                      56,438       MEMEC Picture
Value                     59,658
Date of Acquisition     Oct 2000
</TABLE>

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 EBIT; the holding represents
14.10% of net assets.


<TABLE>
<CAPTION>

2.     HOMEBASE
        (UK)
Company (GBP000's)
<S>                          <C>          <C>
Cost                         5,866        HOMEBASE Picture
Value                       36,773
Date of Acquisition     March 2001

</TABLE>

Homebase is a retailer of DIY ("Do It Yourself") products in the UK. The
brand is particularly strong at the "softer" end of the market - which
includes home accessories, decorative and gardening products. Homebase
operates nearly 300 stores across the UK and Eire. The company underwent a
recapitalisation in April 2002 returning the majority of the cost of the
investment to investors. The valuation basis is EBIT; the holding represents
8.69% of net assets.


<TABLE>
<CAPTION>

3.     COGNIS
      (GERMANY)
Company (GBP000's)
<S>                       <C>           <C>
Cost                      33,652        COGNIS Picture
Value                     34,611
Date of Acquisition     Nov 2001
</TABLE>


Cognis is the chemicals products business of Henkel and 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 cost in fund currency; the holding represents 8.18% of net assets.


<TABLE>
<CAPTION>

4.     HOGG ROBINSON
           (UK)
Company (GBP000's)
<S>                          <C>     <C>
Cost                        24,154   HOGG ROBINSON Picture
Value                       24,749
Date of Acquisition      June 2000

</TABLE>


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 EBIT; the
holding represents 5.85% of net assets.


                                       12


<TABLE>
<CAPTION>

5.     LEICA MICROSYSTEMS
          (GERMANY)

Company (GBP000's)
<S>                                    <C>   <C>
Cost                              11,803    LEICA MIROSYSTEMS Picture
Value                             18,718
Date of Acquisition           March 1998

</TABLE>


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 EBIT; the holding represents 4.42% of net
assets.


<TABLE>
<CAPTION>

6.     SIRONA DENTAL SYSTEMS GROUP
           (GERMANY)
Company (GBP000's)
<S>                                     <C>             <C>
Cost                                    15,994      Sirona Dental Systems
Value                                   17,971        Group Picture
Date of Acquisition                   Nov 1997

</TABLE>

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. The valuation basis is EBIT; the holding represents
4.25% of net assets.

<TABLE>
<CAPTION>


7.     AUSTRIAMICROSYSTEMS
          (AUSTRIA)
Company (GBP000's)
<S>                                   <C>     <C>
Cost                              36,135      AUSTRIA-MICROSYSTEMS Picture
Value                             15,958
Date of Acquisition            June 2000

</TABLE>

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 3.77% of net assets.


<TABLE>
<CAPTION>

8.     TAKKO
     (AUSTRIA)
Company (GBP000's)
<S>                          <C>         <C>
Cost                        17,347       TAKKO Group Picture
Value                       15,880
Date of Acquisition     March 2000
</TABLE>

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 write-down; the holding
represents 3.75% of net assets.


                                       13



<TABLE>
<CAPTION>

9.     KIEKERT
      (GERMANY)
Company (GBP000's)
<S>                        <C>             <C>
Cost                       14,545          KIEKERT Picture
Value                      15,177
Date of Acquisition     Sept 2000
</TABLE>

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 EBIT; the holding represents 3.59% of net assets.
Twenty Largest Underlying Companies continued

<TABLE>
<CAPTION>

10.     AP PLASMAN
         (CANADA)
Company (GBP000's)
<S>                        <C>       <C>
Cost                       11,131    AP PLASMAN Picture
Value                      10,139
Date of Acquisition     Sept 2000

</TABLE>

AP Plasman is an integrated group of five companies providing moulds and
plastic components in addition to the painting and finishing of parts,
primarily for the automotive industry. The valuation basis is EBIT; the
holding represents 2.40% of net assets.


<TABLE>
<CAPTION>

11.     GRAMMER
       (GERMANY)
Company (GBP000's)
<S>                         <C>     <C>
Cost                        9,288   GRAMMER Picture
Value                      10,034
Date of Acquisition     June 2001
</TABLE>


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 EBIT; the holding represents 2.37% of net assets.

<TABLE>
<CAPTION>

12.     PARKWAY HOLDINGS
          (SINGAPORE)
Company (GBP000's)
<S>                            <C>       <C>
Cost                           19,719    PARKWAY HOLDINGS Picture
Value                           9,237
Date of Acquisition          Dec 1999
</TABLE>

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 2.18% of net assets.

                                       14



<TABLE>
<CAPTION>
13.     EEMS
       (ITALY)
Company (GBP000's)
<S>                        <C>      <C>
Cost                       1,750    EEMS Picture
Value                      8,891
Date of Acquisition     May 1999
</TABLE>

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 EBIT; the
holding represents 2.10% of net assets.
Twenty Largest Underlying Companies continued


<TABLE>
<CAPTION>

14.     BETTS GROUP HOLDINGS
               (UK)
Company (GBP000's)
<S>                                 <C>       <C>
Cost                                6,312      BETTS GROUP
Value                               8,593    HOLDINGS Picture
Date of Acquisition              Nov 1998
</TABLE>


Betts is a specialist packaging and injection-moulding business focused on
the pharmaceutical and oral care markets. Betts makes toothpaste and
pharmaceutical tubes, asthma inhalers and other specialised packaging in
plants located in the UK, US, Poland and Asia. The valuation basis is EBIT;
the holding represents 2.03% of net assets.


<TABLE>
<CAPTION>

15.     MESA COMMUNICATIONS
             (USA)
Company (GBP000's)
<S>                                 <C>       <C>
Cost                                 8,766   MESA COMMUNICATIONS Picture
Value                                8,507
Date of Acquisition             March 2000
</TABLE>

Mesa is an independent owner and manager of wireless communication towers,
growing aggressively through acquisition and development in the US. The
valuation basis is cost in fund currency; the holding represents 2.01% of net
assets.


<TABLE>
<CAPTION>

16.     WASHTEC
       (GERMANY)
Company (GBP000's)
<S>                        <C>        <C>
Cost                       5,939      WASHTEC Picture
Value                      6,613
Date of Acquisition     Feb 1998
</TABLE>


Washtec was formed from the merger of California Kleindienst and Wesumat, and
manufactures car wash equipment. Permira funds had previously invested in
California Kleindienst. The valuation basis is quoted; the holding represents
1.56% of net assets.

                                       15



<TABLE>
<CAPTION>

17.     XYMAX
       (JAPAN)
Company (GBP000's)
<S>                          <C>    <C>
Cost                         738    XYMAX Picture
Value                      5,212
Date of Acquisition     Jan 2000
</TABLE>

XYMAX (formerly Recruit Building Management Ltd) is a property management
company managing over 250 office buildings mainly located in the Tokyo and
Osaka metropolitan areas. XYMAX provides services to two different market
segments: the sub-leasing market for small to medium sized building owners,
and the property management market for institutional real estate investors.

The valuation basis is third-party; the holding represents 1.23% of net
assets.

Twenty Largest Underlying Companies continued

<TABLE>
<CAPTION>

18.     EURO DENTAL
         (GERMANY)
Company (GBP000's)
<S>                        <C>     <C>
Cost                       3,662   EURO DENTAL
Value                      5,182     Picture
Date of Acquisition     Jan 2000
</TABLE>


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 EBIT; the holding represents 1.22%
of net assets.

<TABLE>
<CAPTION>

19.   COMACT (CANADA) (FORMERLY GBA
         INDUSTRIAL EQUIPMENT)

Company (GBP000's)
<S>                                     <C>       <C>
Cost                                    2,736        COMACT (CANADA)
Value                                   5,002    (FORMERLY GBA INDUSTRIAL
Date of Acquisition                 June 1997        EQUIPMENT)
                                                      Picture
</TABLE>

Comact is a Canadian manufacturer of industrial equipment for the sawmill,
paper, hydroelectric and aluminium industries, with 75% of consolidated
revenues arising from sales of sawmill equipment. The valuation basis is
EBIT; the holding represents 1.18% of net assets.


<TABLE>
<CAPTION>

20.     TFL
      (GERMANY)
Company (GBP000's)
<S>                          <C>         <C>
Cost                         4,724        TFL
Value                        4,955      Picture
Date of Acquisition     March 2001
</TABLE>


TFL is a supplier of speciality chemicals to the leather processing industry.
Established in 1996 as a joint venture between two of the world's leading
chemical companies, TFL, with six production sites worldwide, has positioned
itself as a supplier of the full product range for all stages of the leather
production process, providing a single source for its customers
(predominantly tanneries). The valuation basis is EBIT; the holding
represents 1.17% of net assets.


                                       16



<TABLE>
<CAPTION>

List of Investments at 30 June 2002


                                    Year     SVIIT's Net    SVIIT's Holding         Value of SVIIT's   SVIIT's Assets
                                  Formed        Original       in the Fund                  Holding                 %
                                            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                   1,159               0.3

  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                  11,482               2.7

  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                  15,670               3.7

  Co-investments with Asia
  Pacific Fund ll and Schroder
  Ventures Asia Pacific Fund                                                                  1,201               0.3

  The Japan Venture Fund II
  Formed to invest in Japanese
  businesses with potential
  for capital growth.               1990             10*               13.7                   3,189               0.8

  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                  13,869               3.3

 TOTAL ASIA                                                                                 46,570              11.1

                                       17

List of Investments continued


                                                        Original    SVIIT's Holding           Value of    SVIIT's Net
                                            Year    Life (years)       in the Fund     SVIIT's Holding         Assets
                                          Formed                                 %             GBP'000              %
  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               22.0             69,096           16.3

  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               22.7            190,641           45.1

  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                492            0.1

  Permira France Venture I
  Formed with a policy of investing in
  development capital opportunities,
  principally in France.                    1992              10               19.0                163            0.0

  Permira German Buy-Outs
  Established to invest in buy-outs of
  companies in Germany and some of its
  neighbouring countries.                   1986             10*               29.7              5,089            1.2

  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              2,391            0.6

  Permira Italy I
  Established to invest in buy-outs
  and development capital businesses,
  principally in Italy.                     1988             10*               33.2                0.0            0.0

  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              1,863            0.4

  The Spanish Venture Fund
  Established with a policy of
  investing in leveraged buy-outs and
  development capital businesses in
  Spain.                                    1990             10*               23.2                797            0.2

  TOTAL CONTINENTAL EUROPE                                                                     270,532           63.9



Along with the related funds, Schroder Ventures Europe changed its name to
Permira with effect from 12 November 2001.

                                       18


List of Investments continued


                                                        Original    SVIIT's Holding           Value of    SVIIT's Net
                                            Year    Life (years)        in the Fund    SVIIT's Holding         Assets
                                          Formed                                 %             GBP'000              %
  UNITED KINGDOM

  Permira UKIII
  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             12,059            2.9

  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                662            0.2

  Permira UK Venture IV
  Established to follow the policies
  of the fully invested Permira UK
  Venture III                               1995              10                4.2              2,275            0.5

  TOTAL UNITED KINGDOM                                                                          14,996            3.6

Along with the related funds, Schroder Ventures Europe changed its name to
Permira with effect from 12 November 2001.

                                       19


List of Investments continued


                                                        Original    SVIIT's Holding           Value of    SVIIT's Net
                                            Year    Life (years)        in the Fund    SVIIT's Holding         Assets
                                          Formed                                 %             GBP'000              %

  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              7,440            1.8

  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              4,032            0.9

  Co-investments with Schroder
  Canadian Buy-Out Funds II and III                                                             14,593            3.4

  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              2,014            0.5

  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             37,084            8.8

  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               29.9              1,269            0.3

  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               30.0             24,293            5.7

  TOTAL NORTH AMERICA                                                                           90,725           21.4

  Total fund portfolio                                                                         422,823          100.0
  Fixed interest investments                                                                    31,000            7.3

  Total investment portfolio                                                                   453,823          107.3
  Other assets less total liabilities                                                         (30,736)          (7.3)

  Total net assets                                                                             423,087          100.0

*     The lives of these funds have been extended.


Note: Permira France II, Permira UKVenture I Extension and Schroder US
Venture Fund terminated during the year and are therefore excluded from the
list of investments.

</TABLE>


                                       20



Report of the Directors for the year ended 30 June 2002

The Directors submit their report and the audited accounts of the Company for
the year ended 30 June 2002.


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 2001 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.
Report of the Directors for the year ended 30 June 2002

A review of the Company's business and its likely future development is given
in the Chairman and CEO's Statement on page 4 and the Portfolio Review on
page 6.

REVENUE AND EARNINGS

The consolidated net revenue deficit for the year after expenses, interest,
taxation and minority interests was GBP1,555,000 (2001: return of GBP2,655,000),
equivalent to a deficit per ordinary share of 1.52p (2001: return of 2.60p).

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 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 30 June 2002.

PURCHASE OF SHARES FOR CANCELLATION

During the year ended 30 June 2002 the Directors did not use the authority
given to them to purchase ordinary shares for cancellation.

The total number of shares in issue on 1 October 2002 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 1 October 2002 will be proposed at the
forthcoming Annual General Meeting for which notice is given on pages 58 and
59.

This authority will lapse at the conclusion of the Company's Annual General
Meeting in 2003, unless renewed earlier.

ISSUE OF NEW SHARES

At the Annual General Meeting of the Company on 22 November 2001, the
Directors were given powers (in substitution for the powers taken at the
Extraordinary General Meeting of the Company in May 2001) 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
pages 58 and 59) 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 1 October
2002) 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 1 October 2002).

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 1 October 2002) 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 1 October 2002).

The Directors are seeking the authority referred to in paragraph (c) of
Resolution 10 in order to provide flexibility in raising monies, including to
take advantage of opportunities arising through the launch of new Schroder
Ventures' or Permira 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 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 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.


                                       21


The authorities proposed to be taken under Resolutions 9 and 10 will lapse at
the conclusion of the Company's Annual General Meeting in 2003, unless
renewed earlier.


Report of the Directors continued


DIRECTORS

The Directors of the Company and their beneficial and family interests in the
Company's share capital during the year to 30 June 2002 are given below:

<TABLE>
<CAPTION>

                                                              Ordinary Shares
                                                              of GBP1.00 each
                                                    At 30 June     At 1 July
                                                          2002         2001+
  <S>                                                      <C>           <C>
  Beneficial
  J J McLachlan                                          15,827        14,405
  N E H Ferguson*                                       175,000       175,000
  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
  I P Sedgwick (resigned 3 May 2002)                     17,500        17,500
  A F Sykes (appointed 3 May 2002)                          Nil           Nil
  A C Williams* (appointed 3 May 2002)                    9,235         9,235
  Non Beneficial
  N E H Ferguson                                         27,900           Nil
  C J Govett                                             20,000        20,000
  A C Williams                                            2,000         2,000

  +     Or date of appointment if later.
  *     Nicholas Ferguson and Andrew Williams have options over ordinary
        shares, details of which are given on page 28.

</TABLE>

There had been no change in the above holdings up until 1 October 2002. In
accordance with the Company's Articles of Association, the elections of Mr
Andrew Sykes and Mr Andrew Williams as Directors will be proposed at the
forthcoming Annual General Meeting, and Mr Govett, Mr Habgood and Mr Koning
will retire at the forthcoming Annual General Meeting and, being eligible,
offer themselves for re-election.

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 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 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.
Andrew Sykes is an Executive Director and Nicholas Ferguson is a
non-executive Director of Schroders plc, whose subsidiaries include Schroder
Investment Management Limited which receives fees from the Company in
accordance with the terms of a secretarial agreement, and Schroder Investment
Management (UK) Limited which receives fees for the provision of cash
management services. Full details of fees paid to both companies can be found
in Note 30 on page 49. 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 1 October 2002 the Company had been notified of the following interests in
excess of 3 per cent. of the issued capital.

<TABLE>
<CAPTION>

                                                    Number of     Percentage
                                               ordinary shares       of class
<S>                                                 <C>                 <C>
  Schroders plc and its subsidiaries:
    - non beneficial, managed for clients           15,334,808          15.00
    - beneficial                                    13,113,449          12.82
  Aegon Aandelenfonds NV                            19,378,665          18.95
  Lansdowne Partners                                 5,258,000           5.14
  British Aerospace Pension Fund                     4,425,000           4.33
  BBC Pension Trust Limited*                         4,384,554           4.29

  *     This interest is also counted in the non-beneficial, managed for
  clients, interest of Schroders plc and its subsidiaries listed above.

                                                       Nominal     Percentage
                                                         Value        of bond
  Convertible Bonds:
  Metropolitan Life Insurance Company on                GBP20.0m          50.00
  behalf of Separate Account 285
  Scottish Widows Investment
  Partnership Limited                                    GBP6.8m          17.00
  Chase Nominees Limited a/c 20477                       GBP4.0m          10.00
  Allsec Nominees Limited                                GBP4.0m          10.00
  Schroder & Co. Bank AG, Zurich                         GBP3.3m           8.25

</TABLE>

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
7 October 2002


                                       22

Statement of Directors' Responsibilities

The Directors are responsible for preparing accounts for each financial year
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 year and of the return for the year,
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.


                                       23


Corporate Governance

The Company is committed to high standards of corporate governance. The UK
Listing Authority requires all listed Companies to disclose how they have
applied the principles of, and complied with, the provisions of the Combined
Code contained in the Listing Rules (the "Combined Code"). This Statement,
together with the Statement of Directors' Responsibilities on page 23,
indicates how the Company has applied the principles of good governance of
the Combined Code and its requirements on Internal Control.

APPLICATION OF CODE PRINCIPLES

THE BOARD

The Board currently consists of six non-executive Directors, five of whom are
independent of the Company Secretary and of the Company and its subsidiaries,
and two executive Directors (see page 2). Mr Govett has in previous years
been considered not to be an independent director in view of his earlier
directorship of Schroders plc. The Board has carefully reviewed this matter
again and has resolved that, as it is now more than four years since his
retirement from Schroders plc, he is now an independent director. Mr Govett
will become a member of the Audit Committee in due course.

The Board meets at least four times a year. Matters specifically reserved for
decision by the full Board have been defined and a procedure 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.

The Board has contractually delegated to Schroder Investment Management (UK)
Limited, the management of the Company's cash balances, and the day to day
accounting and company secretarial requirements to Schroder Investment
Management Limited. Each of these contracts 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 each contract is monitored on an annual
basis by the Remuneration Committee.

When a Director is appointed he or she receives an induction which is
provided by the Company Secretary. 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. In addition, Directors
attend ad hoc seminars covering the latest developments across the investment
trust industry.

BOARD COMMITTEES

The Investment Committee, which consists 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. The Committee is comprised of John McLachlan (Chairman), John Govett
and Anthony Habgood.

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. The Committee is 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.


                                       24



Corporate Governance continued

There is an Audit Committee with defined terms of reference and duties. The
Committee is 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 and 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.

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.

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 Chairman of the Board and of the
Audit Committee at the Annual General Meeting. The Company announced the
level of votes cast by proxy on resolutions proposed at last year's Annual
General Meeting, and intends to announce the votes cast by proxy in a similar
manner at future 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
58 to 59 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 23 and a statement of going concern is set out below.

The Independent Auditors' Report can be found on page 29.

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 consist
mainly of securities that are readily realisable and, accordingly, the
Company has 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.

During the year ended 30 June 2001 the Board approved a detailed risk map
that identified 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 responsibility for the provision of
accounting and company secretarial services. 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 as an investment trust. 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.

                                       25


Corporate Governance continued

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.

STATEMENT OF COMPLIANCE

The Board has conducted an annual review of the effectiveness of the system
of internal control covering all controls including financial, operational
and compliance controls and risk management. 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.

Following the annual review, the Board has agreed that an internal audit
function, for the SVIIT Group, should be established with an external
adviser.

It is anticipated that the initial programme of audit will commence later in
2002.

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.


                                       26


Remuneration Report

This report deals with the remuneration paid to the Company's Executive
Directors, Nicholas Ferguson, Chief Executive of the Company, and Andrew
Williams for the year ended 30 June 2002.


THE REMUNERATION COMMITTEE

(THE "COMMITTEE")

The Committee's members during the year were John McLachlan, John Govett and
Anthony Habgood, all considered by the Board to be independent non-executive
directors.

The Committee is responsible for determining the remuneration of the
Executive Directors 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 is advised by New Bridge Street
Consultants, independent remuneration consultants.

POLICY ON THE REMUNERATION OF THE EXECUTIVE 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 venture capital organisations and financial institutions. The Committee
is sensitive to wider issues including pay and employment conditions
elsewhere 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. Under an annual
bonus scheme, bonuses may be paid conditional upon Group and individual
performance as part of a formal appraisal process.

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. During the year under review Nicholas Ferguson was paid
a bonus of GBP372,726 in respect of the calendar year ended 31 December 2001.
In addition, a pension contribution of GBP250,000 was paid to a money purchase
scheme in respect of the same period. Of the above payments a bonus of
GBP186,363 and pension contributions of GBP125,000 have been accounted for in
the year ended 30 June 2002.

BENEFITS IN KIND

Benefits in kind (which are not pensionable) relate mainly to the provision
of health insurance.

EXTERNAL APPOINTMENTS

The Company permits executive directors of the Company to accept
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

None of the Executive Directors have a service contact with the Company. They
are employed by Schroder Investment Management Limited (SIM) and are seconded
to the Group. Their contracts with SIM provide for 3 months' notice.

PENSION ARRANGEMENTS

The following figures, prepared in accordance with the Listing Rules of the
Financial Services Authority, apply to Nicholas Ferguson in respect of the
year ended 30 June 2002, for which he was an executive director of the
Company. No pension contributions are payable by Nicholas Ferguson
personally.


    Accrued Pension from 22 September 1980 to 30 June 2001      GBP93,395 p.a.
    Accrued Pension at 30 June 2002                            GBP103,265 p.a.
    Increase in accrued pension                                  GBP9,370 p.a.
    Transfer value of increase in accrued pension                    GBP93,202

The following figures apply to Andrew Williams in respect of the period 3 May
2002 to 30 June 2002, for which he was an executive director of the Company.
No pension contributions are payable by Andrew Williams personally.


      Accrued Pension from 7 November 1983 to 3 May 2002     GBP76,139 p.a.
      Accrued Pension at 30 June 2002                        GBP77,760 p.a.
      Increase in accrued pension                             GBP1,621 p.a.
      Transfer value of increase in accrued pension               GBP22,939

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.


                                       27

Remuneration Report continued

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.

Remuneration Report continued

The Remuneration Committee intends to set appropriately demanding performance
targets on the exercise of options. For the options that were granted in June
2001 and April 2002, 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 targets are 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 they may be re-tested every six months up to six years from grant.

To the extent that the performance target has been met, options are
exercisable from three years from grant. However, for the initial share
option grant, a staggered vesting schedule will operate for the Company's
Executive Directors and senior executives of the Group, such that two-thirds
of the initial option grant is exercisable three years from grant, with the
remaining one third exercisable four years from grant.

CURRENT REMUNERATION

The emoluments of the Directors in respect of the year ended 30 June 2002
were as specified below:

<TABLE>
<CAPTION>

  Executive           Salary    Benefits       Annual         Total         Total            Pension         Pensions
                     & fees     in kind     bonus[SS]     emoluments    emoluments    contributions++    contributions
                    GBP'000     GBP'000      GBP'000        year to       year to            year to          year to
                                                       30 June 2002        30 June      30 June 2002     30 June 2001
                                                            GBP'000          2001            GBP'000          GBP'000
                                                                          GBP'000

  <S>                   <C>          <C>         <C>            <C>            <C>               <C>               <C>
  N E H Ferguson        332           7          484            823            10                150                -
  A C Williams+          47           -           54            101             -                  3                -
  Non-Executive
  J J McLachlan          75           -            -             75            50                  -                -
  N E H Ferguson*         -           -            -              -             5                  -                -
  C J Govett             24           -            -             24            18                  -                -
  A J Habgood            24           -            -             24            18                  -                -
  E W Koning             20           -            -             20            17                  -                -
  D Raeburn              22           -            -             22             1                  -                -
  I P Sedgwick           17           -            -             17            15                  -                -
  J Strangfeld            -           -            -              -            15                  -                -
  A F Sykes               4           -            -              4             -                  -                -
  Aggregate             565           7          538          1,110           149                153                -
  emoluments

</TABLE>

[SS] Bonuses include provision for amounts accrued but not paid in respect of
the 6 months ended 30 June 2002. Annual bonuses are awarded in respect of
calendar years.

++ Pensions contributions include GBP125,000 paid to a money purchase scheme on
behalf of Nicholas Ferguson in respect of the 6 months to 31 December 2001.
All other contributions relate to a defined benefit scheme, further details
for which are provided on page 27 and in note 6 to the accounts.

+ This relates to Andrew Williams's remuneration for the period 3 May 2002 to
30 June 2002.

* Nicholas Ferguson's fee for period from 1 July 2000 to 31 December 2000 was
paid to Schroder Ventures (London) Limited. Nicholas Ferguson agreed to waive
his fees as a non-executive Director of SVIIT with effect from 1 January
2001.

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 1 July    Options      Options    Options    At 30 June    Exercise        Exercise dates*
  Director             2001+    granted    exercised     lapsed          2002       price       Earliest       Latest

  <S>                <C>           <C>           <C>        <C>           <C>        <C>      <C>              <C>
  N E H Ferguson     715,446          -            -          -       715,446      410.0p   21 June 2004       20 June 2011

                     357,724          -            -          -       357,724      410.0p   21 June 2005       20 June 2011

                           -    404,484            -          -       404,484      334.5p   5 April 2005       4 April 2012

  A C Williams       373,983          -            -          -       373,983      410.0p   21 June 2004       20 June 2011

                     186,992          -            -          -       186,992      410.0p   21 June 2005       20 June 2011

                     272,645          -            -          -       272,645      334.5p   5 April 2005       4 April 2012

  Total            1,906,790    404,484            -          -     2,311,274

</TABLE>

* Options are exercisable subject to appropriate performance targets being
met.

+ The figures stated for Andrew Williams reflect his holdings on the date of
his appointment (3 May 2002).

The mid-market price of shares at 30 June 2002 was 354.5p and the range
during the financial year was 296.5p to 393.0p.

                                       28



Independent Auditors' Report
To the Members of Schroder Ventures International Investment Trust plc

We have audited the Group's accounts for the year ended 30 June 2002 which
comprise the Consolidated Statement of Total Return, Company Statement of
Total Return, Group and Company Balance Sheets, Consolidated Cash Flow
Statement and the related notes 1 to 31. These accounts have been prepared on
the basis of the accounting policies set out therein.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The directors' responsibilities for preparing the Annual 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 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 are properly prepared in accordance with the Companies Act 1985. We
also report to you if, in our opinion, the Directors' Report 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 Investment Objective, Directors and Advisers, Financial Highlights and
Historical Record, Chairman and CEO's Statement, Portfolio Review, Twenty
Largest Underlying Companies, List of Investments, Report of the Directors,
Statement of Directors' Responsibilities, Corporate Governance, Remuneration
Report, and translated into euros the Consolidated Statement of Total Return,
Group and Company Balance Sheets, and Consolidated Cash Flow Statement and
the Company Summary, Information for Shareholders, Notice and Agenda and
Glossary. 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. 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 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.

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 30 June 2002 and of the net deficit of
the Company and of the Group for the year then ended and have been properly
prepared in accordance with the Companies Act 1985.

Ernst & Young LLP
Registered Auditor
London

7 October 2002


                                       29


Consolidated Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)

<TABLE>
<CAPTION>

                                                For the year ended                       For the year ended
                             Notes    30 June 2002    30 June 2001     Total          Revenue    Capital        Total
                                           Revenue         Capital    GBP'000        GBP'000      GBP'000     GBP'000
                                          GBP'000          GBP'000

  <S>                           <C>            <C>             <C>        <C>             <C>        <C>         <C>
  Realised gains on
  investments                   12               -          11,914     11,914               -       4,774       4,774

  Unrealised losses on
  investments                   12               -         (4,202)    (4,202)               -    (49,190)    (49,190)

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

  Foreign exchange
  gains/(losses) on
  currency 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 return/(deficit)
  before finance costs
  and taxation                                 384           7,754      8,138           3,381    (45,171)    (41,790)

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

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

  Tax on ordinary
  activities                     8           (105)               -      (105)           (141)           -       (141)

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


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

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


  Dividends
  No final dividend
  (2001: 1.80p per
  ordinary share)                9               -               -          -         (1,841)           -     (1,841)

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

  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           7.60p      6.08p             [ss]       [ss]       [ss]

</TABLE>

[ss] There is no dilution (see note 10).

The notes on pages 34 to 51 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.

                                       30


<TABLE>
<CAPTION>

Consolidated Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)

                                               For the year ended                       For the year ended
                                                  30 June 2002                             30 June 2001
                              Notes           Revenue    Capital     Total            Revenue    Capital        Total
                                             GBP'000     GBP'000    GBP'000          GBP'000      GBP'000     GBP'000

<S>                              <C>              <C>       <C>        <C>                <C>         <C>         <C>
  Realised gains on
  investments                    12                 -     11,654     11,654                 -       4,564       4,564
  Unrealised losses on
  investments                 12/14                 -    (3,587)    (3,587)                 -    (48,645)    (48,645)

  Gains/(losses) on
  investments                                       -      8,067      8,067                 -    (44,081)    (44,081)

  Foreign exchange losses
  on currency balances                              -       (91)       (91)                 -       (755)       (755)

  Income                          2             1,638          -      1,638             5,218           -       5,218
  Expenses                        3             (927)          -      (927)           (2,070)           -     (2,070)

  Net return/(deficit)
  before finance costs and
  taxation                                        711      7,976      8,687             3,148    (44,836)    (41,688)

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

  Net (deficit)/return on
  ordinary activities
  before taxation                             (1,121)      7,976      6,855             2,565    (44,836)    (42,271)

  Tax on ordinary
  activities                      8             (116)          -      (116)             (141)           -       (141)

  (Deficit)/return on
  ordinary activities
  after tax for the year                      (1,237)      7,976      6,739             2,424    (44,836)    (42,412)

  Dividends
  No final dividend (2001:
  1.80p per ordinary
  share)                          9                 -          -          -           (1,841)           -     (1,841)

  (Deficit)/surplus
  transferred (from)/to
  reserves                                    (1,237)      7,976      6,739               583    (44,836)    (44,253)
  Return per ordinary
  share                          10           (1.21)p      7.80p      6.59p             2.37p    (43.84)p    (41.47)p
  Return per ordinary
  share - diluted                10           (1.21)p      7.80p      6.59p              [ss]        [ss]        [ss]

</TABLE>

[ss] There is no dilution (see note 10).

The notes on pages 34 to 51 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.


                                       31


<TABLE>
<CAPTION>

Balance Sheets


                                                                  At 30 June 2002               At 30 June 2001
                                                    Notes              Group    Company              Group    Company
                                                                     GBP'000    GBP'000            GBP'000    GBP'000

  <S>                                                 <C>               <C>         <C>               <C>        <C>
  TANGIBLE FIXED ASSETS                                11                296          -                  -          -
                                                                         296          -                  -          -
  FIXED ASSET INVESTMENTS
  Funds and co-investments                          12/13            422,823    401,348            387,030    362,859
  Fixed interest investments                        12/13             31,000     31,000             24,853     24,853
  Investment in subsidiaries                           14                  -     29,560                  -     30,194
                                                                     453,823    461,908            411,883    417,906

  CURRENT ASSETS
  Debtors                                              15              3,548      1,799              2,933        808
  Cash at bank and short-term deposits                                 9,303        798              7,191        449
                                                                      12,851      2,597             10,124      1,257

  CURRENT LIABILITIES
  Creditors: amounts falling due within one year       16              4,357      1,742              4,747      2,291

  NET CURRENT ASSETS/(LIABILITIES)                                     8,494        855              5,377    (1,034)

  TOTAL ASSETS LESS CURRENT LIABILITIES                              462,613    462,763            417,260    416,872

  Creditors: amounts falling due after more than
  one year                                             17             39,152     39,152                  -          -

  Minority interest - non-equity                                         100          -                100          -
  Minority interest - equity                                             274          -                288          -

  NET ASSETS                                                         423,087    423,611            416,872    416,872

  CAPITAL AND RESERVES
  Called up share capital                              20            102,266    102,266            102,266    102,266
  Share premium account                                21              7,453      7,453              7,453      7,453
  Capital redemption reserve                           22              3,204      3,204              3,204      3,204
  Share purchase reserve                               23             92,054     92,054             92,054     92,054
  Capital reserve                                      24            216,705    216,683            208,935    208,707
  Revenue reserve                                      25              1,405      1,951              2,960      3,188

  EQUITY SHAREHOLDERS' FUNDS                           26            423,087    423,611            416,872    416,872

  Net asset value per ordinary share - undiluted       27             413.7p     414.2p             407.6p     407.6p
  - diluted                                            27             412.3p     412.8p                [ss]      [ss]

</TABLE>


[ss] There is no dilution (see note 27)

The accounts were approved by the Board of Directors on 7 October 2002 and
signed on behalf of the Board by:

John J. McLachlan
Nicholas E. H. Ferguson
Directors

The notes on pages 34 to 51 form an integral part of these accounts.

                                       32


<TABLE>
<CAPTION>

Consolidated Cash Flow Statement

                                                             For the year ended                    For the year ended
                                                                   30 June 2002                          30 June 2001
                                                           Note         GBP'000                               GBP'000
  <S>                                                       <C>              <C>                                   <C>
  OPERATING ACTIVITIES
  Income received on investments                                          1,567                                 5,623
  Bank interest received                                                    454                                   570
  Investment advisory fee income received                                 5,047                                    35
  Administrative expenses paid                                          (7,279)                               (2,417)

  Net cash (outflow)/inflow from
  operating activities                                       26           (211)                                 3,811

  RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
  Interest paid                                                               -                                 (224)
  Loan facility costs                                                     (550)                               (1,046)
  Net cash outflow from returns on
  investments and servicing of finance                                    (550)                               (1,270)

  TAXATION
  UK tax recovered                                                            -                                   339
  Overseas tax suffered                                                   (117)                                 (154)
  Total tax (paid)/recovered                                              (117)                                   185

  CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
  Purchase of fixed interest securities                               (316,731)                             (351,516)
  Purchase of subsidiaries                                                    -                                  (36)
  Purchase of tangible fixed assets                                       (311)                                     -
  Sale of fixed interest securities                                     311,001                               452,217
  Calls paid                                                           (77,474)                             (156,024)
  Capital distributions received                                         48,976                                53,647

  Net cash outflow from capital
  expenditure and financial investment                                 (34,539)                               (1,712)

  EQUITY DIVIDENDS PAID
  Dividends                                                             (1,841)                               (4,182)
  Total dividends paid                                                  (1,841)                               (4,182)

  FINANCING
  Proceeds from convertible bond issue                                   40,000                                     -
  Issue and listing costs of convertible
  bonds                                                                   (675)                                     -
  Net cash inflow from financing                                         39,325                                     -

  NET CASH INFLOW/(OUTFLOW)                                               2,067                               (3,168)


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                                             For the year ended                    For the year ended
                                                                   30 June 2002                          30 June 2001
                                                           Note         GBP'000                               GBP'000

  Increase/(decrease) in cash during the
  year                                                                    2,067                               (3,168)
  Cash acquired on purchase of
  subsidiaries                                                                -                                   834
  Exchange gain/(loss) on currency
  balances                                                                   45                                 (755)

  Increase in convertible bonds                                        (39,152)                                     -
  Change in net (debt)/funds                                           (37,040)                               (3,089)
  Net funds at the beginning of the year                                  7,191                                10,280
  Net (debt)/funds at the end of the year                    29        (29,849)                                 7,191

</TABLE>


The notes on pages 34 to 51 form an integral part of these accounts.

                                       33



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 assets which include leasehold improvements, office equipment,
   telecommunications and computers are included at cost and are depreciated
   over their useful lives on a straight line basis at rates varying between 20
   per cent. and 33 per cent. 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"). 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.


   Quoted investments
   All investments listed on recognised stock exchanges are valued at the quoted
   mid-market price at the balance sheet date. If an investment is subject to
   restrictions affecting its disposal, or if the holding is significant in
   relation to the issued share capital, a discount of generally between 0 per
   cent. and 50 per cent. to that price will be applied.

   Unquoted equity investments

   (i)      All Early Stage Equity investments are valued at cost unless one of
            the following applies:

            (1) performance indicates that there has been a permanent and
                significant diminution in the valuation of the investment. If
                this is the case, provisions in incremental tranches of 25 per
                cent. of original cost will be made; or

            (2) a significant transaction involving an independent third party
                at arm's-length values the investment at a materially different
                value.
   (ii)     All Development Stage Equity investments are valued at cost, or
            cost less a provision, for at least one year unless this basis of
            valuation is unsustainable.

Thereafter, they will be valued as follows:

            (1) where available, either on the basis of a significant
                transaction by an independent third party in the equity of the
                investee company or an independent third party valuation of the
                equity; or

                                       34


Notes to the Accounts continued

            (2) where a significant portion of the assets are held in real
                property on the basis of discounted net asset values; or

            (3) where the investee company is performing significantly below
                expectations, at cost less provisions in incremental tranches of
                25 per cent.; or

            (4) where the company is profitable and performing satisfactorily,
                on the basis of earnings (A) capitalised at an appropriate
                price-earnings multiple (B);

            (A) the earnings of the investee company will be based on the latest
                audited accounts or management accounts where appropriate and

            (B) the price-earnings multiple:

                - will take into account the capital and debt structure of the
                  investee company

                - will be based on either comparable company or industry sector
                  multiples taken from the relevant stock exchange

                - will be subject to a minimum discount of 25 per cent. to
                  reflect risk, the illiquidity of the investment and the
                  approximate nature of a valuation based on earnings unless
                  early realisation is expected in which case a smaller
                  discount will be applied.

   Unquoted loan stock and preference shares

   Loan stock and preference shares will be valued at cost plus any accrued
   interest and redemption premia less, in cases where the investee company is
   performing significantly below expectations, any provisions in incremental
   tranches of 25 per cent.

   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 per cent. 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.

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.


                                       35


Notes to the Accounts continued

   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. The
   adoption of FRS19 has had no impact on current or prior year results.

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, with the exception of
   Schroder Ventures North America Inc. ("SVNA") which has a year-end to 31
   December. In respect of SVNA, audited financial statements to 31 December
   2001, together with management accounts covering the remaining 6 months, have
   been used in preparing the consolidated financial statements. 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.

   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.


                                       36


2.     INCOME

<TABLE>
<CAPTION>


                                                         For the        For the          For the         For the
                                                      year ended      year ended      year ended      year ended
                                                    30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                           Group         Company           Group         Company
                                                         GBP'000         GBP'000         GBP'000         GBP'000
       <S>                                                   <C>             <C>           <C>             <C>
       Income from fixed interest securities                 767             767           3,564           3,564
       Dividends                                             770             770           1,403           1,403
       Interest receivable and similar income                452             101             541             251
       Income from investment advisory services            5,685               -             108               -
                                                           7,674           1,638           5,616           5,218
Notes to the Accounts continued
Income arises mainly from UK assets or operations.

</TABLE>


3.     EXPENSES



<TABLE>
<CAPTION>
                                                            For the        For the          For the         For the
                                                         year ended      year ended      year ended      year ended
                                                       30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                              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 30)                                           293             293             345             345
    Directors' remuneration (note 4)                          1,110             186             149             139
    Staff costs (note 5)                                      4,258               -              93               -
    Depreciation                                                 65               -               -               -
    General expenses                                          1,416             331             438             383
    Enlargement of operations costs                              62              62             840             840
    EDR listing costs                                             -               -             230             230
    Auditors' remuneration:
    - audit                                                      74              40              31              24
    - non-audit*                                                 15              15             109             109
                                                              7,293             927           2,235           2,070
</TABLE>

*In addition, fees for non-audit services amounting to GBP21,000 in respect of
the issue of convertible bonds are payable. These will be amortised over 10
years along with other issue costs (note 17).

Certain costs, primarily loan facility costs (note 7), have been reclassified
from last year's accounts, as considered more appropriate.

4.     DIRECTORS' REMUNERATION
<TABLE>
<CAPTION>

                                                       For the         For the        For the         For the
                                                    year ended      year ended      year ended      year ended
                                                  30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                         Group         Company           Group         Company
                                                       GBP'000         GBP'000         GBP'000         GBP'000

          <S>                                              <C>             <C>             <C>             <C>
          J J McLachlan                                     75              75              50              50
          N E H Ferguson                                   823               -              15               5
          C J Govett                                        24              24              18              18
          A J Habgood                                       24              24              18              18
          E W Koning                                        20              20              17              17
          D Raeburn                                         22              22               1               1
          I P Sedgwick (resigned 3 May 2002)                17              17              15              15
          J Strangfeld                                       -               -              15              15
          A F Sykes (appointed 3 May 2002)                   4               4               -               -
          A C Williams (appointed 3 May 2002)              101               -               -               -
                                                         1,110             186             149             139

</TABLE>

                                       37

The amounts shown above do not include any payments or rights to pensions.
Further details on Directors' emoluments are contained in the separate
Remuneration Report on pages 27 and 28. As shown above, Nicholas Ferguson is
the highest paid director.


<TABLE>

5.     STAFF COSTS

                                                     For the        For the          For the         For the
                                                  year ended      year ended      year ended      year ended
                                                30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                       Group         Company           Group         Company
                                                     GBP'000         GBP'000         GBP'000         GBP'000
            <S>                                         <C>              <C>             <C>             <C>
            Salaries and other remuneration            3,491               -              80               -
            Social security costs                        409               -               6               -
            Pension costs (note 6)                       358               -               7               -
                                                       4,258               -              93               -

</TABLE>

Notes to the Accounts continued

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


<TABLE>
<CAPTION>
                                                                                    For the         For the
                                                                                 year ended      year ended
                                                                               30 June 2002    30 June 2001
                                                                                     Number          Number
            <S>                                                                         <C>             <C>
            Full-time employees                                                          17              12
            Seconded staff                                                                4               4
                                                                                         21              16
</TABLE>


6.     PENSION COSTS

The charge for pension costs comprises:

<TABLE>
<CAPTION>

                                                 For the        For the          For the         For the
                                              year ended      year ended      year ended      year ended
                                            30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                   Group         Company           Group         Company
                                                 GBP'000         GBP'000         GBP'000         GBP'000
                <S>                                  <C>             <C>             <C>             <C>
                Defined benefit schemes               52               -               1               -
                Money purchase schemes               306               -               6               -
                                                     358               -               7               -
</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 4 employees,
including the Company's executive directors, seconded from Schroder
Investment Management Limited to Schroder Ventures (London) Limited ("SVLL"),
a wholly owned subsidiary of SVIIT. 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 858 active
members at 31 December 2001 and the accounts of Schroders plc disclosed a net
pension asset less prepayment in respect of the Scheme of GBP38.4 million,
calculated under FRS 17 based on interim valuations prepared by independent
qualified actuaries.


                                       38


7.     INTEREST PAYABLE AND SIMILAR CHARGES

<TABLE>
<CAPTION>

                                                            For the        For the          For the         For the
                                                         year ended      year ended      year ended      year ended
                                                       30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                              Group         Company           Group         Company
                                                            GBP'000         GBP'000         GBP'000         GBP'000
    <S>                                                         <C>             <C>             <C>             <C>
    Convertible bond interest                                 1,100           1,100               -               -
    Convertible bond - amortisation of issue costs               45              45               -               -
    Loan facility costs                                         687             687             359             359
    Other interest                                                -               -             224             224
                                                              1,832           1,832             583             583

</TABLE>

Loan facility costs were included as expenses in last year's accounts but are
more appropriately described as finance costs and therefore included as part
of interest payable and similar charges.


Notes to the Accounts continued

8.     TAXATION

       (a) The charge for taxation for the year is made up as follows:

<TABLE>
<CAPTION>
                                                       For the        For the          For the         For the
                                                    year ended      year ended      year ended      year ended
                                                  30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                         Group         Company           Group         Company
                                                       GBP'000         GBP'000         GBP'000         GBP'000
         <S>                                               <C>             <C>             <C>             <C>
         Current tax
         Corporation tax                                     -               -               -               -
         Double taxation relief                              -               -               -               -
                                                             -               -               -               -
         Overseas tax                                      133             116             141             141
         Prior year adjustment                            (64)               -               -               -
         Total current tax (note 8(b))                      69             116             141             141
         Deferred Tax
         Deferred tax - prior year adjustment               36               -               -               -
         Total deferred tax                                 36               -               -               -
         Total tax                                         105             116             141             141

</TABLE>

There are no profits chargeable to corporation tax in the current year.
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.

                                       39

Notes to the Accounts continued


8.     TAXATION continued

       b) Factors affecting current tax charge for the year:

       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
                                                          year ended      year ended      year ended      year ended
                                                        30 June 2002    30 June 2002    30 June 2001    30 June 2001
                                                               Group         Company           Group         Company
                                                             GBP'000         GBP'000         GBP'000         GBP'000
   <S>                                                          <C>             <C>             <C>             <C>
   (Deficit)/return before taxation                          (1,448)         (1,121)           2,798           2,565
   Corporation tax at 30%                                      (434)           (336)             839             770

   Effects of:
   Overseas taxation written off                                 133             116             141             141
   Overseas tax claimed as an expense                           (86)               -               -               -
   Non deductible expenses                                        54              40             366             366
   Taxable dividend credited to capital                          274             274               -               -
   Unutilised current year expenses carried forward              250              22               -               -
   Venture funds expenses utilised in year                         -               -         (1,136)         (1,136)
   Income of subsidiary not taxable                             (58)               -            (69)               -
   Prior year adjustment - corporation tax                      (64)               -               -               -
   Current tax charge for the year (Note 8(a))                    69             116             141             141

</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 recognised
   because their utilisation is considered unlikely in the foreseeable future.

9.     DIVIDENDS

No dividend has been proposed in respect of the current financial year. For
the year ended 30 June 2001 a dividend of 1.80p per share was declared based
on 102,265,699 ordinary shares in issue.



10.    RETURN PER ORDINARY SHARE
<TABLE>
<CAPTION>


                 For the year ended                For the year ended
                    30 June 2002                      30 June 2001
             Revenue   Capital    Total     Revenue     Capital         Total
  <S>       <C>         <C>       <C>        <C>       <C>          <C>
  Group
  Return    (1.521)p    7.598p    6.077p     2.596p    (44.069)p    (41.473)p
  per
  ordinary
  share -
  basic
  - diluted (1.520)p    7.596p    6.076p        n/a          n/a          n/a
</TABLE>

The basic revenue return per ordinary share is based on the net deficit on
ordinary activities after taxation and minority interests of GBP1,555,000
(2001: return of GBP2,655,000) and on 102,265,699 ordinary shares (2001:
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 GBP7,770,000 (2001: deficit of GBP45,067,000) and on 102,265,699 ordinary
shares (2001: 102,265,699) being the weighted average number of shares in
issue during the year.

<TABLE>
<CAPTION>

                 For the year ended                For the year ended
                    30 June 2002                      30 June 2001
             Revenue   Capital    Total     Revenue      Capital        Total
  <S>       <C>         <C>       <C>        <C>       <C>          <C>
  Company
  Return    (1.210)p    7.799p    6.589p     2.370p    (43.843)p    (41.473)p
  per ordinary
  share - basic
  - diluted (1.210)p    7.797p    6.587p        n/a          n/a          n/a

</TABLE>

                                       40

The basic revenue return per ordinary share is based on the net deficit on
ordinary activities after taxation of GBP1,237,000 (2001: return of
GBP2,424,000) and on 102,265,699 ordinary shares (2001: 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 GBP7,976,000 (2001: deficit of GBP44,836,000) and on 102,265,699 ordinary
shares (2001: 102,265,699) being the weighted average number of shares in
issue during the year.

The diluted returns per ordinary share for the year ended 30 June 2002 have
been calculated in accordance with FRS 14 under which the GBP40 million 4.5%
convertible bonds 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 21
November 2001, the date the bonds were issued at an exercise price of 410p.
Based on an average fair value for the Company's shares of 340.8p for the
period 21 November 2001 to 30 June 2002, there are no potential dilutive
ordinary shares in respect of the convertible bonds.

The diluted 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 20). On this basis, the weighted average number of
options exercisable during the year would have been 18,087, resulting in an
increased weighted average number of shares of 102,283,786 used for
calculating the diluted returns.

There is no difference between the returns for the financial year used in the
basic and diluted returns per share calculations.

Diluted returns have not been calculated for the prior year as there were no
convertible bonds in issue during the year ended 30 June 2001. In addition,
the exercise price of options granted on 21 June 2001 exceeded the fair value
of the Company's shares, calculated in accordance with FRS 14, and the
options were therefore not dilutive.

11.    TANGIBLE FIXED ASSETS (GROUP)
<TABLE>
<CAPTION>

                               Leasehold                    Telecom-    Total
                            improvements     Computer    munications    GBP'000
                                   GBP'000    equipment   and Office
                                                GBP'000    equipment
                                                             GBP'000
  <S>                                <C>          <C>            <C>      <C>
  Cost
  At 1 July 2001                       -            -              -        -
  Additions                          144          127             88      359
  Disposals                            -            -              -        -
  Exchange translation                 -            1              1        2
  adjustments
  At 30 June 2002                    144          128             89      361

  Depreciation
  At 1 July 2001                       -            -              -        -
  Charge for the year                 23           32             10       65
  Disposals                            -            -              -        -
  Exchange translation                 -            -              -        -
  At 30 June 2002                     23           32             10       65

  Net book value                     121           96             79      296
  At 30 June 2002
  At 1 July 2001                       -            -              -        -

</TABLE>

                                       41


Notes to the Accounts continued

12.    INVESTMENTS

  (a) Group
<TABLE>
<CAPTION>

                                         2002               2002         2002
                                    Funds and     Fixed Interest        Total
                               Co-Investments        Investments    Portfolio
                                      GBP'000            GBP'000      GBP'000

  <S>                                 <C>                 <C>         <C>
  Cost brought forward                438,230             24,916      463,146
  Unrealised loss brought forward    (51,200)               (63)     (51,263)
  Valuation at the beginning of       387,030             24,853      411,883
  the year
  Calls and purchases payable          77,474            316,731      394,205
  Distributions and sales            (48,976)          (311,001)    (359,977)
  receivable
  Realised gain                        11,553                361       11,914
  Unrealised (loss)/gain              (4,258)                 56      (4,202)
  Valuation carried forward           422,823             31,000      453,823
</TABLE>

  Gains on investments
<TABLE>
<CAPTION>
                                                            2002         2001
                                                         GBP'000      GBP'000

  <S>                                                     <C>          <C>
  Realised gain on investments                            20,418       42,006
  based on historical cost
  Less: amounts recognised as                            (8,504)     (37,232)
  unrealised in previous year
  Realised gain based on carrying                         11,914        4,774
  value at previous balance sheet
  date
  Net movement in unrealised                             (4,202)     (49,190)
  losses
  Total gains/(losses) on                                  7,712     (44,416)
  investments
</TABLE>

  (b) Company
<TABLE>
<CAPTION>
                                         2002               2002         2002
                                    Funds and    Fixed Interest         Total
                               Co-Investments        Investments    Portfolio
                                      GBP'000            GBP'000      GBP'000

  <S>                                 <C>                  <C>        <C>
  Cost brought forward                407,521             24,916      432,437
  Unrealised loss brought forward    (44,662)               (63)     (44,725)
  Valuation at the beginning of       362,859             24,853      387,712
  the year
  Calls and purchases payable          77,455            316,731      394,186
  Distributions and sales            (48,000)          (311,001)    (359,001)
  receivable
  Realised gain                        11,293                361       11,654
  Unrealised (loss)/gain              (2,259)                 56      (2,203)
  Valuation carried forward           401,348             31,000      432,348


</TABLE>


<TABLE>
<CAPTION>

Gains on investments
                                                            2002         2001
                                                         GBP'000      GBP'000

  <S>                                                     <C>          <C>
  Realised gain on investments                            20,225       41,624
  based on historical cost
  Less: amounts recognised as                            (8,571)     (37,060)
  unrealised in previous year
  Realised gain based on carrying                         11,654        4,564
  value at previous balance sheet
  date
  Net movement in unrealised                             (2,203)     (38,551)
  losses
  Total gains/(losses) on                                  9,451     (33,987)
  investments

</TABLE>

                                       42


Notes to the Accounts continued


13.    GEOGRAPHICAL ANALYSIS OF INVESTMENTS
<TABLE>
<CAPTION>


                                        2002       2002       2001       2001
                                       Group    Company      Group    Company
                                     GBP'000    GBP'000    GBP'000    GBP'000
  <S>                                 <C>        <C>        <C>        <C>
  Funds and co-investments
  Europe
  United Kingdom                      14,996     14,163     16,892     15,795
  France                                 655        655      2,427      2,427
  Germany                              7,480      3,928     10,122      5,415
  Italy                                1,863      1,863      4,995      4,995
  Spain                                  797        797      1,994      1,994
  Pan Europe                         259,737    259,737    209,470    209,470
  Total Europe                       285,528    281,143    245,900    240,096

  Asia
  Asia Pacific                        29,512     15,657     30,700     16,447
  Japan                               17,058     13,869     21,700     17,586
  Total Asia                          46,570     29,526     52,400     34,033

  North America
  Canada                              26,065     26,065     31,710     31,710
  United States*                      64,660     64,614     57,020     57,020
  Total Americas                      90,725     90,679     88,730     88,730
  Total Funds and Co-Investments     422,823    401,348    387,030    362,859
</TABLE>

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

All 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
Funds and co-investments of GBP422,823,000 are listed investments amounting to
GBP38,700,000 (2001: GBP46,100,000).

<TABLE>
<CAPTION>

  Fixed Interest Investments
<S>                                    <C>        <C>        <C>        <C>
  Sterling denominated                 7,884      7,884      2,222      2,222
  Euro denominated                    14,457     14,457     12,300     12,300
  US dollar denominated                8,659      8,659     10,331     10,331
  Total Fixed Interest                31,000     31,000     24,853     24,853
  Investments
  Total Investment Portfolio         453,823    432,348    411,883    387,712
</TABLE>

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 17 to 20. All of these Funds are managed or advised by Schroder
Ventures or Permira.


                                       43


Notes to the Accounts continued

14.    INVESTMENTS IN SUBSIDIARIES
<TABLE>
<CAPTION>

                                             2002       2001
                                          Company    Company
                                          GBP'000    GBP'000

  <S>                                      <C>        <C>
  Cost at the beginning of the year        24,762     24,012
  Capital injection                           750        750
  Cost at the end of the year              25,512     24,762
  Net unrealised gain on investment         4,048      5,432
  Market value at the end of the year      29,560     30,194
</TABLE>

Platinum Trust is included in the Company's balance sheet at its fair value
of GBP28,060,000 (2001: GBP29,444,000). Schroder Ventures (London) Limited
("SVLL") is included at cost of GBP1,500,000 (2001: GBP750,000). Schroder
Ventures North America Inc. is a wholly owned subsidiary of SVLL.


Subsidiary undertakings at 30 June 2002:
<TABLE>
<CAPTION>


                                  Country of                       Number and       Group         Capital         Net revenue/
                               registration,                         class of     holding             and      (deficit) after
                               incorporation                     shares/units           %     reserves at          tax for the
                                         and                      held by the                     30 June           year ended
                                   operation                            Group                        2002         30 June 2002
                                                                                                  GBP'000              GBP'000

  <S>                               <C>                 <C>                            <C>          <C>                    <C>
  Company and business              Guernsey            23,112,000 'A'units(1)          99          28,434                  192
  Platinum Trust (unit trust)                              900,000 'B'units(1)          90
                                          UK      1,500,000 Ordinary Shares(2)         100             957                (544)

  Schroder Ventures (London) Limited
  - advisory and administration services  US              500 Common Shares(3)         100             270                   75
  Schroder Ventures North America Inc.
  - broker/dealer
</TABLE>

(1) On termination of 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.

(3) Schroder Ventures North America Inc. ("SVNA") is a subsidiary of
    SVLL. SVLL acquired SVNA on 18 June 2001 for $50,000 and has made a further
    capital injection of $250,000 in the current year.

15.    DEBTORS

<TABLE>
<CAPTION>

                                          2002       2002     2001       2001
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000
  <S>                                    <C>        <C>        <C>        <C>
  Amounts falling due within one
  year:
  Deferred tax                               -          -       36          -
  Interest receivable                       43         36       75         71
  Prepayments and other debtors          1,892      1,763      771        737
  Accrued investment advisory fee        1,613          -    2,051          -
  income
                                         3,548      1,799    2,933        808

</TABLE>

                                       44


Notes to the Accounts continued

16.    CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

<TABLE>
<CAPTION>

                                       2002       2002     2001       2001
                                      Group    Company    Group    Company
                                    GBP'000    GBP'000  GBP'000    GBP'000

     <S>                              <C>        <C>      <C>          <C>
     Other creditors and accruals     4,357      1,742    2,906        450
     Proposed final dividend              -          -    1,841      1,841
                                      4,357      1,742    4,747      2,291

</TABLE>

The Group has in place a multicurrency revolving loan facility of euro225
million with the Royal Bank of Scotland. No drawdowns have been made under
the facility during the year (2001: euroNil).


17.    CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>

                                          2002       2002     2001       2001
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000

  <S>                                   <C>        <C>          <C>        <C>
  4.5% Subordinated Convertible         40,000     40,000        -          -
  Bonds 2011
  Unamortised issue and listing          (848)      (848)        -          -
  costs
                                        39,152     39,152        -          -

</TABLE>

Creditors due after more than one year comprise GBP40 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 an initial conversion
price of 410p per share. However, the terms of the bonds provide that the
conversion price is subject to adjustment 21 days after the publication of
the 2002 annual report and accounts by the amount that the net asset value
per ordinary share falls below 407p at either 31 December 2001 or 30 June
2002 rounded down to the nearest penny. As a result, 21 days after
publication of this annual report and accounts, the conversion price of the
bonds will be 399p, based on the NAV at 31 December 2001.

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
were not listed at 30 June 2002 and therefore a quoted market value is not
available at the balance sheet date. The bonds obtained a listing on the
London Stock Exchange on 5 July 2002, with UBS Warburg and Dresdner Kleinwort
Wasserstein ("DKW") appointed as market makers. On 8 July 2002, DKW were
quoting a bid-offer spread of GBP1 to GBP2. This equates to a fair valuation
range of GBP40 - GBP80 million for the bonds in issue.

18.    CONTINGENT LIABILITIES

The Company guarantees any drawings taken out by Platinum Trust under the
euro225 million loan facility (GBP145.8 million, translated at the balance
sheet date). At 30 June 2002, no drawings had been made under the facility
(2001: Nil).

                                       45


Notes to the Accounts continued

19.    CAPITAL COMMITMENTS

At 30 June 2002, the Group had uncalled commitments to its Fund investments
as follows:

<TABLE>
<CAPTION>

                                                     Uncalled        Uncalled
                                                    commitment    commitment*
                                              (local currency)           GBPm

  <S>                                                   <C>              <C>
  International Life Sciences Fund III**                $42.0m           27.5
  Permira Europe I                                    euro6.9m            4.4
  Permira Europe II                                 euro442.5m          286.7
  Schroder Canadian Buy-Out Fund II                     C$0.9m            0.4
  Schroder Canadian Buy-Out Fund III                   C$36.5m           15.7
  Schroder Ventures Asia Pacific Fund***                $58.4m           38.3
  Schroder Ventures International Life                  $12.3m            8.1
  Sciences Fund II
  Schroder Ventures US Fund                            $27.7m            18.2
  The Japan Venture Fund III                           Y711.6m            3.9
  Total                                                                 403.2

</TABLE>
     *     Based on exchange rates at 30 June 2002.

     **     Based on amount committed to first close (US$44.2 million).
            Following the second closing of the fund after the year-end, SVIIT
            has committed US$75 million in total.

     ***    Commitments to this fund have been reduced by 20%.

The total commitments shown above include GBP38,000 in relation to Funds held
by Platinum Trust.



20.    SHARE CAPITAL
<TABLE>
<CAPTION>

                                          2002       2002       2001       2001
                                         Group    Company      Group    Company
                                       GBP'000    GBP'000    GBP'000    GBP'000
  <S>                                  <C>        <C>        <C>        <C>
  Authorised:
  150,000,000 shares of GBP1.00 each   150,000    150,000    150,000    150,000

  Allotted, Called Up and Fully Paid:
  Opening and closing balance of
  102,265,699 shares of GBP1.00 each   102,266    102,266    102,266    102,266
</TABLE>

Options over ordinary shares

During the year ended 30 June 2002, options over 1,411,597 shares were
granted. No options were exercised during the year and none lapsed. At 30
June 2002, 4,253,363 (2001: 2,841,766) options to subscribe for ordinary
shares were outstanding:

<TABLE>
<CAPTION>

  Issue date     Exercise price         2002         2001
                      per share       Number       Number
                                    in issue     in issue

  <S>                    <C>       <C>          <C>
  June 2001              410.0p    2,813,407    2,813,407
  June 2001              405.5p       28,359       28,359
  April 2002             335.0p       34,774            -
  April 2002             334.5p    1,376,823            -
                                   4,253,363    2,841,766
</TABLE>

Further details of options over the Company's shares are given in the
Remuneration Report on pages 27 and 28.

21.    SHARE PREMIUM ACCOUNT
<TABLE>
<CAPTION>

                                          2002       2002     2001       2001
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000

  <S>                                    <C>        <C>      <C>        <C>
  Balance brought forward and carried
  forward                                 7,453      7,453    7,453      7,453


                                       46


Notes to the Accounts continued

22.    CAPITAL REDEMPTION RESERVE

                                          2002       2002     2001       2001
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000

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


23.    SHARE PURCHASE RESERVE

                                         2002       2002      2001       2001
                                        Group    Company     Group    Company
                                      GBP'000    GBP'000   GBP'000    GBP'000

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


24.    CAPITAL RESERVE

                                     2002        2002        2001        2001
                                    Group     Company       Group     Company
                                  GBP'000     GBP'000     GBP'000     GBP'000

  Realised gains brought
  forward                         260,256     247,999     219,005     207,129
  Realised gains on venture
  fund distributions               11,553      11,293       5,465       5,256
  Transfer on disposal              8,504       8,571      37,232      37,060
  Realised gains/(losses) on
  currency balances                    42        (91)       (755)       (755)
  Realised exchange
  gains/(losses) on sale of
  fixed interest securities           361         361       (691)       (691)
  Realised gains carried
  forward                         280,716     268,133     260,256     247,999
  Unrealised (losses)/gains
  brought forward                (51,321)    (39,292)      34,997      46,414
  Increase in unrealised
  losses on venture funds         (4,258)     (2,259)    (49,127)    (38,488)
  Transfer on disposal            (8,504)     (8,571)    (37,232)    (37,060)
  Decrease in unrealised
  gains on subsidiary
  undertakings                          -     (1,384)           -    (10,095)
  Increase/(decrease) in
  unrealised exchange gains
  on fixed interest  securities        56          56        (63)        (63)
  Minority interest - equity           16           -         104           -
  Unrealised losses carried
  forward                        (64,011)    (51,450)    (51,321)    (39,292)
                                  216,705     216,683     208,935     208,707
</TABLE>

25.    REVENUE RESERVE
<TABLE>
<CAPTION>

                                          2002       2002     2001       2001
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000

  <S>                                    <C>        <C>      <C>        <C>
  Balance brought forward                2,960      3,188    2,146      2,605
  Transfer (to)/from revenue
  account                              (1,555)    (1,237)      814        583
  Balance carried forward                1,405      1,951    2,960      3,188
</TABLE>

                                       47


Notes to the Accounts continued

26.    RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>

                                      2002       2002        2001        2001
                                     Group    Company       Group     Company
                                   GBP'000    GBP'000     GBP'000     GBP'000

  <S>                              <C>        <C>           <C>         <C>
  (Deficit)/return available to
  equity shareholders              (1,555)    (1,237)       2,655       2,424
  Dividends                              -          -     (1,841)     (1,841)
                                   (1,555)    (1,237)         814         583
  Non-distributable capital
  gain/(loss) for the year           7,770      7,976    (45,067)    (44,836)
  Net addition to/(reduction
  of) shareholders' funds            6,215      6,739    (44,253)    (44,253)
  Shareholders' funds brought
  forward                          416,872    416,872     461,125     461,125
  Shareholders' funds carried
  forward                          423,087    423,611     416,872     416,872
</TABLE>


27.    NET ASSET VALUE PER ORDINARY SHARE

Calculation of the net asset values per share are based on Group net assets
of GBP423,087,000 (2001: GBP416,872,000), Company net assets of GBP423,611,000
(2001: GBP416,872,000) and on 102,265,699 (2001: 102,265,699) ordinary shares
in issue at the year end.

The Group and Company diluted net asset values per share assume the GBP40
million convertible bonds are converted at the balance sheet date at an
exercise price of 410p into 9,756,097 new shares.

The Group and Company diluted net asset values per share also assume that
share options with a strike price lower than the undiluted net asset value
per share are exercised at the balance sheet date. This results in the issue
of an additional 4,253,363 ordinary shares (note 20) for consideration of
GBP16,371,930.

Therefore the calculation of the diluted net asset values per share are based
on Group net assets of GBP479,459,000, Company net assets of GBP479,983,000 and
on 116,275,159 ordinary shares in issue at the year end.

For information, as described in note 17, the conversion price of the bonds
will be adjusted downwards from 410p to 399p with effect from 21 days after
publication of this annual report and accounts. Had the diluted net asset
value per share assumed the GBP40 million convertible bonds are converted at
the balance sheet date at an exercise price of 399p into 10,025,062 new
shares, it would have resulted in diluted net asset values per share of
411.4p for the Group and 411.8p for the Company.

The exercise price of options granted on 21 June 2001 exceeded the basic net
asset value per share at 30 June 2001. As a result diluted net asset values
per share at 30 June 2001 exceeded basic net asset values per share and are
therefore not dilutive. In addition, the convertible bonds were not issued
until November 2001 and therefore have no impact on the prior year
calculations.

28.    RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>

                                                              2002      2001
                                                             Group     Group
                                                           GBP'000   GBP'000

  <S>                                                          <C>     <C>
  Net return before finance costs and taxation                 384     3,381
  Foreign exchange gains credited to the revenue account       (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>

                                       48


Notes to the Accounts continued

29.    ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS
<TABLE>
<CAPTION>

                   At 1     Exchange       Cash       At 30      At 1    Exchange            Cash       Cash    At 30
                   July  (loss)/gain       Flow        June      July     loss on     acquired on       Flow     June
                   2001  on currency    GBP'000        2002      2000    currency     purchase of    GBP'000     2001
                GBP'000     balances                GBP'000   GBP'000    balances    subsidiaries             GBP'000
                             GBP'000                                      GBP'000         GBP'000

  <S>            <C>           <C>          <C>       <C>          <C>      <C>               <C>        <C>    <C>
  Cash at bank   1,093         (104)        738       1,727        48       (755)             834        966    1,093
  Short-term
  deposits       6,098           149      1,329       7,576    10,232           -               -    (4,134)    6,098
                 7,191            45      2,067       9,303    10,280       (755)             834    (3,168)    7,191
  Debt due:
  Within one year    -             -          -           -         -           -               -          -        -
  After more
  than one year      -             -   (39,152)    (39,152)         -           -               -          -        -
  Net
  (debt)/funds   7,191            45   (37,085)    (29,849)    10,280       (755)             834    (3,168)    7,191

</TABLE>

30.     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 cent. per annum of the first GBP50 million of net assets, (ii)
0.06 per cent. per annum of the next GBP50 million of such net assets and (iii)
0.04 per cent. of the remaining net assets. The agreement is subject to a 4
month notice period. The total fees, including VAT, paid or payable to SIM
for these services in respect of the year to 30 June 2002 was GBP246,000 (2001:
GBP267,000), of which GBP126,000 was outstanding at the year end. 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 30 June 2002 was GBP22,000 (2001: Nil), all of which was outstanding at the
year end.

In consideration for its management of the Company's fixed interest
portfolio, Schroder Investment Management (UK) Limited receives a fee based
on the average value of the Company's month-end cash and fixed interest
portfolio, calculated at the rate of 0.10 per cent. per annum on the first
GBP75 million of assets, 0.05 per cent. on the next GBP75 million and 0.03 per
cent. 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 30 June 2002 was GBP25,000 (2001: GBP78,000), of which GBP10,000 was
outstanding at the year end.

SIM has also provided investment trust dealing services. The total cost to
the Company of this service, payable to Lloyds TSB Registrars, for the year
to 30 June 2002 was GBP21,000 (2001: GBP11,000).

On 22 April 2002, Schroders Ventures (London) Limited, 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 to SVIIT for consideration
of GBP1 million.

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. 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.

                                       49


Notes to the Accounts continued

31.    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 treasury bills, 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.

Interest rate risk

The Company's revenue will be affected by changes in prevailing interest
rates since the majority of its income derives from treasury bills and bank
deposit interest. The effect of interest rate changes on the valuation of
investments forms part of valuation risk, which is considered separately
below.

<TABLE>
<CAPTION>

Financial assets of the Group

                                Floating     Fixed    Non-interest      Total
                                    Rate      Rate         Bearing    GBP'000
                                 GBP'000   GBP'000         GBP'000
  <S>                              <C>       <C>            <C>        <C>
  Currency denomination of
  assets at 30 June 2002:
  Sterling                         5,896     7,884          18,544     32,324
  Euro                             3,274    14,457         270,532    288,263
  US dollar                          128     8,659          94,172    102,959
  Japanese yen                         -         -          17,058     17,058
  Canadian dollar                      5         -          26,065     26,070
                                   9,303    31,000         426,371    466,674

                                Floating     Fixed    Non-interest      Total
                                    Rate      Rate         Bearing    GBP'000
                                 GBP'000   GBP'000         GBP'000
  Currency denomination of
  assets at 30 June 2001:
  Sterling                         6,940     2,222          19,825     28,987
  Euro                                17    12,300         229,008    241,325
  US dollar                          229    10,331          87,720     98,280
  Japanese yen                         -         -          21,700     21,700
  Canadian dollar                      5         -          31,710     31,715
                                   7,191    24,853         389,963    422,007
</TABLE>

                                       50

Notes to the Accounts continued

31.    RISK continued

The floating rate assets consist of short-term deposits. The non-interest
bearing assets represent the Funds and co-investments, and other short-term
debtors. The fixed rate assets comprise treasury bills, net of outstanding
redemptions, and can be further analysed as follows:

Fixed rate financial assets

<TABLE>
<CAPTION>

                             30 June 2002                    30 June 2001
                       Weighted       Weighted        Weighted       Weighted
                       average         average         average        average
                      Interest       period on        Interest      period on
                          rate           which            rate          which
                                 rate is based                        rate is
                                                                        based

  <S>                    <C>           <C>               <C>          <C>
  Euro                   3.00%         30 days           4.26%        58 days
  US dollars             1.50%         23 days           3.43%        68 days
  Sterling               3.16%         24 days           4.56%        45 days
</TABLE>

Financial liabilities of the Group

The Company issued GBP40 million nominal of 10 year 4.5% subordinated
convertible bonds in November 2001. The Company does not have any other
borrowings at the year end, although it does have in place an unutilised loan
facility of euro225 million with The Royal Bank of Scotland 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.

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 17 to 20 and a detailed analysis of the twenty largest
underlying companies is given on pages 12 to 16. In accordance with the
Company's accounting policies, set out on pages 34 to 36, 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 30 June 2002,
a 10% movement in the valuation of the Group's Fund portfolio and
co-investments would result in a 11% 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.

                                       51


Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)

<TABLE>
<CAPTION>

                                            For the year ended                           For the year ended
                                                30 June 2002                                 30 June 2001
                                       Revenue     Capital      Total             Revenue      Capital          Total
                                     euro'000     euro'000    euro'000          euro'000       euro'000      euro'000
  <S>                                  <C>         <C>        <C>                <C>           <C>            <C>
  Realised gains on investments              -      19,226      19,226                  -         7,762         7,762

  Unrealised losses on investments           -     (6,781)     (6,781)                  -      (79,989)      (79,989)

  Gains/(losses) on investments              -      12,445      12,445                  -      (72,227)      (72,227)

  Foreign exchange gains/(losses) on
  currency balances                          5          68          73                  -       (1,228)       (1,228)

  Income                                12,385           -      12,385              9,133             -         9,133

  Expenses                            (11,769)           -    (11,769)            (3,634)             -       (3,634)

  Net return/(deficit) before finance
  costs and taxation                       621      12,513      13,134              5,499      (73,455)      (67,956)

  Interest payable and similar charges (2,957)           -     (2,957)              (948)             -         (948)


  Net (deficit)/return on ordinary
  activities before taxation           (2,336)      12,513      10,177              4,551      (73,455)      (68,904)

  Tax on ordinary activities             (170)           -       (170)              (229)             -         (229)

  (Deficit)/return on ordinary
  activities after tax for the year    (2,506)      12,513      10,007              4,322      (73,455)      (69,133)

  Minority interest - equity               (3)          26          23                (3)           169           166

  (Deficit)/return on
  ordinary activities
  after tax and minority
  interest for the year
  attributable to equity shareholders  (2,509)      12,539      10,030              4,319      (73,286)      (68,967)

  Dividends

  Final dividend per ordinary share          -           -           -            (3,058)             -       (3,058)

                                       (2,509)      12,539      10,030              1,261      (73,286)      (72,025)

  Exchange (loss)/gain on translation    (239)    (25,182)    (25,421)                269        19,246        19,515

  Transfer (from)/to reserves          (2,748)    (12,643)    (15,391)              1,530      (54,040)      (52,510)

  Return per ordinary share         euro(0.02)    euro0.12    euro0.10           euro0.04    euro(0.72)    euro(0.68)

</TABLE>

The information on pages 52 to 54 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: euro1.6138 (2001: GBP1:
euro1.6262). There is no dividend in respect of the current year. The prior
year's dividend has been translated into euros at a rate of GBP1: euro1.6613,
being the closing rate at balance sheet date.

                                       52


Balance Sheets - in Euros
(translated into euros - unaudited)
<TABLE>
<CAPTION>


                                   At 30 June 2002           At 30 June 2001
                                  Group     Company         Group     Company
                               euro'000    euro'000      euro'000    euro'000
  <S>                           <C>         <C>           <C>         <C>
  TANGIBLE FIXED ASSETS             457           -             -           -
                                    457           -             -           -
  INVESTMENTS
  Funds and co-investments      652,585     619,441       642,973     602,820

  Fixed interest investments     47,845      47,845        41,288      41,288

  Investment in subsidiaries          -      45,623             -      50,161

                                700,430     712,909       684,261     694,269
  CURRENT ASSETS
  Debtors                         5,476       2,777         4,874       1,342
  Cash at bank and
  short-term deposits            14,358       1,231        11,946         746
                                 19,834       4,008        16,820       2,088
  CURRENT LIABILITIES
  Creditors: amounts
  falling due within one year     6,725       2,689         7,885       3,806

  NET CURRENT
  ASSETS/(LIABILITIES)           13,109       1,319         8,935     (1,718)

  TOTAL ASSETS LESS
  CURRENT LIABILITIES           713,996     714,228       693,196     692,551
  Creditors: amounts
  falling due after more
  than one year                  60,427      60,427             -           -
  Minority interest - non-equity    154           -           166           -
  Minority interest - equity        423           -           479           -


  NET ASSETS                    652,992     653,801       692,551     692,551

  CAPITAL AND RESERVES
  Called up share capital       157,837     157,837       169,895     169,895
  Share premium account          11,503      11,503        12,382      12,382
  Share purchase reserve          4,945       4,945         5,323       5,323
  Capital redemption reserve    142,076     142,076       152,929     152,929
  Capital reserve               334,462     334,429       347,105     346,726
  Revenue reserve                 2,169       3,011         4,917       5,296

  EQUITY SHAREHOLDERS' FUNDS    652,992     653,801       692,551     692,551

  Net asset value per
  ordinary share               euro6.39                  euro6.77
</TABLE>

The information on pages 52 to 54 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: euro1.5434 (2001: GBP1:
euro1.6613), being the closing exchange rate on the balance sheet date.

                                       53


Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)
<TABLE>
<CAPTION>


                                     For the year ended    For the year ended
                                           30 June 2002          30 June 2001
                                               euro'000              euro'000
  <S>                                             <C>                   <C>
  OPERATING ACTIVITIES
  Income received from investments                2,529                 9,144
  Bank interest received                            733                   925
  Investment advisory fee income received         8,145                    59
  Administrative expenses paid                 (11,747)               (3,930)

  Net cash (outflow)/inflow from
  operating activities                            (340)                 6,198

  RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
  Interest paid                                       -                 (364)
  Loan facility costs                             (888)               (1,701)

  Net cash outflow from returns
  on investments and servicing of finance         (888)               (2,065)

  TAXATION
  Overseas tax suffered                           (189)                 (250)
  UK tax recovered                                    -                   551
  Total tax (paid)/recovered                      (189)                   301

  CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
  Purchase of fixed interest securities       (511,126)             (571,563)
  Purchase of subsidiaries                            -                  (59)
  Purchase of tangible fixed assets               (502)                     -
  Sale of fixed interest securities             501,879               735,378
  Calls paid                                  (125,024)             (253,720)
  Capital distributions received                 79,035                87,239

  Net cash outflow from capital
  expenditure and financial investment         (55,738)               (2,725)

  EQUITY DIVIDENDS PAID
  Dividends                                     (2,971)               (6,801)

  Total dividends paid                          (2,971)               (6,801)

  FINANCING
  Proceeds from convertible bond issue           64,551                     -
  Issue and listing costs of
  convertible bonds                             (1,089)                     -

  Net cash outflow from financing                63,462                     -

  NET CASH INFLOW/(OUTFLOW)                       3,336               (5,092)


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                     For the year ended    For the year ended
                                           30 June 2002          30 June 2001
                                               euro'000              euro'000
  Increase/(decrease) in cash                     3,336               (5,092)
  during the year
  Exchange gain/(loss) on                            73               (1,228)
  currency balances
  Exchange movement on                            (997)                   670
  translation
  Cash acquired on purchase of                        -                 1,361
  subsidiaries
  Increase in convertible bonds                (60,427)                     -

  Change in net (debt)/funds                   (58,015)               (4,289)
  Net funds at the beginning of the year         11,946                16,235

  Net (debt)/funds at the end of the year      (46,069)                11,946

The information on pages 52 to 54 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: euro1.6138 (2001:
euro1.6262).
</TABLE>


                                       54

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 and advised by Schroder Ventures
or Permira. To complement this investment objective and address the growing
recognition of private equity in investment portfolios, the Company acquired
Schroder Ventures (London) Limited ("SVLL") and its subsidiary Schroder
Ventures North America Inc. ("SVNA"). The acquisition of SVLL and SVNA has
provided the Company with a team dedicated to the structure and marketing of
products for investment in private equity as well as continuing to advise the
Board on its management of the affairs of the Company. The use of a benchmark
is regularly reviewed by the Board. As a result of the particular
geographical and sectoral diversification of the Company's venture fund
portfolio and the nature of the investments made by the Venture Funds, there
is currently no independent benchmark which the Directors consider
appropriate for the Company.

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 is SVIC. 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
dialing: 0906 843 1432. Calls are charged at 60p per minute at all times.
The net asset value is calculated at 31 December and 30 June 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 Newssheet is distributed to the shareholders
of the Company. The site also contains links to Schroder Ventures, Permira
and Schroders sites.

CAPITAL GAINS TAX INFORMATION

For the 2002/2003 tax year, the annual capital gains of private individuals
in excess of GBP7,700 (2001/2002: GBP7,500) 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 was as follows:

Each 41/2% Subordinated Convertible Bond of GBP100,000 nominal value:
GBP100,000.

                                       55


Company Summary continued

ASSOCIATION OF INVESTMENT TRUST COMPANIES

The Company is a member of the Association of Investment Trust Companies,
which produces monthly publications of detailed information on the majority
of investment trusts. Copies of these publications can be obtained by
subscription on application to the Association of Investment Trust Companies,
Durrant House, 8-13 Chiswell Street, London EC1Y 4YY.

The aims of the Association are to protect and promote the interests of
member companies and their shareholders by:

*  taking specific action to safeguard and to improve the fiscal and
   regulatory regime for member companies and their shareholders

*  improving investor awareness of investment trusts through education,
   publicity and the provision of reliable statistical and other information

*  encouraging commitment to good practice and high professional standards in
   the industry.

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 Emerging Countries 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 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.


                                       56


Information for Shareholders

FINANCIAL CALENDAR FROM 2003


31 December         Company's year end
March               Preliminary results for the financial year announced
March               Annual Report published
May                 Annual General Meeting
September           Interim Results announced
October             Interim Report published


ANALYSIS OF REGISTER OF SHAREHOLDERS
<TABLE>
<CAPTION>


                                           Shares
                                                %
<S>                                         <C>
At 30 June 2002
% of issued shares held by:
Private individuals                         1.25
Banks and Nominee Companies*               75.38
Pension Funds and Insurance Companies      14.21
Other Institutions                          9.16
                                          100.00

Total number of holders                    1,434
</TABLE>

*Some of the nominee company holdings include a large number of private
individuals.


                                       57

Notice of Agenda

NOTICE is hereby given that the sixth Annual General Meeting of Schroder
Ventures International Investment Trust plc will be held at 12.00 noon on
Tuesday 26 November 2002 at 31 Gresham Street, London EC2V 7QA, to consider
and, if thought fit, pass the following resolutions, of which resolutions 1
to 9 will be proposed as Ordinary Resolutions and resolutions 10 and 11 will
be proposed as Special Resolutions:

1.  That the Report of the Directors and the Accounts for the year ended
    30 June 2002 be adopted.

2.  That Mr Andrew Sykes be elected as a Director of the Company.

3.  That Mr Andrew Williams be elected as a Director of the Company.

4.  That Mr John Govett be re-elected as a Director of the Company.

5.  That Mr Anthony Habgood be re-elected as a Director of the Company.

6.  That Mr Edgar Koning be re-elected as a Director of the Company.

7.  That Ernst & Young LLP be re-appointed as Auditors of the Company.

8.  That the Board be authorised to agree the Auditor's remuneration.

9.  That, in substitution for the authority granted at the Company's
    Annual General Meeting held on 22 November 2001, 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 GBP1,022,656 (equivalent to 1 per
        cent. of the issued ordinary share capital of the Company as at 1
        October 2002) in connection with the Schroder Ventures International
        Investment Trust plc Executive Share Option Plan 2001; and

    (b) up to an aggregate nominal amount of GBP34,088,566 (equivalent to
        one-third of the issued ordinary share capital of the Company as at 1
        October 2002),

    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.

10. That, in substitution for the authority granted at the Company's
    Annual General Meeting held on 22 November 2001, 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 the previous resolution, 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 GBP1,022,656 (equivalent to 1 per cent. of the issued ordinary share
         capital of the Company as at 1 October 2002) 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 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


                                       58


    (c)  the allotment (otherwise than pursuant to sub-paragraphs (a) and (b)
         above) of equity securities up to an aggregate nominal amount of
         GBP10,226,569 (equivalent to 10 per cent. of the issued ordinary share
         capital of the Company as at 1 October 2002),


    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.

11. That the Company be and is hereby generally and unconditionally
    authorised in accordance with Section 166 of the Companies Act 1985 (the
    "Act") to make market purchases (within the meaning of Section 163 of the
    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 15,329,628 (equivalent to 14.99 per cent. of the issued ordinary
         share capital of the Company as at 1 October 2002);

    (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)  the authority hereby conferred shall expire at the conclusion of the
         next Annual General Meeting of the Company unless such authority is
         renewed prior to such time; and

    (e)  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.

Registered Office:
31 Gresham Street
London EC2V 7QA

By Order of the Board
Schroder Investment Management Limited
Secretary

14 October 2002

NOTES

1. A member of the Company entitled to attend and vote at the Meeting may
   appoint a proxy or proxies to attend and on a poll to vote in his or her
   stead. A proxy need not be a member of the Company. Forms appointing proxies
   must be lodged with the Company's Registrar not less than 48 hours before the
   time appointed for the Meeting. The completion and return of a form of proxy
   will not preclude a member entitled to attend and vote in person at the
   Meeting from doing so if he or she wishes.

2. 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.

3. 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 12.00 noon on 24 November 2002
   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 12.00 noon on 24 November 2002 shall be disregarded in
   determining the right of any person to attend and vote at the meeting.


                                       59


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.


                                       60






www.svitt.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 89000
              Fax 020 7658 3538          Fax 020 7240 5346



<PAGE>

Exhibit 10.2         The Company's 2001 Report and Accounts


                      Schroder Ventures International Investment Trust plc


                                                  Report and Accounts 2001



Schroder Ventures International Investment Trust plc    Report and Accounts 2001




Investment Objective

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.

To complement this investment objective and address the growing recognition
of private equity in investment portfolios, the Company is committed to the
design and marketing of third party funds of funds products for investment in
private equity.


www.svitt.co.uk                                         Report and Accounts 2001




<TABLE>
<CAPTION>

Contents


                                                                       Page
<S>                                                                    <C>

Directors and Advisers                                                    2
Financial Highlights and Historical Record                                3
Chairman's Statement                                                      4
Chief Executive's Review                                                  6
Portfolio Review                                                          7
Twenty Largest Underlying Companies                                      13
List of Investments                                                      18
Report of the Directors                                                  22
Statement of Directors' Responsibilities                                 24
Corporate Governance                                                     25
Remuneration Report                                                      28
Report of the Auditors                                                   30
Consolidated Statement of Total Return                                   31
Balance Sheets                                                           32
Consolidated Cash Flow Statement                                         33
Notes to the Accounts                                                    34
Consolidated Statement of Total Return (translated into euros -          49
unaudited)
Balance Sheets (translated into euros - unaudited)                       50
Consolidated Cash Flow Statement (translated into euros -                51
unaudited)
Company Summary                                                          52
Information for Shareholders                                             54
Notice and Agenda                                                        55
Glossary                                                                 58

</TABLE>

                                   1


Directors and Advisers


DIRECTORS

John McLachlan*+# (Chairman) (aged 59) 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 a non-executive Director of
GT Income Growth Trust plc and of a number of other companies.

Nicholas Ferguson+ (Chief Executive) (aged 52) was appointed as a Director of
the Company on 12 February 1996. He is Chairman of Schroders Ventures
(London) Limited and was formerly Chairman of Schroder Ventures and
instrumental in its development since 1984. He is a non-executive director of
Schroders plc.

John Govett+# (aged 57) was appointed as a Director of the Company on 12
February 1996 and is a non-executive Director of Derby Trust plc, Invesco
City & Commercial Trust plc, Schroder Emerging Countries Fund plc, Peel
Hotels plc and Rio Tinto Pension Investments Limited.

Anthony Habgood*+# (aged 54) was appointed as a Director of the Company on
12 February 1996 and is Chairman of Bunzl plc.

Edgar Koning*+ (aged 49) 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 57) was appointed as a Director of the Company on 25
June 2001 and has been Managing Director of the asset management company
Global Asset Management (GAM) since 1986.

Peter Sedgwick (aged 65) was appointed as a Director of the Company on 12
February 1996 and is Chairman of Schroders plc, Schroder UK Growth Fund plc
and Invesco City & Commercial Trust plc.

*  Member of the Audit Committee.
+  Member of the Nominations Committee.
#  Member of the Remuneration Committee.

Mr. McLachlan is Chairman of the Audit and Remuneration Committees, Mr
Habgood is Chairman of the Nominations Committee.

Head Office
Burleigh House
357 Strand
London WC2R 0HS
Telephone 020 7010 8925

Secretary and Registered Office
Schroder Investment Management Limited
31 Gresham Street
London EC2V 7QA
Telephone 020 7658 3206


ADVISERS

Auditors
Ernst & Young LLP
Rolls House
7 Rolls Buildings
Fetter Lane
London EC4A 1NH


Bankers

The Royal Bank of Scotland plc
Corporate Banking Office
5-10 Great Tower Street
London EC3P 3HX


Registrars

Lloyds TSB Registrars Scotland
117 Dundas Street
Edinburgh EH3 5ED
Telephone 0870 601 5366


Solicitors

Slaughter and May
35 Basinghall Street
London EC2V 5DB


Stockbrokers

Merrill Lynch International
20 Farringdon Road
London EC1M 3NH
                                       2



<TABLE>
<CAPTION>

                  Financial Highlights and Historical Record


                               PERFORMANCE SINCE LAUNCH

                                          Share price       NAV
                        <S>                      <C>        <C>
                        June 1996               194.5       193
                        October 1996              191       193
                        February 1997           196.5       190
                        June 1997                 177       189
                        October 1997            168.5       189
                        February 1998             169       199
                        June 1998                 181       215
                        October 1998              167       215
                        February 1999             195       288
                        June 1999                 265     325.9
                        October 1999              274     325.9
                        February 2000             360     362.8
                        June 2000               461.5     450.9
                        October 2000              512     450.9
                        February 2001           487.5     439.2
                        June 2001                 393     407.8
</TABLE>


<TABLE>
<CAPTION>


FINANCIAL HIGHLIGHTS TO 30 JUNE 2001



                                     30 June 2001    30 June 2000    Change %
<S>                                         <C>              <C>        <C>
Total assets (GBP'000)                    417,260         461,615      (9.6)%
Shareholders' funds (GBP'000)             416,872         461,125      (9.6)%
Net asset value per share                  407.6p          450.9p      (9.6)%
Share price                                393.0p          461.5p     (14.8)%
Share price (discount)/premium             (3.6)%            2.4%
Dividends per share                         1.80p           3.80p
Total expense ratio                          0.2%            0.2%
Market capitalisation (GBP'000)           401,904         471,956

</TABLE>

<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE


                                     Total     Shareholders'            Net       Price of      Share price
                                    assets             funds          asset       ordinary         premium/
                                   GBP'000           GBP'000          value         shares       (discount)
                                                         per          pence              %
                                                       share
                                                       pence
<S>                                    <C>               <C>            <C>            <C>              <C>
2001                               417,260           416,872          407.6          393.0            (3.6)
2000                               461,615           461,125          450.9          461.5              2.4
1999                               333,630           322,485          325.9          262.5           (19.5)
1998                               230,822           219,730          215.1          182.0           (15.4)
1997                               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>

<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE


                                                                                                 Cost of
                                       Actual        Potential    Earnings    Dividends    running trust
                                gearing ratio    gearing ratio       pence        pence          GBP'000
<S>                                       <C>              <C>         <C>          <C>              <C>
2001                                     0.92             1.00        2.60         1.80            1,434
2000                                     0.70             1.00        4.68         3.80            1,052
1999                                     0.67             1.03        2.35         1.50              878
1998                                     0.73             1.05        2.06         1.30              664
1997                                     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>


Notes:

1. Total assets:                Total assets less current liabilities.
2. Potential gearing ratio:     Total assets divided by shareholders'
                                funds.
3. Cost of running trust:       Operating costs excluding interest payable.
                                For the year ended 30 June 2001 costs of
                                GBP1,160,000 relating to the enlargement of
                                the Company's operations and EDR listing
                                have been excluded (30 June 2000: GBP271,000
                                of EDR costs excluded)
4. Total expense ratio:         Operating costs excluding interest payable
                                (excludes enlargement and EDR listing costs
                                and is net of tax relief on the remaining
                                operating costs) expressed as a percentage
                                of average shareholders' funds.
5. Capital changes:             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
                                15,683,236 ordinary shares.


                               3


Chairman's Statement


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.

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.


ENLARGEMENT OF THE COMPANY'S ACTIVITIES

Following the Extraordinary General Meeting in May 2001, where all
resolutions in connection with the enlargement of the Company's operations
were passed, all conditions relating to the Company's purchase of Schroder
Ventures (London) Limited ("SVLL") and its subsidiary Schroder Ventures North
America Inc. ("SVNA") were met and SVLL and SVNA became fully owned
subsidiaries of the Company in June 2001.

These acquisitions provide the Company with a team that the Board believes
has the right blend of entrepreneurial, strategic, marketing, legal and
financial skills to undertake an expanded range of activities, including
building a specialist financial advisory business and providing the Company
with an opportunity to increase shareholder returns.

Both companies are performing in line with budget and a more detailed report
on the progress of the activities of both SVLL and SVNA is contained in the
Chief Executive's review. Prospects for the business are encouraging and the
formal launch of the Schroder Private Equity Fund of Funds is scheduled for
September 2001.


BOARD

Mr Nick Ferguson, who has been a Director of the Company since its inception
and is Chairman of SVLL, has been appointed Chief Executive of the Company.

In addition, on 25 June 2001, the Board appointed Mr Denis Raeburn as a
Non-Executive Director of the Company and his election as a Director is
proposed at the Annual General Meeting.

Born in Johannesburg, South Africa in June 1944, Mr Raeburn graduated from
the University of Witwatersrand with a Bachelor of Commerce and subsequently
obtained an MBA from the University of Cape Town.

Mr Raeburn has been Managing Director of the asset management company Global
Asset Management (GAM) since 1986. He was also Chairman of Cellcom Limited,
an independent cellular telephone service provider in the UK and France, from
1984 to 2000, and Managing Director of Solaglas AG, the overseas arm of

                                   4

Plate  Glass &  Shatterprufe  Industries  Limited,  a South  African  industrial
company,  from 1974 to 1983.  He was Deputy  Managing  Director of Sage Holdings
Limited,  a major South African  financial group,  until he left South Africa in
1974.

Mr Raeburn will bring valuable experience to the Board and, on behalf of the
Board, I welcome him.

At the same time, Mr John Strangfeld, Chief Executive Officer of Prudential
Investment Management and Chairman and Chief Executive Officer of Prudential
Securities Inc., who has been a Director of the Company since its formation
in 1996, resigned from the Board. On behalf of the Board, I would like to
thank Mr Strangfeld for his contribution and support since the Company's
formation.


OUTLOOK

In the short-term, the general global economic downturn and public market
volatility have affected the environment for realisations and the rate of
realisations from the portfolio is anticipated to improve when market
conditions recover.

In the medium term, global private equity fund raising is not expected to
continue at the levels seen in recent years and available capital for new
funds is likely to be restricted in comparison. Managers with uncalled
capital are therefore in a good position to benefit from more realistic entry
prices and a less competitive environment. The Company has substantial
uncalled commitments and is therefore well placed to benefit from this
potential.


RECENT EVENTS

Since the publication of these results at the beginning of September, the
tragic events in the United States have cast uncertainty over global stock
markets and are likely to have implications for the global economy in the
coming months. Equally, the full impact of these events on private equity
markets in general remains uncertain.


ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 12 noon on Thursday 22 November
2001 at 31 Gresham Street, London, EC2V 7QA and will, as in previous years,
include a presentation on the activities of the Company.


John J. McLachlan
Chairman
                                   5


Chief Executive's Review


OVERVIEW

The year to 30 June 2001 has been a challenging year for the Company and the
funds in which it invests.

Weakening of public markets and the general economic slow down has led to a
decrease in net assets. However, despite this, the Company has reported
compound growth in net assets per share of 16.1% per annum over five years,
outperforming the FTSE World Index on a compound basis by 6.6% per annum over
the same period.


OPERATING REVIEW

Following the Extraordinary General Meeting, the admission of SVLL to IMRO
membership and SVNA's continuing membership in the NASD, both SVLL and SVNA
became fully owned subsidiaries of the Company.

As outlined in the Circular to Shareholders, the SVLL and SVNA team are
focused on the four main areas of the business, the first being advising the
Board on its assessment of future opportunities, implementation of the
Company's investment strategy and ongoing marketing, public and investor
relations. The other three areas of concentration are the provision of
services to Schroders plc and Schroder Ventures and the structuring and
launch of third party private equity fund of funds investment vehicles.

Third Party Private Equity Fund of Funds - the first of the fund of funds
investment vehicles is due to be launched formally by Schroders plc later
this month, with a final closing expected at the end of the first half of
2002. The fund of funds will invest principally with experienced private
equity management groups in the US and Europe. A pre-commitment facility of
up to US$150 million has been established by the Schroder Group, of which
approximately US$140 million has been committed to eleven funds to date.

Provision of services to Schroders plc and Schroder Ventures - these services
continue as planned, with particular increases in activity on the latter with
forthcoming fundraisings for The Japan Venture Fund IV and Schroder Ventures
Life Sciences Fund III.

As reported by the Chairman, both SVLL and SVNA are performing in line with
budget.


MARKET COMMENTARY

The year 2000 was another record year for private equity fundraising, with
over $165.5 billion and e48 billion being raised in the US and Europe, a
respective increase of 41% and 89% on amounts raised in 1999.

Private equity fund raising is not expected to continue at the pace
experienced in recent years, and since December the fund raising environment
has become more difficult. Availability of new capital for investment in
private equity has been constricted by a combination of declining public
markets, causing allocations to private equity to increase as an overall
percentage of portfolios and therefore beyond target allocations, and the
slowing of distributions from private equity managers.

Globally, private equity managers have been affected by the downturn in
public markets, especially in TMT sectors, limiting exit opportunities and
leaving some managers facing write-offs in their portfolios. As a result, a
number of managers are focusing on their existing portfolios rather than
pursuing new investments.

Whilst delaying exit opportunities, uncertainty in public markets has
increased deal-flow to private equity houses as companies look to the
financial buyer for alternative methods of funding. As vendor valuations
adjust to reflect the correction in public markets, private equity managers
with uncalled commitments will be well placed to capitalise on this
deal-flow.


OUTLOOK

The growth in commitments to private equity over the last decade has been
driven by the ability of top performing private equity firms to generate
returns which outperform comparative quoted markets over the medium to long
term. Both the Company's and the Schroder Private Equity Fund of Funds'
underlying portfolio of private equity funds are advised by top performing
managers and we have every confidence in the long-term performance of these
vehicles.


Nick Ferguson
Chief Executive

                                   6


Portfolio Review

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 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

                                   7


(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 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 buy-out 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.

<TABLE>
<CAPTION>


Company                   30 June 2001    30 June 2000    Change in
                             Valuation       Valuation         Year
                               GBP'000         GBP'000      GBP'000
<S>                                <C>             <C>          <C>

XYMAX                            9,898           1,601        8,297
Sirona Dental Systems           16,036          10,678        5,358

</TABLE>

Volatility in public markets has delayed exit opportunities and options
available for private equity managers to realise 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).

SVIIT's share of major realisations by the funds during the year included:

                                   8


Portfolio Review continued


<TABLE>
<CAPTION>


Company                               Realisation     30 June 2000         Cost
                                            Value        Valuation     GBP'000*
                                        GBP'000**          GBP'000
<S>                                           <C>              <C>        <C>


Ferretti                                    6,073            4,093        148
Single                                      2,709            2,227        472

</TABLE>


*   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:

<TABLE>
<CAPTION>


Company                            30 June 2001    30 June 2000    Change in
                                      Valuation       Valuation         Year
                                       GBP'000          GBP'000      GBP'000
<S>                                       <C>               <C>         <C>

AU System                                2,389          *15,159       12,770
Parkway Holdings                         7,580         **15,865        8,285
Takko                                   12,170           18,014        5,844

</TABLE>


*   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.
Portfolio Review continued

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

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;

<TABLE>
<CAPTION>

                                              June 2001       June 2000
                                  Year ended       GBPm            GBPm
<S>                                                 <C>             <C>

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

</TABLE>


VALUATION BASIS

Reflecting the strong deal flow in the year, a considerable portion of the
portfolio is still held at cost, including ten of the Twenty Largest
Underlying Companies.


<TABLE>
<CAPTION>


                        Portfolio Valuation Basis                    Portfolio Valuation Basis
                              30 June 2001                                 30 June 2000
                                             % (by Value)                                 % (by Value)
                <S>                                   <C>   <C>                                    <C>
                Cost                                   58   Cost                                    43
                W/up: P/E                              10   W/up: P/E                                5
                W/up: EBIT                             12   W/up: EBIT                              18
                W/up: 3rd Party                         3   W/up: 3rd Party                          7
                Quoted                                 12   Quoted                                  22
                W/Down                                  5   W/Down                                   5


     Under British Venture Capital Association (BVCA) valuation guildlines,
 investments are normally carried at cost, less a provision if appropriate, for
                at least the first 12 months after acquisition.

</TABLE>



                                        9


<TABLE>
<CAPTION>

                             Investment in Companies (GBPm)    Investment in Companies (GBPm)
                                     30 June 2001                    30 June 2000

                         Quoted     Cost    W/Up    W/Down                    Quoted    Cost    W/Up    W/Down
        <S>                 <C>        <C>   <C>       <C>   <C>                 <C>       <C>     <C>     <C>
        1992 & prior        9.1        0     0.9       0.4   1992 & prior        8.8       0       0       1.6
        1993                3.2        0     0.2         0   1993                2.4       0       0       0.1
        1994                  0        0     0.9       0.3   1994                  4       0     0.4         0
        1995                1.8        0     1.6       0.2   1995                2.1     0.2     2.1       0.1
        1996                0.1        0     8.7       4.3   1996                4.7       0     3.2       0.4
        1997                1.8        1    27.4       0.1   1997                0.2     0.3      15       2.8
        1998                3.3      4.8    33.6       0.7   1998                3.7       1    13.8      11.7
        1999               20.7      7.3    14.2       1.2   1999                8.4     2.1    45.1       1.1
        2000                6.1    174.9    13.5      14.2   2000               38.8    14.5    18.7         0
        2001                  0     40.7       0         0


</TABLE>

The increase in companies valued on a Written Up - P/E basis reflects the
revaluation of XYMAX and Sirona
Dental Systems. The decrease in the proportion of companies valued on a
Written-Up - EBIT basis is simply a reflection of the increased size of the
portfolio, the absolute numbers remain relatively unchanged.

The decrease in companies valued on a third party basis is attributable to
the sale of iD2 Technologies in July 2000.

The fall in SVIIT's exposure to quoted stocks is partly due to realisations,
but is mainly a result of the fall in the valuations of Parkway Holdings and
AU System.

The weighted average P/E multiple used in valuing the relevant portfolio
companies has increased to 18.1 (June 2000: 16.7). After a range of
discounts, investments valued on a P/E basis are effectively valued at 14.5
times earnings (June 2000: 10.9). This increase is due to the revaluation of
XYMAX, which reflects the higher P/E multiples used in the Japanese market.

The weighted average EBIT multiple used in valuing the relevant portfolio
companies remains relatively unchanged at 9.1 (June 2000: 9.2). After a range
of discounts, investments valued on an EBIT basis are effectively valued at
6.8 times earnings (June 2000: 6.8).

The average discount applied to quoted investments has increased to 21% (June
2000: 19%). This increase is mainly due to the large discount applied to
Twinwood, a new investment in Singapore that is quoted. The restructuring of
this company is in its formative stage, hence it is too early to recognise
any gain on the investment.


PORTFOLIO MATURITY

The average age of the portfolio remains low, with 76% of investments held
for three years and under (June 2000: 82%). The tables above show the ageing
of SVIIT's portfolio by valuation method at 30 June 2001 and 30 June 2000.

<TABLE>
<CAPTION>

SVIIT: Analysis by Market


                              30 June 2001    30 June 2000
                              % (by Value)    % (by Value)
<S>                                 <C>             <C>
Continental Europe                  28              49
UK                                  13              11
Far East/Asia Pacific               12              14
International                       30              13
North America                       17              14


</TABLE>


GEOGRAPHICAL DISTRIBUTION

The portfolio's weighting to International continued to increase over the
year and now represents 30% of the portfolio. This is attributable to new
investments such as Memec, Kiekert and Grammer which, although they have
important Continental European businesses, are classified as International
due to their substantial global operations.

                                 10


<TABLE>
<CAPTION>

EVCA Sector Analysis


                                    30 June 2001    30 June 2000
                                    % (by Value)    % (by Value)
<S>                                          <C>             <C>
Consumer                                     17              20
Medical/Health                               23              23
Computer & Other Electronics                 34              34
Industrial Products & Services               14              10
Other Manufacturing                           5               3
Other Services                                3               5
Transportation                                1               3
Construction                                  3               2

</TABLE>


SVIIT's  exposure to Continental  Europe decreased over the year, to some extent
due to the full  realisation  of iD2  Technologies  and partial  realisation  of
Ferretti in addition to the reduction in the  valuation and partial  realisation
of AU System.

<TABLE>
<CAPTION>


SVIIT: Analysis by Market (%)

                 30 June 2001    30 June 2000
<S>                <C>             <C>
Early stage/                4               5
start-up
Development                23              31
Buy-outs                   70              60
Buy-ins                     3               4

</TABLE>


The portfolio's exposure to the UK has increased slightly following the
acquisition of Homebase.


INDUSTRIAL SECTOR

Whilst static year on year (34%) the portfolio's weighting to Computer/other
electronics has decreased since December 2000. This fall in weighting in the
second half of the year is a reflection of recent investments in other
sectors, in addition to the fall in valuation of AU System. Of this 34%, 88%
relates to companies that provide hardware materials (e.g. semiconductors),
11% to IT business to business consultancy and 1% providing IT services
directly to consumers.

The slight increase in the portfolio's weighting to Industrial
products/services is a result of SVIIT's investments in Kiekert and Grammer.
The write-down of Takko, a German retailer, has reduced SVIIT's exposure to
the Consumer sector.


DEAL TYPE

Management Buy-Outs continue to be the largest transaction type by value,
representing 70% of the portfolio (June 2000: 60%) and include new
investments such as Memec, Kiekert and Homebase.

The decrease in development capital investments to 23% (June 2000: 31%) is
due to the decrease in value of AU System and Parkway Holdings.

                                 11



<TABLE>
<CAPTION>

Uncalled Fund Commitments


  Fund                                                            Amount Called     Amount Uncalled    SVIIT Uncalled
                                                               (Local Currency)    (Local Currency)      commitment*
                                                                                                          GBP million
<S>                                                                        <C>                 <C>                <C>
  Schroder UK Venture Fund IV                                           GBP4.3m             GBP0.3m               0.3
  Schroder Ventures European Fund                                    euro169.6m           euro26.4m              15.9
  Schroder Ventures European Fund II                                 euro250.5m          euro499.5m             300.7
  The Japan Venture Fund III                                          Y1,894.5m           Y1,105.5m               6.3
  Schroder Ventures Asia Pacific Fund                                  US$41.6m            US$94.1m              67.0
  Schroder Ventures US Fund                                            US$33.2m            US$40.0m              28.4
  Schroder Canadian Buy-Out Fund II                                     C$17.0m              C$0.9m               0.4
  Schroder Canadian Buy-Out Fund III**                                  C$15.6m             C$34.9m              16.4
  Schroder Ventures
  International Life Sciences Fund II                                  US$52.3m            US$29.4m              20.9
  Total                                                                                                      GBP456.3

  *     Based on exchange rates at 30 June 2001
  **    Based on calls at second closing of the fund (31%). After the fund's
        final closing, capital was returned to investors in the first and
        second closing, resulting in the fund currently being 27% drawn down

</TABLE>

FUND COMMITMENTS

At 30 June 2001, SVIIT had total uncalled commitments of GBP456.3 million to
nine funds (June 2000: GBP580.7 million to eight funds).

As reported in the Interim Report, the Schroder Ventures European Fund II and
Schroder Ventures US Fund both had final closings during the year and are now
33.4% and 45.3% drawn-down respectively.

Since December, the Schroder Canadian Buy-Out Fund III has had a final
closing of C$190 million and is 27% drawn down, with two investments in Matra
Plast and AP Plasman, both of which feature in SVIIT's Twenty Largest
Underlying Companies. SVIIT's commitment to this fund at its final closing
was C$50.5 million.


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.


CONCLUSION

The adverse impact of declining public markets on the portfolio has been
offset by some write-ups and the resulting fall of 9.6% in net assets
compares to a fall of 14.8% in the FTSE World Index. Despite this fall in net
assets, SVIIT has reported compound growth in net asset per share growth of
16.1% per annum over five years, outperforming the FTSE World Index on a
compound basis by 6.6% per annum over the same period.

Realisations during the year have slowed, predominantly driven by the
world-wide decline in public markets and an uncertain global economic
outlook, and it appears likely that these uncertain market conditions will
continue in the near term. The portfolio is relatively immature and 58% of it
is valued at cost, which should provide for future uplift and value as market
conditions improve and the environment for investment realisations becomes
more favourable.

                               12




Twenty Largest Underlying Companies

In the following pages, we show SVIIT's twenty largest investments by value
as at 30 June 2001
(Geographic Locations by head office)

<TABLE>
<CAPTION>


1.  MEMEC
    (UK)
<S>                            <C>                            <C>
Company (GBP000's)                                  MEMEC Picture
Cost                          56,438
Value                         55,712
Date of Acquisition     October 2000

</TABLE>

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 region. The valuation basis is cost in fund currency; the
holding represents 13.36% of SVIIT's net assets.

<TABLE>
<CAPTION>


2.   AMS
     (AUSTRIA)
<S>                            <C>                       <C>
Company (GBP000's)                                 AMS Picture
Cost                          36,202
Value                         37,128
Date of Acquisition        June 2000

</TABLE>

AMS 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 cost
in fund currency; the holding represents 8.91% of SVIIT's net assets.

<TABLE>
<CAPTION>


3.  HOGG ROBINSON
    (UK)
<S>                            <C>                           <C>
Company (GBP000's)                                   Hogg Robinson
Cost                          24,154                AMS Picture
Value                         22,993
Date of Acquisition        June 2000

</TABLE>

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 cost in fund
currency; the holding represents 5.52% of SVIIT's net assets.

<TABLE>
<CAPTION>


4.  HOMEBASE
    (UK)
<S>                            <C>                             <C>

Company (GBP000's)                                  Homebase Picture
Cost                          20,009
Value                         19,479
Date of Acquisition       March 2001

</TABLE>

Homebase is a leading retailer of DIY ("Do It Yourself") products in the UK.
The brand is particularly strong at the "softer" end of the market - which
includes home accessories, decorative and gardening products. Homebase
operates nearly 300 stores across the UK and Eire. The valuation basis is
cost in fund currency; the holding represents 4.67% of net assets.

                                  13


<TABLE>
<CAPTION>


5.  LEICA MICROSYSTEMS
    (GERMANY)
<S>                            <C>                               <C>
Company (GBP000's)                                  Leica Microsystems
Cost                          11,611                 AMS Picture
Value                         17,741
Date of Acquisition       March 1998

</TABLE>

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 EBIT; the holding represents 4.25% of
SVIIT's net assets.

<TABLE>
<CAPTION>


6.  SIRONA DENTAL SYSTEMS GROUP
    (GERMANY)
<S>                            <C>                         <C>
Company (GBP000's)                                 SIRONA DENTAL
Cost                          14,262             SYSTEMS GROUP
Value                         16,036                Picture
Date of Acquisition         Nov 1997

</TABLE>

Sirona is the leading manufacturer of professional dental equipment in the
world and the only major dental manufacturer 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.
The valuation basis is P/E; the holding represents 3.85% of SVIIT's net
assets.

<TABLE>
<CAPTION>


7.  TAKKO
    (GERMANY)
<S>                            <C>                         <C>
Company (GBP000's)                                 TAKKO Picture
Cost                          17,246
Value                         12,170
Date of Acquisition       March 2000

</TABLE>

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 write down; the holding
represents 2.92% of SVIIT's net assets.

<TABLE>
<CAPTION>


8.  KIEKERT
    (GERMANY)
<S>                            <C>                           <C>
Company (GBP000's)                                 KIEKERT Picture
Cost                         11,738
Value                        11,377
Date of Acquisition       Sept 2000

</TABLE>

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 cost in fund currency; the holding represents 2.73% of SVIIT's net
assets.


                                      14


<TABLE>
<CAPTION>

9.  EEMS
    (ITALY)
<S>                            <C>                         <C>
Company (GBP000's)                                 EEMS Picture
Cost                         1,750
Value                       11,242
Date of Acquisition       May 1999

</TABLE>

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 EBIT; the
holding represents 2.70% of SVIIT's net assets.

<TABLE>
<CAPTION>

10.  AP PLASMAN
     (CANADA)
<S>                            <C>                              <C>
Company (GBP000's)                                 AP PLASMAN Picture
Cost                         10,734
Value                        10,947
Date of Acquisition       Sept 2000

</TABLE>

AP Plasman is an integrated group of five companies providing moulds and
plastic components in addition to the painting and finishing of parts,
primarily for the automotive industry. The valuation basis is cost in fund
currency; the holding represents 2.63% of SVIIT's net assets.

<TABLE>
<CAPTION>

11.  XYMAX
     (JAPAN)
<S>                            <C>                         <C>
Company (GBP000's)                                 XYMAX Picture
Cost                         1,601
Value                        9,898
Date of Acquisition       Jan 2000

</TABLE>

XYMAX (formerly Recruit Building Management Ltd) is a leading property
management company managing over 250 office buildings mainly located in the
Tokyo and Osaka metropolitan area. XYMAX provides services to two different
market segments; the sub-leasing market for small to medium sized building
owners; and the property management market for institutional real estate
investors. The valuation basis is P/E; the holding represents 2.37% of net
assets.

<TABLE>
<CAPTION>

12.  GRAMMER
     (GERMANY)
<S>                            <C>                             <C>

Company (GBP000's)                                  GRAMMER Picture
Cost                         9,619
Value                        9,651
Date of Acquisition      June 2001

</TABLE>

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.
Grammer is headquartered in Amerg, Germany and employs 7,000 people. The
valuation basis is cost in fund currency; the holding represents 2.32% of net
assets.

                                 15




<TABLE>
<CAPTION>

13.  BETTS GROUP HOLDINGS
     (UK)
<S>                            <C>                           <C>
Company (GBP000's)                                   BETTS GROUP
Cost                         6,313              HOLDINGS Picture
Value                        8,047
Date of Acquisition       Nov 1998

</TABLE>

Betts is a specialist packaging and injection-moulding business focused on
the pharmaceutical and oral care markets. Betts makes toothpaste and
pharmaceutical tubes, asthma inhalers and other specialised packaging in
plants located in the UK, US, Poland and Asia. The valuation basis is EBIT;
the holding represents 1.93% of SVIIT's net assets.
Twenty Largest Underlying Companies continued

<TABLE>
<CAPTION>

14.  WASHTEC
     (GERMANY)
<S>                            <C>                              <C>
Company (GBP000's)                                    WASHTEC Picture
Cost                         5,939
Value                        7,702
Date of Acquisition        Feb 1998

</TABLE>

Washtec was formed from the merger of California Kleindienst and Wesumat, and
manufactures car wash equipment. Schroder Ventures' funds had previously
invested in California Kleindienst. The valuation basis is quoted; the
holding represents 1.85% of SVIIT's net assets.

<TABLE>
<CAPTION>

15.   PARKWAY HOLDINGS
      (SINGAPORE )
<S>                            <C>                              <C>

Company (GBP000's)                                    PARKWAY Picture
Cost                         15,311
Value                         7,580
Date of Acquisition        Dec 1999

</TABLE>

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 1.82% of SVIIT's net assets.

<TABLE>
<CAPTION>


16.  MESA COMMUNICATIONS
     (USA )
<S>                            <C>                          <C>
Company (GBP000's)                                      MESA
Cost                         6,345               COMMUNICATIONS
Value                        7,331                  Picture
Date of Acquisition     March 2000

</TABLE>

Mesa is an independent owner and manager of wireless communication towers,
growing aggressively through acquisition and development in the US. The
valuation basis is cost in fund currency; the holding represents 1.76% of
SVIIT's net assets.

                                 16


<TABLE>
<CAPTION>

17.   COMACT
      (CANADA )
<S>                            <C>                             <C>
Company (GBP000's)                                    COMACT Picture
Cost                         2,725
Value                        6,602
Date of Acquisition      June 1997

</TABLE>

Comact (formerly GBA Industrial Equipment) is a Canadian manufacturer of
industrial equipment for the sawmill, paper, hydroelectric and aluminium
industries, with 75% of consolidated revenues arising from sales of sawmill
equipment. The valuation basis is EBIT; the holding represents 1.58% of
SVIIT's net assets.

<TABLE>
<CAPTION>


18.  TWINWOOD
     (ASIA)
<S>                            <C>                               <C>
Company (GBP000's)                                    TWINWOOD Picture
Cost                         5,699
Value                        5,942
Date of Acquisition       Oct 2000

</TABLE>

It is anticipated that Twinwood's existing engineering business will be sold
and its operations will be focused around several subsidiaries. The strategy
is to reposition the company as an operating company focused on key
technology areas including broadband and wireless software and services. The
valuation basis is quoted; the holding represents 1.43% of SVIIT's net
assets.

<TABLE>
<CAPTION>

19.  THOUGHTWORKS
     (USA)
<S>                            <C>                                   <C>

Company (GBP000's)                                    THOUGHTWORKS Picture
Cost                         4,588
Value                        5,188
Date of Acquisition     April 2000

</TABLE>

ThoughtWorks is a professional services provider, specialising in the
delivery of highly strategic, web-based systems development and systems
integration solutions for Fortune 1000 companies. The company focuses on the
"business to business" segment of the internet services industry. The
valuation basis is cost in fund currency; the holding represents 1.24% of
SVIIT's net assets.

<TABLE>
<CAPTION>

20   MATRA PLAST
     (CANADA)
<S>                            <C>                                   <C>

Company (GBP000's)                                     MATRA PLAST Picture
Cost                         4,254
Value                        4,468
Date of Acquisition      July 2000

</TABLE>

Matra Plast produces and converts polythene and polycarbonate for products
such as containers, signs and display units. The valuation basis is cost in
fund currency; the holding represents 1.07% of SVIIT's net assets.

                                 17



<TABLE>
<CAPTION>


List of Investments at 30 June 2001


                         Year      Original     SVIIT's     Value of    SVIIT's
                       Formed          Life     Holding      SVIIT's        Net
                                    (years)      in the      Holding     Assets
                                                   Fund      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        1,330        0.3

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     11,552         2.8

Schroder Ventures
Asia Pacific Fund
Established to
make equity or
near equity
investments in
companies that
have significant
exposure to the
AsiaPacific
region. The fund
will focus
principally on
management
buy-outs and
buy-ins,
financial
acquisitions and
larger
development
capital
opportunities.             1999        10          29.9     16,446         3.9

Co-investments
with Asia Pacific
Fund ll and
Schroder Ventures
Asia Pacific Fund                                            1,372         0.3

The Japan Venture
Fund II
Formed as a
successor to The
Japan Venture
Fund to invest in
Japanese
businesses with
potential for
capital growth.            1990       10*          13.7      4,114         1.0

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          17.7     17,586         4.3

TOTAL ASIA                                                   52,400        12.6


</TABLE>
                                      18



<TABLE>
<CAPTION>

List of Investments continued


                           Original      SVIIT's Holding     Value of   SVIIT's
                    Year       Life          in the Fund      SVIIT's       Net
                  Formed    (years)                    %      Holding    Assets
                                                              GBP'000          %
<S>                  <C>       <C>                   <C>          <C>       <C>
CONTINENTAL
EUROPE
Schroder
Ventures
European Fund
The first $1
billion fund
raised for
private
equity
investment in
Europe
focusing on
large and
medium-sized
leveraged
buy-out
opportunities.     1997          10                 22.0      64,503       15.5


Schroder
Ventures
European Fund
II
Formed as the
successor to
Schroder
Ventures
European
Fund, the
fund will
focus on
European
buy-outs and
buy-ins, in
addition to
growth
capital
investments.         2000       10                 22.7      144,967       34.7

Schroder
French
Buy-Out Fund
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          440         0.1

Schroder
Ventures
French
Enterprise
Fund
Formed with a
policy of
investing in
development
capital
opportunities,
principally
in France.         1992       10                 19.0            790        0.2

Schroder
Ventures
French
Buy-Out Club
1995
The main
focus is on
buy-outs of
private
companies and
consideration
is also given
to investment
in
turnarounds
and special
situations.           1995      n/a                 27.9       1,197        0.3

Schroder
German
Buy-Outs
Established
to invest in
buy-outs of
companies in
Germany and
some of its
neighbouring
countries.            1986      10*                 29.7       6,656        1.6

Schroder
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          3,466        0.8

Schroder
Ventures
Italian Fund
II
Established
as a
successor to
The Italian
Venture Fund
to make
equity and
near-equity
investments
in buy-outs
and buy-ins,
including
development
capital
businesses,
principally
in Italy.            1993       10       21.0                  4,995        1.2

The Spanish
Venture Fund
Established
with a policy
of investing
in leveraged
buy-outs and
development
capital
businesses in
Spain.              1990      10*       23.2                   1,994        0.5

TOTAL                                                        229,008       54.9
CONTINENTAL
EUROPE

</TABLE>
                                        19



<TABLE>
<CAPTION>

List of Investments continued


                                  Original       SVIIT's     Value of   SVIIT's
                       Year           Life       Holding      SVIIT's       Net
                     Formed        (years)        in the      Holding    Assets
                                                    Fund      GBP'000         %
                                                       %
<S>                     <C>            <C>           <C>          <C>       <C>

UNITED KINGDOM
Schroder UK
Buy-Out Fund
III
Established as
Schroder
Ventures' 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           13,105         3.1

Schroder UK
Venture I
Extension Fund
Established to
be the
recipient of
the
distributions
from certain
unitholders in
Schroder UK
Venture Fund.         1991        9           17.5              28         0.0

Schroder UK
Venture Fund
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          882         0.2

Schroder UK
Venture Fund IV
Established to
follow the
policies of the
fully invested
third UK
venture fund.          1995        10           4.2        2,877         0.7

TOTAL UNITED                                              16,892         4.0
KINGDOM

</TABLE>

                                    20


<TABLE>
<CAPTION>

List of Investments continued


                           Year     Original      SVIIT's    Value of   SVIIT's
                         Formed         Life      Holding     SVIIT's       Net
                                     (years)       in the     Holding    Assets
                                                    Fund      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         9,004        2.2

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         30.0         6,790        1.6

Co-investments with
Schroder Canadian
Buy-Out Funds II
and III                                                       15,916        3.8

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        2,637        0.6

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      34,896        8.4

Schroder US Venture
Fund
Established to
invest in a
portfolio of
buy-out and
development capital
businesses,
principally located
in the United
States. The fund
was put into
liquidation in
1999.                        1988       10*         14.6           -          -

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         30.0     19,487        4.7

TOTAL NORTH AMERICA                                           88,730       21.3
                                                             387,030       92.8
Total fund
portfolio
Fixed interest                                                24,853        6.0
investments
Total investment                                             411,883       98.8
portfolio
Current assets less                                            4,989        1.2
total liabilities
Total net assets                                             416,872      100.0

* The lives of these funds have been extended.

</TABLE>

Note

The Italian Venture Fund, Schroder UK Venture Fund II, Schroder UK Buy-Out
Fund II, Schroder UK Venture Fund and Schroder Canadian Buy-Out Fund
terminated during the year and are therefore excluded from the list of
investments.

                                    21


Report of the Directors for the year ended 30 June 2002

The Directors submit their report and the audited accounts of the Company for
the year ended 30 June 2001.


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

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.

                                    22


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 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.


DIRECTORS

The Directors of the Company and their beneficial and family interests in the
Company's share capital during the year to 30 June 2001 are given below:

<TABLE>
<CAPTION>


                                              Ordinary Shares
                                              of GBP1.00 each
                                                   At 30 June     At 1 July
                                                         2001          2000
<S>                                                       <C>           <C>
Beneficial
J J McLachlan                                          14,405        14,372
N E H Ferguson*                                       175,000       175,000
C J Govett                                             67,500        67,500
A J Habgood                                            25,000        25,000
E W Koning                                                Nil           Nil
D Raeburn (appointed 25 June 2001)                     60,000           N/A
I P Sedgwick                                           17,500        17,500
J Strangfeld (resigned 25 June 2001)                      Nil           Nil
Non Beneficial
C J Govett                                             20,000        20,000

</TABLE>

*  Mr Ferguson has options over ordinary shares, details of which are given on
   page 29.

There had been no change in the above holdings up until 14 September 2001. In
accordance with the Company's Articles of Association, the election of Mr
Denis Raeburn as a Director will be proposed at the forthcoming Annual
General Meeting, and Mr Sedgwick, Mr McLachlan and Mr Ferguson will retire at
the forthcoming Annual General Meeting and, being eligible, offer themselves
for re-election.

None of the Directors has a contract of service with the Company. Mr Ferguson
and members of his family have an interest in the Carried Interest in respect
of certain Schroder Ventures' funds, awarded prior to January 2001. Mr
Sedgwick is Chairman and Mr Ferguson is a non-executive director of Schroders
plc, whose subsidiaries include Schroder Investment Management Limited which
receives fees from the Company in accordance with the terms of a secretarial
agreement, and Schroder Investment Management (UK) Limited which receives
fees for the provision of cash management services. Full details of fees paid
to both companies can be found in Note 26 on page 46. 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 14 September 2001 the Company had been notified of the following interests
in excess of 3 per cent. of the issued capital.

<TABLE>
<CAPTION>

                                                      Number of    Percentage
                                                ordinary shares      of class
<S>                                                         <C>           <C>
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
</TABLE>


*This interest is also counted in the non-beneficial, managed for clients,
interest of Schroders plc and its subsidiaries listed above.


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
14 September 2001

                                         23



Statement of Directors' Responsibiities

The Directors are responsible for preparing financial statements for each
financial year 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 year and of the return
for the year, 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 financial statements 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 Directors confirm that they have complied with these responsibilities.

                                    24



Corporate Governance

The Company is committed to high standards of corporate governance. The
Combined Code on corporate governance issued by the Committee on Corporate
Governance in June 1998 and supplemented by the guidance on Internal Control
issued by the Institute of Chartered Accountants in England and Wales in
September 1999 (the "Turnbull" guidance) applies to the Company for the year
ended 30 June 2001. This Statement, together with the Statement of Directors'
Responsibilities on page 24, indicates how the Company has applied the
principles of good governance of the Combined Code and the requirements on
Internal Control.


APPLICATION OF CODE PRINCIPLES

THE BOARD

The Board currently consists of six non-executive Directors, the majority of
whom are independent of the Company Secretary, and one executive Director
(see page 2).

The Board meets at least four times a year. Matters specifically reserved for
decision by the full Board have been defined and a procedure 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.

The Board has contractually delegated to Schroder Investment Management (UK)
Limited, the management of the Company's cash balances, and the day to day
accounting and company secretarial requirements to Schroder Investment
Management Limited. Each of these contracts 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 each contract is monitored on an annual
basis by the Remuneration Committee.

When a Director is appointed he or she receives an induction which is
provided by the Company Secretary. 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. In addition, Directors
attend ad hoc seminars covering the latest developments across the investment
trust industry.


BOARD COMMITTEES

The Investment Committee, which consists of Mr Ferguson (Chairman), Mr
Govett, Mr Koning, Mr McLachlan and Mr Raeburn, 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 establishing the remuneration of the Chief
Executive and the issuance of share option grants under the Executive Share
Option Plan established in 2001. Committee members can be found on page 2.
The Remuneration Committee has also taken over the review of certain
contracts with service providers from the Management Engagement Committee,
the duties of which have now been amalgamated into those of the Remuneration
Committee.

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. A formal procedure for the appointment of new
Directors is contained in the

                                   25



terms of reference of the  Committee.  The Committee  meets as necessary to make
recommendations  to the  Board  on the  filling  of Board  vacancies.  Committee
members can be found on page 2. In making its recommendations,  the Committee is
required to ensure that the composition of the Board is  appropriately  balanced
in expertise and ability.

There is an Audit Committee with defined terms of reference and duties.
Committee members can be found on page 2. The function of the Audit Committee
is to ensure that the Company maintains the highest standards of integrity
and 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.

All non-executive 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.


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 the full Board of
Directors and a presentation is made. There is an opportunity for individual
shareholders to question the Chairman of the Board and of the Audit Committee
at the Annual General Meeting. The Company announced the level of votes cast
by proxy on resolutions proposed at last year's Annual General Meeting, and
intends to announce the votes cast by proxy in a similar manner at future
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
55 to 57 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 financial
statements is on page 24 and a statement of going concern is set out below.

The report of the auditors can be found on page 30.


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 consist
mainly of securities that are readily realisable and, accordingly, the
Company has 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 financial statements.


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.

During the year ended 30 June 2001 the Board approved a detailed risk map
that identified 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 responsibility for the provision of
accounting and company secretarial services. 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 as an investment trust. The ongoing risk assessment includes

                                     26


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.

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. In so doing the Board will
review from time to time whether a function equivalent to an internal audit
is needed.


STATEMENT OF COMPLIANCE

The Board has conducted an annual review of the effectiveness of the system
of internal control covering all controls including financial, operational
and compliance controls and risk management. 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.

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.

*    The Board is of the view that there is now an ongoing system in place for
     identifying, evaluating and managing the Company's key risks. Full
     compliance with the Turnbull guidance was not achieved until December 2000,
     the date when the Company's detailed risk assessment and the updated
     monitoring procedures were fully implemented.

                                     27



Remuneration Report

This report deals with the remuneration paid to Mr N Ferguson, Chief
Executive of the Company and the sole executive director from 18 June 2001,
the date the acquisition of Schroder Ventures (London) Limited and Schroder
Ventures North America Inc. was completed, to 30 June 2001, the end of the
Company's financial year.


THE REMUNERATION COMMITTEE

(THE "COMMITTEE")

The Committee's members during the year were Mr J McLachlan, Mr J Govett and
Mr A Habgood, all independent non-executive directors.

The Committee is responsible for determining the remuneration of the Chief
Executive 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 is advised by independent remuneration
consultants.


POLICY ON THE CHIEF EXECUTIVE'S REMUNERATION

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 venture capital organisations and financial institutions. The Committee
is sensitive to wider issues including pay and employment conditions
elsewhere 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 Chief Executive. Under an annual bonus
scheme, bonuses may be paid conditional upon Group and individual performance
as part of a formal appraisal process.

The Chief Executive's basic salary is reviewed annually, having regard to
individual performance and comparative data. In addition, he is 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. In view of the short time since his appointment as Chief
Executive, no bonus was paid to the Chief Executive in the financial year
under review.


Benefits in Kind

Benefits in kind (which are not pensionable) relate mainly to the provision
of health insurance.


External Appointments

The Company permits executive directors of the Company to accept
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. All fees earned
from such directorships are paid to the Company.


Service Contracts

The Chief Executive does not have a service contact with the Company. He is
employed by Schroder Investment Management Limited (SIM) and is seconded to
the Group. The Chief Executive's contract with SIM provides for 3 months'
notice.


Pension Arrangements

The following figures, prepared in accordance with the Listing Rules of the
Financial Services Authority, apply to Mr N Ferguson in respect of the period
from 18 June 2001 to 30 June 2001, for which he was an executive director of
the Company. No pension contributions are payable by Mr N Ferguson
personally.

<TABLE>
<CAPTION>
<S>                                                              <C>

Accrued Pension from 22 September
1980 to 18 June 2001                                            GBP93,318 p.a
    .
    Accrued Pension at 30 June 2001                             GBP93,895 p.a.
    Increase in accrued pension                                    GBP577 p.a.
    Transfer value of increase in accrued pe7nsion                   GBP15,101

</TABLE>


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 Chief Executive 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.

                                     28


Remuneration Report continued

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 Remuneration Committee intends to set appropriately demanding performance
targets on the exercise of options. For the first tranche of options that
were granted in June 2001, 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, the target may be re-tested every six months over the ten year life of
the option.

To the extent that the performance target has been met, a staggered vesting
schedule will operate for the Chief Executive and senior executives of the
Group, such that two-thirds of the initial option grant is exercisable three
years from grant, with the remaining one third exercisable four years from
grant.


CURRENT REMUNERATION

The emoluments received by Directors in respect of the year ended 30 June
2001 were as specified below:

<TABLE>
<CAPTION>

Executive            Salary    Benefits    Annual        Total          Total
                     & fees     in kind     bonus    emoluments    emoluments
                    GBP'000     GBP'000   GBP'000       year to       year to
                                                        30 June       30 June
                                                           2001          2000
                                                        GBP'000       GBP'000
<S>                     <C>         <C>       <C>           <C>           <C>

N E H Ferguson+         10           -         -             10             -

Non-Executive
J J McLachlan           50           -         -             50            25
N E H Ferguson*          5           -         -              5            10
C J Govett              18           -         -             18            10
A J Habgood             18           -         -             18            10
E W Koning              17           -         -             17            10
D Raeburn                1           -         -              1             -
I P Sedgwick            15           -         -             15            10
J Strangfeld            15           -         -             15            10

+  This relates to Mr Ferguson's remuneration for the period 18 June 2001
   to 30 June 2001

*  Mr Ferguson's fee for period from 1 July 2000 to 31 December 2000 was
   paid to Schroder Ventures (London) Limited. Mr Ferguson agreed to waive his
   fees as a non-executive Director of SVIIT with effect from 1 January 2001

</TABLE>

<TABLE>
<CAPTION>

OPTIONS HELD BY DIRECTORS OVER ORDINARY SHARES OF THE COMPANY


  Director          At 1     Granted    Exercised      At 30 June     Exercise
                    July                                     2001         Price
                    2000
<S>                  <C>         <C>         <C>              <C>           <C>

N E H                  -   1,073,170           0        1,073,170       410.0p
Ferguson
</TABLE>


Subject to appropriate performance targets being met, 715,446 options are
exercisable from 21 June 2004 and 357,724 options are exercisable from 21
June 2005. The options expire on 20 June 2011.

No options lapsed during the year. The market price of the shares at 30 June
2001 was 393.0p and the range during the financial year was 380.5p to 533.0p

                                     29


Report of the Auditors
To the Members of Schroder Ventures International Investment Trust plc

We have audited the accounts on pages 31 to 48 which have been prepared under
historical cost convention (as modified by the revaluation of certain fixed
assets) and the accounting policies set out on page 34 to 36.


RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The Directors are responsible for preparing the annual report. As described
on page 24, this includes responsibility for preparing the accounts in
accordance with applicable United Kingdom law and accounting standards. Our
responsibilities, as independent auditors, are established in the United
Kingdom by statute, the Auditing Practices Board, the Listing Rules of the
Financial Services Authority and by our profession's ethical guidance.

We report to you our opinion as to whether the accounts give a true and fair
view and are properly prepared in accordance with the Companies Act. We also
report to you if, in our opinion, the directors' report 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 the 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 on pages 25 to 27
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 either the Company's corporate governance procedures or its
risk and control procedures.

We read the other information contained in the annual report, including the
corporate governance statement, and consider whether it is consistent with
the audited accounts. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with
the accounts.


BASIS OF AUDIT OPINION

We conducted our audit in accordance with 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. 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 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.


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 30 June 2001 and the total return of
the Company and Group for the year then ended and have been properly prepared
in accordance with the Companies Act 1985.


Ernst & Young LLP
Registered Auditor
London
14 September 2001

                                     30


<TABLE>
<CAPTION>

Consolidated Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)

                                                      For the year ended                      For the year ended
                                                         30 June 2001                            30 June 2000
                                              Revenue     Capital        Total           Revenue    Capital        Total
                                              GBP'000     GBP'000      GBP'000           GBP'000    GBP'000      GBP'000
                              Notes
<S>                             <C>               <C>          <C>         <C>               <C>          <C>        <C>
Realised gains on
investments                     9                 -          4,774       4,774                -        86,386     86,386
Unrealised
(losses)/gains on
investments                     9                 -       (49,190)    (49,190)                -        41,175     41,175
(Losses)/gains on
investments                                       -       (44,416)    (44,416)                -       127,561    127,561
Foreign exchange losses
on currency balances           1f                 -          (755)       (755)                -         (415)      (415)
Income                          2             5,616              -       5,616            6,123             -      6,123
Expenses                        3           (2,594)              -     (2,594)          (1,323)           (3)    (1,326)
Net return/(deficit)
before finance costs and
taxation                                     3,022        (45,171)    (42,149)            4,800       127,143    131,943

Interest payable                5             (224)              -       (224)            (251)             -      (251)
Net return/(deficit) on
ordinary activities
before taxation                              2,798       (45,171)    (42,373)            4,549       127,143    131,692

Tax on ordinary
activities                      6             (141)              -       (141)              180             -        180
Return/(deficit) on
ordinary activities
after tax for the year                        2,657       (45,171)    (42,514)            4,729       127,143    131,872

Minority interest -
equity                                          (2)            104         102                -          (99)       (99)

Return/(deficit) on
ordinary activities
after tax and minority
interest for the year
attributable to equity
shareholders                                  2,655       (45,067)    (42,412)            4,729       127,044    131,773
Dividends

Final dividend of 1.80p
(2000: 3.80p) per
ordinary share payable
26 November 2001                 7           (1,841)              -     (1,841)          (3,886)             -    (3,886)

Surplus/(deficit)
transferred to/(from)
reserves                                         814       (45,067)    (44,253)              843       127,044    127,887

Return per ordinary
share                              8             2.60p       (44.07)p  (41.47)p            4.68p       125.87p    130.55p

</TABLE>

The notes on pages 34 to 48 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 and include acquisitions as detailed in
note 11. No operations were discontinued in the year.

                                     31


<TABLE>
<CAPTION>

                                                      At 30 June 2001              At 30 June 2000
                                               Notes       Group    Company              Group   Company
<S>                                              <C>         <C>        <C>                <C>       <C>
                                                         GBP'000    GBP'000            GBP'000   GBP'000
Balance Sheets


INVESTMENTS
Venture funds and co-investments                    9    387,030    362,859            327,210    290,805
Fixed interest investments                          9     24,853     24,853            126,309    126,309
Investment in subsidiaries                         11          -     30,194                  -     39,539
                                                         411,883    417,906            453,519    456,653
CURRENT ASSETS
Debtors                                            12      2,933        808              2,903      1,144
Cash at bank                                               1,093         16                 48         44
Short-term deposits                                        6,098        433             10,232      8,362
                                                          10,124      1,257             13,183      9,550
CURRENT LIABILITIES
Creditors: amounts falling due within one year     13      4,747      2,291              5,087      5,078
NET CURRENT ASSETS                                         5,377    (1,034)              8,096      4,472
TOTAL ASSETS LESS CURRENT LIABILITIES                    417,260    416,872            461,615    461,125
Minority interest - non-equity                             (100)          -              (100)          -
Minority interest - equity                                 (288)          -              (390)          -
NET ASSETS                                               416,872    416,872            461,125    461,125
CAPITAL AND RESERVES
Called up share capital                            16    102,266    102,266            102,266    102,266
Share premium account                              17      7,453      7,453              7,453      7,453
Capital redemption reserve                         18      3,204      3,204              3,204      3,204
Share purchase reserve                             19     92,054     92,054             92,054     92,054
Capital reserve                                    20    208,935    208,707            254,002    253,543
Revenue reserve                                    21      2,960      3,188              2,146      2,605
EQUITY SHAREHOLDERS' FUNDS                         22    416,872    416,872            461,125    461,125
Net asset value per ordinary share                 23     407.6p                        450.9p

</TABLE>

The accounts were approved by the Board of Directors on 14 September 2001 and
signed on behalf of the Board by:

John J. McLachlan
Nicholas E. H. Ferguson
Directors


The notes on pages 34 to 48 form an integral part of these accounts.

                                     32


<TABLE>
<CAPTION>

Consolidated Cash Flow Statement


                             Notes   For the year ended   For the year ended
                                           30 June 2001         30 June 2000
                                                GBP'000              GBP'000
<S>                            <C>                  <C>                  <C>
OPERATING ACTIVITIES
Income received from
investments                                      5,623                5,127
Bank interest received                             570                  364
Administration fee                                  35                    -
income received
Administrative expenses                        (3,463)                (971)
Net cash inflow from
operating activities          24                 2,765                4,520
RETURNS ON INVESTMENTS
AND SERVICING OF
FINANCE
Interest paid                                    (224)                 (63)
Convertible bond                                     -                (376)
interest paid
Net cash outflow from
returns on investments
and servicing of
finance                                           (224)                (439)
TAXATION
UK tax recovered                                   339                  562
Withholding tax paid                             (141)                 (41)
Foreign tax paid                                  (13)                    -
Total tax recovered                                185                  521
CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Purchase of fixed
interest securities                          (351,516)            (756,631)
Purchase of
subsidiaries                                      (36)                    -
Sale of fixed interest
securities                                    452,217              706,525
Calls paid                                   (156,024)            (161,666)
Capital distributions
received                                       53,647              186,082
Net cash outflow from
capital expenditure and
financial investment                           (1,712)             (25,690)
EQUITY DIVIDENDS PAID
Dividends                                      (4,182)              (1,484)
Total dividends paid                           (4,182)              (1,484)
FINANCING
Capital expenses                                     -                  (3)
Net cash outflow from
financing                                            -                  (3)
NET CASH OUTFLOW                               (3,168)             (22,575)


</TABLE>

<TABLE>
<CAPTION>

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                     For the year ended    For the year ended
                                           30 June 2001          30 June 2000
                             Notes              GBP'000               GBP'000
<S>                                                 <C>                   <C>

Decrease in cash during                         (3,168)              (22,575)
the year
Cash acquired on purchase                           834                     -
of subsidiaries
Exchange loss on currency                         (755)                 (415)
balances
Debt converted into                                   -                10,753
equity
Change in net funds                             (3,089)              (12,237)
Net funds at the                                 10,280                22,517
beginning of the year
Net funds at the end of      25                   7,191                10,280
the year

</TABLE>


The notes on pages 34 to 48 form an integral part of these
accounts.

                                     33


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)  Company revenue account

      The Company will not present its own revenue account but, as permitted by
      section 230 of the Companies Act 1985, will disclose information
      supplementing the revenue account as specified in paragraphs 52 to 57 of
      Schedule 4 of the Companies Act 1985.

 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' 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' funds are
      valued by the Directors at the balance sheet date by valuing the
      underlying investments comprising the portfolios of the Schroder Ventures'
      funds in accordance with the valuation policies set out below, as
      adjusted, where appropriate, for other assets and liabilities of the
      Schroder Ventures' funds. The valuation policies of the Company are
      consistent with the current guidelines issued by the British Venture
      Capital Association ("BVCA"). 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.

      Quoted investments
      All investments listed on recognised stock exchanges are valued at the
      quoted mid-market price at the balance sheet date. If an investment is
      subject to restrictions affecting its disposal, or if the holding is
      significant in relation to the issued share capital, a discount of
      generally between 0 per cent. and 50 per cent. to that price will be
      applied.

      Unquoted equity investments
      (i)   All Early Stage Equity investments are valued at cost unless one of
            the following applies:
            (1)  performance indicates that there has been a permanent and
                 significant diminution in the valuation of the investment. If
                 this is the case, provisions in incremental tranches of 25 per
                 cent. of original cost will be made; or

            (2) a significant transaction involving an independent third party
                at arm's-length values the investment at a materially different
                value.
      (ii)  All Development Stage Equity investments are valued at cost, or cost
            less a provision, for at least one year unless this basis of
            valuation is unsustainable.

      Thereafter, they will be valued as follows:
         (1)   where available, either on the basis of a significant transaction
               by an independent third party in the equity of the investee
               company or an independent third party valuation of the equity; or

                                     34


         (2)   where a significant portion of the assets are held in real
               property on the basis of discounted net asset values; or

         (3)   where the investee company is performing significantly below
               expectations, at cost less provisions in incremental tranches of
               25 per cent.; or
         (4)   where the company is profitable and performing satisfactorily, on
               the basis of earnings (A) capitalised at an appropriate
               price-earnings multiple (B);
         (A)   the earnings of the investee company will be based on the latest
               audited accounts or management accounts where appropriate and
         (B)   the price-earnings multiple:

               - will take into account the capital and debt structure of the
                 investee company

               - will be based on either comparable company or industry sector
                 multiples taken from the relevant stock exchange

               - will be subject to a minimum discount of 25 per cent. to
                 reflect risk, the illiquidity of the investment and the
                 approximate nature of a valuation based on earnings unless
                 early realisation is expected in which case a smaller discount
                 will be applied.

      Unquoted loan stock and preference shares
      Loan stock and preference shares will be valued at cost plus any accrued
      interest and redemption premia less, in cases where the investee company
      is performing significantly below expectations, any provisions in
      incremental tranches of 25 per cent.

      Carried interest and management fees
      For the purpose of valuing the Company's holdings in the various Schroder
      Ventures' funds, management fees due to Schroder Ventures will be
      accounted for on the accruals basis. An estimate of Carried Interest, the
      allocation to Schroder Ventures of 20 per cent. 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' 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'
      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'
      funds will be credited to the Company's capital reserve when they are
      declared.

 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 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

                                     35



      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)   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 (d) above.

 i)   Capital reserves
      Capital Reserve - Realised


Notes to the Accounts continued

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.

   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.

                                     36


Notes to the Accounts continued

<TABLE>
<CAPTION>

2.     INCOME

                                                        For the         For the
                                                     year ended      year ended
                                                   30 June 2001    30 June 2000
                                                          Group           Group
                                                        GBP'000         GBP'000
        <S>                                                 <C>             <C>
        Income from fixed interest securities             3,564           5,235
        Dividends                                         1,403             456
        Interest receivable and similar income              541             432
        Income from administration services                 108               -
                                                          5,616           6,123

</TABLE>


<TABLE>
<CAPTION>

3.     EXPENSES


                                                       For the         For the
                                                    year ended      year ended
                                                  30 June 2001    30 June 2000
                                                         Group           Group
                                                       GBP'000         GBP'000
        <S>                                                <C>             <C>
        Administration and secretarial fees               376             378
        Bank loan facility fees                           359             217
        Staff costs                                        93               -
        Directors' remuneration (see note 4)              149              85
        General expenses                                  407             340
        Enlargement of operations costs                   840               -
        EDR listing costs                                 230             259
        Auditors' remuneration
        - audit                                            31              26
        - non-audit*                                      109              18
                                                        2,594           1,323

</TABLE>

* Fees for non-audit services include GBP90,000 in respect of the enlargement of
  operations, (2000: Include GBP12,000 in respect of the EDR listing).

<TABLE>
<CAPTION>


4.     DIRECTORS' REMUNERATION


                                For the       For the       For the         For the
                             year ended    year ended    year ended      year ended
                                30 June  30 June 2001       30 June    30 June 2000
                                   2001       Company          2000         Company
                                  Group       GBP'000         Group         GBP'000
                                GBP'000                     GBP'000
        <S>                         <C>           <C>           <C>             <C>
        J J McLachlan               50             50            25              25
        N E H Ferguson              15              5            10              10
        C J Govett                  18             18            10              10
        A J Habgood                 18             18            10              10
        E W Koning                  17             17            10              10
        D Raeburn                    1              1             -               -
        I P Sedgwick                15             15            10              10
        J Strangfeld                15             15            10              10


                                   149            139            85              85

</TABLE>

Details on Directors' emoluments are contained in the separate Remuneration
Report on pages 28 and 29.

                                     37


<TABLE>
<CAPTION>

5.     INTEREST PAYABLE


                                             For the         For the
                                          year ended      year ended
                                        30 June 2001    30 June 2000
                                               Group           Group
                                             GBP'000         GBP'000
          <S>                                    <C>             <C>
          Convertible bond interest                -             188
          Other interest                         224              63
                                                 224             251

</TABLE>


<TABLE>
<CAPTION>

6.     TAXATION

The charge for taxation on the net surplus of revenue for the year is made up
as follows:

Notes to the Accounts continued

                                                   For the         For the
                                                year ended      year ended
                                              30 June 2001    30 June 2000
                                                     Group           Group
                                                   GBP'000         GBP'000
      <S>                                              <C>             <C>
      Corporation tax                                    -              34
      Less: relief for overseas tax                      -            (34)
                                                         -               -
      Overseas tax                                     141              41
      Tax over-provided in previous years                -           (221)
                                                       141           (180)

</TABLE>

There are no profits chargeable to corporation tax in the current year
because 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. The amount of GBPNil (2000: GBP221,000) credited as an
adjustment to prior year's tax charges relates to similar excess management
expenses which reduce the Company's profits chargeable to corporation tax
provided in earlier years.
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>

7.     DIVIDENDS


                                                      For the         For the
                                                   year ended      year ended
                                                 30 June 2001    30 June 2000
                                                        Group           Group
                                                      GBP'000         GBP'000
  <S>                                                     <C>             <C>
  Final dividend of 1.80p (2000: 3.80p) per             1,841           3,886
  share

</TABLE>

The final dividend is based on 102,265,699 (2000: 102,265,699) ordinary
shares in issue and will be paid to shareholders on 26 November 2001, subject
to their approval at the Annual General Meeting.

                                     38



<TABLE>
<CAPTION>


8.     RETURN PER ORDINARY SHARE


                                                     For the year ended
                           For the year ended           30 June 2000
                                30 June 2001
             Revenue     Capital      Total     Revenue   Capital       Total
  <S>            <C>         <C>        <C>         <C>       <C>         <C>
  Return       2.60p    (44.07)p    (41.47)p      4.68p    125.87p    130.55p
  per
  ordinary
  share

</TABLE>

The basic revenue return per ordinary share is based on the net return on
ordinary activities after interest payable, taxation and minority interest of
GBP2,655,000 (2000: GBP4,729,000) and on 102,265,699 ordinary shares (2000:
100,931,523) being the weighted average number of shares in issue during the
year.

The capital return per ordinary share is based on the net deficit for the
year of GBP45,067,000 (2000: surplus of GBP127,044,000) and on 102,265,699
ordinary shares (2000: 100,931,523) being the weighted average number of
shares in issue during the year.


<TABLE>
<CAPTION>

Notes to the Accounts continued

9.     INVESTMENTS (GROUP)

                                          2001              2001         2001
                            Schroder Ventures'    Fixed Interest        Total
                                     Funds and         Portfolio    Portfolio
                                Co-Investments           GBP'000      GBP'000
                                       GBP'000
  <S>                                      <C>               <C>          <C>
  Cost brought forward                 294,775           123,585      418,360
  Unrealised gain
  brought forward                       32,435             2,724       35,159
  Valuation at the
  beginning of the year                327,210           126,309      453,519
  Calls and purchases
  payable                              155,371           351,516      506,887
  Distributions and
  sales receivable                    (51,889)         (452,218)    (504,107)
  Realised gain/(loss)                   5,465             (691)        4,774
  Unrealised loss                     (49,127)              (63)     (49,190)
  Valuation carried
  forward                              387,030            24,853      411,883
  Gains on investments

</TABLE>

<TABLE>
<CAPTION>
                                                            2001         2000
                                                         GBP'000      GBP'000
  <S>                                                        <C>          <C>
  Realised gain on
  investments based on
  historical cost                                        42,006      126,810
  Less: amounts
  recognised as
  unrealised in
  previous year                                         (37,232)     (40,424)
  Realised gain based
  on carrying value at
  previous balance
  sheet date                                               4,774       86,386
  Net movement in
  unrealised
  (losses)/gains                                        (49,190)       41,175
  Total (losses)/gains
  on investments                                        (44,416)      127,561

</TABLE>

                                     39


<TABLE>
<CAPTION>


Notes to the Accounts continued

10.     GEOGRAPHICAL ANALYSIS OF INVESTMENTS


                                        2001       2001       2000       2000
                                       Group    Company      Group    Company
                                     GBP'000    GBP'000    GBP'000    GBP'000
  <S>                                    <C>        <C>        <C>        <C>
  Schroder Ventures Funds and
  Co-Investments
  Europe
  United Kingdom                      16,892     15,795     22,340     20,237
  France                               2,427      2,427      5,825      5,825
  Germany                             10,122      5,415     15,031      8,974
  Italy                                4,995      4,995     25,072     25,072
  Spain                                1,994      1,994      2,083      2,083
  Pan Europe                         209,470    209,470    151,087    151,087
  Total Europe                       245,900    240,096    221,438    213,278
  Asia
  Asia Pacific                        30,700     16,447     39,472     15,989
  Japan                               21,700     17,586     14,226      9,464
  Total Asia                          52,400     34,033     53,698     25,453
  North America
  Canada                              31,710     31,710     16,002     16,002
  United States*                      57,020     57,020     36,072     36,072
  Total Americas                      88,730     88,730     52,074     52,074
  Total Venture Funds and
  Co-Investments                     387,030    362,859    327,210    290,805

</TABLE>

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

Included in the value of Total Ventures Funds and Co-Investments of GBP387.0m
are listed investments amounting to GBP46.1m.


<TABLE>

FIXED INTEREST INVESTMENTS

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

Sterling denominated                 2,222      2,222     32,332     32,332
Euro denominated                    12,300     12,300     60,624     60,624
US dollar denominated               10,331     10,331     33,353     33,353
Total Fixed Interest                24,853     24,853    126,309    126,309
Investments
Total Investment Portfolio         411,883    387,712    453,519    417,114

</TABLE>


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 funds are managed or advised by Schroder
Ventures.

                                     40


Notes to the Accounts continued

<TABLE>
<CAPTION>


11.     INVESTMENTS IN SUBSIDIARIES


                                                     2001       2000
                                                  Company    Company
                                                  GBP'000    GBP'000
          <S>                                         <C>        <C>
          Cost at the beginning of the year        24,012     24,012
          Acquisitions at cost                          -          -
          Capital injection                           750          -
          Cost at the end of the year              24,762     24,012
          Net unrealised gain on investment         5,432     15,527
          Market value at the end of the year      30,194     39,539

</TABLE>

<TABLE>
<CAPTION>

Subsidiary undertakings at 30 June 2001:


                                      Country of                 Number and       Group          Capital       Net revenue
                                   registration,                   class of     holding              and     after tax for
                                   incorporation               shares/units           %      reserves at    the year ended
                                             and                held by the                 30 June 2001      30 June 2001
                                       operation                      Group                      GBP'000           GBP'000
        <S>                                  <C>                        <C>         <C>              <C>               <C>
        Company and business
        Platinum Trust (unit
        trust)                            Guernsey   23,112,000 'A' units(1)          99           29,828               233
                                                        900,000 'B' units(1)          90

        Schroder Ventures                       UK         750,000 Ordinary          100              751              -(4)
        (London) Limited                                           Shares(2)
        - advisory and
        administration services
        Schroder Ventures North
        America Inc.                            US      500 Common Shares(3)         100               56              -(4)
        - broker/dealer

        (1)   On termination of the 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.

        (3)   Schroder Ventures North America Inc. ("SVNA") is a subsidiary of
              SVLL. SVLL acquired SVNA on 18 June 2001 for $50,000 and
              subsequently paid the Schroder Group a further $28,553 in respect
              of an increase in required capital for regulatory reasons.

        (4)   For the 12 days from 18 June 2001.


</TABLE>


<TABLE>
<CAPTION>

12.     DEBTORS

                                                  2001       2001     2000       2000
                                                 Group    Company    Group    Company
                                               GBP'000    GBP'000  GBP'000    GBP'000
         <S>                                       <C>        <C>      <C>        <C>
         Amounts falling due within one
         year:
         Deferred tax                              18          -        -          -
         Venture fund distributions
         receivable                                 -          -    1,758          -
         Interest receivable                       75         71      761        760
         Prepayments and other debtors            757        737       42         42
         Advance corporation tax recoverable        -          -      322        322
         Corporation tax recoverable                -          -       20         20
         Accrued administration fee income      2,051          -        -          -
         Other                                     32          -        -          -
                                                2,933        808    2,903      1,144

</TABLE>

                                     41



Notes to the Accounts continued

13.     CREDITORS

<TABLE>
<CAPTION>


                                          2001       2001     2000       2000
                                         Group    Company    Group    Company
                                       GBP'000    GBP'000  GBP'000    GBP'000
  <S>                                  <C>        <C>      <C>        <C>

Amounts falling due within one
year:
Other creditors and accruals             2,906        450      547        538
Proposed final dividend                  1,841      1,841    3,886      3,886
Venture Fund calls payable                   -          -      654        654
                                         4,747      2,291    5,087      5,078
</TABLE>

The Group has in place a multicurrency revolving loan facility of euro225
million which replaced the previous euro140 million facility. No drawdowns
have been made under either facility during the year (2000: euroNil).

14.      CONTINGENT LIABILITIES

The Company guarantees any drawings taken out by Platinum Trust under the
euro225 million loan facility (GBP135.4m, translated at the balance sheet
date). At 30 June 2001, euroNil was drawn under the facility (2000: euroNil).

15.     CAPITAL COMMITMENTS

At 30 June 2001, the Company had uncalled commitments to its venture fund
investments as follows:

<TABLE>
<CAPTION>

                                                    Uncalled         Uncalled
                                                   commitment     commitment*
                                             (local currency)            GBPm
  <S>                                            <C>               <C>

Schroder Ventures European Fund                     euro26.4m            15.9
Schroder Ventures European Fund II                 euro499.5m           300.7
Schroder Ventures International Life                   $29.4m            20.9
Sciences Fund II
Schroder Ventures US Fund                              $40.0m            28.4
Schroder Ventures Asia Pacific Fund                    $94.1m            67.0
The Japan Venture Fund III                          Y1,105.5m             6.3
Schroder Canadian Buy-Out Fund II                      C$0.9m             0.4
Schroder Canadian Buy-Out Fund III                    C$34.9m            16.4
Schroder UK Venture Fund IV                           GBP0.3m             0.3
Total                                                               GBP456.3m
</TABLE>

*Based on exchange rates at 30 June 2001

                                     42


Notes to the Accounts continued



16.     SHARE CAPITAL

<TABLE>
<CAPTION>

                                          2001       2001       2000       2000
                                         Group    Company      Group    Company
                                       GBP'000    GBP'000    GBP'000    GBP'000
  <S>                                  <C>        <C>        <C>        <C>

Authorised:
150,000,000 shares of GBP1.00          150,000    150,000    150,000    150,000
each
Allotted, Called Up and Fully
Paid:
Opening balance of 102,265,699
(2000: 98,966,319) shares of           102,266    102,266     98,966     98,966
GBP1.00 each
Issued on conversion of 'B'                  -          -      3,300      3,300
bonds
Closing balance of 102,265,699
(2000:102,265,699) shares of
GBP1.00 each                           102,266    102,266    102,266    102,266

</TABLE>

Options over ordinary shares

Options over 2,841,766 shares were granted during the year ended 30 June
2001. No options were exercised during the year. At 30 June 2001, 2,841,766
options to subscribe for ordinary shares were outstanding:

<TABLE>
<CAPTION>

Exercise price                 2001      2000
                             Number    Number
<S>                         <C>          <C>

410.0 pence per share     2,813,407         -
405.5 pence per share        28,359         -
                          2,841,766         -
</TABLE>

17.     SHARE PREMIUM ACCOUNT

<TABLE>
<CAPTION>


                                        2001       2001     2000       2000
                                       Group    Company    Group    Company
                                     GBP'000    GBP'000  GBP'000    GBP'000
<S>                                  <C>         <C>      <C>       <C>

Balance brought forward                7,453      7,453        -          -
Premium on conversion of 'B' bonds         -          -    7,453      7,453
Balance carried forward                7,453      7,453    7,453      7,453
</TABLE>

18.     CAPITAL REDEMPTION RESERVE

<TABLE>
<CAPTION>

                                            2001       2001     2000       2000
                                           Group    Company    Group    Company
                                         GBP'000    GBP'000  GBP'000    GBP'000
<S>                                      <C>        <C>      <C>        <C>

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

</TABLE>


19.     SHARE PURCHASE RESERVE

<TABLE>
<CAPTION>

                                         2001       2001      2000       2000
                                        Group    Company     Group    Company
                                      GBP'000    GBP'000   GBP'000    GBP'000
<S>                                   <C>        <C>       <C>        <C>

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

</TABLE>

                                     43


Notes to the Accounts continued

20.     CAPITAL RESERVE

<TABLE>
<CAPTION>


                                   2001        2001        2000        2000
                                  Group     Company       Group     Company
                                GBP'000     GBP'000     GBP'000     GBP'000
<S>                             <C>         <C>         <C>         <C>

Realised gains brought          219,005     207,129      80,093      70,393
forward
Realised gains on venture         5,465       5,256      87,909      84,215
fund distributions
Transfer on disposal             37,232      37,060      52,944      54,442
Other realised losses                 -           -         (3)         (3)
Realised losses on currency       (755)       (755)       (415)       (395)
balances
Realised exchange losses on
sale of fixed interest            (691)       (691)     (1,523)     (1,523)
securities
Realised gains carried          260,256     247,999     219,005     207,129
forward
Unrealised gains brought         34,997      46,414      46,865      56,082
forward
(Decrease)/increase in         (49,127)    (38,488)      38,451      32,288
unrealised gains on venture
funds
Transfer on disposal           (37,232)    (37,060)    (52,944)    (54,442)
(Decrease)/increase in
unrealised gains on
subsidiary
undertakings                          -    (10,095)           -       9,762
(Decrease)/increase in
unrealised exchange gains
on fixed interest
securities                         (63)        (63)       2,724       2,724
Minority interest-equity            104           -        (99)           -
Unrealised (losses)/gains      (51,321)    (39,292)      34,997      46,414
carried forward
                                208,935     208,707     254,002     253,543
</TABLE>

21.     REVENUE RESERVE

<TABLE>
<CAPTION>


                                   2001       2001     2000       2000
                                  Group    Company    Group    Company
                                GBP'000    GBP'000  GBP'000    GBP'000
<S>                             <C>        <C>      <C>        <C>

Balance brought forward           2,146      2,605    1,303      1,786
Transfer from revenue account       814        583      843        819
Balance carried forward           2,960      3,188    2,146      2,605

</TABLE>

As stated in note 1(b), the Company has not presented its own revenue
account. The net revenue after tax and before dividends dealt with in the
accounts of the parent company was GBP2,424,000 (2000: GBP4,705,000).

                                     44


Notes to the Accounts continued

22.     RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

<TABLE>
<CAPTION>

                                     2001        2001       2000       2000
                                    Group     Company      Group    Company
                                  GBP'000     GBP'000    GBP'000    GBP'000
<S>                               <C>         <C>        <C>        <C>

Net revenue available for           2,655       2,424      4,729      4,705
distribution
Dividends                         (1,841)     (1,841)    (3,886)    (3,886)
                                      814         583        843        819
Non-distributable capital        (45,067)    (44,836)    127,044    127,068
(loss)/gain for the year
Shares issued on conversion             -           -      3,300      3,300
of 'B' bonds
Share premium on conversion             -           -      7,453      7,453
of 'B' bonds
Net addition to shareholders'    (44,253)    (44,253)    138,640    138,640
funds
Shareholders' funds brought       461,125     461,125    322,485    322,485
forward
Shareholders' funds carried       416,872     416,872    461,125    461,125
forward
</TABLE>


23.     NET ASSET VALUE PER ORDINARY SHARE

Calculation of the net asset value per share is based on net assets of
GBP416,872,000 (2000: GBP461,125,000) and on 102,265,699 (2000: 102,265,699)
ordinary shares in issue at the year end.

24.     RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES

<TABLE>
<CAPTION>

                                                   2001      2000
                                                  Group     Group
                                                GBP'000   GBP'000
<S>                                             <C>       <C>

Net return before finance costs and taxation      3,022     4,800
Decrease/(increase) in accrued income               686     (632)
(Increase)/decrease in debtors                    (659)        22
(Decrease)/increase in creditors                  (284)       330
Net cash inflow from operating activities         2,765     4,520

</TABLE>

25.     ANALYSIS OF CHANGES IN NET FUNDS

<TABLE>
<CAPTION>

                                                     Cash
                                  Exchange       acquired
                                      loss             on
                         At             on       purchase                       At 30
                     1 July       currency             of                        June     At 1 July                 At 30 June
                       2000       balances   subsidiaries      Cash Flow         2001          1999     Cash Flow         2000
                    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             48          (755)            834            966        1,093            42             6           48
Short-term deposits  10,232              -              -        (4,134)        6,098        33,228      (22,996)       10,232

                     10,280          (755)            834        (3,168)        7,191        33,270      (22,990)       10,280

Debt due:
Within one year           -              -              -              -            -             -             -            -
After more than
one year                  -              -              -              -            -      (10,753)        10,753            -
Net funds            10,280          (755)            834        (3,168)        7,191        22,517      (12,237)       10,280

</TABLE>

                                     45


Notes to the Accounts continued

26.     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 cent. per annum of the first GBP50 million of net assets, (ii)
0.06 per cent. per annum of the next GBP50 million of such net assets and (iii)
0.04 per cent. of the remaining net assets. The agreement is subject to a 4
month notice period. The total fees, including VAT, paid or payable to SIM
for these services in respect of the year to 30 June 2001 was GBP267,000 (2000:
GBP257,000), of which GBP132,000 was outstanding at the year end.

Furthermore during the year SIM provided investment advice in respect of the
Company's enlargement of operations. The total fee including VAT paid or
payable for these services in respect of the ended 30 June 2001 was GBP88,000
of which GBP88,000 was outstanding at year end.

One of the Company's bankers is Schroder & Co. Limited. During the year
banking facilities provided by Schroders changed from J. Henry Schroder & Co
Limited to Schroder & Co Limited. The total interest received in the year to
30 June 2001 was GBP247,000 (2000: GBP325,000), and the cash balance held at 30
June 2001 was GBP433,000 (2000: GBP8,362,000).

In consideration for its management of the Company's fixed interest
portfolio, Schroder Investment Management (UK)Limited receives a fee based on
the average value of the Company's month-end cash and fixed interest
portfolio, calculated at the rate of 0.10 per cent. per annum on the first
GBP75 million of assets, 0.05 per cent. on the next GBP75 million and 0.03 per
cent. 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 30 June 2001 was GBP78,000 (2000: GBP121,000), of which GBP43,000 was
outstanding at the year end.

SIM has also provided investment trust dealing services. The total fees paid
or payable in the year to 30 June 2001 was GBP11,000 (2000: GBP2,000), of which
GBP4,000 was outstanding at the year end.

Mr J J McLachlan and Mr N EH Ferguson are members of the Advisory Committees
of certain of the Schroder Ventures' funds in which the Company invests.

Mr N E H Ferguson and members of his family have an interest in the Carried
Interest in respect of certain Schroder Ventures' funds, awarded prior to
January 2001.

27.     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 Schroder
Ventures' buy-out and development capital funds, which are managed and
advised by Schroder Ventures. In addition, the Company holds treasury bills,
cash and short-term deposits and various items such as debtors and creditors
that arise directly from its operations. The financial instruments held by
the Company are generally liquid.

                                     46


Notes to the Accounts continued

27.     RISK continued

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.

Interest rate risk

The Company's revenue will be affected by changes in prevailing interest
rates since the majority of its income derives from treasury bills and bank
deposit interest. The effect of interest rate changes on the valuation of
investments forms part of valuation risk, which is considered separately
below.


Financial assets of the Group
<TABLE>
<CAPTION>


                              Floating     Fixed     Non-interest     Total
                                  Rate      Rate          Bearing   GBP'000
                               GBP'000   GBP'000          GBP'000
<S>                           <C>        <C>         <C>            <C>

Currency denomination of
assets at 30 June 2001:
Sterling                        6,940      2,222          16,892     26,054
Euro                               17     12,300         229,008    241,325
US dollar                         229     10,331         119,430    129,990
Japanese Yen                        -          -          21,700     21,700
Other                               5          -               -          5
                                7,191     24,853         387,030    419,074
</TABLE>

<TABLE>
<CAPTION>

                             Floating      Fixed    Non-interest      Total
                                 Rate       Rate         Bearing    GBP'000
                              GBP'000    GBP'000         GBP'000
<S>                           <C>        <C>         <C>            <C>

Currency denomination of
assets at 30 June 2000:
Sterling                        2,454     32,332          22,340     57,126
Euro                            7,763     60,624         199,098    267,485
US dollar                          48     33,353          91,546    124,947
Japanese Yen                        -          -          14,226     14,226
Other                              15          -               -         15
                               10,280    126,309         327,210    463,799
</TABLE>

                                     47


Notes to the Accounts continued

27.     RISK continued

The floating rate assets consist of short-term deposits. The non-interest
bearing assets represent the venture fund portfolio and co-investments. 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:

Fixed rate financial assets
<TABLE>
<CAPTION>


                  30 June 2001        Weighted    30 June 2000       Weighted
                      Weighted         average        Weighted        average
                       average       period on         average      period on
                      Interest           which        Interest          which
                          rate   rate is based            rate        rate is
                                                                        based
<S>                    <C>        <C>              <C>               <C>

Euro                     4.26%         58 days           4.23%        93 days
US dollars               3.43%         68 days           6.71%        58 days
Sterling                 4.56%         45 days           5.73%        73 days

</TABLE>

The Company does not have any borrowings at the year end, although it does
have in place a loan facility of euro225 million with The Royal Bank of
Scotland 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.

Valuation risk

The Company's exposure to valuation risk comprises mainly movements in the
value of its underlying investments. A breakdown of the venture 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 34 to 36, 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 30 June 2001,
a 10% movement in the valuation of the Group's venture fund portfolio and
co-investments would result in a 9% 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 Schroder Ventures' 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
Schroder Ventures' funds. In a majority of the Schroder Ventures' 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 Schroder Ventures Fund, it will suffer
a resultant dilution in interest and possibly the compulsory sale of its
interest.

                                     48


<TABLE>
<CAPTION>

Consolidated Statement of Total Return - in Euros
(translated into euros - unaudited)


                       For the year ended              For the year ended
                          30 June 2001                   30 June 2000
               Revenue    Capital       Total    Revenue  Capital     Total
              euro'000   euro'000    euro'000   euro'000 euro'000  euro'000
<S>           <C>        <C>         <C>        <C>      <C>       <C>

Realised            -       7,762       7,762         -   137,934   137,934
gains on
investments
Unrealised          -    (79,989)    (79,989)         -    65,512    65,512
gains on
investments

Gains on            -    (72,227)    (72,227)         -   203,446   203,446
investments
Foreign             -     (1,228)     (1,228)         -     (662)     (662)
exchange
(losses)/gains
Income from     5,796           -       5,796     8,349         -     8,349
fixed
interest
securities
Income from     2,282           -       2,282       727         -       727
distributions
Interest        1,055           -       1,055       689         -       689
receivable
and similar
income
Expenses       (4,218)          -     (4,218)   (2,110)       (5)   (2,115)

Net return      4,915    (73,455)    (68,540)     7,655   202,779   210,434
before
finance
costs and
taxation
Interest        (364)           -       (364)     (400)         -     (400)
payable

Net return      4,551    (73,455)    (68,904)     7,255   202,779   210,034
on ordinary
activities
before
taxation
Tax on          (229)           -       (229)       287         -       287
ordinary
activities

Return on       4,322    (73,455)    (69,133)     7,542   202,779   210,321
ordinary
activities
after tax
for the year
Minority          (3)         169         166         -     (158)     (158)
interest -
equity

Return on       4,319    (73,286)    (68,967)     7,542   202,621   210,163
ordinary
activities
after tax
and minority
interest for
the year
attributable
to equity
shareholders

Dividends
Final          (3,058)          -     (3,058)   (6,137)         -   (6,137)
dividend per
ordinary
share
payable 26
November
2001

                1,261    (73,286)    (72,025)     1,405   202,621   204,026

Exchange          269      19,246      19,515       (8)     4,469     4,461
(loss)/gain
on
translation

Surplus         1,530    (54,040)    (52,510)     1,397   207,090   208,487
transferred
to reserves

Return per   euro0.04  euro(0.72)  euro(0.68)  euro0.07  euro2.01  euro2.08
ordinary
share
</TABLE>


The information on pages 49 to 51 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: euro1.6262 (2000: GBP1:
euro1.5949). The proposed dividend has been translated into euros at a rate
of GBP1: euro1.6613 (2000: GBP1: euro1.5793), being the closing rate at the
balance sheet date.

                                     49


<TABLE>
<CAPTION>

Balance Sheets - in Euros
(translated into euros - unaudited)


                              At 30 June 2001             At 30 June 2000
                              Group     Company           Group     Company
                           euro'000    euro'000        euro'000    euro'000
<S>                        <C>         <C>             <C>         <C>

INVESTMENTS
Venture funds and           642,973     602,820         516,763     459,268
co-investments
Fixed interest               41,288      41,288         199,480     199,480
investments
Investment in                     -      50,161               -      62,444
subsidiaries
                            684,261     694,269         716,243     721,192

CURRENT ASSETS
Debtors                       4,874       1,342           4,585       1,807
Cash at bank and             11,946         746          16,235      13,275
short-term deposits
                             16,820       2,088          20,820      15,082

CURRENT LIABILITIES
Creditors: amounts            7,885       3,806           8,034       8,019
falling due within
one year

NET CURRENT ASSETS            8,935     (1,718)          12,786       7,063

TOTAL ASSETS LESS           693,196     692,551         729,029     728,255
CURRENT LIABILITIES
Minority interest -           (166)           -           (158)           -
non-equity
Minority interest -           (479)           -           (616)           -
equity

NET ASSETS                  692,551     692,551         728,255     728,255

CAPITAL AND
RESERVES
Called up share             169,895     169,895         161,509     161,509
capital
Share premium                12,382      12,382          11,771      11,771
account
Share purchase                5,323       5,323         145,381     145,381
reserve
Capital redemption          152,929     152,929           5,060       5,060
reserve
Capital reserve             347,105     346,726         401,145     400,420
Revenue reserve               4,917       5,296           3,389       4,114

EQUITY                      692,551     692,551         728,255     728,255
SHAREHOLDERS' FUNDS

Net asset value per        euro6.77                    euro7.12
ordinary share
</TABLE>

The information on pages 49 to 51 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: euro1.6613 (2000: GBP1:
euro1.5793), being the closing exchange rate on the balance sheet date.

                                     50


<TABLE>
<CAPTION>

Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)


                                   For the year ended    For the year ended
                                         30 June 2001          30 June 2000
                                             euro'000              euro'000
<S>                                    <C>                   <C>

OPERATING ACTIVITIES
Income received from                            9,144                 8,177
investments
Bank interest received                            984                   581
Administrative expenses                       (5,631)               (1,549)

Net cash inflow from operating                  4,497                 7,209
activities

RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest paid                                   (364)                 (100)
Convertible bond interest paid                      -                 (600)

Net cash outflow from returns                   (364)                 (700)
on investments and servicing of
finance

TAXATION
Withholding tax paid                            (229)                  (65)
Foreign tax paid                                 (21)                     -
UK tax recovered                                  551                   896

Total tax recovered/(paid)                        301                   831

CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Purchase of fixed interest                  (571,622)           (1,206,751)
securities
Sale of fixed interest                        735,378             1,126,837
securities
Calls paid                                  (253,720)             (257,841)
Capital distributions received                 87,239               296,782

Net cash outflow from capital                 (2,725)              (40,973)
expenditure and financial
investment

EQUITY DIVIDENDS PAID
Dividends                                     (6,801)               (2,367)

Total dividends paid                          (6,801)               (2,367)

FINANCING
Realised exchange                             (1,228)                 (662)
(losses)/gains on currency
balances
Capital expenses                                    -                   (5)

Net cash outflow from financing               (1,228)                 (667)

NET CASH (OUTFLOW)/INFLOW                     (6,320)              (36,667)

</TABLE>

<TABLE>
<CAPTION>

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                   For the year ended    For the year ended
                                         30 June 2001          30 June 2000
                                             euro'000              euro'000
<S>                                   <C>                   <C>

(Decrease)/increase in cash                   (6,320)              (36,667)
during the year
Exchange movement on                              670                 2,049
translation
Cash acquired on purchase of                    1,361                     -
subsidiaries
Debt converted into equity                          -                15,236

Change in net funds                           (4,289)              (19,382)
Net funds at the beginning of                  16,235                35,617
the year

Net funds at the end of the                    11,946                16,235
year
</TABLE>

The information on pages 49 to 51 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: euro1.6262 (2000:
euro1.5949).

                                     51


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 and advised by Schroder
Ventures. The use of a benchmark is regularly reviewed by the Board. As a
result of the particular geographical and sectoral diversification of the
Company's venture fund portfolio and the nature of the investments made by
the Venture Funds, there is currently no independent benchmark which the
Directors consider appropriate for the Company.

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 are listed on the London Stock Exchange. The stock
exchange code for the shares is SVI. 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
dialing: 0906 843 1432. Calls are charged at 60p per minute at all times.

The net asset value is calculated at 31 December and 30 June 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 Newssheet is distributed to the shareholders
of the Company. The site also contains links to Schroder Ventures and
Schroders sites.

CAPITAL GAINS TAX INFORMATION

For the 2001/2002 tax year, the annual  capital gains of private  individuals in
excess of GBP7,500  (2000/2001:  GBP7,200) are assessed for capital gains tax at
20 per cent. where such gains, when added to the individual's  total income, are
below the basic rate limit of GBP29,400 (2000/2001:  GBP28,400) and 40 per cent.
where they exceed that limit.

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.

                                     52


ASSOCIATION OF INVESTMENT TRUST COMPANIES

The Company is a member of the Association of Investment Trust Companies,
which produces monthly publications of detailed information on the majority
of investment trusts. Copies of these publications can be obtained by
subscription on application to the Association of Investment Trust Companies,
Durrant House, 8-13 Chiswell Street, London EC1Y 4YY.

The aims of the Association are to protect and promote the interests of
member companies and their shareholders by:

*      taking specific action to safeguard and to improve the fiscal and
       regulatory regime for member companies and their shareholders

*      improving investor awareness of investment trusts through education,
       publicity and the provision of reliable statistical and other information

*      encouraging commitment to good practice and high professional standards
       in the industry.

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
Asia Pacific Fund plc, Schroder Emerging Countries Fund plc, Schroder Income
Growth Fund plc, Schroder Japan Growth Fund plc, Schroder Split Fund plc,
Schroder UK Growth 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 GBP3,000 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 117 Dundas Street, Edinburgh, Scotland
EH3 5ED. The helpline telephone number of Lloyds TSB Registrars is 0870 601
5366.

Lloyds TSB Registrars Scotland have recently launched a new web-based enquiry
service for shareholders. Initially 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.

                                     54


Information for Shareholders

<TABLE>
<CAPTION>
FINANCIAL CALENDAR

<S>          <C>
30 June      Company's year end
September    Preliminary results for the financial year published
September    Annual Report published
November     Annual General Meeting
March        Interim Results announced
April        Interim Report published
</TABLE>

<TABLE>
<CAPTION>
ANALYSIS OF REGISTER OF SHAREHOLDERS


                                         Shares
                                              %
<S>                                      <C>

At 30 June 2001
% of issued shares held by:
Private individuals                         1.40
Banks and Nominee Companies*               69.84
Pension Funds and Insurance Companies      19.70
Other Institutions                          9.06

                                          100.00

Total number of holders                    1,535
</TABLE>

*Some of the nominee company holdings include a large number of private
individuals.

                                     55


Notice and Agenda

NOTICE is hereby given that the fifth Annual General Meeting of Schroder
Ventures International Investment Trust plc will be held at 12.00 noon on
Thursday 22 November 2001 at 31 Gresham Street, London EC2V 7QA, to consider
and, if thought fit, pass the following resolutions, of which resolutions 1
to 9 will be proposed as Ordinary Resolutions and resolutions 10 and 11 will
be proposed as Special Resolutions:

1.     That the Report of the Directors and the Accounts for the year ended
       30 June 2001 be adopted.

2.     To declare a final dividend of 1.80p per share for the year ended 30
       June 2001.

3.     That Mr Denis Raeburn be elected as a Director of the Company.

4.     That Mr Peter Sedgwick be re-elected as a Director of the Company.

5.     That Mr John McLachlan be re-elected as a Director of the Company.

6.     That Mr Nicholas Ferguson be re-elected as a Director of the Company.

7.     That Ernst & Young LLP be re-appointed as Auditors of the Company.

8.     That the Board be authorised to agree the Auditor's remuneration.

9.     That, in substitution for the authority granted at the Company's
       Extraordinary General Meeting held on 3 May 2001, 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 GBP1,022,656 (equivalent to
               1 per cent. of the issued ordinary share capital of the Company
               as at 14 September 2001) in connection with the Schroder Ventures
               International Investment Trust plc Executive Share Option Plan
               2001; and

       (b)     up to an aggregate nominal amount of GBP34,088,566 (equivalent to
               one-third of the issued ordinary share capital of the Company as
               at 14 September 2001), 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.

10.     That, in substitution for the authority granted at the Company's
        Extraordinary General Meeting held on 3 May 2001, 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 the previous
        resolution, 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 GBP1,022,656 (equivalent to 1 per cent. of the issued
                ordinary share capital of the Company as at 14 September 2001)
                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 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

                                     56


Notice and Agenda continued

       (c)      the allotment (otherwise than pursuant to sub-paragraphs (a) and
                (b) above) of equity securities up to an aggregate nominal
                amount of GBP10,226,569 (equivalent to 10 per cent. of the
                issued ordinary share capital of the Company as at 14 September
                2001), 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.

11.     That the Company be and is hereby generally and unconditionally
        authorised in accordance with Section 166 of the Companies Act 1985 (the
        "Act") to make market purchases (within the meaning of Section 163 of
        the 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 15,329,628 (equivalent to 14.99 per cent. of the issued
                ordinary share capital of the Company as at 14 September 2001);

        (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)     the authority hereby conferred shall expire at the conclusion of
                the next Annual General Meeting of the Company unless such
                authority is renewed prior to such time; and

        (e)     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.

Registered Office:
31 Gresham Street
London EC2V 7QA

By Order of the Board
Schroder Investment Management Limited
Secretary

28 September 2001
                                 57



Notice and Agenda continued

NOTES

1.     A member of the Company entitled to attend and vote at the Meeting may
       appoint a proxy or proxies to attend and on a poll to vote in his or her
       stead. A proxy need not be a member of the Company. Forms appointing
       proxies must be lodged with the Company's Registrar not less than 48
       hours before the time appointed for the Meeting. The completion and
       return of a form of proxy will not preclude a member entitled to attend
       and vote in person at the Meeting from doing so if he or she wishes.

2.     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.

                                58



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.

                                 59


www.svitt.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 8925
              Fax 020 7658 3538          Fax 020 7240 5346



Schroder Ventures International Investment Trust plc - Report and Accounts
2001



<PAGE>

Exhibit 10.3         The Company's 2000 Report and Accounts


               Schroder Ventures International Investment Trust plc


                                           Report and Accounts 2000

Investment Objective

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 advised by and Schroder
Ventures.

www.svitt.co.uk                                     Report and Accounts 2000


Contents
                                                                         Page

  Directors and Advisers                                                    2
  Financial Highlights and Historical Record                                3
  Chairman's Statement                                                      4
  Portfolio Review                                                          6
  View from Schroder Ventures                                              12
  Twenty Largest Underlying Companies                                      14
  List of Investments                                                      19
  Report of the Directors                                                  23
  Statement of Directors' Responsibilities                                 25
  Corporate Governance                                                     26
  Report of the Auditors                                                   29
  Consolidated Statement of Total Return                                   30
  Balance Sheets                                                           31
  Consolidated Cash Flow Statement                                         32
  Notes to the Accounts                                                    33
  Consolidated Statement of Total Return (translated into euros -          47
  unaudited)
  Balance Sheets (translated into euros- unaudited)                        48
  Consolidated Cash Flow Statement (translated into euros -                49
  unaudited)
  Company Summary                                                          50
  Information for Shareholders                                             52
  Notice and Agenda                                                        53
  Amendments to the Articles of Association                                55
  Glossary                                                                 56

Directors and Advisers

DIRECTORS

John McLachlan*+ (Chairman) (aged 58) 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 a non-executive Director of
GT Income Growth Trust plc and House of Fraser Trustees 1994 Limited.

Nicholas Ferguson+ (aged 51) was appointed as a Director of the Company on 12
February 1996. He is Chairman of Schroder Ventures Limited and is responsible
for developing and co-ordinating the activities of Schroder Ventures
world-wide. He is a member of the investment committee for each of the
Schroder Ventures' funds.

John Govett+ (aged 56) was appointed as a Director of the Company on 12
February 1996 and is a non-executive Director of Derby Trust plc, Invesco
City & Commercial Trust plc, Schroder Emerging Countries Fund plc, Peel
Hotels plc and Rio Tinto Pension Investments Limited.

Anthony Habgood*+ (aged 53) was appointed as a Director of the Company on 12
February 1996 and is Chairman of Bunzl plc. He is also a non-executive
Director of PowerGen plc.

Edgar Koning*+ (aged 48) 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.

Peter Sedgwick+ (aged 64) was appointed as a Director of the Company on 12
February 1996 and is Chairman of Schroders plc, Schroder UK Growth Fund plc
and Invesco City & Commercial Trust plc. He is Vice President of The
Equitable Life Assurance Society and non-executive Director of certain other
companies.

John Strangfeld*+ (aged 47) was appointed as a Director of the Company on 12
February 1996 and is Chief Executive Officer of Prudential Global Asset
Management, responsible for all of Prudential's asset management activities.
In this capacity he is also Executive Vice President of the parent company,
The Prudential Insurance Company of America.

*     Member of the Audit and Management Engagement Committee.
+     Member of the Nomination Committee.

ADVISERS

Secretary and Registered Office
Schroder Investment Management Limited
31 Gresham Street
London EC2V 7QA
Telephone 020 7658 3206

Bankers
The Royal Bank of Scotland plc
Corporate Banking Office
5-10 Great Tower Street
London EC3P 3HX

Solicitors
Slaughter and May
35 Basinghall Street
London EC2V 5DB

Registrars
Lloyds TSB Registrars Scotland
117 Dundas Street
Edinburgh EH3 5ED
Telephone 0870 601 5366

Auditors
Ernst & Young
Rolls House
7 Rolls Buildings
Fetter Lane
London EC4A 1NH

Stockbrokers
Merrill Lynch International
20 Farringdon Road
London EC1M 3NH

                                        2


                   Financial Highlights and Historical Record


                          PERFORMANCE SINCE LAUNCH


                                          NAV    Share Price
                   30 June 2000         450.9          461.5
                   31 December 1999     362.8          318.5
                   30 June 1999         325.9          262.5
                   31 December 1998     287.8          152.5
                   30 June 1998         215.1            182
                   31 December 1997     198.6            166
                   30 June 1997         189.2          174.5
                   31 December 1996     190.1          193.5
                   30 June 1996         190.5            200
                   23 May 1996          193.3            194

<TABLE>
<CAPTION>


FINANCIAL HIGHLIGHTS TO 30 JUNE 2000

                                   30 June 2000    30 June 1999    Change %
<S>                                       <C>               <C>          <C>

Total assets (GBP'000)                  461,615         333,630       38.4%
Shareholders' funds (GBP'000)           461,125         322,485       43.0%
Net asset value per share                450.9p          325.9p       38.4%
Share price                              461.5p          262.5p       75.8%
Share price premium/(discount)             2.4%         (19.5%)           -
Dividends per share                        3.8p            1.5p      153.3%
Total expense ratio                        0.2%            0.2%           -
Market capitalisation (GBP'000)         471,956         259,787       81.7%
</TABLE>


<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE

                                Total assets    Shareholders'          Net asset           Price of    Share price
                                     GBP'000            funds    value per share    ordinary shares       premium/
                                                      GBP'000              pence              pence     (discount)
                                                                                                                %
<S>                                     <C>             <C>                 <C>                <C>             <C>

2000                                 461,615          461,125              450.9              461.5            2.4
1999                                 333,630          322,485              325.9              262.5         (19.5)
1998                                 230,822          219,730              215.1              182.0         (15.4)
1997                                 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>


<TABLE>
<CAPTION>

HISTORICAL RECORD TO 30 JUNE


                                Earnings    Dividends          Cost of
                                   pence        pence    running trust
                                                               GBP'000
<S>                                  <C>         <C>              <C>

2000                                4.68         3.80            1,326
1999                                2.35         1.50              878
1998                                2.06         1.30              664
1997                                1.58         1.92              728
1996 (launched 23 May 1996)          N/A          N/A              N/A

</TABLE>


Notes:
1. Total assets:                Total assets less current liabilities,
                                before deducting prior charges.
2. Potential gearing ratio:     Total assets divided by shareholders'
                                funds.
3. Cost of running trust:       Operating costs excluding interest payable.
4. Total expense ratio:         Operating costs excluding interest payable
                                (net of tax relief on those costs)
                                expressed as a percentage of average
                                shareholders' funds.
5. Capital changes:             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's Statement

OVERVIEW

I am pleased to report that the twelve months to 30 June 2000 represented
another very positive year for the Company.

Performance during the second half of the year was excellent, with the effect
that the Company's net assets increased by 43.0% during the year to 30 June
2000 and more than doubled in the two-year period between 1 July 1998 and 30
June 2000.

The highlights of the year to 30 June 2000 were as follows:-

*     Net asset value per share increased by 38.4% to 450.9 pence (June 1999:
      325.9 pence per share), allowing for the increase in share capital
      following the conversion of bonds during the year.

*     Realisations during the year were at significant premia to 30 June 1999
      valuations, including Across Wireless and SVIIT's remaining interest in
      Charles Vogele.

*     Considerable uplifts in the value of some of SVIIT's underlying
      companies during the year.

*     Major new fund commitments, including euro750 million to Schroder
      Ventures European Fund II.

*     Compound Annual Growth Rate of 23% in net assets per share, since
      launch in May 1996.

*     Euro-denominated receipt (EDR) to be issued in September 2000.

*     Investor relations web site launched at www.sviit.co.uk.

I am pleased to announce that a SVIIT euro-denominated receipt will be
issued in September 2000. This is the first listing of a depository receipt for
a company of this nature and has been undertaken in response to interest from
Continental European investors, who wish to access private equity investment
opportunities through SVIIT, but prefer to invest in a euro-denominated stock.

Furthermore, the growing interest of private investors and smaller
institutions has also led us to develop our investor relations web site,
www.sviit.co.uk, launched today, and to seek to ensure that our shares can be
traded through the CREST settlement system.

REALISATIONS

SVIIT has enjoyed strong realisations during the year to 30 June 2000, which
have contributed to the considerable growth in net assets. Two such
realisations were AU System and Across Wireless.

Through its fund investments, SVIIT's interest in these companies was
acquired in May 1999 as part of its investment in AU System Group. Due to the
nature of the companies in the group and their different exit plans, the
investment was structured as a demerger into three separate companies,
resulting in three separate new investments for the funds; AU System, Across
Wireless and iD2 Technologies.

In April, SVIIT's entire interest in Across Wireless was sold at a GBP42.1
million premium to the 30 June 1999 gross valuation. This was followed by the
successful flotation of AU System on the OM Stockholm Exchange in June, where
approximately a third of SVIIT's interest was sold. The proceeds of the
partial realisation in AU System, in addition to the value of the remaining
investment, represented an uplift of GBP20.3 million to the 30 June 1999 gross
valuation.

In addition to the above two realisations, the sale of iD2 Technologies was
announced in June, however the transaction did not complete until after the
year end.

NEW FUND COMMITMENTS

Substantial cash-flows from realisations during the year to 30 June 2000,
coupled with the Company's existing cash balances, have enabled SVIIT to make
significant commitments to new Schroder Ventures' funds. Uncalled commitments
to Schroder Ventures' funds have increased from GBP124.7 million at 30 June
1999 to GBP580.7 million at 30 June 2000.

The most notable commitment during the year was the euro750 million
commitment to the Schroder Ventures European Fund II, which is expected to
build on the success of the first Schroder Ventures European Fund. At 30 June
2000, the fund was 11.7% drawn-down and had made three investments, two of
which feature in SVIIT's Twenty Largest Underlying Companies. The fund is
expected to have a final closing in the fourth quarter of 2000 at a maximum
fund size of euro3.3 billion.

In addition, SVIIT has committed $135.6 million to Schroder Ventures Asia
Pacific Fund at its final closing in June 2000 and has made a $64.5 million
commitment to Schroder Ventures US Fund at its third closing in May 2000.
SVIIT has also agreed to commit approximately C$50 million to the Schroder
Canadian Buy-Out Fund III, which is expected to have its first closing later
in 2000.

                                        4

Chairman's Statement continued

EURO-DENOMINATED DEPOSITORY RECEIPT LISTING

As mentioned above, the Company will issue a depository receipt denominated
in euros, to provide for investors who have indicated that they would prefer
to invest in the Company via a euro-denominated stock. Each EDR will be
representative of one ordinary share, and will be traded in registered form.

CREST

Since the launch of the Company, the Company's shares have not been traded
through the CREST system. During the year, the Board has become increasingly
aware of the growing interest from private investors looking to gain exposure
to private equity through a vehicle such as SVIIT. In order to facilitate
future investment in the Company, particularly from private individuals who
use nominee accounts, the Board believes that the CREST settlement system
should be made available at this time for trading in the Company's shares. In
order for the Company's shares to be traded through the CREST system, the
Company's Articles of Association first require amendment. A resolution is
therefore proposed at the Annual General Meeting to adopt new Articles of
Association which provide for trading through the CREST system.

DIRECTORS' FEES

The Board continues to monitor the payment of fees to Directors. In order to
provide the Board with additional flexibility in the setting of Directors'
fees in the future, a resolution will be proposed at the Annual General
Meeting that the cap on the total amount of Directors' fees be increased from
GBP100,000 to GBP200,000.

WEB SITE

I am pleased to announce the launch of www.sviit.co.uk, a web site dedicated
to the Company. The site includes full information on the Company, background
information on Schroder Ventures, SVIIT's share price performance, recent
press releases and presentations on the Company, and in addition will provide
electronic copies of the Newssheet, Annual Reports and Interim Reports.

OUTLOOK

Performance during the year has been extremely positive.

The Company continues to enjoy realisations at significant premia to
valuations. This, coupled with the growth of the underlying portfolio, has
allowed the Company to make significant new commitments to Schroder Ventures'
funds. While the Company's cash balances remain high, it is anticipated that
these balances will be substantially reduced in the coming year as SVIIT's
uncalled commitments to Schroder Ventures' funds are drawn-down.

The underlying portfolio is now relatively immature -- 82% of investments
have been held for three years or less and 43% of the portfolio is valued at
cost. This, coupled with the conservative valuations of portfolio companies,
would suggest that there is still potential for continued growth.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held at 12 noon on Tuesday 5 December 2000
at the offices of Schroders plc at 31 Gresham Street, London, EC2V 7QA, and
will, as in previous years, include a presentation on the activities of the
Company.


John J. McLachlan
Chairman

                                        5

Portfolio Review

OVERVIEW

In the year to 30 June 2000, SVIIT's net assets increased by 43.0% to GBP461.1
million (30 June 1999: GBP322.5 million), comprising GBP327.2 million of fund
investments (30 June 1999: GBP226.4 million) and GBP133.9 million held directly
in cash and marketable securities (net of liabilities) (30 June 1999: GBP96.1
million).

This growth in net assets represents an increase of 38.4% in net asset value
per share to 450.9 pence (30 June 1999: 325.9 pence per share), allowing for
the increase in SVIIT's issued share capital, following the conversion of
bonds in November 1999 and the proposal of a dividend of 3.8p per share (30
June 1999: 1.5p per share).

The increase in net asset value over the year to 30 June 2000 has been partly
due to a number of substantial realisations, notably Across Wireless and
Charles Vogele, which respectively represented a GBP42.1 million and GBP17.2
million premium to gross valuations at 30 June 1999 (and GBP42.1 million and
GBP68.6 million premium to cost).

In addition, there have been considerable increases in the value of some of
SVIIT's underlying portfolio companies, in particular iD2, EEMS and Leica
Microsystems, which together represented a write up of GBP27.7 million during
the year. The sale of iD2 Technologies was announced on 28 June 2000,
however, the transaction did not complete until July and the valuation is
based on these proceeds.

Other notable write-ups were AU System and Ferretti, both of which floated in
June 2000. AU System listed on the OM Stockholm Exchange and approximately
one third of the investment was sold. The proceeds of this partial
realisation, together with the value of the remaining investment, represent
an uplift of GBP20.3 million to the 30 June 1999 gross valuation.

Ferretti was listed on the Milan Stock Exchange and approximately 65% of the
investment was realised. SVIIT's proceeds from the partial realisation, in
addition to the value of its remaining holding in the company, represent a
GBP15.2 million premium to the 30 June 1999 gross valuation and a GBP20.3
million premium to cost.

SVIIT's geographical exposure has become more diversified in the year, mainly
due to new investments made in Asia, the US and in the Life Sciences' sector.
However, SVIIT continues to have a significant exposure to Continental
Europe, which will continue with the commitment of euro750 million to the
Schroder Ventures European Fund II.

The portfolio comprises holdings in all 25 of Schroder Ventures' funds,
giving an underlying portfolio of 155 companies in 18 countries worldwide. A
small number of large investments constitute the majority of the portfolio,
with SVIIT's Twenty Largest Underlying Companies representing 70% of the
total fund investments (30 June 1999: 72%). The profile of SVIIT's Twenty
Largest Underlying Companies has changed considerably over the year with
eight new investments, the largest of which, AMS, represents 7.47% of net
assets.

Since its launch in May 1996, SVIIT has reported a compound net asset per
share growth of 23% per annum. There is still significant potential for
further growth, with six of SVIIT's Twenty Largest Underlying Companies and
43% of the total portfolio being valued at cost (30 June 1999: 29%), and 82%
of investments having been held for three years or less (30 June 1999: 74%).

CASHFLOW

Distributions receivable from realisations of GBP187.8 million in the year to
30 June 2000 stood at an average premium of 88% to the 30 June 1999
valuations. Distributions in the second half of the year stood at an average
premium of 48.5% to 31 December 1999 valuations.

Calls payable amounted to GBP162.3 million to fund 46 new and 64 follow-on
investments in the year. In addition, since the year-end, SVIIT has paid
calls of approximately GBP23 million.

FUND COMMITMENTS

SVIIT made commitments to three new Schroder Ventures' funds during the year
and at 30 June 2000 had total uncalled commitments of GBP580.7 million to eight
funds (30 June 1999: GBP124.7 million to seven funds).

                                        6


Portfolio Review continued


<TABLE>
<CAPTION>

                                                     Uncalled Fund Commitments


Fund                                                                         Amount Called        AmountSVIIT Uncalled
                                                                                    (Local      Uncalled   commitment*
                                                                                 Currency)        (Local   GBP million
                                                                                               Currency)
<S>                                                                                 <C>            <C>            <C>
Schroder Ventures European Fund                                                 euro162.7m     euro33.3m          21.1
Schroder Ventures International Life Sciences Fund II                             US$27.7m      US$53.9m          35.6
The Japan Venture Fund III                                                        Y1549.5m      Y1450.5m           9.1
Schroder Canadian Buy-Out Fund II                                                  C$16.6m        C$1.3m           0.6
Schroder UK Venture Fund IV                                                        GBP3.2m       GBP1.4m           1.4
Schroder Ventures Asia Pacific Fund                                               US$30.5m     US$105.1m          69.4
Schroder Ventures US Fund                                                         US$27.9m      US$36.6m          24.2
Schroder Ventures European Fund II                                               euro87.8m    euro662.2m         419.3
Total                                                                                                       euro580.7m

* Based on exchange rates at 30 June 2000


</TABLE>


In April 2000, SVIIT committed euro750 million to the Schroder Ventures
European Fund II, which was 11.7% called as at 30 June 2000 and is
anticipated to have a final closing in the fourth quarter of this year with a
maximum fund size of euro3.3 billion. It will, like its predecessor, focus on
European Buy-Outs and Buy-Ins, in addition to growth capital investments
(typically within the technology and life sciences sectors) and will target
mainly the technology, healthcare, consumer products and services and
industrial products sectors. As at 30 June 2000, the fund had already
invested in three companies, two of which, AMS and Hogg Robinson, are
included in SVIIT's Twenty Largest Underlying Companies. Since the year-end,
the fund has made one further investment, Kiekert, bringing the fund to 17.5%
drawn down at 31 August 2000.

SVIIT has also made a $64.5 million commitment to the Schroder Ventures US
Fund, which had its third closing in May 2000, and has indicated a commitment
of approximately 30% of any subsequent closings. The fund will target larger
development capital and mid-sized buy-outs in the US, with a sector focus on
media, telecommunications and technology sectors. US companies that seek
international expansion and international companies that intend to break into
the US market will be the primary targets. The fund is 43.5% drawn down and
its first two investments, Mesa Communications and ThoughtWorks feature in
SVIIT's Twenty Largest Underlying Companies.

In addition, during the year, the Schroder Ventures Asia Pacific Fund had a
final closing. SVIIT's commitment to this fund totalled $135.6 million. At 30
June 2000, the fund was 22.5% drawn down, with its first investment, Parkway
Holdings, featured in SVIIT's Twenty Largest Underlying Companies.
Portfolio Review continued

It is expected that SVIIT will make a commitment of C$50 million to the
Schroder Canadian Buy-Out Fund III, which is due to have its first closing
during 2000. The fund, which has a target size of C$150 million, will invest
principally in buy-outs, buy-ins, leveraged build-ups and development capital
opportunities in Canada.

GEOGRAPHICAL DISTRIBUTION

SVIIT's geographic exposure has become more diversified during the year, in
part due to new investments made by Schroder Ventures Asia Pacific Fund,
Schroder Ventures US Fund and Schroder Ventures International Life Sciences
Fund II. However, SVIIT continues to have a significant exposure to
Continental Europe, which will continue with the commitment of euro750
million to Schroder Ventures European Fund II.


<TABLE>
<CAPTION>

                     SVIIT: Analysis by Market

                               30 June 2000 30 June 1999
                               % (by Value) % (by Value)
<S>                                      <C>          <C>
Continental Europe                       49           62
UK                                       11            8
Far East/Asia Pacific                    13            8
International                            13           14
North America                            14            8

</TABLE>

                                       7


Portfolio Review continued

<TABLE>
<CAPTION>


                         EVCA Sector Analysis

                              30 June 2000 30 June 1999
                               % (by Value) % (by Value)
<S>                                     <C>          <C>
Consumer                                20           38
Medical/Health                          23           20
Computer & Other Electronics            34           16
Industrial Products & Services          10           11
Other Manufacturing                      3            4
Other Services                           5            2
Transportation                           3            5
Construction                             2            4

</TABLE>


INDUSTRIAL SECTOR

SVIIT has increased its exposure to investments in the computer and
electronics sectors, (see table above, EVCA Sector Analysis), with major new
investments such as AMS and ThoughtWorks, and rises in the value of
previously held portfolio companies including AU System, EEMS and iD2; all
these companies now feature in SVIIT's Twenty Largest Underlying Companies.
SVIIT's exposure to consumer related industries has fallen, principally due
to the realisation of Charles Vogele, however, this has been offset slightly
by the investment in Takko, the German retailer of fashionable "value for
money" clothing.


DEAL TYPE

As shown on the right, Management Buy-Outs continue to be the largest
transaction type by value, representing 60% of the portfolio (30 June 1999:
71%). There has also been an increase in development capital investments to
31% (30 June 1999: 13%), mainly due to the new investment in Mesa
Communications, in addition to AU System's increase in value.

PORTFOLIO MATURITY

As shown above, the average age of the portfolio has fallen during the year,
with 82% of investments held for three years and under (30 June 1999: 74%).


<TABLE>
<CAPTION>

             SVIIT: Investments by Stage (%)

                    30 June 2000    30 June 1999
<S>                            <C>             <C>
Early stage/
start-up                       5               5
Development                   31              13
Buy-outs                      60              71
Buy-ins                        4              11

</TABLE>

                                       8


Portfolio Review continued

<TABLE>
<CAPTION>

                       Investments in Companies (GBPm)                           Investments in Companies (GBPm)
                                30 June 2000                                           30 June 1999

                      W/Down    Cost        W/Up    Quoted                      W/Down     Cost      W/Up  Quoted
<S>                      <C>     <C>         <C>       <C>    <C>                  <C>      <C>       <C>     <C>
  1991 & prior           1.6     0.0         0.0       8.8    1990 & prior         1.5      0.0       3.7     0.0
  1992                   0.1     0.0         0.1       2.4    1991                 0.3      0.0       2.8     0.2
  1993                   0.0     0.0         0.4       4.0    1992                 0.0      0.0       0.4     4.9
  1994                   0.1     0.2         2.1       2.1    1993                 0.7      0.0       0.4     2.5
  1995                   0.4     0.0         3.2       4.7    1994                 0.3      0.2       5.1     4.0
  1996                   2.8     0.3        15.0       0.2    1995                 0.3      0.0      14.8     4.7
  1997                  11.7     1.0        13.8       3.7    1996                 0.8      0.1      17.8     0.5
  1998                   1.1     2.1        45.1       8.4    1997                 0.8     17.2      24.3    58.4
  1999                   0.0    14.5        18.7      38.8    1998                 3.1     21.1       7.6     1.1
  2000                   0.0   122.9         0.0       0.0    1999                 0.0     17.7       0.0     0.0


</TABLE>


SVIIT VALUATION BASIS

The chart below shows that there is still considerable potential for future
up-lifts in the value of those companies that are held at cost, which include
six of SVIIT's Twenty Largest Underlying Companies.

The valuation of most companies using a quoted, PE and third-party offer
basis involves the application of a range of discounts to reflect expected
timing of exits or lack of liquidity in a company's equity. As at 30 June
2000, the weighted average discount applied to the gross values of quoted and
written up companies was 24% (30 June 1999: 27%). Last year the higher
average reflected discounts applied to specific major investments which have
now been sold or are valued on a different basis.

The weighted average PE multiple used in valuing the underlying portfolio
companies was 13.8 (30 June 1999: 13.0). After the application of a range of
discounts which average 28% (30 June 1999: 33%), investments valued on a PE
basis are effectively valued at 9.9 times earnings (30 June 1999: 8.7).

SVIIT PORTFOLIO PERFORMANCE

The Company's return on its holdings of Schroder Ventures' funds is
summarised below;


        Year ended                         30 June 2000    30 June 1999
                                                   GBPm            GBPm
        Opening Valuation                         226.4           152.1
        Calls Paid                                162.3            49.2
        Distributions received                  (187.8)          (80.9)
                                                 200.9            120.4
        Increase in value of portfolio            126.3           106.0
        Closing portfolio                         327.2           226.4

Distributions of GBP187.8 million receivable in the year were at an average 88%
premium to the 30 June 1999 values of GBP99.9 million. Distributions in the
second half of the year stood at an average premium of 48.5% to 31 December
1999 valuations. The return on the portfolio in the year was 56% in Sterling
terms and 55% in local currencies.

<TABLE>
<CAPTION>

               Portfolio Valuation Basis                                      Portfolio Valuation Basis
                      30 June 2000                                                  30 June 1999
                                     % (by Value)                                                  % (by Value)
<S>                                     <C>                    <C>                                    <C>
Cost                                    43                     Cost                                   29
W/up: P/E                               23                     W/up: P/E                              27
W/up: 3rd Party                          7                     W/up: 3rd Party                         7
Quoted                                  22                     Quoted                                 34
W/Down                                   5                     W/Down                                  3

</TABLE>

     Under British Venture Capital Association (BVCA) valuation guildlines,
   investments are normally carried at cost for at least the first 12 months
                               after acquisition.


                                       9


Portfolio Review continued

CASH AND MARKETABLE SECURITIES

At 30 June 2000, the Company's gross cash balance of GBP136.6 million (30 June
1999: GBP117.3 million) was held principally in a portfolio of short-dated
treasury bills, denominated in currencies that broadly match, in percentage
terms, the currency exposure of outstanding fund commitments, adjusted for
anticipated short term cash flows. The overall performance of Sterling during
the year resulted in a gain on exchange on cash and marketable securities of
GBP0.7 million.

FUND TRANSACTIONS

The number of underlying companies held by Schroder Ventures' funds increased
to 155 from 149 in the year reflecting a total of 46 new investments and 40
full realisations.

Portfolio Review continued

Eight new investments are included in SVIIT's Twenty Largest Underlying
Companies, among them AMS, Hogg Robinson and Takko.

"Public to private" transactions featured in the portfolio during the year.
Funds advised by Schroder Ventures completed two such transactions during the
year, AMS (Austria) and Hogg Robinson (UK). In addition, since the year end
funds advised by Schroder Ventures have announced a public to private
transaction in Germany (Kiekert). SVIIT's share of this investment will be
approximately GBP12 million, representing approximately 3% of net assets (based
on 30 June 2000 published figures). This transaction is subject to
shareholder and regulatory approval.

In addition, since 30 June 2000, funds advised by Schroder Ventures have led
the $2.35 billion agreed bid for Veba Electronics Group from E.ON AG. Under
the terms of the agreement, Schroder Ventures and other investors will
acquire the Memec Group, a global specialist semiconductor distribution
company. The company had 1999 sales of $1.8 billion and 2,300 employees based
in 40 countries. SVIIT's share of this investment will be approximately GBP60
million and the Memec Group will be the largest of SVIIT's portfolio
companies, representing approximately 13% of net assets (based on 30 June
2000 published figures). The agreement is conditional on receiving
competition authority clearances.

There have been a number of significant realisations during the year,
including Across Wireless (full), AU System (partial) and Ferretti (partial).

SVIIT's shares of major realisations by the funds during the year were as
shown below;

<TABLE>
<CAPTION>


Company               Realisation    30 June 1999
                            Value       Valuation      Cost
                          GBP'000         GBP'000   GBP'000
<S>                          <C>            <C>        <C>

Charles Vogele             74,857          57,676     6,274
Across Wireless            43,052             915       915
Ferretti                   13,775          3,723*      384*
MSH International          13,355          10,151     1,384
Tetley                     10,861          10,569     5,965
AU System                   9,382          3,234*    3,234*

</TABLE>


*     costs and valuations as at 30 June 1999 have been pro rated to reflect
      the residual holding. Significant uplifts in value of portfolio companies
      included;

<TABLE>
<CAPTION>


Company                30 June 2000    30 June 1999    Change in
                          Valuation       Valuation         Year
                            GBP'000         GBP'000      GBP'000
<S>                            <C>             <C>          <C>

AU System                    21,014          6,838*       14,176
Leica Microsystems           18,544          11,877        6,667
ID2                          12,393             746       11,647
EEMS                         11,121           1,732        9,389
Ferretti                      7,124          2,004*        5,120

*     valuations as at 30 June 1999 have been pro rated to reflect the
      residual holding.
</TABLE>

The sale of iD2 was announced in June 2000, however the transaction did not
complete until after the year end. The valuation is the sum of the proceeds
received.

AU System was listed on the OM Stockholm Exchange in June 2000 and
approximately one third of the investment was sold, the remainder being
subject to a lock-in period of six months.

Ferretti was listed on the Milan Exchange in June 2000 and approximately 65%
of the investment was sold. A further 15% of the investment was sold in July
2000, with the remainder being subject to a lock-in period of six months.
Leica Microsystems continues to perform well and is now valued on a PE basis.
At 30 June 1999, the valuation basis was cost.

                                 10

Portfolio Review continued

Funds advised by Schroder Ventures invested in EEMS in May 1999. The company
has been revalued from cost for the first time and the valuation reflects the
company's improved performance during the year.

There have been some write-downs in the portfolio during the year. These have
included;

<TABLE>
<CAPTION>

Company                   30 June 2000    30 June 1999    Change in
                             Valuation       Valuation         Year
                               GBP'000         GBP'000      GBP'000
<S>                               <C>             <C>          <C>

Sirona Dental Systems           10,678          13,916      (3,238)
Datentechnik                     2,364           4,872      (2,508)

</TABLE>


Sirona had been re-valued at a 25% discount to cost in the first half of the
year, due to difficulties in the restructuring of the dental distribution
company, coupled with a downturn in the German dental market. No further
reduction in value was considered necessary at 30 June 2000.

Datentechnik's valuation reflects a fall in the quoted share price.

CONCLUSION

Performance during the year to 30 June 2000 has been excellent, with a
capital return on the portfolio of 56% and an increase of 38.4% in net asset
value per share. This has not only been the result of realisations such as
Charles Vogele and Across Wireless, but also due to the revaluation of
certain portfolio investments, notably AU System, iD2, Ferretti, Leica
Microsystems and EEMS.

SVIIT has made considerable commitments to new Schroder Ventures' funds in
the year, bringing its total uncalled commitments to GBP580.7 million. SVIIT
continues to have large cash balances, primarily due to the significant
realisations received during the year. However, it has paid calls of GBP162
million during the year, a significant increase on last year (30 June 1999:
GBP49 million) and since the year end, SVIIT has paid calls of approximately
GBP23 million, further reducing its cash balances.

SVIIT's exposure to Continental Europe continues to dominate the portfolio.
Whilst this is expected to continue, especially in light of SVIIT's
commitment of euro750 million to Schroder Ventures European Fund II, the
portfolio's geographical exposure is diversifying reflecting SVIIT's
commitments to new Schroder Ventures' funds, namely in Asia, US and the Life
Sciences' sector. The portfolio's weighting to computer and other electronic
markets has doubled in the year. This is not only attributable to major new
investments, but also significant increases in value of existing portfolio
companies in these sectors.

SVIIT has now reported compound annual net asset growth per share of 23%
since its launch in May 1996 and there is still significant potential for
continued growth, with 43% of the investments valued at cost and 82% of the
investments held for three years and under.

                                 11

View from Schroder Ventures

GLOBAL OVERVIEW

Private equity has been one of the most rapidly growing asset classes over
the last ten years. In 1999, commitments to private equity reached a new
record with approximately $127 billion raised for investment in the US, Asia
and Europe. The US, being the most mature private equity market, still
accounts for the majority of funds raised, but there have been recent strong
increases in the supply of funds to the European market.

Historically, growth in this asset class has been driven by the ability of
private equity firms to generate returns which significantly outperform
comparative quoted markets over the medium to long term.

A more recent driver, however, is the establishment of international private
equity (i.e. non-US private equity) as an asset class (see below).
Allocations are increasing and new markets are being sought to accommodate
this capital.

<TABLE>
<CAPTION>


Investment Profile: Most Attractive Investment
Type over the Next Three Years (US Investors) %

                        Venture      Leveraged      General      Mezzanine
                        Capital        Buyouts      Private      Financing
                                                     Equity
<S>                        <C>            <C>           <C>            <C>

North
America                    28.1           11.2          9.9            5.3
Developed
International               8.9           14.1         10.3            1.5
Emerging
International               1.9            3.6          4.6            0.6
                           38.9           28.9         24.8            7.4

</TABLE>

Source: 1999 Goldman Sachs & Co. and Frank Russell Company Report on
Alternative Investing

Outside the US and Europe the industry is still at a less developed stage. In
Eastern Europe, US and European government and quasi-government bodies have
raised funds and these are now being followed, albeit to a limited extent, by
some private funds. The Asia Pacific region is relatively well served by
private equity funds, although the pool of available capital is small
compared to Western Europe and the US. Latin America is also emerging as a
market in its own right.

The year 2000 has been dominated by the technology and internet sectors. The
steep increase in valuations of quoted companies, especially in the
technology sectors, in the first quarter receded in the second quarter, with
valuations in some sectors falling by up to 90% as public markets fell-in
line with the "correction" on NASDAQ. Since then, mainly spearheaded by
renewed interest in the technology, media and telecoms sectors, quoted
markets have recovered somewhat.

Despite the turbulent public markets and reduced opportunities for private
equity managers to realise investments via IPOs, funds advised by Schroder
Ventures have realised a number of holdings in companies via IPO, for
example, AU System (partial), Ferretti (partial) and CHL (partial).

EUROPE

Largely driven by the convergence of the markets and the effect of the euro,
Continental Europe continues to be an attractive opportunity for private
equity investment. Approximately euro24.5 billion was raised in 1999 for
private equity investment, an increase of 25% year on year and a 220%
increase since 1996. The year 2000 is set to be another record breaking year
for private equity fund raising, with around euro21 billion being raised in
the first six months of 2000.

Whilst representing almost 50% of funds raised for private equity in Europe,
commitments to buy-out funds decreased marginally in 1999 to euro11.8 billion
(1998: euro12 billion). Commitments to venture capital funds tripled to
euro8.4 billion, mainly driven by the rapid pace of technological change. Of
the funds raised for venture capital, euro3.4 billion was earmarked for
investment for expansion/development capital, an increase of 100% and euro5.1
billion was earmarked for high technology investment, three times the amount
raised in 1998.

                        Expected Allocation of Funds Raised -
                                   Europe 1999


                                                             %
                  High Tech Early Stage                   19.9
                  Non High Tech Early Stage                1.9
                  High Tech Expansion/Development         13.2
                  Non High Tech Expansion/Development     12.5
                  Buy out                                 46.6
                  Non Available                            5.8
Source: EVCA

The strong trend apparent in 1999 of smaller/medium sized UK companies
looking to move from public listing to private ownership looks set to
continue as more mature companies in "undervalued" sectors struggle for a
share of voice and a share of funding. In 1999, there were approximately 50
public to private deals and this year more than ten have been completed in
the UK, with others on the way. This trend is filtering into the European
marketplace and funds advised by Schroder Ventures have announced three
public to private transactions in the first half of 2000, AMS (Austria),
Kiekert (Germany) and Hogg Robinson (UK).

As the need to create value increases in order to support successful bids at
auction, another emerging trend is joint deals with corporate buyers are
becoming more commonplace. Funds advised by Schroder Ventures have already
announced one such deal, the agreed purchase of the VEBA Electronics Group
with a consortium that included Arrow Electronics, Inc. and Avnet, Inc.
On the exit side, despite uncertainty in public markets, disposals during the
year have been strong, across all sectors.

                                  12

View from Schroder Ventures continued

NORTH AMERICA

After a record $95 billion was raised in 1999 for private equity in the US,
commitments to US private equity funds have continued their rapid pace in the
first half of 2000 with nearly $70 billion being committed to 174 funds.
These commitments have easily exceeded the amounts raised in the first half
of 1998 and 1999, and puts 2000 on course for a seventh year of
record-breaking fund raising activity.

                               Commitments to Funds ($US billions)

                                First half 2000    First half 1999
             All Funds                     69.7               28.5
             Venture Funds                 25.2                9.3
             Buy-Out Funds                 34.8               16.2

Despite the large amounts of capital being committed to private equity funds,
investors are being selective. First-time funds and new management teams have
found it difficult to raise equity, while existing funds and existing
management teams with strong track records have had greater success.

Like Europe, the profile of US funds raised in 1999 changed with commitments
to buy-out funds decreasing by 36% to $39 billion, the first decline since
1991, and commitments to venture capital funds jumping 87% to $36 billion.
Fundraising in 2000 is on track to follow the same trend and whilst buy-out
funds look set to continue to dominate the US private equity market,
commitments to venture capital funds in the first half of 2000 have exceeded
the total amount raised for venture capital in 1999.

The interest in taking public companies private is gathering pace in the US
also, with almost $10.2 billion committed this year to privatise a number of
public companies. This compares to $5 billion for the same period last year
and approximately $3 billion for the whole of 1998.

The public markets have recovered from their sharp April declines. Both the
Dow Jones Industrial Average and NASDAQ are at, or near, where they were at
the beginning of the year, although NASDAQ is still down from its record high
set earlier this year. Moreover, companies with large cash requirements
continue to remain depressed as private equity managers focus on paths to
profitability.

The IPO market has improved slightly, but remains selective in the new issues
being offered, while the high yield market remains closed to most issuers.
These factors have contributed to a significant increase in deal flow as
companies in need of financing seek alternative sources.

ASIA PACIFIC

The private equity industry in Asia has received considerable interest during
2000. Many new funds have been established, often by new management groups.
Public perceptions of the role of private equity in the region as a whole
have been raised by the establishment of some particularly high profile
direct investment pools, several of which are listed Hong Kong entities.

There is increased focus on technology investment, with several large
technology focused funds established in 2000. This focus mirrors themes that
have been seen in other developed private equity markets and is mainly a
response to the increased international attention focused on high technology
resources in Asia and in particular in India, where many new businesses have
grown up in the software industry.

Even with the increase in funds raised targeting investment opportunities in
Asia, the markets are still relatively under-served by private equity capital
and scope for attractive pricing of investments remains.

JAPAN

As economic conditions and government deregulation continue to improve, many
private equity managers are looking to Japan as the potential new growth
market. In anticipation of this, there have been a number of new entrants in
the Japanese buy-out market.

With the restructuring of corporate Japan and corporations focusing on their
core businesses, M&A transactions have almost tripled since 1995. This has
been a major catalyst for increasing buy-out activity in Japan - of the eight
Management Buy-Outs to be completed since 1995, five of these have occurred
within the last year. Three of them were led by Schroder Ventures.

On the exit side, new public markets, such as "Mothers" (Market for High
Growth and Emerging Stocks) and NASDAQ Japan will provide additional exit
opportunities for private equity firms. Of the 200-250 companies expected to
go public in 2000, 50-100 are expected to list either on NASDAQ Japan or
Mothers.

                                  13

Twenty Largest Underlying Companies


1.     AMS                          AMS Picture
       (AUSTRIA)
Company (GBP000's)
Cost                       33,238
Value                      34,427
Date of Acquisition     June 2000

AMS designs, manufactures and sells semiconductor speciality products,
focussing 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 cost
in fund currency; the holding represents 7.47% of SVIIT's net assets.

2.     HOGG ROBINSON                 Hogg Robinson
       (UK)                               Picture
Company (GBP000's)
Cost                        29,253
Value                       29,905
Date of Acquisition      June 2000

Hogg Robinson is a "business to business" 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
cost in fund currency; the holding represents 6.49% of SVIIT's net assets.

3.     AU SYSTEM GROUP                AU System Group
       (Sweden)                             Picture
Company (GBP000's)
Cost                          6,838
Value                        21,014
Date of Acquisition        May 1999

AU System is a consultancy and software development business focussed on
value added solutions. The business has expertise in advanced wireless
technologies. On 21 June 2000 the company was listed on the OM Stockholm
Exchange and approximately one third of the investment was sold, the
remainder being subject to a lock-in period of six months. The valuation
basis is quoted; the holding represents 4.56% of SVIIT's net assets.

4.     LEICA MICROSYSTEMS                   Leica Microsystems
       (GERMANY)                                   Picture
Company (GBP000's)
Cost                               11,611
Value                              18,544
Date of Acquisition            March 1998

Leica manufactures and supplies microscopes and related equipment for the
healthcare, research and semi conductor industries. The company has leading
positions in most of its markets and a strong track record in product
innovation. The valuation basis is PE; the holding represents 4.02% of
SVIIT's net assets.

                                  14


Twenty Largest Underlying Companies continued

5.     TAKKO                         TAKKO Picture
       (GERMANY)
Company (GBP000's)
Cost                        17,846
Value                       18,014
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 cost in fund currency; the
holding represents 3.91% of SVIIT's net assets.

6.     ID2 TECHNOLOGIES                 ID2 TECHNOLOGIES Picture
       (SWEDEN)
Company (GBP000's)
Cost                              749
Value                          12,393
Date of Acquisition         Sept 1998

iD2 develops and sells software for data protection over the internet. The
key applications are in payment transactions (e.g. internet banking) and
e-commerce. iD2's products allow network users to be identified and
authenticated. The investment was fully realised in early July 2000 and the
valuation is based on these proceeds; the holding represents 2.69% of SVIIT's
net assets.

7.     EEMS                        EEMS Picture
       (ITALY)
Company (GBP000's)
Cost                       1,750
Value                     11,121
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 PE; the holding
represents 2.41% of SVIIT's net assets.

8.     SIRONA DENTAL SYSTEMS GROUP                  SIRONA DENTAL SYSTEMS
       (GERMANY)                                         GROUP Picture
Company (GBP000's)
Cost                                    14,262
Value                                   10,678
Date of Acquisition                   Nov 1997

Sirona is a manufacturer of professional dental equipment and the only major
dental manufacturer 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. The company continues to restructure.
The valuation basis is write down; the holding represents 2.32% of SVIIT's
net assets.

                                  15

Twenty Largest Underlying Companies continued


9.     PARKWAY HOLDINGS                PARKWAY HOLDINGS Picture
       (SINGAPORE)
Company (GBP000's)
Cost                           9,622
Value                         10,176
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 2.21% of SVIIT's net assets.

10.     MESA COMMUNICATIONS                  MESA COMMUNICATIONS Picture
        (USA)
Company (GBP000's)
Cost                                 9,282
Value                                9,696
Date of Acquisition             March 2000

Mesa is an independent owner and manager of wireless communication towers,
growing aggressively through acquisition and development in the US. The
valuation basis is cost in fund currency; the holding represents 2.10% of
SVIIT's net assets.

11.     BETTS GROUP HOLDINGS                BETTS GROUP HOLDINGS
        (UK)                                         Picture
Company (GBP000's)
Cost                                6,323
Value                               8,119
Date of Acquisition              Nov 1998

Betts is a specialist packaging and injection-moulding business focused on
the pharmaceutical and oral care markets. Betts makes toothpaste and
pharmaceutical tubes, asthma inhalers and other specialised packaging in
plants located in the UK, US, Poland and Asia. The valuation basis is PE; the
holding represents 1.76% of SVIIT's net assets.

12.     WASHTEC                       WASHTEC
        (GERMANY)                     Picture
Company (GBP000's)
Cost                       5,939
Value                      7,912
Date of Acquisition     Feb 1998

Washtec was formed from the merger of California Kleindienst and Wesumat, and
is the global leader in the manufacture of car wash equipment. Schroder
Ventures' funds had previously invested in California Kleindienst. The
valuation basis is quoted; the holding represents 1.72% of SVIIT's net
assets.

                                 16

Twenty Largest Underlying Companies continued


13.     FERRETTI                     FERRETTI
        (ITALY)                       Picture
Company (GBP000's)
Cost                         206
Value                      7,124
Date of Acquisition     Feb 1998


Ferretti is a producer of luxury motor yachts. The company's current position
is built on a series of acquisitions, mainly in Italy. A strong sales order
book has ensured growth, with sales mainly within Europe (70%) and the US
(25%). The company floated on the Milan Stock Exchange on 23 June 2000 and
approximately two thirds of SVIIT's investment was realised. The valuation
basis is quoted; the holding represents 1.54% of SVIIT's net assets.

14.     COMACT                                       COMACT
        (FORMERLY GBA INDUSTRIAL EQUIPMENT)          Picture
        (CANADA)
Company (GBP000's)
Cost                                        2,725
Value                                       6,282
Date of Acquisition                     June 1997

Comact is a leading Canadian manufacturer of industrial equipment for the
sawmill, paper, hydroelectric and aluminium industries, with 75% of
consolidated revenues arising from sales of sawmill equipment. The valuation
basis is PE; the holding represents 1.36% of SVIIT's net assets.

15.     THOUGHTWORKS                      THOUGHTWORKS
        (USA)                               Picture
Company (GBP000's)
Cost                          4,980
Value                         5,251
Date of Acquisition      April 2000

ThoughtWorks is an internet professional services provider, specialising in
the delivery of highly strategic, web-based systems development and systems
integration solutions for Fortune 1000 companies. The company focuses on the
"business to business" segment of the internet services industry. The
valuation basis is cost in fund currency; the holding represents 1.14% of
SVIIT's net assets.

16.     LAS INTERNATIONAL                   LAS INTERNATIONAL
        (JAPAN)                                  Picture
Company (GBP000's)
Cost                             2,789
Value                            3,982
Date of Acquisition           Dec 1993

LAS International has holdings in several companies, the most valuable by far
being Sazaby, a Japanese retailer of consumer products and services. Sazaby
was floated on the Japanese OTC market in September 1997. The valuation basis
is quoted; the holding represents 0.86% of SVIIT's net assets.

                                 17

Twenty Largest Underlying Companies continued


17.     FAVORITE RESTAURANTS                FAVORITE RESTAURANTS
        (ASIA)                                   Picture
Company (GBP000's)
Cost                                3,130
Value                               3,851
Date of Acquisition              Dec 1996

Favorite operates KFC and Pizza Hut franchises in South East Asia. The
strategy is to grow each operation organically and to seek market
development. The company continues to perform well. The valuation basis is
PE; the holding represents 0.84% of SVIIT's net assets.

18.     ARMATURE                                     ARMATURE
        (UK)                                          Picture
Company (GBP000's)
Cost                       3,605
Value                      3,771
Date of Acquisition     Feb 2000

Armature develops and implements retail supply chain software for large food,
drug and hardware retailers in the UK, Europe and North America. The
valuation basis is cost in fund currency; the holding represents 0.82% of
SVIIT's net assets.

19.     ORCHID CHEMICALS AND                       ORCHID CHEMICALS AND
        PHARMACEUTICALS                            PHARMACEUTICALS Picture
        (INDIA)
Company (GBP000's)
Cost                                  4,492
Value                                 3,684
Date of Acquisition                Nov 1999

Orchid is the fastest-growing pharmaceutical company in India. The company is
one of the world's largest producers of cephalosporins, one of the most
important classes of antibiotics. The valuation basis is quoted; the holding
represents 0.80% of SVIIT's net assets.

20.     INDIAN HOSPITALS CORPORATION           INDIAN HOSPITALS CORPORATION
        (INDIA)                                             Picture
Company (GBP000's)
Cost                                     576
Value                                  3,459
Date of Acquisition                 Oct 1995

Indian Hospitals Corporation owns a chain of pharmacies and carries out
project management and consultancy work to set up private hospitals in the
Indian sub-continent and Middle and Far East. The valuation basis is quoted;
the holding represents 0.75% of SVIIT's net assets.

                                        18

List of Investments at 30 June 2000

<TABLE>
<CAPTION>

                                Year Formed           Original Life   SVIIT's Holding in     Value of SVIIT's   SVIIT's Net Assets
                                                           (years)            the Fund %      Holding 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                1,155                  0.2

  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               20,149                  4.4

  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 will focus
  principally on management
  buy-outs and buy-ins,
  financial acquisitions and
  larger development capital
  opportunities. The
  principal geographical
  focus of the fund will be
  in Australia, New Zealand,
  India, Hong Kong,
  Singapore and Thailand.             1999                     10                 28.3               15,989                  3.5

  Co-investments with Asia
  Pacific Fund ll and
  Schroder Ventures Asia
  Pacific Fund:

  Cobalt (Parkway)                                                                                    2,179                  0.5

  The Japan Venture Fund II
  Formed as a successor to
  The Japan Venture Fund to
  invest in Japanese
  businesses with potential
  for capital growth.                 1990                     10                  13.7                4,762                  1.0

  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                  17.7                9,464                  2.0

  TOTAL ASIA                                                                                          53,698                 11.6

</TABLE>

                                        19

List of Investments continued

<TABLE>
<CAPTION>


                                                                    Original    SVIIT's Holding           Value of    SVIIT's Net
                                                        Year    Life (years)       in the Fund     SVIIT's Holding         Assets
                                                      Formed                                 %             GBP'000              %
<S>                                                      <C>             <C>               <C>                 <C>            <C>

  CONTINENTAL EUROPE

  Schroder Ventures European Fund
  The first $1 billion fund raised for equity
  investment in Europe focusing on large and
  medium-sized leveraged buy-out opportunities.         1997              10               22.0             96,752           21.0

  Schroder Ventures European Fund II
  Formed as the successor to Schroder Ventures
  European Fund, the fund will focus on European
  Buy-Outs and Buy-Ins, in addition to growth
  capital investments (typically within the
  technology and life sciences industries). The
  main sector focus of the fund will be
  technology, healthcare, engineering and consumer
  products and services.                                2000              10               26.8             54,335           11.8

  Schroder French Buy-Out Fund
  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                441            0.1

  Schroder Ventures French Enterprise Fund
  Formed with a policy of investing in development
  capital opportunities, principally in France.         1992              10               19.0              4,693            1.0

  Schroder Ventures French Buy-Out Club 1995
  The main focus is on buy-outs of private
  companies and consideration is also given to
  investment in turnarounds and special
  situations.                                           1995             n/a               27.9                691            0.1

  Schroder German Buy-Outs
  Established to invest in buy-outs of companies
  in Germany and some of its neighbouring
  countries.                                            1986             10*               29.7              8,673            1.9

  Schroder 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              6,358            1.4

  The Italian Venture Fund
  Established to invest in buy-outs and
  development capital businesses, principally in
  Italy.                                                1988             10*               33.2                256            0.1

  Schroder Ventures Italian Fund II
  Established as a successor to The Italian
  Venture Fund to make equity and near-equity
  investments in buy-outs and buy-ins, including
  development capital businesses, principally in
  Italy.                                                1993              10               21.0             24,816            5.4

  The Spanish Venture Fund
  Established with a policy of investing in
  leveraged buy-outs and development capital
  businesses in Spain.                                  1990              10               23.2              2,083            0.5

  TOTAL CONTINENTAL EUROPE                                                                                 199,098           43.3

</TABLE>


                                        20

List of Investments continued

<TABLE>
<CAPTION>


                                                                    Original    SVIIT's Holding           Value of    SVIIT's Net
                                                        Year    Life (years)        in the Fund    SVIIT's Holding         Assets
                                                      Formed                                 %             GBP'000              %
<S>                                                      <C>             <C>                <C>                <C>            <C>

  UNITED KINGDOM

  Schroder UK Buy-Out Fund II
  Established to invest in larger leveraged
  buy-outs principally in the United Kingdom.           1988             10*               23.2              1,078            0.2

  Schroder UK Buy-Out Fund III
  Established as Schroder Ventures' 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             15,529            3.4

  Schroder UK Venture Fund
  Established as Schroder Ventures' first fund in
  the United Kingdom with a view to investing in
  buy-out and development capital businesses in
  the United Kingdom.                                   1985             10*               49.0                314            0.1

  Schroder UK Venture I Extension Fund
  Established to be the recipient of the
  distributions from certain unitholders in
  Schroder UK Venture Fund.                             1991              9                17.5                 82            0.0

  Schroder UK Venture Fund 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              1,453            0.3

  Schroder UK Venture Fund IV
  Established to follow the policies of the fully
  invested third UK venture fund.                       1995              10                4.2              3,884            0.8

  TOTAL UNITED KINGDOM                                                                                      22,340            4.8

</TABLE>


                                        21


List of Investments continued

<TABLE>
<CAPTION>

                                                                    Original    SVIIT's Holding           Value of    SVIIT's Net
                                                        Year    Life (years)        in the Fund    SVIIT's Holding         Assets
                                                      Formed                                 %             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              8,635            1.9

  Co-investments with Schroder Canadian Buy-Out
  Fund II:
  Comact                                                                                                     2,720            0.6
  Fib-Pak                                                                                                      355            0.1
  Flexia                                                                                                     1,734            0.4
  Huntingdon Mills                                                                                           2,055            0.4
  Med-Eng                                                                                                      325            0.1
  Nova Pb                                                                                                      178            0.0

  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              2,824            0.6

  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               29.1             15,611            3.4

  Schroder US Venture Fund
  Established to invest in a portfolio of buy-out
  and development capital businesses, principally
  located in the United States. The fund was put
  into liquidation in 1999.                             1988             10*               14.6                  -              -

  Schroder Ventures US Fund
  Established to invest in larger development
  capital andmid-size buy-outs in the US, with a
  particular focus on media, telecommunications
  and technology sectors.                               1999              10               30.0             17,637            3.8

  TOTAL NORTH AMERICA                                                                                       52,074           11.3

  Total fund portfolio                                                                                     327,210           71.0
  Fixed interest investments                                                                               126,309           27.4

  Total investment portfolio                                                                               453,519           98.4
  Current assets less total liabilities                                                                      7,606            1.6

  Total net assets                                                                                         461,125          100.0

*     The lives of these funds have been extended.
</TABLE>


Notes
1.     Schroder UK Venture Fund II and Schroder Canadian Buy-Out Fund
terminated during the year and are therefore excluded from the list of
investments.

                                        22

Report of the Directors for the year ended 30 June 2000

The Directors submit their report and the audited accounts of the Company for
the year ended 30 June 2000.

COMPANY'S BUSINESS

The Company carries on business as an investment trust. 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. However,
under Corporate Tax Self Assessment, which applies to accounting periods
ending after 30 June 1999, the Inland Revenue will no longer be 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 and the Portfolio Review on page 6.

REVENUE AND EARNINGS

The net return for the year after expenses, interest, taxation and minority
interests was GBP4,729,000 (1999: GBP2,344,000), equivalent to a return per
ordinary share of 4.68p (1999: 2.35p).

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 3.80
pence per share (1999: 1.50 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 GBP843,000 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 2000.

NEW ARTICLES OF ASSOCIATION

As referred to in the Chairman's Statement, the Company is proposing to adopt
new Articles of Association which will permit the trading of shares through
CREST. Several other changes are also proposed which reflect minor amendments
to the Listing Rules of the UK Listing Authority.

DIRECTORS' REMUNERATION

An ordinary resolution is proposed pursuant to Article 1(F) of the Articles
of Association to increase the maximum aggregate remuneration payable to
directors to GBP200,000.

PURCHASE OF SHARES FOR CANCELLATION

During the year ended 30 June 2000 the Directors did not use the authority
given to them to purchase ordinary shares for cancellation.

The total number of shares in issue on 31 August 2000 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 31 August 2000 will be proposed at the
forthcoming Annual General Meeting for which notice is given on page 53.

This authority will lapse at the conclusion of the Company's Annual General
Meeting in 2001, unless renewed earlier.

During the year, restrictions in place when the Company sought approval to
the implementation of a share buy-back scheme, which required the Company to
relinquish investment company status, have now been lifted. The effect of
this on the Company is that it has reapplied to become an investment company.

ISSUES OF NEW SHARES

At the Annual General Meeting of the Company in December 1999 the Directors
were also given the power to allot new ordinary shares for cash. The
Directors wish to renew the power to allot new ordinary shares for cash at
the forthcoming Annual General Meeting.

If ordinary shares are to be allotted for cash, Section 89(1) of the
Companies Act 1985 requires such new shares to be offered first to existing
holders of ordinary shares. This entitlement is known as a "pre-emption
right". In certain circumstances it is beneficial for the Directors to allot
shares for cash otherwise than pro rata to existing shareholders and the
Companies Act 1985 provides for shareholders to give such power to the
Directors by waiving their pre-emption rights.

Therefore, Resolutions 8 and 9, will be proposed at the Annual General
Meeting, the combined effect of which, if passed, will give the Directors
power to allot ordinary shares for cash on a non pre-emptive basis up to a
maximum aggregate nominal amount of GBP5,113,284 (equivalent to 5,113,284
ordinary shares of GBP1 and 5 per cent. of the Company's existing issued
ordinary share capital at 31 August 2000), as if Section 89 (1) of the
Companies Act 1985 did not apply.

                                        23

Report of the Directors continued

This authority will lapse at the conclusion of the Company's Annual General
Meeting in 2001, unless renewed earlier.

The Directors intend to use this authority to issue new shares to investors
whenever they believe it is advantageous both to those investors and to the
Company's existing shareholders to do so. The authority will not be used in
circumstances where the interests of existing shareholders are diluted and
shares will only be issued at a price which exceeds the net asset value
attributable to the shares at the time of issue.

DIRECTORS

The Directors of the Company and their beneficial and family interests in the
Company's share capital during the year to 30 June 2000 are given below:


                           Ordinary Shares
                   of GBP1.00 each     At 1 July
                        At 30 June          1999
                              2000
Beneficial
J J McLachlan               14,372        12,854
N E H Ferguson             175,000       175,000
C J Govett                  67,500        67,500
A J Habgood                 25,000        25,000
E W Koning                     Nil           Nil
I P Sedgwick                17,500         7,500
J Strangfeld                   Nil           Nil
Non Beneficial
C J Govett                  20,000        20,000

There had been no change in the above holdings up until 31 August 2000. In
accordance with the Company's Articles of Association, Mr Govett, Mr Habgood
and Mr Koning will retire at the forthcoming Annual General Meeting and,
being eligible, offer themselves for re-election.

None of the Directors has a contract of service with the Company. Mr Ferguson
and members of his family have an interest in the Carried Interest in respect
of certain Schroder Ventures' funds. Mr Sedgwick is Chairman of Schroders
plc, whose subsidiaries include Schroder Investment Management Limited which
receives fees from the Company in accordance with the terms of a secretarial
agreement, and Schroder Investment Management (UK) Limited which receives
fees for the provision of cash management services. Full details of fees paid
to both companies can be found in Note 26 on page 44. 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 31 August 2000 the Company had been notified of the following interests in
excess of 3 per cent. of the issued capital.
Report of the Directors continued


                                                       Shares
                                                Number of     Percentage
                                          ordinary shares       of class
Schroders plc and its subsidiaries:
- non beneficial, managed for clients          15,636,218          15.29
- beneficial                                   13,113,449          12.82
The Prudential Insurance Company
of America                                     13,196,711          12.90
Aegon Aandelenfonds NV                         12,780,309          12.50
British Aerospace Pension Fund                  5,100,000           4.99
BBC Pension Trust Limited                       4,127,712           4.04

AUDITORS

Ernst & Young 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                                         5 September 2000
London
EC2V 7QA

By order of the Board
Schroder Investment Management Limited
Secretary

                                        24


Statement of Directors' Responsibilities

The Directors are responsible for preparing financial statements for each
financial year 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 year and of the return
for the year, 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 financial statements 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 Directors confirm that they have complied with these responsibilities.

                                        25

Corporate Governance

The Company is committed to high standards of corporate governance. The Board
has put in place a framework for corporate governance which it believes is
appropriate for an investment trust company and which enables the Company to
comply with the Principles of Good Governance and Code of Best Practice ("the
Combined Code") prepared by the Committee on Corporate Governance, published
in June 1998.

APPLICATION OF CODE PRINCIPLES

THE BOARD

The Board currently consists of seven non-executive directors, the majority
of whom are independent of Schroder Ventures and of the Company Secretary.
(see page 2).

The Board normally meets four times a year. Matters specifically reserved for
decision by the full Board have been defined and a procedure adopted for
directors, in the furtherance of their duties, to take independent
professional advice if deemed necessary 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.

When a director is appointed he or she receives an induction which is
provided by the Company Secretary and other parties where appropriate. An
induction pack is given to each new director and relevant training is
provided. Directors are provided, on a regular basis, with key information on
the Company's policies, regulatory requirements and internal financial
controls. Changes affecting directors' responsibilities are advised to the
Board as they arise. The Board receives and considers reports regularly from
the investment manager and ad hoc reports and information are supplied to the
Board as required. In addition, directors attend ad hoc seminars covering the
latest developments across the investment trust industry.

The Board has contractually delegated to Schroder Investment Management (UK)
Limited, the management of the Company's cash balances and the day to day
accounting and company secretarial requirements to Schroder Investment
Management Limited. Each of these contracts 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 each are monitored on an annual basis by
the Management Engagement Committee.

The Board has established a Nomination Committee as a result of the
recommendations of the Combined Code, to make recommendations on the
appointment of new directors. 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. The Committee consists of all the directors of
the Company. In making its recommendations, the Committee is required to
ensure that the composition of the Board is appropriately balanced in
expertise and ability.

In accordance with the Association of Investment Trust Companies ("AITC")
recommendation, a Management Engagement Committee with defined terms of
reference and duties, was established in 1998, which consists of all the
independent non-executive directors, to review and discuss the terms of the
Secretarial Agreement with Schroder Investment Management Limited and the
Cash Management Agreement with Schroder Investment Management (UK) Limited.

The Investment Committee, which consists of a majority of independent
directors, 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.

There is also an Audit Committee consisting of all the independent
non-executive directors with defined terms of reference and duties. The
function of the Audit Committee is to ensure that the Company maintains the
highest standards of integrity, financial reporting and internal control. It
also meets with representatives of Schroder Ventures and the Company
Secretary and receives reports on the quality and effectiveness of the
accounting records and management information maintained on behalf of the
Company.

                                        26

Corporate Governance continued

All non-executive 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 re-election, in
accordance with the existing Articles of Association. Thereafter Directors
retire by rotation at least every three years.

DIRECTORS' REMUNERATION

Under the London Stock Exchange's Listing Rule 21.20(i), where an investment
trust company has no executive directors the Code principles relating to
directors' remuneration do not apply. The Chairman receives a fee of GBP25,000
per annum, and the other members of the Board each receive GBP10,000 per annum.

RELATIONS WITH SHAREHOLDERS

The Board, together with Schroder Ventures, has an annual programme of
meetings with institutional shareholders. The Board believes that the Annual
General Meeting provides an effective forum for private investors to
communicate with the Board, and encourages participation. All directors are
expected to attend the Annual General Meeting and the Investment Manager
makes a presentation. There is an opportunity for individual shareholders to
question the Chairman of the Board and the Chairman of the Audit and
Management Engagement Committees at the Annual General Meeting. The Company
announced the level of votes cast by proxy on resolutions proposed at last
year's Annual General Meeting, and intends to announce the votes cast by
proxy in a similar manner at future 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 page 53
sets out the business of the meeting.

EXERCISE OF VOTING POWERS

The Company has approved a corporate governance voting policy in respect of
its investments which, in summary, is based on the governance recommendations
of the Code of Best Practices from Cadbury and Greenbury 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 financial
statements is on page 25 and a statement of going concern is set out below.

The report of the auditors can be found on page 29.

The Board has previously reported on internal financial controls in line with
the issued guidelines. New guidelines were issued in late September 1999 for
the review of internal controls ("the Turnbull guidance"). As permitted by
the London Stock Exchange, the Company has adopted the transitional approach
for reporting on the internal controls aspects of the Combined Code.

The Board has undertaken a full review of all the aspects covered by the
Turnbull guidance and believes that there is a robust and dynamic framework
substantially in place to meet the requirements of the Code. The Board is
currently finalising all measures necessary to implement the Turnbull
guidance in full. It is the Board's intention to be compliant with the Code
in December 2000.

For the financial year under review, The London Stock Exchange has permitted
the directors to report on internal financial control in accordance with the
existing guidance for directors on internal control and financial reporting
which was issued in December 1994.

The directors are responsible for the internal financial control systems of
the Company and for reviewing their effectiveness. These aim to ensure the
maintenance of proper accounting records, the reliability of the financial
information upon which business decisions are made and which is used for
publication and that the assets of the Company are safeguarded. The financial
controls operated by the Board include the authorisation of the investment
strategy and regular reviews of the financial results and investment
performance. As stated above, the Board has contractually delegated to
external agencies the services the Company requires.

                                        27

Corporate Governance continued

These systems of internal financial control are designed to provide
reasonable, but not absolute, assurance against material misstatement or
loss. By the procedures set out above the directors have kept under review
the effectiveness of the internal financial controls throughout the year.

STATEMENT OF GOING CONCERN

The directors are of the opinion that, at the time of approving the financial
statements, the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt
the going concern basis in preparing the financial statements.
Corporate Governance continued

STATEMENT OF COMPLIANCE

The Board considers that it has complied with the provisions contained within
Section 1 of the Combined Code (as annexed to the Listing Rules) throughout
the accounting period under review except as follows:

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 member. In this respect, the Company has
not complied with part of provision A.2.1 of the Code.

Although the Combined Code requires the Company to report on internal
controls, the Company has continued to report only on internal financial
controls as permitted by the London Stock Exchange.

                                        28

Report of the Auditors
To the Members of Schroder Ventures International Investment Trust plc

We have audited the accounts on pages 30 to 46 which have been prepared under
historical cost convention (as modified by the revaluation of certain fixed
assets) and the accounting policies set out on page 33 to 35.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The Directors are responsible for preparing the annual report. As described
on page 25, this includes responsibility for preparing the accounts in
accordance with applicable United Kingdom law and accounting standards. Our
responsibilities, as independent auditors, are established in the United
Kingdom by statute, the Auditing Practices Board, the Listing Rules of the
Financial Services Authority and by our profession's ethical guidance.

We report to you our opinion as to whether the accounts give a true and fair
view and are properly prepared in accordance with the Companies Act. We also
report to you if, in our opinion, the directors' report 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 the 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 on pages 26 to 28
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 either the Company's corporate governance procedures or its
risk and control procedures.

We read the other information contained in the annual report, including the
corporate governance statement, and consider whether it is consistent with
the audited accounts. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with
the accounts.

BASIS OF AUDIT OPINION

We conducted our audit in accordance with 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. 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 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.

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 30 June 2000 and the total return of
the Company and Group for the year then ended and have been properly prepared
in accordance with the Companies Act 1985.

Ernst & Young
Registered Auditor
London
5 September 2000

                                        29

<TABLE>
<CAPTION>


Consolidated Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)

                                                           For the year ended                           For the year ended
                                                              30 June 2000                                 30 June 1999
                                                       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        9                     -     86,485     86,485                     -      54,392     54,392
  Unrealised gains on
  investments                          9                     -     41,076     41,076                     -      52,445     52,445

  Gains on investments                                       -    127,561    127,561                     -     106,837    106,837

  Foreign exchange
  (losses)/gains on currency
  balances                            1f                     -      (415)      (415)                     -         167        167

  Income                               3                 6,123          -      6,123                 3,613           -      3,613

  Expenses                             4               (1,323)        (3)    (1,326)                 (878)           -      (878)

  Net return before finance
  costs and taxation                                     4,800    127,143    131,943                 2,735     107,004    109,739
  Interest payable                     5                 (251)          -      (251)                 (766)           -      (766)

  Net return on ordinary
  activities before taxation                             4,549    127,143    131,692                 1,969     107,004    108,973
  Tax on ordinary activities           6                   180          -        180                   380           -        380

  Return on ordinary activities
  after tax for the year                                 4,729    127,143    131,872                 2,349     107,004    109,353
  Minority interest - equity                                 -       (99)       (99)                   (5)        (48)       (53)

  Return on ordinary activities
  after tax and minority
  interest for the year
  attributable to equity
  shareholders                                           4,729    127,044    131,773                 2,344     106,956    109,300

  Dividends

  Final dividend of 3.80p
  (1999: 1.50p) per ordinary
  share payable 7 December 2000        7               (3,886)          -    (3,886)               (1,484)           -    (1,484)

  Surplus transferred to
  reserves                                                 843    127,044    127,887                   860     106,956    107,816

  Return per ordinary share            8                 4.68p    125.87p    130.55p                 2.35p     107.26p    109.61p

</TABLE>


The notes on pages 33 to 46 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 acquired or
discontinued in the year.

                                        30

<TABLE>
<CAPTION>


Balance Sheets

                                                                                  At 30 June 2000               At 30 June 1999
                                                                                 Group    Company              Group     Company
                                                              Notes            GBP'000    GBP'000            GBP'000     GBP'000
<S>                                                             <C>                <C>        <C>                <C>         <C>

  INVESTMENTS
  Venture funds                                                   9            327,210    290,805            226,368     196,978
  Fixed interest investments                                      9            126,309    126,309             84,067      84,067
  Investment in subsidiaries                                     11                  -     39,539                  -      29,778
                                                                               453,519    456,653            310,435     310,823
  CURRENT ASSETS
  Debtors                                                        12              2,903      1,144             16,866      16,863
  Cash at bank                                                                      48         44                 42          35
  Short-term deposits                                                           10,232      8,362             33,228      32,446
                                                                                13,183      9,550             50,136      49,344
  CURRENT LIABILITIES
  Creditors: amounts falling due within one year              13(a)              5,087      5,078             26,941      26,929

  NET CURRENT ASSETS                                                             8,096      4,472             23,195      22,415

  TOTAL ASSETS LESS CURRENT LIABILITIES                                        461,615    461,125            333,630     333,238
  Creditors: amounts falling due after more than one year
  (including convertible bonds)                               13(b)                  -          -           (10,753)    (10,753)
  Minority interest - non-equity                                                 (100)          -              (100)           -
  Minority interest - equity                                                     (390)          -              (292)           -

  NET ASSETS                                                                   461,125    461,125            322,485     322,485

  CAPITAL AND RESERVES
  Called up share capital                                        16            102,266    102,266             98,966      98,966
  Share premium account                                          17              7,453      7,453                  -           -
  Capital redemption reserve                                     18              3,204      3,204              3,204       3,204
  Share purchase reserve                                         19             92,054     92,054             92,054      92,054
  Capital reserve                                                20            254,002    253,543            126,958     126,475
  Revenue reserve                                                21              2,146      2,605              1,303       1,786

  EQUITY SHAREHOLDERS' FUNDS                                     22            461,125    461,125            322,485     322,485

  Net asset value per ordinary share                             23             450.9p                        325.9p

</TABLE>


The accounts were approved by the Board of Directors on 5 September 2000 and
signed on behalf of the Board by:

John J. McLachlan
Nicholas E. H. Ferguson

Directors

The notes on pages 33 to 46 form an integral part of these accounts.


                                        31

<TABLE>
<CAPTION>

Consolidated Cash Flow Statement

                                                                                       For the year ended    For the year ended
                                                                                             30 June 2000          30 June 1999
                                                                              Notes               GBP'000               GBP'000
    <S>                                                                         <C>                   <C>                   <C>

    OPERATING ACTIVITIES
    Income received from investments                                                                5,127                 3,122
    Bank interest received                                                                            364                   654
    Administrative expenses                                                                         (971)               (1,020)

    Net cash inflow from operating activities                                    24                 4,520                 2,756

    RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
    Interest paid                                                                                    (63)                  (13)
    Convertible bond interest paid                                                                  (376)                 (753)

    Net cash outflow from returns on investments and servicing of finance                           (439)                 (766)

    TAXATION
    UK tax recovered/(paid)                                                                           521                 (322)

    Total tax recovered/(paid)                                                                        521                 (322)

    FINANCIAL INVESTMENT
    Purchase of fixed interest securities                                                       (756,631)             (493,844)
    Sale of fixed interest securities                                                             706,525               485,857
    Calls paid                                                                                  (161,666)              (49,721)
    Capital distributions received                                                                186,082                80,930

    Net cash (outflow)/inflow from financial investment                                          (25,690)                23,222

    EQUITY DIVIDENDS PAID
    Dividends                                                                                     (1,484)               (1,287)

    Total dividends paid                                                                          (1,484)               (1,287)

    FINANCING
    Realised exchange (losses)/gains on currency balances                                           (415)                   167
    Shares purchased for cancellation                                                                   -               (4,983)
    Capital expenses                                                                                  (3)                  (58)
    Stamp duty                                                                                          -                  (25)

    Net cash outflow from financing                                                                 (418)               (4,899)

    NET CASH (OUTFLOW)/INFLOW                                                                    (22,990)                18,704

</TABLE>

<TABLE>
<CAPTION>


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS

                                                                                       For the year ended    For the year ended
                                                                                             30 June 2000          30 June 1999
                                                                              Notes               GBP'000               GBP'000
   <S>                                                                          <C>                   <C>                   <C>

   (Decrease)/increase in cash during the year                                                   (22,990)                18,704
   Debt converted into equity                                                                      10,753                     -

   Change in net funds                                                                           (12,237)                18,704
   Net funds at the beginning of the year                                                          22,517                 3,813

   Net funds at the end of the year                                              25                10,280                22,517

</TABLE>


The notes on pages 33 to 46 form an integral part of these accounts.


                                        32
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)     Company revenue account
                 The Company will not present its own revenue account but, as
                 permitted by section 230 of the Companies Act 1985, will
                 disclose information supplementing the revenue account as
                 specified in paragraphs 52 to 57 of Schedule 4 of the
                 Companies Act 1985.

          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' 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'
                 funds are valued by the Directors at the balance sheet date by
                 valuing the underlying investments comprising the portfolios
                 of the Schroder Ventures' funds in accordance with the
                 valuation policies set out below, as adjusted, where
                 appropriate, for other assets and liabilities of the Schroder
                 Ventures' funds. The valuation policies of the Company are
                 consistent with the current guidelines issued by the British
                 Venture Capital Association ("BVCA"). 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.

                 Quoted investments
                 All investments listed on recognised stock exchanges are
                 valued at the quoted mid-market price at the balance sheet
                 date. If an investment is subject to restrictions affecting
                 its disposal, or if the holding is significant in relation to
                 the issued share capital, a discount of generally between
                 0 per cent. and 50 per cent. to that price will be applied.

                 Unquoted equity investments
        (i)      All Early Stage Equity investments are valued at cost unless
                 one of the following applies:

                 (1)     performance indicates that there has been a permanent
                         and significant diminution in the valuation of the
                         investment. If this is the case, provisions in
                         incremental tranches of 25 per cent. of original cost
                         will be made; or

                (2)      a significant transaction involving an independent
                         third party at arm's-length values the investment at a
                         materially different value.

      (ii)      All Development Stage Equity investments are valued at cost, or
                cost less a provision, for at least one year unless this basis
                of valuation is unsustainable.

     Thereafter, they will be valued as follows:

                (1) where available, either on the basis of a significant
                    transaction by an independent third party in the equity of
                    the investee company or an independent third party
                    valuation of the equity; or

                (2) where a significant portion of the assets are held in real
                    property on the basis of discounted net asset values; or

                (3) where the investee company is performing significantly
                    below expectations, at cost less provisions in incremental
                    tranches of 25 per cent; or

                (4) where the company is profitable and performing
                    satisfactorily, on the basis of earnings (A) capitalised at
                    an appropriate price-earnings multiple (B);

                                        33

Notes to the Accounts continued

1.     ACCOUNTING POLICIES continued

              (A) the earnings of the investee company will be based on the
                  latest audited accounts or management accounts where
                  appropriate and

              (B) the price-earnings multiple:

               - will take into account the capital and debt structure of the
                 investee company

               - will be based on either comparable company or industry sector
                 multiples taken from the relevant stock exchange

               - will be subject to a minimum discount of 25 per cent. to
                 reflect risk, the illiquidity of the investment and the
                 approximate nature of a valuation based on earnings unless
                 early realisation is expected in which case a smaller discount
                 will be applied.

                 Unquoted loan stock and preference shares
                 Loan stock and preference shares will be valued at cost plus
                 any accrued interest and redemption premia less, in cases
                 where the investee company is performing significantly below
                 expectations, any provisions in incremental tranches of 25 per
                 cent.

                 Carried interest and management fees
                 For the purpose of valuing the Company's holdings in the
                 various Schroder Ventures' funds, management fees due to
                 Schroder Ventures will be accounted for on the accruals basis.
                 An estimate of Carried Interest, the allocation to Schroder
                 Ventures of 20 per cent. 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' 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' 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' funds will be credited to the Company's
                 capital reserve when they are declared.

          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 a 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)     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.
                 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 (d) above.

         i)      Capital reserves
                 Capital Reserve - Realised

                                                34

Notes to the Accounts continued

                 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.

                 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.


2.     INVESTMENT COMPANY STATUS

       During the year, the Company reapplied to become an investment company
       within the meaning of s266, Companies Act 1985. Therefore the Company
       did not qualify as an investment company for the entire financial year.
       However, it continued to conduct its affairs as an investment trust for
       taxation purposes under s842 of the Income and Corporation Taxes Act
       1988, and the Articles of the company prohibit capital profits from
       being distributed by way of dividend. As such, the directors consider it
       necessary to continue to present the financial statements in accordance
       with the Statement of Recommended Practice 'Financial Statements of
       Investment Trust Companies' (the SORP). Under the SORP, the financial
       performance of the Company is presented in a statement of total return
       in which the revenue column excludes certain capital items which, since
       the Company did not qualify as an investment company throughout the
       year, the Companies Act and/or FRS3 would ordinarily require to be
       included in the revenue account. Under these provisions, profits on
       disposal of investments, calculated by reference to their previous
       carrying amount, of GBP86.5 million (1999: GBP54.4 million) and realised
       exchange losses of GBP0.4 million (1999: gain of GBP0.2 million) would
       have been debited/credited to the revenue account. In the opinion of the
       directors the inclusion of these items in the revenue account would be
       misleading because they would obscure and distort both the revenue and
       capital performance of the Company, and would not show clearly the
       revenue profits emerging to be distributable by way of dividend. The
       directors therefore consider that these departures from the specific
       provisions of Schedule 4 of the Companies Act relating to the form and
       content of financial statements for companies other than investment
       companies and these departures from accounting standards are
       necessary to give a true and fair view. The departures have no effect on
       total return or on the balance sheet.

                                        35

Notes to the Accounts continued

<TABLE>
<CAPTION>


3.     INCOME


                                                   For the         For the
                                                 year ended      year ended
                                               30 June 2000    30 June 1999
                                                      Group           Group
                                                    GBP'000         GBP'000
<S>                                                     <C>             <C>

    Income from fixed interest securities             5,235           2,993
    Income from distributions                           456               -
    Interest receivable and similar income              432             620
                                                      6,123           3,613
</TABLE>


<TABLE>
<CAPTION>


4.     EXPENSES


                                                  For the         For the
                                                year ended      year ended
                                              30 June 2000    30 June 1999
                                                     Group           Group
                                                   GBP'000         GBP'000
<S>                                                    <C>             <C>

      Administration and secretarial fees              378             285
      Bank loan facility fees                          217             210
      EDR issue costs                                  259               -
      General expenses                                 340             294
      Directors' fees                                   85              65
      Auditors' remuneration
      - audit                                           26              21
      - non-audit                                       18               3
                                                     1,323             878
</TABLE>


<TABLE>
<CAPTION>


5.     INTEREST PAYABLE

                                                  For the         For the
                                                year ended      year ended
                                              30 June 2000    30 June 1999
                                                     Group           Group
                                                   GBP'000         GBP'000

<S>                                                    <C>             <C>
          Convertible bond interest                   188             753
          Other interest                               63              13
                                                      251             766

</TABLE>


                                        36

Notes to the Accounts continued


6.     TAXATION

The charge for taxation on the net surplus of revenue for the year is made up
as follows:

<TABLE>
<CAPTION>

                                                  For the         For the
                                                year ended      year ended
                                              30 June 2000    30 June 1999
                                                     Group           Group
                                                   GBP'000         GBP'000
<S>                                                    <C>             <C>
      Corporation tax                                   34               -
      Less: relief for overseas tax                   (34)               -
                                                         -               -
      Overseas tax                                      41               -
      Tax over-provided in previous years            (221)           (380)
                                                     (180)           (380)
</TABLE>


There are no profits chargeable to corporation tax in the current year
because 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. The amount of GBP221,000 (1999: GBP380,000) credited as an
adjustment to prior year's tax charges relates to similar excess management
expenses which reduce the Company's profits chargeable to corporation tax
provided in earlier years.

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.

7.     DIVIDENDS
<TABLE>
<CAPTION>


                                                     For the         For the
                                                   year ended      year ended
                                                 30 June 2000    30 June 1999
                                                        Group           Group
                                                      GBP'000         GBP'000
<S>                                                       <C>             <C>
  Final dividend of 3.80p (1999: 1.50p) per             3,886           1,484
  share

</TABLE>

The final dividend is based on 102,265,699 (1999: 98,966,319) ordinary shares
in issue.

8.     RETURN PER ORDINARY SHARE
<TABLE>
<CAPTION>


                    For the year ended               For the year ended
                       30 June 2000                     30 June 1999
               Revenue    Capital     Total     Revenue   Capital       Total
<S>                <C>        <C>       <C>         <C>       <C>         <C>

  Return         4.68p    125.87p    130.55p      2.35p    107.26p    109.61p
  per
  ordinary
  share
  Return         4.68p    125.87p    130.55p          *    102.14p    104.88p
  per
  ordinary
  share -
  fully
  diluted

</TABLE>

*Fully diluted return is not applicable (see below)

The basic revenue return per ordinary share is based on the net return on
ordinary activities after interest payable, taxation and minority interest of
GBP4,729,000 (1999: GBP2,344,000) and on 100,931,523 ordinary shares (1999:
99,716,263) being the weighted average number of shares in issue during the
year.

The capital return per ordinary share is based on the net surplus for the
year of GBP127,044,000 (1999: GBP106,956,000) and on 100,931,523 ordinary shares
(1999: 99,716,263) being the weighted average number of shares in issue
during the year.

Fully diluted returns for the year ended 30 June 2000 are equivalent to the
basic returns since all the convertible bonds in issue were fully converted
into ordinary shares during the year. The diluted returns per ordinary share
for the year ended 30 June 1999, have been calculated on the assumption that
all convertible bonds in issue throughout the year were converted into
4,998,923 ordinary shares on the first day of the financial year giving a
weighted average of 104,715,186 ordinary shares. Interest would not be
payable on these bonds following conversion. This would have resulted in
revenue returns per ordinary share in both years exceeding the basic return
per ordinary share. On conversion of the bonds there would therefore have
been no dilution and diluted revenue returns are not shown for the previous
year.

                                        37


Notes to the Accounts continued

9.   INVESTMENTS (GROUP)

<TABLE>
<CAPTION>

                                     Schroder    Fixed Interest           Total
                                    Ventures'         Portfolio       Portfolio
                             Funds Portfolio              GBP'000           GBP'000
                                       GBP'000
<S>                                      <C>                <C>             <C>
    Cost brought forward             192,058             83,968         276,026
    Unrealised gain
    brought forward                   34,310                 99          34,409
    Valuation at the
    beginning of the
    year                             226,368             84,067         310,435
    Calls and purchases
    payable                          162,320            731,579         893,899
    Distributions and
    sales receivable               (187,838)          (690,538)       (878,376)
    Realised gain/(loss)              87,909            (1,424)          86,485
    Unrealised gain                   38,451              2,625          41,076
    Valuation carried
    forward                          327,210            126,309         453,519

</TABLE>


<TABLE>
<CAPTION>

    Gains on investments                                For the         For the
                                                     year ended      year ended
                                                   30 June 2000    30 June 1999
                                                          GBP'000           GBP'000
    <S>                                                     <C>             <C>
    Realised gain on
    liquidation of
    subsidiary                                                -               2
    Realised gain on
    investments based on
    historical cost                                     126,810          57,920
    Less: amounts
    recognised as
    unrealised in
    previous year                                      (40,325)         (3,530)
    Realised gain based
    on carrying value at
    previous balance
    sheet date                                           86,485          54,392
    Net movement in
    unrealised gains                                     41,076          52,445
    Total gains on
    investments                                         127,561         106,837

</TABLE>


                                       38

Notes to the Accounts continued


10.  GEOGRAPHICAL ANALYSIS OF INVESTMENTS
<TABLE>
<CAPTION>

                                 At 30 June 2000              At 30 June 1999
                                  Group    Company             Group    Company
                                  GBP'000      GBP'000             GBP'000      GBP'000
    <S>                             <C>        <C>               <C>        <C>
    Schroder Ventures
    Funds - unlisted
    Europe
    United Kingdom               22,340     20,237            36,178     30,786
    France                        5,825      5,825             5,206      5,206
    Germany                      15,031      8,974            24,205     18,835
    Italy                        25,072     25,072            11,860     11,860
    Spain                         2,083      2,083             6,200      6,200
    Pan Europe                  151,087    151,087           104,794    104,794
    Total Europe                221,438    213,278           188,443    177,681
    Asia
    Asia Pacific                 39,472     15,989            15,544          -
    Japan                        14,226      9,464             3,825        751
    Total Asia                   53,698     25,453            19,369        751
    North America
    Canada                       16,002     16,002            11,900     11,900
    United States*               36,072     36,072             6,656      6,646
    Total Americas               52,074     52,074            18,556     18,546
    Total Venture
    Funds                       327,210    290,805           226,368    196,978

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


    Fixed Interest Investments
    Sterling denominated         32,332     32,332            23,306     23,306
    Euro denominated             60,624     60,624            32,803     32,803
    US dollar denominated        33,353     33,353            27,958     27,958
    Total Fixed Interest
    Investments                 126,309    126,309            84,067     84,067
    Total Investment Portfolio  453,519    417,114           310,435    281,045

    </TABLE>


    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 19 to 22. All of these funds are managed or advised by Schroder
    Ventures.


                                       39

Notes to the Accounts continued


11.  INVESTMENTS IN SUBSIDIARIES
    <TABLE>
    <CAPTION>

                                                 For the         For the
                                              year ended      year ended
                                            30 June 2000    30 June 1999
                                                 Company         Company
                                                   GBP'000           GBP'000
    <S>                                              <C>             <C>
    Cost at the beginning of the year             24,012          24,012
    Disposals at cost                                  -               -
    Cost at the end of the year                   24,012          24,012
    Net unrealised gain on investment             15,527           5,766
    Market value at the end of the year           39,539          29,778

</TABLE>

    Platinum Trust is the only subsidiary undertaking at 30 June 2000:

    <TABLE>
    <CAPTION>

                    Country of       Number and    Holding   Capital        Net
                 registration,         class of                  and    revenue
                 incorporation     shares/units         %   reserves      after
                           and             held                   at    tax for
                     operation                               30 June   the year
                                                                2000      ended
                                                               GBP'000    30 June
                                                                           2000
                                                                          GBP'000
    <S>                    <C>              <C>                  <C>        <C>
    Company and business
    Platinum
    Trust
    (unit
    trust)           Guernsey       23,112,000       99     40,030         23
                                    'A' units

                                   900,000 'B'       90
                                       units
</TABLE>

    On termination of the 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.


12.  DEBTORS
<TABLE>
<CAPTION>

                                           2000       2000      1999       1999
                                          Group    Company     Group    Company
                                          GBP'000      GBP'000     GBP'000      GBP'000
    <S>                                     <C>        <C>       <C>        <C>

    Amounts falling due within one
    year:
    Treasury bill redemptions                 -          -    15,987     15,987
    Venture fund distributions receivable 1,758          -         2          -
    Interest receivable                     761        760       129        128
    Prepayments and other debtors            42         42        64         64
    Advance corporation tax recoverable     322        322       322        322
    Corporation tax recoverable              20         20       362        362
                                          2,903      1,144    16,866     16,863
</TABLE>



                                       40

Notes to the Accounts continued


13.  CREDITORS
<TABLE>
<CAPTION>

                                           2000       2000      1999       1999
                                          Group    Company     Group    Company
                                          GBP'000      GBP'000     GBP'000      GBP'000
    <S>                                     <C>        <C>       <C>        <C>
    a) Amounts falling due within one
    year:
    Other creditors and accruals            547        538       405        393
    Proposed final dividend               3,886      3,886     1,484      1,484
    Venture Fund calls payable              654        654         -          -
    Treasury bill purchases                   -          -    25,052     25,052
                                          5,087      5,078    26,941     26,929
    b) Amounts falling due after more
    than one year:
    Convertible bonds 2006:
    - 'B' bonds                                               10,753     10,753
                                                              10,753     10,753
    </TABLE>

    The 'B' bonds were converted during the year into 3,299,380 ordinary shares
    of GBP1.00 each by reference to the Company's net asset value per share as
    at 30 June 1999.


14.  CAPITAL COMMITMENTS

    At 30 June 2000, the Company had uncalled commitments to its venture fund
    investments as follows:

    <TABLE>
    <CAPTION>
                                                                          SVIIT
                                                          Amount       uncalled
                                                        uncalled    commitment*
                                              (local currency)             GBPm
    <S>                                                      <C>            <C>
    Schroder Ventures European Fund                    euro33.3m           21.1
    Schroder Ventures European Fund II                euro662.3m          419.3
    Schroder Ventures International Life
    Sciences Fund II                                      $53.9m           35.6
    Schroder Ventures US Fund                             $36.6m           24.2
    Schroder Ventures Asia Pacific Fund                  $105.1m           69.4
    The Japan Venture Fund III                           Y1,451m            9.1
    Schroder Canadian Buy-Out Fund II                     C$1.3m            0.6
    Schroder UK Venture Fund IV                          GBP1.4m            1.4
    Total                                                             GBP580.7m


    *Based on exchange rates at 30 June 2000

</TABLE>

15.   CONTINGENT LIABILITIES

      The Company guarantees any drawings taken out by Platinum Trust under the
      euro140 million loan facility (GBP88.6m, translated at the balance sheet
      date). At 30 June 2000, euroNil was drawn under the facility (1999:
      euroNil).


                                       41

 Notes to the Accounts continued

16.   SHARE CAPITAL
<TABLE>
<CAPTION>

                                        2000       2000       1999       1999
                                       Group    Company      Group    Company
                                       GBP'000      GBP'000      GBP'000      GBP'000
    <S>                                  <C>        <C>        <C>        <C>
    Authorised:
    150,000,000 shares of GBP1.00
    each                               150,000    150,000    150,000    150,000
    Allotted, Called Up and Fully
    Paid:
    Opening balance of 98,966,319
    (1999:102,170,490) shares of
    GBP1.00 each                          98,966     98,966    102,170    102,170
    Issued on conversion of 'B'
    bonds (note 13)                     3,300      3,300          -          -
    Purchase of own shares for
    cancellation                             -          -    (3,204)    (3,204)
    Closing balance of 102,265,699
    (1999:98,966,319) shares of
    GBP1.00 each                         102,266    102,266     98,966     98,966

</TABLE>

17.  SHARE PREMIUM ACCOUNT

<TABLE>
<CAPTION>
                                            2000       2000     1999       1999
                                           Group    Company    Group    Company
                                           GBP'000      GBP'000    GBP'000      GBP'000
    <S>                                      <C>        <C>      <C>        <C>
    Balance brought forward                    -          -        -          -
    Premium on conversion of 'B' bonds     7,453      7,453        -          -
    Balance carried forward                7,453      7,453        -          -

</TABLE>


18.  CAPITAL REDEMPTION RESERVE
<TABLE>
<CAPTION>
                                            2000       2000     1999       1999
                                           Group    Company    Group    Company
                                           GBP'000      GBP'000    GBP'000      GBP'000
    <S>                                      <C>        <C>      <C>        <C>
    Balance brought forward                3,204      3,204        -          -
    Purchase of own shares for
    cancellation                               -          -    3,204      3,204
    Balance carried forward                3,204      3,204    3,204      3,204

</TABLE>


19.   SHARE PURCHASE RESERVE
<TABLE>
<CAPTION>
                                          2000       2000       1999       1999
                                         Group    Company      Group    Company
                                         GBP'000      GBP'000      GBP'000      GBP'000
    <S>                                    <C>        <C>        <C>        <C>
    Balance brought forward             92,054     92,054     97,115     97,115
    Purchase of own shares for
    cancellation                             -          -    (4,983)    (4,983)
    Stamp duty on share buy-back             -          -       (25)       (25)
    Legal fees on implementing share
    buy-back scheme                          -          -       (53)       (53)
    Balance carried forward             92,054     92,054     92,054     92,054

</TABLE>


    On 24 June 1998, the Company obtained approval from the High Court to cancel
    its share premium account and set up a new reserve, the share purchase
    reserve, against which the cost of purchasing shares for cancellation by the
    Company may be debited.


                                       42

Notes to the Accounts continued

<TABLE>
<CAPTION>

20.   CAPITAL RESERVE

                                          2000       2000       1999       1999
                                         Group    Company      Group    Company
                                         GBP'000  GBP'000    GBP'000    GBP'000
     <S>                                   <C>        <C>        <C>        <C>
    Realised gains brought forward      80,093     70,393     25,534     18,901
    Realised gains on venture fund
    distributions                       87,909     84,215     54,114     51,047
    Other realised (losses)/gains          (3)        (3)          2          2
    Realised (losses)/gains on
    currency balances                    (415)      (394)        167        167
    Realised exchange
    (losses)/gains on sale of fixed
    interest securities                (1,424)    (1,424)        276        276
    Realised gains carried forward     166,160    152,787     80,093     70,393
    Unrealised gains/(losses)
    brought forward                     46,865     56,082    (5,532)        170
    Increase in unrealised gains on
    venture funds                       38,452     32,288     51,761     49,981
    Increase in unrealised gains on
    subsidiary undertakings                  -      9,762          -      5,247
    Increase in unrealised exchange
    gains
    on fixed interest securities         2,624      2,624        684        684
    Minority interest-equity              (99)          -       (48)          -
    Unrealised gains carried
    forward                            87,842    100,756     46,865     56,082
                                      254,002    253,543    126,958    126,475

    </TABLE>


21.  REVENUE RESERVE
    <TABLE>
    <CAPTION>

                                         2000       2000     1999       1999
                                        Group    Company    Group    Company
                                        GBP'000      GBP'000    GBP'000      GBP'000
      <S>                                 <C>        <C>      <C>        <C>
      Balance brought forward           1,303      1,786      443      1,374
      Transfer from revenue account       843        819      860        412
      Balance carried forward           2,146      2,605    1,303      1,786

</TABLE>

As stated in note 1(b), the Company has not presented its own revenue
account. The net revenue after tax and before dividends dealt with in the
accounts of the parent company was GBP4,705,000 (1999: GBP1,896,000).


22.   RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
                                          2000       2000       1999       1999
                                         Group    Company      Group    Company
                                         GBP'000      GBP'000      GBP'000      GBP'000
    <S>                                    <C>        <C>        <C>        <C>
    Net revenue available for
    distribution                         4,729      4,705      2,344      1,896
    Dividends                          (3,886)    (3,886)    (1,484)    (1,484)
                                           843        819        860        412
    Non-distributable capital gain
    for the year                       127,044    127,068    106,956    107,404
    Shares issued on conversion of
    'B' bonds                            3,300      3,300          -          -
    Share premium on conversion of       7,453      7,453          -          -
    'B' bonds
    Purchase of own shares for
    cancellation                             -          -    (4,983)    (4,983)
    Stamp duty on share buy-backs            -          -       (25)       (25)
    Legal fees on implementing
    share buy-back scheme                    -          -       (53)       (53)
    Net addition to shareholders'
    funds                              138,640    138,640    102,755    102,755
    Shareholders' funds brought
    forward                            322,485    322,485    219,730    219,730
    Shareholders' funds carried
    forward                            461,125    461,125    322,485    322,485

</TABLE>

23.   NET ASSET VALUE PER ORDINARY SHARE

    Calculation of the net asset value per share is based on net assets of
    GBP461,125,000 (1999: GBP322,485,000) and on 102,265,699 (1999: 98,966,319)
    ordinary shares in issue at the year end.



                                       43

Notes to the Accounts continued

24.   RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
      ACTIVITIES
<TABLE>
<CAPTION>

                                                          2000      1999
                                                         Group     Group
                                                         GBP'000     GBP'000
       <S>                                                 <C>       <C>
       Net return before finance costs and taxation      4,800     2,735
       (Increase)/decrease in accrued income             (632)       163
       Decrease in debtors                                  22        30
       Increase/(decrease) in creditors                    330     (172)
       Net cash inflow from operating activities         4,520     2,756

</TABLE>



25.   ANALYSIS OF CHANGES IN NET FUNDS
<TABLE>
<CAPTION>

                                     At 1 July          Debt                  At 30 June    At 1 July                 At 30 June
                                          1999    Conversion     Cash Flow          2000         1998    Cash Flow          1999
                                       GBP'000       GBP'000       GBP'000       GBP'000      GBP'000      GBP'000       GBP'000
       <S>                                 <C>           <C>           <C>           <C>          <C>          <C>           <S>
       Cash at bank                         42             -             6            48           35            7            42
       Short-term deposits              33,228             -      (22,996)        10,232       14,531       18,697        33,228
                                        33,270             -      (22,990)        10,280       14,566       18,704        33,270
       Debt due:
       Within one year                       -             -             -             -            -            -             -
       After more than one year       (10,753)        10,753             -             -     (10,753)            -      (10,753)
       Net funds                        22,517        10,753      (22,990)        10,280        3,813       18,704        22,517

</TABLE>


26.   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 and
      the aggregate of (i) 0.12 per cent per annum of the first GBP50 million of
      net assets, (ii) 0.06 per cent per annum of the next GBP50 million of such
      net assets and (iii) 0.04 per cent of the remaining net assets. The
      agreement is subject to a 4 month notice period. The total fees, including
      VAT, paid or payable to SIM for these services in respect of the year to
      30 June 2000 was GBP257,000 (1999: GBP201,000), of which GBP139,000 was
      outstanding at the year end.

      One of the Company's bankers is J. Henry Schroder & Co. Limited ("JHS").
      The total interest received from JHS in the year to 30 June 2000 was
      GBP325,000 (1999: GBP107,000), and the cash balance held with JHS at 30
      June 2000 was GBP8,362,000 (1999: GBP32,446,000).

      With effect from 1 January 1998, JHS became entitled to a fee in
      consideration for its management of the Company's fixed interest
      portfolio. Under the terms of an agreement, JHS became entitled to receive
      a fee based on the average value of SVIIT's month-end cash and fixed
      interest portfolio, calculated at the rate of 0.1 per cent per annum on
      the first GBP75 million of assets and 0.05 per cent per annum on the
      excess, subject to a minimum fee of GBP20,000 per annum. With effect from
      6 March 2000, the fee was amended so that JHS became entitled to a fee at
      the rate of 0.10 per cent per annum on the first GBP75 million of assets,
      0.05 per cent on the next GBP75 million and 0.03 per cent thereafter,
      subject to a minimum fee of GBP20,000 per annum. With effect 18 April 2000
      the management of the Company's fixed interest portfolio was delegated to
      Schroder Investment Management (UK) Limited in place of JHS by SIM on the
      same fee basis. The total fees, including VAT, paid or payable for these
      services in respect of the year to 30 June 2000 was GBP121,000 (1999:
      GBP84,000), of which GBP30,000 was outstanding at the year end.

      SIM has also provided investment trust dealing services. The total fees
      paid or payable in the year to 30 June 2000 was GBP2,000 (1999: GBP2,000),
      of which GBP2,000 was outstanding at 30 June 2000.

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

      Mr Ferguson and members of his family have an interest in the Carried
      Interest in respect of certain Schroder Ventures' funds.


                                       44



Notes to the Accounts continued

27.   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
      Schroder Ventures' buy-out and development capital funds, which are
      managed and advised by Schroder Ventures. In addition, the Company holds
      treasury bills, cash and short-term deposits and various items such as
      debtors and creditors that arise directly from its operations. The
      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.

      Interest rate risk

      The Company's revenue will be affected by changes in prevailing interest
      rates since the majority of its income derives from treasury bills and
      bank deposit interest. The effect of interest rate changes on the
      valuation of investments forms part of valuation risk, which is considered
      separately below.


      Financial assets of the Group

<TABLE>
<CAPTION>

                                   Floating      Fixed    Non-interest      Total
                                       Rate       Rate         Bearing      GBP'000
                                      GBP'000      GBP'000           GBP'000
      <S>                               <C>        <C>             <C>        <C>
      Currency denomination of
      assets at 30 June 2000:
      Sterling                        2,406     32,332          22,340     57,078
      Euro                            7,763     60,624         199,098    267,485
      US dollar                          48     33,353          91,546    124,947
      Japanese Yen                        -          -          14,226     14,226
      Other                              15          -               -         15
                                     10,232    126,309         327,210    463,751

</TABLE>


<TABLE>
<CAPTION>

                                   Floating      Fixed    Non-interest      Total
                                       Rate       Rate         Bearing    GBP'000
                                    GBP'000    GBP'000         GBP'000
      <S>                               <C>        <C>             <C>        <C>
      Currency denomination of
      assets at 30 June 1999:
      Sterling                          948     23,360          36,178     60,486
      Euro                           13,658     23,683         152,265    189,606
      US dollar                         233     27,959          22,200     50,392
      Swiss franc                    18,383          -               -     18,383
      Other                               6          -          15,725     15,731
                                     33,228     75,002         226,368    334,598

</TABLE>


                                       45


Notes to the Accounts continued


27.   RISK continued

      The floating rate assets consist of short-term deposits. The non-interest
      bearing assets represent the venture fund portfolio. 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:

      Fixed rate financial assets
<TABLE>
<CAPTION>

                             30 June 2000                    30 June 1999

                          Weighted        Weighted        Weighted       Weighted
                           average         average         average        average
                          Interest       period on        Interest      period on
                              rate           which            rate          which
                                     rate is based                        rate is
                                                                            based
      <S>                      <C>             <C>             <C>            <C>
      Euro                   3.46%         93 days           2.46%        48 days
      US dollars             6.71%         58 days           4.38%        57 days
      Sterling               5.73%         73 days           4.80%        79 days

</TABLE>



The Company does not have any borrowings at the year end, although it does
have in place a loan facility of euro140 million with The Royal Bank of
Scotland 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.

Valuation risk

The Company's exposure to valuation risk comprises mainly movements in the
value of its underlying investments. A breakdown of the venture fund
portfolio is given on pages 19 to 22 and a detailed analysis of the twenty
largest underlying companies is given on pages 14 to 18. In accordance with
the Company's accounting policies, set out on pages 33 to 35, 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 30 June 2000,
a 10% movement in the valuation of the Group's venture fund portfolio would
result in a 7% 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 Schroder Ventures' funds
significantly reduces the risks normally associated with making investments
in the buy-out and development capital markets.

Holdings risk

In certain circumstances, SVIIT may wish to transfer its holdings in Schroder
Ventures' funds. In a majority of the Schroder Ventures' funds in which SVIIT
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 SVIIT 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.

                                       46

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

Consolidated Statement of Total Return - in Euros
(translated into euros - unaudited)

<TABLE>
<CAPTION>

                                                          For the year ended                            For the year ended
                                                             30 June 2000                                  30 June 1999
                                                    Revenue     Capital      Total                Revenue    Capital        Total
                                                  euro'000     euro'000    euro'000             euro'000     euro'000    euro'000
<S>                                                     <C>       <C>         <C>                     <C>        <C>         <C>
  Realised gains on investments                           -     137,934     137,934                     -      80,819      80,819
  Unrealised gains on investments                         -      65,512      65,512                     -      77,927      77,927

  Gains on investments                                    -     203,446     203,446                     -     158,746     158,746
  Foreign exchange (losses)/gains                         -       (662)       (662)                     -         248         248
  Income from fixed interest
  securities                                          8,349           -       8,349                 4,447           -       4,447
  Income from distributions                             727           -         727                     -           -           -
  Interest receivable and similar income                689           -         689                   921           -         921
  Expenses                                          (2,110)         (5)     (2,115)               (1,305)           -     (1,305)

  Net return before finance costs and taxation        7,655     202,779     210,434                 4,063     158,994     163,057
  Interest payable                                    (400)           -       (400)               (1,140)           -     (1,140)

  Net return on ordinary activities
  before taxation                                     7,255     202,779     210,034                 2,923     158,994     161,917
  Tax on ordinary activities                            287           -         287                   565           -         565

  Return on ordinary activities after
  tax for the year                                    7,542     202,779     210,321                 3,488     158,994     162,482

  Minority interest - equity                              -       (158)       (158)                   (7)        (71)        (78)

  Return on ordinary activities after
  tax and minority interest for the
  year attributable to equity shareholders            7,542     202,621     210,163                 3,481     158,923     162,404

  Dividends
  Final dividend per ordinary share
  payable 7 December 2000                           (6,137)           -     (6,137)               (2,268)           -     (2,268)

                                                      1,405     202,621     204,026                 1,213     158,923     160,136

  Exchange (loss)/gain on translation                   (8)       4,469       4,461                   102       4,559       4,661

  Surplus transferred to reserves                     1,397     207,090     208,487                 1,315     163,482     164,797

  Return per ordinary share                        euro0.07    euro2.01    euro2.08              euro0.03    euro1.59    euro1.62

</TABLE>


The information on pages 47 to 49 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: euro1.5949 (1999: GBP1:
euro1.4859). The proposed dividend has been translated into euros at a rate
of GBP1: euro1.5793 (1999: GBP1: euro1,5285), being the closing rate at the
balance sheet date.

                                       47


<TABLE>
<CAPTION>

Balance Sheets - in Euros
(translated into euros - unaudited)


                                                                       At 30 June 2000                At 30 June 1999
                                                                            Group     Company              Group     Company
                                                                         euro'000    euro'000           euro'000    euro'000
      <S>                                                                   <C>         <C>                <C>         <C>
      INVESTMENTS
      Venture funds                                                       516,763     459,268            346,003     301,081
      Fixed interest investments                                          199,480     199,480            128,496     128,496
      Investment in subsidiaries                                                -      62,444                  -      45,516
                                                                          716,243     721,192            474,499     475,093
      CURRENT ASSETS
      Debtors                                                               4,585       1,807             25,780      25,775
      Cash at bank and short-term deposits                                 16,235      13,275             50,853      49,647
                                                                           20,820      15,082             76,633      75,422
      CURRENT LIABILITIES
      Creditors: amounts falling due within one year                        8,034       8,019             41,179      41,161

      NET CURRENT ASSETS                                                   12,786       7,063             35,454      34,261

      TOTAL ASSETS LESS CURRENT LIABILITIES                               729,029     728,255            509,953     509,354
      Creditors: amounts falling due after more than one year
      (including convertible bonds)                                             -           -           (16,436)    (16,436)
      Minority interest - non-equity                                        (158)           -              (153)           -
      Minority interest - equity                                            (616)           -              (446)           -

      NET ASSETS                                                          728,255     728,255            492,918     492,918

      CAPITAL AND RESERVES
      Called up share capital                                             161,509     161,509            151,270     151,270
      Share premium account                                                11,771      11,771                  -           -
      Share purchase reserve                                              145,381     145,381            140,704     140,704
      Capital redemption reserve                                            5,060       5,060              4,897       4,897
      Capital reserve                                                     401,145     400,420            194,055     193,317
      Revenue reserve                                                       3,389       4,114              1,992       2,730

      EQUITY SHAREHOLDERS' FUNDS                                          728,255     728,255            492,918     492,918

      Net asset value per ordinary share                                 euro7.12                       euro4.98

</TABLE>


The information on pages 47 to 49 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: euro1.5793 (1999: GBP1:
euro1.5285), being the closing exchange rate on the balance sheet date.

                                       48


<TABLE>
<CAPTION>


Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)


                                                                                  For the year ended    For the year ended
                                                                                        30 June 2000          30 June 1999
                                                                                             GBP'000               GBP'000
        <S>                                                                                    <C>                   <C>
        OPERATING ACTIVITIES
        Income received from investments                                                       8,177                 4,639
        Bank interest received                                                                   581                   972
        Administrative expenses                                                              (1,549)               (1,516)

        Net cash inflow from operating activities                                              7,209                 4,095

        RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
        Interest paid                                                                          (100)                  (19)
        Convertible bond interest paid                                                          (600               (1,119)

        Net cash outflow from returns on investments and servicing of finance                  (700)               (1,138)

        TAXATION
        UK tax recovered/(paid)                                                                  831                 (478)

        Total tax recovered/(paid)                                                               831                 (478)

        FINANCIAL INVESTMENT
        Purchase of fixed interest securities                                            (1,206,751)             (733,789)
        Sale of fixed interest securities                                                  1,126,837               721,921
        Calls paid                                                                         (257,841)              (73,879)
        Capital distributions received                                                       296,782               120,252

        Net cash (outflow)/inflow from financial investment                                 (40,973)                34,505

        EQUITY DIVIDENDS PAID
        Dividends                                                                            (2,367)               (1,912)

        Total dividends paid                                                                 (2,367)               (1,912)

        FINANCING
        Realised exchange (losses)/gains on currency balances                                  (662)                   248
        Shares purchased for cancellation                                                          -               (7,404)
        Capital expenses                                                                         (5)                  (86)
        Stamp duty                                                                                 -                  (37)
        Net cash outflow from financing                                                        (667)               (7,279)

        NET CASH (OUTFLOW)/INFLOW                                                           (36,667)                27,793


</TABLE>


<TABLE>
<CAPTION>

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                                                                  For the year ended    For the year ended
                                                                                        30 June 2000          30 June 1999
                                                                                            euro'000              euro'000

          <S>                                                                                 <C>                     <C>
          (Decrease)/increase in cash during the year                                       (36,667)                27,793
          Exchange movement on translation                                                     2,049                 2,421
          Debt converted into equity                                                          15,236                     -
          Change in net funds                                                               (19,382)                30,214
          Net funds at the beginning of the year                                              35,617                 5,403
          Net funds at the end of the year                                                    16,235                35,617

</TABLE>

The information on pages 47 to 49 is for illustrative purposes and does not
form part of the audited financial statements. The cash flows for the year
have been translated at an average rate of GBP1: euro1.5949 (1999: euro1.4859).

                                       49


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 and advised by Schroder
Ventures. The use of a benchmark is regularly reviewed by the Board. As a
result of the particular geographical and sectoral diversification of the
Company's venture fund portfolio and the nature of the investments made by
the Venture Funds, there is currently no independent benchmark which the
Directors consider appropriate for the Company.

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 are listed on the London Stock Exchange. The stock
exchange code for the shares is SVI. 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
dialing: 0906 843 1432. Calls are charged at 60p per minute at all times.

The net asset value is calculated at 31 December and 30 June 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 has launched a dedicated Web Site for the Company, which 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 Interim Report, and a Newssheet which incorporates information on
recent transactions, a comprehensive analysis of the Company's Portfolio,
detailed market commentary and Schroder Ventures' strategy. The Newssheet is
distributed to the shareholders of the Company. The site also contains links
to Schroder Ventures and Schroders sites.


CAPITAL GAINS TAX INFORMATION
For the 2000/2001 tax year, the annual capital gains of private individuals
in excess of GBP7,200 (1999/2000: GBP7,100) are assessed for capital gains tax
at 20 per cent. where such gains, when added to the individual's total income,
are below the basic rate limit of GBP28,400 (1999/2000: GBP28,000) and 40 per
cent. where they exceed that limit.

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 each: 191.50p.


ASSOCIATION OF INVESTMENT TRUST COMPANIES
The Company is a member of the Association of Investment Trust Companies,
which produces monthly publications of detailed information on the majority
of investment trusts. Copies of these publications can be obtained by
subscription on application to the Association of Investment Trust Companies,
Durrant House, 8-13 Chiswell Street, London EC1Y 4YY.

                                       50


Company Summary continued

The aims of the Association are to protect and promote the interests of
member companies and their shareholders by:


*      taking specific action to safeguard and to improve the fiscal and
       regulatory regime for member companies and their shareholders

*      improving investor awareness of investment trusts through education,
       publicity and the provision of reliable statistical and other information

*      encouraging commitment to good practice and high professional standards
       in the industry.

In 1999, the AITC initiated a campaign aimed at promoting investment trusts
to the general public. The campaign includes advertising, seminars for
private investors and independent financial advisers, a website and other
activities.

The Company contributed towards the cost of the campaign in its first year
and has also agreed to contribute towards the cost of the campaign in its
second year.


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 Schroder investment trusts which are available through this service are
Schroder Asia Pacific Fund plc, Schroder Emerging Countries Fund plc,
Schroder Income Growth Fund plc, Schroder Japan Growth Fund plc, Schroder
Split Fund plc and Schroder UK Growth Fund plc.

It has recently been agreed that, in order to make this service more
attractive as a means of investing in the ordinary shares of the Company, the
charges applied to the service have been revised. There is now no initial
charge for investment in the service, although the stamp duty charge of 0.5%
remains. In addition, there is no charge for switching between investment
trusts in the service.

If you would like further information about the Schroder Investment Trust
Dealing Service please contact the Secretary of the Company at 31 Gresham
Street, London, EC2V 7QA or call Schroder Investor Services on freephone 0800
718 777.


INDIVIDUAL SAVINGS ACCOUNT STATUS
The Individual Savings Account (ISA) is a new type of tax-free savings
vehicle that has replaced PEPs and TESSAs from 6 April 1999. The government
has pledged that the ISA regime will operate for at least ten years and that
there will be no lifetime savings limit. This means that investors will not
be prevented from investing in ISAs, no matter what holdings they previously
had in PEPs and TESSAs. Anyone aged 18 or over, who is resident in the UK for
tax purposes, can invest up to GBP7,000 in an ISA during the 2000/2001 tax
year.

Schroders are providing a non CAT standard investment trust ISA, which
includes Schroder Ventures International Investment Trust plc. The investment
trust ISA is designated as a maxi account and made up entirely of a stocks
and shares component; a cash or insurance component is not offered. Further
details may be obtained from the Company Secretary at 31 Gresham Street,
London, EC2V 7QA or from Schroder Investor Services on 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 117 Dundas Street, Edinburgh, Scotland
EH3 5ED. The helpline telephone number of Lloyds TSB Registrars is 0870 601
5366.

Lloyds TSB Registrars Scotland have recently launched a new web-based enquiry
service for shareholders. Initially 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.

                                       51

Intormation for Shareholders


FINANCIAL CALENDAR

30 June                 Company's year end
September               Preliminary results for the financial year published
September               Annual Report published
December                Annual General Meeting
March                   Interim Results announced
April                   Interim Report published




<TABLE>
<CAPTION>

ANALYSIS OF REGISTER OF SHAREHOLDERS


                                          Shares
                                               %
<S>                                         <C>
At 30 June 2000
% of issued shares held by:
Private individuals                         1.60
Banks and Nominee Companies*               49.09
Pension Funds and Insurance Companies      44.59
Other Institutions                          4.72
                                          100.00
Total number of holders                      877


*Some of the nominee company holdings include a large number of private
individuals.

</TABLE>


                                       52

Notice and Agenda

NOTICE is hereby given that the fifth Annual General Meeting of Schroder
Ventures International Investment Trust plc will be held at 12.00 noon on
Tuesday 5 December 2000 at 31 Gresham Street, London, EC2V 7QA, to consider
and, if thought fit, pass the following resolutions, of which resolutions 1
to 9 will be proposed as Ordinary Resolutions and resolutions 10, 11 and 12
will be proposed as Special Resolutions:

1.     That the Report of the Directors and the Accounts for the year ended
       30 June 2000 be adopted.

2.     To declare a final dividend of 3.80p per share for the year ended 30
       June 2000.

3.     That Mr John Govett be re-elected as a Director of the Company.

4.     That Mr Anthony Habgood be re-elected as a Director of the Company.

5.     That Mr Edgar Koning be re-elected as a Director of the Company.

6.     That Ernst & Young be re-appointed as Auditors of the Company.

7.     That the Board be authorised to agree the Auditor's remuneration.

8.     That the aggregate limit of all fees payable to directors, as set out
       in Article 1(F) of the Company's Articles of Association, be increased to
       GBP200,000.

9.     That the Directors be and they are hereby generally and
       unconditionally authorised in substitution for all subsisting authorities
       in accordance with Section 80 of the Companies Act 1985 (the Act) to
       exercise all the powers of the Company to allot relevant securities (as
       defined in that section) up to a maximum aggregate nominal value of
       GBP5,113,284 (equivalent to 5,113,284 ordinary shares of GBP1 and 5 per
       cent. of the aggregate nominal amount of the share capital in issue on 31
       August 2000) provided that this authority shall expire on the date of the
       next Annual General Meeting of the Company, but so that this authority
       shall allow the Company to make offers or agreements before such expiry
       which would or might require relevant securities to be allotted after
       such expiry.

10.    That, subject to the passing of resolution 9 set out above, the
       Directors be and they are hereby empowered, pursuant to section 95 of the
       Act to allot equity securities (as defined in Section 94 of the Act)
       pursuant to the authority given in accordance with Section 80 of the Act
       by the said resolution 9 as if Section 89 (1) of the Act did not apply
       to any such allotment, provided that this power shall be limited to the
       allotment of equity securities up to an aggregate nominal amount of
       GBP5,113,284 (representing 5 per cent. of the aggregate nominal amount
       of the share capital in issue on 31 August 2000); and provided that this
       power shall expire on the date of the next Annual General Meeting of the
       Company, but so that this power shall enable the Company to make offers
       or agreements before such expiry which would or might require equity
       securities to be allotted after such expiry.

11.    That the Company be and is hereby generally and unconditionally
       authorised in accordance with Section 166 of the Companies Act 1985 (the
       "Act") to make market purchases (within the meaning of Section 163 of the
       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 15,329,628;

       (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)     the authority hereby conferred shall expire at the conclusion of
               the next Annual General Meeting of the Company unless such
               authority is renewed prior to such time; and

       (e)     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.


                                       53


Notice and Agenda continued


12.    That the proposed new form of Articles of Association produced to the
       meeting and initialled by the Chairman for the purpose of identification
       be adopted as the Articles of Association of the Company in substitution
       for and to the exclusion of the Company's existing Articles of
       Association.

Registered Office:
31 Gresham Street
London EC2V 7QA

By Order of the Board
Schroder Investment Management Limited
Secretary

14 September 2000



NOTES

1.   A member of the  Company  entitled  to attend and vote at the  Meeting  may
     appoint a proxy or  proxies  to attend  and on a poll to vote in his or her
     stead.  A proxy  need  not be a member  of the  Company.  Forms  appointing
     proxies must be lodged with the Company's  Registrar not less than 48 hours
     before the time  appointed for the Meeting.  The completion and return of a
     form of proxy  will not  preclude a member  entitled  to attend and vote in
     person at the Meeting from doing so if he or she wishes.

2.   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.


                                       54

Amendments to the Articles of Association

The notice convening an Annual General Meeting, to take place on 5th
December, 2000, is set out on page 53. The meeting will consider various
amendments to the Articles of Association which require, if they are to be
implemented, the approval of a Special Resolution of the Shareholders, that
is a resolution approved by 75 per cent. of the votes cast.

The principal proposed amendments to the Company's Articles of Association
are explained below. A number of other changes are also proposed which
reflect minor amendments to the Listing Rules of the UK Listing Authority.
The number identifying each Article in this summary corresponds to the
numbering used in the amended Articles of Association, which will be
available for inspection before and during the Annual General Meeting.


LAYOUT
The new Articles will continue to be split into two parts with Part I
containing provisions particular to the Company, and Part II containing
definitions and then a series of topics, with related matters being grouped
together.


ARTICLES 1(D), 3, 13, 14, 34, 35, 37, 38, 39, 40, 43, 46, 117, 118, 121, 125,
129, 133, 135 - UNCERTIFICATED SHARES/CREST
It is proposed to amend the Articles to provide expressly for the Company's
shares to be held and transferred in the CREST system and for the Company to
take advantage of the facilities of the CREST system as well as the
facilities which it is anticipated that the CREST system may have in the
future such as, for example, facilities to enable dividends to be paid or
notices to be sent to shareholders by means of the CREST system. These
changes include some new points that are not included in the current
Articles. Shareholders will still be able to choose whether their shares are
to be evidenced by share certificates or held in electronic form in the CREST
system and accordingly the new Articles take account of shares being held in
either form.


ARTICLE 3 - DEFINITIONS
The definition of London Stock Exchange has been amended to reflect its
change from a private to a public company. Several new definitions have been
incorporated to provide for the holding and transfer of shares through CREST.


ARTICLE 13 - UNCERTIFICATED SHARES
With this new Article, the Board may permit the holding of shares in a class
in uncertificated form and the transfer of any such shares by means of CREST.
It also allows for shares to be changed from uncertificated to certificated
form and vice versa, with an obligation on the Board to record the relevant
form on the register of members.


ARTICLE 14 - RIGHT TO SHARE CERTIFICATES
This Article has been limited so as to apply only to certificated shares and
to reflect the fact that the listing rules no longer prescribe limits over
and above those prescribed by the Companies Acts regarding the timing of the
issue of certificates.


ARTICLE 34 - FORM OF TRANSFER
This Article has been updated and expanded to provide for the transfer of
uncertificated shares through CREST.


ARTICLE 40 - UNTRACED SHAREHOLDERS
Since January 2000, the contents of this Article are no longer regulated by
the London Stock Exchange and the Article has been amended to reflect this
change.


                                       55

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.

                                       56






www.svitt.co.uk




          Schroder Ventures International    Schroder Ventures
          Investment Trust plc               20 Soutahmpton Street
          Registered Office                  London WC2E 7QG
          31 Gresham Street
          London EC2V 7QA                    Telephone 020 7632 1050
                                             Fax 020 7240 5346
          Telephone 020 7658 3206
          Fax 020 7658 3538


Schroder Ventures International Investment Trust plc - Report and Accounts 2000