Document:

Schroder Ventures International Investment Trust plc

                                               Report and Accounts December 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 December 2002

www.sviit.co.uk                                         Report and Accounts 2002

Content
                                                                          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                                                30
Consolidated Statement of Total Return                                      31
Company Statement of Total Return                                           32
Balance Sheets                                                              33
Consolidated Cash Flow Statement                                            34
Notes to the Accounts                                                       35
Consolidated Statement of Total Return (translated into euros - unaudited)  53
Balance Sheets (translated into euros - unaudited)                          54
Consolidated Cash Flow Statement (translated into euros - unaudited)        55
Company Summary                                                             56
Information for Shareholders                                                58
Proposal Relating to Transfer of Assets to New Investment Vehicle (P123)    59
Notice and Agenda                                                           60
Glossary                                                                    63

                                      -1-

<PAGE>

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 non-executive  Chairman of Invesco Income Growth
Trust plc and a non-executive Director of a number of other companies.  Nicholas
Ferguson (Chief  Executive) (aged 54) 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 in its development since 1984. He
is a non-executive Director of Schroders plc.

John Govett (aged 59) 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 56) 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 2001
and  was  Managing  Director  of  the  asset  management  company  Global  Asset
Management (GAM) between 1986 and 1999.

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-

<PAGE>

Schroder Ventures International Investment Trust plc

Financial Highlights and Historical Record

<TABLE>
<CAPTION>

                                       5 YEAR PERFORMANCE

                                                                      FTSE ALL    FTSE WORLD
                                 SVIIT Share price     SVIIT NAV   SHARE INDEX   INDEX (GBP)
        <S>                                    <C>           <C>           <C>          <C>

        January 1998                         100.0         100.0         100.0        100.0
        April 1998                           109.3         100.9         115.7        112.7
        July 1998                             90.7         108.1         101.2         96.3
        October 1998                          91.9         144.9         110.9        119.6
        January 1999                         146.7         139.6         125.6        133.2
        April 1999                           165.7         167.4         121.9        134.0
        July 1999                            191.9         182.7         134.5        153.3
        October 1999                         242.8         201.1         124.5        152.4
        January 2000                         288.9         224.5         133.1        167.2
        April 2000                           290.7         221.2         123.8        145.2
        July 2000                            239.5         220.9         119.0        141.2
        October 2000                         212.0         206.8         107.4        124.4
        January 2001                         208.7         199.5         104.7        123.0
        April 2001                           215.7         200.7         104.2        118.7
        July 2001                            184.0         203.0          84.9       96.2.0
        October 2001                         228.3         224.5          78.5       88.3.0

Source: Datastream

</TABLE>

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS TO 31 DECEMBER 2002

                                                                   31 December 2002  30 June 2002      Change %
<S>                                                                             <C>           <C>           <C>

Total assets1 (GBP'000)                                                     502,746       462,613          8.7%
Shareholders' funds (GBP'000)                                               463,192       423,087          9.5%
Market capitalisation (GBP'000)                                             387,587       362,532          6.9%
Net asset value per share - diluted                                          445.8p        412.3p          8.1%
Share price                                                                  379.0p        354.5p          6.9%
Share price discount                                                        (15.0)%       (14.0)%
Dividends per share                                                             Nil           Nil
Total expense ratio5                                                          0.2%+          0.1%

+For the six month period ended 31 December 2002, costs have been annualised.
</TABLE>

<TABLE>
<CAPTION>

HISTORICAL RECORD TO 31 DECEMBER/30 JUNE*

                                                                              Diluted
                                                                            net asset     Price of  Share price
                                                      Total Shareholders'   value per     ordinary     premium/
                                                    assets 1        funds       share       shares   (discount)
                                                    GBP'000       GBP'000       pence        pence            %

<C>                                                 <C>           <C>           <C>          <C>         <C>
2002 (December)                                     502,746       463,192       445.8        379.0       (15.0)
2002 (June)                                         462,613       423,087       412.3        354.5       (14.0)
2001                                                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

HISTORICAL RECORD TO 31 DECEMBER/30 JUNE*

                                                  Actual                                                Cost of
                                          earing ratio 2     Potential     Earnings     Dividends Running trust 4
                                                       gearing ratio 3        pence         pence       GBP'000

2002 (December)                                     1.04          1.09       (2.14)           Nil           786
2002 (June)                                         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 (launched 23 May 1996)                         0.71          1.29          N/A           N/A           N/A
*The Company changed its financial year-end from 30 June to 31 December, effective from 31 December 2002.
</TABLE>
<TABLE>
<CAPTION>

Notes:
<S>                             <C>
1. Total assets:                Total assets less current liabilities (excluding loans).
2. Actual gearing ratio:        Total assets (less cash and money market instruments) 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.
5. Total expense ratio:         Company only.  Operating costs  excluding  interest  payable  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

</TABLE>

                                      -3-
<PAGE>

Chairman and CEO's Statement

PORTFOLIO ACTIVITY FOR THE SIX MONTHS TO 31 DECEMBER 2002

We are  pleased  to report a strong  performance  over the six  months  with net
assets  increasing  by 9.5% to GBP463.2  million and net assets per share,  on a
fully-diluted  basis,  increasing to 445.8p.  This compares to falls in the FTSE
All-Share  and FTSE World  Indices  over the same  period of (16.3)% and (17.1)%
respectively.

The largest  contributor  to the increase in net assets was the  realisation  of
Homebase at a substantial  premium (GBP58  million) to the June 2002  valuation.
However, the increase can also be credited to a strong portfolio of companies as
a whole, which in aggregate continue to increase earnings, generate cash and pay
down debt in spite of difficult economic conditions.

New Fund Commitments

SVIIT proposes to make two new fund commitments in the coming months.

SVIIT expects to make a substantial  commitment to Permira Europe III, which was
launched  this  month.  The fund is  expected to build on the success of its two
predecessor  funds,  both of which have  provided  investors  with top  quartile
returns to date.  The fund will focus on European  buy-outs and buy-ins across a
range of  industries  and  sectors.  We believe  the  opportunity  for  European
buy-outs/ins to be particularly  attractive over the next few years, in terms of
both deal-flow and pricing, and Permira remains a leader in this field.

In addition,  SVIIT  intends to make a  commitment  to The Japan Fund IV (JFIV),
which has been launched by MKS Consulting  (formerly  Schroder  Ventures Japan).
JFIV will predominantly  invest in buy-out  transactions in Japan across a range
of industries  and sectors.  SVIIT  believes that the nascent  Japanese  buy-out
market,  in which MKS is a leader,  is  attractive.  Driven by years of economic
stagnation and the need for companies to dispose of non-core  assets,  there are
currently a number of good investment opportunities in companies with solid cash
flows at attractive prices. This, combined with the low interest rates in Japan,
has the potential to provide investors with superior returns.

Operating Review

SVIIT's fund  advisory  business  continues to meet its key  milestones  and the
business is on track to build revenue and profit  streams that will,  over time,
add incremental value to SVIIT.

The first SVIIT advised  product,  the EUR242 million Schroder Private Equity
Fund of Funds I, has been  operating  for nearly 12 months and has  already
reported strong  investment  performance,  with  a  number  of  realisations
within  the portfolio. The fund is now approximately 70% committed.

In addition to its existing  investment  service  business,  which  continues to
perform on target,  the team has also been working on a number of new  projects,
including:

Schroder Private Equity Fund of Funds II (SPEFOF II)

SPEFOF II will be launched later this month in  conjunction  with Schroders plc.
SPEFOF II is the successor fund to the Schroder  Private Equity Fund of Funds I,
which is listed in Dublin with three classes of shares and a minimum  investment
of EUR125,000.  As with its predecessor,  Schroder  Ventures (London) Limited
will act as the  investment  adviser  to  SPEFOF  II,  which  will  follow a
similar investment   remit,   investing  in  both  buy-out  and  venture
capital  funds predominantly in Europe and the US.

P123

SVIIT aims to start the formal marketing of another fund of funds,  P123, in the
coming months.  It is anticipated  that P123 will have  commitments to Permira's
two existing  pan-European buy-out funds, Permira Europe I and II, and will also
make a substantial commitment to Permira Europe III.

It is intended  that SVIIT will  transfer a portion of its  interests in Permira
Europe I and II to P123 in return  for a holding of  approximately  40% of P123.
The remaining 60% of P123 will be placed with other  investors.  As noted above,
SVIIT will separately make a direct commitment to Permira Europe III.

The transfer of some of SVIIT's  interests in Permira  Europe I and II in return
for a substantial  holding in P123 will enable SVIIT to gain a greater  exposure
to Permira Europe III, whilst  maintaining,  both directly and on a look through
basis through P123,  the great  majority of its exposure to Permira Europe I and
II.

The amount to be  transferred  by SVIIT will be dependent on  valuations  at the
time of transfer  and the number of shares  placed with other  investors.  It is
anticipated SVIIT will transfer  approximately EUR135 million of assets in
Permira Europe  I and II and EUR50  million  of  uncalled  commitments  to the
two funds, representing  approximately 17% of gross assets.  The assets in
Permira Europe I and II will be transferred at net asset value at the time of
transfer,  which is anticipated to take place in the second half of this year.

                                      -4-

<PAGE>

Chairman and CEO's Statement continued

As mentioned above, the transfer of some of SVIIT's  interests in Permira Europe
I and II to P123 will enable SVIIT to have a greater  exposure to Permira Europe
III. It is expected  that the benefits  from this will  outweigh any dilution on
the transferred  interests.  Based on our current return assumptions for Permira
Europe III, this increased  exposure  should have a material  positive impact on
SVIIT's net asset  value in the future.  Ultimately,  P123 will  distribute  its
proceeds from these funds to its shareholders, including SVIIT.

We will be seeking shareholder  approval at the forthcoming AGM for the transfer
of these  interests  to P123.  Schroders  plc and  AEGON  Aandelefonds  NV,  who
together beneficially represent 26.6% of SVIIT's issued share capital, have each
separately indicated their intention to vote in favour of this resolution.

More details on P123 are on page 59.

CHANGE OF YEAR-END AND ANNUAL GENERAL MEETING

As signalled in the June 2002  accounts,  SVIIT has changed its year-end from 30
June to 31 December and accounts for this six-month period are audited. The next
full financial year will be the year ending 31 December 2003.

An Annual General Meeting will be held at 12.00pm on 25 April 2003 at 31 Gresham
Street, London EC2V 7QA.

OUTLOOK

Business,  political and economic  uncertainty  continue to dominate  investment
markets  and the last six  months  of 2002  remained  challenging,  with  public
markets falling further over the period.

SVIIT  continues  to perform  well,  outperforming  its quoted  competitors  and
relative stock market indices,  and reporting 17.5% p.a.  compound growth in net
asset value over five years.  We believe the current  portfolio  of companies is
well placed to provide for further increases in net asset value.

John McLachlan

Chairman

Nicholas Ferguson

Chief Executive

                                      -5-
<PAGE>

Portfolio Review for the six months to 31 December 2002

SUMMARY

The overall  strong  performance  of SVIIT's  portfolio  in the six months to 31
December 2002 resulted in a 9.5% increase in net assets to GBP463.2  million and
an increase in net assets per share, on a fully-diluted basis, to 445.8p (452.9p
undiluted) (June 2002: GBP423.1 million - 413.7p per share undiluted).

This increase  principally  reflects two key factors.  Firstly,  the  successful
realisation  of Homebase  at a  substantial  premium to the June 2002  valuation
added 57p to net assets per share.  Secondly,  at the underlying  company level,
the overall  valuation of the  portfolio  has  remained  relatively  robust.  In
aggregate,  SVIIT's  portfolio  of  companies  continues  to increase  earnings,
generate  cash and pay down debt,  in spite of  difficult  economic and business
conditions.

The total calls of GBP122.7  million paid during the six-month  period were well
ahead of the GBP77.5  million of calls paid in the  preceding  12 months to June
2002 and were  dominated  by two new  investments;  Travelodge  and Little  Chef
(GBP56.5 million) and Ferretti (GBP31.8 million).  With public markets remaining
closed as a funding  alternative  for  companies,  private  equity is becoming a
larger  part of merger  and  acquisition  activity  and we  expect  the level of
completed transactions to remain relatively strong.

SVIIT received a total of GBP104.5  million of  distributions  in the six months
since June, the majority of which came from the  successful  sale of Homebase to
GUS plc in November. In the short to medium term, uncertain business,  political
and economic environments will continue to overshadow investment markets. Whilst
sales of good quality companies in this market environment are achievable,  this
uncertain outlook will continue to delay a number of exits.  However,  we expect
recapitalisations  and other  sales  transactions  to  continue  to occur in the
portfolio, providing an on-going source of distributions.

Half of the portfolio  (51%) is valued on an earnings  basis with a bias towards
EBIT  valuations  due to its  concentration  on buy-outs.  The percentage of the
portfolio  held on a cost  basis has  increased  to 28% (June  2002:  17%).  The
proportion  of the portfolio  valued on a write-down  basis has increased to 12%
(June 2002: 9%).

The portfolio  continues to have a clear  weighting  towards  Multinational  and
Continental European companies (58% in total). The portfolio's  weighting to the
UK has increased to 19% due to the investment in Travelodge and Little Chef.

The Twenty Largest  Underlying  Companies  represent 72% of the  portfolio.  The
total  number of  portfolio  companies  held by the 22 buy-out  and  development
capital  funds in which  SVIIT  invests  decreased  to 141 from 151, a result of
realisations.

FUND TRANSACTIONS

A total of GBP122.7  million in calls were paid  during the six months,  funding
eight  new and 18  follow-on  investments.  Of the eight  new  investments,  two
feature in the Twenty Largest Underlying  Companies;  Travelodge and Little Chef
(GBP56.5 million) and Ferretti (GBP31.8 million).

The investment in Travelodge and Little Chef,  through funds advised by Permira,
is the largest investment to date for SVIIT and is its largest portfolio company
representing  12.2% of net assets.  Travelodge is the second largest operator in
the UK budget hotel sector,  providing around 13,000 rooms in 227 hotels located
around Britain.  Little Chef is the largest roadside restaurant chain in Britain
with approximately 400 outlets.  Permira intends to develop both businesses over
the next few years, with a focus on operational improvements and expansion.

Ferretti was originally acquired by a fund advised by Permira (Permira Italy II)
in 1998 and  floated on the Milan  Stock  Exchange  in June 2000.  At  flotation
Permira  sold the  majority of its  interest in Ferretti  and has since sold its
remaining  holding.  Since 1998 the  Ferretti  Group has grown  organically  and
through acquisitions,  and is currently Europe's largest builder of luxury motor
yachts.  Following a  successful  tender  offer,  the company has now been taken
private by Permira  Europe II.  Ferretti is SVIIT's  fourth  largest  underlying
company, representing 7.1% of net assets.

+ The full GBP8.8 million in Silverlink was called from and paid by SVIIT
   before 31 December 2002.

                                      -6-
<PAGE>

Portfolio Review continued

Another  new  investment,  Silverlink,  does not  feature in the Twenty  Largest
Underlying  Companies  as only the  initial  tranche of the  investment  (GBP4.4
million) had been made at 31 December 2002. Since December a further  investment
has been made taking SVIIT's total  investment in this company to  approximately
GBP8.8 million+.  Silverlink is the holding company for the Amanresorts, a group
of high-end  luxury resorts and spas.  Amanresorts  opened its flagship  resort,
Amanpuri in Phuket, Thailand in 1988 and has since added 12 hotels in Indonesia,
the  Philippines,  France,  North Africa,  Mexico,  the United States and French
Polynesia.  It now owns  and/or  manages 13 resorts  with a number of them being
regularly voted amongst the top ten hotels worldwide.

Since 31 December 2002,  funds advised by Permira have taken a majority  holding
in Premiere,  the leading pay-TV operator in Germany and Austria,  with over 2.6
million subscribers.  Premiere offers exclusive premium Pay-TV content including
sport,  movies  and  special  interest  packages  on  23  channels  as  well  as
Pay-per-View.  SVIIT's  commitment  to this  investment is  approximately  GBP22
million.

SVIIT received a total of GBP104.5 million of  distributions in the period,  the
most  substantial  being from the sale of Homebase to GUS plc in November  2002.
Funds advised by Permira  backed the buy-out of Homebase in March 2001. In April
2002, the company  underwent a  recapitalisation,  returning the majority of the
cost of the  investment  to  investors  and at June 2002 was  valued at  GBP36.8
million. SVIIT received GBP95.2 million from this realisation and, including the
recapitalisation, has received approximately GBP109.2 million in total from this
investment against a total cost of GBP20.0 million.
<TABLE>
<CAPTION>

                                        30 June 2002
Company                    Proceeds        Valuation         Cost
                            GBP'000          GBP'000      GBP'000
<S>                             <C>              <C>          <C>

Homebase                     95,208           36,773       *6,015

</TABLE>

*  The remaining attributable cost of the investment following the return of
   capital in April 2002.

There  were  several  changes  to  valuations  in the  period.  The  three  most
significant  write-ups were Cognis, Med Eng and Takko. Cognis, has been revalued
from cost to an EBITDA basis and is now valued at GBP38.1 million (cost: GBP33.7
million).  The company is  performing  well and is ahead of its  projected  debt
position.

<TABLE>
<CAPTION>

                  31 December 2002   30 June 2002    Change in
                         Valuation      Valuation       Period
Company                     GBP'000       GBP'000      GBP'000
<S>                             <C>           <C>          <C>

Cognis                       38,114        34,611        3,503
Med Eng                       5,549         2,163        3,386
Takko**                      20,029        17,027        3,002
</TABLE>

** The  valuation at 30 June 2002 has been  adjusted to include a follow-on
   investment  in the company  after 30 June 2002.

Based in Ontario,  Canada,  Med Eng designs and manufactures  protection systems
worn by individuals  working with explosive  devices  (including  anti-personnel
land  mines  and  chemical/biological  devices)  and by  crowd-control  security
forces.  The  Schroder  Canadian  Buy-Out  Fund  II  backed  the  buy-out  of  a
controlling  interest in the company in April 2000 and since then the  company's
earnings have grown rapidly.  As a result, the company has been written up on an
EBITDA basis to GBP5.5 million, against a cost of GBP1.8 million.

Takko has been written-up  having been  written-down in June 2001. The company's
earnings have since improved strongly and it is now performing  in-line with its
original budget and has been revalued on an EBIT basis to GBP20.0 million. There
have been some reductions in valuations in the period.  The two most significant
are Leica Microsystems and Kiekert. The valuation of Leica Microsystems has been
reduced by 30%,  mainly a result of declining  comparable  EBIT  multiples and a
projected  fall in forecast 2003  earnings in its  semiconductor  business.  The
valuation of Kiekert has been  reduced by 35%, a result of a fall in  comparable
EBIT multiples and a projected fall in 2003/2004 earnings.

                   31 December 2002   30 June 2002    Change in
Company                   Valuation      Valuation       Period
                            GBP'000        GBP'000      GBP'000
Leica Microsystems           12,635         18,718      (6,083)
Kiekert                       9,924         15,177      (5,253)

VALUATION BASIS (BY VALUE)

Over a quarter of the portfolio is now valued on a cost basis (28%),  reflecting
the level of new  investments  and the maturing of  investments  such as Cognis,
which is now valued on an earnings basis.

The  percentage  of the portfolio  valued on an earnings  basis has decreased to
51%, a result of the sale of Homebase and the  revaluation  of companies such as
Kiekert.

Weaker public markets and share-prices have meant that the portfolio's weighting
to quoted  companies has decreased to 5%. The percentage of the portfolio valued
on a write-down basis has increased to 12%.

                                      -7-
<PAGE>

Portfolio Review continued
<TABLE>
<CAPTION>

                    1 December 2002                                               31 December 2001
                      % (by Value)                                                  % (by Value)

      <S>                 <C>                                                           <C>
       Cost                                    28                     Cost                                   17
       P/E                                      2                     P/E                                     3
       EBIT                                    49                     EBIT                                   57
       3rd Party                                4                     3rd Party                               5
       Quoted                                   5                     Quoted                                  9
       W/Down                                  12                     W/Down                                  9

                Under British Venture Capital Association (BVCA) valuation guidelines, investments are
    normally carried at cost, less a provision if appropriate, for at least the first 12 months after acquisition.

</TABLE>

The weighted  average EBIT  multiple  used in valuing the  applicable  portfolio
companies  has increased to 11.3 (June 2002:  9.4).  After a range of discounts,
investments valued on an EBIT basis are effectively valued at 8.1 times earnings
(June 2002:  6.8). This average number is chiefly  influenced by the higher than
average EBIT  multiples used for the valuation of the  semiconductor  companies,
which represent 21% of the portfolio, and the sale of Homebase, which was valued
on a discounted  EBIT multiple of 4.0 in June 2002. The average  discounted EBIT
multiple for  non-semiconductor  companies has  increased  slightly to 5.1 (June
2002:  4.9). The average  discount  applied to companies valued on an EBIT basis
has remained unchanged over the six-month period.

The  weighted  average P/E  multiple  used in valuing the  applicable  portfolio
companies has decreased to 10.7 (June 2002:  13.5).  After a range of discounts,
investments  valued on a P/E basis are effectively  valued at 7.7 times earnings
(June 2002: 9.9).

The average discount applied to quoted investments  remained static at 16% (June
2002: 16%).

GEOGRAPHICAL AND SECTOR DISTRIBUTION (BY VALUE)

The  portfolio  continues  to be  dominated  by  Multinational  and  Continental
European  companies,  now representing  almost two-thirds of the portfolio.  The
portfolio's  exposure to the UK has increased to 19%, a result of the investment
in Travelodge and Little Chef.

<TABLE>
<CAPTION>

                                   Geographical Analysis

                        31 December 2002      31 December 2001
                            % (by Value)          % (by Value)
<S>                                  <C>                  <C>

Multinational                         37                   37
Continental Europe                    21                   21
North America                         14                   16
UK                                    19                   16
Far East/Asia Pacific                  9                   10

</TABLE>

With  SVIIT's  investments  in  Ferretti  and  Travelodge  and  Little  Chef the
portfolio's  weighting to Consumer has increased to 31%,  whilst its exposure to
Computer/other  electronics has declined further,  driven by investment in other
sectors  and  the  recapitalisation  of  Memec,  which  returned  8% of  cost to
investors. Of the 21% of the portfolio invested in this sector, 18.8% relates to
companies that produce or distribute  hardware materials (e.g.  semiconductors);
2.0% to IT business to business  consultancy and 0.2% to companies  providing IT
services directly to consumers.

                                      -8-
<PAGE>

Portfolio Review continued

                                                   Sector Analysis
<TABLE>
<CAPTION>

                                                                 31 December 2002   31 December 2001
                                                                     % (by Value)       % (by Value)

                             <S>                                              <C>                <C>
                            Consumer                                           31                 20
                            Computer & Other Electronics                       21                 26
                            Medical/Health                                     21                 24
                            Industrial Products & Services                     10                 10
                            Chemicals                                           9                  9
                            Other Manufacturing                                 5                  6
                            Other Services                                      2                  3
                            Construction                                        1                  0
                            Transportation                                      0                  2

</TABLE>

PORTFOLIO PERFORMANCE

Distributions  from  realisations of GBP104.5 million were at an average premium
of 120.1% to the 30 June 2002 valuations.

Calls payable during the period  amounted to GBP122.7  million to fund eight new
and 18 follow-on investments.

SVIIT's return on its holdings of Schroder Ventures and Permira funds is
summarised below:

<TABLE>
<CAPTION>
                                   6 months to  12 months to
                                   31 December       30 June
                                          2002          2002
                                          GBPm          GBPm
<S>                                        <C>           <C>

Opening Valuation                        422.8         387.0
Calls Payable                            122.7          77.5
Distributions Receivable               (104.5)        (49.0)

                                  --------------------------
                                         441.0         415.5
Increase in Value of Portfolio            43.0           7.3

                                  --------------------------
Closing Portfolio                        484.0        422.8

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

</TABLE>

CASH & MARKETABLE  SECURITIES

At 31 December 2002, SVIIT's gross cash balance of GBP18.8 million (June 2002:
GBP40.3  million) was held principally in two money market funds.

DEAL TYPE

SVIIT's  portfolio is biased toward  Management  Buy-Outs/Ins  (82%),  with
limited exposure to early stage investing, entirely in life sciences.

<TABLE>
<CAPTION>

                         31 December 2002     30 June 2002
                             % (by Value)     % (by Value)
<S>                                   <C>              <C>

Early stage/Start-up                    4                4
Development                            14               17
Buy-outs/ins                           82               79

</TABLE>

                                      -9-
<PAGE>

Portfolio Review continued

<TABLE>
<CAPTION>

             Investments in Companies (GBPm)                           Investments in Companies (GBPm)
                    31 December 2002                                       31 December 2001

                                     PE/EBIT/3rd                                                E/EBIT/3r
                      Quoted    Cost       Party    W/Down                      Quoted     CostP    Partyd W/Down
      <S>                <C>     <C>         <C>       <C>    <C>                  <C>       <C>       <C>    <C>

      1992 & prior       0.2       0           0       8.4    1992 & prior         0.4        0       0.8       8
      1993                 0       0         0.2       1.2    1993                   0        0       0.2     2.1
      1994                 0       0         0.9         0    1994                   0        0       0.8       0
      1995                 0       0         0.6       1.8    1995                 0.1        0       1.9     2.2
      1996               1.6       0         5.7       0.1    1996                 2.5      0.4       5.7     0.1
      1997               0.9     2.1          23       0.7    1997                 0.2        0      25.8     4.5
      1998               1.9       0        25.7       1.2    1998                 0.9      0.5      40.2     1.4
      1999               1.4     0.8        19.1      10.4    1999                   1      1.2        16    15.3
      2000              48.4    11.7       129.4       1.9    2000                35.3     24.7     130.6     4.3
      2001               0.6    10.4        58.7       0.3    2001                   0     45.2        58     0.8
      2002                 0   108.9           0         0    2002                   0      2.9         0       0

</TABLE>

PORTFOLIO MATURITY

The average age of the portfolio remains low, with 77% of investments being held
for three years and under (June 2002: 74%).

FUND COMMITMENTS

At 31 December 2002, SVIIT had GBP293.4 million in uncalled  commitments to nine
funds (June 2002: GBP403.2 million to nine funds).

SVIIT expects to make a substantial  commitment to Permira Europe III, which was
launched  this  month.  This fund is expected to build on the success of its two
predecessor  funds, both of which have provided  investors with superior returns
to date. The fund will focus on European  buy-outs and buy-ins across a range of
industries and sectors.

In addition,  SVIIT  intends to make a  commitment  to The Japan Fund IV (JFIV),
which has been launched by MKS

<TABLE>
<CAPTION>

Uncalled Fund Commitments at 31 December 2002

Fund                                                           Amount Called  Amount Uncalled   SVIIT Uncalled
                                                            (Local Currency)  (Local Currency)      Commitment*
                                                                                                    GBP million

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

Permira Europe I                                                   EUR189.6m          EUR6.9m               4.5
Permira Europe II                                                  EUR462.7m        EUR287.3m             187.2
The Japan Venture Fund III                                       YEN2,928.1m        YEN521.9m               2.7
Schroder Ventures Asia Pacific Fund                                 US$73.7m         US$34.9m              21.7
Schroder Ventures US Fund                                           US$42.1m         US$31.1m              19.3
Schroder Canadian Buy-Out Fund II                                    C$17.0m           C$0.9m               0.4
Schroder Canadian Buy-Out Fund III                                   C$14.0m          C$36.5m              14.3
Schroder Ventures International Life Sciences Fund II               US$77.6m          US$4.1m               2.5
International Life Sciences Fund III                                 US$9.4m         US$65.6m              40.8

Total                                                                                                     293.4

*  Based on exchange rates at 31 December 2002.

</TABLE>

                                      -10-
<PAGE>

Portfolio Review continued

Consulting (formerly Schroder Ventures Japan). JFIV will predominantly invest in
buy-out transactions in Japan across a range of industries and sectors.

CONCLUSION

The increase in net assets of 9.5% over the period compares to respective  falls
in the FTSE  All-Share and FTSE World  Indices of (16.3)% and (17.1)%.  Over the
last five years,  SVIIT has reported  compound growth in net assets per share of
17.5% p.a.,  which  compares to negative  compound  returns of (4.7)% and (2.5)%
p.a. from the FTSE All-Share and FTSE World Indices  respectively  over the same
period.

Overall SVIIT's portfolio of companies  continues to perform well, generate cash
and repay debt, in spite of difficult economic and business conditions.

                                      -11-

<PAGE>

Twenty Largest Underlying Companies

In the following pages, we show the Group's twenty largest investments
by value at 31 December 2002 (Geographic Locations by head office)

1.  TRAVELODGE &
    LITTLE CHEF
    (UK)                             Travelodge &
                                  Little Chef Picture
Company (GBP000's)
Cost                     56,468
Value                    56,461
Date of                Dec 2002
Acquisition

Travelodge  is the  second  largest  operator  in the UK budget  hotel  sectors,
providing around 13,000 rooms in 227 hotels located around Britain.  Little Chef
is the largest  roadside  restaurant  chain in Britain  with  approximately  400
outlets.  The valuation basis is cost in fund currency;  the holding  represents
12.19% of SVIIT's net assets.

2.  MEMEC
    (UK)
                                     MEMEC Picture
Company (GBP000's)
Cost                     51,837
Value                    54,278
Date of                Oct 2000
Acquisition

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 11.72% of
SVIIT's net assets.

3.  COGNIS                           Cognis Picture
    (GERMANY)

Company (GBP000's)
Cost                     33,652
Value                    38,114
Date of                Nov 2001
Acquisition

Cognis is a leading world-wide supplier of speciality chemicals which was carved
out  from  Henkel  in  1999.   The  three   divisions  of  the  Cognis  Group  -
Oleochemicals,  Care Chemicals and Organic  Specialities - supply  international
manufacturers of detergents, cleaners and cosmetics, as well as other industrial
customers.  The  valuation  basis is EBITDA;  the  holding  represents  8.23% of
SVIIT's net assets.

4.  FERRETTI
    (ITALY)
                                   Ferretti Picture
Company (GBP000's)
Cost                     31,780
Value                    32,850
Date of                Nov 2002
Acquisition

Ferretti was originally acquired by funds advised by Permira in 1998 and floated
on the Milan Stock Exchange in June 2000. At flotation Permira sold the majority
of its interest in Ferretti and later sold its remaining holding. Since 1998 the
Ferretti Group has grown  organically and through  acquisitions and is currently
Europe's largest builder of luxury motor yachts.  The valuation basis is cost in
fund currency; the holding represents 7.09% of SVIIT's net assets.

                                      -12-
<PAGE>

Twenty Largest Underlying Companies continued

5.  HOGG ROBINSON
    (UK)
                                     Hogg Robinson
                                        Picture
Company (GBP000's)
Cost                     24,154
Value                    24,897
Date of               June 2000
Acquisition

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.  The employee
benefit  services  comprise  benefit  consulting,   administration  and  payment
processing. The valuation basis is EBIT; the holding represents 5.38% of SVIIT's
net assets.

6.  TAKKO
    (GERMANY)
                                         Takko
                                        Picture
Company (GBP000's)
Cost                     18,494
Value                    20,029
Date of              March 2000
Acquisition

Takko is a retailer of  fashionable  "value for money"  clothing  targeting  the
young  family  and women  aged  between  25 and 40.  It runs over 520  stores in
Germany and Austria.  The valuation basis is EBIT; the holding  represents 4.32%
of SVIIT's net assets.
                                     Sirona Dental
7.  SIRONA DENTAL                    Systems Group
    SYSTEMS GROUP                       Picture
    (GERMANY)
Company (GBP000's)
Cost                     16,066
Value                    18,068
Date of                Nov 1997
Acquisition

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 3.90% of SVIIT's net assets.

8.  AUSTRIAMICRIOSYSTEMS
    (AUSTRIA)
                                  Austriamicrosystems
                                        Picture
Company (GBP000's)
Cost                      36,192
Value                     16,064
Date of Acquisition    June 2000

Austriamicrosystems  designs,  manufactures and sells  semiconductor  speciality
products,  focusing on analogue and mixed signal ASICS  (Application  - Specific
Integrated Circuits). The company serves the wireless communications, industrial
and automotive  end-customer  markets. The valuation basis is written down on an
EBIT basis; the holding represents 3.47% of SVIIT's net assets.

                                      -13-
<PAGE>

Twenty Largest Underlying Companies continued

9.  LEICA MICROSYSTEMS
    (GERMANY)
                                   Leica Microsystems
                                        Picture
Company (GBP000's)
Cost                      11,849
Value                     12,635
Date of Acquisition   March 1998

Leica  manufactures  and  supplies  microscopes  and related  equipment  for the
healthcare,  research  and  semiconductor  industries.  The  company has leading
positions  in  most  of  its  markets  and a  strong  track  record  in  product
innovation. The valuation basis is EBIT; the holding represents 2.73% of SVIIT's
net assets.

10. GRAMMER
    (GERMANY)
                                        Grammer
                                        Picture
Company (GBP000's)
Cost                       9,288
Value                     10,094
Date of Acquisition    June 2001

Grammer  supplies  seating  equipment  to  the   automotive/commercial   vehicle
industry.  The  company  serves  three  different  segments  of the  automotive/
commercial vehicle industry:  automotive  equipment (mainly seating  utilities),
commercial  vehicle driver seats and commercial  vehicle  passenger  seats.  The
valuation basis is EBITDA; the holding represents 2.18% of net assets.

11. KEIKERT
    (GERMANY)
                                        Keikert
                                        Picture
Company (GBP000's)
Cost                      14,545
Value                      9,924
Date of Acquisition    Sept 2000

Kiekert  produces  complete systems for all devices that open,  close,  lock and
unlock cars and has operated in this market since 1920.  Products include highly
integrated system locks as well as complex door modules.  The valuation basis is
written  down on an EBIT  basis;  the  holding  represents  2.14% of SVIIT's net
assets.

12. EEMS
    (ITALY)
                                          EEMS
                                        Picture
Company (GBP000's)
Cost                       1,759
Value                      9,568
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 EBIT; the holding represents
2.07% of SVIIT's net assets.

                                      -14-
<PAGE>

Twenty Largest Underlying Companies continued

13. AP PLASMAN
    (CANADA)
                                       Ap Plasman
                                        Picture
Company (GBP000's)
Cost                      11,048
Value                      8,331
Date of Acquisition    Sept 2000

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 written down on an EBIT basis; the
holding represents 1.80% of SVIIT's net assets.

14. PARKWAY HOLDINGS
    (SINGAPORE)
                                    Parkway Holdings
                                        Picture
Company (GBP000's)
Cost                      19,700
Value                      7,777
Date of Acquisition     Dec 1999

Parkway  is a private  healthcare  provider  in  Singapore  with an  established
network of hospitals and clinics in Malaysia,  Indonesia and India.  The company
has the  region's  best known  brand  name and a  reputation  for  technological
leadership.  The  valuation  basis is quoted;  the holding  represents  1.68% of
SVIIT's net assets.

15. BETTS GROUP HOLDINGS
    (UK)
                                      Betts Group
                                        Holdings
                                        Picture
Company (GBP000's)
Cost                       6,345
Value                      7,369
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 EBIT;  the holding  represents
1.59% of SVIIT's net assets.

16. MESA COMMUNICATIONS
    (USA)
                                          Mesa
                                     Communications
                                        Picture
Company (GBP000's)
Cost                       8,766
Value                      7,249
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  write-down;  the  holding  represents  1.57% of SVIIT's net
assets.

                                      -15-
<PAGE>

Twenty Largest Underlying Companies continued

17. TFL
    (GERMANY)
                                          TFL
                                        Picture
Company (GBP000's)
Cost                       4,724
Value                      7,146
Date of Acquisition   March 2001

TFL is a supplier of speciality  chemicals to the leather  processing  industry.
TFL 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
1.54% of SVIIT's net assets.

18. EURO DENTAL
    (GERMANY)
                                      Euro Dental
                                        Picture
Company (GBP000's)
Cost                       3,684
Value                      7,050
Date of Acquisition     Jan 2000

Euro Dental is a leading mail order house for dental consumables in Germany. The
company has two  subsidiaries,  Krugg, the market leading  distributor of dental
consumables in Italy and a small start-up  company  called  Dentranet,  which is
aimed at exploiting  e-commerce  opportunities in the German dental  consumables
market. The valuation basis is EBIT; the holding represents 1.52% of SVIIT's net
assets.

19. WASHTEC
    (GERMANY)
                                        Washtec
                                        Picture
Company (GBP000's)
Cost                       5,939
Value                      6,430
Date of Acquisition     Feb 1998

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
1.39% of SVIIT's net assets.

20. MED ENG
    (CANADA)
                                        MED ENG
                                        Picture
Company (GBP000's)
Cost                       1,789
Value                      5,549
Date of Acquisition     Jan 2000

Med Eng designs and manufactures  protection systems worn by individuals working
with   explosive   devices    (including    anti-personnel    land   mines   and
chemical/biological devices) and by crowd-control security forces. The valuation
basis is EBITDA; the holding represents 1.20% of net assets.

                                      -16-
<PAGE>

List of Investments at 31 December 2002

<TABLE>
<CAPTION>

                                                                                SVIIT's Holding          Value of    SVIIT's Net
                                                             Year      Original     in the Fund   SVIIT's Holding         Assets
                                                          Formed  Life (years)               %           GBP'000              %
<S>                                                           <C>           <C>             <C>               <C>            <C>
ASIA
Asia Pacific Trust
Formed to invest in equity and near-equity investments
in the high growth economies of the Asia Pacific
region.This trust has been in liquidation since 1998.        1990            8*             6.4               920            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             9,661            2.1

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            26,208            5.7
Co-investments with Asia Pacific Fund ll and Schroder
Ventures Asia Pacific Fund                                                                                  1,011            0.2

The Japan Venture Fund II
Formed to invest in Japanese businesses with potential
for capital growth.                                          1990           10*            13.7             2,056            0.4

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            13,862            3.0

TOTAL ASIA                                                                                                 53,718           11.6

</TABLE>

                                      -17-
<PAGE>

<TABLE>
<CAPTION>

List of Investments continued

                                                                                SVIIT's Holding          Value of    SVIIT's Net
                                                             Year      Original     in the Fund   SVIIT's Holding         Assets
                                                           Formed  Life (years)               %           GBP'000              %
<S>                                                           <C>           <C>             <C>               <C>            <C>
CONTINENTAL EUROPE
Permira Europe I
The first $1 billion fund raised for private equity
investment in Europe focusing on large and medium-sized
leveraged buy-out opportunities.                             1997           10             22.0           67,925           14.7

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          247,328           53.4

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              375            0.1

Permira France Venture I
Formed with a policy of investing in development
capital opportunities, principally in France.                1992          10*             19.0              113            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            6,114            1.3

Permira German Buy-Outs 1992
Established to invest in a diverse portfolio of
buy-outs, buy-ins, development capital businesses and
turnarounds, principally in Germany, Austria and
Switzerland.                                                 1991          10*             19.4            2,382          0.5

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            1,642          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              930          0.2

TOTAL CONTINENTAL EUROPE                                                                                 326,809         70.6

</TABLE>

                                      -18-
<PAGE>

<TABLE>
<CAPTION>

List of Investments continued

                                                                                SVIIT's Holding          Value of    SVIIT's Net
                                                             Year      Original     in the Fund   SVIIT's Holding         Assets
                                                          Formed  Life (years)               %           GBP'000              %
<S>                                                           <C>           <C>             <C>               <C>            <C>
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            10,706           2.4

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               588           0.1

Permira UK Venture IV
Established to follow the policies of the fully
invested Permira UK Venture III                              1995           10              4.2             2,050           0.4

TOTAL UNITED KINGDOM                                                                                       13,344           2.9

</TABLE>

                                      -19-

<PAGE>

<TABLE>
<CAPTION>

List of Investments continued

                                                                                SVIIT's Holding          Value of    SVIIT's Net
                                                             Year      Original     in the Fund   SVIIT's Holding         Assets
                                                            Formed  Life (years)               %           GBP'000              %
<S>                                                           <C>           <C>             <C>               <C>            <C>
NORTH AMERICA
Schroder Canadian Buy-Out Fund II
Established to invest in buy-outs and development
capital opportunities, principally in Canada.                1994            10            22.6             9,334            2.0

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             3,193            0.7

Co-investments with Schroder Canadian Buy-Out Funds II
and III                                                                                                    13,997            3.0

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             1,688            0.4

Schroder Ventures International Life Sciences Fund II
Established as a successor to Schroder Ventures
International Life Sciences Fund, to invest in a
diversified portfolio of life sciences companies
principally in the United States and Europe. The
majority of these investments will be in early stage
opportunities.                                               1999            10            29.2            38,094            8.1

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             5,022            1.1

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            18,760            4.1

TOTAL NORTH AMERICA                                                                                        90,088           19.4

Total fund portfolio                                                                                      483,959          104.5
Money market instruments                                                                                   13,911            3.0

Total investment portfolio                                                                                497,870          107.5
Other assets less total liabilities                                                                       (34,678)          (7.5)

Total net assets                                                                                          463,192          100.0

*The lives of these funds have been extended.

Note: Permira Italy I terminated during the period and is therefore excluded from the list of investments.

</TABLE>

                                      -20-
<PAGE>

Report of the Directors for the six months ended 31 December 2002

The  Directors  submit their report and the audited  accounts of the Company for
the six months ended 31 December 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.

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  six  months  after  expenses,
interest,  taxation and minority  interests was GBP2,185,000 (year ended 30 June
2002:  deficit of  GBP1,555,000),  equivalent to a deficit per ordinary share of
2.14p (30 June 2002: deficit of 1.52p).

DIVIDEND

The Company is prohibited by its Articles of Association  from  distributing  as
dividends any capital surpluses which arise from the realisation of investments.
Accordingly, any dividends paid by the Company will be funded out of its revenue
account.

The  Company's  investment  objective  is  one  of  capital  growth  and  it  is
anticipated  that returns for  shareholders  will derive primarily from capital.
The Directors do not  recommend  the payment of a final  dividend as the Company
has reported a deficit for the financial period on its revenue account.

POLICY FOR PAYMENT OF CREDITORS

It is the  policy  of the  Company  to settle  all  investment  transactions  in
accordance  with the terms and  conditions  of the relevant  markets in which it
operates.  All other expenses are paid on a timely basis in the ordinary  course
of business. The Company had no trade creditors at 31 December 2002.

PURCHASE OF SHARES FOR CANCELLATION

During the six  months  ended 31  December  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 21 March 2003 was 102,391,012 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 21 March 2003 will be  proposed  at the  forthcoming  Annual
General Meeting for which notice is given on pages 60 and 61.

This  authority  will lapse at the  conclusion of the Company's  Annual  General
Meeting in 2004, unless renewed earlier.

ISSUE OF NEW SHARES

At the Annual General  Meeting of the Company on 26 November 2002, the Directors
were given powers (in  substitution  for the powers taken at the Annual  General
Meeting of the Company in November  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 8 and 10 (set out
in the notice of the Annual General Meeting on pages 60 and 61) will be proposed
at the Annual General Meeting.

If passed,  Resolution  8 will give the  Directors  the power to allot  relevant
securities up to an aggregate nominal amount of (a) GBP1,023,910  (equivalent to
1% of the  Company's  issued  ordinary  share  capital  as at 21 March  2003) in
connection with the Company's Executive Share Option Plan; and (b) GBP34,130,337
(equivalent to one-third of the Company's issued ordinary share capital as at 21
March 2003).

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  GBP1,023,910
(equivalent to 1% of the Company's  issued ordinary share capital as at 21 March
2003) 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  GBP10,239,101  (equivalent  to 10% of the  Company's  issued
ordinary share capital as at 21 March 2003).

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
or Permira funds, and for general corporate purposes. It is the intention of the
Board that any equity securities  allotted under this authority will be allotted
at an effective  premium to the estimated net asset value per ordinary  share at
the date of pricing of the issue of the relevant equity securities.

The Directors  intend to exercise the authority  referred to in paragraph (b) of
Resolution  8  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 8 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 8 and 10 will lapse at
the conclusion of the Company's  Annual General Meeting in 2004,  unless renewed
earlier.

                                      -21-
<PAGE>

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 six months to 31  December  2002 are given
below:

<TABLE>
<CAPTION>
                                  Ordinary Shares
                                   of GBP1.00 each
                            At 31 December    At 30 June
                                      2002          2002
<S>                                    <C>           <C>
Beneficial
J J McLachlan                       16,423        15,827
N E H Ferguson*                    230,000       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
A F Sykes                              Nil           Nil
A C Williams*                        9,235         9,235
Non-Beneficial
N E H Ferguson                      27,900        27,900
C J Govett                          20,000        20,000
A C Williams                         2,000         2,000

</TABLE>

* Nicholas  Ferguson and Andrew Williams have options over ordinary shares,
  details of which are given on page 29.

Mr Ferguson also holds GBP100,000 Convertible Bonds due 2011.

On 14 March 2003, Mr Habgood acquired a  non-beneficial  interest in 12,500
shares.

There had been no other change in the above  holdings up until 21 March 2003. In
accordance with the Company's Articles of Association,  Mr Raeburn, Mr McLachlan
and Mr Ferguson 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 50. No other  Director  has any  material  interest in any other
contract which is significant to the Company's business.

DIRECTORS' REMUNERATION REPORT

New  legislation  requires the Company to produce a yearly  report on Directors'
remuneration  and  the  Company's  remuneration  policy,  and to  put an  annual
resolution to  shareholders  for the approval of that report.  The  Remuneration
Report   prepared  in  accordance  with  the  Directors'   Remuneration   Report
Regulations  2002 can be found on pages 27 to 29.  Therefore,  the notice of the
Annual General  Meeting on pages 60 and 61 contains an ordinary  resolution (no.
2) to approve the Remuneration  Report for the year. It should be noted that the
result of this resolution is advisory only.

DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

During  the  period 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 25 March 2003 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       16,622,251         16.23
  clients
- beneficial                         7,113,449          6.95
Aegon Investment Management BV      22,403,665         21.88
Lansdowne Partners                   5,758,162          5.62
Fidelity International Limited       4,551,451          4.45

</TABLE>

<TABLE>
<CAPTION>
                                         Nominal    Percentage
                                           Value       of bond
<S>                                          <C>           <C>
Convertible Bonds:
Metropolitan Life Insurance             GBP20.0m         50.63
Company
Scottish Widows Investment
Partnership Limited                      GBP6.8m         17.22
Chase Nominees Limited a/c 20477         GBP4.0m         10.13
Alliance Trust                           GBP4.0m         10.13
Schroder & Co. Bank AG, Zurich           GBP3.3m          8.35

</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
25 March 2003

                                      -22-
<PAGE>

Statement of Directors' Responsibilities

The Directors are responsible for preparing  accounts for each financial  period
which give a true and fair view of the state of affairs  of the  Company  and of
the Group at the end of the  financial  period and of the return for the period,
and are in accordance with applicable laws and regulations.

The Directors are satisfied that the Group has adequate resources to continue in
business and accordingly that the accounts should be drawn up on a going concern
basis.  Further,  appropriate  accounting  policies,  consistently  applied  and
supported by reasonable and prudent judgements and estimates,  have been used in
the preparation of these accounts and applicable  accounting standards have been
followed.   These  policies  and  standards,  for  which  the  Directors  accept
responsibility, have been discussed with the Auditors.

The  Directors  are  responsible  for keeping  proper  accounting  records which
disclose  with  reasonable  accuracy at any time the  financial  position of the
Group and to enable them to ensure that the accounts  comply with the  Companies
Act 1985. They are also responsible for safeguarding the assets of the Group and
hence for taking  reasonable  steps for the  prevention  and detection of fraud,
error, other irregularities and non-compliance with laws and regulations.

The accounts are published on the  www.sviit.co.uk  website,  which is a website
maintained  by Schroder  Ventures  (London)  Limited  ("SVLL"),  a wholly  owned
subsidiary of the Company.  The maintenance and integrity of this website is the
responsibility of SVLL.

The accounts are also published on the  www.schroders.co.uk  website, which is a
website  maintained by Schroders.  The  maintenance and integrity of the website
maintained  by Schroders or any other  subsidiary of Schroders plc is, so far as
it relates to the Company, the responsibility of Schroders.

The work  carried  out by the  auditors  does not involve  consideration  of the
maintenance and integrity of these websites and accordingly, the auditors accept
no  responsibility  for any changes that have occurred to the accounts  shown on
the websites from this published  report and accounts.  Visitors to the websites
need  to  be  aware  that  legislation  in  the  United  Kingdom  governing  the
preparation  and  dissemination  of the accounts may differ from  legislation in
their jurisdiction.

The Directors believe that they have complied with these responsibilities.

                                      -23-
<PAGE>

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).

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.

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.

                                      -24-
<PAGE>

Corporate Governance continued

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 Chairmen of the Board,  the Audit  Committee,  the
Remuneration  Committee  and the  Nominations  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 60 to 61 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 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 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-
<PAGE>

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.

Following  the annual  review in 2002,  the Board agreed that an internal  audit
function,  for the SVIIT Group,  should be established with an external adviser.
The initial programme of audit commenced in 2002.

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.

                                      -26-
<PAGE>

Remuneration Report for the six months ended 31 December 2002

This report deals with the  remuneration  paid to the  Directors  including  the
Company's  executive  Directors,  Nicholas  Ferguson,  Chief  Executive  of  the
Company, and Andrew Williams for the six months ended 31 December 2002.

THE REMUNERATION COMMITTEE (THE "COMMITTEE")

The Committee's members during the period were John McLachlan  (Chairman),  John
Govett  and  Anthony  Habgood,  all  considered  by the Board to be  independent
non-executive Directors.

The  Committee  is  responsible  for  determining  the  remuneration  policy for
executives  of the SVIIT Group (the  "Group") and the operation of the Company's
Executive  Share  Option  Plan.  Its terms of  reference  take into  account the
provisions  of the Combined  Code on corporate  governance.  The  Committee  has
appointed New Bridge Street Consultants,  independent remuneration  consultants,
to advise it. This firm also  provides  advice on the operation of the Company's
share schemes.

POLICY ON THE REMUNERATION OF THE DIRECTORS

The  Committee's  aim is to ensure that  remuneration  packages  should attract,
retain and  motivate  senior  executives  but should  avoid  paying more than is
necessary  for  this  purpose.  Basic  salaries  are set on this  basis  and the
Committee  has due regard to  competitive  market data on similar  positions  in
other private equity organisations and financial institutions.  The Committee is
sensitive to wider issues  including pay and employment  conditions in the Group
when  setting pay levels.  No  executive  Director of the Company is involved in
deciding his own remuneration.

Performance-related  elements of remuneration  form a significant  proportion of
the total remuneration package of the executive Directors.

The basic  salaries of the  executive  Directors are reviewed  annually,  having
regard to individual  performance  and comparative  data. In addition,  they are
eligible for a non-pensionable discretionary bonus which is conditional on Group
performance and the achievement of  predetermined  personal  objectives based on
the successful  implementation of the business plan and strategies agreed by the
Board.

Benefits in Kind

Benefits in kind (which are not  pensionable)  relate to the provision of health
insurance and life assurance cover.

External Appointments

The Company permits executive  Directors of the Company to accept  non-executive
directorships  and other similar  appointments,  it being  recognised  that such
appointments  increase their commercial knowledge and business experience to the
general  benefit of the  Company.  Fees  earned from such  directorships  may be
retained by the executive directors.

Service Contracts

Neither of the executive Directors has a service contract with the Company. They
are employed by Schroder Investment Management Limited (SIM) and are seconded to
the Group.  Their  contracts  with SIM provide  for 3 months'  notice and do not
include  liquidated  damages  provisions.  Mr.  Ferguson's  contract  is dated 6
September  1971 and Mr William's  contract is dated 7 November  1983.  It is the
Company's policy to have regard to the duty of a departing executive Director to
mitigate his loss when determining the level of any termination payment.

The terms of the service  contracts are  currently  under review and any changes
will be made with regard to institutional shareholders' stated views.

NON-EXECUTIVE DIRECTORS

At the present time,  non-executive Directors do not have letters of appointment
with the Company, although this is under review.

Remuneration  paid to  non-executive  Directors is  determined  by the Board and
reviewed  each  year.  When  considering  remuneration  levels  the  Board  will
consider,  amongst other things,  industry  practice and contribution to various
committees and time spent on the business of the Company.

Pension Arrangements

The  following  figures,  prepared in  accordance  with UK  legislation  and the
Listing Rules of the Financial  Services  Authority,  apply to Nicholas Ferguson
and Andrew  Williams in respect of the six months  ended 31 December  2002,  for
which they were executive Directors of the Company. No pension contributions are
payable by either executive Director.

                                      -27-

<PAGE>

<TABLE>
<CAPTION>

Remuneration Report continued

EXECUTIVE DIRECTORS' PENSIONS
                                                                                                                           Transfer
                                                                                                                           value at
                                                                                                                        31 December
                                                                                                (Decreas)/            in respect of
                                                       Change in                                  Increase                 increase
                                          Change in      accrued      Accrued     Transfer     in transfer     Transfer  in accrued
                              Accrued       accrued  benefit due   benefit at     value at       value net     value at     benefit
                           benefit at   benefit due     to other  31 December      30 June   of director's  31 December (excluding)
                         30 June 2002  to inflation      factors         2002         2002   contributions         2002   inflation
                              GBP'000       GBP'000      GBP'000      GBP'000      GBP'000         GBP'000      GBP'000     GBP'000
<S>                             <C>             <C>          <C>          <C>          <C>             <C>          <C>         <C>

N E H Ferguson                  103              2            1          106        1,283             (28)       1,255           12
A C Williams                     78              1            4           83          790              18          808           40

</TABLE>

Transfer values are liabilities of the relevant pension fund rather than amounts
due to be paid to the executive Directors or liabilities of the Company.

CURRENT REMUNERATION*

The  emoluments  of the Directors in respect of the six months ended 31 December
2002 were as specified below:

<TABLE>
<CAPTION>
                                                                                                   Total         Total
                                                                                              emoluments    emoluments
                                                                                           six months to       year to
                                                         Salary      Benefits       Annual   31 December       30 June
                                                         & fees       in kind       bonus(S)        2002          2002
                                                        GBP'000       GBP'000      GBP'000       GBP'000       GBP'000
<S>                                                         <C>           <C>          <C>           <C>           <C>

Executive
N E H Ferguson                                              165             1          301           467           823
A C Williams (appointed 3 May 2002)                         152             1          170           323           101
Non-Executive
J J McLachlan                                                38             -            -            38            75
C J Govett                                                   12             -            -            12            24
A J Habgood                                                  12             -            -            12            24
E W Koning                                                   11             -            -            11            20
D Raeburn                                                    12             -            -            12            22
I P Sedgwick                                                  -             -            -             -            17
A F Sykes (appointed 3 May 2002)                             10             -            -            10             4

Aggregate emoluments                                        412             2          471           885         1,110

(S)  Bonuses  include  provision for amounts  accrued but not paid in respect of
     the six months ended 31 December  2002.Annual bonuses are awarded in
     respect of calendar years.

*    This represents the audited section of the Remuneration Report.
</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 Company's executive Directors and other
executives of the Group are aligned with  shareholders  through the operation of
the  Company's  Executive  Share  Option  Plan,  which  was  introduced  at  the
Extraordinary General Meeting held on 3 May 2001.

Options will be granted  regularly to qualifying  employees and secondees of the
Group and the Committee  will  determine  grant levels,  taking into account the
development of the business and individual performance.

All  options are granted at around the  prevailing  market  price at the time of
grant.

                                      -28-

<PAGE>

Remuneration Report continued

OPTIONS HELD BY DIRECTORS OVER ORDINARY SHARES OF THE COMPANY

The following Directors have been granted options over Ordinary Shares under the
Executive Share Option Plan:

<TABLE>
<CAPTION>

                                                                    At 31
                     At 1 July  Options    Options   Options     December    Exercise              Exercise dates*
                          2002  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                2,311,274        -          -         -    2,311,274

</TABLE>

* Options are exercisable subject to appropriate performance targets being met.

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 plus 4% per annum over the three years from the date
of grant. If the performance target is not satisfied on the third anniversary of
the date of grant,  for the options  granted in June 2001 they may be  re-tested
every  six  months  over the ten year  life of the  option  and for the  options
granted  in April  2002 they may be  re-tested  every six months up to six years
from grant.

The  mid-market  price of shares at 31  December  2002 was  379.0p and the range
during the period was 277.0p to 379.0p. Remuneration Report continued

The Committee  intends to continue to set  appropriately  demanding  performance
targets on the exercise of options.  For options  granted in 2003, the target is
for growth in the  Company's  net asset value per  ordinary  share to exceed the
growth in the Retail Prices Index ("RPI") plus 4% per annum over the three years
from the date of grant. If the performance  target is not satisfied on the third
anniversary  of the date of grant it may be re-tested  every six months over the
six years  following  grant.  This target is  consistent  with the target set in
2002, and it is anticipated,  will continue to be utilised as a target in future
years.

It is not  anticipated  that the value of shares  under  options  granted in any
financial year will, other than in exceptional  circumstances,  exceed two times
an individual's remuneration.

The  performance  of the net asset  value of the  Company has been chosen as the
target  in order  to align  the  interests  of  executive  Directors  and  other
executives of the Group with shareholders' interests.

External advisers will, from 2004, confirm the performance criteria calculations
annually for the Committee.

To the extent that the  performance  target has been met,  options are  normally
exercisable from three years from grant.

PERFORMANCE GRAPH

The  Companies  Act 1985  requires  this report to include a  performance  graph
comparing the Company's total shareholder return  performance  against that of a
broad equity market index. For this purpose,  the Committee has decided that the
FTSE All-Share  Index is the most  appropriate  available  index for comparative
purposes  because it is the principal  index in which the  Company's  shares are
quoted.

<TABLE>
<CAPTION>
                               SVIIT Share      FTSE All
                               Price Total         Share
                                    Return    Indextotal
                                                  Return
<S>                                    <C>           <C>

30 June 1998                       100.000       100.000
30 June 1999                       145.283       110.141
30 June 2000                       256.813       115.782
30 June 2001                       220.335       106.807
30 June 2002                       199.790       91.0088
31 December 2002                   213.627       77.2643

Source: Datastream
</TABLE>

On behalf of the Board
John McLachlan
Chairman, Remuneration Committee
25 March 2003

                                      -29-

<PAGE>

Independent Auditors' Report

To the Members of Schroder Ventures International Investment Trust plc

We have audited the Group's  accounts for the six months ended 31 December  2002
which comprise the Consolidated  Statement of Total Return, Company Statement of
Total Return,  Consolidated Balance Sheet,  Company Balance Sheet,  Consolidated
Cash Flow  Statement  and the related  notes 1 to 31. These  accounts  have been
prepared on the basis of the accounting  policies set out therein.  We have also
audited the information in the Directors'  Remuneration Report that is described
as having been audited.

This report is made solely to the  Company's  members,  as a body, in accordance
with Section 235 of the Companies Act 1985.  Our audit work has been  undertaken
so that we might state to the Company's members those matters we are required to
state to them in an auditors'  report and for no other  purpose.  To the fullest
extent  permitted  by law, we do not accept or assume  responsibility  to anyone
other than the Company and the Company's  members as a body, for our audit work,
for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The directors'  responsibilities for preparing the Annual Report, the Directors'
Remuneration  Report and the  accounts  in  accordance  with  applicable  United
Kingdom law and accounting  standards are set out in the Statement of Directors'
Responsibilities.

Our  responsibility  is to audit  the  accounts  and the part of the  Directors'
Remuneration   Report  in  accordance   with  relevant   legal  and   regulatory
requirements,  United  Kingdom  Auditing  Standards and the Listing Rules of the
Financial Services Authority.

We report to you our  opinion as to whether  the  accounts  give a true and fair
view and whether the accounts and the part of the Directors' Remuneration Report
to be audited have been properly  prepared in accordance  with the Companies Act
1985.  We also report to you if, in our opinion,  the  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
Directors'  Report,  unaudited  part  of  the  Directors'  Remuneration  Report,
Chairman's Statement,  Manager's Report and Corporate Governance  Statement.  We
consider  the  implications  for our report if we become  aware of any  apparent
misstatements   or   material    inconsistencies   with   the   accounts.    Our
responsibilities do not extend to any other information.

BASIS OF AUDIT OPINION

We conducted  our audit in accordance  with United  Kingdom  Auditing  Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis,  of evidence  relevant to the amounts and disclosures in the accounts and
the part of the Directors'  Remuneration  Report to be audited. It also includes
an assessment of the significant  estimates and judgements made by the directors
in the preparation of the accounts,  and of whether the accounting  policies are
appropriate to the Group's  circumstances,  consistently  applied and adequately
disclosed.

We  planned  and  performed  our audit so as to obtain all the  information  and
explanations  which  we  considered  necessary  in  order  to  provide  us  with
sufficient evidence to give reasonable  assurance that the accounts and the part
of the  Directors'  Remuneration  Report to be  audited  are free from  material
misstatement, whether caused by fraud or other irregularity or error. In forming
our opinion we also  evaluated  the  overall  adequacy  of the  presentation  of
information in the accounts and the part of the Directors'  Remuneration  Report
to be audited.

OPINION

In our opinion:

-    the  accounts  give a true and fair  view of the  state of  affairs  of the
     Company and of the Group as at 31 December  2002 and of the total return of
     the group for the six months then ended; and

-    the  accounts  and the part of the  Directors'  Remuneration  Report  to be
     audited have been properly  prepared in  accordance  with the Companies Act
     1985.

Ernst & Young LLP
Registered Auditor
London
25 March 2003

                                      -30-

<PAGE>

<TABLE>
<CAPTION>

Consolidated Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)
                                                           For the six months ended                     For the year ended
                                                               31 December 2002                           30 June 2002
                                                             Revenue      Capital       Total     Revenue      Capital       Total
                                                   Notes     GBP'000      GBP'000     GBP'000     GBP'000      GBP'000     GBP'000
<S>                                                  <C>         <C>          <C>         <C>         <C>          <C>         <C>

Realised gains on investments                         12         -        57,997       57,997           -       11,914      11,914
Unrealised losses on investments                      12         -      (15,420)     (15,420)           -      (4,202)     (4,202)

Gains on investments                                             -        42,577       42,577           -        7,712       7,712
Foreign exchange losses on loans                                 -         (901)        (901)           -            -           -
Foreign exchange (losses)/gains on currency
balances                                                      (17)           591          574           3           42          45
Income                                                 2     3,385             -        3,385       7,674            -       7,674
Expenses                                               3   (4,065)             -      (4,065)     (7,293)            -     (7,293)

Net (deficit)/return before finance costs and                (697)        42,267       41,570         384        7,754       8,138
taxation
Interest payable and similar charges                   7   (1,523)             -      (1,523)     (1,832)            -     (1,832)

Net (deficit)/return on ordinary activities                (2,220)        42,267       40,047     (1,448)        7,754       6,306
before taxation
Tax on ordinary activities                             8        36             -           36       (105)            -       (105)

(Deficit)/return on ordinary activities after              (2,184)        42,267       40,083     (1,553)        7,754       6,201
tax for the period
Minority interest - equity                                     (1)            23           22         (2)           16          14

(Deficit)/return on ordinary activities after              (2,185)        42,290       40,105     (1,555)        7,770       6,215
tax and minority interest for the period
attributable to equity shareholders
Dividends                                              9         -             -            -           -            -           -

(Deficit)/surplus transferred (from)/to reserves           (2,185)        42,290       40,105     (1,555)        7,770       6,215

Return per ordinary share                             10   (2.14)p        41.35p       39.21p     (1.52)p        7.60p       6.08p
Return per ordinary share - diluted                   10   (2.14)p        41.35p       39.21p     (1.52)p        7.60p       6.08p

</TABLE>

The notes on pages 35 to 52 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 six months.

                                      -31-
<PAGE>

<TABLE>
<CAPTION>

Company Statement of Total Return
(INCORPORATING THE REVENUE ACCOUNT)
                                                           For the six months ended                     For the year ended
                                                               31 December 2002                           30 June 2002
                                                             Revenue      Capital       Total     Revenue      Capital       Total
                                                   Notes     GBP'000      GBP'000     GBP'000     GBP'000      GBP'000     GBP'000
<S>                                                  <C>         <C>          <C>         <C>         <C>          <C>         <C>

Realised gains on investments                         12           -       57,969      57,969           -       11,654      11,654
Unrealised losses on investments                   12/14           -     (15,300)    (15,300)           -      (3,587)     (3,587)

Gains on investments                                               -       42,669      42,669           -        8,067       8,067
Foreign exchange losses on loans                                   -        (901)       (901)           -            -           -
Foreign exchange gains/(losses) on currency
balances                                                           -          629         629           -         (91)        (91)
Income                                                 2         521            -         521       1,638            -       1,638
Expenses                                               3       (755)            -       (755)       (927)            -       (927)

Net (deficit)/return before finance costs and                  (234)       42,397      42,163         711        7,976       8,687
taxation
Interest payable and similar charges                   7     (1,522)            -     (1,522)     (1,832)            -     (1,832)

Net (deficit)/return on ordinary activities                  (1,756)       42,397      40,641     (1,121)        7,976      6,855
before taxation
Tax on ordinary activities                             8         (1)            -         (1)       (116)            -       (116)

(Deficit)/return on ordinary activities after                (1,757)       42,397      40,640     (1,237)        7,976       6,739
tax for the period

Dividends                                              9           -            -           -           -            -           -

(Deficit)/surplus transferred (from)/to reserves             (1,757)       42,397      40,640     (1,237)        7,976       6,739

Return per ordinary share                             10     (1.72)p       41.46p      39.74p     (1.21)p        7.80p       6.59p
Return per ordinary share - diluted                   10     (1.72)p       41.46p      39.74p     (1.21)p        7.80p       6.59p

</TABLE>

The notes on pages 35 to 52 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 six months.

                                      -32-

<PAGE>

<TABLE>
<CAPTION>

Balance Sheets
                                                                 Notes  At 31 December 2002            At 30 June 2002
                                                                           Group   Company             Group   Company
                                                                         GBP'000   GBP'000           GBP'000   GBP'000
<S>                                                                <C>       <C>       <C>               <C>       <C>

Tangible fixed Assets                                               11       282         -               296         -
                                                                             282         -               296         -
FIXED ASSET INVESTMENTS
Funds and co-investments                                         12/13   483,959   459,043           422,823   401,348
Money market instruments                                         12/13    13,911    13,911            31,000    31,000
Investment in subsidiaries                                          14         -    28,920                 -    29,560
                                                                         497,870   501,874           453,823   461,908

CURRENT ASSETS
Debtors                                                             15     4,490     1,364             3,548     1,799
Cash at bank and short-term deposits                                       4,887     1,031             9,303       798
                                                                           9,377     2,395            12,851     2,597

CURRENT LIABILITIES
Creditors: amounts falling due within one year                      16     4,783       817             4,357     1,742

NET CURRENT ASSETS                                                         4,594     1,578             8,494       855

TOTAL ASSETS LESS CURRENT LIABILITIES                                    502,746   503,452           462,613   462,763
Creditors: amounts falling due after more than one year             17    39,201    39,201            39,152    39,152
Minority interest - non-equity                                               100         -               100         -
Minority interest - equity                                                   253         -               274         -

NET ASSETS                                                               463,192   464,251           423,087   423,611

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   258,995   259,080           216,705   216,683
Revenue reserve                                                     25     (780)       194             1,405     1,951

EQUITY SHAREHOLDERS' FUNDS                                          26   463,192   464,251           423,087   423,611

Net asset value per ordinary share   - undiluted                    27    452.9p    454.0p            413.7p    414.2p
                                     - diluted                      27    445.8p    446.7p            412.3p    412.8p

</TABLE>

The accounts were approved by the Board of Directors on 25 March 2003 and signed
on behalf of the Board by:

John J. McLachlan

Nicholas E. H. Ferguson
Directors

The notes on pages 35 to 52 form an integral part of these accounts.

                                      -33-
<PAGE>

<TABLE>
<CAPTION>

Consolidated Cash Flow Statement
                                                                         For the six months ended   For the year ended
                                                                                 31 December 2002         30 June 2002
                                                                               Notes      GBP'000              GBP'000
<S>                                                                               <C>         <C>                  <C>

OPERATING ACTIVITIES
Income received on investments                                                                440                1,567
Bank interest received                                                                        228                  454
Investment advisory fee income received                                                     1,857                5,047
Administrative expenses paid                                                              (2,433)              (7,279)

Net cash inflow/(outflow) from operating activities                               28           92                (211)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                                                             (1,801)                    -
Loan facility finance costs                                                                 (634)                (550)

Net cash outflow from returns on investments and servicing of finance                     (2,435)                (550)

TAXATION
Overseas tax suffered                                                                        (24)                (117)

Total tax paid                                                                               (24)                (117)

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of money market instruments                                                    (127,797)            (316,731)
Purchase of tangible fixed assets                                                            (34)                (311)
Sale of money market instruments                                                          144,494              311,001
Calls paid                                                                              (122,677)             (77,474)
Capital distributions received                                                            104,510               48,976

Net cash outflow from capital expenditure and financial investment                        (1,504)             (34,539)

EQUITY DIVIDENDS PAID
Dividends                                                                                       -              (1,841)

Total dividends paid                                                                            -              (1,841)

FINANCING
Drawdown from loan facility                                                       16       25,110                    -
Repayment of loan facility                                                        16     (26,011)                    -
Proceeds from convertible bond issue                                                            -               40,000
Issue and listing costs of convertible bonds                                                (218)                (675)

Net cash (outflow)/inflow from financing                                                  (1,119)               39,325

NET CASH (OUTFLOW)/INFLOW                                                                 (4,990)                2,067

</TABLE>

<TABLE>
<CAPTION>

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
                                                                         For the six months ended   For the year ended
                                                                                 31 December 2002         30 June 2002
                                                                               Notes      GBP'000              GBP'000
<S>                                                                               <C>         <C>                  <C>

(Decrease)/increase in cash during the period                                             (4,990)                2,067
Exchange gain on currency balances                                                            574                   45
Increase in convertible bonds                                                                (49)             (39,152)

Change in net debt                                                                        (4,465)             (37,040)

Net (debt)/funds at the beginning of the period                                          (29,849)                7,191

Net debt at the end of the period                                                29      (34,314)             (29,849)

</TABLE>

The notes on pages 35 to 52 form an integral part of these accounts.

                                      -34-
<PAGE>

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% and 33% per annum.

   c)  Fixed asset investments

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

   d)  Valuation of investments

       The Company's investments in the various Schroder Ventures and Permira
       funds are valued by the Directors at the balance sheet date by valuing
       the underlying  investments  comprising the portfolios of the Schroder
       Ventures and Permira funds in accordance  with the valuation  policies
       set out below, as adjusted,  where  appropriate,  for other assets and
       liabilities of the Schroder  Ventures and Permira funds. The valuation
       policies  of the Company are  consistent  with the current  guidelines
       issued  by  the  British  Venture  Capital  Association  ("BVCA").  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% and 50% 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% 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

                                      -35-
<PAGE>

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%; 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% 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%.

       Carried interest and management fees

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

   e)  Income and capital gains recognition

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

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

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

   f)  Foreign currencies

       Transactions  denominated in foreign  currencies will be translated at
       the  exchange  rate  at  the  date  of  the  transaction.  Assets  and
       liabilities  recorded in foreign  currencies  will be translated  into
       sterling  at  exchange  rates  at the date of the  accounts.  Exchange
       differences  arising  from  the  re-translation  of  the  opening  net
       investments will be taken to reserves and reported in the Consolidated
       and the Company's Statement of Total Return.

       Foreign subsidiary  financial  statements are translated into sterling
       using the closing rate method with all exchange  differences  taken to
       reserves and reported in the  Consolidated  Statement of Total Return.
       All other foreign exchange differences will be included as an exchange
       gain or loss in capital reserve or in the revenue account depending on
       whether  the  gain  or  loss  is  of  a  capital  or  revenue   nature
       respectively.

                                      -36-
<PAGE>

1.     ACCOUNTING POLICIES continued

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

   h)  Taxation

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

  i)   Basis of consolidation

       The  Consolidated  Statement  of Total  Return and Balance  Sheet
       include  the   financial   statements  of  the  company  and  its
       subsidiary  undertakings  made up to the balance sheet date using
       the purchase method. Goodwill arising on consolidation is written
       off against reserves on acquisition.  In the Company's  accounts,
       investments in subsidiary  undertakings  are stated in accordance
       with the policies outlined under (c) above.

  j)   Capital reserves

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

       -   gains and losses on the  realisation of investments  calculated by
           reference to their carrying value at the previous balance sheet date.

       -   realised exchange differences of a capital nature.

       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.

                                      -37-

<PAGE>

<TABLE>
<CAPTION>

Notes to the Accounts continued

2.     INCOME
                                                    For the            For the           For the          For the
                                           six months ended   six months ended        year ended       year ended
                                           31 December 2002   31 December 2002      30 June 2002     30 June 2002
                                                      Group            Company             Group          Company
                                                    GBP'000            GBP'000           GBP'000          GBP'000
<S>                                                     <C>                <C>               <C>              <C>

Income from money market instruments                    267                267               767              767
Income from Funds and co-investments                    153                153               770              770
Interest receivable and similar income                  249                101               452              101
Income from investment advisory services              2,716                  -             5,685                -

                                                      3,385                521             7,674            1,638

Income arises mainly from UK assets or operations.

</TABLE>

<TABLE>
<CAPTION>

Notes to the Accounts continued

3.     EXPENSES
                                                     For the            For the           For the          For the
                                            six months ended   six months ended        year ended       year ended
                                            31 December 2002   31 December 2002      30 June 2002     30 June 2002
                                                       Group            Company             Group          Company
                                                     GBP'000            GBP'000           GBP'000          GBP'000
<S>                                                      <C>                <C>               <C>              <C>

Fees payable to Schroder Investment
Management
Limited (note 30)                                       192                 192               293              293
Directors' remuneration (note 4)                        885                  95             1,110              186
Staff costs (note 5)                                  1,746                   -             4,258                -
Depreciation (note 11)                                   45                   -                65                -
General expenses                                      1,146                 428             1,416              331
Enlargement of operations costs                           -                   -                62               62
Auditors' remuneration:
- audit                                                  28                  19                74               40
- non-audit*                                             23                  21                15               15

                                                      4,065                 755             7,293              927

 *Fees for non-audit  services relate primarily to the preparation
  and  filing  of  accounts  with the US  Securities  and  Exchange
  Commission.

</TABLE>

<TABLE>
<CAPTION>

4.     DIRECTORS' REMUNERATION
                                                For the six      For the six             For the          For the
                                               months ended     months ended          year ended       year ended
                                           31 December 2002 31 December 2002        30 June 2002     30 June 2002
                                                      Group          Company               Group          Company
                                                    GBP'000          GBP'000             GBP'000          GBP'000
<S>                                                     <C>              <C>                 <C>              <C>

J J McLachlan                                            38               38                  75               75
N E H Ferguson                                          467                -                 823                -
C J Govett                                               12               12                  24               24
A J Habgood                                              12               12                  24               24
E W Koning                                               11               11                  20               20
D Raeburn                                                12               12                  22               22
I P Sedgwick                                              -                -                  17               17
A F Sykes (appointed 3 May 2002)                         10               10                   4                4
A C Williams (appointed 3 May 2002)                     323                -                 101                -

                                                        885               95               1,110              186

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 to 29. As shown
above, Nicholas Ferguson is the highest paid director.

</TABLE>

                                      -38-
<PAGE>

Notes to the Accounts continued

<TABLE>
<CAPTION>

5.     STAFF COSTS
                                                              For the       For the       For the       For the
                                                           six months    six months    year ended    year ended
                                                                ended         ended  30 June 2002  30 June 2002
                                                          31 December   31 December         Group       Company
                                                                 2002          2002       GBP'000       GBP'000
                                                                Group       Company
                                                              GBP'000       GBP'000
<S>                                                               <C>           <C>           <C>           <C>

Salaries and other remuneration                                 1,401             -         3,491             -
Social security costs                                             237             -           409             -
Pension costs (note 6)                                            108             -           358             -

                                                                1,746             -         4,258             -

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

</TABLE>

<TABLE>
<CAPTION>
                                                                                          For the       For the
                                                                                       six months    year ended
                                                                                            ended  30 June 2002
                                                                                      31 December        Number
                                                                                             2002
                                                                                           Number
<S>                                                                                           <C>           <C>

Full-time employees                                                                            20            17
Seconded staff                                                                                  4             4
                                                                                               24            21
</TABLE>

<TABLE>
<CAPTION>

6.     PENSION COSTS
       The charge for pension costs comprises:

                                                               For the       For the
                                                            six months    six months
                                                                 ended         ended       For the       For the
                                                           31 December   31 December    year ended    year ended
                                                                  2002          2002  30 June 2002  30 June 2002
                                                                 Group       Company         Group       Company
                                                               GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                <C>           <C>           <C>           <C>
Defined benefit schemes                                            29              -            52             -
Money purchase schemes                                             79              -           306             -
                                                                  108              -           358             -

</TABLE>

The Group does not participate in a SVIIT Group pension scheme. Costs in respect
of defined  benefit  schemes relate to payments due to the Schroders  Retirement
Benefits  Scheme  ("the  Scheme") in respect of four  employees,  including  the
Company's  executive  Directors,  seconded from Schroder  Investment  Management
Limited  to  Schroder  Ventures  (London)  Limited  ("SVLL"),   a  wholly  owned
subsidiary  of 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.  The
Annual  Report and Accounts of Schroders plc for the year ended 31 December 2002
is  expected  to be  received  by  shareholders  before  the end of March  2003.
However, they have already announced a deficit of GBP10.9 million for the Scheme
at 31 December 2002.

                                      -39-
<PAGE>

Notes to the Accounts continued

7.    INTEREST PAYABLE AND SIMILAR CHARGES

<TABLE>
<CAPTION>

                                                                     For the       For the
                                                                  six months    six months
                                                                       ended         ended       For the       For the
                                                                 31 December   31 December    year ended    year ended
                                                                        2002          2002  30 June 2002  30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000

<S>                                                                      <C>           <C>         <C>           <C>
       Convertible bond interest                                         900           900         1,100         1,100
       Convertible bond - amortisation of issue and listing
       costs                                                              45            45            45            45
       Loan facility finance costs                                       577           577           687           687
       Other interest                                                      1             -             -             -

                                                                       1,523         1,522         1,832         1,832

8.     TAXATION
       (a) The charge for taxation for the period is made up as follows:

                                                                     For the       For the       For the       For the
                                                                  six months    six months
                                                                       ended         ended
                                                                 31 December   31 December    year ended    year ended
                                                                        2002          2002  30 June 2002  30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000

       Current tax
       Corporation tax                                                     -             -             -             -
       Double taxation relief                                              -             -             -             -

                                                                           -             -             -             -
       Overseas tax                                                        8             1           133           116
       Prior year adjustment                                            (44)             -          (64)             -

       Total current tax (note 8(b))                                    (36)             1            69           116

       Deferred Tax
       Deferred tax - prior year adjustment                                -             -            36             -

       Total deferred tax                                                  -             -            36             -

       Total tax                                                        (36)             1           105           116

</TABLE>

There are no profits chargeable to corporation tax in the current period. Excess
management  expenses  relating to the venture fund  investments are available to
set against any taxable income of the Company.  These excess management expenses
are included within the investments in venture funds in the balance sheet of the
Company and are not reflected in the Company's  revenue account.  If in a future
year in relation to the venture fund investments,  income exceeds expenses,  the
taxation charge to the Company's revenue account will include tax on this excess
with a suitable note by way of explanation.

                                       -40-

<PAGE>

Notes to the Accounts continued

8.     TAXATION CONTINUED

       (b)Factors affecting current tax charge for the period:

       The tax assessed for the period is lower than the standard  rate of
       corporation  tax in the UK for a large company  (30%).  The
       differences are explained below:

<TABLE>
<CAPTION>
                                                                       For the        For the      For the      For the
                                                                    six months     six months
                                                                         ended          ended
                                                                   31 December    31 December   year ended   year ended
                                                                          2002           2002 30 June 2002 30 June 2002
                                                                         Group        Company        Group      Company
                                                                       GBP'000        GBP'000      GBP'000      GBP'000

<S>                                                                    <C>            <C>         <C>          <C>
       Deficit on ordinary activities before taxation                  (2,220)        (1,756)     (1,448)      (1,121)

       Corporation tax at 30%                                            (666)          (527)       (434)        (336)

       Effects of:
       Overseas taxation written off                                         8              1         133          116
       Overseas tax claimed as an expense                                    -              -        (86)            -
       Non deductible expenses                                               8              4          54           40
       Taxable dividend credited to capital                                  -              -         274          274
       Unutilised current period expenses carried forward                  625            460         250           22
       Other timing differences                                             61             63           -            -
       Income of subsidiary not taxable                                   (28)              -        (58)            -
       Prior year adjustment - corporation tax                            (44)              -        (64)            -

       Current tax charge for the period (Note 8(a))                      (36)              1          69          116

</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
       period.  Similarly,  no dividend was declared in respect of
       the year ended 30 June 2002.

10.    RETURN PER ORDINARY SHARE

<TABLE>
<CAPTION>

                                                           For the six months ended          For the year ended
                                                               31 December 2002                 30 June 2002
                                                           Revenue   Capital      Total   Revenue    Capital     Total
       Group

<S>                                                        <C>        <C>        <C>      <C>          <C>       <C>
       Return per ordinary share - basic                   (2.14)p    41.35p     39.21p   (1.52)p      7.60p     6.08p
        - diluted                                          (2.14)p    41.35p     39.21p   (1.52)p      7.60p     6.08p

</TABLE>

       The basic  revenue  return per ordinary  share is based on the net
       deficit on ordinary  activities  after  taxation and minority
       interests of GBP2,185,000  (year ended 30 June 2002:  deficit of
       GBP1,555,000)  and on 102,265,699  ordinary  shares (year ended 30
       June 2002: 102,265,699) being the weighted average number of shares in
       issue during the period.

       The capital  return per ordinary  share is based on the net return for
       the six months of  GBP42,290,000  (year ended 30June 2002: return of
       GBP7,770,000)  and on 102,265,699  ordinary  shares (year ended 30June
       2002:  102,265,699)  being the weighted  average number of shares in
       issue during the period.

<TABLE>
<CAPTION>
                                                           For the six months ended          For the year ended
                                                               31 December 2002                 30 June 2002
                                                           Revenue   Capital      Total   Revenue    Capital     Total
       Company

<S>                                                        <C>        <C>        <C>      <C>          <C>       <C>
       Return per ordinary share - basic                   (1.72)p    41.46p     39.74p   (1.21)p      7.80p     6.59p
        - diluted                                          (1.72)p    41.46p     39.74p   (1.21)p      7.80p     6.59p

</TABLE>

                                       -41-

<PAGE>

Notes to the Accounts continued

10.    RETURN PER ORDINARY SHARE continued

       The basic revenue  return per ordinary  share is based on the net deficit
       on ordinary  activities  after  taxation of GBP1,757,000 (year ended 30
       June 2002:  deficit of GBP1,237,000)  and on  102,265,699  ordinary
       shares (year ended 30June 2002:  102,265,699) being the weighted average
       number of shares in issue during the period.

       The capital  return per ordinary  share is based on the net return for
       the six months of  GBP42,397,000  (year ended 30June 2002: return of
       GBP7,976,000)  and on 102,265,699  ordinary  shares (year ended 30 June
       2002:  102,265,699)  being the weighted  average number of shares in
       issue during the period.

       The diluted  returns per ordinary  share for the six months ended 31
       December 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
       1 July  2002,  at an exercise  price of 399p.  Based on an average fair
       value for the Company's  shares of 328.3p for the period 1 July 2002 to
       31 December 2002, there are no potential  dilutive  ordinary shares in
       respect of the convertible bonds. The convertible bonds also did not have
       a dilutive effect for the year ended 30 June 2002.

       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 six months would have been Nil (year ended 30
       June 2002:  18,087),  and,  therefore,  the options do not
       have a dilutive effect on the returns during the six months.

       There is no difference between the returns for the six months used in the
       basic and diluted returns per share calculations.

11.    TANGIBLE FIXED ASSETS (GROUP)

<TABLE>
<CAPTION>
                                                                   Leasehold                    Telecom-         Total
                                                                                             munications
                                                                                  Computer    and office
                                                                improvements     equipment     equipment
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                      <C>           <C>            <C>          <C>
       Cost
       At 1 July 2002                                                    144           128            89           361
       Additions                                                           7            16            11            34
       Disposals                                                           -             -             -             -
       Exchange translation adjustments                                  (1)           (2)           (1)           (4)

       At 31 December 2002                                               150           142            99           391

       Depreciation
       At 1 July 2002                                                     23            32            10            65
       Charge for the period                                              12            22            11            45
       Disposals                                                           -             -             -             -
       Exchange translation                                                -           (1)             -           (1)

       At 31 December 2002                                                35            53            21           109

       Net book value
       At 31 December 2002                                               115            89            78           282

       At 1 July 2002                                                    121            96            79           296

</TABLE>

                                       -42-

<PAGE>

Notes to the Accounts continued

12.    INVESTMENTS

       (a)Group
<TABLE>
<CAPTION>

                                                                                 Funds and  Money market         Total
                                                                                                             portfolio
                                                                            co-investments   instruments       GBP'000
                                                                                   GBP'000       GBP'000

<S>                                                                                 <C>            <C>          <C>
       Cost at 1 July 2002                                                         486,785        30,944       517,729
       Unrealised (loss)/gain at 1 July 2002                                      (63,962)            56      (63,906)

       Valuation at 1 July 2002                                                    422,823        31,000       453,823
       Calls and purchases payable                                                 122,677       127,797       250,474
       Distributions and sales receivable                                        (104,510)     (144,494)     (249,004)
       Realised gain/(loss)                                                         58,425         (428)        57,997
       Unrealised (loss)/gain                                                     (15,456)            36      (15,420)

       Valuation at 31 December 2002                                               483,959        13,911       497,870

       Gains on investments
                                                                                        Six months ended    Year ended
                                                                                             31 December       30 June
                                                                                                    2002          2002
                                                                                                 GBP'000       GBP'000

       Realised gain on investments based on historical cost                                      89,641        20,418
       Less: amounts recognised as unrealised in previous year                                  (31,644)       (8,504)

       Realised gain based on carrying value at previous balance sheet date                       57,997        11,914
       Net movement in unrealised losses                                                        (15,420)       (4,202)

       Total gains on investments                                                                 42,577         7,712

       (b)Company
                                                                                 Funds and  Money market         Total
                                                                            co-investments   instruments     portfolio
                                                                                   GBP'000       GBP'000       GBP'000

       Cost at 1 July 2002                                                         456,840        30,944       487,784
       Unrealised (loss)/gain at 1 July 2002                                      (55,492)            56      (55,436)

       Valuation at 1 July 2002                                                    401,348        31,000       432,348
       Calls and purchases payable                                                 122,524       127,797       250,321
       Distributions and sales receivable                                        (110,030)     (144,494)     (254,524)
       Realised gain/(loss)                                                         58,397         (428)        57,969
       Unrealised (loss)/gain                                                     (13,196)            36      (13,160)

       Valuation at 31 December 2002                                               459,043        13,911       472,954

       Gains on investments
                                                                                        Six months ended    Year ended
                                                                                             31 December       30 June
                                                                                                    2002          2002
                                                                                                 GBP'000       GBP'000

       Realised gain on investments based on historical cost                                      90,231        20,225
       Less: amounts recognised as unrealised in previous year                                  (32,262)       (8,571)

       Realised gain based on carrying value at previous balance sheet date                       57,969        11,654
       Net movement in unrealised losses                                                        (13,160)       (2,203)

       Total gains on investments                                                                 44,809         9,451

</TABLE>

                                       -43-

<PAGE>

Notes to the Accounts continued

13.    GEOGRAPHICAL ANALYSIS OF INVESTMENTS

<TABLE>
<CAPTION>

                                                                    31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                   <C>           <C>           <C>           <C>
       Funds and co-investments
       Europe
       United Kingdom                                                 13,344        12,603        14,996        14,163
       France                                                            488           488           655           655
       Germany                                                         8,496         4,229         7,480         3,928
       Italy                                                           1,642         1,642         1,863         1,863
       Spain                                                             930           930           797           797
       Pan Europe                                                    315,253       315,083       259,737       259,737

       Total Europe                                                  340,153       334,975       285,528       281,143

       Asia
       Asia Pacific                                                   37,800        26,192        29,512        15,657
       Japan                                                          15,918         7,835        17,058        13,869

       Total Asia                                                     53,718        34,027        46,570        29,526

       North America
       Canada                                                         26,524        26,524        26,065        26,065
       United States*                                                 63,564        63,517        64,660        64,614

       Total Americas                                                 90,088        90,041        90,725        90,679

       Total Funds and co-investments                                483,959       459,043       422,823       401,348

       Money market instruments
       Sterling denominated                                           10,000        10,000         7,884         7,884
       Euro denominated                                                3,911         3,911        14,457        14,457
       US dollar denominated                                               -             -         8,659         8,659

       Total money market investments                                 13,911        13,911        31,000        31,000

       Total Investment Portfolio                                    497,870       472,954       453,823       432,348

</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 GBP483,959,000  are listed investments  amounting to
GBP26,081,000 (30 June 2002: GBP38,700,000).

Significant interests in investment funds

Details of  investments  in which the Company or Group has an interest of 10% or
more of any class of  share/units  are  detailed in the list of  investments  on
pages 17 to 20. All of these Funds are  managed or advised by Schroder  Ventures
or Permira.

                                       -44-

<PAGE>

Notes to the Accounts continued

14.    INVESTMENTS IN SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                              Six months    Year ended
                                                                                                   ended       30 June
                                                                                             31 December          2002
                                                                                                    2002       Company
                                                                                                 Company       GBP'000
                                                                                                 GBP'000

<S>                                                                                               <C>           <C>
       Cost at the beginning of the period                                                        25,512        24,762
       Capital injection                                                                           1,500           750

       Cost at the end of the period                                                              27,012        25,512

       Net unrealised gain on investment                                                           1,908         4,048

       Market value at the end of the period                                                      28,920        29,560

</TABLE>

Platinum  Trust is included in the Company's  balance sheet at its fair value of
GBP25,920,000 (30 June 2002: GBP28,060,000).  Schroder Ventures (London) Limited
("SVLL")  is  included  at cost of  GBP3,000,000  (30 June 2002:  GBP1,500,000).
Schroder  Ventures  North  America Inc. and  Schroder  Ventures  Boston Inc. are
wholly owned subsidiaries of SVLL.

<TABLE>
<CAPTION>

       Subsidiary undertakings at 31 December 2002:

                                                                           Number and   Group      Capital  Net revenue/
                                            Country of                       class of  holding         and     (deficit)
                                         registration,                   shares/units      %   reserves at         after
                                         incorporation                    held by the          31 December   tax for the
                                                   and                          Group                 2002    six months
                                             operation                                             GBP'000         ended
                                                                                                             31 December
                                                                                                                    2002
                                                                                                                 GBP'000

<S>                                               <C>                 <C>                <C>          <C>         <C>
       Company and business
       Platinum Trust (unit trust)                            23,112,000 'A' units(1)     99)
       - investment                           Guernsey           900,000 'B' units(1)     90)       26,272          93
       Schroder Ventures (London) Limited
       - advisory and administration services       UK   3,000,000 Ordinary Shares(2)    100         1,973       (525)
       Schroder Ventures North America Inc
       - broker/dealer.                             US           500 Common Shares(3)    100           268          13
       Schroder Ventures Boston Inc.
       - investment advisor                         US           100 Common Shares(4)    100            62           -
       SVIIT Investment Managers Limited
       - investment manager                         UK         100 Ordinary Shares(5)    100             -           -

</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 18June 2001. On 26 June 2001, SVLL issued 749,900
ordinary GBP1 shares to the Company for GBP749,900. On 22April2002,  SVLL issued
a further  750,000  ordinary  GBP1  shares to the  Company  for  GBP750,000.  On
19December 2002, SVLL issued a further 1,500,000  ordinary shares to the Company
for GBP1,500,000.

(3) Schroder  Ventures North America Inc. ("SVNA") is a subsidiary of SVLL. SVLL
acquired SVNA on 18June 2001 for $50,000 and made a further capital injection of
$250,000 in the year ended 30 June 2002.

(4) Schroder  Ventures  Boston Inc.  ("SVBI") is also a subsidiary of SVLL. SVBI
commenced  operations  on 1January  2003.  SVLL  acquired 100 shares for $100 on
13 December 2002.

(5) SVIIT  Investment  Managers  Limited  has not  commenced  operations.  SVIIT
acquired 100 shares for GBP100 on 16October 2002.

                                       -45-

<PAGE>

Notes to the Accounts continued

<TABLE>
<CAPTION>

15.    DEBTORS
                                                                    31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                       <C>           <C>           <C>           <C>
       Amounts falling due within one year:
       Interest receivable                                                45            43            43            36
       Prepayments and other debtors                                   1,950         1,321         1,892         1,763
       Accrued investment advisory fee income                          2,495             -         1,613             -

                                                                       4,490         1,364         3,548         1,799

16.    CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
                                                                    31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
       Interest payable and similar charges                              219           219         1,488         1,488
       Other creditors and accruals                                    4,564           598         2,869           254

                                                                       4,783           817         4,357         1,742

The Group has in place a multicurrency revolving loan facility of EUR225 million
with the Royal Bank of  Scotland.  During the period under  review,  the Company
borrowed  EUR38  million and US$2 million  under this  facility.  The loans were
fully repaid by 31 December 2002. No drawings were made in the previous year.

17.    CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

                                                                    31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
       4.5% Subordinated Convertible Bonds 2011                       40,000        40,000        40,000        40,000
       Unamortised issue and listing costs                             (799)         (799)         (848)         (848)

                                                                      39,201        39,201        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 a conversion price of 399p per
share.  Following the balance sheet date,  GBP0.5 million  nominal of bonds have
been converted into 125,313 new ordinary shares.

In accordance with FRS 4 "Capital  Instruments",  issue costs are charged to the
revenue account over the term of the capital instrument.

FRS 13 requires  disclosure of the fair value of debt. The convertible bonds are
listed on the London Stock  Exchange,  with UBS Warburg and  Dresdner  Kleinwort
Wasserstein  ("DKW") appointed as market makers. On 31 December 2002, the market
makers were  quoting a bid-offer  spread of 75p to 125p.  This equates to a fair
valuation range of GBP30 - GBP50million for the bonds in issue.

18.    CONTINGENT LIABILITIES

The Company guarantees any drawings taken out by Platinum Trust under the EUR225
million loan facility (GBP146.7 million,  translated at the balance sheet date).
At 31  December  2002,  no  drawings  had been made  under the  facility  by the
Platinum Trust (30June 2002: Nil).

                                       -46-

<PAGE>

Notes to the Accounts continued

19.    CAPITAL COMMITMENTS

At 31 December 2002, the Group had uncalled  commitments to its Fund investments
as follows:

<TABLE>
<CAPTION>
                                                                                                Uncalled      Uncalled
                                                                                              commitment   commitment*
                                                                                                  (local          GBPm
                                                                                               currency)

<S>                                                                                                 <C>            <C>
       International Life Sciences Fund III                                                       $65.6m          40.8
       Permira Europe I                                                                          EUR6.9m           4.5
       Permira Europe II                                                                       EUR287.3m         187.2
       Schroder Canadian Buy-Out Fund II                                                          C$0.9m           0.4
       Schroder Canadian Buy-Out Fund III                                                        C$36.5m          14.3
       Schroder Ventures Asia Pacific Fund                                                        $34.9m          21.7
       Schroder Ventures International Life Sciences Fund II                                       $4.1m           2.5
       Schroder Ventures US Fund                                                                  $31.1m          19.3
       The Japan Venture Fund III                                                              YEN521.9m           2.7

       Total                                                                                                     293.4

</TABLE>

*      Based on exchange rates at 31 December 2002.

       The total commitments shown above include GBP1.2m in relation to Funds
       held by Platinum Trust.

20.    SHARE CAPITAL
<TABLE>
<CAPTION>
                                                                          31 December 2002              30 June 2002
                                                                         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                      102,266       102,266       102,266       102,266
       shares of GBP1.00 each

       Options over ordinary shares

</TABLE>

During  the six  months  ended  31  December  2002,  no  options  were  granted.
Similarly,  no options were exercised during the six months and none lapsed.  At
31 December 2002,  4,253,363 (30 June 2002:  4,253,363) options to subscribe for
ordinary shares were outstanding:

<TABLE>
<CAPTION>

       Issue date                                                           Exercise price   31 December       30 June
                                                                                                    2002          2002
                                                                                                  Number        Number
                                                                                 per share      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        34,774
       April 2002                                                                   334.5p     1,376,823     1,376,823

                                                                                               4,253,363     4,253,363

</TABLE>

Further  details  of  options  over  the  Company's  shares  are  given  in  the
Remuneration Report on pages 28 and 29.

21.    SHARE PREMIUM ACCOUNT

<TABLE>
<CAPTION>
                                                                         31 December 2002              30 June 2002
                                                                       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

</TABLE>

                                       -47-

<PAGE>

Notes to the Accounts continued

22.    CAPITAL REDEMPTION RESERVE

<TABLE>
<CAPTION>
                                                                         31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                       <C>         <C>            <C>           <C>

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

</TABLE>

23.    SHARE PURCHASE RESERVE
<TABLE>
<CAPTION>
                                                                        31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                  <C>              <C>            <C>          <C>

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

</TABLE>

24.    CAPITAL RESERVE
<TABLE>
<CAPTION>
                                                                        Six months ended               Year ended
                                                                        31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                    <C>            <C>            <C>            <C>

       Realised gains brought forward                                280,716       268,133       260,256       247,999
       Realised gains on venture fund distributions                   58,425        58,397        11,553        11,293
       Transfer on disposal                                           31,644        32,262         8,504         8,571
       Realised exchange gains/(losses) on currency balances             591           629            42          (91)
       Realised exchange losses on loans                               (901)         (901)             -             -
       Realised exchange (losses)/gains on sale of money               (428)         (428)           361           361
       market instruments

       Realised gains carried forward                                370,047       358,092       280,716       268,133

       Unrealised losses brought forward                            (64,011)      (51,450)      (51,321)      (39,292)
       Increase in unrealised losses on venture funds               (15,456)      (13,196)       (4,258)       (2,259)
       Transfer on disposal                                         (31,644)      (32,262)       (8,504)       (8,571)
       Decrease in unrealised gains on subsidiary undertakings             -       (2,140)             -       (1,384)
       Increase in unrealised exchange gains on money market              36            36            56            56
       instruments
       Minority interest - equity                                         23             -            16             -

       Unrealised losses carried forward                           (111,052)      (99,012)      (64,011)      (51,450)

       Balance carried forward                                       258,995       259,080       216,705       216,683

</TABLE>

25.    REVENUE RESERVE
<TABLE>
<CAPTION>
                                                                         Six months ended               Year ended
                                                                         31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                     <C>            <C>            <C>         <C>

       Balance brought forward                                         1,405         1,951         2,960         3,188
       Transfer to revenue account                                   (2,185)       (1,757)       (1,555)       (1,237)

       Balance carried forward                                         (780)           194         1,405         1,951
</TABLE>

                                       -48-

<PAGE>

Notes to the Accounts continued

26.    RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
                                                                         Six months ended               Year ended
                                                                         31 December 2002              30 June 2002
                                                                       Group       Company         Group       Company
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
<S>                                                                     <C>           <C>           <C>            <C>

       Deficit attributable to equity shareholders                   (2,185)       (1,757)       (1,555)       (1,237)
       Dividends                                                           -             -             -             -

       Deficit on revenue account                                    (2,185)       (1,757)       (1,555)       (1,237)
       Non-distributable capital gain for the period                  42,290        42,397         7,770         7,976

       Net addition to shareholders' funds                            40,105        40,640         6,215         6,739
       Shareholders' funds brought forward                           423,087       423,611       416,872       416,872

       Shareholders' funds carried forward                           463,192       464,251       423,087       423,611
</TABLE>

27.    NET ASSET VALUE PER ORDINARY SHARE

Calculation  of the net asset  values per share are based on Group net assets of
GBP463,192,000   (30  June  2002:   GBP423,087,000),   Company   net  assets  of
GBP464,251,000 (30 June 2002:  GBP423,611,000)  and on 102,265,699 (30June 2002:
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 399p into  10,025,062 new shares (30 June 2002:  exercise price of 410p
into  9,756,097  new  shares).  The  conversion  price of the bonds was adjusted
downwards from 410p to 399p with effect from 8 November 2002.

The Group and Company  diluted net asset values per share also assume that share
options  (note 20) with a strike price lower than the  undiluted net asset value
per share are  exercised  at the balance  sheet date.  This would  result in the
issue of 4,253,363  ordinary shares (30 June 2002:  4,253,363) for consideration
of GBP16,372,000 (30June 2002: GBP16,372,000).

Therefore,  the  calculation of the diluted net asset values per share are based
on Group net assets of GBP519,564,000 (30June 2002: GBP479,459,000), Company net
assets of  GBP520,623,000  (30 June  2002:  GBP479,983,000)  and on  116,544,124
ordinary shares (30 June 2002: 116,275,159) in issue at the year end.

28.    RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES

<TABLE>
<CAPTION>

                                                                                              Six months          Year
                                                                                                   Ended         ended
                                                                                             31 December       30 June
                                                                                                    2002          2002
                                                                                                   Group         Group
                                                                                                 GBP'000       GBP'000
<S>                                                                                                 <C>            <C>

       Net (deficit)/return before finance costs and taxation                                      (697)           384
       Foreign exchange losses/(gains) credited to the revenue account                                17           (3)
       Increase in accrued income                                                                  (861)         (604)
       Increase in debtors                                                                          (24)          (15)
       Increase in creditors                                                                       1,657            27

       Net cash inflow/(outflow) from operating activities                                            92         (211)
</TABLE>

                                       -49-

<PAGE>

Notes to the Accounts continued

29.    ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS
<TABLE>
<CAPTION>

                                   At 1 July  Exchange                     At        At  Exchange                   At
                                               (loss)/      Cash  31 December    1 July      gain       Cash   30 June
                                        2002      gain      Flow         2002      2001                 Flow      2002
                                     GBP'000   GBP'000   GBP'000      GBP'000   GBP'000   GBP'000    GBP'000   GBP'000
<S>                                     <C>         <C>     <C>           <C>      <C>        <C>      <C>        <C>

       Cash at bank                    9,303       574   (4,990)        4,887     7,191        45      2,067     9,303
       Debt due:
       Within one year                     -         -         -            -         -         -          -         -
       After more than one year     (39,152)         -      (49)     (39,201)         -         -   (39,152)  (39,152)

       Net (debt)/funds             (29,849)       574   (5,039)     (34,314)     7,191        45   (37,085)  (29,849)
</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 annum of the first GBP50million of net assets, (ii) 0.06% per annum of
the next GBP50  million of such net assets and (iii) 0.04% of the  remaining net
assets.  The agreement is subject to a four-month notice period. The total fees,
including  VAT, paid or payable to SIM for these  services in respect of the six
months to 31 December 2002 was  GBP144,000  (year to 30 June 2002:  GBP246,000),
all of which was  outstanding  at the  balance  sheet  date.  In  addition,  SIM
receives fees for the provision of taxation  services to the Company.  The total
fees paid or payable to SIM for these  services  in respect of the six months to
31December  2002 was  GBP15,000  (year  to 30 June  2002:  GBP22,000),  of which
GBP11,000 was outstanding at the balance sheet date.

In  consideration  for its management of the Company's  money market  portfolio,
Schroder  Investment  Management (UK) Limited ("SIMUK")  receives a fee based on
the average value of the Company's  month-end  cash and money market  portfolio,
excluding  funds managed by SIMUK,  calculated at the rate of 0.10% per annum on
the first  GBP75million  of assets,  0.05% on the next GBP75  million  and 0.03%
thereafter,  subject to a minimum fee of  GBP20,000  per annum.  The total fees,
including  VAT, paid or payable for these  services in respect of the six months
to 31December  2002 was GBP18,000 (year to 30 June 2002:  GBP25,000);  GBP29,000
was  outstanding at the balance sheet date. At 31 December  2002,  SVIIT held an
investment of GBP10 million in the Schroder Offshore Cash Fund.

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

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  GBP1million  due from  Schroder
Investment  Management (Ireland) Limited ("SIMIL") to SVIIT for consideration of
GBP1million.  During the period under  review,  GBP338,000  was repaid by SIMIL,
leaving an  outstanding  debt of GBP662,000  at  31December  2002. An additional
GBP210,000 has been repaid after the balance sheet date.

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 Investments Limited.

                                       -50-

<PAGE>

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 money
market  instruments,  cash and  short-term  deposits  and various  items such as
debtors and creditors that arise directly from its  operations.  These financial
instruments held by the Company are generally liquid.

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

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

Currency risk

The  Company is exposed to  currency  risk  directly  since the  majority of its
assets and liabilities  are  denominated in foreign  currency and their sterling
value can be significantly  affected by movements in foreign exchange rates. The
Company does not normally hedge against foreign currency movements affecting the
value of its investments,  but takes account of this risk when making investment
decisions.

Interest rate risk

The Company's  revenue will be affected by changes in prevailing  interest rates
since the majority of its income derives from money market  instruments and bank
deposit  interest.  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 31 December 2002:
       Sterling                                                       14,765             -        17,834        32,599
       Euro                                                            3,989             -       326,809       330,798
       US dollar                                                          31             -       101,364       101,395
       Japanese yen                                                        -             -        15,918        15,918
       Canadian dollar                                                    13             -        26,524        26,537

                                                                      18,798             -       488,449       507,247

                                                                    Floating         Fixed  Non-interest
                                                                        Rate          Rate       Bearing         Total
                                                                     GBP'000       GBP'000       GBP'000       GBP'000
       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
</TABLE>

                                       -51-

<PAGE>

Notes to the Accounts continued

31.    RISK continued

Floating  rate assets  consist of  short-term  deposits and money market  funds.
Non-interest  bearing assets represent the Funds and  co-investments,  and other
short-term   debtors.   Fixed  rate  assets  comprise  treasury  bills,  net  of
outstanding redemptions, and can be further analysed as follows:

       Fixed rate financial assets
<TABLE>
<CAPTION>

                                                          31 December 2002                    30 June 2002

                                                  Weighted average Weighted average  Weighted average Weighted average
                                                          Interest  period on which          Interest  period on which
                                                              rate    rate is based              rate    rate is based
<S>                                                           <C>              <C>              <C>           <C>

       Euro                                                      -                -             3.00%          30 days
       US dollars                                                -                -             1.50%          23 days
       Sterling                                                  -                -             3.16%          24 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  balance  sheet  date,  although it does have in place a loan
facility of EUR225 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 35 to 37, all underlying  investments are
valued by the Directors in accordance with the current  guidelines issued by the
British  Venture  Capital  Association  ("BVCA"),  adopting the overriding  BVCA
principle  that the  value  should  be a fair one.  The  Company  does not hedge
against  movements in the value of these  investments.  Uncertainty  arises as a
result  of  future  changes  in  the  valuation  of  the  Company's   underlying
investments,  the  majority  of which are  unquoted,  and the effect  changes in
exchange rates may have in the sterling value of these investments.  Development
Stage Equity  Investments and Early Stage Equity  Investments,  by their nature,
involve  uncertainty  as to the  ultimate  value  likely to be  realised  on the
disposal of those investments,  particularly as their unquoted nature means that
a ready market may not exist for them.

The  Company's  sensitivity  to  valuation  risk will be  affected by changes in
levels of  borrowing  and  liquidity,  as approved by the Board.  At 31 December
2002,  a 10%  movement  in the  valuation  of the  Group's  Fund  portfolio  and
co-investments would result in a 10% 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.

                                       -52-

<PAGE>

Consolidated Statement of Total Return - in Euros
(translated into euros - unaudited)
<TABLE>
<CAPTION>

                                                           For the six months ended          For the year ended
                                                               31 December 2002                 30 June 2002
                                                           Revenue    Capital     Total   Revenue    Capital     Total
                                                           EUR'000    EUR'000   EUR'000   EUR'000    EUR'000   EUR'000
<S>                                                          <C>         <C>      <C>       <C>        <C>        <C>

Realised gains on investments                                    -     91,003    91,003         -     19,226    19,226
Unrealised losses on investments                                 -   (24,196)  (24,196)         -    (6,781)   (6,781)

Gains on investments                                             -     66,807    66,807         -     12,445    12,445
Foreign exchange losses on loans                                 -    (1,414)   (1,414)         -          -         -
Foreign exchange (losses)/gains on currency balances          (27)        928       901         5         68        73
Income                                                       5,312          -     5,312    12,385          -    12,385
Expenses                                                   (6,378)          -   (6,050)  (11,769)          -  (11,769)

Net (deficit)/return before finance costs and taxation     (1,093)     66,321    65,228       621     12,513    13,134
Interest payable and similar charges                       (2,390)          -   (2,390)   (2,957)          -   (2,957)

Net (deficit)/return on ordinary activities before         (3,483)     66,321    62,838   (2,336)     12,513    10,177
taxation
Tax on ordinary activities                                      56          -        56     (170)          -     (170)

(Deficit)/return on ordinary activities after tax for      (3,427)     66,321    62,894   (2,506)     12,513    10,007
the period
Minority interest - equity                                     (2)         36        34       (3)         26        23

(Deficit)/return on ordinary activities after tax and      (3,429)     66,357    62,928   (2,509)     12,539    10,030
minority interest for the period attributable to equity
shareholders
Dividends                                                        -          -         -         -          -         -

                                                           (3,429)     66,357    62,928   (2,509)     12,539    10,030
Exchange gain/(loss) on translation                             62    (3,468)   (3,406)     (239)   (25,182)  (25,421)

Transfer (from)/to reserves                                (3,367)     62,889    59,522   (2,748)   (12,643)  (15,391)

Return per ordinary share                                EUR(0.03)    EUR0.65   EUR0.62 EUR(0.02)    EUR0.12   EUR0.10

</TABLE>

The information on pages 53 to 55 is for illustrative purposes and does not form
part of the audited  financial  statements.  The returns for the six months have
been  translated  into euros at an average rate of GBP1:  EUR1.5691  (year ended
30June 2002: GBP1: EUR1.6138).

                                       -53-

<PAGE>

Balance Sheets - in Euros
(translated into euros - unaudited)
<TABLE>
<CAPTION>

                                                         At 31 December 2002                    At 30 June 2002
                                                              Group       Company                 Group        Company
                                                            EUR'000       EUR'000               EUR'000        EUR'000
<S>                                                            <C>          <C>                   <C>             <C>

TANGIBLE FIXED ASSETS                                           433             -                   457              -

                                                                433             -                   457              -

INVESTMENTS
Funds and co-investments                                    742,490       704,264               652,585        619,441
Money market instruments                                     21,342        21,342                47,845         47,845
Investment in subsidiaries                                        -        44,369                     -         45,623

                                                            763,832       769,975               700,430        712,909

CURRENT ASSETS
Debtors                                                       6,887         2,091                 5,476          2,777
Cash at bank and short-term deposits                          7,498         1,582                14,358          1,231

                                                             14,385         3,673                19,834          4,008

CURRENT LIABILITIES
Creditors: amounts falling due within one year                7,338         1,253                 6,725          2,689

NET CURRENT ASSETS                                            7,047         2,420                13,109          1,319

TOTAL ASSETS LESS CURRENT LIABILITIES                       771,312       772,395               713,996        714,228
Creditors: amounts falling due after more than one
year                                                         60,142        60,142                60,427         60,427
Minority interest - non-equity                                  153             -                   154              -
Minority interest - equity                                      388             -                   423              -

NET ASSETS                                                  710,629       712,253               652,992        653,801

CAPITAL AND RESERVES
Called up share capital                                     156,896       156,896               157,837        157,837
Share premium account                                        11,434        11,434                11,503         11,503
Share purchase reserve                                        4,916         4,916                 4,945          4,945
Capital redemption reserve                                  141,229       141,229               142,076        142,076
Capital reserve                                             397,351       397,481               334,462        334,429
Revenue reserve                                             (1,197)           298                 2,169          3,011

EQUITY SHAREHOLDERS' FUNDS                                  710,629       712,254               652,992        653,801

Net asset value per ordinary share                          EUR6.95                             EUR6.39

</TABLE>

The information on pages 53 to 55 is for illustrative purposes and does not form
part of the audited  financial  statements.  The consolidated  balance sheet has
been  translated  into euros at a rate of GBP1:  EUR1.5342 (30 June 2002:  GBP1:
EUR1.5434), being the closing exchange rate on the balance sheet date.

                                       -54-

<PAGE>

Consolidated Cash Flow Statement - in Euros
(translated into euros - unaudited)
<TABLE>
<CAPTION>
                                                                                   For the six months     For the year
                                                                                                ended            ended
                                                                                     31 December 2002     30 June 2002
                                                                                              EUR'000          EUR'000
<S>                                                                                               <C>              <C>
OPERATING ACTIVITIES
Income received on investments                                                                    690            2,529
Bank interest received                                                                            358              733
Investment advisory fee income received                                                         2,914            8,145
Administrative expenses paid                                                                  (3,818)         (11,747)

Net cash inflow/(outflow) from operating activities                                               144            (340)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid                                                                                 (2,826)                -
Loan facility finance costs                                                                     (995)            (888)

Net cash outflow from returns on investments and servicing of finance                         (3,821)            (888)

TAXATION
Overseas tax suffered                                                                            (38)            (189)

Total tax paid                                                                                   (38)            (189)

capital expenditure and FINANCIAL INVESTMENT
Purchase of money market instruments                                                        (200,526)        (511,126)
Purchase of tangible fixed assets                                                                (53)            (502)
Sale of money market instruments                                                              226,726          501,879
Calls paid                                                                                  (192,493)        (125,024)
Capital distributions received                                                                163,987           79,035

Net cash outflow from capital expenditure and financial investment                            (2,359)         (55,738)

EQUITY DIVIDENDS PAID
Dividends                                                                                           -          (2,971)

Total dividends paid                                                                                -          (2,971)

FINANCING
Drawdown from loan facility                                                                    39,400                -
Repayment of loan facility                                                                   (40,814)                -
Proceeds from convertible bond issue                                                                -           64,551
Issue and listing costs of convertible bonds                                                    (342)          (1,089)

Net cash (outflow)/inflow from financing                                                      (1,756)           63,462

NET CASH (OUTFLOW)/INFLOW                                                                     (7,830)            3,336

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (debt)/FUNDS
                                                                                   For the six months     For the year
                                                                                                ended            ended
                                                                                     31 December 2002     30 June 2002
                                                                                              EUR'000          EUR'000

(Decrease)/increase in cash during the period                                                 (7,830)            3,336
Exchange gain on currency balances                                                                901               73
Exchange movement on translation                                                                  434            (997)
Increase in convertible bonds                                                                    (80)         (60,427)

Change in net debt                                                                            (6,575)         (58,015)
Net (debt)/funds at the beginning of the period                                              (46,069)           11,946

Net debt at the end of the period                                                            (52,644)         (46,069)

</TABLE>

The information on pages 53 to 55 is for illustrative purposes and does not form
part of the audited financial statements. The cash flows for the six months have
been  translated  into euros at an average rate of GBP1:  EUR1.5691  (year ended
30June 2002: GBP1:EUR1.6138).

                                       -55-

<PAGE>

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.

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 30June and  31December  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 23May 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.

                                       -56-

<PAGE>

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 31Gresham 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
EH41WQ. 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 JPMorgan Chase Bank,  Trinity Tower,  9Thomas More Street,
London E1N 1YT.

                                       -57-

<PAGE>

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

April                       Annual General Meeting

September                   Interim Results announced

October                     Interim Report published

ANALYSIS OF REGISTER OF SHAREHOLDERS
<TABLE>
<CAPTION>

                                                                                                                Shares
                                                                                                                     %
<S>                                                                                                                <C>
At 31 December 2002
% of issued shares held by:
Private individuals                                                                                               1.19
Banks and Nominee Companies*                                                                                     73.57
Pension Funds and Insurance Companies                                                                            14.09
Other Institutions                                                                                               11.15

                                                                                                                100.00

Total number of holders                                                                                          1,319

</TABLE>

*Some of the nominee company holdings include a large number of private
individuals.

                                       -58-

<PAGE>

Proposal Relating to Transfer of Assets to New Investment Vehicle (P123)

SVIIT is proposing to transfer a portion of its limited partnership interests in
Permira  Europe I and Permira  EuropeII (the  Interests) to a new fund of funds,
P123 in  return  for  shares  in P123.  It is  anticipated  that  P123 will also
separately  make a  substantial  commitment  to  Permira  EuropeIII,  which  was
launched  this month,  thereby  giving it interests in Permira  Europe I, II and
III. Your Directors are seeking Shareholders' approval for the proposed transfer
of the Interests to, and the related  arrangements  to be made with, P123 at the
forthcoming Annual General Meeting.

SVIIT will not hold more than 50% of the issued  share  capital of P123 with the
balance of the share capital being placed with other investors.

The Interests will be valued using the most recent BVCA valuation  received from
the managers of Permira Europe I and II, adjusted for payments made by SVIIT and
receipts  from the two funds in relation to the  Interests  since the  valuation
date.  In addition,  the  valuations  will be adjusted for any  realisations  by
Permira  Europe I and II since the valuation  date that are not  distributed  to
SVIIT.

The  effect  of the  proposed  transaction  is that  SVIIT  will  have a smaller
interest in Permira  Europe I and II  represented  by SVIIT's  remaining  direct
limited  partnership  interests and also indirectly by its shareholding in P123.
P123  will  assume  SVIIT's  uncalled  commitments  relating  to  the  Interests
transferred.  The  transaction  will allow  SVIIT a greater  exposure to Permira
Europe III through  both a direct  commitment  to that fund and also  through an
indirect interest by virtue of SVIIT's shareholding in P123.

It is not anticipated that SVIIT will transfer Interests  representing more than
EUR150  million  of  unrealised  underlying  investments  and EUR50  million  of
uncalled  commitments.  The precise amount of Interests to be  transferred  will
depend on the net asset value of the  Interests  and the number of shares placed
with other investors.

SVIIT  proposes  retaining  its  shares  in P123.  Ultimately,  once all  P123's
outstanding  obligations  and expenses have  beenmet,  P123 would be expected to
distribute  any  realisations   from  Permira  Europe  I,  II  and  III  to  its
shareholders, including SVIIT.

Subsidiaries  of SVIIT will act as investment  manager  (subject to  appropriate
Financial Services  Authority  authorisation) and investment adviser to P123 and
receive fees for performing those services.

Assuming  approval of the  shareholders in principle at the  forthcoming  Annual
General Meeting,  implementation of the proposal is subject  principally to: (i)
finalising  the terms of the  offering  of shares in P123;  (ii) the  successful
placing of shares in P123;  and (iii)  resolution,  to the  satisfaction  of the
Directors,  of the final terms and  conditions  of the  transfer by SVIIT of the
Interests and any related arrangements.

An  offering  document  for shares in P123 is expected  to be  published  in the
second quarter of 2003.

Your Directors consider the proposed transfer by the Company of a portion of its
interests  in  Permira  EuropeI  and  Permira  Europe  II to,  and  the  related
arrangements  to be made  with,  P123,  as  described  above,  to be in the best
interests of SVIIT and its shareholders as a whole.  Accordingly,  the Directors
unanimously  recommend  that  Shareholders  vote in favour of resolution 9 to be
proposed  at the  forthcoming  AGM as they  intend to do in respect of their own
beneficial holdings of SVIIT shares.

                                       -59-

<PAGE>

Notice and Agenda

NOTICE is hereby  given that the  seventh  Annual  General  Meeting of  Schroder
Ventures International Investment Trust plc will be held at 12.00 noon on Friday
25 April 2003 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 six months ended 31
December 2002 be adopted.

2. That the Directors'  Remuneration Report for the six months ended 31 December
2002 be adopted.

3.  That Mr Denis Raeburn be re-elected as a Director of the Company.

4.  That Mr John McLachlan be re-elected as a Director of the Company.

5.  That Mr Nicholas Ferguson be re-elected as a Director of the Company.

6.  That Ernst & Young LLP be re-appointed as Auditors of the Company.

7.  That the Board be authorised to agree the Auditors' remuneration.

8. That,  in  substitution  for the authority  granted at the  Company's  Annual
General  Meeting held on 26 November 2002, 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 GBP1,023,910  (equivalent to 1 per
       cent. of the issued  ordinary  share  capital of the  Company as at 21
       March 2003) in connection  with  the  Schroder  Ventures  International
       Investment Trust  plc Executive Share Option Plan 2001;and

   (b) up to an aggregate  nominal amount of GBP34,130,337  (equivalent to
       one-third of the issued  ordinary share capital of the Company as at 21
       March 2003),

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.

9. That the  proposed  transfer by the Company of a portion of its  interests in
Permira Europe I and Permira  EuropeII,  to and the related  arrangements  to be
made with,  P123,  as described in the December  2002 Report and Accounts be and
are hereby  approved,  and that the  Directors  of the Company be and are hereby
authorised to take all such steps as may be necessary or appropriate in relation
thereto and to carry the same into effect with such  modifications,  variations,
revisions or amendments as they (or any committee of the  Directors)  shall deem
necessary or appropriate.

10. That,  in  substitution  for the authority  granted at the Company's  Annual
General Meeting held on 26 November 2002, 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 resolution8 above, as if sub-section (1) of Section 89 of
the said Act did not apply to any such allotment, PROVIDED THAT this power shall
be limited to:

    (a) the allotment of equity  securities up to an aggregate  nominal  amount
        of GBP1,023,910  (equivalent  to 1 per cent. of the issued ordinary
        share capital of the Company as at 21 March 2003) 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

    (c) the allotment  (otherwise than pursuant to  sub-paragraphs  (a) and (b)
        above) of equity  securities up to an aggregate  nominal amount of
        GBP10,239,101 (equivalent to 10 per cent. of the issued ordinary share
        capital of the Company as at 21 March 2003),

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.

                                       -60-

<PAGE>

Notice and Agenda continued

11. That the Company be and is hereby generally and  unconditionally  authorised
in  accordance  with  Section  166 of the  Companies  Act  1985 to  make  market
purchases (within the meaning of Section 163 of the said Act) of ordinary shares
of GBP1.00 each in the capital of the Company ("Shares"), provided that:

    (a) the maximum  number of Shares  hereby  authorised  to be purchased
        shall be 15,348,412  (equivalent  to 14.99per  cent. of the issued
        ordinary share capital of the Company as at 21March 2003);

    (b) the minimum price which may be paid for a Share is GBP1.00;

    (c) the  maximum  price  which may be paid for a Share is an amount  equal
        to 105 per cent.  of the  average  of the  middle  market quotations
        for a Share  taken from the London  Stock  Exchange  Daily  Official
        List for the five  business  days  immediately preceding the day on
        which the Share is purchased;

    (d) purchases may only be made pursuant to this  authority if the Shares are
        (at the date of the proposed  purchase)  trading on the London Stock
        Exchange at a discount to the net asset value;

    (e) the  authority  hereby  conferred  shall expire at the  conclusion of
        the next Annual  General  Meeting of the Company after the passing of
        this resolution unless such authority is renewed prior to such time; and

    (f) the Company may make a contract to purchase  Shares under the authority
        hereby  conferred prior to the expiry of such authority which will or
        may be  executed  wholly or partly  after the  expiration  of such
        authority  and may make a  purchase  of Shares pursuant to any such
        contract.

Registered Office:
31 Gresham Street
London EC2V 7QA

By Order of the Board
Schroder Investment Management Limited
Secretary

27 March 2003

                                       -61-

<PAGE>

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,  31Gresham  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  12.00noon  on 23 April 2003 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
12.00noon on 23 April 2003 shall be disregarded in determining  the right of any
person to attend and vote at the meeting.

                                       -62-

<PAGE>

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.

                                       -63-

<PAGE>

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 8900
                    Fax 020 7658 3538          Fax 020 7240 5346Exhibit 10.1 -- Oral Understanding with Boling Clinical Trials

              Oral Understanding with Boling Clinical Trials

Clinical Trials Assistance Corporation ("CTAC") 2078 Redwood Crest, Vista,
California 92083-7340, on or about July 1, 2002 entered into an oral
understanding with Boling Clinical Trials, 8283 Grove Avenue, Suite 203,
Rancho Cucamonga, California 91730.   This summarizes this oral
understanding:

a)  CTAC and Boling Clinical Trials will work together to recruit patients
    for clinical studies conducted by Boling Clinical Trials.

b)  CTAC bills Boling Clinical Trials 50 percent of the amount of its
    estimated invoice for recruitment services, and the balance is due 30
    days after the completion of services for that particular invoice.  This
    invoice includes any agreed upon hard cost, such as the purchase of mailing
    labels, printing costs, the cost of a mailing, or newspaper advertising.
    The final invoice will include actual costs plus a 20 percent mark-up.

c)  Boling Clinical Trials is responsible to hire and pay for additional
    personnel.  This would include the hiring of two additional technicians
    for screening patients, two clerical personnel and one registered nurse
    to help screen patients.  They are also responsible for paying for an
    answering service, which screens initial enrollees and sets appointments.

d)  Boling Clinical Trials and the Company agreed to work together to measure
    the financial costs of this developmental program to recruit patients for
    clinical studies.  They agreed to evaluate recruitment for clinical trails
    per individual disease state.  Initially, they are focusing on osteoporosis
    and rheumatoid arthritis patient recruitment.  The measurements are based
    on the final costs of patients enrolled in the studies.

e)  This oral understanding can be cancelled by either party, without notice
    or penalties to the party who cancels this agreement.

<PAGE>

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