Investment Advisory Agreement

RNS Number:3309C
British Smaller Tech Cos VCT PLC
26 August 2004


British Smaller Technology Companies VCT PLC (the "Company")
26 August 2004

Change in Investment Advisory Agreement

In its preliminary results for the year ended 31 December 2003, announced on 17
March 2004, the Company and its investment adviser, Yorkshire Fund Manager
("YFM"), released details of the reduction in the fees payable under the
investment advisory agreement. The Company is pleased to announce that this
exercise has now been completed.

With retrospective effect from 1 January 2004, YFM's investment advisory fee
will be reduced from #375,000 to #200,000 per annum (the "Base Fee").
In addition to the Base Fee, YFM may receive for each accounting period
commencing after 1 January 2004 a further fee ("the Success Fee") subject to,
and calculated in accordance with, the following provisions;

(i)  the cash proceeds realised in an exit from the Company's portfolio of
     investments, by way of sale or listing, ("Exit") occurring on or after 
     1 January 2004 shall be aggregated and the Success Fee shall be payable in 
     respect of any accounting period(s) when the aggregate of the cash proceeds 
     calculated cumulatively exceeds the Company's most recently reported net 
     asset value of #6.04 million (the "Base Value"); and

(ii) the Success Fee shall be an amount equal to 15% of the aggregate value of
     the cash proceeds realised in Exits in excess of the Base Value subject to
     a maximum in any accounting period of the cumulative investment advisory 
     fees foregone plus 10%.

The Success Fee (if any) shall be payable as follows:-

(i)  Fifty per cent (50%) of the Success Fee in cash, payable immediately
     following the adoption of the Company's annual audited accounts by the 
     board of directors in respect of the relevant accounting period; and

(ii) In respect of the other Fifty per cent (50%) of the Success Fee, YFM shall
     have the right to be granted options to subscribe for shares in the 
     Company. The number of shares over which these subscription rights will be 
     granted shall be calculated by dividing the 50 per cent of the Success Fee
     due by 33.83p (being the last reported net asset value per share of 48.7 
     pence, less 10 per cent. discount, less 10 pence per share being the 
     exercise price). These options shall be exercisable at 10p per share at 
     anytime following issue. However no options shall be granted pursuant to 
     the subscription rights unless they have first been approved by a 
     resolution of the Company's shareholders.

No Success Fee shall be payable in respect of accounting periods commencing
after 31 December 2008 unless approved by shareholders.

In certain circumstances the Company may elect to pay a compensatory amount of
cash to YFM instead of subscription rights. This amount will reflect the
economic value of the subscription rights.

This transaction constitutes a related party transaction under the UK Listing
Rules. Brewin Dolphin Securities, in its capacity as independent adviser,
considers that the terms of the proposed transaction with the related party are
fair and reasonable so far as shareholders of the Company are concerned.

ENDS



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