Interim Management Statement

Baronsmead VCT 2 plc Interim Management Statement For the period from 1 April 2010 to 12 August 2010. Headlines - 3.1% Net Asset Value (NAV) total return increased by 3.1% in the quarter. The FTSE All-Share index decreased by 11.8% over the same period. £4 million Invested in five new investee companies and several further round financings 2 Occam sold for 1.5 times original cost and Advanced Computer realisations Software 2.1 times original cost Performance Summary As at As at 30 Jun 2010 31 Mar 2010 Movement Capital return Total net assets £60.2m £60.4m Net asset value per share 89.44 pence 86.73 pence* 3.1% Share price 78.75 pence 78.75 pence - Discount to NAV (12.0%) (9.2%) Total return 3 month (%) 3 year (%) 10 year (%) Since launch (%) Net asset value (1) 3.1% (6.4%) 45.6% 96.5% Share price (2) 3.2% (5.1%) 25.8% 91.3% FTSE All-share (3) (11.8%) (16.2%) 16.9% 33.6% * Adjusted for 2.5p interim dividend for comparative purposes. Key: (1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLP (2) Share price total return = Mid to mid share price + reinvested dividends; Source: AIC (3) FTSE All-share = FTSE All-share Index + reinvested dividends; Source: AIC These total returns are stated before the inclusion of VCT tax reliefs which are designed to mitigate the higher risks and costs associated with investing in smaller companies and the other constraints of the VCT legislation. The tax reliefs given at the time of subscription have been 20%,40% and latterly 30%, so any adjusted performance measure including this relief will vary depending on the date of subscription. Additionally shareholders benefit from receiving VCT dividends tax free. Investment Performance The unquoted portfolio increased in value during the quarter, while the AIM portion of the portfolio decreased modestly in weak markets. The performance of the 69 investee companies continued to improve with 91% (Q1 2010 86%) of companies now reporting steady or improving business. Top ten Investments Position at Position at Percentage of NAV 30 June 2010 31 March 2010 Company as at 30 June 1 2 Nexus Vehicle Holdings 6.6 2 1 Reed & Mackay 6.1 3 10 Crew Clothing Company 3.3 4 5 Quantix 3.1 5 4 CableCom Networking Holdings 3.1 6 6 Fisher Outdoor Leisure Holdings 3.0 7 7 CSC (World) 2.8 8 3 Carnell Contractors 2.8 9 8 Independent Living Services 2.7 10 9 Kafevend Holdings 2.6 Total 36.1 Analysis of Total Assets Percentage of total Percentage of total assets assets 30 June 2010 31 March 2010 AIM, Listed & Collective Investments 23 23 Unquoted investments 49 41 Interest Bearing Securities 24 30 Cash 4 6 Total cash portfolio 28 36 Total Assets 100 100 Analysis of Investment Portfolio by Sector (excluding cash and interest bearing securities) Percentage of total investments Percentage of total investments at 30 June 2010 at 31 March 2010 Business 39 37 Services Consumer 17 14 Markets Financial 5 6 Services Healthcare & 9 8 Education IT & Media 30 35 Total 100 100 Investment Activity Five AIM traded investments totalling £0.5m were completed in the period. Three were in existing portfolio companies and two were in new companies (BGlobal plc and Strategic Thought Group plc). Five unquoted investments totalling £3.5m were completed in three new companies, Getting Personal Ltd, Inspired Thinking Group Ltd and Surgi C Ltd plus further round financings into two existing portfolio companies. Investments made Company Date Cost (£'000) Unquoted Surgi C Ltd Apr 2010 1,102 Independent Living Services May/Jun 2010 122 Inspired Thinking Group Ltd May 2010 796 Nexus Vehicle Holdings May 2010 499 Getting Personal Ltd Jun 2010 988 Quoted Strategic Thought Group plc May 2010 35 BGlobal plc Jun 2010 176 Electric Word plc May 2010 27 Green Compliance plc Jun 2010 156 Tasty plc Jun 2010 114 Total investments 4,015 Realisations One AIM investment, Advanced Computer Software plc and one listed investment, Inverness Medical Inc. were part sold and one unquoted investment, Occam DM, was realised in full. Occam was sold to St Ives a UK plc in May 2010 for 1.5 times original cost. This is a good result as Occam at one time was valued at 25% of original cost. The work of the ISIS portfolio management team helped to stabilise the business and enabled a profitable trade sale to be delivered. Company Date Cost Proceeds Multiple (£'000) (£'000) of cost† Inverness Medical Inc. Apr 2010 23 29 1.3 Occam DM May 2010 516 462 1.5 Advanced Computer May/Jun 263 553 2.1 Software plc 2010 Total realisations 802 1,044 † includes interest and dividends received in prior periods. In addition, Payzone plc, an AIM investment, was written off. Fundraising Currently it is intended that the Company will make a top-up issue to existing shareholders seeking to raise the sterling equivalent of €2.5m, when the annual report for the financial year ended 30 September is published during November 2010. The full terms and conditions of the offer will be contained in the offer document. Net Asset Value The NAV per share at 31 July 2010 was 89.48p. Events after the period end Other than as discussed in this statement the Board is not aware of any significant events or transactions which have occurred between 30 June 2010 and the date of publication of this statement which would have a material impact on the financial position of the Company. Investment objective Baronsmead VCT 2 plc is a tax efficient listed company which aims to achieve long-term investment returns for private investors, including tax-free dividends. Further information Further information regarding the Company, including net asset values published since the end of the period and quarterly factsheets, can be found at the Company's website www.baronsmeadvct2.co.uk Contact For further information please contact: Michael Probin Investor Relations Manager 020 7506 5600 michael.probin@isisep.com

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