Interim Management Statement

Baronsmead VCT 2 plc Interim Management Statement For the 3 month period from 1 April 2013 to 30 June 2013. Headlines 6.5p second interim dividend declared, payable on 20 September to shareholders on the register as of 6 September 2013 £2.0 million invested in 4 new and 2 follow-on investments £5.2 million realised from the sale of investments Performance Summary As at As at 30 June 31 March 2013 Movement 2013 Capital return Total net assets £76.68m £79.41m Net asset value per 105.09p* 105.72p (0.6%) share Share price 97.38p 99.50p (2.1%) Discount to NAV (7.3%) (5.9%) 3 months 1 year (%) 5 years 10 years Since launch (%) (%) (%) (%) Net asset value total return(1) (0.6) 10.6 43.5 123.5 174.6 * Adjusted for 3.0p first interim dividend for comparative purposes. Actual NAV per share was 102.09p. Key: (1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLP 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 constraints of the VCT legislation. The tax reliefs given at the time of subscription have varied between 20% and 40%, so any adjusted performance measure including this relief will vary depending on the date of subscription. There is also the additional ongoing benefit of receiving VCT dividends tax free. Investment Performance In the three months to 30 June 2013, Baronsmead VCT 2's net asset value per share decreased by 0.6% as a result of slight reductions in the value of the unquoted and quoted portfolios. The Company's net assets as at 30 June 2013 were £76.7 million. This figure takes into account the valuation of the Company's investments as at 30 June 2013 and the first interim dividend of 3.0p per share paid on 14 June 2013 (£2.3 million). Top Ten Investments Position at Position at Percentage 30 June 2013 31 March 2013 of NAV Company as at 30 June 2013 1 1 CableCom Networking Holdings 7.0 Limited 2 2 Nexus Vehicle Holdings Limited 6.0 3 8 CSC (World) Limited 3.7 4 7 Kafevend Holdings Limited 3.5 5 6 Crew Clothing Holdings Limited 3.2 6 5 IDOX plc 3.2 7 3 Staffline Group plc 3.0 8 9 Valldata Group Limited 2.8 9 10 Netcall plc 2.5 10 11 Inspired Thinking Group Limited 2.4 Total 37.3 Analysis of Total Assets Percentage of Percentage of total assets at total assets at 30 June 2013 31 March 2013 Unquoted investments 48 49 AIM, listed, PLUS & collective investment 38 38 vehicle Listed interest bearing securities 8 7 Net current assets 6 6 Total liquid assets 14 13 Total assets 100 100 Analysis of Investment Portfolio by Sector (excluding liquid assets) Percentage of Percentage of total investments total investments at at 30 June 2013 31 March 2013 Business Services 38 37 Consumer Markets 17 17 Financial Services 2 2 Healthcare & Education 12 15 Technology, Media & 31 29 Telecommunications Total 100 100 Investment Activity In the three months to 30 June 2013, Baronsmead VCT 2 invested a total of £2.0 million in 4 new and 2 follow on investments as set out in the table below. Investments made Date Cost (£'000) Eque2 Limited Apr 2013 877 Playforce Holdings Limited* Apr 2013 163 One Media iP Group plc Apr 2013 56 Tangent Communications plc* May 2013 39 Armstrong Craven Limited Jun 2013 673 Bioventix plc Jun 2013 227 Total investments 2,035 *Follow on investments The two new unquoted investments in the quarter were £0.9m in Eque2, which delivers software expertise to the construction and contracting sector and £0.7m in Armstrong Craven, a provider of research services to Human Resource departments of leading global corporations. Following the period end, Consumer Investment Partners Limited, an existing portfolio company established in 2012 to seek investments in the Consumer Markets sector, invested £0.96m in Luxury for Less, an online bathroom products retailing business and a new unquoted investment of £0.95m was made in Key Travel, a travel management company focused on the not-for- profit sector. The Company's investment strategy has been to invest in larger, established companies and this strategy has been implemented through a policy of co-investing with other funds managed by ISIS EP LLP, the Company's Manager. Since 2004, the Company has co-invested with the other Baronsmead VCTs although prior to that time the Company also invested in unquoted investments alongside the Manager's other institutional clients. Commencing with the Company's investment in Armstrong Craven in June 2013, new unquoted investments will, once again, be made alongside an institutional fund managed by ISIS EP LLP. The Baronsmead VCTs and the institutional fund will invest in all new unquoted investments that fit the investment criteria of the Baronsmead VCTs on the same terms. This will enhance the Company's ability to invest in larger, established companies by being able to participate in investments where the initial commitment exceeds £5m. Realisations In the three months to 30 June 2013, Baronsmead VCT 2 realised a total of £5.2 million as set out in the table below. The sale of Baronsmead VCT 2's holding in Independent Living Services Limited in April 2013 realised a return of 2.5 times its original cost. During the period the final proceeds from the sale of Kidsunlimited in 2008 were received. In addition, £1.6m was received from a partial realisation of the Company's holding in Staffline Group plc through market sales. Realisations Company Date Cost Proceeds Multiple* (£'000) (£'000) Independent Living Services Limited Apr 2013 1,599 3,426 2.5 Kidsunlimited Group Limited Apr 2013 113 176 ** Staffline Group plc Apr 2013 104 1,575 6.0 Total realisations 1,816 5,177 *Includes interest/dividends received, loan note redemptions and partial realisations accounted for in prior periods. ** Kidsunlimited Group Limited was realised in April 2008. As part of the consideration, Baronsmead VCT 2 received £113,000 in loan stock, which was redeemed in April 2013. The overall multiple return for the investment in Kidsunlimited was 4.9 times original cost. Dividend Declaration Following recent profitable sales of investments, the Directors have declared a second interim dividend of 6.5p per share in lieu of a final dividend for the year to 30 September 2013. This dividend will be paid on 20 September to shareholders on the register as of 6 September 2013. Dividends totalling 9.5p for the year to 30 September 2013 have either been paid or declared. Net Asset Value as at 31 July 2013 The net asset value as at 31 July 2013 was 103.31p per share. This is stated before taking into account the second interim dividend of 6.5p per share payable on 20 September 2013. Fundraising Update The Board is currently considering raising further funds in the current tax year. It is currently anticipated that the subscription documentation, which will contain the full terms and conditions, will be available in early 2014. Shareholders will be sent the subscription documentation as soon as it is published. Investment objective Baronsmead VCT 2 is a tax efficient listed company which aims to achieve long-term investment returns for private investors, including tax free dividends. Events after the period end Other than the events described above, the Board is not aware of any significant events or transactions which have occurred between 30 June 2013 and the date of publication of this statement which would have a material impact on the financial position of the Company. 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 the Company's Investment Manager, ISIS EP LLP as follows: mailto: Email: baronsmeadvcts@isisep.com Telephone: 020 7506 5717 Facsimile: 020 7506 5718 Post: 100 Wood Street, London, EC2V 7AN

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