Interim Management Statement

Baronsmead VCT 2 plc Interim management statement For the three month period from 1 October 2009 to 31 December 2009 Financial Headlines * 2.2% (1.9p per share) increase in underlying Net Asset Value (NAV) per share * 3.0p final dividend for the year ending 30 September 2009 paid on 30 December 2009 * 4.5% increase in the valuation of the unquoted portfolio largely as a result of improved trading within portfolio companies Investment Objective and Dividend Policy 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. The Board aims to sustain a minimum annual dividend level at an average of 5.5p per Ordinary Share, mindful of the need to maintain net asset value. The ability to meet these objectives depends significantly on the level and timing of profitable realisations and cannot be guaranteed. There will be variations in the amount of dividends paid year on year. Since launch the average annual tax-free dividend paid to shareholders has been 6.2p per ordinary share (equivalent to a pre-tax return of 9.3p per ordinary share for a higher rate taxpayer). Performance Summary Capital return As at As at Movement 31 December 30 September % 2009 2009 Ordinary shares Total net assets £60.0m £61.2m Net asset value per 87.93p 86.06p* 2.2% share Share price 78.0p 77.5p 0.6% Premium/(Discount) to (11.3%) (13.0%) NAV *Adjusted for 3.0p final dividend for comparative purposes Total return 3 months to 1 year to 5 years to Ten years to 31 December 31 December 31 December 31 December 2009 2009 2009 2009 Ordinary shares Net asset value 1 2.1% 7.6% 20.4% 48.6% Share price2 2.5% 7.8% 23.0% 59.7% FTSE All-share3 5.5% 30.1% 36.8% 17.7% 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 InvestmentPerformance Both the AIM and unquoted portfolios increased in value over the quarter. After accounting for these gains and the payment of the 3.0p final dividend, paid 30 December 2009, the NAV per share at 31 December 2009 was 87.93p. This equates to an underlying quarterly increase of 2.2%. Investment Activity During the period ScriptSwitch, an unquoted investment made in May 2007, was realised resulting in a return, including expected future payments, approaching four times the initial cost. Five AIM traded investments totalling £0.8m were completed in two existing portfolio companies and two new companies. Baronsmead VCT 2 also received shares in Chime Communications plc when that company acquired Essentially Group Ltd. Investments made Date Cost (£'000) Adventis Group plc Dec 09 81 Electric Word plc Nov 09 36 Green Compliance plc (new) Dec 09 250 Chime Communications plc (takeover Essentially Group Nov 09 369 Ltd) Marwyn Value Investors plc (new) Nov 09 64 Total Investments 800 In total three AIM investments were realised in full and another, Ffastfill plc, part sold. Realisations Company Date Cost Proceeds (£ Multiple '000) (£'000) Essentially Group Ltd Nov 09 495 369 0.7 (Acquired by Chime Communications plc see above) Ffastfill plc Dec 09 226 359 1.6 Research Now plc Dec 09 263 376 1.4 Silverdell plc Dec 09 14 1 0.1 Total realisations 998 1,105 1.1 In addition three AIM investments were written off, MKM Group plc, Optimisa plc and Relax Group plc. Top ten investment holdings Position as at Position as Company Percentage of at net assets as at 31 December 31 December 2009 30 September 2009 2009 1 1 Reed and Mackay 5.2 2 4 Carnell Contractors 4.4 3 3 Nexus Vehicle 4.2 4 6 Quantix 3.1 5 5 Cablecom 3.1 6 8 Fisher Outdoor 3.0 7 7 ILS 2.6 8 9 Kafévend 2.4 9 10 Crew Clothing 2.2 10 11 CSC 2.1 Total 32.3 Sector breakdown (excluding cash and interest bearing securities) Percentage of total Percentage of total investments at investments at 31 December 2009 30 September 2009 Business Services 38 35 Consumer Markets 13 12 IT & Media 31 28 Healthcare & Education 12 19 Financial Services 6 6 Total 100 100 12th Annual General Meeting on 14 December 2009 The AGM was attended by over 100 Shareholders and included a number of presentations and a shareholder workshop. The Chairman gave his view on the current economic situation followed by comment on the investment environment from the Manager. Colin MacAdam, Managing Director of Playforce, presented the growth story of this business. Events since 31 December 2009 Other than as disclosed in this statement the Board is not aware of any significant events or transactions which have occurred between 31 December 2009 and the date of publication of this statement which would have a material impact on the financial position of the Company. The NAV per share at 31 January 2010 was 88.02p. Further information Information regarding the Company, including latest financial statements or quarterly factsheets, can be found at the Company's website www.baronsmeadvct2.co.uk. For further information please contact: Michael Probin, VCT Investor Relations, ISIS EP LLP on 020 7506 5796 or michael.probin@isisep.com. Barry Lawson, Company Secretary, on 020 7506 5658 or barry.lawson@isisep.com.

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