Half-yearly Report

Mobeus Income & Growth 2 VCT plc Half-Yearly Report for the six months ended 31 October 2012 INVESTMENT OBJECTIVE Mobeus Income & Growth 2 VCT plc formerly Matrix Income & Growth 2 VCT plc ("MIG2", the "Company" or the "Fund") is a Venture Capital Trust ("VCT") managed by Mobeus Equity Partners LLP previously Matrix Private Equity Partners LLP ("Mobeus") investing primarily in established, profitable, unquoted companies. The Company's objective is to provide investors with a regular income stream, arising both from the income generated by the companies selected for the portfolio and from realising any growth in capital. Venture Capital Trust Status Mobeus Income & Growth 2 VCT has satisfied the requirements as a Venture Capital Trust under section 274 of the Income Tax Act 2007 ("ITA") and the Directors intend to conduct the business of the Company so as to continue to comply with that section. FINANCIAL HIGHLIGHTS As at 31 October 2012 - The Company realised its investment in Iglu.com Holidays in May for an overall return of 2.53 times the original investment cost in two and a half years. - Increase of 0.5% in Total Shareholder return (share price basis) over the half-year. - The net asset value (NAV) total shareholder return per share since launch at 31 October 2012 was 113.2 pence per share. - Stable NAV and portfolio performance. NAV increased by 0.5%. PERFORMANCE SUMMARY The net asset value (NAV) per share as at 31 October 2012 was 99.2 pence The table below shows the recent past performance of the original funds raised in 2001. Historic data for the original subscription in 2001 is shown on in a table at the end of this announcement. Performance data for all fundraising rounds are shown in a table at the end of this announcement. Ordinary Shares of 1 penny (formerly C Shares until 10 September 2010) Period Net assets Net Cumulative NAV total Share price Share price (£ million) asset dividends return to total return value paid per shareholders to per share since launch shareholders Share per Share (NAV) (p)) (p) (p) (p)1 (p) Ordinary Share Fund (formerly C Share Fund until 10 September 2010) As at 31 October 24.6 99.2 14.0 113.2 67.4 81.4 2012 As at 30 April 24.5 98.7 14.0 112.7 67.0 81.0 2012 As at 31 October 25.2 99.4 10.0 109.4 64.8 74.8 2011 At close of Offer 8.7 94.5 - - - - for subscription in 2005 1 Source: London Stock Exchange In the graph on page 3 of the Half-Yearly Report, the NAV and share price total returns to shareholders comprise the NAV and share price respectively, assuming the dividends paid were re-invested on the date on which the shares were quoted ex-dividend in respect of each dividend. The total return figures have been rebased to 100 at 21 December 2005. CHAIRMAN'S STATEMENT I am pleased to enclose the Half-Yearly Report of Mobeus Income & Growth 2 VCT plc (the "Company") for the period from 1 May 2012 to 31 October 2012 (the "Report"). The Company changed its name from Matrix Income & Growth 2 VCT plc to Mobeus Income & Growth 2 VCT plc on 29 June 2012. Performance The Net Asset Value ("NAV") per Ordinary Share at 31 October 2012 was 99.24 pence (30 April 2012: 98.71 pence). The NAV total return since launch was 113.24 pence per share (30 April 2012: 112.71 pence per share). Both represent an increase of 0.5% over the period, mainly due to gains in the investment portfolio. This represents slippage against the Board's target for the Manager of an average total NAV return of 8% per annum, although the previous two years since this target was set have averaged 10.5% per annum. Shareholders should note that the performance data in my statement relates to the one Ordinary Share class now in existence, which was formerly called the C share class. This single share class was created after a share class merger of the former Ordinary and C share class on 10th September 2010. To assist shareholders to monitor the performance of their original Ordinary or C Share investment in a particular fundraising on a consistent basis, we have included separate performance data in a table at the end of this announcement. Investment Portfolio The first six months of the financial year continued to see the UK and global economies struggling to come to terms with the persisting volatility caused in part by the unresolved debt problems in several of the Eurozone countries. We expect the recovery to be slow and uncertain. However, despite the macro-economic situation, the portfolio has remained stable. Overall, the portfolio recorded realised and unrealised gains of £99,858 over the six month period. Apart from one major realisation (Iglu.com) and a new investment in the period (Tessella Holdings Limited) the Company's investment and portfolio activity were relatively quiet. The new investment environment was affected by the continued weakness in the economy and more recently by the uncertainty regarding the future direction of VCT tax regulation. Even though the rate of investment has been low compared to some previous periods, the Investment Manager is currently considering a number of potentially strong opportunities. The Board and the Investment Manager continue to adopt a cautious approach to completing sufficiently robust new investments in this challenging market. Portfolio Activity The Company invested £906,762 in the period, into Tessella Limited via the acquisition vehicle Sawrey Limited, as part of the Manager's Operating Partner programme. The sale of Iglu.com in May for an overall return of 2.5 times the original investment cost in two and a half years was a pleasing result. A smaller follow-on investment of £57,143 was made into PXP in June 2012 as part of a major re-structuring of the company to enable PXP to continue to trade following a sustained period of poor trading in a challenging market. Blaze Signs repaid their entire original loan, generating proceeds of £356,158, including premium of £82,190. After the period end, £623,480 including premium was repaid in respect of their second loan bringing the total loan payment proceeds (including interest) to date to £1.45m. Details of investment activity during the six months to 31 October 2012 and a summary of performance highlights in the portfolio can be found in the Manager's Review below. Revenue Account The results for this period are set out on the following pages and show a revenue gain (after tax) of 0.77 pence per Ordinary Share (30 April 2012: gain of 2.03 pence). The total gain (after tax) was 0.40 pence per Ordinary Share (30 April 2012: gain of 5.23 pence). The revenue return for the period of £191,288 is a fall of £85,766 from last year's comparable period. This is principally due to a fall in income of £67,432 from last year's £520,516 to £453,084 now. This was due in turn to three main factors:- Revenue returns benefited firstly from an increase in loan stock interest of £41,235 (being an increase of 12%, compared to the comparable period last year). The rise in loan stock interest reflects the new loan stock investments made over the last year, namely EMaC Limited, DiGiCo Global and most recently Tessella Holdings Limited. Dividend income fell by £103,971, principally because the prior year included a dividend from DiGiCo of £135,282, but dividends from Vectair, RDL and Focus mitigated this reduction. Lower cash balances than the comparable period contributed to lower liquidity fund income and bank interest of £10,905. Expenses charged to the Revenue Account have risen by £13,945. Fund management fees charged to the Income Statement in total have increased by 0.68% to £303,820, in line with the slightly higher net assets than the equivalent period last year. Other expenses have also risen by £13,433 in the period to £150,097 (2011: £136,664). This increase was due to higher registrars' fees, audit fees and trail commission costs. Dividends The Board's objective is, subject to the availability of sufficient reserves and liquidity, to distribute regular and consistent dividends. The Board intends to review the level of dividends to be paid before the year-end. Liquidity As a result of the investment activity referred to above, the Company retains cash liquidity of £4.1 million. The sum has since increased by £623,480 due to the repayment of Blaze in November 2012. When the investments in acquisition companies of £6 million are taken into account, the Company remains well positioned to make new investments and support suitable investment opportunities within the portfolio if required. Investment in qualifying holdings The Company is required to meet the target set by HM Revenue & Customs ("HMRC") of investing 70% of the funds raised in qualifying unquoted and AIM quoted companies. The Company exceeded this limit (based on VCT cost as defined in tax legislation, which differs from the actual cost given in the Investment Portfolio Summary below) throughout the period. The balance of the portfolio was invested in cash and a selection of readily realisable, money market funds with AAA credit ratings. Changes to VCT legislation The enactment of the Finance Act 2012 has ended a period of uncertainty in finalising the changes to the tax legislation that will apply to VCTs in the future. The principal change that affects the Company is that the funds raised after 6 April 2012 can no longer be used by the Manager to carry out certain types of management buy-out transactions ("MBOs"). However, the Company has a significant amount of cash raised prior to this date that it will continue to use to pursue its successful strategy of investing in MBOs of profitable and cash generative companies. A number of the tests for VCT investment have also been revised by the Finance Act, enabling VCTs to invest in larger companies with up to 250 staff and gross assets of up to £15 million immediately before investment and £16 million immediately after the investment. Also, investee companies can now receive up to £5 million in any rolling 12 month period from state-aided sources, which include VCTs. Share Buybacks During the six months ended 31 October 2012 the Company continued to implement its buy-back policy and bought back 80,160 Ordinary Shares, representing 0.32% of the shares in issue at the start of the year, at a total cost of £55,116. The shares above were bought back at a price of 68.4 pence per share. This represented a discount to the latest announced NAV at the time of 30.7%. These shares were subsequently cancelled by the Company. Selling your shares The Company's shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other quoted company through a stockbroker. Shareholders wishing to sell their shares are advised to contact the Company's stockbroker, Panmure Gordon (UK) Limited, by telephoning 020 7886 2716 or 2717 before agreeing a price with your stockbroker. Shareholders are also advised to discuss their individual tax position with their financial advisor before deciding to sell their shares. Shareholder communication The Company maintains a programme of regular communication with Shareholders through newsletters and a dedicated website in addition to the Company's Half-Yearly and Annual Reports. The Manager has established a new website, which can be accessed by going to www.mobeusequity.co.uk. This is regularly updated with information on your investments including case studies of portfolio companies. The Company continues to have its own dedicated section of the website which Shareholders may prefer to access directly by going to www.mig2vct.co.uk. This includes performance tables and details of dividends paid as well as copies of past reports to shareholders. As we informed Shareholders in last year's Annual Report, we have adopted electronic communications because we believe that this is the most efficient way of communicating with Shareholders as well as making savings to the Company on postage and printing costs. Accordingly, we previously informed Shareholders that the principal method of communicating with them would be by email, but offered them the opportunity to elect to continue to receive printed copies of communications through the post. Shareholders who have replied will, depending on the option chosen, receive either an email notifying them that documents have been placed on the Company's website or printed copies of these documents through the post. If they have not replied, they will receive a letter notifying them that documents have been placed on the Company's website but will be given another opportunity to select one of these two communication options. Shareholder workshop We received positive feedback from the second shareholder workshop, held in January 2012, which was attended by nearly 100 Mobeus VCT shareholders. It is intended that this will be an annual event and shareholders should have already received an invitation to attend either the lunchtime or evening session at the next workshop which is to be held on 29 January 2013. The workshops will include presentations from the Manager on the portfolio as a whole and from a successful entrepreneur from one of the VCT's investee companies. Industry awards for the Investment Manager It is pleasing to report that Mobeus won the award for VCT of the Year 2012 at the Investor AllStars Award 2012. It was also named VCT House of the Year 2012 at the Unquote" British Private Equity Awards 2012. The citations for these awards recognised Mobeus' outstanding performance in achieving record realisations during the year. The Board is delighted that the work of the Investment Manager has been acknowledged in this way. Outlook The recent changes to the VCT legislation referred to above are not expected to affect the Company's performance unduly for the next few years. We are continuing to monitor developments in the industry, including the recent consultation paper published by the FSA on the promotion of VCT shares to retail investors and the implementation of the Retail Distribution Review. Any resulting impact on the fund will be reported to shareholders. The UK economy remains relatively depressed, with only minimal economic growth being forecast. In such an environment, your Board and Investment Manager will remain vigilant about the potential impact on the portfolio and cautious when evaluating new opportunities. I would like to thank all our Shareholders for their continuing support. Nigel Melville Chairman 14 December 2012 RESPONSIBILITY STATEMENT In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Nigel Melville (Chairman), Adam Kingdon (Chairman of the Audit Committee), Sally Duckworth (Chairman of the Investment Committee) and Kenneth Vere Nicoll (Chairman of the Nomination and Remuneration Committee), the Directors of the Company, confirm that to the best of their knowledge: (a) the condensed set of financial statements, which have been prepared in accordance with the statement "Half-Yearly Reports" issued by the Accounting Standards Board, give a true and fair view of the assets, liabilities, financial position and loss of the Company as required by DTR 4.2.4; (b) the interim management report included within the Chairman's Statement, Investment Policy, Investment Manager's Review and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7 being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; (c) a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and (d) There are no related party transactions in the first six months of the current financial year to be disclosed, in accordance with DTR 4.2.8. PRINCIPAL RISKS AND UNCERTAINITIES In accordance with Disclosure and Transparency Rule (DTR) 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed from those identified in the Annual Report and Accounts for the year ended 30 April 2012. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 Income Tax Act 2007. The principal risks faced by the Company are: - economic risk; - loss of approval as a Venture Capital Trust; - investment and strategic risk; - regulatory risk; - financial and operating risk; - market risk; - asset liquidity risk; - market liquidity risk; - credit/counterparty risk. A detailed explanation of the principal risks facing the Company can be found in the 2012 Annual Report and Accounts on page 46. Copies are available from www.mig2vct.co.uk. RELATED PARTY TRANSACTION There are no related party transactions in the first six months of the current financial year to be disclosed. GOING CONCERN The Board has assessed the Company's operation as a going concern. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report which is included within the Chairman's Statement, Investment Policy, Investment Manager's Review and Investment Portfolio Summary. The Directors have satisfied themselves that the Company continues to maintain a significant cash position; the majority of companies in the portfolio continue to trade profitably; and the portfolio taken as a whole remains resilient and well-diversified. The major cash outflows of the Company (namely investments, buy-backs and dividends) are within the Company's control. The Board's assessment of liquidity risk and details of the Company's policies for managing its capital and financial risks are shown in Note 19 on pages 46 - 54 of the Annual Report and Accounts for the year ended 30 April 2012. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the Half-Yearly Report and annual financial statements. CAUTIONARY STATEMENT This report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this report should be construed as a profit forecast. For and on behalf of the Board: Nigel Melville Chairman 14 December 2012 INVESTMENT POLICY The VCT's policy is to invest primarily in a diverse portfolio of UK established, profitable, unquoted companies in order to generate capital gains from trade sales and flotations. Investments are structured as part loan and part equity in order to receive regular income and to provide downside protection in the event of under-performance. Investments are made selectively across a number of sectors, primarily in management buyout transactions (MBOs) i.e. to support incumbent management teams in acquiring the business they manage but do not own. Investments are primarily made in companies that are established and profitable. Uninvested funds are held in cash and low risk money market funds. VCT regulation The investment policy is designed to ensure that the VCT continues to qualify and is approved as a VCT by HM Revenue & Customs ("HMRC"). Amongst other conditions, the VCT may not invest more than 15% of its investments in a single company and must achieve at least 70% by value of its investments throughout the period in shares or securities comprised in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised after 6 April 2011) must be ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, although the VCT can invest less than 30% (70% for funds raised after 6 April 2011) of an investment in a specific company in ordinary shares it must have at least 10% by value of its total investments in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). UK Companies The companies in which investments are made must have no more than £15 million of gross assets at the time of investment to be classed as a VCT qualifying holding. The additional £7.3 million funds raised by the Company after 6 April 2006 are subject to a £7 million gross assets test for an investment to be VCT qualifying. Asset mix We aim to hold at least 80% of the Company's net assets in qualifying investments. The balance of the portfolio is held in readily realisable interest bearing investments and deposits. Risk diversification and maximum exposures Risk is spread by investing in a number of different businesses across different industry sectors. To reduce the risk of high exposure to equities, each qualifying investment is structured using a significant proportion of loan stock (up to 70% of the total investment in each VCT qualifying company). Initial investments in VCT qualifying companies are generally made in amounts ranging from £200,000 to £1 million at cost. Ongoing monitoring of each investment is carried out by the Manager generally through taking a seat on the Board of each VCT qualifying company. Co-investment The VCT aims to invest alongside three other Income and Growth VCTs advised by the Manager with a similar investment policy. This enables the VCT to participate in combined investments by the Investment Manager of up to £5 million. Borrowing The VCT has no borrowing and does not have any current plans for future borrowings. Management The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Investment and divestment proposals are originated, negotiated and recommended by the Manager and are then subject to formal approval by the Directors. Mobeus Equity Partners LLP provides Investment Advisory, Company Secretarial and Accountancy services to the VCT. INVESTMENT MANAGER'S REVIEW Overview It was harder to complete new investments in the six month period under review, partially due to the second dip into recession which revived uncertainty surrounding the extent and depth of the recovery. Lack of clarity regarding changes to VCT regulations further dampened the fragile market. Nonetheless, dealflow has improved in recent months, at least in terms of the number of deals coming forward, although concluding transactions has continued to be difficult. We have a number of interesting opportunities in the pipeline and are therefore hopeful that the pace of new investment will increase again. Uncertainty over the future persists, particularly amongst potential sellers of businesses, but our investment approach combining debt and equity continues to be attractive to companies seeking investment in a market where availability of bank finance remains patchy at best. This means that management buy-out teams are frequently turning to us as a reliable source of funding for their plans. The VCT and the Investment Manager are broadening the scope of the deals which we target by identifying opportunities to invest more capital to support the expansion of successful businesses in the existing portfolio, including where appropriate, deploying loan funding to support portfolio companies' growth plans. We believe that the VCT's strategy of investing in well-structured MBO deals; supporting highly motivated management teams; focusing on acquiring established, profitable, positive cashflow businesses; and investing partly in income yielding loan stocks substantially increases the downside protection to Shareholders' capital. We have noted the recent change in VCT legislation preventing certain types of MBOs, but also note that this restriction does not apply to the substantial level of funds held by the VCT from earlier fundraisings. The strategy above is executed by retaining and developing a portfolio of successful companies until each has reached the optimal point for a profitable realisation. In the meantime, the portfolio routinely benefits from returns of loan stock interest, dividends and loan repayments, during the life of an investment. New investment One new investment was completed during the six months period under review. In July 2012, the Company invested £906,762 in Tessella, resulting in a partial refund of the Company's existing investment of £1 million in the acquisition vehicle Sawrey, to support the MBO of Tessella, an international provider of science-powered technology and consulting services. Founded in 1980, the company delivers innovative and cost-effective solutions to complex real-world commercial and technical challenges such as developing smarter drug trials, and minimising risk in oil and gas exploration. This company has made an encouraging start since investment. We are confident that our Operating Partner programme will continue to generate successful investments for the Company and accordingly £6 million is held in six acquisition vehicles. These companies continue to pursue an active search for investment opportunities. Each of the acquisition vehicles is headed by an experienced Chairman, well known to us, who is working closely with us in seeking to identify and complete investments in specific sectors relevant to their industry knowledge and experience. We have established these companies to provide time for us to identify and invest in suitable target companies at sufficiently attractive valuations. Follow-on investments Only one investee company received further funds in the period. A small follow-on investment of £57,143 was made into PXP Holdings in June 2012 as part of a major re-structuring of the company following a sustained period of poor trading in a challenging market. Trading in recent months has started to show improvement. Realisations Against an uncertain economic background, we are pleased to report realisations during the six months under review. During the period these have generated net cash of £1.89m (excluding Sawrey's partial refund of £93k). In May 2012, the Company realised its entire investment in Iglu.com Holidays, the specialist online ski and cruise holiday travel agent, for cash proceeds and interest of £1.46 million through a sale to Growth Capital Partners. This realisation contributed to total cash proceeds of £2.53 million to the Company over the two and a half year life of the investment, representing a 2.53 times return on the Company's original investment of £1 million. We have supported this established online ski agent through a period of rapid growth in its cruise holiday business since the MBO in December 2009. Iglu is now one of the leading distributors of cruise holidays, in the UK, and the largest independent retailer of ski holidays. The company's revenues now exceed £90 million. A total of £433,528 (including any premiums paid) has also been received in loan stock repayments from portfolio companies during the six months to 31 October 2012. Blaze Signs repaid a total of £356,158 in three separate payments received between May and August 2012 and Fullfield Limited made a scheduled payment of £77,370 in July 2012. Portfolio review The portfolio at 31 October 2012 comprised thirty investments (2011: twenty-eight) with a cost of £22.8 million (2011: £19.6 million) and valued at £20.5 million (2011: £21 million). On a like for like basis the portfolio has increased by 0.59% compared with the valuations prevailing at 30 April 2012. Over the same period the FTSE All-Share and FTSE SmallCap indices have risen by 1.33% and 4.41% respectively. The portfolio's performance as a whole continues to be robust. ATG Media and DiGiCo continue to be the strongest performers. Blaze has made a steady recovery from the difficulties it experienced during the economic downturn, enabling it to repay part of its loans as noted above. Focus is expected to exceed its budget, is performing well on product development and has a healthy pipeline of new products. Fullfield has maintained its solid start and cash generation at this company has been strong, as evidenced by its early partial repayment of its loan stock during the year. British International has had a difficult year, with further falls in passenger journeys on its scheduled route to the Isles of Scilly leading to a material reduction in group profitability; this was compounded by the delays in completing the sale to Sainsbury of its heliport in Penzance, which was dependent on full planning permission being granted. However, completion finally took place in October 2012 and the substantial receipt enabled the company to fully repay its bank borrowings. The continuing downturn in the construction and house building sectors continues to affect the performance of PXP and Plastic Surgeon, although management have worked well to reposition both of these businesses and make the necessary cuts in costs. The market environment for Youngman remains uncertain, although it has now fully repaid its bank debt and is well positioned to benefit from any upturn in its markets. Faversham has been streamlining its operations although progress is slower than anticipated. Outlook The outlook for the UK economy is still uncertain, but we are hopeful that we are entering a healthy period of new investment during the latter part of the year. We continue to be conscious of the need to ensure that investee companies take appropriate actions to respond to the challenging environment ahead. We are maintaining a prudent approach to making new investments and ensuring that the portfolio remains well capitalised. We are confident that good returns can continue to be earned for investors. Mobeus Equity Partners LLP 14 December 2012 INVESTMENT PORTFOLIO SUMMARY as at 31 October 2012 Date of Total first Book cost Valuation Valuation % of investment/ at 31 at 30 at 31 net Sector October April 2012 October assets 2012 2012 by value £ £ £ Qualifying investments AiM quoted investments Omega Diagnostics Group plc December 2010 214,998 259,789 246,352 1.0% In vitro diagnostics for Pharmaceuticals food intolerance, auto-immune diseases and infectious diseases Vphase plc (formerly March 2001 254,586 1,014 697 0.0% Flightstore Group plc) Development of energy Electronic and saving devices for domestic electrical use equipment 469,584 260,803 247,049 1.0% Unquoted investments ATG Media Holdings Limited October 2008 767,907 1,865,911 1,969,924 8.0% Publisher and online Media auction platform operator Blaze Signs Holdings April 2006 1,124,530 1,422,619 1,473,441 6.0% Limited Manufacturing and Support services installation of signs Fullfield Limited, trading July 2011 1,000,000 1,062,194 1,097,819 4.5% as Motorclean Limited Vehicle cleaning and valet Support services services Ingleby (1879) Limited October 2008 1,095,723 1,095,723 1,095,723 4.5% trading as EMaC Limited (formerly Vanir Consultants Limited) Service plans for the motor Support services trade Ackling Management Limited January 2012 1,000,000 1,000,000 1,000,000 4.1% Food manufacturing, Food production distribution and brand & distribution management Almsworthy Trading Limited March 2012 1,000,000 1,000,000 1,000,000 4.1% Specialist construction, Support services building support services, building products and related services Peddars Management Limited January 2012 1,000,000 1,000,000 1,000,000 4.1% Database management, Support services mapping, data mapping and management services to legal and building industries Culbone Trading Limited April 2012 1,000,000 1,000,000 1,000,000 4.1% Outsourced services Support services Fosse Management Limited January 2012 1,000,000 1,000,000 1,000,000 4.1% Brand management, consumer Support services products and retail Madacombe Trading Limited April 2012 1,000,000 1,000,000 1,000,000 4.1% Engineering services Support services Tessella Holdings Limited July 2012 906,762 - 906,762 3.7% (formerly Oval (2253) Limited)3 Provision of specialist Support services scientific and computer programming consultancy RDL Corporation Limited October 2010 1,000,000 921,169 857,426 3.5% Recruitment consultants for Support services the pharmaceutical , business intelligence and IT industries British International June 2006 1,000,000 1,005,644 840,000 3.4% Holdings Limited Helicopter service Support services operators EOTH Limited trading as October 2011 817,185 817,185 817,185 3.3% Equip Outdoor Technologies Limited Branded outdoor equipment General and clothing retailers Focus Pharma Holdings October 2007 517,827 578,529 798,716 3.2% Limited Licensor and distributer of Support services generic pharmaceuticals Youngman Group Limited October 2005 1,000,052 699,966 699,966 2.8% Manufacturer of ladders and Support services access towers Machineworks Software April 2006 25,727 550,340 597,176 2.4% Limited Software for CAM and Software and machine tool vendors Computer Services ASL Technology Holdings December 2010 1,360,130 801,951 506,735 2.1% Limited Printer and photocopier Support services services The Plastic Surgeon April 2008 392,264 203,433 238,012 1.0% Holdings Limited Snagging and finishing of Support services domestic and commercial properties Racoon International December 2006 878,527 254,441 192,747 0.8% Holdings Limited Supplier of hair Personal goods extensions, hair care products and training Vectair Holdings Limited January 2006 60,293 154,045 159,549 0.6% Design and sale of washroom Support services products Lightworks Software Limited April 2006 25,727 116,629 95,570 0.4% Software for CAD vendors Software and Computer Services Faversham House December 2010 374,870 216,647 83,856 0.3% Publisher, exhibition Media organiser and operator of websites for the environmental, visual communications and building services sectors Monsal Holdings Limited December 2007 847,614 76,897 76,897 0.3% Supplier of engineering Engineering services to the water and waste sectors PXP Holdings Limited December 2006 1,220,579 - 57,143 0.2% (Pinewood Structures) Design, manufacture and Construction supply of timber frames for buildings Legion Group plc (formerly August 2005 150,000 - - 0.0% SectorGuard plc) Provision of manned Support Services guarding, mobile patrolling, and alarm response services Iglu.com Holidays Limited December 2009 - 1,455,265 - 0.0% Online ski and cruise Retail travel agent Sawrey Limited3 March 2011 - 1,000,000 - 0.0% Marketing services and Support services media 20,565,717 20,298,588 18,564,647 75.6% Total qualifying 21,035,301 20,559,391 18,811,696 76.6%1 investments Non-qualifying investments DiGiCo Global Limited July 2007 1,334,291 1,334,291 1,334,291 5.4% (formerly Newincco 1124 Limited) Design and manufacture of Technology, audio mixing desks hardware and equipment British International 160,000 320,000 320,000 1.3% Holdings Limited Fullfield Limited, trading 5,809 83,179 5,809 0.0% as Motorclean Limited ATG Media Holdings Limited 104 443 478 0.0% Fuse 8 plc 250,000 - - 0.0% Legion Group plc 106 - - 0.0% Total non-qualifying 1,750,310 1,737,913 1,660,578 6.7% investments Total portfolio investments 22,785,611 22,297,304 20,472,274 83.3% Money market funds 2 3,800,720 15.4% Debtors 170,381 0.7% Cash 316,362 1.3% Creditors (181,548) (0.7%) Net assets 24,578,189 100.0% 1 As at 31 October 2012 the Company held more than 70% of its total investments in qualifying holdings, and therefore complied with the VCT Investment test. For the purposes of the VCT Investment tests, the Company is permitted to disregard disposals of investments for six months from the date of disposal. 2 Disclosed within Current assets as Current Investments in the Balance Sheet. 3 The Company's existing investment in Sawrey Limited of £1m was used to make an investment in Tessella Holdings Limited of £906,762 resulting in a net repayment of £93,238 to the Company. UNAUDITED INCOME STATEMENT for the six months ended 31 October 2012 Six months ended Year ended 30 31 October 2012 April 2012 (unaudited) (audited) Notes Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Unrealised gains on investments held at fair value - 99,858 99,858 - 949,129 949,129 Realised gains on investments held at fair value - - - - 230,239 230,239 Income 3 453,084 - 453,084 1,042,824 - 1,042,824 Investment management expense 4 (75,955) (227,865) (303,820) ( 152,221) ( 456,662) ( 608,883) Other expenses (150,097) - (150,097) ( 280,200) - ( 280,200) Profit/(loss) on ordinary activities before taxation 227,032 (128,007) 99,025 610,403 722,706 1,333,109 Tax on profit/(loss) on ordinary activities 5 (35,744) 35,744 - ( 93,826) 93,826 - Profit/(loss) on ordinary activities after taxation 191,288 (92,263) 99,025 516,577 816,532 1,333,109 Basic and diluted earnings per share Ordinary Shares 6 0.77p (0.37)p 0.40p 2.03p 3.20p 5.23p Six months ended 31 October 2011 (unaudited) Notes Revenue Capital Total £ £ £ Unrealised gains on investments held at fair value - 577,783 577,783 Realised gains on investments held at fair value - - - Income 3 520,516 - 520,516 Investment management expense 4 ( 75,443) ( 226,330) ( 301,773) Other expenses ( 136,664) - ( 136,664) Profit/(loss) on ordinary activities before taxation 308,409 351,453 659,862 Tax on profit/(loss) on ordinary activities 5 ( 31,355) 31,355 - Profit/(loss) on ordinary activities after taxation 277,054 382,808 659,862 Basic and diluted earnings per share Ordinary Shares 6 1.08p 1.48p 2.56p The total column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. There were no other recognised gains or losses in the period. Other than revaluation movements arising on investments held at fair value through profit and loss there were no differences between the profit/(loss) as stated above and at historical cost. Unaudited Balance Sheet as at 31 October 2012 31 October 2012 30 April 2012 31 October 2011 (unaudited) (audited) (unaudited) Notes £ £ £ Non-current assets Investments at fair value 9 20,472,274 22,297,304 21,018,933 Current Assets Debtors and prepayments 170,381 213,610 215,722 Current Investments 10 3,800,720 2,099,906 4,121,576 Cash at bank 316,362 79,786 112,861 4,287,463 2,393,302 4,450,159 Creditors: amounts falling due within one year (181,548) (163,967) (256,309) Net current assets 4,105,915 2,229,335 4,193,850 Net assets 24,578,189 24,526,639 25,212,783 Capital and reserves 11 Called up share capital 247,673 248,475 253,595 Capital redemption reserve 58,974 58,172 53,052 Revaluation reserve 193,533 1,478,804 1,808,252 Special distributable reserve 14,202,309 14,350,803 15,748,617 Profit and loss account 9,875,700 8,390,385 7,349,267 24,578,189 24,526,639 25,212,783 Net asset value per share Ordinary Shares 7 99.24p 98.71p 99.42p Unaudited Reconciliation of Movements in Shareholders' Funds for the six months ended 31October 2012 Six months ended Year ended Six months ended 31 October 2012 30 April 2012 31 October 2011 (unaudited) (audited) (unaudited) Notes £ £ £ Opening shareholders funds 24,526,639 24,863,968 24,863,968 Net share capital bought back (55,116) (668,744) (315,397) Profit for the year 99,025 1,333,109 659,862 Dividends refunded/(paid) in period 8 7,641 (1,001,694) 4,350 Closing shareholders' funds 24,578,189 24,526,639 25,212,783 Unaudited Summarised Cash Flow Statement for the six months ended 31 October 2012 Six months Six months ended Year ended ended 31 October 2012 30 April 2012 31 October 2011 (unaudited) (audited) (unaudited) £ £ £ Operating activities Investment income received 494,262 913,442 488,734 Other income 6,209 - - Investment management fees paid (303,820) (608,883) (301,773) Other cash payments for other expenses (111,895) (280,803) (193,360) Net cash inflow/(outflow) from operating activities 84,756 23,756 (6,399) Investing activities Acquisition of investments (57,143) (8,152,849) (2,150,457) Disposal of investments 1,982,031 5,421,329 - Net cash inflow/(outflow) from investing activities 1,924,888 (2,731,520) (2,150,457) Dividends Dividends refunded/(paid) 7,641 (1,001,694) 4,350 Net cash inflow/(outflow) before liquid resource management and financing 2,017,285 (3,709,458) (2,152,506) Movement in money market and other deposits (1,700,814) 4,438,591 2,416,921 Financing Purchase of own shares (79,895) (725,638) (227,845) Net cash outflow from financing (79,895) (725,638) (227,845) Increase in cash 236,576 3,495 36,570 £ £ £ Net funds at start of period 79,786 76,291 76,291 Increase in cash for the period 236,576 3,495 36,570 Net funds at the end of the period 316,362 79,786 112,861 Reconciliation of profit on ordinary activities before taxation to net cash inflow/(outflow) from operating activities for the six months ended 31 October 2012 Six months ended Year ended Six months ended 31 October 2012 30 April 2012 31 October 2011 (unaudited) (audited) (unaudited) £ £ £ Profit on ordinary activities before taxation 99,025 1,333,109 659,862 Net unrealised gains on investments (99,858) (230,239) (577,783) Net gains on realisations on investments - (949,129) - Decrease/(increase) in debtors 43,229 (132,191) (38,580) Increase/(decrease) in creditors and accruals 42,360 2,206 (49,898) Net cash inflow/(outflow) from operating activities 84,756 23,756 (6,399) Notes to the Unaudited Financial Statements 1. Principal accounting policies The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report. a) Basis of accounting The unaudited results cover the six months to 31 October 2012 and have been prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent with the accounting policies set out in the statutory accounts for the year ended 30 April 2012 and the 2009 Statement of Recommended Practice, `Financial Statements of Investment Trust Companies and Venture Capital Trusts' ("the SORP") issued by the Association of Investment Companies. The financial statements are prepared under the historical cost convention except for the revaluation of certain investments. The Half-yearly Report has not been audited, nor has it been reviewed by the auditor pursuant to the Financial Reporting Council (FRC)'s guidance on Review of Interim Financial Information. b) Presentation of the Income Statement In order to better reflect the activities of a VCT and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007. c) Investments Investments are accounted for on a trade date basis All investments held by the Company are classified as "fair value through profit and loss" as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. For investments actively traded in organised financial markets, recognition and fair value is determined by reference to Stock Exchange market trading rules and quoted bid prices at the close of business on the balance sheet date. Unquoted investments are valued by the Directors at `fair value through profit and loss'. Accordingly, in the absence of a market price, the Directors have valued unquoted investments in accordance with International Private Equity Venture Capital Valuation (IPEVCV) guidelines as updated in September 2009. All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered: (i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used. (ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:- a) an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Manager compared to the sector including, inter alia, a lack of marketability). or:- b) where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Manager, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value. (iii) Premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable. (iv) Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied. d) Capital gains and losses Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation reserves and movements in the period are shown in the Income Statement. 2. The Company revoked its status as an investment company on 7 September 2005, so that it can regard realised capital profits as part of the profits available for distribution. 3. Income Six months ended Year ended Six months ended 31 October 2012 30 April 2012 31 October 2011 (unaudited) (audited) (unaudited) Income from investments £ £ £ Dividends 48,314 216,406 152,285 Money-market funds 8,994 35,694 20,296 Loan stock interest 388,832 789,960 347,597 Bank deposit and other interest 735 764 338 Other income 6,209 - - Total Income 453,084 1,042,824 520,516 4. Investment management expense Under the terms of an investment management agreement dated 10 September 2010, Mobeus provides investment advisory, administrative and company secretarial services to the Company, for a fee of 2.0% per annum calculated on a quarterly basis by reference to the net assets at the end of the preceding quarter, plus a fee of £113,589 per annum, the latter being subject to changes in the retail prices index each year. In accordance with the policy statement published under "Management and Administration" in the Company's prospectus dated 10 May 2000, the Directors have charged 75% of the investment management expenses to the capital account. This is in line with the Board's expectation of the long-term split of returns from the investment portfolio of the Company. 5. Taxation There is no tax charge in the period as the Company has tax losses in the current year as tax deductible expenditure charged against the capital return exceeds the taxable revenue return. 6. Basic and diluted earnings per share Six months Year ended Six months ended 31 30 April ended 31 October 2012 2012 October 2011 (unaudited) (audited) (unaudited) Ordinary Shares Ordinary Shares Ordinary Shares £ £ £ Total earnings after taxation: 99,025 1,333,109 659,862 Basic and diluted earnings per share (note a) 0.40p 5.23p 2.56p Net revenue from ordinary activities after taxation 191,288 516,577 277,054 Basic and diluted revenue earnings per share (note b) 0.77p 2.03p 1.08p Net realised capital gains - 230,239 - Net unrealised capital gains 99,858 949,129 577,783 Capital expenses (net of taxation) (192,121) (362,836) (194,975) Total capital return (92,263) 816,532 382,808 Basic and diluted capital earnings per share (note c) (0.37)p 3.20p 1.48p Weighted average number of shares in issue in the period 24,824,253 25,484,692 25,764,981 Notes: a) Basic and diluted earnings per share is total earnings after taxation divided by the weighted average number of shares in issue. b) Basic and diluted revenue earnings per share is revenue earnings after taxation divided by the weighted average number of shares in issue. c) Basic and diluted capital earnings per share is total capital earnings divided by the weighted average number of shares in issue. 7. Net asset value per share Net asset value per share As at 31 As at 31 October As at 30 October 2012 April 2012 2011 (unaudited) (audited) (unaudited) £ £ £ Net assets 24,578,189 24,526,639 25,212,783 Number of shares in issue 24,767,305 24,847,465 25,359,455 Net asset value per share (pence) 99.24 p 98.71 p 99.42 p 8. Dividends paid Six months Year Six months to 31 October to 30 April to 31 October 2012 2012 2011 (unaudited) (audited) (unaudited) £ £ £ Ordinary shares Interim capital dividend paid for the year ended 30 April 2012 of 2p per share on 20 April 2012 - 500,847 - Interim income dividend paid for the year ended 30 April 2012 of 2p per share on 20 April 2012 - 500,847 - Dividends refunded* (7,641) - (4,350) Total (7,641) 1,001,694 (4,350) * - This amount represents dividends that were paid on shares subsequent to being bought back by the Company. As a result, the dividends have been refunded to the Company. 9. Summary of non-current asset investments at fair value during the period Traded Unquoted Preference Qualifying Total on AiM Ordinary Shares loans shares £ £ £ £ £ Cost at 1 May 2012 469,584 7,015,231 43,413 15,797,142 23,325,370 Unrealised gains/(losses) at 30 April 2012 41,219 618,637 (17,565) (495,387) 146,904 Permanent impairment at 30 April 2012 (250,000) (150,106) - (774,864) (1,174,970) Value at 30 April 2012 260,803 7,483,762 25,848 14,526,891 22,297,304 Purchases at cost - 57,143 - - 57,143 Net sale proceeds - (1,546,177) (2,326) (433,528) (1,982,031) (Decrease)/increase in unrealised gains (13,754) 498,926 (2,000) (383,314) 99,858 Reclassification at valuation - (155,203) - 155,203 - Valuation at 31 October 2012 247,049 6,338,451 21,522 13,865,252 20,472,274 Book cost at 31 October 2012 469,584 7,549,369 39,258 14,727,400 22,785,611 Unrealised gains/(losses) at 31 October 2012 27,465 (1,060,812) (17,736) (87,284) (1,138,367) Permanent impairment at 31 October 2012 (250,000) (150,106) - (774,864) (1,174,970) Valuation at 31 October 2012 247,049 6,338,451 21,522 13,865,252 20,472,274 Unrealised (losses)/gains at 1 May 2012 (208,781) 468,531 (17,565) (1,270,251) (1,028,066) Net movement in unrealised (depreciation)/appreciation in the period (13,754) 498,926 (2,000) (383,314) 99,858 Realisation of previously unrealised gains - (1,302,939) - (82,190) (1,385,129) Unrealised losses on investments at 31 October 2012 (222,535) (335,482) (19,565) (1,735,755) (2,313,337) 10. Current asset investments at fair value Current asset investments comprise investments in four OEIC money market funds (three Dublin based and one London based), managed by Blackrock Investment Management (UK) Ltd, Royal Bank of Scotland, Federated Prime Rate Capital Management and Scottish Widows Investment Partnership. All of this sum, £3,800,720 (30 April 2012: £2,099,906; 31 October 2011: £4,121,576), is subject to same day access. 11. Movement in share capital and reserves Called up Capital Special Profit share redemption Revaluation distributable and loss capital reserve reserve reserve account Total £ £ £ £ £ £ At 30 April 2012 248,475 58,172 1,478,804 14,350,803 8,390,385 24,526,639 Shares bought back (802) 802 - (55,116) - (55,116) Transfer of realised capital losses to Special distributable reserve (note) - - - (93,378) 93,378 - Realised gain on investments - - - - - - Realisation of previously unrealised gain - - (1,385,129) - 1,385,129 - Dividends refunded - - - - 7,641 7,641 Profit/(loss) for the period - - 99,858 - (833) 99,025 At 31 October 2012 247,673 58,974 193,533 14,202,309 9,875,700 24,578,189 The cost of shares bought back of £79,895 shown in the Cash Flow Statement differs to that disclosed above by £24,779. This is due to an opening share buyback creditor of £24,779 settled during the period. The cancelled share premium account provides the Company with a special reserve out of which it can fund buy-backs of the Company's Shares as and when it is considered by the Board to be in the interests of the Shareholders, and to absorb any existing and future realised losses. Under Resolution 9 of the Annual General Meeting held on 6 September 2012, Shareholders authorised the Company to purchase its own shares pursuant to section 693(4) of the Companies Act 2006. The authority is limited to a maximum of 14.99 per cent of the issued Ordinary Share Capital of the Company, and will unless, previously revoked or renewed, expire on the conclusion of the Annual General Meeting of the Company to be held in 2013. The maximum price that may be paid for Ordinary Shares will be an amount equal to 105 per cent of the average of the middle market quotation as taken from the London Stock Exchange daily official list for the five business days immediately preceding the day on which that Ordinary Share is purchased. The minimum price that may be paid for Ordinary Shares is 1 penny per share. The authority provides that the Company may make a contract to purchase Ordinary Shares under the authority conferred by this resolution 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 Ordinary Shares pursuant to such contract. 12. The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The information for the year ended 30 April 2012 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The auditor has reported on these financial statements and that report was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. 13. Copies of this statement are being sent to all Shareholders. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London, SW1Y 4EX, or can be downloaded via the Company's website at www.mig2vct.co.uk. MOBEUS INCOME & GROWTH 2 VCT PLC INVESTOR PERFORMANCE APPENDIX Performance data at 31 October 2012 The two former 'C' and Ordinary classes of shares were merged on 10 September 2010, and the 'C' share class redesignated as Ordinary Shares. The following tables show, for all investors in the former share classes how their investments have performed since they were originally allotted shares in each fundraising. Total return data, which includes cumulative dividends paid to date, is shown on both a share price and NAV basis as at 31 October 2012. The NAV basis enables Shareholders to evaluate more clearly the performance of the Manager, as it reflects the underlying value of the portfolio at the reporting date. This is the most widely used measure of performance in the VCT sector. Ordinary Share Fund Share price as at 31 October 2012 67.38p 1 NAV per share as at 31 October 2012 99.24p Total return per share to shareholders since allotment Cumulative Net dividends % increase Allotment allotment paid per since 30 Allotment date(s) price price 2 share4 April 2012 (Share price (NAV basis) basis) (NAV basis) (p) (p) (p) (p) (p) Funds raised 2005 Between 5 January 2006 and 5 April 2006 100.00 60.00 14.00 81.38 113.24 0.47% Funds raised 2008/09 Between 3 April 2009 and 5 May 2009 92.39 64.67 10.00 77.38 109.24 0.49% Former Ordinary Share Fund Share price as at 31 October 2012 55.72p NAV per share as at 31 October 2012 82.07p Shareholders in the former Ordinary Share Fund received 0.827 shares in the Company for each former Ordinary share that they held on the 10 September 2010, when the two share classes merged. Both the share price and the NAV per share shown above have been adjusted using this merger ratio. Total return per share to shareholders since allotment Cumulative Net dividends % increase Allotment allotment paid per since 30 Allotment date(s) price price 2 share4 April 2012 (Share price (NAV (NAV basis) basis) basis) (p) (p) (p) (p) (p) % Funds raised 2000/01 3 Between 30 May 2000 and 11 December 2000 100.00 80.00 33.41 89.13 115.48 0.38% 1 - Source: London Stock Exchange. 2 - Net allotment price is the allotment price less applicable income tax relief. The tax relief was 20% up to 5 April 2004, 40% from 6 April 2004 to 5 April 2006, and 30% thereafter. 3 - Investors in this fundraising may also have enhanced returns if they had also deferred capital gains tax liabilities. 4 - For derivation, see table below. Cumulative dividends paid Funds Funds raised raised 2000/01 2005 (p) (p) (p) 20 April 2012 3.31 1 4.00 4.00 20 April 2011 3.31 1 4.00 4.00 10 September 2010 - Merger of Ordinary Share Fund and C Share Fund 13 August 2010 - 1.00 1.00 19 September 2009 - 1.00 1.00 23 July 2008 6.00 2.50 19 September 2007 6.00 1.50 8 February 2006 6.00 20 October 2005 6.00 24 September 2003 0.51 16 September 2002 1.35 10 September 2001 0.93 33.41 14.00 10.00 SHAREHOLDER INFORMATION The Manager completed its buyout from Matrix Group on 30 June 2012 to become a fully independent firm owned by its partners and changed its name to Mobeus Equity Partners on 29 June 2012. The name of the Company also changed from Matrix Income & Growth 2 VCT plc on this date. The Manager's team and the Company's current investment strategy remain unchanged. On 18 December 2008, the Company appointed Matrix Corporate Capital LLP as corporate broker. On 25 October 2012 Matrix Corporate Capital LLP ceased to be a market maker and the Company appointed Panmure Gordon (UK) Limited as its corporate broker, as the team previously providing these services at Matrix Corporate Capital LLP has moved to Panmure Gordon (UK) Limited. Shareholders wishing to follow the Company's progress can visit the Company's website at www.mig2vct.co.uk. The website includes dedicated pages on the Company providing up-to-date details on fund performance and dividends as well as publicly available information or links to information about our largest investments, the latest NAV and the share price. The London Stock Exchange's website at www.londonstockexchange.com/en-gb/pricesnews provides up to the minute details of the share price and latest NAV announcements, etc. A number of commentators such as Allenbridge at www.taxshelterreport.co.uk provide comparative performance figures for the VCT sector as a whole. The share price is also quoted in the Financial Times. The Company circulates a bi-annual newsletter to Shareholders, as well as the usual Annual and Half-Yearly Reports. The next edition will be distributed in January 2013. Shareholder enquires: For enquiries concerning the investment portfolio, please contact the Investment Manager, Mobeus Equity Partners LLP, on 020 7024 7600 or by e-mail to info@mobeusequity.co.uk. For information on your holding, to notify the Company of a change of address or to request a dividend mandate form (should you wish to have future dividends paid directly into your bank account) please contact the Company's Registrars, Capita Registrars, on 0871 664 0300 (calls cost 10p per minute plus network extras. If calling from overseas please ring +44 208 639 2157) or write to them at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. Alternatively you can contact them via their website at www.capitaregistrars.com. Shareholder communications Shareholders receive a regular newsletter published by the Investment Manager for all its VCT Shareholders. The newsletter includes information on the latest investments made by the Company and portfolio news as well as performance data. The Investment Manager holds an annual shareholder workshop which will includes a presentation on the Mobeus VCTs' investment activity and performance. The next AGM of the Company will be held in September 2013. The AGM will include a presentation by the Investment Manager and there will be the opportunity for shareholders to discuss the progress of the portfolio with the Board and the Investment Manager. Net asset value per share The Company's NAV as at 31 October 2012 was 99.24 pence per Ordinary Share. The Company announces its unaudited NAV on a quarterly basis. Dividends The Board is not recommending the payment of an interim dividend in respect of the six months ended 31 October 2012 to Ordinary Shareholders. The Directors will consider the payment of a dividend in respect of the year-ending 30 April 2013 before the end of the year. Shareholders who wish to have future dividends paid directly into their bank account rather than sent by cheque to their registered address can complete a mandate for this purpose. Mandates can be obtained by contacting the Company's Registrars, Capita Registrars, at the address below. Selling your shares The Company's shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other quoted company through a stockbroker. Shareholders wishing to sell their shares are advised to contact the Company's stockbroker, Panmure Gordon (UK) Limited, by telephoning 020 7886 2716 or 2717 before agreeing a price with their stockbroker. Shareholders are also advised to discuss their individual tax position with their financial advisor before deciding to sell their shares. CORPORATE INFORMATION Directors Nigel Melville (Chairman) Sally Duckworth Adam Kingdon Kenneth Vere Nicoll Company's registered office and head office 30 Haymarket London SW1Y 4EX Company Registration Number 3946235 Website www.mig2vct.co.uk Company Secretary Investment Manager, Promoter Auditor and Tax and Company Accountants Advisers Mobeus Equity Partners LLP Mobeus Equity Partners LLP PKF (UK) LLP 30 Haymarket 30 Haymarket Farringdon Place London London, SW1Y 4EX 20 Farringdon Road SW1Y 4EX London [e-mail: EC1M 3AP e-mail: info@mobeusequity.co.uk] mig2@mobeusequity.co.uk Bankers Solicitors Stockbrokers Barclays Bank plc SGH Martineau LLP Panmure Gordon (UK) Limited PO Box 544 No 1 Colmore Square One New Change 54 Lombard Street Birmingham London London B4 6AA EC4M 9AF EC3V 9EX Also at One America Square London EC3N 2SG Registrar VCT Tax Adviser Capita Registrars PricewaterhouseCoopers LLP The Registry 1 Embankment Place 34 Beckham Road London Beckham WC2N 6RN Kent BR3 4TU Tel: 0871 664 0300 (calls cost 10p per minute plus net work extras. Lines are open 8.30am-5.30pm Mon-Fri. If calling from overseas please ring +44 208 639 2157) Contact details for further enquiries: Robert Brittain at Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail on mig2@mobeusequity.co.uk Mark Wignall or Mike Walker at Mobeus Equity Partners LLP (the Investment Manager), on 020 7024 7600 or by e-mail on info@mobeusequity.co.uk. DISCLAIMER Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

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