Final Results

Baronsmead VCT 2 PLC 17 May 2002 To: RNS From: Baronsmead VCT 2 plc Date: 17 May 2002 Unaudited Preliminary Results - Year Ended 31 March 2002 Investment Objective Baronsmead VCT 2 is a tax efficient listed company which aims to achieve long-term capital growth and generate tax free dividends and capital distributions for private investors. • Baronsmead VCT 2 plc has maintained its position as a top performing VCT within its peer group • 11 new investments made during the year taking the total equity portfolio to 38 companies • Dividends totaling 2.8 pence per share for the year • Net asset value down 10.5 per cent to 100.5 pence per share versus FTSE All-Share Index down 5.7 per cent. Within this overall performance, the AiM portfolio was down by 26.3 per cent over the year compared to the FTSE AiM Index, down 28 percent over the same period. The unquoted portfolio was down by 5.9 per cent over the year • Total return since launch 20.2 per cent Results The NAV at 31 March 2002 was 100.5p per share compared to 112.3p at the previous year-end. This is a reduction of 10.5% over the year, although if the dividends paid to shareholders in the year are added back, the NAV per share would have been 103.3p, a fall in total return of 8.0% over the same period. The comparable reduction in the FTSE All-Share total return index was 3.2% although the more relevant indices for smaller companies, the FTSE SmallCap and FTSE AiM, fell 12% and 28%, respectively. The Board recommends a final dividend of 1.5p per share, which together with the interim dividend of 1.3p per share makes total dividends of 2.8p per share. While the performance is disappointing in isolation, it has to be set against the performance of the market as a whole. Not only did the Company outperform the FTSE SmallCap and the FTSE AiM indices, it has consistently been one of the top three performers in its own peer group of nine other VCTs launched at the same time. Investment Environment An important priority of the Investment Managers has been to invest the share capital raised from private investors into appropriate qualifying companies, within three years of subscription. Recently both the UK private equity and AiM markets have seen a reduction in the total number of opportunities and completed transactions. This has created a challenging environment for the managers to achieve their demanding investment targets. Against this background, 5 new unquoted investments, 6 AiM subscriptions and 5 further investments totalling £6.3m were made in the last financial year. The portfolio grew to 38 'equity' investments by the year-end and it has further increased to 40 during April 2002. Outlook The next year is likely to see a slow and possibly fragile recovery from the downturn. The increasing diversity of the portfolio should counter further volatility and move us steadily through this period before calmer and better growth conditions return. The Managers are actively seeking to complete new investments, believing that this is a propitious time in the economic cycle, ahead of the typical up swing that follows the uncertain times of the last year. Enquiries: David Thorp 0207 506 1100, ISIS Capital Gary Fraser 0131 465 1000, Friends Ivory & Sime plc Baronsmead VCT2 Unaudited Statement of Total Return (incorporating the revenue account) of the Company Year to 31 March 2002 Revenue Capital Total £'000 £'000 £'000 Gains /(Losses) on investments - (4,410) (4,410) Income 2,135 - 2,135 Investment management fee (210) (630) (840) Other expenses (335) - (335) Return on ordinary activities 1,590 (5,040) (3,450) before taxation Taxation on ordinary activities (434) 200 (234) Return attributable to 1,156 (4,840) (3,684) equity shareholders Dividends in respect of equity shares (1,142) - (1,142) Transfer to/(from) reserves 14 (4,840) (4,826) Return per ordinary 10p share: 2.84p (11.91p) (9.07p) Basic Baronsmead VCT2 Audited Statement of Total Return (incorporating the revenue account) of the Company Year to 31 March 2001 Revenue Capital Total £'000 £'000 £'000 Gains/(losses) on investments - (3,090) (3,090) Income 2,680 - 2,680 Investment management fee (235) (705) (940) Other expenses (243) - (243) Return on ordinary activities 2,202 (3,795) (1,593) before taxation Taxation on ordinary activities (626) 211 (415) Return attributable to 1,576 (3,584) (2,008) equity shareholders Dividends in respect of equity shares (1,563) - (1,563) Transfer to reserves 13 (3,584) (3,571) Return per ordinary 10p share: 3.94p (8.97p) (5.03p) Basic Baronsmead VCT2 Unaudited Balance Sheet 31.3.02 31.3.01 Audited £'000 £'000 Assets Investments Listed investments 673 1,515 Alternative Investment Market 5,301 5,349 Quoted on OFEX 266 494 Unquoted investments 11,950 9,703 Listed fixed interest investments 21,477 28,330 _____ _____ 39,667 45,391 Net current assets/(liabilities) 1,527 (374) Total assets less current liabilities 41,194 45,017 Financed by Shareholders' funds 41,194 45,017 Net asset value per ordinary share 100.54p 112.30p Baronsmead VCT2 Unaudited Cash Flow Statement Year ended 31 Year ended 31 March March 2002 2001 £'000 £'000 Operating activities Investment income received 1,947 1,790 Deposit interest received 45 290 Underwriting commission received - 1 Investment management fees charged to revenue (215) (216) Other cash payments (330) (234) _____ _____ Net cash inflow from operating activities 1,447 1,631 _____ _____ Taxation Corporation tax paid (189) - Income tax recovered - 192 _____ _____ Tax (paid)/recovered (189) 192 _____ _____ Capital expenditure and financial investment Purchase of investments (16,240) (32,631) Disposals of investments 18,347 12,116 Investment management fee charged to capital (646) (651) _____ _____ Net cash inflow/(outflow) from capital expenditure and financial investment 1,461 (21,166) _____ _____ Ordinary dividends paid (1,409) (1,145) _____ _____ Net cash inflow/(outflow) before financing 1,310 (20,488) _____ _____ Financing Issue of ordinary shares 1,220 18,411 Expenses of issue (30) (921) Buy-back of ordinary shares (187) (47) _____ _____ Net cash inflow from financing 1,003 17,443 _____ _____ Increase / (decrease) in cash 2,313 (3,045) _____ _____ Reconciliation of net cash flow to movement in net cash Increase/(decrease) in cash in the year 2,313 (3,045) Net cash at 1 April 2001/2000 439 3,484 _____ _____ Net cash at 31 March 2002/2001 2,752 439 _____ _____ Notes 1. Revenue return per Ordinary Share is based on a weighted average of 40,622,274 (2001 : 39,957,070) Ordinary Shares in issue during the year. 2. The final dividend of 1.50p per share, if approved, will be paid on 5 July 2002 to shareholders on the Register on 7 June 2002. 3. There were 40,971,186 Ordinary Shares in issue at 31 March 2001 (2001 : 40,086,980). 921,124 Ordinary Shares were issued through the Offer for Subscription and 164,082 Ordinary Shares were issued through the Dividend Reinvestment Scheme. The Company bought back 201,000 Ordinary Shares for cancellation during the year. 4. These are not statutory accounts in terms of Section 240 of the Companies Act 1985. Full statutory accounts for the year to 31 March 2001, which were unqualified, have been lodged with the Registrar of Companies. No statutory accounts in respect of any period after 31 March 2001 have been reported on by the Company's auditors or delivered to the Registrar of Companies. A full annual report will be sent to shareholders and will be available for inspection at 100 Wood Street, London EC2V 7AN, the registered office of the Company. 5. The Annual General Meeting will be held at the offices of Friends Ivory & Sime plc, 100 Wood Street, London on 21 June 2002 at 10.30am. This information is provided by RNS The company news service from the London Stock Exchange

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