Final Results

British SmallerTechCompaniesVCT2PLC
01 April 2008


                  BRITISH SMALLER TECHNOLOGY COMPANIES VCT 2 PLC

                         UNAUDITED PRELIMINARY RESULTS
                               FOR THE YEAR ENDED

                                31 DECEMBER 2007


British Smaller Technology Companies VCT2 plc ("the Company") today announces
its unaudited preliminary results for the year ended 31 December 2007.


Chairman's Statement

In my first Chairman's Statement I am pleased to report a continuation of the
successful realisations of previous years and an increase in dividends over the
previous year. The total return for the Company has however decreased from 90.7
pence per share to 89.5 pence per share following some reductions in the value
of existing investments.


Investment Portfolio

During the year the Company realised its remaining holding in Cozart plc
generating proceeds of £2.91 million. Cozart plc, a medical diagnostics company
specialising in testing devises for drugs of abuse, became an investment in 2004
on its admission to the Alternative Investment Market (AIM). The total proceeds
received from our investment in Cozart amounted to £3.17 million (including the
proceeds of £2.91 million) compared with an original cost of £0.9 million,
generating a total return of 3.5 times.

This year has also seen the receipt of the remaining deferred consideration in
respect of the realisation of the investment in Voxar Limited amounting to £0.05
million.

It is pleasing to note that following the sale of Tamesis Limited to Patsystems
plc in 2005, Tamesis Limited has achieved its earn-out conditions and that
consequently the Company has received shares in Patsystems plc to the value of
£0.29 million. A further 96,084 shares with a value of £0.03 million were issued
in final settlement of the earn-out in February 2008.

A total of £2.56 million has been invested during the year, which comprised
£1.54 million of new investments and £1.02 million of follow-on investments.

The follow-on investments included £0.65 million into Digital Healthcare Limited
to support the marketing roll-out in the USA, £0.25 million into Immunobiology
Limited and £0.1 million into Silistix Limited, both in support of further
product development, and £0.02 million into Tissuemed Limited for marketing
activities.


The new investments during the year comprised unquoted investments of £0.39
million into London-based Harvey Jones Limited, a kitchen manufacturer and
retailer; £0.35 million into Goole-based RMS Group Holdings Limited, a port
operator and stevedoring business; £0.25 million into Ellfin Home Care Limited,
a domiciliary care business and £0.25 million into Cater Plus Limited, a
Watford-based contract caterer for the care home sector. In addition, £0.3
million has been invested into specialist engineering business Pressure
Technologies plc on its admission to AIM. The nature of these investments
reflects the Company's continued approach to broadening its investment strategy
to encompass later stage, more mature investments that are capable of producing
more certain income and capital growth.


Financial Results and Dividend

The result for the financial year ended 31 December 2007 was a loss of £0.2
million, equivalent to 1.22 pence per share. The prior year comparison was a
profit of £1.52 million (9.0 pence per share). The operating loss has decreased
26.7% year on year, with increased income being partially offset by the increase
in Fund Manager's fees resulting from the higher average net asset value
throughout the year. The performance of the Company continues to benefit from
the reduced cost base following the acquisition of British Smaller Technology
Companies VCT plc in December 2005. Shareholders have begun to see the benefit
of these economies through improved dividend distributions.

In 2007, dividends of 3.5 pence per share were paid including a special interim
dividend of 1.5 pence per share which was declared following the successful
realisation of Cozart plc. The board is now proposing a final dividend of 1.5
pence per share. If approved, this dividend will be paid on 16 May 2008 to
shareholders on the register at 11 April 2008. The final dividend has not been
recognised in the accounts under International Financial Reporting Standards as
the contractual obligation did not exist at the balance sheet date.

The net asset value as at 31 December 2007 was 79.0 pence per share, a decrease
of 0.7 pence per share on the 79.7 pence per share reported at 30 June 2007. The
4.7 pence decrease from the net asset value at 31 December 2006 of 83.7 pence
per share is in large part attributed to the payment of dividends amounting to
3.5 pence per share.

Cash and cash equivalents at the end of the year amounted to £4.3 million,
representing 33% of net asset value. The board considers this sufficient to take
advantage of selective new investment opportunities and support the current
portfolio with a view to maximising value. Further realisations will enhance
cash reserves and enable further distributions to shareholders in the form of
tax free dividends.


Shareholder Relations

The board continues to run shareholder workshops where investors are invited to
meet members of the board, representatives from YFM Private Equity Limited, the
Company's Fund Manager and the CEOs of one or more of the portfolio investments.
The workshops held during 2007 were well attended, as was the latest event held
in February 2008. The board remains committed to these events.

Following the withdrawal of the share buy back policy in 2006, the share price
has remained at a discount to net asset value of approximately 45%, reflecting
the long term nature of VCT shares and a relatively illiquid secondary market.
The board will keep under review the policy regarding share buy-backs, but for
the time being it believes utilising cash to support the existing portfolio with
a view to increasing value, making selective new investments under the revised
investment strategy, which has continued to show evidence of success, and
returning value to shareholders in the form of tax free dividends is the
appropriate way forward.

The Annual General Meeting of the Company will be held at 12.30 pm on 13 May
2008 at 23 Berkeley Square, Mayfair, London W1J 6HE.


The Board

In December 2007 the Company announced that, with effect from 31 December 2007,
Sir Andrew Hugh Smith was to retire as Chairman and non-executive director of
the Company.

The board would like to thank Sir Andrew for his considerable contribution
throughout his time as Chairman and wishes him well for the future.


Outlook

The changes relating to VCTs announced in the Budget earlier this year,
particularly the reduction in the number of employees to 50, being part of the
test for a qualifying company, will have some impact on the VCT industry but,
with the board and its Fund Manager already focussing primarily on this market,
the changes are expected to have less of an impact on the Company than some
others.

The outlook for the next financial year should see further investment activity,
a proportion of which is likely to result from further funding requirements of
the companies in the portfolio as well as new investments. Continued interest in
a number of portfolio companies is encouraging, indicating the possibility of
other realisations during 2008.

The board remains focussed on continuing to actively support the investments in
the portfolio, maximising and realising value wherever possible and is
optimistic about the growth prospects over the medium to long term.


Richard Last
Chairman

1 April 2008





Unaudited Income Statement
for the year ended 31 December 2007

                                                       Notes    2007      2006
                                                                £000      £000

Income                                                           339       220
Administrative expenses:
   Fund Management fee                                          (404)     (371)
   Other expenses                                               (213)     (228)
                                                             -------   -------
                                                                (617)     (599)
  
Operating loss                                                  (278)     (379)

Gain on realisation of investments                             1,501     1,421
(Losses) gains on investments held at fair value              (1,426)      473
                                                             -------   -------
(Loss) profit on ordinary activities before taxation            (203)    1,515
                                                             -------   -------
Taxation                                                           -         -
                                                             -------   -------
(Loss) profit for the year from continuing operations           (203)    1,515
                                                             -------   -------
Basic and diluted (loss) earnings per ordinary share     3     (1.22p)    9.00p
                                                             -------   -------




Unaudited Balance Sheet
at 31 December 2007

                                                        Notes   2007      2006
                                                                £000      £000
Assets

Non-current assets
Financial assets at fair value through profit or loss          8,743     9,008
                                                             -------   -------
Current assets
Trade and other receivables                                      228       335
Cash and cash equivalents                                      4,337     4,984
                                                             -------   -------
                                                               4,565     5,319
Liabilities

Current liabilities
Trade and other payables                                        (157)     (391)
                                                             -------   -------
Net current assets                                             4,408     4,928
                                                             -------   -------
Net assets                                                    13,151    13,936
                                                             -------   -------
Shareholders' equity
Share capital                                                  1,664     1,664
Share premium                                                     69        69
Capital redemption reserve                                        88        88
Merger reserve                                                 5,525     5,525
Other reserve                                                      2         2
Retained earnings                                              5,803     6,588
                                                             -------   -------
Total Shareholders' equity                                    13,151    13,936
                                                             -------   -------
Net asset value per Ordinary share                        4     79.0p     83.7p
                                                             -------   -------



Unaudited Statement of Changes in Shareholders' Equity

                                              Share
                                   Share    premium      Merger      *Other  Retained     Total
                                 capital    account     reserve    reserves  earnings    equity    
                                    £000       £000        £000        £000      £000      £000

Balance at 31 December 2005        1,731         69       5,525          23     5,492    12,840
Profit for the year                    -          -           -           -     1,515     1,515
Purchase of own shares               (67)         -           -          67      (419)     (419)
                                 -------    -------     -------     -------   -------   -------
Balance at 31 December 2006        1,664         69       5,525          90     6,588    13,936
Loss for the year                      -          -           -           -      (203)     (203)
Dividends                              -          -           -           -      (582)     (582)
                                 -------    -------     -------     -------   -------   -------
Balance at 31 December 2007        1,664         69       5,525          90     5,803    13,151
                                 -------    -------     -------     -------   -------   -------

The above table includes prior year comparatives.

*Other reserves include the capital redemption reserve and other reserve, which
are non-distributable.


The Merger reserve was created to account for the difference between the nominal
and fair value of shares issued as consideration for the acquisition of the
assets and liabilities of British Smaller Technology Companies VCT plc. The
reserve was created after meeting the criteria under section 131 of the
Companies Act 1985 for merger relief. The merger reserve is a non-distributable
reserve.

Included within retained earnings is £1,381,000 (2006: £1,211,000) in respect of
unrealised gains in respect of investments held at fair value through profit or
loss. These gains are not distributable under the Companies Act 1985 and
provisions of the Companies Act 2006.



Unaudited Cash Flow Statement
for the year ended 31 December 2007

                                                        Notes    2007     2006
                                                                 £000     £000

Net cash outflows from operating activities               5      (314)    (393)
                                                              -------  -------
Cash flows from investing activities
Costs of acquisition                                                -     (172)
                                                              -------  -------
Acquisition net of cash acquired                                    -     (172)
Purchase of financial assets at fair value
through profit or loss                                         (2,852)    (276)
Proceeds from sale of financial assets at fair value
through profit or loss                                          3,116    2,875
                                                              -------  -------
Net cash from investing activities                                264    2,427
                                                              -------  -------
Cash flows used in financing activities
Purchase of own shares and associated warrants                      -     (419)
Dividends paid                                                   (582)    (346)
                                                              -------  -------
Net cash used in financing activities                            (582)    (765)
                                                              -------  -------
Net (decrease) increase in cash and cash equivalents             (632)   1,269
equivalents
Cash and cash equivalents at beginning of the year              4,984    3,834
Effect of market value changes in cash equivalents                (15)    (119)
                                                              -------  -------
Cash and cash equivalents at the end of the year                4,337    4,984
                                                              -------  -------


Notes to Financial Statements
for the year ended 31 December 2007


1.     Accounting Policies

This preliminary announcement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985.

The information for the year ended 31 December 2006 is an extract from the
statutory accounts to that date which have been delivered to the Registrar of
Companies. Those accounts included an audit report which was unqualified and
which did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985. The accounting policies set out in those accounts have continued to be
followed. The statutory accounts for the year ended 31 December 2007, upon which
the auditors have still to report, will be delivered to the Registrar following
the Company's annual general meeting.

The accounts have been prepared on a going concern basis and in accordance with
the International Financial Reporting Standards (IFRS) as adopted by the
European Union, and those parts of the Companies Act 1985 applicable to
companies reporting under IFRS.

The financial statements are prepared in accordance with IFRS and
interpretations in force at the reporting date. The Company has not adopted any
standards or interpretations in advance of the required implementation dates. It
is not expected that adoption of standards or interpretations which have been
issued by the International Accounting Standards Board but have not been adopted
will have a material impact on the financial statements.


2.     Dividends

Amounts recognised as distributions to equity holders in the period:

                                                                 2007     2006
                                                                 £000     £000

Final dividend for the year ended 31 December 2006              
of 2p (2005: £nil) per share                                      332        -
Special interim dividend for the year ended 31 December         
2007 of 1.5p (2006: £nil) per share                               250        -
                                                              -------  -------
                                                                  582        -
                                                              -------  -------

The Special interim dividend of 1.5p was declared on 23 October 2007 and paid on
30 November 2007 to shareholders on the register on 2 November 2007.

A final dividend of 1.5p per Ordinary share in respect of the year to 31
December 2007, amounting to £250,000, is proposed. This dividend has not been
recognised in the year ended 31 December 2007 as the obligation did not exist at
the balance sheet date.


3.     (Loss) Earnings per Ordinary Share

The (loss) earnings per Ordinary share is based on the loss from ordinary
activities after tax of £203,000 (2006 profit: £1,515,000) and 16,641,000 (2006:
16,878,000) shares being the weighted average number of shares in issue during
the year.

The only potentially dilutive shares are those shares which, subject to certain
criteria being achieved in the future, may be issued by the Company to meet its
obligations under the investment management agreement. No such shares have been
issued or are currently expected to be issued. There are, therefore, considered
to be no potentially dilutive shares in issue at 31 December 2007 or 31 December
2006. Consequently, basic and diluted earnings per share are the same for the
years ended 31 December 2007 and 31 December 2006.


4.     Net Asset Value per Ordinary Share

The net asset value per Ordinary share is calculated on attributable assets of
£13,151,000 (2006: £13,936,000) and 16,641,257 (2006: 16,641,257) shares in
issue at the year end.

5.     Reconciliation of Net (Loss) Profit on Ordinary Activities before
Taxation to Net Cash Outflow from Operating Activities

                                                                 2007     2006
                                                                 £000     £000

(Loss) Profit on ordinary activities before taxation             (203)   1,515
                                                              -------  -------
Decrease in accruals                                               (7)     (49)
(Increase) decrease in prepayments and accrued income             (29)      35
Gains on realisation of investments in the year                (1,501)  (1,421)
Losses (Gains) on investments held at fair value                1,426     (473)
                                                              -------  -------
Net cash outflow from operating activities                       (314)    (393)
                                                              -------  -------


6.     Total Return per Ordinary Share

The total return per Ordinary share takes into account the closing net asset
value per share and cumulative dividends paid per share at the balance sheet
date to eligible founder shareholders.

                                                  For the year ended 31 December
                                            2007        2006        2005        2004        2003

Net asset value per Ordinary share          79.0p       83.7p       74.2p       97.1p       84.6p
Cumulative dividend paid per Ordinary share 10.5p        7.0p        7.0p          -           -
                                         -------     -------     -------     -------     -------
Total Return per Ordinary share             89.5p       90.7p       81.2p       97.1p       84.6p
                                         -------     -------     -------     -------     -------


7.     Annual Report

Copies of the full financial statements for the year ended 31 December 2007 will
be available to the public at the registered office of the Company at Saint
Martins House, 210-212 Chapeltown Road, Leeds, LS7 4HZ.



For further information, please contact:

David Hall YFM Private Equity Limited Tel: [phone]

Alan Davies YFM Private Equity Limited Tel: [phone]

Jonathan Becher Teather & Greenwood Limited Tel: [phone]

Michael Bellamy Teather & Greenwood Limited Tel: [phone]




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