Final Results

Octopus Titan 2 VCT plc
Final Results

13 February 2009

Octopus Titan 2 VCT plc (the "Company"), managed by Octopus
Investments Limited, today announces the final results for the year
ended 31 October 2008.

These results were approved by the Board of Directors on 12 February
2009.

You may view the Annual Report in full at www.octopusinvestments.com
and navigating to the VCT Annual and Interim Reports under the 'Learn
More' section.

About Octopus Titan VCT 2 plc

Octopus Titan VCT 2 plc ("Titan 2", "Company" or "Fund") is a venture
capital trust ("VCT") which aims to provide shareholders with
attractive tax-free dividends and long-term capital growth, by
investing in a diverse portfolio of predominately unquoted
companies.  The Company is managed by Octopus Ventures Limited
("Octopus" or "Manager"). Octopus Ventures Limited is a subsidiary of
Octopus Investments Limited.

Titan 2 was incorporated on 12 October 2007 with the first allotment
of equity being 19 December 2007. In collaboration with Octopus Titan
VCT 1 plc ("Titan 1"), the funds raised over £30.8 million in
aggregate (£29.5 million net of expenses) through an offer (the
"Offer") for subscription which closed on 16 May 2008. Titan 2 will
invest primarily in unquoted UK smaller companies and aims to deliver
absolute returns on its investments.

Further details of the fund's progress are discussed in the
Chairman's Statement and Investment Managers Review on pages 4 to 9.

Financial Highlights


                              As at 31 October 2008

Net assets (£'000s)                          14,036
Net loss after tax (£'000s)                   (722)
Net asset value per share                     89.9p
Dividend per share - proposed                  0.5p


Chairman's Statement
I am pleased to report on the first annual report for the period
ended 31 October 2008 for Octopus Titan VCT 2 plc.

Background
As I reported in the Half-Yearly Report, the Fund opened in November
2007 and raised over £15.4 million, before expenses, by the time it
closed on 16 May 2008.  When combined with our sister fund, Octopus
Titan VCT 1 plc, over £30.8 million was raised in the Offer, making
it one of the largest VCTs launched in the 2007/2008 tax year.

Net Asset Value
It is disappointing to have to report a reduction in net asset value
per share ("NAV") from 94.5p at initial investment to 89.9p at the
period end.

The disappointing capital loss, albeit unrealised, has resulted
primarily on the money market portfolio managed by Goldman Sachs and
the OEICs by Octopus Investments. At 31 October, when market turmoil
was at its height, the portfolio of bonds, money market funds and
OEICs was showing a significant loss, most of which I am pleased to
say has now been recovered. Your Board have reviewed the management
of the funds managed by Goldman Sachs held prior to its investment
into unquoted opportunities and decided that the primary objective is
capital preservation. We will continue to closely monitor the
performance of these funds during these uncertain times.

Your Board has decided to propose a final revenue dividend of 0.5p
per share. Under investment company regulations, we are required to
retain no more than 15% of our revenue return each year. Whilst our
primary aim is to create distributable capital gains, we anticipate
declaring modest dividends in the early years although these are
likely to be smaller than originally envisaged due to the substantial
reduction in interest rates.

Investment Portfolio
During the second half of the year, the Fund made four unquoted
investments amounting to £2,052,000 and a further one since the year
end amounting of £559,000, as set out in more detail in the
Investment Manager's Review on pages 6 to 9. In the case of the first
of these investments, lower than expected results since we made our
investment have necessitated a write down in the valuation. However
on balance our Manager is encouraged by the performance of the
unquoted portfolio and the good flow of investment opportunities
which it is seeing.

VAT on Management Fees
The Government has announced that VCTs will be exempt from paying VAT
on investment management fees with effect from 1 October 2008.  This
follows a European Court of Justice Judgement against the Government
in a case relating to VAT payable by investment trusts.  It is now
almost certain that a VAT repayment will be obtained in relation to
VAT paid on management fees prior to 1 October 2008.  However, the
extent and timing of repayments is not yet known. We will follow
developments with the help of our advisers.  The saving in VAT for
the 2008/2009 year should amount to around £42,000.

VCT Qualifying Status
PricewaterhouseCoopers LLP provides the Board and Investment Manager
with advice concerning ongoing compliance with Her Majesty's Revenue
& Customs ("HMRC") rules and regulations concerning VCTs.  The Board
has been advised that Octopus Titan VCT 2 plc is in compliance with
the conditions laid down by HMRC for maintaining approval as a VCT.
This is discussed further in Shareholder Information on page 10.

A key requirement now is to achieve the 70% qualifying investment
level, within the required timescale.  As at 31 October 2008 over
13.1% of the portfolio (as measured by HMRC rules) was invested in
VCT qualifying investments. Your Board continue to be confident that
the 70% target will be met by the required date.

Outlook
Notwithstanding the disappointing performance of the money market
portfolio, we view the future with confidence. Stability seems to be
gradually returning to the markets and a good proportion of the
unrealised losses on the money market portfolio as at 31 October 2008
has been recovered. Whilst the return on that part of the portfolio
will reduce as interest rates remain low, we do have a portfolio of
bonds which are showing an attractive yield when compared to current
interest rates.

Of greater importance, our investment manager is seeing an increasing
number of interesting investment opportunities which we believe can
only increase during a period of restrictions in bank lending.  We
anticipate that 2009 will show more realistic prices being asked for
the unquoted opportunities. This will be good for the Fund over the
longer term and allow us to deliver our aim of generating attractive
returns for shareholders in the medium to long term.

John Hustler
Chairman
12 February 2009

Investment Manager's Review
During the period, fundraising was completed and we began the
investment process. As is the norm for VCTs, we have until the end of
the third accounting period in which to build the number of holdings
and achieve the 70% investment requirement. There has been
significant upheaval and volatility in the financial markets that has
been well documented by the press. As a result, to date only a small
proportion of funds have been committed to qualifying companies.

Investment Policy
The investment approach of Titan 2 is not designed to deliver a
return that is measured against a stock market index. Instead, the
focus of Titan 2 is on generating absolute returns over the
medium-term. In order to achieve this goal, the Fund will focus on
providing early stage, development and expansion funding to unquoted
companies with a typical deal size of £0.25 million to £1 million.

Investment Strategy
The investee companies are those that we believe have great potential
but need some financial support to realise it. Each company that we
target will have the potential to create a large business by taking a
relatively modest market share. We are particularly interested in
businesses that address current market trends and aim to create a
balanced investment portfolio spanning multiple industries and
business sectors.

We expect that the portfolio of holdings built by Titan 2 will
encompass investments in 20-25 unquoted companies, with a focus on
the environmental, technology, media, telecoms, consumer lifestyle
and wellbeing sectors. It is envisaged that, at the end of the three
year initial investment period, 75-85% of the proceeds of the Offer
will be invested in a range of qualifying investments with 15-25%
invested in a combination of cash, money market securities and Open
ended investment companies ("OEIC's")* managed by Octopus.

*Titan invests in two OEICs managed by the Octopus AIM fund managers,
these are the CF Octopus Partner Fund - Absolute Return and CF
Octopus Partner Fund - UK Smaller Companies

Portfolio Review
As at 31 October 2008 net asset value ("NAV"), calculated as the
value of all the assets held by the Fund divided by the number of
shares in issue, stood at 89.9p, down from the initial NAV at
original investment of 94.5p (post initial fees) in April 2008,
representing a fall of 4.9%.  By contrast, over the same period, the
FTSE 100 Index fell 32.0%, the FTSE AIM-All Share Index fell 57.3%
and the FTSE UK Smaller Companies Index fell 49.4%.

Fortunately, the structure of VCTs allows us to invest relatively
slowly, so we are able to be patient and not rush into investments.
In the short to medium term, we aim to make the most of low company
valuations for investors and take advantage of the opportunities
inherent in the current environment

We have taken a cautious approach to investments, only investing
13.9% of the Fund in unquoted companies at this stage. Investments in
cash and money market securities were also made into a series of
instruments by our cash asset manager Goldman Sachs. Unfortunately,
due to the challenging economic environment and upheavals in the bond
and debt markets, this led to a 2.1p unrealised loss. However, since
the year end this has already recovered by 1.8p.

Investment Portfolio
In the period under review we have made four investments into
qualifying companies as below:

GB Environmental Limited
Two investments were made in GB Environmental (GBE) in 2008. The
company provides a range of products for use in the disinfection of
air and liquids, and on surfaces by ultra-violet (UV) radiation.
GBE's products are simple, elegant in design, easily scalable and are
protected by a number of patents for the UV lamp cleaning mechanism
and chamber design. GBE owns patents covering the retrofitting of UVC
systems into air conditioning ducts, the pasteurisation of fluids at
room temperature and the surface disinfection of perishable goods and
their packaging. The company focuses on the food and drink sector
where there are strong needs for liquid, air, surface and food
disinfecting products.

In August 2008, GB Environmental announced the appointment of a new
CEO, Rosemary Mason. She undertook an extensive review of the
business to produce a new business plan by the end of the year. An
interim plan was also presented to major shareholders, who approved a
new set of three and six month milestones. Meanwhile, £650,000 was
invested by current shareholders, (including £125,000 from Titan 2),
to fund the company until March 2009. The company has developed a
prototype for new equipment which will be run at a plant in January
2009, while the production of its I-Pipe has been transferred to the
main factory.

Since the end of January it has been apparent that, in the current
environment, the company is facing significant challenges. Your
investment manager is in discussions with the management team and
will update you on progress made in the period reviewed in the next
Interim Management Statement. This will be published shortly after
the Annual report.

Initial investment date:
                                              May 2008 (further
investment in October 2008)
Cost:
                                              £325,000 (Ordinary
Shares and loan notes)
Valuation:
                                              £314,811
Valuation basis:
                                               Last funding round
Equity held:
                                              11.3%
Equity held by all funds managed by Octopus:               22.5%
Last audited accounts:
                                                 N/A

True Knowledge Limited
The business has developed an Internet search engine website that
answers questions. Finding information on the internet currently
involves a process of trial and error, hoping that the search engine
retrieves the information you're looking for. True Knowledge has
devised technology that resolves this fundamental problem by
operating along a more intuitive system. It intelligently answers
questions asked on any topic in plain English. It can be used just
like a conventional search engine, but users can also add knowledge
directly to it.

The company is making progress in commercialising the technology. It
has benefitted from recent BBC radio publicity leading to an increase
in the number of users and facts added to the site. There are now
over 120 million facts in the Knowledge base and almost 15,000
registered Beta test users. True Knowledge is now in discussions with
major internet search companies regarding the use of its technology
and it continues to identify new leads each week. The company's
progress has been aided by expansion - it now employs 24 staff
including a complete management team plus a back-end team that is
working to develop its core intellectual property. The company
remains on track in its development, with the current focus being
"local data" search, to demonstrate its technology capability, with
tests scheduled within the next few months.

Initial investment date:
                                              July 2008
Cost:
                                              £681,282 (Ordinary
Shares)
Valuation:
                                              £681,282
Valuation basis:
                                               Fair Value (being
cost)
Equity held:
                                                6.8%
Equity held by all funds managed by Octopus:               13.5%
Last audited accounts:
                                              31 July 2008
Loss before interest & tax:
                                              £(528,796)
Net assets:
                                              £1,954,024

The Key Revolution Limited
An investment was made in 2008 into The Key Revolution. The work of
The Key Revolution heralds the move towards 'cloud computing'. Its
patented technology enables internet users to securely authenticate
themselves and access their own files on any computer, then clear
their text or data. The highly innovative Mobiu key device combines
both SIM card and chip and pin features. Lost or stolen Mobiu keys
can also be deactivated, ensuring total security.

Over the last quarter, the company has made progress by identifying,
engaging and selling to distributors and sellers. Key distributors
such as Trust and Insight, are confident that the Mobiu will sell in
large numbers (although this is still to be proven). While the
company is behind its sales targets, this is believed to be due to
underestimating the time necessary to move to saleable product, and
subsequently build sales, rather than the quality of the product. The
company is prepared for eventualities, with a Plan B proposal in
place if difficulties arise, involving streamlining headcount and
narrowing the marketing focus.  As a result of the business being
behind its budget we have revalued the investment to a value which
represents its fair value at the period end.

Initial investment date:
                                              May 2008
Cost:
                                               £411,068 (Ordinary
Shares)
Valuation:
                                              £205,534
Valuation basis:
                                               Provision
Equity held:
                                               10.0%
Equity held by all funds managed by Octopus:               20.0%
Last audited accounts:
                                              31 March 2008
Loss before interest & tax:
                                              £(234,040)
Net assets:
                                              £34,526

Calastone Limited
In October 2008, an investment was made into Calastone. Calastone is
the UK's only independent transaction service for the mutual fund
industry.  It enables buyers and sellers of mutual funds on different
platforms to communicate orders electronically by providing a
universal message communication and 'translation' service. This will
be welcome in an industry which has not yet been able to invest in
the real-time exchange of information between participants to date.
Orders are commonly communicated by fax or telephone with a high
level of manual re-keying and manual error correction. Calastone's
'translation' service means that neither the transmitter nor receiver
need purchase additional technology or change their existing systems.

Initial investment date:
                                              October 2008
Cost:
                                              £634,746 (Ordinary
Shares)
Valuation:
                                              £634,746
Valuation basis:
                                               Fair Value (being
cost)
Equity held:
                                              7.5%
Equity held by all funds managed by Octopus:               17.3%
Last audited accounts:
                N/A

Recent Investments
Since the period end Titan 2 has made an investment of £559,000 into
Zoopla.co.uk, an award-winning online property information service
and community website. We will provide a full update on the
investment in the next report.

Outlook
In the six months to 31 October 2008 we reviewed 374 business plans
and met with 116 businesses.  We continue to see a good deal flow and
we are seeing strong management teams that are ambitious and highly
entrepreneurial. In deciding to provide support to companies we are
able to draw on the extensive industry knowledge and expertise within
our own team, as well as from the Octopus Investor Group whose advice
and knowledge is invaluable. These are exciting times to be investing
as the current environment presents opportunities to invest at
attractive valuations with the potential for rewards on recovery.  We
anticipate completing on a number of deals in the forthcoming months.

If you have any questions on any aspect of your investment, please
call one of the team on 0800 316 2347.

Alex Macpherson
Octopus Ventures Limited
12 February 2009

Directors' Responsibility Statement

The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and
regulations.

Company law requires the Directors to prepare financial statements
for each financial period.  Under that law the Directors have elected
to prepare financial statements in accordance with United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting
Practice).

The financial statements are required by law to give a true and fair
view of the state of affairs of the Company and of the profit or loss
of the Company for that period.  In preparing these financial
statements, the Directors are required to:

*                     select suitable accounting policies and then
  apply them consistently;
*                     make judgements and estimates that are
  reasonable and prudent;
*                     state whether applicable UK accounting
  standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
*                     prepare financial statements on a going concern
  basis unless it is inappropriate to presume that the Company will
  continue in business.

The Directors confirm that to the best of their knowledge the
financial statements for the period ended 31 October 2008 comply with
the requirements set out above and that suitable accounting policies,
consistently applied and supported by reasonable and prudent
judgement, have been used in their preparation.  They also confirm
that the annual report includes a fair review of the development and
performance of the business together with a description of the
principal risks and uncertainties faced by the Company.

The Directors are responsible for keeping proper accounting records
that disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 1985.  They are also
responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and
other irregularities.

Under applicable law and regulations, the Directors are responsible
for preparing a Directors' Report (including Business Review),
Directors' Remuneration Report and Corporate Governance Statement
which comply with that law and those regulations.

In so far as the Directors are aware:

*                     there is no relevant audit information of which
  the Company's auditor is unaware; and
*                     the Directors have taken all steps that they
  ought to have taken to make themselves aware of any relevant audit
  information and to establish that the auditor is aware of that
  information.

The Company's financial statements are published on the Octopus
Investments website.  The investment manager is responsible for the
maintenance and integrity of the corporate and financial information
set out on their website; this is not the responsibility of the
Company.  The work carried out by Grant Thornton UK LLP as
independent auditor of the Company does not involve consideration of
the maintenance and integrity of the website and accordingly they
accept no responsibility for any changes that have occurred to the
financial statements since they were initially presented on the
website.

Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements may differ from legislation
in other jurisdictions.

To the best of my knowledge:


  * the financial statements, prepared in accordance with the
    applicable set of accounting standards, give a true and fair view
    of the assets, liabilities, financial position and profit or loss
    of the Company; and



  * the management report includes a fair review of the development
    and performance of the business and the position of the Company,
    together with a description of the principal risks and
    uncertainties that it faces.


On Behalf of the Board

John Hustler
Chairman
12 February 2009


Income Statement
                                           Period to 31 October  2008
                                             Revenue  Capital   Total
                                     Notes     £'000    £'000   £'000

Loss on valuation of fixed asset
investments                           10           -    (215)   (215)
Loss on valuation of current asset
investments                           12           -    (437)   (437)

Other income                           2         326        -     326

Investment management fees             3        (55)    (164)   (219)
Other expenses                         4       (177)        -   (177)

Profit/(loss) on ordinary activities
before tax                                        94    (816)   (722)

Taxation on profit/(loss) on
ordinary activities                    6           -        -       -

Profit/(loss)  on ordinary
activities after tax                              94    (816)   (722)
Profit/(loss)  per share - basic and
diluted                                8        1.0p   (8.3)p  (7.3)p



  * The 'Total' column of this statement is the profit and loss
    account of the Company; the supplementary revenue return and
    capital return columns have been prepared under guidance
    published by the Association of Investment Companies.
  * all revenue and capital items in the above statement derive from
    continuing operations
  * the accompanying notes are an integral part of the financial
    statements
  * the Company has only one class of business and derives its income
    from investments made in shares and securities and from bank and
    money market funds


The Company has no recognised gains or losses other than the results
for the period as set out above.


Note of Historical Cost Profits and Losses
                                              Period ended 31 October
                                                                 2008
                                                                £'000
Loss on ordinary activities before taxation                     (722)
Loss on valuation of fixed asset                                  215
investments
Loss on valuation of current asset                                437
investments
Realisation of prior years' net unrealised                          -
gains on investment
Historical cost loss on ordinary activities                      (70)
before taxation
Historical cost loss on ordinary activities                      (70)
after taxation




Reconciliation of Movements in Shareholders' Funds
                                            Period ended 31 October
                                                     2008
                                                                £'000
Shareholders' funds at start of year                                -
Loss profit on ordinary activities after
tax                                                             (722)
Issue of equity (net of expenses)                              14,758
Shareholders' funds at end of period                           14,036



Balance Sheet
                                                As at 31 October 2008
                                          Notes      £'000      £'000

Fixed asset investments                    10                   1,837
Current assets:
Debtors                                    11          162
Investments                                12       11,663
Cash at bank                                           461
                                                    12,286
Creditors: amounts falling due within one
year                                       13         (87)
Net current assets                                             12,199

Total assets less current liabilities                          14,036

Called up equity share capital             14        1,562
Share Premium                              15       13,196
Capital reserve  - realised                15        (164)
                          - unrealised     15        (652)
Revenue reserve                            15           94
Total shareholders' funds                                      14,036
Net asset value per share                   9                   89.9p


The accompanying notes are an integral part of the financial
statements.

The statements were approved by the Directors and authorised for
issue on 12 February 2009 and are signed on their behalf by:
John Hustler
Chairman


Cash Flow Statement
                                           Period to 31 October  2008
                                     Notes                      £'000

Net cash outflow from operating
activities                                                      (145)

Financial investment :
Purchase of fixed asset investments   10                      (2,052)

Management of funds :
Purchase of current asset
investments                           11                     (24,433)
Sale of current asset investments     11                       12,333

Financing :
Issue of shares                                                15,443
Share issue expense                                             (685)
Increase in cash resources                                        461



Reconciliation of Net Cash Flow to Movement in Liquid Resources
                                         Period to 31 October  2008
                                                              £'000
Increase in cash at bank                                        461
Movement in cash equivalent securities                       11,663
Opening net funds                                                 -
Net funds at 31 October                                      12,124


Funds at 31 October comprised:

                        Period to 31 October  2008
                                             £'000
Cash at Bank                                   461
Bonds                                        5,209
Money Market Funds                           3,021
OEICs                                        3,433
Net funds at 31 October                     12,124



Reconciliation of Loss before Taxation to Cash Flow from Operating
Activities
                                                 Period to 31 October
                                                                 2008
                                                                £'000
Loss on ordinary activities before tax                          (722)
Loss on valuation of fixed asset investments                      215
Loss on valuation of current asset
investments                                                       437
Increase in debtors                                             (162)
Increase in creditors                                              87
Outflow from operating activities                               (145)


Notes to the Financial Statements

1.         Principal Accounting policies

The financial statements have been prepared under the historical cost
convention,  except  for   the  revaluation   of  certain   financial
instruments, and in accordance with UK Generally Accepted  Accounting
Practice (UK GAAP).   Where presentational  guidance set  out in  the
Statement of  Recommended Practice  (SORP) "Financial  Statements  of
Investment Trust  Companies", revised  December 2005,  is  consistent
with the  requirements  of UK  GAAP,  the directors  have  sought  to
prepare the financial statements on a consistent basis compliant with
the recommendations of the SORP.

The principal accounting policies are set out below.

Investments
Purchases and sales of investments are recognised in the financial
statements at the date of the transaction (trade date).

These investments will be managed and their performance evaluated on
a fair value basis in accordance with a documented investment
strategy and information about them has to be provided internally on
that basis to the Board.  Accordingly as permitted by FRS 26, the
investments will be designated as fair value through profit and loss
("FVTPL") on the basis that they qualify as a group of assets
managed, and whose performance is evaluated, on a fair value basis in
accordance with a documented investment strategy.  The Company's
investments are measured at subsequent reporting dates at fair
value.

In the case of unquoted investments, fair value is established in
accordance with industry guidelines by using measurements of value
such as price of recent transaction, earnings multiple and net
assets; where no reliable fair value can be estimated using such
techniques, unquoted investments are carried at cost subject to
provision for impairment where necessary.

Gains and losses arising from changes in fair value of investments
are recognised as part of the capital return within the profit and
loss account and allocated to the revaluation reserve.

In preparation of the valuations of assets the directors are required
to make judgements and estimates that are reasonable and incorporate
their knowledge of the performance of the investee companies.

Current asset investments
Current asset investments comprise money market funds and are
designated as FVTPL.  Gains and losses arising from changes in fair
value of investments are recognised as part of the capital return
within the profit and loss account and allocated to the revaluation
reserve as appropriate.

The current asset investments are all invested with the Company's
cash manager and are readily convertible into cash at the choice of
the Company.  The current asset investments are held for trading, are
actively managed and the performance is evaluated on a fair value
basis in accordance with a documented investment strategy.
Information about them has to be provided internally on that basis to
the Board.

Income
Investment income includes interest earned on bank balances and money
market securities and includes income tax withheld at source.
Dividend income is shown net of any related tax credit.

Dividends receivable are brought into account when the Company's
right to receive payment is established and there is no reasonable
doubt that payment will be received.  Fixed returns on debt and money
market securities are recognised on a time apportionment basis so as
to reflect the effective yield, provided there is no reasonable doubt
that payment will be received in due course.

Expenses
All expenses are accounted for on an accruals basis.  Expenses are
charged wholly to revenue with the exception of the investment
management fee, which has been charged 25% to the revenue account and
75% to the realised capital reserve to reflect, in the Directors'
opinion, the expected long term split of returns in the form of
income and capital gains respectively from the investment portfolio.

Revenue and capital
The revenue column of the income statement includes all income and
revenue expenses of the Company.  The capital column includes
realised and unrealised gains and losses on investments.  Gains and
losses arising from changes in fair value of investments are
recognised as part of the capital return within the income statement
and allocated to the realised or unrealised capital reserve on the
basis of whether they are readily convertible to cash in full at the
balance sheet date.

Taxation
Corporation tax payable is applied to profits chargeable to
corporation tax, if any, at the current rate. The tax effect of
different items of income/gain and expenditure/loss is allocated
between capital and revenue return on the "marginal" basis as
recommended in the SORP.

Deferred tax is recognised on an undiscounted basis in respect of all
timing differences that have originated but not reversed at the
balance sheet date where transactions or events have occurred at that
date that will result in an obligation to pay more, or a right to pay
less tax, with the exception that deferred tax assets are recognised
only to the extent that the directors consider that it is more likely
than not that there will be suitable taxable profits from which the
future reversal of the underlying timing can be deducted.

Cash and liquid resources
Cash, for the purposes of the cash flow statement, comprises cash in
hand and deposits repayable on demand, less overdrafts payable on
demand.  Liquid resources are current asset investments which are
disposable without curtailing or disrupting the business and are
either readily convertible into known amounts of cash at or close to
their carrying values or traded in an active market.  Liquid
resources comprise term deposits of less than one year (other than
cash), government securities, investment grade bonds and investments
in money market managed funds, as well as Open ended investment
companies.

Loans and receivables
The Company's loans and receivables are initially recognised at cost
and subsequently measured at fair value, being amortised cost using
the effective interest rate method.

Financial instruments
The Company's principal financial assets are its investments and the
policies in relation to those assets are set out above.  Financial
liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the
assets of the entity after deducting all of its financial
liabilities. Where the contractual terms of share capital do not have
any terms meeting the definition of a financial liability then this
is classed as an equity instrument. Dividends and distributions
relating to equity instruments are debited direct to equity.

Dividends
Dividends payable are recognised as distributions in the financial
statements when the Company's liability to make payment has been
established.  This liability is established when the dividends
proposed by the Board are approved by the shareholders.

2.         Income

                                           31 October 2008
                                        Revenue Capital Total
                                          £'000   £'000 £'000
Money market funds & OEIC's - dividends     174       -   174
Bond interest receivable                    107       -   107
Loan note interest receivable                45       -    45
                                            326       -   326


3.         Investment management fees

                             31 October 2008
                          Revenue Capital Total
                            £'000   £'000 £'000
Investment management fee      45     135   180
Irrecoverable VAT thereon      10      29    39
                               55     164   219


As mentioned above in Accounting Policies, for the purposes of the
revenue and capital columns in the income statement, the management
fee (including VAT) has been allocated 25 per cent to revenue and 75
per cent to capital, in line with the Board's expected long term
return in the form of income and capital gains respectively from the
Company's investment portfolio.

Octopus provides investment management and accounting and
administration services to the Company under a management agreement
which runs for a period of five years with effect from 2 November
2007 and may be terminated at any time thereafter by not less than
twelve months' notice given by either party.  No compensation is
payable in the event of terminating the agreement by either party, if
the required notice period is given.  The fee payable, should
insufficient notice be given, will be equal to the fee that would
have been paid should continuous service be provided, or the required
notice period was given.  The basis upon which the management fee is
calculated is disclosed within note 19 to the financial statements.

The Chancellor of the Exchequer announced in his budget statement on
12 March 2008 that the Finance Act 2008 would contain draft
legislation exempting VCTs from VAT on management fees with effect
from 1 October 2008. This legislation has now been passed and as such
all VCTs have been exempt from VAT on management fees from this date.

4.         Other expenses

                                                   31 October 2008
                                                Revenue Capital Total
                                                  £'000   £'000 £'000
Accounting and administration services               32       -    32
Directors' remuneration                              28       -    28
Fees payable to the Company's auditor for the
audit of the financial statements                    12       -    12
Fees payable to the Company's auditor for other
services - tax compliance                             3       -     3
Legal and professional expenses                      38       -    38
Other expenses                                       64       -    64
                                                    177       -   177


Total  annual  running  costs  are  capped  at  3.2%  of  net  assets
(excluding irrecoverable VAT).  For the period to 31 October 2008 the
running costs were 2.1% of net assets.

5.         Directors' remuneration

                        31 October 2008
                                  £'000
Directors' emoluments
John Hustler (Chairman)              13
Mark Faulker                          8
Matt Cooper                           7
                                     28


None of the Directors received any other remuneration from the
Company during the period however they did receive a small number of
additional free shares upon application, resulting from a discount of
the Offer charges. The Company has no employees other than
non-executive Directors.  The average number of non-executive
Directors in the year was three.

6.         Tax on ordinary activities
The corporation tax charge for the period was £nil

Factors affecting the tax charge for the current year:
The current tax charge for the period differs from the standard rate
of corporation tax in the UK of 29%.  The differences are explained
below.


Current tax reconciliation:              31 October 2008
                                                   £'000
Loss on ordinary activities before tax             (722)
Current tax at 29%                                 (209)
Expenses not deductible for tax purposes             188
Unrelieved tax losses                                 21
Total current tax charge                               -

Excess management charges of £221,000 have been carried forward at 31
October 2008 and are available for offset against future taxable
income subject to agreement with HMRC.

Approved venture capital trusts are exempt from tax on capital gains
within the Company.  Since the directors intend that the Company will
continue to conduct its affairs so as to maintain its approval as a
venture capital trust, no current deferred tax has been provided in
respect of any capital gains or losses arising on the revaluation or
disposal of investments.

7.         Dividends

                                       31 October 2008
                                                 £'000
Proposed in respect of the year
Proposed final dividend 0.5p per share              78
                                                    78

The final dividend of 0.5p per share for the period ended 31 October
2008, subject to shareholder approval at the annual general meeting,
will be paid on 10 April 2009 to those shareholders on the register
on 11 March 2009.

8.         Loss per share
The loss per share is based on loss after tax of £(722,000) and on
9,832,696 shares, being the weighted average number of shares in
issue during the period.

There are no potentially dilutive capital instruments in issue and,
therefore no diluted returns per share figures are relevant. The
basic and diluted earnings per share are therefore identical.

9.        Net asset value per share
The calculation of net asset value per share as at 31 October 2008 is
based on net assets of £14,036,000 divided by 15,616,879 ordinary
shares in issue at that date.

10.        Fixed asset investments

                                £'000 £'000
Movement in the year:
Purchases at cost               2,052
Revaluation in year             (215)
Valuation at 31 October 2008          1,837
Book cost at 31 October 2008:
- Ordinary shares               1,892
- Loan notes/other securities     160

Revaluation to 31 October 2008:
- Ordinary shares               (215)
Valuation at 31 October 2008          1,837


Further details of the fixed asset investments held by the Company
are shown within the Investment Manager's Review on pages 6 to 9.

All investments are designated as fair value through profit or loss
at the time of acquisition, and all capital gains or losses on
investments so designated.  Given the nature of the Company's venture
capital investments, the changes in fair value of such investments
recognised in these financial statements are not considered to be
readily convertible to cash in full at the balance sheet date and
accordingly these gains are treated as unrealised.

At 31 October 2008 there were no commitments in respect of
investments approved by the manager but not yet completed.

11.        Debtors

                               31 October 2008
                                         £'000
Prepayments and accrued income             162


12.        Current asset investments
Current asset investments at 31 October 2008 comprised bonds, money
market funds and OEICs.

                                   £'000  £'000
Movement in the year:
Purchases at Cost                 24,433
Disposal proceeds               (12,333)
Revaluation in year                (437)

Valuation as at 31 October 2008          11,663
Book cost at 31 October 2008:
- Bonds                            6,955
- Money Market Funds               1,603
- OEICs                            3,542

Revaluation to 31 October 2008:
- Bonds                            (254)
- Money Market Funds                (74)
- OEICs                            (109)

Valuation as at 31 October 2008          11,663


When the Company revalues its investments during the period, any
gains or losses arising are credited / charged to the Capital reserve
- unrealised unless any diminution in value is considered to be
permanent, in which case it is charged to the Capital reserve -
realised.

When an investment is sold any balance held on the Capital reserve -
unrealised is transferred to the Capital reserve - realised as a
movement in reserves.

13.        Creditors: amounts falling due within one year

                31 October 2008
                          £'000
Accruals                     79
Other creditors               8
                             87


14.        Share capital

                                   31 October 2008
                                             £'000
Authorised:
 50,000,000 ordinary shares of 10p           5,000
Allotted and fully paid up:
15,616,879 ordinary shares of 10p            1,562


The capital of the Company is managed in accordance with its
investment policy with a view to the achievement of its investment
objective as set on page 15.  The Company is not subject to any
externally imposed capital requirements.

The Company issued 15,616,879 shares during the year at a price of
100p per share.

On 17 October 2007, the company made an allotment of 50,000
Redeemable Preference shares of £1 each.  These shares were allotted
at par and £0.25 was paid on each share.  These were subsequently
redeemed on 21 January 2008, out of the proceeds of a first share
issue. As a result, no capital Redemption Reserve transfer was deemed
necessary.  Following this redemption, a resolution was passed
whereby these preference shares were re-designated as ordinary shares
of 10p each and rank pari-passu with the existing ordinary shares.

15.        Reserves

                                           Capital    Capital
                                    Share  reserve    reserve Revenue
                                  Premium realised unrealised reserve
                                    £'000    £'000      £'000   £'000
As at date of incorporation             -        -          -       -
Loss on ordinary activities after
tax                                     -        -          -   (722)
Capitalisation of management fees       -    (164)          -     164
Gains/losses on revaluation             -        -      (652)     652
Issue of Equity                    13,196        -          -       -
Balance as at 31 October 2008      13,196    (164)      (652)      94


When the Company revalues its investments during the period, any
gains or losses arising are credited/charged to the income
statement.  Unrealised gains/(losses) are then transferred to the
Capital reserve - unrealised.  When an investment is sold any balance
held on the capital reserve - unrealised reserve is transferred to
the capital reserve - realised as a movement in reserves.

16.        Financial instruments and risk management

The Company's financial instruments comprise equity and fixed
interest investments, cash balances and liquid resources including
debtors and creditors. The Company holds financial assets in
accordance with its investment policy of investing mainly in a
portfolio of VCT qualifying unquoted securities whilst holding a
proportion of its assets in cash or near-cash investments in order to
provide a reserve of liquidity.

Fixed asset investments (see note 10) are valued at fair value.
Unquoted investments are carried at fair value as determined by the
directors in accordance with current venture capital industry
guidelines. The fair value of all other financial assets and
liabilities is represented by their carrying value in the balance
sheet.  The Directors believe that the fair value of the assets are
held at the period end is equal to their book value.

In carrying on its investment activities, the Company is exposed to
various types of risk associated with the financial instruments and
markets in which it invests. The most significant types of financial
risk facing the Company are price risk, interest rate risk, credit
risk and liquidity risk. The Company's approach to managing these
risks is set out below together with a description of the nature and
amount of the financial instruments held at the balance sheet date.

Market risk
The Company's strategy for managing investment risk is determined
with regard to the Company's investment objective, as outlined on
page 15. The management of market risk is part of the investment
management process and is a central feature of venture capital
investment. The Company's portfolio is managed in accordance with the
policies and procedures described in the Corporate Governance
statement on pages 25 to 29, having regard to the possible effects of
adverse price movements, with the objective of maximising overall
returns to shareholders. Investments in unquoted companies, by their
nature, usually involve a higher degree of risk than investments in
companies quoted on a recognised stock exchange, though the risk can
be mitigated to a certain extent by diversifying the portfolio across
business sectors and asset classes. The overall disposition of the
Company's assets is regularly monitored by the Board.

Details of the Company's investment portfolio at the balance sheet
date are set out on page 6 to 9.  An analysis of investments between
debt and equity instruments is given in note 10.

13.1% by value of the Company's net assets comprises investments in
unquoted companies held at fair value.  The valuation methods used by
the Company include the application of a price/earnings ratio derived
from listed companies with similar characteristics, and consequently
the value of the unquoted element of the portfolio can be indirectly
affected by price movements on the London Stock Exchange. A 10%
overall increase in the valuation of the unquoted investments at 31
October 2008 would have increased net assets and the total return for
the year by £183,700 an equivalent change in the opposite direction
would have reduced net assets and the total return for the year by
the same amount.

83.1% by value of the Company's net assets comprises of OEIC's and
Money Market Securities held at fair value.  A 10% overall increase
in the valuation of the OEIC's and Money Market Securities at 31
October 2008 would have increased net assets and the total return for
the year by £1,166,000 an equivalent change in the opposite direction
would have reduced net assets and the total return for the year by
the same amount.

Interest rate risk
Some of the Company's financial assets are interest-bearing, of which
some are at fixed rates and some variable.  As a result, the Company
is exposed to fair value interest rate risk due to fluctuations in
the prevailing levels of market interest rates.

Fixed rate
The table below summarises weighted average effective interest rates
for the fixed interest-bearing financial instruments:

                                   As at 31 October 2008
                        Total fixed Weighted
                               rate  average    Weighted average time
                       portfolio by interest  for which rate is fixed
                        value £'000   rate %                 in years

Listed fixed-interest
investments                   3,680    4.85%                      1.2
Fixed-rate investments
in unquoted companies           160   10.00%                      5.0
                              3,840


Due to the relatively short period to maturity of the fixed rate
investments held within the portfolio, it is considered than an
increase or decrease of 1% in interest rates as at the reporting date
would not have had a significant effect on the Company's net assets
or total return for the period.

Floating rate
The Company's floating rate investments comprise cash held on
interest-bearing deposit accounts and, where appropriate, within
interest bearing money market securities.  The benchmark rate which
determines the rate of interest receivable on such investments is the
bank base rate, which was 4.5% at 31 October 2008.  The amounts held
in floating rate investments at the balance sheet date were as
follows:


                                     31 October 2008
                                                £000

Floating rate notes                            1,529
Cash on deposit & money market funds           3,481
                                               5,010


A 1% increase in the base rate would increase income receivable from
these investments and the total return for the period by £50,000.

Credit risk
Credit risk is the risk that a counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has
entered into with the Company. The investment manager and the Board
carry out a regular review of counterparty risk. The carrying values
of financial assets represent the maximum credit risk exposure at the
balance sheet date.

At 31 October 2008 the Company's financial assets exposed to credit
risk comprised the following:

                                          31 October 2008
                                                     £000

Investments in fixed interest instruments           3,840
Investments in floating rate instruments            1,529
Cash on deposit & money market funds                3,481
Accrued dividends and interest receivable             157
                                                    9,007


Credit risk relating to listed money market securities is mitigated
by investing in a portfolio of investment instruments of high credit
quality, comprising securities issued by the UK Government and major
UK companies and institutions. Credit risk relating to loans to and
preference shares in unquoted companies is considered to be part of
market risk.

Those assets of the Company which are traded on recognised stock
exchanges are held on the Company's behalf by third party custodians
(Goldman Sachs International in the case of listed money market
securities and Charles Stanley Limited in the case of quoted equity
securities).  Bankruptcy or insolvency of a custodian could cause the
Company's rights with respect to securities held by the custodian to
be delayed or limited.

Credit risk arising on the sale of investments is considered to be
small due to the short settlement and the contracted agreements in
place with the settlement lawyers.

The Company's interest-bearing deposit and current accounts are
maintained with Goldman Sachs International and HSBC PLC.

There were no significant concentrations of credit risk to
counterparties at 31 October.  By cost, no individual investment
exceeded 11.2% of the Company's net assets at 31 October 2008

Liquidity risk
The Company's financial assets include investments in unquoted equity
securities which are not traded on a recognised stock exchange and
which generally may be illiquid. They also include investments in
AIM-quoted companies, which by their nature, involve a higher degree
of risk than investments on the main market.  As a result, the
Company may not be able to realise some of its investments in these
instruments quickly at an amount close to their fair value in order
to meet its liquidity requirements, or to respond to specific events
such as deterioration in the creditworthiness of any particular
issuer.

The Company's listed money market securities are considered to be
readily realisable as they are of high credit quality as outlined
above.

The Company's liquidity risk is managed on a continuing basis by the
Investment Manager in accordance with policies and procedures laid
down by the Board. The Company's overall liquidity risks are
monitored on a quarterly basis by the Board.

The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses.
At 31 October 2008 these investments were valued at £12,100,000.

17.        Post balance sheet events
The following events occurred between the balance sheet date and the
signing of these financial statements:
*         On 7 January 2009 Titan 2 invested £559,000 into
  Zoopla.co.uk, acquiring 498,321 ordinary shares in the company

18.        Contingencies, guarantees and financial commitments
As mentioned in the Chairman's Statement on page 4 and 5, there may
be an opportunity to obtain a repayment of VAT paid on management
fees to Octopus.  It is not yet clear to what degree this may be
possible.  There were no further contingencies, guarantees or
financial commitments as at 31 October 2008.

19.        Related party transactions
Matt Cooper, a non-executive Director of Octopus Titan VCT 2 plc, is
a Director of Octopus Investments Limited, the parent company of
Octopus Ventures Limited.  Octopus Titan VCT 2 plc has employed
Octopus throughout the year as investment manager.  Octopus Titan VCT
2 plc has paid Octopus £219,000 (including irrecoverable VAT at the
applicable rate) in the year as a management fee and there is £nil
outstanding at the balance sheet date.  The management fee is payable
quarterly in advance and is based on 2.0% of the net asset value
calculated at annual intervals as at 31 October.  Octopus Investments
Limited provides accounting, administrative and company secretarial
services to the Company, payable quarterly in advance for a fee of
0.3% of the net asset value calculated at annual intervals as at 31
October.  During the year £32,000 (including irrecoverable VAT at the
applicable rate) was paid to Octopus Investments Limited and there is
£nil outstanding at the balance sheet date, for the accounting and
administrative services.

In addition, Octopus is entitled to performance related incentive
fees. The incentive fees are designed to ensure that there are
significant tax-free dividend payments made to Shareholders as well
as strong performance in terms of capital and income growth, before
any performance related incentive fee payment is made. Therefore,
only if by the end of a financial year (commencing no earlier than
close of the 2011 financial year), declared distributions per Share
have reached 40p in aggregate and if the Performance Value at that
date exceeds 130p per Share, a performance incentive fee equal to 20%
of the excess of such Performance Value over 100p per Share will be
payable to Octopus Ventures and Octopus Investments, in equal
proportions. If, on a subsequent financial year end, the Performance
Value of Octopus Titan 2 falls short of the Performance Value on the
previous financial year end, no incentive fee will arise. If, on a
subsequent financial year end, the performance exceeds the previous
best Performance Value of Octopus Titan 2, the Investment Manager and
Octopus Investments will be entitled to 20% of such excess in
aggregate.

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