Preliminary Results

Oxford Technology 2 VCT PLC
06 May 2004

 Preliminary Announcement for Oxford Technology 2 Venture Capital Trust plc for
                        the year ended 29 February 2004

                              Chairman's Statement

                              Investment Portfolio

Oxford Technology 2 VCT investee companies have generally had a good year, with
some making great strides forward. The net asset value as at 29 February 2004
was 78p per share.

Insense Ltd has made excellent progress. A spin-out from Unilever, Professor
Paul Davis founded the company to develop an instrument which would use the
exquisitely sensitive and specific olfactory sense of bees to detect odours in
minute concentrations. Subsequent contracts for various government departments
in both the US and UK have shown that the technology can be used to detect
explosives and narcotics. In addition to its work on bee olfaction, the company
has developed an active wound-healing dressing using pharmaceutically pure
ingredients but which mimics the legendary wound-healing properties of honey.
The early results in this were so encouraging that Insense was demerged into two
companies, with Insense Ltd retaining the wound-healing, and Inscentinel Ltd, a
new company initially with exactly the same pro rata shareholdings, retaining
the bee olfaction. For the purposes of the accounts, the historic cost of the
original investment in Insense has been split between Insense and Inscentinel.
In Summer 2003, Insense raised £1.6m of additional capital to finance clinical
trials of Oxyzyme wound dressing, the first of which started in February 2004 in
North America. The initial results have been highly encouraging.

Coraltech, the company that has developed a method for producing strong and
lightweight injection moulded plastic products by mixing a foaming agent with
the plastic, has developed a second technology that also seems to have
significant potential for the plastics industry. The scale of the opportunity is
such that it was decided to set up a new venture, Im-Pak Technologies  Ltd, to
exploit the new technology, and take on a new CEO with a successful track record
as both investor and entrepreneur in the plastics industry. Since the Im-Pak
technology had been developed by Peter Clarke, the founder of Coraltech, for the
purposes of the accounts it was decided to split the historic cost of the
investment in Coraltech between Coraltech and the new company, Im-Pak. OT2VCT,
along with other shareholders in Coraltech, became pro rata shareholders in the
new venture at its formation.

Other companies doing well include Commerce Decisions Ltd, which raised £1.8m
investment at the beginning of the year and continues to expand the market for
its complex procurement software.  OCRobotics Ltd won its first two major orders
in the year. The first was for a 'snake robot arm' for a remote bomb disposal
unit which should enter MoD trials later in 2004. The second, worth £650k, was
for three designs of their 'snake robot arm' for the Swedish nuclear industry.
Both Inaplex Ltd and ImmunoBiology Ltd have also made encouraging progress
during the year. Finally, Intellikraft, which suffered a major setback last
year, has cut back its overheads and  is now making good technical advances.

However, not all companies in the portfolio have fared well over the last year -
some have struggled to raise funds and one, M3 Networks Ltd, went into voluntary
liquidation having consistently failed to achieve sufficient margins on its
sales.

Overall, the Board is pleased with the way the portfolio is developing.

                              Results for the year

Interest on bank deposits and investee loans together with dividend income
produced gross revenue of £39,000 (2003: £68,000) in the year. Net revenue after
taxation and management expenses was a loss of £159,000 (2003: loss of £118,000)
and revenue return for the period was a loss of 2.65p (2003: loss of 1.97p) per
share. Capital return was a loss of 3.55p (2003: loss of 55.92p) per share. The
graph on page 7 shows the historical Net Current Assets (chiefly cash) plus
Gilts per share, and Other Investments (the fund's venture capital investments)
per share, Together, these two figures make up the total Net Asset Value per
share. The graph also shows cumulative dividends paid to date.

                                      AGM

Shareholders should note that the AGM for Oxford Technology 2 VCT will be held
on Monday 7 June 2004, at the Magdalen Centre, Oxford Science Park, starting at
12.10 pm and will include presentations by some of the companies in which the
Oxford Technology VCTs have invested. A formal Notice of AGM has been included
at the back of the Accounts together with a Form of Proxy for those not
attending.

Fuller information on each of the investee companies is given in the April 2004
newsletter.

John Jackson

Chairman

6 May 2004

  Statement of total return (incorporating the revenue account)*  for the year
                             ended 29 February 2004
                                                           2004                         2003
                                                        Audited                      Audited
                                      Revenue  Capital    Total    Revenue  Capital    Total
                                         £000     £000     £000       £000     £000     £000
Loss on investments                         -    (213)    (213)          -  (3,355)  (3,355)
Income                                     39        -       39         68        -       68
Investment management  fee              (133)        -    (133)      (134)        -    (134)
Other expenses                           (65)        -     (65)       (52)        -     (52)
                                        _____    _____    _____      _____    _____    _____
Net loss on ordinary activities         (159)    (213)    (372)      (118)  (3,355)  (3,473)
before taxation
Tax on ordinary activities                  -        -        -          -        -        -
                                        _____    _____    _____      _____    _____    _____
Loss attributable to equity             (159)    (213)    (372)      (118)  (3,355)  (3,473)
shareholders and transfers from
reserves
                                       ======   ======   ======     ======   ======   ======
Loss per ordinary share               (2.65p)  (3.55)p  (6.20)p    (1.97)p (55.92)p (57.89)p
                                       ======   ======   ======     ======   ======   ======

* The revenue 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 recognised gains or losses for the year other than
those shown above.

                       Balance sheet at 29 February 2004

                                      29 February 2004         28 February 2003 
                                               Audited                  Audited
                                      £000        £000         £000        £000
Fixed assets
Investments                                      4,402                    4,462
Current assets
Debtors                                 38                       28
Cash at bank                           251                      574
                                     _____                    _____
                                       289                      602
Creditors: amounts falling due         (5)                      (6)
within one year
                                     _____                    _____
Net current assets                                 284                      596
                                                 _____                    _____
Net assets                                       4,686                    5,058
                                                 =====                    =====
Capital and reserves
Called up share capital                            600                      600
Share premium account                            5,221                    5,221
Other reserves:
Capital reserve - realised                       (583)                    (136)
Capital reserve - unrealised                     (231)                    (465)
Revenue reserve                                  (321)                    (162)
                                                 _____                    _____
Shareholders' funds                              4,686                    5,058
                                                 =====                    =====
Net asset value per share                          78p                      84p
                                                 =====                    =====

            Cash flow statement for the year ended 29 February 2004

                                           2004    2003
                                        Audited Audited
                                           £000    £000
Net cash outflow from operating           (170)   (146)
activities
Capital expenditure and financial
investment
                Purchase of investments   (156)   (664)
   Disposal / redemption of investments       3     477
                                         ______  ______
Net cash outflow from capital             (153)   (187)
expenditure and financial  investment
                                         ______  ______
Decrease in cash                          (323)   (333)
                                         ======  ======

                                     Notes:

1. Basis of preparation

The preliminary announcement has been prepared in accordance with applicable
accounting standards up to and including FRS 19 and with the Statement of
Recommended Practice 'Financial statements of investment trust companies' issued
in January 2003. The principal accounting policies have remained unchanged from
those set out in the company's 2003 financial statements.

2. Return per Ordinary Share

The calculation of revenue return per share is based on the net deficit for the
financial period of £159,000 (2003: £118,000) divided by the weighted average
number of ordinary shares of 6,000,000 (2003: 6,000,000) in issue during the
period.

The calculation of capital return per share is based on the net capital loss for
the financial period of £213,000 (2003: loss of £3,355,000) divided by the
weighted average number of ordinary shares of 6,000,000 (2003: 6,000,000) in
issue during the period.

3. General

The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The balance sheet at 29 February 2004 and the statement of total return,
cash flow statement and associated notes for the year then ended have been
extracted from the company's 2004 statutory financial statements on which the
auditors' opinion is unqualified and does not include any statement under
section 237 of the Companies Act 1985.


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