Annual Financial Report

Maven Income and Growth VCT 2 PLC

The Directors announce the Company's results for the year ended 31 January 2012.

Chairman's Statement

I am pleased to report that the Company has continued to achieve positive Shareholder returns during the year to 31 January 2012, despite a background of continued volatility for global quoted markets and economic uncertainty for UK businesses and investors.

The primary objective of the Company is to invest in a broad range of later-stage private companies, on conservative entry multiples, where each business can demonstrate predictable earnings and strong prospective cash flow. This investment approach has allowed the Company to deliver growth in the underlying NAV in recent years in tandem with a steadily increasing level of dividends for Shareholders. This is in line with the objective of generating long term capital appreciation and maintainable levels of tax-free income.

The Board was encouraged by recent independent coverage of the Company's performance. An AIC press release, which analysed the significant representation of VCTs in 2011 among the top performing investment companies, highlighted the fact that your Company was ranked 3rd of the generalist VCTs by share price total return during that year. The Manager's ability to source high quality private company assets was featured in the Deloitte Buyout Track 100 report published in February 2012, which tracks the performance of the top 100 private equity backed medium-sized companies in Britain over the past two years, and four of the Company's existing portfolio companies feature in that report.

The major highlights of the year are:

·; NAV total return of 78.42p (2011: 72.82p) per share at 31 January 2012, an increase of 7.7%;

·; NAV at the year end of 58.8p (2011: 56.2p) per share, an increase of 4.6%;

·; Five new later-stage higher yielding private company investments completed;

·; Disposal of Walker Technical Resources, for a total return of 3 times cost;

·; Interim dividend of 1.5p per share paid on 11 November 2011; and

·; Final dividend of 1.5p per share proposed for payment on 22 June 2012.

Performance

The NAV total return per share at 31 January 2012 was 78.42p, an increase of 7.7% over the equivalent figure at 31 January 2011. At 31 January 2012, the NAV per share was 58.8p.

NAV total return is regarded by most commentators and investors as the most meaningful performance measure for a VCT, representing the long-term aggregate of tax-free dividend payments combined with the current NAV. The NAV in isolation is a less relevant measure, as the underlying investments are long-term in nature and not readily realisable, and the NAV does not reflect the significant element of investor return already paid via dividend payments.

Dividends

It is the Company's policy to generate a sustainable income stream for investors, paying regular dividends out of revenue and realised capital gains. The Board is proposing a final dividend of 1.5p per share, comprising 1.0p of capital and 0.5p of revenue, to be paid on 22 June 2012 to Shareholders on the register on 25 May 2012. Including the interim dividend paid in November 2011, the 3.0p total dividend per share represents a tax-free yield for the year of 3.75% on the net cost to Shareholders (taking into account the initial tax relief available at the time of investment).

Since the Company's launch, and after receipt of the proposed final dividend, Shareholders will have received 21.12p per share in tax-free dividends.

Principal risks and uncertainties

The Board has reviewed the principal risks and uncertainties facing the Company for the financial year. In order to reduce the exposure to investment risk, the Company has invested in a broadly-based portfolio of investments in private and AIM/PLUS quoted companies in the United Kingdom.

VCT qualifying status

The Company is required to meet the 70% qualifying and other tests on a continuous basis to continue to qualify as a VCT. The Board regularly reviews the status of these criteria and I am pleased to confirm that all tests continue to be met.

Investment strategy

The Company's investment strategy is to build a large and diversified portfolio of profitable and income producing later-stage private companies across a range of industry sectors. The principal domicile of these companies will generally be in the UK, although many have an export dimension or overseas operations.

The Manager has a UK-wide office network, with six regionally based deal teams being introduced to a varied flow of potential opportunities throughout the year. The Company therefore has regular access to a range of well managed mature businesses, and investments are typically structured with a significant element of secured loan stock in order to generate an immediate high yield to the VCT.

In line with the strategy of building a broadly based private equity portfolio capable of generating maintainable levels of tax-free income, the Board and the Manager have previously concluded that the potential returns available from AIM and PLUS quoted companies are too uncertain, with very limited liquidity in many stocks and poor dividend yield in comparison with private equity investments. The Manager has, therefore, continued to selectively realise quoted holdings for value during the year, and to redeploy the proceeds into established private companies. Shareholder value is created by a combination of generating revenue through yield payments from portfolio companies, and the capital proceeds arising from profitable realisations, normally achieved via trade sales. At the year end, AIM or PLUS quoted holdings represented less than 2% of net assets.

The Listing Rules require the Board to ensure that the Annual Report includes information on the investment policy, including a description of the asset mix, the spread of risk and maximum exposures. This information is contained in the Directors' Report and in the various tabular analyses of the portfolio.

Valuation process

Investments held by Maven Income and Growth VCT 2 in unquoted companies are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Investments quoted or traded on a recognised stock exchange, including AIM, are valued at their bid prices.

Share capital and fund raising

The Company raised £690,000 of additional funds through the second Maven Linked VCT Offer in the period to 29 April 2011, less costs of 5% of total subscriptions, and 1,244,988 new shares were issued. In December 2011, the Board announced a further opportunity to acquire new shares in the Company through a top-up Offer aiming to raise £1.25 million before expenses, which is within the maximum permitted under the Prospectus Rules and avoids the higher costs associated with publishing a full prospectus. The Company will not be issuing more than 10% of its issued share capital, which is within existing Shareholder authorities. I am pleased to confirm that the Offer closed, fully subscribed, on 1 March 2012. The Company made its Offer in parallel with similar Offers by Maven Income and Growth VCT, Maven Income and Growth VCT 3, and Maven Income and Growth VCT 4, each also aiming to raise £1.25 million and with each investor's subscription to be split equally between the four participating Companies.

Monies raised under these Offers may be used by the Company to pay dividends and cover general running costs. This has the effect of preserving for investment purposes an equivalent sum of valuable 'old money' which operates under more advantageous VCT regulations. The proceeds of these Offers will also provide additional liquidity for the Company to make further later-stage investments, and allow it to spread its costs over a larger asset base to the benefit of all Shareholders.

Co-investment scheme of the Manager

The co-investment scheme, which allows executive members of the Manager to invest alongside the Company, continued in operation during the year. The scheme operates through a nominee company which invests in each and every transaction made by the Company, including any follow-on investments. The scheme closely aligns the interests of the executives and the Company's Shareholders while providing an incentive to enable the Manager to retain the existing skills and capacity of its investment team in a competitive market.

Outlook

The Board is pleased that the focussed later-stage investment strategy is producing tangible improvements in Shareholder returns, including an increase in tax-free dividend distributions. The reconstruction of the portfolio achieved over recent years has positioned the Company to be able to continue this positive performance, underpinned by a robust and diversified private company asset base which is generating strong revenues, supplemented by an emerging trend of profitable exits.

Charles Nicolson

Chairman

11 May 2012

A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.

All items in the above statement are derived from continuing operations. The Company has only one class of business and

derives its income from investments made in shares, securities and bank deposits.

The total column of this statement is the Profit and Loss Account of the Company.

Notes

Accounting Policies - UK Generally Accepted Accounting Practice

(a) Basis of preparation

The Financial Statements have been prepared under the historical cost convention, modified to include the revaluation of investments, and in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust

Companies and Venture Capital Trusts' (the SORP) issued in January 2009. The disclosures on going concern in the Directors' Report form part of these Financial Statements.

(b) Income

Dividends receivable on equity shares and unit trusts are treated as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the period. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective interest rate on the debt securities and shares. Provision is made for any fixed income not expected to be received. Interest receivable from cash and short term deposits and interest payable are accrued to the end of the year.

(c) Expenses

All expenses are accounted for on an accruals basis and charged to the Income Statement. Expenses are charged through the revenue account except as follows:

·; expenses which are incidental to the acquisition and disposal of an investment are charged to capital; and

·; expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 10% to revenue and 90% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth.

(d) Taxation

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted.

Timing differences are differences arising between the Company's taxable profits and its results as stated in the Financial Statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non- discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the period.

UK corporation tax is provided at amounts expected to be paid/recovered using the tax rates and laws that have been enacted, or substantially enacted, at the balance sheet date.

(e) Investments

In valuing unlisted investments, the Directors follow the criteria set out below. These procedures comply with the revised International Private Equity and Venture Capital Valuation Guidelines (IPEVCV) for the valuation of private equity and venture capital investments. Investments are recognised at their trade date and are designated by the Directors as fair value through profit and loss. At subsequent reporting dates, investments are valued at fair value, which represents the Directors' view of the amount for which an asset could be exchanged between knowledgeable and willing parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have an intention to sell their holding in the near future.

A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.

1. For investments completed within the 12 months prior to the reporting date and those at an early stage in their development, fair value is determined using the Price of Recent Investment Method, except that adjustments are made when there has been a material change in the trading circumstances of the company or a substantial movement in the relevant sector of the stock market.

2. Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price.

3. Mature companies are valued by applying a multiple to their fully taxed prospective earnings to determine the enterprise value of the company.

3.1 To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance related mechanisms is taken into account when determining the value of the ordinary share capital.

3.2 Preference shares, debentures and loan stock are valued using the Price of Recent Investment Method. When a redemption premium has accrued, this will only be valued if there is a reasonable prospect of it being paid. Preference shares which carry a right to convert into ordinary share capital are valued at the higher of the Price of Recent Investment Method basis and the price/earnings basis, both described above

4. Where there is evidence of impairment, a provision may be taken against the previous valuation of the investment.

5. In the absence of evidence of a deterioration, or strong defensible evidence of an increase in value, the fair value is determined to be that reported at the previous balance sheet date.

6. All unlisted investments are valued individually by the Manager's Portfolio Management Team. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the Company.

7. In accordance with normal market practice, investments listed on the Alternative Investment Market or a recognised stock exchange are valued at their bid market price.

(f) Fair value measurement

Fair value is defined as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or the most advantageous market of the investment. A three-tier hierarchy has been established to maximise the use of observable market data and minimise the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on best information available in the circumstances.

The three-tier hierarchy of inputs is summarised in the three broad levels listed below:

·; Level 1 - quoted prices in active markets for identical investments;

·; Level 2 - other significant observable inputs (included quoted prices for similar investments, interest rates, prepayment speeds, credit risk etc); and

·; Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments).

(g) Gains and losses on investments

When the Company sells or revalues its investments during the year, any gains or losses arising are credited/charged to the Income Statement.

Movement in reserves

Return per Ordinary Share

The returns per Ordinary Share are based on the following figures:

NAV per Ordinary Share

NAV per Ordinary Share as at 31 January 2012 has been calculated using the number of Ordinary Shares in issue at that date of 24,247,282 (2011: 23,834,294).

Principal risks and uncertainties

The Board has reviewed the principal risks and uncertainties facing the Company for the financial year. The principal risks facing the Company relate to its investment activities and include market price, interest rate, liquidity and credit risk. An explanation of these risks and how they are managed is contained in Note 18 to the Financial Statements. Additional risks faced by the Company, and the mitigation approach adopted by the Board, are as follows:

·; investment objective: the Board's aim is to maximise absolute returns to Shareholders while managing risk by ensuring an appropriate diversification of investments;

·; investment policy: inappropriate stock selection leading to underperformance in absolute and relative terms is a risk which the Manager mitigates by operating within investment guidelines and regularly monitoring performance against the peer group. The regulations affecting venture capital trusts are central to the Company's investment policy;

·; discount volatility: due to the lack of liquidity in the secondary market, venture capital trust shares tend to trade at a discount to NAV, which the Board seeks to manage by having the Company make purchases of its own shares in the market from time to time; and

·; regulatory risk: the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 274 of the Income Tax Act 2007 could result in the Company being subject to capital gains tax on the sale of its investments. A breach of the VCT Regulations could result in the loss of VCT status and consequent loss of tax reliefs currently available to Shareholders. A serious breach of other regulations, such as the UKLA Listing Rules or the Companies Acts, would lead to suspension of its shares from the Stock Exchange, loss of VCT status and reputational damage. The Board receives quarterly reports from the Manager in order to monitor compliance with regulations.

The Board considers all of the above risks and the measures in place to manage them at each Board Meeting.

Other information

The Annual General Meeting will be held on 12 June 2012, commencing at 10.30 am.

This Announcement has been prepared on the same basis as the Annual Report and Financial Statements for the year ended 31 January 2011. The Annual Report and Financial Statements for the year ended 31 January 2012 will be submitted to the National Storage Mechanism and be available for inspection at: www.Hemscott.com/nsm.do, and will also be filed with the Registrar of Companies and issued to Shareholders in due course. 

The financial information contained within this Announcement does not constitute the Company's statutory Financial Statements as defined in the Companies Act 2006. The statutory Financial Statements for the year ended 31 January 2011 have been delivered to the Registrar of Companies and contained an audit report which was unqualified and did not constitute statements under S498(2) or S498(3) of the Companies Act 2006.

Copies of this announcement, and of the Annual Report and Financial Statements Annual Report and Financial Statements for the year ended 31 January 2012, will be available to the public at the office of Maven Capital Partners UK LLP, 149 St Vincent Street, Glasgow G2 5NW; at the registered office of the Company, 9-13 St Andrew Street, London EC4A 3AF and on the Company's website at www.mavencp.com/migvct2.

Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Directors' responsibility statement

The Directors believe that, to the best of their knowledge:

·; the Financial Statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities and financial position and profit or loss of the Company as at 31 January 2012 and for the year to that date; and

·; the Directors' Report includes a fair review of the development and performance of the Company, together with a description of the principal risks and uncertainties that it faces.

By Order of the Board

Maven Capital Partners UK LLP

Secretary

11 May 2012