Mobeus Income

& Growth 2 VCT plc

A Venture Capital Trust

Annual Report & Financial Statements

for the year ended 31 March 2022

Mobeus Income & Growth 2 VCT plc, (“the Company”) is a Venture Capital Trust (“VCT”)

advised by Gresham House Asset Management Limited (“Gresham House”), investing primarily

in established unquoted growth companies that meet the ‘qualifying company’ requirements of

VCT legislation.

Objective of the Company

The objective of the Company is to provide investors with a regular income stream, arising

both from the income generated by companies selected for the portfolio and from realising

any growth in capital, while continuing at all times to qualify as a VCT.

Dividend Policy

The Company seeks to pay dividends at least annually out of income and capital as

appropriate, and subject to fulfilling certain regulatory requirements. More details are provided

on pages 4 to 5 of the Chairman’s Statement and on page 10.

YOUR PRIVACY

We are committed to protecting and respecting your privacy. To understand how we collect, use and otherwise process

personal data relating to you, or that you provide to us, please read our privacy notice, which can be found at

www.mig2vct.co.uk.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Contents

Financial Highlights

Financial Highlights and Performance Summary 2

Chairman’s Statement 3

Strategic Report 6

- Company Objective and Business Model 6

- Objective 6

- Summary of Investment Policy 6

- The Company and its Business Model 6

- Summary of VCT Legislation 7

- Performance and Key Performance Indicators 8

- Investment Adviser’s Review 12

- Twelve largest investments in the Portfolio by Valuation 20

- Investment Portfolio Summary 24

- Key Policies 27

- Investment Policy 27

- Stakeholder Engagement and Directors’ Duties 28

- Principal and emerging risks, management and regulatory environment 31

- Going concern and Long-Term viability of the Company 33

Reports of the Directors 34

- Board of Directors 34

- Directors’ Report 35

- Corporate Governance Statement 39

- Report of the Audit Committee 42

- Directors’ Remuneration Report 44

- Statement of Directors’ Responsibilities 48

Independent Auditor’s Report 49

Financial Statements 54

Information for Shareholders 78

- Shareholder Information 78

- Performance Data at 31 March 2022 80

- VCT Tax Benefits for the Investor 82

- Notice of the Annual General Meeting 83

- Glossary of terms 86

- Corporate Information 87

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Results for the year ended 31 March 2022

As at 31 March 2022:

Net assets: £77.51 million

Net Asset Value (“NAV”) per share: 96.37 pence

➤ Net asset value (“NAV”) total return

per share of 13.3%.

➤ Share price total return

per share of 23.4%.

➤ Dividends paid and declared in respect of the year amounted to 12.00 pence

per share. Cumulative dividends paid

amount to 134.00 pence per share.

➤ £4.61 million was invested into three new growth capital investments and

seven existing portfolio companies during the year.

➤ Strong portfolio performance generated £9.55 million of unrealised gains.

➤ The Company realised investments totalling £6.37 million of cash proceeds

and generated net realised gains of £2.54 million.

Definitions of key terms and alternative performance measures (“APMs”)/Key Performance Indicators (“KPIs”) shown above and throughout this

report are provided in the Glossary of terms on page 86.

Performance Summary

The table below shows the recent past performance of the current share class, first raised in 2005/06 at an original subscription

price of 100 pence per share, before the benefit of income tax relief. Performance data for all fundraising rounds are shown in the

tables on pages 8 to 11 of this Annual Report.

Reporting date

as at

Net assets

(£m)

Net asset

value (NAV)

per

(p)

Share price

(mid-market

price)

(p)

Cumulative

dividends

paid per

(p)

Cumulative total return per

share since launch

Dividends

paid and

declared in

respect of

each year

(p)

(NAV basis)

(p)

(Share

price basis)

(p)

31 March 2022 77.51 96.37 87.50 134.00 230.37 221.50 12.00

31 March 2021 73.90 100.91 85.50 116.00 216.91 201.50 13.00

31 March 2020 43.57 72.99 70.50 109.00 181.99 179.50 26.00

31 March 2019 48.73 99.60 85.50 83.00 182.60 168.50 5.00

31 March 2018 47.60 96.54 86.50 78.00 174.54 164.50 16.00

Definitions of key terms and alternative performance measures (“APMs”)/Key Performance Indicators (“KPIs”) shown above and throughout this

report are provided in the Glossary of terms on page 86.

Source: Panmure Gordon & Co (mid-market price).

Financial Highlights and

Performance Summary

Financial Highlights

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

I am pleased to present the

annual results of Mobeus

Income & Growth 2 VCT plc

for the year ended

31 March 2022.

Overview

Following on from last year’s record

performance, your Company has

experienced another year of strong

trading and growth in the value of its

portfolio at 31 March 2022. The

Company achieved an NAV total return

per share of 13.3% for the year (2021:

47.8%).

Although the year under review was

marked by many challenges, the

portfolio proved to be resilient and

adaptive in facing them. The threat from

global supply issues in logistics,

materials and labour resulting from

COVID-19 disruption is expected to

remain for some months and the

unfolding geopolitical events relating to

the war in Ukraine has added to the

uncertainty. We are starting to see the

impact of inflationary pressures on

consumer confidence although, for the

most part, trading for your Company’s

largely service and software-based

portfolio remains robust.

Despite Brexit concerns and

considerable COVID-19 related

restrictions across the year, M&A activity

remained buoyant and the Investment

Adviser continues to see healthy deal

flow. The Company deployed £4.61

million of investment capital and

generated £6.37 million in realisation

proceeds as, in that time, it realised two

of its investments and added three new

and seven follow-on investments to the

portfolio.

Shareholders should note that following

the listing on AIM of two portfolio

companies shortly before the previous

year-end 7.8% of the portfolio value is in

AIM listed entities. This increases the

potential volatility in the value of the

Company’s portfolio and subsequent NAV

returns. The initial uplift in value following

their IPOs in March 2021 has been eroded

after a number of unfavourable trading

statements led to a significant reduction

in their share prices. The remainder of the

portfolio largely demonstrated strong

performance and growth over the same

period.

We are witnessing a clear demonstration

of the benefits of what is now a diverse

and maturing portfolio. Following the 2015

VCT rule change, the revised investment

strategy is bearing fruit as more of these

young growth investments start to achieve

significant scale and value. Several

third-party investments have validated this

view, resulting in significant positive

re-ratings in values of portfolio

businesses, such as MPB, MyTutor and

Bella & Duke. The Company has also

provided support for the scaling of

investments such as Preservica, with

significant further funding in November

2021. Additional information on value

movements is given in the Investment

Adviser’s Review on pages 12 to 19.

The Company launched an Offer for

Subscription on 20 January 2022

alongside the three other Mobeus VCTs

(“Offers”) and the Board was very pleased

to see that unprecedented demand

meant that the target of £7.5 million was

reached in less than 24 hours, at which

point no further applications were

accepted. It was gratifying that

approximately half of the applications

received were from existing Shareholders

in the Company. The subsequent

allotment of shares has now bolstered the

Company’s capital to deploy in new and

exciting investment opportunities.

The Board acknowledges that not all of

our existing Shareholders were able to

subscribe to the Offer due to the

unexpectedly rapid response and were

disappointed. Consequently, the Board

will explore several options in order to

give all Shareholders the same

opportunity to invest whether

electronically, by email or by post for any

future fundraise.

Performance

NAV total return, expressed on a pence

per share basis, was derived as follows:

Year ended 31 March

2022

(pence

per

share)

2021

(pence

per

share)

Net realised and

unrealised gains on the

investment portfolio 15.04 34.63

Income from the

investment portfolio and

liquid assets 1.34 2.32

Share buybacks and

adjustments 0.89 0.07

Gross return 17.27 37.02

Less: Investment

Adviser’s fees and other

expenses (3.81) (2.10)

Net return 13.46 34.92

NAV total return per

share 13.3% 47.8%

The Company’s NAV total return per

share was 13.3% for the year to 31 March

2022 (2021: 47.8%) being the closing

NAV per share of 96.37 pence plus

18.00 pence of dividends paid in the

year (this includes 6.00p interim

dividend for the year ended 31 March

2021), divided by the opening NAV per

share of 100.91 pence. The share price

total return was 23.4% (2021: 31.2%). The

difference between the share price and

NAV total returns arises principally due

to the timing of NAV announcements,

which are usually made on a date

following the date to which they relate

and is explained more fully under

Performance in the Strategic Report on

pages 8 to 11. The positive NAV total

return for the year was principally the

result of unrealised gains in the value of

investments still held, as well as realised

gains achieved via exits and partial

realisations of several portfolio

companies. The continued strong NAV

performance, in addition to dividends

paid in excess of the agreed target rate

has resulted in a performance incentive

fee amounting to £1,014,703 payable to

the Investment Adviser for the year (for

further details please refer to Note 4b on

pages 61).

At the year-end, the Company was ranked

out of 41 Generalist VCTs over five

years and 1

out of 31 Generalist VCTs

over ten years, in the Association of

Investment Companies’ (“AIC”) analysis of

Cumulative NAV Total Return.

Shareholders should note that the AIC’s

rankings are based on the latest available

published NAVs and therefore did not

reflect the NAV per share of the Company

at 31 March 2022. For further details on

the performance of the Company, please

refer to the Strategic Report on pages 8 to

11.

Target Return

The Board’s current target is to achieve an

average NAV total return of 8.0% per

annum. This year’s 13.3% (2021: 47.8%) has

contributed to an average over five years

of 14.9% per annum, well in excess of the

target.

The Board reminds Shareholders that

investment portfolio returns and dividend

payments should always be viewed over

the longer term.

Dividends

The Board continues to be committed to

providing an attractive dividend stream

to Shareholders. In respect of the year

ended 31 March 2022, the Company has

declared and paid a dividend of 12.00

pence per share to Shareholders. This

dividend was paid on 7 January 2022 to

Shareholders on the register on

10 December 2021. To date, cumulative

dividends paid since inception total

134.00 pence per share.

Chairman’s Statement

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

The Company has now met or exceeded

the Board’s annual dividend target of

paying at least 5.00 pence per share, for

the last twelve financial years.

As Shareholders have been advised

previously, the gradual move of the

portfolio to younger growth capital

investments as well as the realisations of

older, more mature companies that have

provided a good income yield, are likely

to make dividends harder to achieve

from income and capital returns alone in

any given year. The Board aims to

distribute realised profits (such as

income and gains from realisations)

achieved in a year as dividends but

notes that a reduction in income

received by the Company was seen

during the year. The Board, therefore,

continues to monitor the sustainability of

the annual dividend target. Shareholders

should also note that there may continue

to be circumstances where the

Company is required to pay dividends in

order to maintain its regulatory status as

a VCT, for example, to stay above the

minimum percentage of assets required

to be held in qualifying investments.

Such dividends paid in excess of net

income and capital gains achieved will

cause the Company’s NAV per share to

reduce by a corresponding amount.

Investment and portfolio

performance

The portfolio movements across the

year were as follows:

2022

£mn

2021

£mn

Opening portfolio value 41.83 21.99

New and further investments 4.61 5.39

Disposal proceeds (6.37) (10.91)

Net realised gains 2.54 4.77

Valuation movements 9.55 20.59

Portfolio value at 31 March 52.16 41.83

During the year, the Company invested a

total of £4.61 million into three new and

seven existing portfolio companies

(2021: £5.39 million; five new, eight

existing). New investments totalling £1.73

million were made into Legatics (a SaaS

LegalTech software business), Vet’s

Klinic (a veterinary clinic roll out) and

Proximity Insight (a retail platform). This

investment into Proximity Insight is the

first investment made since the

acquisition of the Mobeus VCT

investment advisory business by

Gresham House and the Company’s

investment was made alongside the

other VCTs advised and managed by

Gresham House (the three other Mobeus

VCTs and the two Baronsmead VCTs). In

accordance, with the agreed allocation

policy, the Company contributed £0.56

million towards a total Gresham House

supported investment of £5.00 million.

Additional funding of £2.88 million was

provided across seven existing portfolio

companies: Bella & Duke (a frozen raw

dog food provider), Caledonian Leisure

(a UK Leisure Breaks provider), Tapas

Revolution (a Spanish restaurant chain),

MyTutor (an online tutoring marketplace),

Andersen EV (a producer of premium EV

chargers), ActiveNav (a provider of

enterprise-level file analysis software),

and Preservica (a proprietary digital

archiving software provider).

The Company generated £5.06 million in

proceeds from the realisation of its

investments in Proactive Group (£1.60

million) and Red Paddle (£3.46 million)

during the year. In addition to proceeds

received from the partial realisation of

MyTutor (£0.52 million), together with

loan repayments and deferred proceeds

totalling £0.79 million, the Company

generated total proceeds of £6.37

million in the year to 31 March 2022.

The portfolio has performed well over

the Company’s financial year. The

portfolio achieved £12.09 million (2021:

£25.36 million) in realised and unrealised

gains in the year, being 28.9% (2021:

115.3%) of the opening portfolio value.

The portfolio was valued at £52.16 million

at the year-end (2021: £41.83 million).

Within net realised gains, the principal

contributors were the full realised gains

of Proactive Group and Red Paddle (total

of £2.21 million). Total proceeds received

over the life of investments in Proactive

Group (£1.63 million) and Red Paddle

(£3.86 million) generated multiples of

cost of 2.6x (IRR: 33.0%) and 5.4x (33.2%)

respectively. Further realised gains were

also generated from the partial

realisation of MyTutor (£0.26 million).

The portfolio’s valuation at the year-end

demonstrates the continued beneficial

impact of changes in UK consumer and

business behaviour brought on by the

pandemic and lockdown restrictions,

particularly for those businesses

operating direct-to-consumer models.

However, it also underscores the

success of portfolio companies in

adapting to a rapidly changing

environment, becoming more efficient

and diversifying their product offering in

order to take advantage of opportunities

that have arisen. This level of resilience

has enabled the portfolio to continue to

trade well in what have been challenging

global market conditions in the second

half of the Company’s financial year.

As anticipated, the Company’s quoted

stocks such as Virgin Wines and Parsley

Box are subject to stock market

movements and have brought an

additional level of volatility to a portion of

the portfolio. In the second half of the

year, these investments saw a significant

value decline in the face of changing

market sentiment and announcement of

results which were below market

expectations. Your Board remains

confident in the future prospects of both

these AIM quoted businesses.

In contrast, there have been pleasing

unquoted valuation increases,

supported by a sizeable further

investment from the Mobeus VCTs in the

case of Preservica, and by third-party

investment transactions in the cases of

MyTutor, MPB and Bella & Duke.

The portfolio achieved a net increase in

unrealised valuations of £9.55 million for

the year in investments still held, with

the biggest value increases in

Preservica, Bella & Duke and Media

Business Insight partially offset by

valuation falls at Virgin Wines and

Parsley Box, as well as modest falls at

Bleach London and ActiveNav. For

further information on portfolio valuation

movements, see the Investment

Adviser’s Review on pages 14 to 15.

Further details of the Company’s

investment activity (including

transactions that have occurred after the

year end) and the performance of the

portfolio are contained in the Investment

Adviser’s Review and the Investment

Portfolio Summary on pages 12 to 26.

Liquidity & Fundraising

Cash and cash equivalents held by the

Company as at 31 March 2022 amounted

to £26.26 million, or 33.9% of net assets.

On 20 January 2022, the Company

launched an Offer for Subscription of £7.50

million, alongside Offers from the other

Mobeus VCTs. As previously stated in my

Overview on page 3, the Offers

experienced unprecedented demand such

that the Company received subscriptions

amounting to the full amount sought within

24 hours of launching and was

subsequently then closed to further

applications. In accordance with the Offers’

prospectus, the allotment of all shares

under the offer took place on

9 March 2022, and generated net funds

(after costs) of £7.26 million. In

consideration of environmental factors and

cost savings, the Company elected to

release the Prospectus digitally, with hard

copies available on request, and invite

applications to be submitted online via a

digital portal. This method provided

increased security and efficiency in the

Chairman’s Statement

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

application process and the Board strongly

recommends that Shareholders wishing to

subscribe to any future offers opt to submit

their applications via the online facility.

Share buy-backs

During the year, the Company bought

back and cancelled 697,498 of its own

shares (2021: 387,471), representing 1.0%

of the shares in issue at the beginning of

the year (2021: 0.7%), at a total cost of

£0.64 million, inclusive of expenses

(2021: £0.29 million). It is the Company’s

policy to cancel all shares bought back

in this way. The Board regularly reviews

its buyback policy and currently seeks to

maintain the discount at which the

Company’s shares trade at no more than

5% below the latest published NAV.

Shareholder Communications &

Annual General Meeting

May I remind you that the Company’s

website is available at: www.mig2vct.co.uk.

The Investment Adviser held a virtual

Shareholder Event on the morning of

25 February 2022. A presentation was

provided by representatives of each of

the Mobeus VCT Boards as well as the

Investment Adviser and the key

executives of two portfolio companies,

Virgin Wines and Media Business Insight.

A recording of the event is available

here: https://mvcts.connectid.cloud/

Your Board is pleased to be able to hold

the next Annual General Meeting

(“AGM”) of the Company in person at

11.00 am on Wednesday, 21 September

2022 at the offices of Shakespeare

Martineau LLP, 6th Floor, 60

Gracechurch Street, London, EC3V 0HR.

A webcast will also be available at the

same time for those Shareholders who

cannot attend in person. However,

please note that you will not be able to

vote via this method and so are

encouraged to return your proxy form

before the deadline of 11:00 am on

Monday, 19 September 2022.

Information setting out how to join the

meeting by virtual means will be shown

on the Company’s website. For further

details, please see the Notice of the

Meeting which can be found at the end

of this Annual Report & Financial

Statements, on pages 83 to 85.

Board Composition & Succession

The Board comprised three directors

throughout the year. After considering

and reviewing its composition, the Board

agreed that the directors have the

breadth and depth of relevant

knowledge and experience plus the

appropriate skill sets. The Board consists

of two male and one female directors.

Adam Kingdon has advised of his wish

to retire as a director of the Company

immediately following the AGM in

September 2022. Adam has provided an

invaluable contribution to the Board

whilst a director of the Company, for

which we are very grateful. The Board

will be considering its composition and

succession in light of this.

Fraud Warning

We have been made aware that

Shareholders are being contacted in

connection with sophisticated but

fraudulent financial scams which purport to

come from the Company or to be

authorised by it. This is often by a phone

call or an email usually originating from

outside of the UK, claiming or appearing to

be from a corporate finance firm offering to

buy your shares at an inflated price.

The Board strongly recommends

Shareholders take time to read the

Company’s Fraud warning section,

including details of who to contact,

contained within the Information for

Shareholders section on pages 78 to 79.

Environmental, Social and

Governance (“ESG”)

The Board and the Investment Adviser

believe that the consideration of

environmental, social and corporate

governance (“ESG”) factors throughout

the investment cycle will contribute

towards enhanced shareholder value.

Following the novation of the investment

advisory agreement to Gresham House,

who have a dedicated team which is

focused on sustainability, the Board

views this as an opportunity to enhance

the Company’s existing protocols and

procedures through the adoption of the

highest industry standards. Under the

new enlarged investment team, each

investment executive is responsible for

their own individual ESG objectives in

support of the wider overarching ESG

goals of the Investment Adviser. For

further details, Gresham House

published its inaugural Sustainable

Investment Report in 2022, which can

be found on its website at:

www.greshamhouse.com.

Your Board would like to assure

Shareholders that ESG matters form a

key consideration in investment

decisions. The FCA reporting

requirements consistent with the Task

Force on Climate-related Financial

Disclosures commencing from 1 January

2021 do not currently apply to the

Company but will be kept under review,

the Board being mindful of any

recommended changes.

Outlook

The year under review can be

characterised as a continuation of the

challenging environment created for

businesses by COVID-19 and Brexit.

However, much in the same way that we

were able to report on its remarkable

recovery one year ago, the Company

has continued to achieve success in

creating opportunities and building on

them. This has been exemplified by

strong trading performances and value

growth across the portfolio and

continued strong levels of investment

activity.

However, we anticipate that the indirect

effects of the COVID-19 pandemic and

Brexit will continue to impact the UK

economy and bring an element of

uncertainty for some time to come, most

notably in the form of supply chain and

inflationary pressures. More recently, the

distressing invasion of Ukraine has sent

shockwaves through global financial

markets. Whilst the portfolio has limited

direct exposure to Eastern Europe,

Russia’s action has introduced a

disruptive factor which cannot yet be

fully measured. This combination of

factors is causing a shortage of many

resources and supply chain disruption.

Furthermore confidence is being eroded

as inflation and interest rates increase.

Nonetheless, despite its caution your

Board considers that your Company is

well positioned to adapt as necessary.

The Board was very pleased to have

witnessed such a positive response to

the launch of the Company’s Offer for

subscription in January and would like to

thank all Shareholders for their interest

in applying for the Company’s shares.

The Board has been satisfied with the

Company’s ability to maintain a high rate

of investment in quality opportunities

over the year. It believes that the

additional fundraising will provide the

necessary capital to continue to create

value growth for Shareholders in what

has, to date, proven to be a successful

investment strategy.

I would like to take this opportunity once

again to thank all Shareholders for your

continued support and to extend a warm

welcome to new Shareholders.

Ian Blackburn

Chairman

29 June 2022

Chairman’s Statement

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Company Objective and

Business Model

Introduction

The Directors are pleased to present the

Strategic Report of the Company for the

year ended 31 March 2022. The purpose

of this Report is to inform Shareholders

and help them assess how the Directors

have performed their duty to promote the

success of the Company.

The Report has been prepared by the

Directors in accordance with section 414A

of the Companies Act 2006 (“the Act”).

Objective

The Objective of the Company is to

provide investors with a regular income

stream, arising both from the income

generated by the companies selected

for the portfolio and from realising any

growth in capital, while continuing at all

times to qualify as a VCT.

Summary of Investment Policy

The Company’s policy is to invest

primarily in a diverse portfolio of UK

unquoted companies. Investments are

generally structured as part loan and

part equity in order to produce a regular

income stream and to generate capital

gain from realisations.

The Company’s cash and liquid funds

are held in a portfolio of readily

realisable interest bearing investments

which can be of varying maturities,

subject to the overriding criterion that

the risk of loss of capital be minimised.

The Company will seek to make

investments in accordance with the

requirements of prevailing VCT

legislation. A summary of this is set out

overleaf, in the table “Summary of VCT

Regulation”.

The Company and its

Business Model

The Company is a Venture Capital Trust.

Its Objective and Investment Policy are

designed to ensure that it continues to

qualify as a VCT, and continues to be

approved as such by HM Revenue &

Customs, whilst maximising returns to

Shareholders from both income and

capital. A summary of the most important

rules that determine VCT approval is

contained in the panel headed

“Summary of VCT Regulation” on the

next page.

The Company is a fully listed company

on the London Stock Exchange, which

also fulfils a VCT regulatory requirement.

It is therefore also required to comply

with the Listing Rules governing such

companies.

The Company is an externally advised

Fund with a Board comprising Non-

Executive Directors. The Board has

overall responsibility for the Company’s

affairs including the determination of its

Investment Policy (material changes to

which are subject to approval by

Shareholders). Investment advice and

operational support are outsourced to

external service providers (including the

Investment Adviser, Company Secretary

and Administrator and Registrar), with

the key strategic and operational

framework and key policies set and

monitored by the Board. Investment and

divestment proposals are originated,

negotiated and recommended by the

Investment Adviser and are then subject

to review and approval by the Directors.

The Company previously invested

alongside three other VCTs advised by

Mobeus in proportion to the relative net

assets of each VCT at the date the

investment proposal submitted to each

Board. Following the acquisition of the

VCT investment advisory business of

Mobeus Equity Partners LLP on

30 September 2021 by Gresham House,

the Investment Manager of the two

Baronsmead VCTs, the Company now

will co-invest alongside the Baronsmead

VCTs and the Mobeus VCTs in new

unquoted VCT qualifying investments in

proportion to the relative net assets of

each VCT (excluding direct AIM

investments).

The total percentage of equity held in

each investment by all funds advised by

Gresham House is shown in Note 9 on

page 67.

Private individuals invest in the

Company to benefit from both income

and capital returns from the portfolio. By

subscribing for shares in a VCT they also

receive immediate income tax relief

(currently 30% of the amount subscribed

by an investor). Investors receive

tax-free dividends from the Company

and incur no capital gains tax upon the

eventual sale of the shares. These tax

benefits are subject to the VCT

The Company’s business model is set out in the diagram below.

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

To maintain its status as a VCT, the

Company must meet a number of

conditions, the most important of which

are that:

●● the Company must hold at least

80%, by VCT tax value

, of its total

investments (shares, securities and

liquidity) in VCT qualifying holdings,

within approximately three years of

a fundraising;

●● all qualifying investments made by

VCTs after 5 April 2018, together

with qualifying investments made

by funds raised after 5 April 2011

are, in aggregate, required to

comprise at least 70% by VCT tax

value in “eligible shares”, which

carry no preferential rights (save as

may be permitted under VCT rules);

●● no investment in a single company

or group of companies may

represent more than 15% (by VCT

tax value) of the Company’s total

investments at the date of

investment;

●● the Company must pay sufficient

levels of income dividend from its

revenue available for distribution so

as not to retain more than 15% of its

income from shares and securities

in a year;

●● the Company’s shares must be

listed on a regulated European

stock market;

●● non-qualifying investments cannot

be made, except for certain

exemptions in managing the

Company’s short-term liquidity;

●● VCTs are required to invest 30% of

funds raised in an accounting

period beginning on or after 6 April

2018 in qualifying holdings within 12

months of the end of the accounting

period; and

●● the period for reinvestment of

proceeds on disposal of qualifying

investments is 12 months.

To be a VCT qualifying holding, new

investments must be in companies:

●● which carry on a qualifying trade;

●● which have no more than £15 million

of gross assets at the time of

investment and no more than £16

million immediately following

investment from VCTs;

●● whose maximum age is generally

up to seven years (ten years for

knowledge intensive businesses);

●● that receive no more than an annual

limit of £5 million and a lifetime limit

of £12 million (for knowledge

intensive companies the annual limit

is £10 million and the lifetime limit is

£20 million), from VCTs and similar

sources of State Aid funding; and

●● that use the funds received from

VCTs for growth and development

purposes.

In addition, VCTs may not:

●● offer secured loans to investee

companies, and any returns on loan

capital above 10% must represent

no more than a commercial return

on the principal; and

●● make investments that do not meet

the ‘risk to capital’ condition (which

requires a company, at the time of

investment, to be an

entrepreneurial company with the

objective to grow and develop, and

where there is a genuine risk of loss

of capital).

VCT tax value means as valued in

accordance with prevailing VCT legislation.

The calculation of VCT tax value is arrived

at using tax values, based on the cost of the

most recent purchase of an investment

instrument in a particular company, which

may differ from the actual cost of each

investment shown in the Investment

Portfolio Summary on pages 24 to 26.

Strategic Report

Summary of VCT Legislation

To assist Shareholders, the following table contains a summary of the most important rules that determine VCT approval.

maintaining its approved VCT status and

the shares being held for a minimum of

five years from the date of subscription.

Page 82 contains information setting out

the tax benefits for an investor in VCT

shares.

The Company’s investee companies are

primarily unquoted businesses and

operate in the UK. These businesses

fulfil the criteria and characteristics as

set out in the current Investment Policy.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Performance and Key Performance Indicators

The Board has identified six key performance indicators that are used in its own assessment of the Company’s progress. Some of

these are classified as alternative performance measures (“APMs”) in line with Financial Reporting Council (“FRC”) guidance. See

Glossary of terms for details on page 86. APMs are measures of performance that are in addition to the data reported in the

Financial Statements. It is intended that these will provide Shareholders with sufficient information to assess how the Company

has performed against its Objectives in the year ended 31 March 2022, and over the longer-term, through the application of its

investment and other principal policies:

1. Annual and cumulative returns per share for the year

The Company’s objective is to generate long-term growth in capital and income. To assess this, the Board monitors the growth

in total returns per share, both on a NAV basis and a share price basis, adjusted for dividends paid in the year. NAV basis reflects

the net assets of the Company and share price basis reflects the price at which a Shareholder could expect to sell their shares.

These are the most widely used measures of performance in the VCT sector.

Total returns per share for the year

The Net Asset Value and share price total returns per share for the year ended 31 March 2022 were 13.3% and 23.4%

respectively, as shown below:

NAV basis

(p)

Share price

basis

(p)

Closing NAV per share 96.37 Closing share price 87.50

Plus: dividend paid in year 18.00 Plus: dividend paid in year 18.00

NAV Total return for year 114.37 Share Price Total return for year 105.50

Less: opening NAV per share 100.91 Less: opening share price 85.50

Increase in NAV total return for year

per share (Note 1) +13.46

Increase in Share Price total return for

year per share (Note 2) +20.00

% NAV total return for year 13.3% % Share Price total return for year 23.4%

The analysis of the source of the NAV total returns is set out below:

Note 1: NAV total return per share for the year is comprised of:

Year ended 31 March

2022

(pence)

2021

(pence)

Gross portfolio capital returns 15.04 34.63

Gross income returns 1.34 2.32

Costs (3.81) (2.10)

Other movements 0.89 0.07

NAV return for the year as above 13.46 34.92

The contributions from portfolio returns and income are shown before deducting attributable costs. They are explained below

under review of financial performance for the year. Costs are referred to in section 6 on page 11.

Note 2: The Share Price total return differs from the NAV total return because the share prices quoted are typically by reference

to the latest announced NAV per share. In respect of the year to 31 March 2022, the share price total return is higher than the

NAV total return because the opening share price at 31 March 2021 did not contain a 13.69 pence NAV per share increase that

occurred in the final quarter of the year to 31 March 2021. The uplift was not reflected in the share price at 31 March 2021 until the

year-end NAV was announced on 30 June 2021.

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Cumulative total returns per share (NAV basis)

The longer term trend of performance on this measure is shown in the chart below:-

Pence

per share

Net Asset Value Cumulative dividends paid

100

110

120

130

140

150

160

31/03/2021 31/03/202231/03/202031/03/201931/03/201831/03/2017

Cumulative

NAV total

return

(pence per

share)

168.70 181.99 216.91 230.37182.60174.54

170

180

190

200

210

220

230

106.70

62.00

96.54

78.00

99.60

83.00

72.99

109.00

100.91

116.00

96.37

134.00

For similar performance data to that shown above for each allotment in each fundraising since the inception of the Company,

please see the Performance Data on pages 80 to 81 of this Annual Report.

Review of financial results for the year ended 31 March 2022:

2022

£mn

2021

£mn

Capital profit 9.84 24.50

Revenue profit 0.27 1.02

Total profit 10.11 25.52

The capital profit for the year of £9.84 million (12.24 pence of NAV return for the year per share, net of costs charged to capital) is

primarily due to a net increase in the unrealised valuation of portfolio companies as well as realised gains from the full exit of

Vian Marketing (trading as Red Paddle) and the partial realisation of MyTutorweb. The decrease in capital returns from £24.50

million is principally due to lower realised gains of existing portfolio companies compared to 2021 and a lower level of unrealised

gains (£11.03 million fall).

The revenue profit for the year of £0.27 million (0.33 pence of NAV return for the year per share, net of costs charged to revenue)

is derived from income, primarily loan interest, exceeding revenue expenses. The decrease from the previous year is mainly due

to a fall in dividend income. The lower revenue return also resulted from higher expenses charged to revenue (mainly due to

higher Investment Adviser fees arising from higher net assets over the year), partially offset by a reduction in the revenue tax

charge.

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

2. The VCT’s performance compared with its peer group performance

The Board places emphasis on benchmarking the Company’s performance against a peer group of generalist VCTs and aims

to maintain the Company’s performance within the top quartile of this peer group.

Using the benchmark of NAV Cumulative total return on an investment of £100, performance is as follows:

Year to 31 March 2022 Ranking Number of VCTs (AIC generalist VCTs)

10 years 1

5 years 7

3 years 6

1 year 22

Source: Association of Investment Companies (“AIC”) based on statistics prepared by Morningstar as at 31 March 2022.

The Company has maintained a ranking with the Board’s target of being within the top quartile compared to a peer group of AIC

Generalist VCTs across the 3, 5 and 10-year periods and will strive to improve the relative performance over the 1-year period.

Shareholders should note that the 1-year performance figures are heavily impacted by the timing of results and therefore the

rankings can be subject to a high degree of volatility.

3. Dividends paid compared with dividend target

The Board has set a target of paying a regular dividend of not less than 5.00 pence per share in respect of each financial year.

Whilst the Board cannot guarantee future payments, it believes this target is still achievable although, as the proportion of more

established income generating investments in the portfolio reduces, it will become more challenging.

Pence

per share

Dividends paid/payable in respect of the year Cumulative dividends paid/payable in respect of the year

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

110.00

120.00

31/03/202231/03/202131/03/202031/03/201931/03/2018

16.00

78.00

5.00

83.00

26.00

109.00

13.00

130.00

140.00

122.00

12.00

134.00

An interim dividend declared for the year ended 31 March 2022 of 12.00 pence per share, was paid on 7 January 2022 to

Shareholders on the Register of Members as at the record date of 10 December 2021. The 12.00 pence dividend in respect of the

year ended 31 March 2022 exceeded the Company’s 5.00 pence dividend target for the year.

4. Compliance with VCT legislation

In making their investment in a VCT, Shareholders become eligible for several tax benefits under VCT tax legislation, as long

as the Company also complies with VCT tax legislation. To achieve this, the Company must meet a number of tests set by the

VCT tax legislation. The principal tests are summarised in the panel entitled ‘Summary of VCT Legislation’ on page 7. In respect

of the year ended 31 March 2022, the Company continued to meet these tests.

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

5. Share price and discount to NAV

The Board recognises that Shareholders may wish to sell their shares from time to time and that the secondary market for VCT

shares can be limited. The impact of this limited secondary market is that the Company’s share price will typically trade at a level

which is less than the Company’s NAV per share. Subject to the Company having sufficient available funds and distributable

reserves, it is the Board’s current intention to pursue a buyback policy with the objective of maintaining the discount to the latest

published NAV per share at which the shares trade at approximately 5% or less. It has succeeded in carrying out this objective in

the year.

The discount for the Company’s shares at 31 March 2022 was 4.9% (2021: 2.0%) based upon the share price shown in the

Performance Summary on page 11 and the NAV at 28 February 2022 of 91.98 pence per share.

The Board considers that a 5% discount represents a fair balance between assisting investors who wish to sell shares and the

majority of investors who wish to continue to invest in a portfolio of investments in unquoted shares. Any future purchases will be

subject to the Company having appropriate authorities from Shareholders and sufficient funds available for this purpose. Share

buybacks will also be subject to the Listing Rules and any applicable law at the relevant time. Shares bought back in the market

are always cancelled. Continuing Shareholders benefit from the difference between the NAV and the price at which the shares

are bought back and cancelled.

During the year ended 31 March 2022, Shareholders holding 0.70 million shares, expressed their desire to sell their investments.

The Company instructed its brokers, Panmure Gordon (UK) Limited (“Panmure Gordon”), to purchase these shares at prices

representing a discount of approximately 5% to the previously announced NAV per share. The Company subsequently

purchased these shares at prices between 87.83 and 97.92 pence per share and cancelled them.

In total, during the year the Company bought back 1.0% of the issued share capital of the Company at the beginning of the year.

6. Costs

Shareholders will be aware there are a number of costs involved in operating a VCT. Although Shareholders do not bear

ongoing costs in excess of the expense cap of 3.60%, the Board aims to maintain the ratio before any performance fees at

not more than 3%.

The Board monitors costs using the Ongoing Charges Ratio which is set out in the table below:

2022 2021

Ongoing charges 2.50% 2.36%

Performance fee 1.29% 0.00%

Ongoing charges plus accrued performance fee 3.79% 2.36%

The Ongoing Charges Ratio has been calculated using the Association of Investment Companies recommended methodology.

The ratio of 2.50% is well within the Board’s target ratio of 3%. The increase in the ratio from 2.36% to 2.50% over the year

reflects the rise in other expenses partially offset by higher average net assets over the year.

Investment Adviser fees and other expenses

Investment Adviser fees have increased from £1.20 million to £1.65 million, charged to both revenue (increase of £0.11 million) and

capital (increase of £0.34 million). This was mainly due to the net asset value, upon which Investment Adviser’s fees are

calculated (quarterly in arrears) being higher for most of the year. Also, the Investment Adviser performance incentive fee targets

were achieved during the year resulting in an accrued performance fee of £1.01 million. Other expenses (all charged to revenue)

have increased by £0.06 million to £0.40 million. This resulted from a combination of a rise in professional, registrar and printing

fees.

Further details of these are contained in Note 4 to the Financial Statements on pages 60 to 62 of this Annual Report.

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Investment Adviser’s Review

Portfolio Review

Having recovered from the COVID-19

related decline in value by the start of

the Company’s financial year, the

portfolio continues on a positive

trajectory.

Widespread volatility of global markets

and negative sentiment have hampered

the ability of businesses to sustain the

exceptional performance of the previous

financial year. Nevertheless, a

continuation of steady underlying

trading by the majority of investee

companies bolstered by a small number

of significant re-ratings has ensured that

the portfolio has nonetheless been able

to record portfolio value growth of 28.9%

over the year, with combined net

unrealised and realised gains of £12.09

million.

A limited number of portfolio companies

experienced disruption as a result of the

UK lockdowns, but it is pleasing to report

that a significant proportion have

benefited from what appears to be a

structural change in consumer

purchasing habits. Indeed, the majority

of the portfolio companies are now

trading above their pre COVID-19 levels.

Overall, the majority of the portfolio has

demonstrated a high degree of

resilience, with the vast majority of

companies by number showing revenue

and/or earnings progression over the

previous two years. Investments

classified as Retailers now comprise

over 44% of the portfolio by value, all of

which are demonstrating the success of

the direct-to-consumer business model.

Significant positive re-ratings in the

unquoted portfolio have been a

consistent feature across the year, with

third-party investment driving value

uplifts in MPB (£0.63 million) and Bella &

Duke (£3.00 million), and a sizeable

further investment from the Mobeus

VCTs doing the same in the case of

Preservica (£5.02 million). Whilst the

portfolio has limited exposure to more

challenging sectors such as hospitality

and overseas travel, software and other

technology-enabled businesses have

performed strongly. A small number of

companies have struggled, though they

are in the minority and their impact on

overall shareholder return is minimal.

Furthermore, some of these companies,

such as Media Business Insight and RDL,

have fundamentally re-engineered their

businesses, which should provide a

more positive outlook.

It is noted that Preservica and Bella &

Duke currently account for a significant

proportion of the invested portfolio’s

value (27.9% of the portfolio value, 18.8%

of net assets), with 7.8% of the portfolio

now held in AIM-listed investments

(which equates to 5.2% of net assets).

The AIM market has witnessed some

volatility in the second half of the

Company’s financial year, with negative

market sentiment compounding a period

of challenging customer recruitment to

result in value reductions for both Virgin

Wines and Parsley Box. In line with

market practice, in both cases the

Company’s shareholdings are subject to

lock-up arrangements for a period

post-flotation.

Strong trading activity levels have

created investment opportunities for the

Company as portfolio companies sought

to enhance their positions by building

capability in light of demand. A number

of further investments were therefore

made into the portfolio during the year.

Gresham House continues to review the

opportunities for follow-on investments.

M&A sentiment also remained buoyant

with a continuing stream of attractive

realisations throughout the year. The

outlook for both follow-on investment

and realisations continues to be positive.

The Company made investments

totalling £4.61 million (2021: £5.39

million), comprising £1.73 million (2021:

£2.37 million) into three new investments

and £2.88 million (2021: £3.02 million)

into seven existing investments. This

level of new and follow-on investment is

pleasing given the continued uncertainty

and lockdown restrictions during the

year under review.

A strong track record for the growth

investments has emerged which

validates the strategic change arising

from the amendment to VCT rules in

2015. Overall, it is reassuring to see that

the more traditional investments, as well

as the growth investments, are

continuing to make good progress.

The portfolio’s valuation changes in the year are summarised as follows:

Investment Portfolio Capital Movement 2022

£mn

2021

£mn

Increase in the value of unrealised investments 14.91 21.42

Decrease in the value of unrealised investments (5.36) (0.83)

Net increase in the value of unrealised investments

9.55 20.59

Realised gains 2.54 4.81

Realised losses - (0.04)

Net realised gains in the year 2.54 4.77

Net investment portfolio movement in the year 12.09 25.36

The portfolio movements in the year are summarised as follows:

2022

£mn

2021

£mn

Opening portfolio value 41.83 21.99

New and further investments 4.61 5.39

Disposal proceeds (6.37) (10.91)

Net realised gains 2.54 4.77

Valuation movements 9.55 20.59

Portfolio value at 31 March 52.16 41.83

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

New Investments during the year

A total of £1.73 million was invested into three new investments during the year, as detailed below:

Company Business Date of

investment

Amount of new

investment (£mn)

Legatics

SaaS LegalTech software

business

June 2021 0.61

Legatics (legatics.com) transforms legal transactions by enabling deal teams to collaborate and close deals in an interactive

online environment. Designed by lawyers to improve legacy working methods and solve practical transactional issues, the

legal transaction management platform increases collaboration, efficiency and transparency. As a result, Legatics has been

used by around 1,500 companies, and has been procured by more than half of the top global banking and finance law firms,

with collaborations having been hosted in approximately 50 countries. With this new funding round, Legatics will be looking to

double the size of its team over the next 18 months and further develop its technology to deliver new features and use cases

for a wider range of practice areas within new and existing customers.

Vet’s Klinic Veterinary clinics June 2021 0.56

Pets’ Kitchen (trading as Vet’s Klinic) is an established and profitable veterinary clinic providing veterinary services

(vetsklinic.co.uk) as well as a premium pet food provider (vetskitchen.co.uk). Its primary Swindon ‘super clinic’ is a first opinion

veterinary practice where pet owners can schedule consultations online and obtain real time feedback on in-patient care

through its own technology platform. Without compromising on quality of care, this model enables a significantly higher

transaction per vet compared to the industry average. This new investment will be used to roll out its unique clinic model to

other sites along the M4 corridor.

Proximity Insight Retail Software February 2022 0.56

Proximity Insight (proximityinsight.com) is a retail technology business that offers a ‘Super-App’ that is used by the customer-

facing teams of brands and retailers to engage, inspire and transact with customers. Headquartered in London with offices in

New York and Sydney, Proximity Insight has a global client base that includes over 20 brands, boutiques and department

stores in fashion, beauty, jewellery, electronics and homewares. These clients use Proximity Insight’s platform to blur the lines

between physical and digital retail, enhancing the customer experience and improving the lifetime value of their customers by

upwards of 35%. The business grew annual recurring revenue by 117% to £2.2m in 2021, and the investment will support

Proximity Insight’s continued product development and international growth. The investment was made across all six VCTs

advised and managed by Gresham House, including the two Baronsmead VCTs.

Further investments during the year

A total of £2.88 million was invested into seven existing portfolio companies during the year, as detailed below:

Company Business Date of

investment

Amount of further

investment (£mn)

Bella & Duke

Frozen raw dog food

provider

May 2021 0.61

Bella & Duke (bellaandduke.com) is a direct-to-consumer subscription service, providing premium frozen raw dog food to pet

owners in the UK. Founded in 2016, the business provides an alternative to standard meal options for dog owners by focusing on

the well documented health benefits of a raw food diet. This area is a growing niche in the large and established pet food market

and is being driven by the premiumisation of dog food. This follow-on investment from the Company, alongside a co-investment by

the British Growth Fund and existing shareholders, will provide additional working capital enabling Bella & Duke to continue to

scale.

Caledonian Leisure

UK leisure and

experience breaks

April 2021-

February 2022

0.39

Caledonian Leisure works with accommodation providers, coach businesses and other experienced providers (such as

entertainment destinations and theme parks) to deliver UK-based leisure and experience breaks to its customers. It comprises

two brands, Caledonian Travel (caledoniantravel.com) and UK Breakaways (ukbreakaways.com). The domestic leisure and

experience travel market has been devastated by the COVID-19 pandemic, but the company is well-placed to expand as

lockdown and travel restrictions have eased. A series of planned investment tranches has helped the company prepare for and

capitalise on the strong demand for UK staycation holidays.

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Company Business Date of

investment

Amount of further

investment (£mn)

Tapas Revolution Spanish restaurant chain June 2021 0.05

Spanish Restaurant Group (trading as Tapas Revolution) (tapasrevolution.com) is a leading Spanish restaurant chain in the casual dining

sector. At initial investment in January 2017, it was operating five sites and, subsequent to a further investment round in March 2018, had

grown to 12 sites. Tapas was trading well and had a strong outlook up until the onset of COVID-19 which mandated the closure of much of

its estate during the course of 2020 in response to the varying patterns of government restrictions. Costs were controlled well under the

circumstances and this further investment provided financial headroom whilst the business re-opened its estate.

MyTutor

Digital marketplace for

online tutoring

August 2021 0.52

MyTutorweb (trading as MyTutor) (mytutor.co.uk) is a digital marketplace that connects school pupils who are seeking private

one-to-one tutoring with university students. The business is satisfying a growing demand from both schools and parents to

improve pupils’ exam results. This further investment, alongside other existing shareholders and Australian strategic co-investor,

SEEK, who invested £30 million, aims to build and reinforce its position as a UK category leader in the online education market as

well as to begin to develop a broader, personalised learning product. The company has been chosen as a Tutoring Partner for the

National Tuition Programme where they will directly support 30,000 students in catching up on lost learning because of the

COVID-19 pandemic.

Andersen EV

Provider of premium

electric vehicle (EV)

chargers

September 2021 0.16

Muller EV Limited (trading as Andersen EV) (andersen-ev.com) is a design-led manufacturer of premium electric vehicle

chargers. Incorporated in 2016, this business has secured high profile partnerships with Porsche and Jaguar Land Rover,

establishing an attractive niche position in charging points for the high end EV market. This follow-on funding is to further

support its premium brand and product positioning whilst ensuring all new and existing products meet the most recent and

highest safety and compliance standards. Andersen has continued its strong trading performance with revenue up over 300%

year on year.

Preservica

Seller of proprietary

digital archiving

software

October/

November 2021

0.89

Preservica is a SaaS software business with blue chip customers and strong recurring revenues. It has developed market

leading software for the long-term preservation of digital records, ensuring that digital content can remain accessible,

irrespective of future changes in technology. This latest investment is to provide additional growth capital to finance the further

development of the business. The business has seen annual recurring revenues nearly double over the last two financial years.

ActiveNav File analysis Software December 2021 0.26

Data Discovery Solutions (trading as ActiveNav) (activenav.com) is a file analysis software solution which makes it easier for

companies to clean up network drives, respond to new data protection laws and dispose of redundant and out dated

documents. ActiveNav’s solution is used by significant blue chip customers, particularly those in highly regulated industries

such as energy and professional services, as well as government entities in the USA, Canada, Australia and the UK. This further

funding is to market its nascent SaaS-based Hubble platform in order to generate company value.

Portfolio valuation movements

The portfolio generated net unrealised

gains of £9.55 million in the year. The

scale of the valuation increases was

underpinned by the Company’s growth

portfolio, many of which have direct-to-

consumer business models which have

grown significantly since the onset of the

COVID-19 pandemic. Despite ongoing

uncertainties relating to COVID-19,

Gresham House believes that the

pandemic has accelerated existing trends

in consumer behaviour and, in many

cases, companies have experienced

strong growth in demand. Over this

period, some older style MBO portfolio

companies with similar business practices

have also benefited. However, the

volatility of markets and fall in consumer

confidence towards the end of the

Company’s financial year have had an

impact on valuations of quoted assets as

well as sector PE multiples, making this a

more challenging environment for the

portfolio. The portfolio has nevertheless

proven to be resilient.

Total valuation increases were £14.91

million. The main valuation increases

were:

●● Preservica – £5.02 million

●● Bella & Duke – £3.00 million

●● Media Business Insight – £1.83 million

●● MyTutor – £1.08 million

●● Master Removers Group – £1.05

million

Preservica, Bella & Duke and MyTutor

have benefitted from significant re-rating

as part of a further funding rounds and

increased scale. Media Business Insight

has continued to reap the rewards of the

success of its diversification to online

income streams and a more flexible cost

base, whilst Master Removers Group has

been effective in taking advantage of

strong property markets and a structural

shift in demand for storage and logistics.

Investment Adviser’s Review

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Total valuation decreases were £(5.36)

million. The main valuation decreases

were:

●● Virgin Wines – £(3.02) million

●● Parsley Box – £(1.72) million

●● Bleach London – £(0.20) million

●● ActiveNav – £(0.16) million

Virgin Wines and Parsley Box have been

impacted by negative market sentiment

compounded by more challenging

customer recruitment over the year.

Bleach has had a challenging year

having had to delay its US launch and

having experienced normalised D2C

revenues post UK lockdown. Active Nav

has had slower revenue growth than

anticipated, but other avenues for sales

growth are in the process of being

established.

Portfolio Realisations during the year

The Company realised two of its investments during the year, as detailed below:

Company Business Period of

investment

Total cash proceeds over

the life of the investment/

Multiple over cost

Proactive

Group

Provider of media

services and investor

conferences

January 2018

September 2021

£1.63 million

2.6x cost

On 29 September 2021, the Company sold its investment in Proactive Group Holdings Inc (“Proactive”). The Company received £1.60

million in cash following the disposal of its equity and loan notes, contributing to a realised gain over cost over the life of the

investment of £0.99 million. Total proceeds received over the nearly four-year life of the investment were £1.63 million, compared to

an original cost of £0.64 million, which is a multiple on cost of 2.6x and an IRR of 33.0%.

Red Paddle

Design and

manufacturer of Stand

up paddleboards

July 2015 to

November 2021

£3.86 million

5.4x cost

The Company sold its investment in Vian Marketing (trading as Red Paddle) to Myers Family Office for £3.28 million (realised gain in

the year: £2.22 million). Total proceeds received to date over the six-year life of the investment were £3.86 million compared to an

original investment cost of £0.72 million, which is a multiple on cost of 5.4x and an IRR of 33.2%.

Loan stock repayments and other gains during the year

During the year, the Company received loan repayments from MPB (£0.27 million), Red Paddle (£0.18 million), and Media Business

Insight (£0.50 million; realised gain of £0.04 million). There was also further partial realisation of MyTutor which generated £0.52 million

proceeds for the Company and a realised gain in the year of £0.26 million. In addition to the above, the Company received further

deferred proceeds of £0.02 million bringing the total proceeds received in the year to £6.37 million.

Portfolio income and yield

In the year under review, the Company received the following amounts in loan interest and dividend income:

Investment Portfolio Yield 2022

£mn

2021

£mn

Interest received in the year 0.79 0.84

Dividends received in the year

0.29 0.83

Total portfolio income in the year

1.08 1.67

Portfolio value at 31 March 52.16 41.83

Portfolio Income Yield (Income as a % of Portfolio value at 31 March) 2.1% 4.0%

Total portfolio income in the year is generated solely from investee companies within the portfolio.

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Investment Adviser’s Review

Strategic Report

New investment made after the year-end

The Company made one new investment of £0.43 million after the year-end, as detailed below:

Company Business Date of

investment

Amount of new

investment (£mn)

Bidnamic Retail Software May 2022 0.43

Lads Store Limited (trading as Bidnamic) (www.bidnamic.com) is a marketing technology business that offers a SaaS platform

for online retailers to optimise their search engine marketing (“SEM”) spend. The technology was all developed internally, and

uses bespoke machine learning algorithms to automate the management and optimisation of online retailers’ Google

shopping spend. The ARR of the business has grown substantially over the last two years and this is projected to continue.

The investment round will be used to further enhance the product’s capabilities, and drive continued ARR growth through

expanding the sales & marketing team and building a presence in North America.

Further investments made after the year-end

The Company made further investments totalling £0.57 million into three existing portfolio companies after the year-end, as

detailed below:

Company Business Date of

investment

Amount of further

investment (£mn)

Northern Bloc

Vegan and dairy-free

ice cream producer

April 2022 0.12

Northern Bloc Ice Cream (northern-bloc.com) is an established food brand in the emerging and rapidly growing vegan market.

By focusing on chef quality and natural ingredients, Northern Bloc has carved out an early mover position in the vegan ice

cream sector. The company’s focus on plant-based alternatives has strong environmental credentials as well as it being the first

ice cream brand to move wholly into sustainable packaging. The investment is aimed at capitalising on the company’s market

position and accelerating growth. It has obtained key listings across several large supermarkets and is well placed to benefit

from the food service recovery as it continues to secure menu placings. Northern Bloc has doubled its retail store facings in

2020 and saw a 60% increase in retail sales over the year. Current facings now stand at 1,800 across the UK.

Andersen EV

Provider of premium

electric vehicle (EV)

chargers

May 2022 0.27

Muller EV Limited (trading as Andersen EV) (andersen-ev.com) is a design-led manufacturer of premium electric vehicle

chargers. Incorporated in 2016, this business has secured high profile partnerships with well-known car brands, establishing an

attractive niche position in charging points for the high end EV market. This follow-on funding is to further support its premium

brand and product positioning whilst ensuring all new and existing products meet the most recent and highest safety and

compliance standards. Andersen has continued its strong trading performance with revenue up over 300% year on year.

RotaGeek

Workforce management

software

June 2022 0.18

RotaGeek is a provider of cloud-based enterprise software to help larger retail, leisure and healthcare organisations predict

and meet demand to schedule staff effectively. Covid-19 resulted in some temporary disruption to its markets but also provided

opportunities and the company is well placed to emerge stronger and has made significant commercial progress. The total

further funding, along with additional funds from external parties, will enable RotaGeek to deliver on its growth plans and

profitability.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Strategic Report

Realisation after the year-end

The Company realised one of its investments after the year end, generating proceeds of £2.77 million, as detailed below:

Company Business Period of

investment

Total cash proceeds over

the life of the investment/

Multiple over cost

Media Business

Insight

Publishing and events

business

January 2015

June 2022

£4.47 million

2.2x cost

The Company sold its investment in Media Business Insight Holdings Limited to GlobalData plc for £2.77 million. Total proceeds

received to date over the seven-year of the investment were £4.47 million compared to an original investment cost of £2.01 million,

which is a multiple on cost of 2.2x and an IRR of 13.7%. Further proceeds held in escrow may be payable in due course.

Environmental, Social, Governance

considerations

Following the novation of the advisory

agreement to Gresham House on

30September 2021, a market leader that

is well-resourced with knowledge and

expertise in sustainability, the

Investment Advisor has moved to

establish ESG procedures and protocols

of the highest standards as set out and

informed by Gresham House plc. The

first tangible example of this revised

approach is that that the individual

members of the investment team now

have their own individual ESG objectives

set which align with the wider ESG goals

of the Investment Adviser.

Gresham House is committed to

sustainable investment as an integral

part of its business strategy. During

2021, the Investment Adviser has taken

further steps to formalise its approach to

sustainability and has put in place

several processes to ensure

environmental, social and governance

(“ESG”) factors and stewardship

responsibilities are built into asset

management across all funds and

strategies, including venture capital

trusts.

Gresham House believes the “G”

(Governance) of ESG is the most

important factor in its investment

processes. Board composition,

governance, control, company culture,

alignment of interests, shareholder

ownership structure and remuneration

policy are important elements that will

feed into the analysis and the valuation

of portfolio companies.

The “E” and “S” (Environmental and

Social) will be assessed as risk factors

during due diligence to screen

companies that face environmental and

social risks that cannot be mitigated

through engagement and governance

changes.

Where material ESG risks are identified,

these will be reviewed by the Adviser

and a decision on how to proceed will

be documented. The Adviser will then

proactively follow up with the investee

company management team and ensure

appropriate corrective and preventative

action is taken and any material issues

or incidents are recorded by the Adviser.

Gresham House published its second

Sustainable Investment Report in April

2022 that, along with existing asset

specific policies, including the Public

Equity Policy, can be found on its

website (www.greshamhouse.com).

These reports and policies cover the

Investment Adviser’s sustainable

investment commitments, how the

investment processes meet these

commitments and the application of the

sustainable investment framework. The

Gresham House Board and General

Management Committee assess the

adherence to the commitments in the

Sustainable Investment Policies on an

annual basis.

In a changing world, the Investment

Adviser believes that this approach will

contribute towards the enhancement of

shareholder value going forward.

Outlook

Whilst the year under review has been

marked with volatility and uncertainty as

a result of a number of factors affecting

both the global and UK economy, the

portfolio has continued to trade well.

Even so, negative market sentiment has

impacted valuations towards the end of

the year, particularly those of the

AIM-listed stocks, and we are now for

the first time starting to see a noticeable

impact on consumer confidence. The

tragic events unfolding in Ukraine have

amplified the uncertainty and shocked

financial markets around the world

however there had been no material

impact on the valuation of the portfolio

at the year-end. In spite of these

challenges, the Company has achieved

a positive net return for the year and

investment activity has remained

buoyant. The Investment Adviser

therefore remains cautiously optimistic

that the portfolio is well positioned.

Gresham House Asset Management

Limited

Investment Adviser

29 June 2022

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Investment Adviser’s Review

Strategic Report

Investments by market sector

Investments by value remain spread across a number of sectors, primarily in retailers, software and computer services and

industrial support services. Although the portfolio appears concentrated on three main sectors, the range of companies

contained within these sectors is considered to be very diverse and the Investment Adviser continues to target further

investments to complement these sectors.

31 March 2022 31 March 2021

0% 20% 25%

30%35% 40% 45% 50% 55%

10%5% 15%

Industrial support services

Software & computer services

Media

Retailers

0.4%

0.7%

0.0%

1.1%

0.8%

2.6%

0.8%

0.5%

3.0%

0.0%

6.9%

5.1%

23.4%

33.3%

55.4%

44.4%

8.4%

11.1%

Leisure goods

General industrials

Travel & Leisure

Consumer Services

Food producers

Construction and materials

Technology, hardware & equipment

60%

0.1%

0.8%

1.1%

All of the retailers investments have branded online direct-to-consumer businesses with no physical high street retail presence,

being Bella & Duke, Bleach London, Buster and Punch, EOTH (trading as RAB and Lowe Alpine), MPB Group, Parsley Box, Wetsuit

Outlet, and Virgin Wines.

Age of the portfolio by value

20222022

< 1 year

1 - 2 years

2 - 3 years

3 - 4 years

MBO

Growth Capital

4 - 5 years

> 5 years

20212021

20222022 20212021

20.4%

15.8%

84.2%

23.2%

76.8%

1.3%

9.8%

58.4%

3.3%

6.8%

1.5%

6.0%

21.1%

42.8%

15.8%

12.8%

Type of investment transaction by value

20222022

< 1 year

1 - 2 years

2 - 3 years

3 - 4 years

MBO

Growth Capital

4 - 5 years

> 5 years

20212021

20222022 20212021

20.4%

15.8%

84.2%

23.2%

76.8%

1.3%

9.8%

58.4%

3.3%

6.8%

1.5%

6.0%

21.1%

42.8%

15.8%

12.8%

Growth Capital contains all investments made after the 2015 rule change which are young businesses using the Company’s

investment for growth and development purposes (as defined under VCT legislation). This category also contains a small number

of growth capital style investments made before the 2015 rule change under the Investment Adviser’s MBO strategy.

MBO contains MBO type investments made under the Investment Adviser’s previous MBO strategy. This typically includes

companies which are more mature compared to those invested under the growth capital strategy.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Strategic Report

This page has been left blank intentionally.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Twelve largest investments in the portfolio

at 31 March 2022 by valuation

Bella & Duke Limited

www.bellaandduke.com

Cost £2,062,000

Valuation £5,941,000

Basis of valuation

Revenue multiple

Equity % held

10.2%

Income receivable in year

£Nil

Business

A premium frozen raw dog food

provider

Location

Edinburgh

Original transaction

Growth capital

Audited financial information

Year ended 31 March 2021

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £1,024,000

Year ended 31 March 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £3,027,000

Additions/disposals during the year

None.

Preservica Limited

www.preservica.com

Cost £2,429,000

Valuation £8,602,000

Basis of valuation

Revenue multiple

Equity % held

9.4%

Income receivable in year

£44,517

Business

Seller of proprietary digital archiving

software

Location

Abingdon, Oxfordshire

Original transaction

Growth capital

Audited financial information

Year ended 31 March 2021

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net liabilities £(3,057,000)

Year ended 31 March 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net liabilities £(1,394,000)

Additions/disposals during the year

Follow-on investments made in

October 2021 and November 2021.

MPB Group Limited

www.mpb.com

Cost £870,000

Valuation £4,392,000

Basis of valuation

Revenue multiple

Equity % held

2.6%

Income receivable in year

£3,398

Business

Online marketplace for photographic

and video equipment

Location

Brighton

Original transaction

Growth capital

Audited financial information

Year ended 31 March 2021

Turnover £64,888,000

Operating loss £(911,000)

Net assets £31,267,000

Year ended 31 March 2020

Turnover £44,179,000

Operating loss £(311,000)

Net assets £9,753,000

Additions/disposals

during the year

Loan repayment in May 2021.

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

EOTH Limited (trading as Rab

and Lowe Alpine)

www.equipuk.com

Cost £817,000

Valuation £3,774,000

Basis of valuation

Earnings multiple

Equity % held

1.5%

Income receivable in year

£246,308

Business

Branded outdoor equipment and

clothing

Location

Alfreton, Derbyshire

Original transaction

Growth capital

Audited financial information

Year ended 31 January 2021

Turnover £61,258,000

Operating profit £8,241,000

Net assets £32,711,000

Year ended 31 January 2020

Turnover £65,230,000

Operating profit £8,665,000

Net assets £31,084,000

Additions/disposals during the year

None.

MyTutorWeb Limited (trading

as MyTutor)

www.mytutor.co.uk

Cost £1,847,000

Valuation £3,377,000

Basis of valuation

Revenue multiple

Equity % held

4.0%

Income receivable in year

£Nil

Business

Provider of a digital marketplace

connecting school pupils seeking

one-to-one online tutoring

Location

London

Original transaction

Growth capital

Financial information (unaudited)

Year ended 31 December 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £2,953,000

Year ended 31 December 2019

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £1,399,000

Additions/disposals

during the year

Follow-on investment in August 2021,

and subsequent partial realisation in

August 2021.

Virgin Wines UK plc

www.virginwines.co.uk

Cost £31,000

Valuation £3,848,000

Basis of valuation

Bid price (AIM quoted)

Equity % held

5.5%

Income receivable in year

£Nil

Business

Online wine retailer

Location

Norwich

Original transaction

Management buyout

Audited financial information

Year ended 30 June 2021

Turnover £73,634,000

Operating profit £3,468,000

Net assets £17,627,000

Year ended 30 June 2020¹

Turnover £56,554,000

Operating profit £4,759,000

Net assets £6,137,000

The financial information quoted is from

unaudited financial information.

Additions/disposals during the year

None.

Strategic Report

Financial information above and opposite is derived from publicly available Report and accounts. The valuation of each investee

company is derived in line with the valuation methodology detailed in Note 8 and is typically based upon each investee

company’s latest management accounts information not yet disclosed to public sources.

Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.co.uk

Operating profit is stated before charging depreciation and amortisation, where appropriate, for all investee companies.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

End Ordinary Group Limited

(trading as Buster and Punch)

www.busterandpunch.com

Cost £1,232,000

Valuation £2,718,000

Basis of valuation

Earnings multiple

Equity % held

6.4%

Income receivable in year

£Nil

Business

Industrial inspired lighting and

interiors retailer

Location

Stamford

Original transaction

Growth capital

Financial information (unaudited)

Year ended 31 March 2021

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £5,614,000

Year ended 31 March 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £1,679,000

Additions/disposals during the year

None.

Media Business Insight

Holdings Limited

www.mb-insight.com

Cost £1,510,000

Valuation £2,646,000

Basis of valuation

Earnings multiple

Equity % held

11.6%

Income receivable in year

£223,842

Business

A publishing and events business

focused on the creative production

industries

Location

London

Original transaction

Management buyout

Financial information (unaudited)

Year ended 31 December 2020

Turnover £8,342,000

Operating profit £649,000

Net assets £971,000

Year ended 31 December 2019

Turnover £11,890,000

Operating profit £1,493,000

Net liabilities £(2,367,000)

Additions/disposals during the year

Part loan repayment made in November

2021 and January 2022. This

investment was realised after the

year-end. See Investment Adviser’s

review for further details.

Strategic Report

Master Removers Group 2019

Limited (trading as Anthony

Ward Thomas, Bishopsgate

and Aussie Man & Van)

www.ward-thomas.co.uk

Cost £252,000

Valuation £2,154,000

Basis of valuation

Earnings multiple

Equity % held

4.8%

Income receivable in year

£111,422

Business

A specialist logistics, storage and

removals business

Location

London

Original transaction

Growth capital

Audited financial information

Year ended 30 September 2020

Turnover £26,984,000

Operating profit £4,143,000

Net assets £14,286,000

Year ended 30 September 2019

Turnover £10,208,000

Operating profit £1,775,000

Net assets £14,690,000

Additions/disposals during the year

None.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Manufacturing Services

Investment Limited

(trading as Wetsuit Outlet)

www.wetsuitoutlet.co.uk

Cost £1,717,000

Valuation £1,716,000

Basis of valuation

Earnings multiple

Equity % held

4.7%

Income receivable in year

£85,850

Business

Online retailer in the water sports

market

Location

Southend on Sea, Essex

Original transaction

Growth capital

Financial information (unaudited)

Year ended 31 March 2021

Turnover £25,149,000

Operating profit £1,970,000

Net assets £8,897,000

Year ended 31 March 2020

Turnover £16,531,000

Operating loss £(138,000)

Net assets £8,803,000

Additions/disposals

during the year

None.

Arkk Consulting Limited

(trading as Arkk Solutions)

www.arkksolutions.com

Cost £1,300,000

Valuation £1,385,000

Basis of valuation

Revenue multiple

Equity % held

5.5%

Income receivable in year

£30,062

Business

Provider of services and software

to enable organisations to remain

compliant with regulatory reporting

requirements

Location

London

Original transaction

Growth capital

Audited financial information

Year ended 31 December 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net liabilities £(428,000)

Year ended 31 December 2019

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £347,000

Additions/disposals

during the year

None.

Data Discovery Solutions

Limited (trading as ActiveNav)

www.activenavigation.com

Cost £1,207,000

Valuation £1,988,000

Basis of valuation

Revenue multiple

Equity % held

6.6%

Income receivable in year

£Nil

Business

Provider of a global market leading

file analysis software for information

governance, security and

compliance

Location

Winchester

Original transaction

Growth capital

Audited financial information

Year ended 29 June 2020

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £5,023,000

Year ended 29 June 2019

Turnover Not disclosed

Operating profit/(loss) Not disclosed

Net assets £3,558,000

Additions/disposals during the year

None.

Strategic Report

Financial information above and opposite is derived from publicly available Report and accounts. The valuation of each investee

company is derived in line with the valuation methodology detailed in Note 8 and is typically based upon each investee

company’s latest management accounts information not yet disclosed to public sources.

Further details of the investments in the portfolio may be found on the Gresham House website: www.greshamhouse.co.uk

Operating profit is stated before charging depreciation and amortisation, where appropriate, for all investee companies.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Date of first

investment

and Sector

Total Book

cost at

31 March

2022

Valuation

31 March

2021

Additions

at cost

Disposals

at opening

valuation

Change in

valuation

for year

Valuation

31 March

2022

% of net

assets by

value

£ £ £ £ £ £

Qualifying investments

Preservica Limited

Seller of proprietary digital archiving

software

December 2015

Software &

computer services

2,428,743 2,689,711 890,517 - 5,022,119 8,602,347 11.1%

Bella & Duke Limited

A premium frozen raw dog food

provider

February 2020

Retailers

2,062,146 2,334,829 611,045 - 2,995,533 5,941,407 7.7%

MPB Group Limited

Online marketplace for photographic

and video equipment

June 2016

Retailers

869,871 4,025,448 - (267,318) 633,981 4,392,111 5.7%

Virgin Wines UK Plc (AIM quoted)

Online wine retailer

November 2013

Retailers

30,541 6,864,072 - - (3,016,498) 3,847,574 5.0%

EOTH Limited (trading as Equip

Outdoor Technologies)

Branded outdoor equipment and

clothing (Rab and Lowe Alpine)

October 2011

Retailers

817,185 3,142,002 - - 631,862 3,773,864 4.9%

MyTutorweb Limited (trading as

MyTutor)

Digital marketplace connecting

school pupils seeking one-to-one

online tutoring

May 2017

Industrial support

services

1,846,886 2,033,227 524,434 (259,455) 1,078,424 3,376,630 4.4%

End Ordinary Group Limited

(trading as Buster and Punch)

Industrial inspired lighting and

interiors retailer

March 2017

Retailers

1,231,510 2,386,154 - - 331,863 2,718,017 3.5%

Media Business Insight Holdings

Limited

A publishing and events business

focused on the creative production

industries

January 2015

Media

1,447,188 760,342 - - 1,823,213 2,583,555 3.3%

Master Removers Group 2019

Limited (trading as Anthony Ward

Thomas, Bishopsgate and Aussie

Man & Van)

A specialist logistics, storage and

removals business

December 2014

Industrial support

services

251,763 1,105,897 - - 1,047,722 2,153,619 2.8%

Data Discovery Solutions Limited

(trading as ActiveNav)

Provider of global market leading

file analysis software for information

governance, security and

compliance

November 2019

Software &

computer services

1,207,040 1,886,000 264,040 - (161,945) 1,988,095 2.6%

Manufacturing Services Investment

Limited (trading as Wetsuit Outlet)

Online retailer in the water sports

market

July 2017

Retailers

1,412,992 1,411,876 - - (363) 1,411,513 1.8%

Arkk Consulting Limited (trading as

Arkk Solutions)

Provider of services and software

to enable organisations to remain

compliant with regulatory reporting

requirements

May 2019

Software &

computer services

1,299,865 1,355,617 - - 29,088 1,384,705 1.8%

Tharstern Group Limited

Software based management

Information systems

July 2014

Software &

computer services

789,815 812,315 - - 379,593 1,191,908 1.5%

Connect Childcare Group Limited

Nursery management software

provider

December 2020

Software &

computer services

828,419 1,004,302 - (49,420) 954,882 1.2%

Vivacity Labs Limited

Provider of artificial intelligence &

urban traffic control systems

February 2021

Technology,

hardware &

equipment

876,541 876,541 - - 876,541 1.1%

Caledonian Leisure Limited

Provider of UK leisure and

experience breaks

March 2021

Travel & leisure

522,509 135,852 386,657 236,820 759,329 1.0%

Investment Portfolio Summary

as at 31 March 2022

Strategic Report

Green Growth focused portfolio

Blue MBO focused portfolio

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Date of first

investment

and Sector

Total Book

cost at

31 March

2022

Valuation

31 March

2021

Additions

at cost

Disposals

at opening

valuation

Change in

valuation

for year

Valuation

31 March

2022

% of net

assets by

value

£ £ £ £ £ £

Rota Geek Limited

Workforce management software

August 2018

Software &

computer services

733,200 553,833 - 82,430 636,263 0.8%

Legatics Holdings Limited

SaaS LegalTech software provider

June 2021

Software &

computer services

605,374 - 605,374 - - 605,374 0.8%

Bleach London Holdings Limited

Hair colourants brand

December 2019

Retailers

539,682 789,520 - - (196,346) 593,174 0.8%

Spanish Restaurant Group Limited

(trading as Tapas Revolution)

Spanish restaurant chain

January 2017

Travel & Leisure

947,645 198,550 45,147 - 331,196 574,893 0.7%

Pets' Kitchen Limited (trading as

Vet's Klinic)

Veterinary clinics

June 2021

Consumer services

561,680 - 561,680 - - 561,680 0.7%

Northern Bloc Ice Cream Limited

Supplier of premium vegan ice

cream

December 2020

Food producers

303,000 317,369 - 241,482 558,851 0.7%

Proximity Insight Holdings Limited

Super-App used by customer-facing

teams of brands and retailers to

engage, inspire and transact with

customers

February 2022

Software &

computer services

555,000 - 555,000 - - 555,000 0.7%

IPV Limited

Provider of media asset software

November 2019

Software &

computer services

535,459 535,459 - - - 535,459 0.7%

Muller EV Limited (trading as

Andersen EV)

Provider of premium electric vehicle

(EV) chargers

June 2020

Technology,

hardware &

equipment

381,500 181,191 163,500 36,809 381,500 0.5%

CGI Creative Graphics International

Limited

Vinyl graphics to global automotive,

recreation vehicle and aerospace

markets

June 2014

General industrials

999,568 336,016 - - (73,856) 262,160 0.3%

RDL Corporation Limited

Recruitment consultants for

the pharmaceutical, business

intelligence and IT industries

October 2010

Industrial support

services

1,000,000 367,499 - - (112,280) 255,219 0.3%

Parsley Box Group Plc (AIM quoted)

Supplier of home delivered, ambient

ready meals targeting the over 60s

May 2019

Retailers

520,549 1,937,524 - - (1,722,244) 215,280 0.3%

Kudos Innovations Limited

Online platform that provides and

promotes academic research

dissemination

November 2018

Software &

computer services

277,950 82,823 - (16,600) 66,223 0.1%

Jablite Holdings Limited (in

members' voluntary liquidation)

Manufacturer of expanded

polystyrene products

April 2015

Construction and

materials

281,398 37,110 - - - 37,110 0.0%

Veritek Global Holdings Limited

Maintenance of imaging equipment

July 2013

Industrial support

services

967,780 - - - - - 0.0%

Racoon International Group Limited

Supplier of hair extensions, hair care

products and training

December 2006

Personal goods

906,935 - - - - - 0.0%

BookingTek Limited

Software for hotel groups

October 2016

Software &

computer services

450,283 - - - - - 0.0%

Oakheath Limited (in members'

voluntary liquidation)

Online platform that connects

people seeking home care from

experienced independent carers

March 2018

Industrial support

services

384,720 - - - - - 0.0%

Strategic Report

Green Growth focused portfolio

Blue MBO focused portfolio

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Investment Portfolio Summary

as at 31 March 2022

Date of first

investment

and Sector

Total Book

cost at

31 March

2022

Valuation

31 March

2021

Additions

at cost

Disposals

at opening

valuation

Change in

valuation

for year

Valuation

31 March

2022

% of net

assets by

value

£ £ £ £ £ £

Realised in year

Proactive Group Holdings Inc

Provider of media services and

investor conferences for companies

primarily listed on secondary public

markets

January 2018

Media

- 1,598,518 - (1,598,518) - - 0.0%

Vian Marketing Limited (trading as

Red Paddle Co)

Design, manufacture and sale

of stand-up paddleboards and

windsurfing sails

July 2015

Leisure goods

- 1,250,675 - (1,250,675) - - 0.0%

Total qualifying investments 28,874,737 41,010,272 4,607,394 (3,375,966)

9,552,583

51,794,283

66.8%

Non-qualifying investments

Manufacturing Services Investment

Limited (trading as Wetsuit Outlet)

Online retailer in the water sports

market

July 2017

Retailers

304,000 304,000 - - - 304,000 0.4%

Media Business Insight Limited

A publishing and events business

focused on the creative production

industries

January 2015

Media

62,839 517,789 - (459,881) 4,931 62,839 0.1%

365 Agile Group plc (formerly

Iafyds plc)

Development of energy saving

devices for domestic use

March 2001

Technology,

hardware &

equipment

254,586 - - - - - 0.0%

Racoon International Group Limited

Supplier of hair extensions, hair care

products and training

December 2006

Personal goods

139,050 - - - - - 0.0%

Total non-qualifying investments 760,475 821,789 - (459,881) 4,931 366,839 0.5%

Total investment portfolio per

Note 8, page 65

29,635,212 41,832,061 4,607,394 (3,835,847)

9,557,514

52,161,122 67.3%

Cash and current asset investments

30,019,758 - - 26,259,504 33.9%

Total investments including cash

and current asset investments

29,635,212 71,851,819 4,607,394 (3,835,847)

9,557,514

78,420,626 101.2%

Other current assets 2,218,906 260,786 0.3%

Current liabilities (171,857) (1,175,430) (1.5)%

Totals 29,635,212 4,607,394 (3,835,847)

Net assets at the year-end 73,898,868 77,505,982 100.0%

Total Investment Portfolio split by type

Growth focused portfolio

22,755,512 32,136,918 4,607,394 (3,375,966) 10,552,411 43,920,757 84.2%

MBO focused portfolio

6,879,700 9,695,143 - (459,881)

(994,897)

8,240,365 15.8%

Investment Adviser’s Total 29,635,212 41,832,061 4,607,394 (3,835,847)

9,557,514

52,161,122 100.0%

Strategic Report

¹ As at 31 March 2022, the Company held more than 80% of its total investments in qualifying holdings, and therefore complied with the VCT

Qualifying Investment test. For the purposes of the VCT qualifying test, the Company is permitted to disregard disposals of investments for

twelve months from the date of disposal. It also has up to three years to bring in new funds raised, before these need to be included in the

qualifying investment test.

² Disclosed as Current asset investments and Cash at bank within Current assets in the Balance Sheet on page 55.

³ The growth focused portfolio contains all investments made after the change in the VCT regulations in 2015 plus some investments that are

growth in nature made before this date. The MBO focused portfolio contains investments made prior to 2015 as part of the previous MBO

strategy.

Green Growth focused portfolio

Blue MBO focused portfolio

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Key policies

The Board has put in place the following policies to be applied to meet the

Company’s overall Objective and to cover specific areas of the Company’s business.

Investment policy

The Investment Policy is designed to

meet the Company’s Objective:

Investments

The Company invests primarily in a

diverse portfolio of UK unquoted

companies. Investments are made

selectively across a number of

sectors, principally in established

companies. Investments are usually

structured as part loan stock and part

equity in order to produce a regular

income stream and to generate

capital gains from realisations.

There are a number of conditions

within the VCT legislation which need

to be met by the Company and which

may change from time to time. The

Company will seek to make

investments in accordance with the

requirements of prevailing VCT

legislation.

Asset allocation and risk

diversification policies, including the

size and type of investments the

Company makes, are determined in

part by the requirements of prevailing

VCT legislation. No single investment

may represent more than 15% (by VCT

tax value) of the Company’s total

investments at the date of

investment.

Liquidity

The Company’s cash and liquid funds

are held in a portfolio of readily

realisable interest-bearing

investments, deposit and current

accounts, of varying maturities,

subject to the overriding criterion that

the risk of loss of capital be

minimised.

Borrowing

The Company’s Articles of

Association permit borrowings of

amounts up to 10% of the adjusted

capital and reserves (as defined

therein).

However, the Company has never

borrowed and the Board would only

consider doing so in exceptional

circumstances.

Diversity Policy

The Directors have considered diversity

in relation to the composition of the

Board and have concluded that its

membership is diverse in relation to

gender and its breadth of experience.

The Board comprises two male and one

female directors. The Company does not

have any senior managers or

employees. The Board has made a

commitment to always consider diversity

in making future appointments.

Other policies

In addition to the Investment Policy, the

Diversity Policy and the policies on

payment of dividends and share

buybacks, which are detailed earlier in

this section, the Company has adopted

a number of further policies relating to:

●● Environmental and social

responsibility;

●● Human rights;

●● Anti-bribery;

●● Global greenhouse gas emissions;

●● Whistleblowing; and

●● Anti-Tax Evasion

These are set out in the Directors’

Report on pages 35 to 36 of this Annual

Report.

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Stakeholder Engagement and Directors’ Duties

The Board has discussed the discharge of their Director’s duties under Section 172 of the Companies Act 2006 having regard to

the factors set out under Provision 5 of the Association of Investment Companies (AIC) Code and in line with the UK Corporate

Governance Code. The views of and the impact of the Company’s activities on the key stakeholders are an important

consideration for the Board when making relevant decisions. The Board, in normal circumstances, engages directly with

stakeholder groups through either regular or annual meetings and investor presentations to assist the directors in understanding

the issues to which they must have regard.

The table below sets out the interests of key stakeholders that have been considered throughout the year during the Board’s

discussions and in decision making.

Stakeholders Engagement Type Outcome

All

Stakeholders

Change in management arrangements After careful consideration and due diligence, the Board

believe that consenting to the novation of the investment

advisory arrangements was in the interests of the Company’s

Shareholders and stakeholders. The Board expected the

creation of the enlarged VCT team to be well received by the

market as creating an exciting and potent commercial force

that should lead to enhanced prospects for Shareholders. In

the context of a VCT sector that is evolving, this view is

predicated on the following main factors:

●● Scale Advantage – The integration of the Mobeus and

Baronsmead VCT teams within Gresham House would

create one of the largest VCT teams in the sector with the

coverage, experience, contacts and know how to access

more and higher quality investment opportunities. The

greater breadth and depth of resource in portfolio and

talent management should also be valuable in assisting the

Mobeus VCTs’ existing portfolio companies to grow

successfully.

●● Continuity – Trevor Hope and Clive Austin will continue to

lead the VCT team. This management group is well known

and has been highly regarded by Shareholders for a

considerable period. The Boards are confident that the

team will continue to build the Mobeus VCTs’ portfolios

and enhance their value. Gresham House’s investment

philosophy is similar to that developed over many years by

Mobeus, and the procedure for undertaking due diligence

and approving new investments will be substantially the

same as before.

●● Portfolio Diversification – The access to a much larger

asset base and investment opportunities should enable

the combined VCT investment team to build more

diversified VCT portfolios across a broader range of sizes

and stages of investment. The Board believes that this

combined VCT investment team will be a major force in the

supply of capital to the VCT sector and it is anticipated that

the team’s enhanced market position should attract strong

deal flow.

●● Investment in Capability – The Mobeus VCT investment

team has delivered outstanding performance over many

years, but it has become clear that the changing demands

of the market mean that the requirement for additional

investment in people, technology and processes could

become constrained within the framework of the existing

Mobeus partnership structure.

The Board can confirm that, in the process of its novation, no

material changes were made to the terms of the investment

advisory arrangements. Shareholders can also be assured that

the Board’s track record of governance and independence will

be maintained.

Strategic Report

Stakeholders Engagement Type Outcome

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Shareholders The key mechanisms of Shareholder

engagement is:

●● Annual General Meeting

●● Annual, Interim Reports and Interim

Management Statements

●● Annual Investor Events

●● RNS Announcements

●● Website

●● Offer for subscription

●● Whilst Shareholders would normally attend the AGM and

engage with the Board and Investment Adviser, this was

not possible under the COVID-19 restrictions for the 2021

AGM. However, given the relaxation of UK Government

COVID restrictions, the 2022 AGM is planned to take place

in person. There will also be a live stream providing access

to view the meeting remotely, though only Shareholders

physically attending will be able to formally take part in the

meeting and vote on resolutions by a show of hands.

Shareholders unable to attend are therefore encouraged

to submit their votes on resolutions via proxy forms ahead

of the meeting.

●● Shareholders are provided with Annual and Interim

Reports in hard or soft copy according to their choice,

which are also available on the Company’s website.

Voluntary Interim Management Statements are released in

the quarters between reports to ensure that Shareholders

are kept up to date with events. This was particularly

important during the pandemic and the resultant

uncertainty. The website is an important source of

information for Shareholders and announcements are also

regularly made through the London Stock Exchange.

●● The Share buyback programme has continued to be

offered throughout the year. This provides Shareholders

with liquidity if they wish to sell their shares, at a price

close to the latest announced NAV per share, the Board

having considered the interests of remaining Shareholders.

Further details are contained in the Chairman’s Statement

on page 5 and in the Director’s Report on page 35.

●● Shareholders are welcome to contact the Chairman or the

Investment Adviser by email as advised on page 79 of this

Report.

●● The Annual Shareholder Event was held as a virtual event

and took place on 25 February 2022. A recording of the

event is available via a link on the home page of the

Company’s website at www.mig2vct.co.uk for those

Shareholders that were unable to join on the day.

●● The Company seeks to create value for Shareholders by

generating good returns which are eventually distributed

to Shareholders as dividends. The importance of tax-free

dividends to Shareholders is recognised by the Board and

considered at each quarterly meeting and a decision was

made to declare an interim dividend of 12.00 pence per

share for payment in January 2022. The Company’s

dividend target has consistently been achieved or

exceeded as outlined in the Chairman’s Statement on page

3 and in the Strategic Report.

●● The liquidity level of the Company has remained strong

and is managed with the primary aim of preserving capital,

as discussed at each Board meeting. Liquidity levels are

managed after considering, inter alia, applicable annual

dividend commitments as well as the provision of the

buyback facility.

Strategic Report

Stakeholders Engagement Type Outcome

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

●● The Board, along with the three other Mobeus VCTs,

opened Offers for Subscription on 20 January 2022 having

considered: the impact of dilution of Shareholder’s holdings;

the ability to adhere to the dividend policy of the Company;

the effect on the Net Asset Value and the ability of the

Company and its liquidity levels to be able to meet HMRC’s

VCT investment rules and timeline; the costs involved in

issuing a prospectus and charged to Shareholders; the risk

to performance and the equal treatment of investors across

the four Mobeus VCTs and those investors that the

Company co-invests with.

Suppliers Including: Registrar, Broker, Auditor,

Lawyer, Sponsor, Banker and the VCT

Status Adviser

●● The Investment Adviser regularly communicates with each

of the professional advisers and secures an annual

confirmation of the policies they have in place. The Board

review the performance of each provider on an annual

basis.

Government &

Regulators

The Board is committed to conducting

business in line with the appropriate

laws and regulation. Mobeus Income &

Growth 2 VCT plc does not provide

financial contributions to political

parties or lobby groups.

●● As a UK listed company the Board and Investment Adviser

comply with the Companies Act, the UKLA, HMRC, UK

Accounting Standards and FCA regulatory requirements in

addition to the Alternative Investment Fund Managers

Directive, to ensure the Company can continue to trade.

Non-compliance with the VCT regulations in particular is

viewed as a principal risk for the Company. The Company

continued to comply with these regulations throughout the

year and to the date of this Report.

Investee

Companies

The Board has delegated authority for

the day-to-day management of the

Company to the Investment Adviser

and engages with the Investment

Adviser in setting, approving and

overseeing the execution of the

business strategy and related policies.

●● The Board aims to have a diverse mix of companies across

a range of different sectors and regularly reviews the

composition of the portfolio.

●● The Investment Adviser reports at the Company’s quarterly

Board meetings on each of the portfolio companies.

Members of the Investment Adviser sit on the majority of

the portfolio companies’ boards. This is to provide input on

key matters such as advancing the shareholder value

agenda, ensuring class leading corporate governance and

encouraging best practice in areas such as ESG.

●● Gresham House organises, when permitted in person and

more recently by virtual means, seminars and events that

involve portfolio companies to benefit from the Gresham

House network.

Investment

Adviser

The Investment Adviser’s performance

is vital for the Company to deliver its

investment strategy, meeting its

objectives and generating investment

returns for Shareholders, and is a

crucial relationship for the Board.

●● The Investment Adviser meets with the Board at each

quarterly meeting and is in frequent contact throughout the

periods in between meetings e.g. to approve investment

transactions. All key strategic and operational topics are

discussed in detail and a close dialogue is maintained with

the Board. The Board take an active interest in the

challenges faced by the portfolio companies. The Board

considers each potential disposal based on the company’s

performance, market conditions and the offer(s) in its

decision to sell the Company’s holding. The Investment

Adviser’s performance is evaluated annually and its

re-appointment is dependent on the outcome of that

evaluation.

Stakeholders Engagement Type Outcome

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Principal and emerging risks, management and regulatory environment

The Directors acknowledge the Board’s responsibilities for the Company’s internal control systems and have instigated systems

and procedures for identifying, evaluating and managing the significant and emerging risks faced by the Company. This includes

a key risk management review and robust assessment of the risks, which takes place at each quarterly board meeting. Further

details of these are contained in the corporate governance section of the Directors’ Report on page 39. The principal risks and

the emerging risk identified by the Board are set out below:

Risk Possible consequence How the Board manages risk

Political and

Economic

Events such as the war in Ukraine, the COVID-19

pandemic, the impact of Brexit, an economic

recession, supply shortages or a movement in

sterling or in interest rates, could affect trading

conditions for smaller companies and consequently

the value of the Company’s qualifying investments.

Movements in UK Stock Market indices may affect

the valuation of the Company’s investments, as well

as affecting the Company’s own share price and its

discount to net asset value.

●● The Board monitors the portfolio as a whole to

(1) ensure that the Company invests in a

diversified portfolio of companies;

(2) ensure that developments in the macro-

economic environment such as movements

in interest rates are monitored; and

(3) The Investment Adviser holds ongoing

discussions with all the portfolio companies

to ascertain where support is required.

Cash comprises a significant proportion of

the net assets of the Company, further to

the successful realisations and the

fund-raise earlier in the year giving the

Company a strong liquidity position. The

portfolio has minimal exposure to sectors

such as leisure, hospitality and retail, and

travel which are currently more at risk.

Investment

and strategic

Investment in VCT qualifying earlier stage unquoted

small companies involves a higher degree of

risk than investment in fully listed companies.

Smaller companies often have limited product

lines, markets or financial resources, may not be

profitable at the point of investment and may be

dependent for their management on a smaller

number of key individuals. This may leaI to variable

investment returns and the use of more subjective

valuation methodologies.

●● The Board regularly reviews the Company’s

investment strategy.

●● Careful selection and review of the investment

portfolio on a regular basis.

●● The Investment Adviser has provided a

growing pipeline of compliant investment

opportunities and continues to strengthen its

investment team.

●● The valuation of the investment portfolio and

valuation methodologies are reviewed by the

Board each quarter.

Loss of

approval as

a Venture

Capital Trust

The Company must comply with section 274 of the

Income Tax Act 2007 (“ITA”) which allows it to be

exempt from capital gains tax on investment gains.

Any breach of these rules may lead to the Company

losing approval as a VCT, qualifying Shareholders

who have not held their shares for the designated

holding period having to repay the income tax relief

they obtained and future dividends paid by the

Company becoming subject to tax. The Company

would also lose its exemption from corporation tax

on capital gains.

●● The Company’s VCT qualifying status is

continually reviewed by the Investment

Adviser.

●● The Board receives regular reports from its

VCT Status Adviser who has been retained by

the Board to monitor the Company’s ongoing

compliance with the VCT Rules.

VCT

Regulatory

Changes

The Company is required to comply with the VCT

specific regulations relating to European State Aid

regulations as enacted by the UK Government which

still apply. Non-compliance would result in a loss of

VCT status.

●● The Board receives advice from PHA in

respect of these requirements, including those

that may arise from the withdrawal from the EU,

and conducts its affairs in order to comply with

these requirements.

Regulatory

Changes

The Company is required to comply with the

Companies Act, the Listing Rules of the UK

Listing Authority and United Kingdom Accounting

Standards. Changes to and breaches of any of these

might lead to suspension of the Company’s Stock

Exchange listing, financial penalties or a qualified

audit report.

●● Regulatory and legislative developments are

kept under review by the Company’s solicitors

and the Board.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Risk Possible consequence How the Board manages risk

Financial and

operating

Failure of systems (including breaches of cyber

security) at any of the third-party service providers

that the Company has contracted with could lead

to inaccurate reporting or monitoring. Inadequate

controls could lead to the misappropriation or

insecurity of assets. Outsourcing and the increase

in remote working could give rise to cyber and data

security risk and internal control risk.

●● The Board carries out an bi-annual review of

the internal controls in place and reviews the

risks facing the Company at Board meetings

and receives control reports by exception.

●● The Board reviews the performance of the

service providers annually and has obtained

assurance that such providers have controls in

place to reduce the risk of breaches of their

cyber security.

Market Movements in the valuations of the Company’s

investments will, inter alia, be connected to

movements in UK Stock Market indices as well as

affecting the Company’s own share price and its

discount to net asset value.

●● The Board receives quarterly valuation reports

from the Investment Adviser and remains

focused on the investments being at fair value,

after considering many factors, including the

impact of market movements.

●● The Investment Adviser alerts the Board of any

adverse movements.

Asset liquidity The Company’s investments may be difficult to

realise.

●● The Board receives reports from the

Investment Adviser and reviews the portfolio at

each quarterly Board meeting. It carefully

monitors investments where a particular risk

has been identified.

Market

liquidity

Shareholders may find it difficult to sell their shares

at a price which is close to the net asset value

given the limited secondary market in VCT shares.

●● The Board has a share buyback policy which

seeks to mitigate market liquidity risk.

Cyber and

Data Security

The Company and its Shareholders may suffer

losses in the event of the IT systems at principal

suppliers being compromised by cyber attack.

●● The Board monitors and seeks assurance from

the Company’s principal suppliers in respect of

the systems and processes they have adopted

to counter these risks.

Emerging Risk:

Environmental,

Social and

Governance

Non-compliance with current and future reporting

requirements could lead to a fall in demand from

investors. That may affect the level of capital the

Company has available to meet its investment

objectives.

●● ESG and climate change impacts are taken into

account when considering new investment

proposals. The Investment Adviser monitors

the potential impact on investee companies of

any proposed new legislation regarding

environmental, social and governance matters

and advises and adapts accordingly.

●● The Board recognises that climate change is

an important emerging risk which the Company

is taking into account in their strategic planning

although the Company itself has little direct

impact on environmental issues. Measures had

been introduced to decrease the amount of

travel undertaken prior to the pandemic and

working from home and to reduce the cost and

environmental impact of providing paper

copies of Shareholder correspondence, as

mentioned elsewhere in the Annual Report.

The risk profile of the Company changed as a result of changes to VCT legislation 2015. As the Company is required to focus its new

investment activity on growth capital investments in younger companies it is anticipated that investment returns will be more volatile

and have a higher risk profile. The Board also discusses emerging risks as and when they arise, such as the war in Ukraine and

COVID-19 pandemic, and puts in place mitigating actions to manage the risk. In an environment of low interest rates, returns on

liquidity may impact overall performance. This factor is monitored by the Board with the objective of optimising returns on liquid

funds whilst minimising capital risk.

Strategic Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Going concern and Long-Term viability of the Company

The Board is required to assess the Company’s operation as a going concern. The Company’s business activities, together with

the factors likely to affect its future development, performance and position are set out in the preceding pages of this Strategic

Report. The majority of companies in the portfolio are well funded and the portfolio taken as a whole remains resilient and

well-diversified, although the impact of COVID-19, the war in Ukraine, Brexit and supplier shortages may still impose

considerable demands on the liquidity of some of these companies in the near-term. The Board believes the recent fundraise will

assist the Company in meeting those needs for liquidity, where justified. The major cash outflows of the Company (namely

investments, share buybacks and dividends) are within the Company’s control. Accordingly, the Board believes that the

Company’s cash position, noting the successful fundraise just prior to the year-end, is adequate to enable the Company to

continue as a going concern under any plausible stress scenario. Further details of this assessment are shown within Note 2 on

page 59. The Board’s assessment of liquidity risk, and details of the Company’s policies for managing financial risk and its capital,

are shown in Notes 15 and 16 on pages 69 to 77. Accordingly, the Directors believe that it is appropriate to continue to apply the

going concern basis of accounting in preparing the annual Financial Statements.

Furthermore, the Directors have considered whether there are any material uncertainties that the Company may face during the

twelve months from the date of approval of the financial statements that may impact on its ability to operate as a going concern.

In particular, the Directors have continued to consider the impact of changes to VCT legislation. No further material uncertainties

have been identified by the Board.

Viability Statement

The UK Corporate Governance Code includes a requirement for companies to include a Viability Statement in the Annual Report

addressed to Shareholders with the intention of providing an improved and broader assessment of long term solvency and

liquidity. The Code does not define long term but expects the period to be longer than twelve months with individual companies

choosing a period appropriate to the nature of their own businesses. The Directors have chosen a period of three years, as

explained further below.

The Directors have carried out a robust assessment comprising the emerging risks, such as ESG and Climate Change as shown

on page 32 and principal risks, facing the Company and the disclosure of the principal and emerging risks are listed on pages 31

to 32 and above. Subsequent to this review they have a reasonable expectation that the Company will continue to operate and

meet its liabilities, as they fall due, for the next three years. The Directors believe that a three-year period is appropriate given

the frequency with which it is necessary to review and assess the impact of past, current and proposed regulatory changes. A

period greater than three years is considered to be too uncertain for it to be meaningful. The Directors’ assessment has been

made with reference to the Company’s current position and prospects, the Company’s present strategy, the Board’s risk appetite

and the Company’s principal and emerging risks and how these are managed, as described on the previous pages. The Board is

mindful of these risks but considers that its actions to manage those risks provide reasonable assurance that the Company’s

affairs are safeguarded for the stated period.

The Directors have reached this conclusion after giving careful consideration to the Company’s strategy. They believe the

Company’s current strategy of “providing investors with a regular income stream by way of tax-free dividends and to generate

capital growth through portfolio realisations” remains valid. The Board has focused upon the range of future investments that the

Company will be permitted to fund under the current VCT legislation.

The Board expects that positive returns should continue to be achievable from future investments and from the existing portfolio.

The Company has made three more new investments in compliance with the VCT rules introduced in 2015 and its revised

Investment Policy, and the Investment Adviser continues to build a healthy pipeline of such investment opportunities. The Board

will continue to monitor this assumption on a regular basis and is encouraged, in the current circumstances, by the returns

generated from some of these investments to date.

The Board will continue to monitor returns from growth capital investments on a regular basis and the prospective returns

thereon over the next three years. The Board considers that the Company has sufficient liquidity to maintain its present

investment rate in the short to medium-term.

Shareholders should be aware that, under the Company’s Articles of Association, it is required to hold a continuation vote at the

next AGM falling after the fifth anniversary of last allotting shares. As shares were last allotted in March 2022 (under the Offer for

Subscription), this factor has not affected the Board’s assumptions for the next three years.

Future prospects

For a discussion of the Company’s future prospects (both short and medium-term), please see the Chairman’s Statement on page

5 and the Investment Adviser’s Review on page 17.

Ian Blackburn

Chairman

29 June 2022

Strategic Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Ian Blackburn

Independent, Non-executive Chairman

and Chair of Nomination and

Remuneration and Management

Engagement Committees

Appointed to the Board:

1 July 2017.

Experience:

Ian is an FCA who

specialised in Corporate Finance at

KPMG before building and selling two

listed food groups. He has extensive UK

and European strategic, operations and

finance experience as CEO and FD of

Perkins Foods Plc and Zetar Plc.

Currently he is an active investor in a

number of SMEs including Chairman and

Non-Executive roles with Mood Foods

Limited, SlimLine Wine Limited, Pink

Prosecco Limited and Make it Plain

Limited. He is also the treasurer of The

Thomas Fryer Charity and a trustee of

The Rutland Learning Trust (Multi

Academy Trust).

Adam Kingdon

Independent, Non-executive Director

and Chair of Audit Committee

Appointed to the Board:

29 September

2006.

Experience:

Adam has over twenty

years’ experience as a turnaround

specialist and of restoring companies to

profitability. He has turned around more

than ten loss-making engineering and

technology companies in the UK,

France, Germany, Holland and Belgium.

In 2005 he founded i20 Water to

develop innovative technology for the

international water sector. In February

2015 he left i20 Water to found Utonomy,

a supplier of intelligent utility networks.

Sally Duckworth

Independent, Non-executive Director

and Chair of Investment Committee

Appointed to the Board: 1 January 2007.

Experience:

Sally has worked in the

financial services sector since 1990 and

in the private equity industry since

2000. She has extensive C-suite,

Chairman and VC experience in

investing in, growing, restructuring and

exiting early and development stage

technology companies. After qualifying

as an ACA with Price Waterhouse she

moved to JP Morgan as an investment

banker and then became an early stage

technology investor at Quester Capital

Management, as part of their VCT

investment team. After leaving Quester

she founded an angel network,

Endeavour Ventures before becoming

COFO for Redkite Financial Service

Services; a business they exited to

NASDAQ listed NICE Actimize. She then

spent 3 years as CEO of You at Work, a

full service employee benefits provider,

helping to restructure the business. She

has sat on a large number of boards and

currently chairs StorMagic, which was a

gold winner in two different categories

of the 2021 Cybersecurity Excellence

Awards. Sally was also shortlisted for the

Private Equity Backed category of the

2021 Non-Executive Director Awards.

Board of Directors

Reports of the Directors

For details of the share interest and remuneration of the Directors please see page 46 of the Directors’ Remuneration Report.

Details of the attendance record of the Directors is also reported in the Directors’ Remuneration Report on the same page.

Reports of

the Directors

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

The Directors present the

Annual Report and Audited

Financial Statements of the

Company for the year ended

31 March 2022.

The Corporate Governance

Statement on pages 39 to 41,

including the Report of the

Audit Committee on pages

42 to 43, form part of this

Directors’ Report.

The Board believes that the Annual

Report and Financial Statements taken as

a whole is fair, balanced and

understandable and provides the

information necessary for Shareholders to

assess the Company’s performance,

business model and strategy.

The Company is registered in England and

Wales as a Public Limited Company

(registration number 03946235).

The Company has satisfied the

requirements for full approval as a Venture

Capital Trust under section 274 of the

Income Tax Act 2007 (“ITA”). It is the

Directors’ intention to continue to manage

the Company’s affairs in such a manner as

to comply with section 274 of the ITA.

To enable capital profits to be distributed

by way of dividends, the Company

revoked its status as an investment

company as defined in section 833 of the

Companies Act 2006 (“the Companies

Act”) on 7 July 2005. The Company does

not intend to re-apply for such status.

Share capital

The Company’s Ordinary shares of 1.00

penny each (“shares”) are listed on the

London Stock Exchange (“LSE”).

Buyback of shares

The following disclosure is made in

accordance with Part 6 of Schedule 7 of

The Large and Medium-sized Companies

and Groups (Accounts and Reports)

Regulations 2008 (as amended in 2013).

The reason the Company makes market

purchases of its own shares is to enhance

the liquidity of the Company’s shares and

to seek to manage the level and volatility

of the discount to Net Asset Value at

which the Company’s shares may trade.

At the Annual General Meeting of the

Company held on 8 September 2021,

Shareholders granted the Company

authority, pursuant to section 701 of the

Companies Act 2006, to make market

purchases of up to 10,977,218 million of its

own shares, representing 14.99% of the

issued share capital of the Company at

that date. Such authority has been in

place through the year under review.

During the year under review, the

Company bought back 697,498 (2021:

387,471) of its own shares at a total cost

(including expenses) of £643,810 (2021:

£292,568). These shares represented

1.0% of the issued share capital at the

beginning of the year (2021: 0.7%). All

shares bought back by the Company were

subsequently cancelled.

Issued Share Capital

The issued share capital of the Company

as at 31 March 2022 was £804,263 (2021:

£732,303) and the number of shares in

issue at this date was 80,426,321 (2021:

73,230,275).

Substantial interests

As at the date of the Report, the Company

had not been notified of any beneficial

interest exceeding 3% of the issued share

capital.

Dividends

Shareholders received a dividend in

respect of the year ended 31 March 2022

of 12.00 pence per share on

7 January 2022.

Directors

The names, dates of appointment and

brief biographical details of each of the

Directors are given on the previous page

of this Annual Report.

Disclosure of Information to the

Auditor

So far as each of the Directors in office at

31 March 2022 are aware, there is no

relevant audit information of which the

auditor is unaware. They have individually

taken all the steps that they ought to have

taken as Directors in order to make

themselves aware of any relevant audit

information and to establish that the

Company’s Auditor is aware of that

information.

Director’s indemnity and officers’

liability insurance

The Directors have individually entered

into Deeds of indemnity with the Company

which indemnifies each Director, subject to

the provisions of the Companies Act 2006

and the limitations set out in each deed,

against any liability arising out of any claim

made against him or her in relation to the

performance of their duties as Directors of

the Company. Copies of each Deed of

indemnity entered into by the Company for

the Directors are available at 5th floor, 80

Cheapside, London EV2V 6EE.

The Company maintains a Directors’ and

Officers’ liability insurance policy. The

policy does not provide cover for

fraudulent or dishonest actions by the

Directors.

Environmental and social

responsibility policies

The Board recognises its obligations

under Company law to provide information

in this respect about environmental

matters (including the impact of the

Company’s business on the environment),

human rights and social and community

issues, including information about any

policies the Company has in relation to

these matters and the effectiveness of

these policies. The Board has recognised

ESG and Climate Change as an emerging

risk, as referenced on page 32, and takes

full consideration of relevant factors within

the overall assessment of potential

investee companies. It is considered

alongside investment assessments of

potential investee companies.

The Board seeks to maintain high

standards of conduct in respect of ethical,

environmental, governance and social

issues and to conduct the Company’s

affairs responsibly. It considers relevant

social and environmental matters when

appropriate and particularly with regard to

investment decisions. The Investment

Adviser encourages good practice within

the companies in which the Company

invests. The Board seeks to avoid

investing in certain areas which it

considers to be unethical and does not

invest in companies which do not operate

within relevant ethical, environmental and

social legislation or otherwise fail to

comply with appropriate industry

standards. Following the novation of the

advisory agreement to Gresham House

on 30 September 2021, a market leader

that is well-resourced with knowledge and

expertise in sustainability, the Investment

Adviser will align its current ESG

procedures and protocols to the highest

standards as set out and informed by

Gresham House plc. The Investment

Adviser believes that this approach will

contribute towards the enhancement of

shareholder value going forward.

The Company does not have any

employees or officers and the Board

therefore believes that there is limited

scope for developing environmental,

social or community policies. The

Company has however adopted electronic

communications for Shareholders as a

means of reducing the volume of paper

that the Company uses to produce its

reports. It uses mixed source paper from

well-managed forests as endorsed by the

Forest Stewardship Council for the

printing of its circulars and annual and

Directors’ Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

Interim reports. The Investment Adviser is

conscious of the need to reduce its impact

on the environment and has taken a

number of initiatives in its offices including

recycling and the reduction of its energy

consumption.

Global greenhouse gas emissions

The Company has no greenhouse gas

emissions to report from its operations, nor

does it have responsibility for any other

emissions producing sources under the

Companies Act 2006 (Strategic Report

and Directors’ Reports) Regulations 2013,

(including those within the Company’s

underlying investment portfolio). The

Company does not fall within the scope of

The Companies (Directors’ Report) and

Limited Liability Partnerships (Energy and

Carbon Report) Regulations 2018 effective

as of 1 April 2019 which implements the

Government’s policy on Streamlined

Energy and Carbon Reporting, replacing

the Carbon Reduction Commitment

Scheme. The 2018 Regulations require

companies that have consumed over

40,000 kilowatt-hours of energy to include

energy and carbon information in their

Directors’ Report. This does not apply to

the Company as it qualifies as a low

energy user.

Human rights policy

The Board seeks to conduct the

Company’s affairs responsibly and gives

full consideration to the human rights

implications of its decisions, particularly

with regard to investment decisions.

Anti-bribery policy

The Company has adopted a zero-

tolerance approach to bribery and has

established an anti-bribery policy and

procedures, copies of which are available

in the Corporate Governance section of

the Company’s website:

www.mig2vct.co.uk

Whistleblowing policy

The Board has considered the

recommendation made in the UK

Corporate Governance Code with regard

to a policy on whistleblowing and has

reviewed the arrangements at the

Investment Adviser under which staff may,

in confidence, raise concerns. It has

concluded that adequate arrangements

are in place at the Investment Adviser for

the proportionate and independent

investigation of such matters and, where

necessary, for appropriate follow-up action

to be taken by the Investment Adviser. The

Board has also asked each of its service

providers to confirm that they have a

suitable whistle-blowing policy in place.

Anti-Tax Evasion

The Company has also adopted a

zero-tolerance approach to tax evasion in

compliance with the Criminal Finance Act

2017 and the corporate criminal offence of

failing to take reasonable steps to prevent

the facilitation of tax evasion. The

Company has applied due diligence

procedures, taking an appropriate

risk-based approach, in respect of

persons who perform or will perform

services on behalf of the Company, in

order to mitigate risks.

Financial risk management

The main risks arising from the Company’s

financial instruments are due to

fluctuations in market prices, investment

risk, liquidity risk, interest rates and credit

risk. The Board regularly reviews and

agrees policies for managing these risks

and full details can be found in Note 15 to

the Financial Statements on pages 69 to

76 of this Annual Report.

Post balance sheet events

For a full list of the post balance sheet

events that have occurred since 31 March

2022, please see Note 18 to the Accounts

on page 77.

Articles of Association

The Company may amend its Articles of

Association (“the Articles”) by special

resolution in accordance with section 21 of

the Companies Act 2006. It is not the

Company’s intention to change its Articles

at the forthcoming AGM.

Annual General Meeting

The Notice of the Annual General

Meeting, which will be held at 11:00 am on

Wednesday, 21 September 2022 at the

offices of Shakespeare Martineau LLP, 6th

Floor, 60 Gracechurch Street, London

EC3V 0HR is set out on pages 83 to 85 of

this Annual Report.

A proxy form for the meeting is enclosed

separately with Shareholders’ copies of

this Annual Report. Proxy votes may be

submitted electronically via the Link

Group Signal Shares Portal at

www.signalshares.com. Shareholders may

also request a hard copy proxy form by

contacting the Company’s Registrar Link

Group using their details as stated on

page 87. Shareholders are encouraged to

lodge their proxy vote and appoint the

Chairman of the Meeting as their proxy, as

soon as possible.

Shareholders will be able to attend the

AGM in person this year. However, should

this change, Shareholders will be notified

by an RNS announcement as well as on

the Company’s website. Shareholders will

also be able to join, (though not vote) at

the meeting by virtual means and details

of how to join will be shown on the

Company’s website. Shareholders may

send any questions on the resolutions

proposed to the following email address:

AGM@greshamhouse.com and a

response will be provided prior to the

deadline for lodging your proxy vote.

Voting on the resolutions will be

conducted at the meeting on a show of

hands.

Resolutions 1 to 6 are being proposed as

ordinary resolutions requiring more than

50% of the votes cast at the meeting to be

in favour and resolutions 7 and 8 will be

proposed as special resolutions requiring

the approval of at least 75% of the votes

cast at the meeting.

The following is an explanation of the

business to be proposed:

Resolution 1 – To receive the

Annual Report and Financial

Statements

The Directors are required to present the

Financial Statements, Directors’ report

and Auditor’s report for the financial year

ended 31 March 2022 to the meeting.

Resolution 2 – To approve the

Directors’ Remuneration Report

Under section 420 of the Companies Act

2006 (the “Act”), the Directors must

prepare an annual report detailing the

remuneration of the Directors and a

statement by the chairman of the

Remuneration Committee (together the

“Directors’ Remuneration Report”). The

Act also requires that a resolution be put

to Shareholders each year for their

approval of that report. The Directors’

Remuneration Report can be found on

pages 44 to 47 of this Annual Report and

Financial Statements. Resolution 2 is an

advisory vote only.

Full details of Directors’ remuneration can

be found in the Directors’ Remuneration

Report on page 45 of this Annual Report.

Resolutions 3 & 4 – To re-elect the

Directors

The Company’s Articles of Association

require that each Director appointed to

the Board shall retire and seek election at

their first AGM following appointment and

every three years thereafter. The Board

considers that it is not appropriate for the

Directors to be appointed for a specified

term as recommended by principle 3 of

the AIC Code.

The Board has previously agreed that

each Director will retire and offer

themselves for re-election annually after

Directors’ Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

serving on the Board for more than nine

years. However, following the publication

of the revised UK Corporate Governance

Code in July 2018, which applied to the

Company from 1 January 2019 onwards,

the Board has agreed to follow the

recommendation of provision 18, namely

that all directors be subject to annual

re-election. Adam Kingdon has confirmed

his intention to retire from the Board at the

conclusion of the Annual General Meeting

and therefore will not be offering himself

for re-election at the meeting.

Ian Blackburn

Independent non-executive chairman

Following his annual performance review,

the remaining Directors agree that Ian

continues to carry out his duties

effectively and makes a significant

contribution to the Company’s long-term

sustainable success. The remaining

Directors are confident that he is a strong

and effective Chairman and director and

have no hesitation in recommending his

re-election to Shareholders.

Sally Duckworth

Independent non-executive director

Following a review of Sally’s performance,

the remaining Directors agree that she

continues to make a significant

contribution to the work of the Board and

continues to demonstrate commitment to

her role and as Chair of the Investment

Committee. The other Directors have no

hesitation in recommending her re-

election to Shareholders. Sally has agreed

to remain a director for another year.

The Directors believe that the Board

comprises an appropriate balance of skills,

experience and knowledge. However,

they will be assessing the constitution of

the Board following Adam Kingdon’s

retirement. Brief biographical details of the

Directors are given on page 34 of this

Annual Report.

Resolution 5 – To reappoint BDO

LLP as auditor of the Company, to

hold office until the conclusion of

the next general meeting at which

accounts are laid before the

Company and to authorise the

Directors to determine the

remuneration of the auditor.

At each meeting at which the Company’s

accounts are presented to its members,

the Company is required to appoint an

auditor to serve until the next such

meeting. The Board, on the

recommendation of the Audit Committee,

recommends the re- appointment of BDO

LLP. This resolution also gives authority to

the Directors to determine the

remuneration of the auditor. For further

information, please see the report of the

Audit Committee on pages 42 and 43.

Resolution 6 – Authority for the

Directors to allot shares in the

Company and Resolution 7 –

disapply the pre-emption rights of

members

These two resolutions grant the Directors

the authority to generally allot shares for

cash to a limited and defined extent

otherwise than pro rata to existing

Shareholders.

Resolution 6 will enable the Directors to

allot new shares up to an aggregate

nominal value of £268,088, representing

one-third of the existing issued share

capital of the Company as at the

publication date of the Notice convening

the Annual General Meeting.

Under section 561(1) of the Act, if the

Directors wish to allot new shares or sell

or transfer treasury shares for cash they

must first offer such shares to existing

Shareholders in proportion to their current

holdings. It is proposed by Resolution 7 to

sanction the disapplication of such

pre-emption rights in respect of the

allotment of equity securities:

(i) with an aggregate nominal value of up

to, but not exceeding, £120,640 of the

issued share capital in connection

with offer(s) for subscription; and

(ii) otherwise than pursuant to (i) above,

with an aggregate nominal value of

equity securities of up to 10 of the

issued share capital of the Company

from time to time,

in each case where the proceeds may be

used in whole or part to purchase the

Company’s shares in the market.

The Company normally allots shares at

prices based on the prevailing net asset

value per share of the existing shares on

the date of allotment (plus costs). The

Directors thus seek to manage any

potential dilution of existing shareholdings

as a result of the disapplication of

Shareholders’ pre-emption rights

proposed in resolution 7.

The Company does not currently hold any

shares as treasury shares.

Both of these authorities, unless previously

renewed, varied or revoked, will expire on

the date falling fifteen months after the

passing of the resolution or, if earlier, on

the conclusion of the Annual General

Meeting of the Company to be held in

2023. However, the Directors may allot

securities after the expiry dates specified

above in pursuance of offers or

agreements made prior to the expiration of

these authorities. Both resolutions

generally renew previous authorities

approved at the Annual General Meeting of

the Company held on 8 September 2021.

Resolution 8 – Authority to

purchase the Company’s own

This resolution authorises the Company to

purchase its own shares pursuant to

section 701 of the Companies Act. The

authority is limited to the purchase of an

aggregate of 12,055,905 shares

(representing approximately 14.99% of the

issued share capital of the Company as at

the date of the Notice of the Meeting) or, if

lower, such number of shares (rounded

down to the nearest whole share) as shall

equal 14.99% of the issued share capital at

the date the resolution is passed. The

maximum price that may be paid for a

share will be the higher of (i) an amount

that is not more than 5% above the

average of the middle market quotations

of the shares as derived from the Daily

Official List of the UK Listing Authority for

the five business days preceding the date

such shares are contracted to be

purchased and (ii) the price stipulated by

Article 5(6) of the Market Abuse

Regulation (EU) 596/2014 (as such

Regulation forms part of UK law and as

amended). The minimum price that may be

paid for a share is 1 penny, being the

nominal value thereof.

Market liquidity in VCTs is normally very

restricted. The passing of this resolution will

enable the Company to purchase its own

shares thereby providing a mechanism by

which the Company may enhance the

liquidity of its shares and seek to manage

the level and volatility of the discount to

NAV at which its shares may trade.

It is the Directors’ intention to cancel any

shares bought back under this authority.

Shareholders should note that the

Directors do not intend to exercise this

authority unless they believe to do so

would result in an increase in net assets

per share which would be in the interests

of Shareholders generally. This resolution

will expire on the date falling fifteen

months after the passing of this resolution

or, if earlier, on the conclusion of the

Annual General Meeting of the Company

to be held in 2023 except that the

Company may purchase its own shares

after this date in pursuance of a contract or

contracts made prior to the expiration of

this authority.

Recommendation

The Board recommends that Shareholders

vote in favour of the resolutions to be

proposed at the Annual General Meeting,

as the Directors intend to do in respect of

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Directors’ Report

Reports of

the Directors

their own beneficial holdings of 54,172

shares (representing 0.07% of the issued

share capital as at the date of publication).

Voting rights of Shareholders

At general meetings of the Company,

Shareholders have one vote on a show of

hands, and one vote per share held on a

poll. No member shall be entitled to vote

or exercise any rights at a general

meeting unless all their shares have been

paid up in full. Any instrument of proxy

must be deposited at the place specified

by the Directors no later than 48 hours

before the time fixed for holding the

meeting.

There are no restrictions on voting rights

and no agreements between holders of

securities that may prevent or restrict the

transfer of securities or voting rights.

By order of the Board

Gresham House Asset Management

Limited

Company Secretary

29 June 2022

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

This Corporate Governance

Statement forms part of the

Directors’ Report.

The Directors have adopted the

Association of Investment Companies

(AIC) Code of Corporate Governance

2019 (“the AIC Code”) for the financial

year ended 31 March 2022. The Board

has considered the principles and

recommendations of the AIC Code by

reference to the AIC Corporate

Governance Guide for investment

companies (“AIC Guide”). The AIC Code,

as explained by the AIC Guide,

addresses all the principles set out in

the UK Corporate Governance Code

(“the UK Code”), as well as setting out

additional principles and

recommendations on issues that are of

specific relevance to the Company.

The Board considers that reporting

against the principles and

recommendations of the AIC Code, and

by reference to the AIC Guide (which

incorporates the UK Code), will provide

the most appropriate information to

Shareholders.

The AIC Code was endorsed by the

Financial Reporting Council (FRC) in

February 2019. In adopting the AIC

Code, the Company will therefore meet

its obligations in relation to the reporting

requirements of the Financial Conduct

Authority’s Listing and Disclosure and

Transparency Rules on Corporate

Governance.

The AIC Code can be viewed on the

AIC’s website at www.theaic.co.uk/

aic-code-of-corporate-governance

Statement of Compliance

This statement has been compiled in

accordance with the FCA’s Disclosure

and Transparency Rule (DTR) 7.2 on

Corporate Governance Statements.

The Board considers that the Company

has complied with the recommendations

of the AIC Code and relevant provisions

of the UK Code throughout the year

under review, except as explained in the

following paragraphs. A table providing

further explanations of how the

Company has complied with the AIC

Code during the year is available in the

Corporate Governance section of the

Company’s website: www.mig2vct.co.uk.

As an externally managed VCT, most of

the Company’s operations are

delegated to third parties and the

Company has no executive directors,

employees or internal operations. The

Board has therefore concluded, for the

reasons set out in the AIC Guide, that

not all the provisions of the UK Code are

relevant to the Company. Firstly, as the

Company does not employ a chief

executive, nor any executive directors,

the provisions of the AIC Code relating

to the rate of the chief executive and

executive directors’ remuneration are

not relevant to the Company. Secondly,

the systems and procedures of the

Investment Adviser, the provision of VCT

monitoring services by Philip Hare &

Associates LLP, as well as the size of the

Company’s operations, give the Board

full confidence that an internal audit

function is not necessary. The Company

has therefore not reported further in

respect of these provisions.

Internal control

The Board acknowledges that it is

responsible for the Company’s system of

internal control and for reviewing its

effectiveness. Internal control systems

are designed to manage the particular

needs of the Company and the risks to

which it is exposed and can by their

nature only provide reasonable and not

absolute assurance against material

misstatement or loss.

The Company’s internal control system

aims to ensure the maintenance of

proper accounting records, the reliability

of the finance information used for

publication and upon which business

decisions are made, and that the assets

of the Company are safeguarded. The

financial controls operated by the Board

include regular reviews of signing

authorities, quarterly management

accounts and the processes by which

investments in the portfolio are valued.

The Board also provides authorisation of

the Investment Policy and regular

reviews of the financial results and

investment performance.

The Board has put in place ongoing

procedures for identifying, evaluating

and managing the significant risks faced

by the Company. As part of this process

an annual review of the control systems

is carried out. The review covers a

consideration of the key business,

operational, compliance and financial

risks facing the Company and includes a

review of the risks in relation to the

financial reporting process. The Board

reviews a schedule of key risks and the

management accounts at each quarterly

Board meeting. It is assisted by the Audit

Committee in respect of the Annual and

Interim Reports and other published

financial information.

The Board has delegated, contractually

to third parties, the management of the

investment portfolio, the day-to-day

accounting, company secretarial and

administration requirements and the

registration services. Each of these

contracts was entered into after full and

proper consideration by the Board of the

quality and cost of services offered,

including the financial control systems in

operation at the service providers in so

far as they relate to the affairs of the

Company. The Board regularly monitors

these controls from a risk perspective

and receives reports from the Registrar

and Investment Adviser and

Administrator when appropriate.

The Board, assisted by the Audit

Committee, carries out separate

assessments in respect of the Annual

and Interim Reports and other published

financial information. As part of these

reviews, the Board appraises all the

relevant risks ensuing from the internal

control process referred to above. The

main aspects of the internal controls

which have been in place throughout

the year in relation to financial reporting

are:

Internal controls are in place for the

preparation and reconciliation of the

valuations prepared by the Investment

Adviser.

Independent reviews of the valuations of

investments within the portfolio are

undertaken quarterly by the Board.

The information contained in the Annual

Report and other financial reports is

reviewed separately by the Audit

Committee prior to consideration by the

Board.

The Board reviews all financial

information prior to publication.

The system of internal control and the

procedure for the review of control

systems has been in place and

operational throughout the year under

review and up to the date of this Report.

The Audit Committee and the Board

carried out an assessment of the

effectiveness of internal controls in

managing risk which was conducted on

the basis of reports from the relevant

service providers. The last review took

place on 15 June 2022. The Board has

identified no significant problems with

the Company’s internal control

mechanisms.

Section 172 Director Duties

The Directors continue to have regard to

the interests of the Company’s

Shareholders and other stakeholders,

including the impact of its activities on

the community, environment and the

Company’s reputation, when making

decisions. The Directors, acting fairly

and in good faith, consider what is most

likely to promote the success of the

Company for its members and

Corporate Governance Statement

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

stakeholders in the long-term. For

further information on how the Directors

have fulfilled their duties under Section

172 of the Companies Act 2006, please

see pages 28 to 29.

Fees paid to the Investment Adviser

The fees paid to the Investment Adviser

are set out in Note 4 to the Financial

Statements on page 60.

In addition, the Investment Adviser

received fees totalling £288,267 (2021:

£315,137) during the year ended 31 March

2022, being £98,172 (2021: £137,298) for

arrangement fees, and £190,095 (2021:

£177,839) for acting as non-executive

directors on a number of investee

company boards. These amounts are the

share of such fees attributable to

investments made by the Company.

Alternative Investment Fund

Manager (“AIFM”)

The Board appointed the Company as

its own AIFM in compliance with the

European Commission’s Alternative

Investment Fund Management Directive

with effect from 22 July 2014. The

Company is registered as a small AIFM,

and is therefore exempt from the

principal requirements of the Directive.

Gresham House continues to provide

investment advisory and administrative

services to the Company. However, in

order for the Company to continue to

discharge its safekeeping

responsibilities for the documents of title

to its investments, Gresham House

company secretarial staff are now

directly responsible to the Board, under

its instruction, it has contracted a

third-party, Apex Group, to act as

custodian..

The Board and its Committees

The powers of the Directors have been

granted by company law, the Company’s

Articles of Association and resolutions

passed by the Company’s members in

general meeting. Resolutions are

proposed annually at each annual

general meeting of the Company to

authorise the Directors to allot shares,

disapply the pre-emption rights of

members and buyback the Company’s

own shares on behalf of the Company.

These authorities are currently in place

and resolutions to renew them will be

proposed at the Annual General

Meeting of the Company to be held on

21 September 2022.

The Board has agreed a schedule of

matters specifically reserved for

decision by the Board. These include

compliance with the requirements of the

Companies Act 2006 and the Income

Tax Act 2007, the UK Listing Authority

and the London Stock Exchange;

strategy and management of the

Company; changes relating to the

Company’s capital structure or its status

as a plc; financial reporting and controls;

board and committee appointments as

recommended by the Nomination and

Remuneration Committee and terms of

reference of committees; material

contracts of the Company and contracts

of the Company not in the ordinary

course of business.

In regard to the Chairman of the Board’s

tenure, the length of service of all

directors is considered on an ongoing

basis, with the Nomination &

Remuneration Committee giving

consideration to succession and

composition at its year-end meeting, in

compliance with the AIC Code of

Corporate Governance guidance.

Ian Blackburn was appointed by the

Board on 1 July 2017, Sally Duckworth

was appointed by the Board on

1January 2007 and Adam Kingdon was

appointed by the Board on

29September 2006. Both Ian Blackburn

and Sally Duckworth will be seeking

re-election at the upcoming Annual

General Meeting on 21 September 2022,

whilst Adam Kingdon has confirmed his

intention to retire from the Board at the

conclusion of that meeting. The Board

continues to consider its composition

and appoint a successor to Adam as

Chairman of the Audit Committee.

The Board is of the view that a term of

service in excess of nine years is not in

itself prejudicial to a director’s ability to

carry out their duties effectively and

from an independent perspective; the

nature of the Company’s business is

such that an individual director’s

experience and continuity of non-

executive board membership can

significantly enhance the effectiveness

of the Board as a whole.

Following the performance evaluation of

the Directors during the year, the Board

confirms that each of Ian Blackburn,

Sally Duckworth and Adam Kingdon

have and continue to demonstrate

commitment to their roles and to be

effective in carrying out their duties on

behalf of the Company.

Copies of the directors’ letters of

appointment will be available for

inspection at the place of the Annual

General Meeting for at least 15 minutes

before and during the Meeting.

Board Committees

The Board has established three

Committees, the Nomination and

Remuneration Committee, the

Investment Committee and the Audit

Committee, each with responsibilities for

specific areas of its activity. Each of the

Committees have written terms of

reference, which detail their authority

and duties. Shareholders may obtain

copies of these by making a written

request to the Company Secretary or by

downloading these documents from the

Company’s website: www.mig2vct.co.uk.

The Board has satisfied itself that each

of its Committees has sufficient

resources to undertake its duties.

Audit Committee

The Audit Committee is chaired by

Adam Kingdon and comprises himself,

Ian Blackburn and Sally Duckworth. A

full description of the work of the Audit

Committee is set out in the Report of the

Audit Committee on pages 42 and 43 of

this Annual Report.

Nomination and Remuneration

Committee

The Nomination and Remuneration

Committee is chaired by Ian Blackburn

and comprises himself, Sally Duckworth

and Adam Kingdon.

In considering nominations, the

Committee is responsible for making

recommendations to the Board

concerning new appointments of

Directors to the Board and its

committees; the periodic review of the

composition of the Board and its

committees; and the annual

performance review of the Board, the

Directors and the Chairman. This

includes the ongoing review of each

Director’s actual or potential conflicts of

interest which may arise as a result of

the external business activities of Board

members. The Board remains committed

to include consideration of gender and

diversity for all future appointments.

A full description of the work of the

Committee with regard to remuneration

is included within the Directors’

Remuneration Report on pages 44 to 47.

Investment Committee

The Investment Committee is chaired by

Sally Duckworth and comprises all three

Directors.

The Committee meets as necessary to

consider the investment proposals put

forward by the Investment Adviser. The

Committee advises the Board on the

development and implementation of the

Investment Policy and leads the process

for the ongoing monitoring of investee

companies and the Company’s

investment therein. Investment guidance

Corporate Governance Statement

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

has been issued to the Investment

Adviser and the Committee ensures that

this guidance is adhered to. New

investments and divestments are

approved by the Committee following

discussions between Committee

members and are subsequently ratified

by the Board. Investment matters are

discussed at each Board meeting.

During the year, the Committee formally

approved all investments, divestments

and variation decisions, meeting

informally on numerous occasions.

The Committee considers and agrees,

on the advice of the Investment Adviser

for recommendation to the Board, all

unquoted investment valuations.

Investments are valued in accordance

with the International Private Equity and

Venture Capital (IPEV) Valuation

Guidelines under which investments are

valued at fair value as defined in those

guidelines. Any AIM or other quoted

investment will be valued at the closing

bid price of its shares as at the relevant

reporting date, in accordance with

generally accepted accounting practice.

Financial risk management

The main risks arising from the

Company’s financial instruments are due

to investment risk, liquidity risk, credit

risk, fluctuations in market prices (market

price risk), cash flow interest rate risk

and currency risk. The Board regularly

reviews and agrees policies for

managing these risks and full details can

be found in Note 15 to the Accounts on

pages 69 to 76 of this Annual Report.

Investment management and

service providers

On 30 September 2021, Mobeus Equity

Partners LLP, the investment adviser to

the Mobeus VCTs, completed the sale of

its VCT fund and investment

management business to a subsidiary of

Gresham House plc. As part of the sale,

the Boards agreed to the novation of the

investment advisory arrangements from

Mobeus to Gresham House Asset

Management Limited (“Gresham

House”).

Mobeus acted as Investment Adviser for

six months of the year under review and

provided administrative and company

secretarial services to the Company up

until the novation of the investment

advisory agreement to Gresham House

on 30 September 2021. With effect from

1 October 2021, the same team, now

working under Gresham House,

provides Investment Advisory,

administrative and company secretarial

services to the Company.

The Directors carry out an annual review

of the performance of and contractual

arrangements with the Investment

Adviser. The annual review of the

Investment Adviser forms part of the

Board’s overall internal control

procedures discussed above. As part of

this review, the Board considers the

quality and continuity of the investment

management team, investment

performance, quality of information

provided to the Board, remuneration of

the Investment Adviser, the investment

process and the results achieved to

date. A review of the performance of the

Company is included in the Strategic

Report on pages 8 to 11. The Board

concluded that the Investment Adviser

had performed consistently well over

the medium-term and has returned a

good performance in respect of the year

under review. The Company’s

investment portfolio has performed very

well and the Investment Adviser has

been proactive in ensuring the Company

remains informed and well-positioned to

maintain compliance with VCT tax

legislation.

The Board places significant emphasis

on the Company’s performance against

its peers and further information on this

has been included in the Strategic

Report on page 10. The Board further

considered the Investment Adviser’s

commitment to the promotion of the

Company and was satisfied that this was

highly prioritised by the Investment

Adviser as evidenced by, inter alia, the

Mobeus VCT fundraisings which have

taken place between 2010 and 2022

and annual Shareholder events.

The Board considers that the Investment

Adviser continued to exercise

independent judgement while producing

valuations which reflect fair value.

Overall, the Board continues to believe

that the Investment Adviser possesses

the experience, knowledge and

resources that are required to support

the Board in achieving the Company’s

long term investment objectives. The

Directors therefore believe that the

continued appointment of the

Investment Adviser to the Company on

the terms currently agreed is in the

interests of Shareholders, and this was

formally approved by the Board on

15June 2022.

The principal terms of the Company’s

Investment Advisory Agreement,

amended and restated on 30 September

2016, and its Performance Incentive Fee

Agreement, novated on 30 September

2021 to Gresham House are set out in

Note 4 to the Financial Statements on

page 61 of this Annual Report. The

Board seeks to ensure that the terms of

these agreements represent an

appropriate balance between cost and

the incentivisation of the Investment

Adviser.

By order of the Board

Gresham House Asset Management

Limited

Company Secretary

29 June 2022

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

This Report of the Audit

Committee forms part of the

Directors’ Report.

The Audit Committee is chaired by

Adam Kingdon and comprises himself,

Ian Blackburn and Sally Duckworth. Due

to there only being three directors

appointed to the Company, it was

deemed appropriate that the Chairman,

who was independent upon his

appointment to the Board, should be a

member of the Audit Committee.

The duties of the Committee are set out

in the Terms of Reference which can be

found on the website in the Corporate

Governance section at:

www.mig2vct.co.uk.

A summary of the Audit Committee’s

principal activities for the year to

31March 2022 is provided below:

Financial statements

The Interim and Annual Reports to

Shareholders were thoroughly reviewed

by the Committee prior to submission to

the Board for approval.

Internal control

The Committee has monitored the

system of internal controls throughout

the year under review as described in

more detail in this Report on page 39. It

receives a report by exception on the

Company’s progress against its internal

controls at its Annual and Interim results

meetings and reviews a schedule of key

risks at each meeting. A full review of

the internal controls in operation by the

Company was undertaken by the

Committee on 15 June 2022.

Valuation of investments

The Investment Adviser prepared

valuations of the investments in the

portfolio at the end of each quarter and

these were considered in detail and

agreed by the Investment committee for

recommendation to the Board. The Audit

Committee continued to monitor the

adequacy of the controls over the

preparation of these valuations. As part

of this process, it focused on ensuring

that both the bases of the valuations and

any assumptions used were reasonable

and in accordance with the IPEV

Valuation Guidelines. The Committee

received a review within a report from

the external auditor as part of both the

year-end audit process and the

advanced audit procedures carried out

by BDO LLP at the Half-Year. These

reports were discussed in full by the

Committee, the Investment Adviser and,

with the Auditor as necessary, before a

recommendation to approve the

valuations was made to the Board.

Key issues considered by the

Committee

The key accounting and reporting issues

considered by the Committee in addition

to those described above during the

year included:

Going concern and long-term

viability

The Committee monitors the Company’s

resources at each quarterly board

meeting and has satisfied itself that the

Company has an adequate level of

resources for the foreseeable future. It

has assessed the viability of the

Company for three years and beyond.

Consideration is given to the cash

balances and holdings in money market

funds, together with the ability of the

Company to realise its investments. See

page 33 of the Strategic Report for

further details.

Recognition of impairment and

realised losses

If an investment has been impaired such

that there is no realistic expectation that

there will be a full return from the

investment, the loss is treated as a

permanent impairment and is

recognised as a realised loss in the

Financial Statements. The Committee

reviews the appropriateness and

completeness of such impairments.

Compliance with the VCT tests

The Company engages the services of a

VCT Status Adviser (Philip Hare &

Associates LLP) to advise on its ongoing

compliance with the legislative

requirements relating to VCTs. A report

on the Company’s compliance

supported by the tests carried out is

produced by the VCT Status Adviser on

a bi-annual basis and reviewed by the

Committee for recommendation to the

Board. The Committee has continued to

consider the risk and compliance

aspects of changes to the VCT Rules

introduced by the Finance Act (No 2)

2015 and the Finance Act (No 2) 2018.

As an essential part of this work, the

Committee has held ongoing

discussions with the Company’s VCT

Status Adviser throughout the year.

Tax Compliance Services

Philip Hare & Associates LLP were

appointed during the year ended

31December 2018 and continued to

provide such services during the year

under review.

Income from investee companies

The Committee notes that revenue from

loan stock and dividends may be

uncertain given the type of companies in

which the VCT invests. Dividends in

particular may be difficult to predict. The

payments received however have a

direct impact on the level of income

dividends the Company is able to pay to

Shareholders. The Committee agrees

policies for revenue recognition and

reviews their application at each of its

meetings. It considers schedules of

income received and receivable from

each of the investee companies and

assesses, in consultation with the

Investment Adviser, the likelihood of

receipt of each of the amounts.

Key risks faced by the Company

The Board has identified the key risks

faced by the Company and established

appropriate controls (as disclosed in the

Strategic Report on page 31). The

Committee monitors these controls and

reviews any incidences of non-

compliance. Further details are set out in

the section of this report that discusses

the Company’s system of internal

controls (page 39).

Cyber Security

The Board sought and obtained

assurances during the year from the

Investment Adviser, the Registrar and

the other service providers concerning

their cyber security procedures and

policies. Board papers are circulated

and stored through an electronic

platform providing additional cyber

security protection.

Anti-tax evasion policy

In compliance with the Criminal Finance

Act 2017 the Company adopted a zero

tolerance towards the criminal facilitation

of tax evasion. A summary of the policy

is available on page 36 of the Annual

Report.

Safekeeping of the Company’s

documents of title to its

investments

The Committee has established

procedures for the safekeeping of the

Company’s documents of title under a

Safekeeping Agreement dated

17February 2022 with Apex Fund and

Corporate Services (Guernsey) Limited,

for accessing and dealing with these

documents.

Relationship with the external

auditor and re-appointment

The Committee is responsible for

Report of the Audit Committee

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

overseeing the relationship with the

external Auditor, assessing the

effectiveness of the external audit

process and making recommendations

on the appointment and removal of the

external Auditor. It makes

recommendations to the Board on the

level of audit fees and the terms of

engagement for the Auditor. The

external Auditor is invited to attend Audit

Committee meetings, where

appropriate, and also has the

opportunity to meet with the Committee

and its Chairman without representatives

of the Investment Adviser being present.

The Committee undertook an audit

tender process in 2016 in compliance

with the requirements on audit firm

rotation under the European Audit

Regulation Directive. As a consequence

of that process, BDO LLP were

reappointed. BDO LLP has been the

independent auditor to the Company

since 2008.

The Audit Committee also undertakes

an annual review of the external Auditor

and the effectiveness of the audit

process on an annual basis. When

assessing the effectiveness of the

process, the Committee considers

whether the Auditor:

●● demonstrated strong technical

knowledge and a clear

understanding of the business;

●● indicated professional scepticism in

key judgements and raised any

significant issues in advance of the

audit process commencing;

●● provided an audit team that is

appropriately resourced;

●● demonstrated a proactive approach

to the audit planning process and

engaged with the Committee

Chairman and other key individuals

within the business;

●● provided a clear explanation of the

scope and strategy of the audit;

●● demonstrated the ability to

communicate clearly and promptly

with the members of the Committee

and the Investment Adviser and

produce comprehensive reports on

its findings;

●● demonstrated that it has appropriate

procedures and safeguards in place

to maintain its independence and

objectivity;

●● charged justifiable fees in respect of

the scope of services provided; and

●● handled key audit issues effectively

and responded robustly to the

Committee’s questions.

This review constituted the Audit

Committee’s annual assessment of the

effectiveness of the external audit

process. The Audit Committee

concluded that the re-appointment of

BDO LLP is in the best interests of the

Company and Shareholders and the

Board recommends their re-appointment

by Shareholders at the forthcoming

Annual General Meeting.

Non-audit services

The Board regularly reviews and

monitors the external Auditor’s

independence and objectivity. As part of

this it reviews the nature and extent of

services supplied by the Auditor to

ensure that independence is maintained.

The Committee has reviewed the

implications of the Financial Reporting

Council‘s (“FRC”) Revised Ethical

Reporting Standard 2019 effective from

5 March 2020.

The Audit Committee, based upon the

review of this 2019 Ethical Standard, has

decided to purchase certain non-audit

services, such as tax compliance

services and iXBRL tagging, from

separate firms. The auditor provides

certain non-audit services in respect of

the Half-Year Report, whereas Philip

Hare & Associates LLP provide tax

compliance services, and Arkk

Consulting Limited, one of the

Company’s investee companies,

provides the iXBRL Tagging Service.

Additional disclosures in the

Directors’ Report

Disclosures required by certain publicly-

traded companies as set out in Part 6 of

Schedule 7 of the Large and Medium-

sized Companies and Groups (Accounts

and Reports) Regulations 2008 (as

amended 2013) are contained in the

Directors’ Report on page 35.

By order of the Board

Adam Kingdon

Chairman of the Audit Committee

29 June 2022

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

Introduction

This Report has been prepared by the

Directors in accordance with the

requirements of Schedule 8 of The Large

and Medium-sized Companies and

Groups (Accounts and Reports)

(Amendment) Regulations 2013, the

Companies Act 2006 and the Listing

Rules of the UK Listing Authority (“the

Listing Rules”).

The Company’s independent auditor is

required to give its opinion on the

information provided on Directors’

emoluments and Director’s interests on

page 46 of this Annual Report and this is

explained further in the Auditor’s report

to Shareholders on pages 49 to 53.

The resolution to approve the Directors’

Remuneration Policy as set out in the

Annual Report for the year ended

31March 2020 was approved by

Shareholders at the Annual General

Meeting of the Company held on

9September 2020. Full details of the

Remuneration Policy can be found within

this report in the adjacent column and on

page 45.

The resolution to approve the Directors’

Annual Remuneration Report, as set out

in the Annual Report for the year ended

31 March 2021, was approved by

Shareholders at the Annual General

Meeting of the Company held on

8September 2021. An ordinary resolution

will be proposed at the forthcoming

Annual General Meeting of the Company

to be held on 21 September 2022 for the

approval of the Annual Remuneration

Report as set out below.

Remuneration statement by the

Chairman of the Nomination and

Remuneration Committee

This report sets out the Company’s

forward-looking Directors’ Remuneration

Policy and the Annual Remuneration

Report which describes how this policy

has been applied during the year.

As set out in the Directors’ Remuneration

Report, the Committee recommended an

increase in Director’s fees with effect

from 1 April 2022; the first increase in

Directors’ remuneration since 1 October

2018. The Committee has reviewed the

fees paid in the year ended 31 March

2022 and decided that, given its desire

to recruit a successor to Adam Kingdon

who will retire from the Board at the close

of the Annual General Meeting on

21September 2022, an increase in the

level of remuneration was necessary to

align with the current market rate for a

VCT director with the requisite

experience. As part of this review, the

Committee considered information on the

fees paid to directors of a peer group of

VCTs of a similar size operating in its

sector.

Ian Blackburn

Chairman of the Nomination and

Remuneration Committee

29 June 2022

Directors’ Remuneration Policy

The remuneration policy is set by the

Board on the recommendation of the

Nomination and Remuneration

Committee and is unchanged from last

year. In determining the Company’s

remuneration policy, the Committee

seeks to determine a level of fees

appropriate to attract and retain

individuals of sufficient calibre to lead the

Company in achieving its strategy. When

considering the level of Directors’ fees, it

takes account of the required workload

and responsibilities of each role and the

value and amount of time that a Director

is required to commit to the Company. It

further considers remuneration levels

elsewhere in the Venture Capital Trust

industry for companies of a similar size

and structure, together with other

relevant information.

The level of fees paid to each of the

Directors is reviewed annually by the

Nomination and Remuneration

Committee which makes

recommendations to the Board.

The Committee has access to

independent advice where and when it

considers appropriate. In coming to a

decision on the Board’s remuneration,

the Committee reviewed an analysis of

VCT industry remuneration obtained from

David Cartwright FCA.

The Committee agreed that an increase

in remuneration from the previous year to

£35,000 per annum paid to each

Director, with the addition of a fee of

£3,000 paid to the Chairman of the

Board. The Directors may, at their

discretion, pay additional sums in respect

of specific tasks carried out by individual

Directors on behalf of the Company.

Since all the Directors are Non-Executive,

the Company is not required to comply

with the executive director’s provisions of

the Listing Rules, the UK Corporate

Governance Code and the AIC Code of

Corporate Governance in respect of

Directors’ remuneration, except in so far

as they relate specifically to Non-

Executive Directors.

The Committee also took into account

the additional work required in

consideration of the change of

investment advisory arrangements and,

given the substantial additional time

requirement, recommended to the Board

that a discretionary payment of £3,000

be made to the Chairman and £1,000 to

the other two directors of the Board, each

to be paid in respect of the year under

review. Both of these recommendations

were subsequently reviewed and

approved by the Board at its meeting on

24 November 2021.

Performance-related remuneration

Whilst it is a key element of this policy to

recruit directors of the calibre required to

lead the Company in achieving its short

and long-term objectives no component

of the fees paid is directly related to

performance.

Pensions

All the Directors are non-executive and

the Company does not provide pension

benefits to any of the Directors.

Additional benefits

Whilst the Board agreed to pay a

discretionary payment to each Director in

respect of the change in investment

advisory arrangements as mentioned

previously, the Company does not have

any other schemes in place to pay

bonuses or benefits to the Directors. No

arrangements have been entered into

between the Company and the Directors

to entitle any of the Directors to

compensation for loss of office. None of

the Directors receive pension benefits

from the Company and the Company has

not granted any Director any options over

the share capital of the Company.

Directors’ Remuneration Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

Recruitment remuneration

Remuneration of any new Director, who

may subsequently be appointed to the

Board, will be in line with the

Remuneration Policy set out in this Report

and the levels of remuneration stated

therein, as modified from time to time.

Shareholders’ views on

remuneration

The Board prioritises the views of

Shareholders and encourages an open

discussion at general meetings of the

Company. It takes Shareholders’ views

into account, where appropriate, when

formulating its remuneration policy.

Shareholders can contact the Chairman

or the Company Secretary, Gresham

House, at any time by email using the

address: mobeusvcts@greshamhouse.

com.

Directors’ terms of appointment

In accordance with the 2019 AIC Code,

Ian Blackburn and Sally Duckworth have

agreed to offer themselves for re-election

annually and will next seek re-election by

Shareholders at the Company’s Annual

General Meeting on 21 September 2022.

Adam Kingdon will not be seeking

re-election and will retire at the

conclusion of that meeting.

All of the Directors are Non-Executive

and none of the Directors has a service

contract with the Company.

All Directors receive a formal letter of

appointment setting out the terms of their

appointment and their specific duties and

responsibilities and the fees pertaining to

their appointment. A Director’s

appointment may be terminated on three

months’ notice being given by the

Company and in certain other

circumstances. Copies of the Directors’

appointment letters will be available for

inspection at the place of the Annual

General Meeting on 21 September 2022

from 10.45 am. New Directors are asked

to undertake that they have sufficient

time to carry out their responsibilities to

the Company and to disclose their other

significant time commitments to the

Board before appointment.

Shareholder approval of the

Company’s Remuneration Policy

This policy applied throughout the

financial year ended 31 March 2022 and

will continue to apply to the current

financial year ending 31 March 2023.

A resolution to approve the Directors’

Remuneration Policy, as set out in the

Annual Report for the year ended

31March 2020, was unanimously

approved by Shareholders at the Annual

General Meeting held on 9 September

2020. The Company received proxy

votes in favour of the resolution

representing 96.28% (including those

who appointed the Chairman to vote at

his discretion) of the votes received and

3.72% against.

The Board is required to ask

Shareholders to approve the

Remuneration Policy every three years.

The Directors will therefore recommend

that Shareholders approve the Policy

again at the Annual General Meeting of

the Company to be held in 2023.

Future Remuneration Policy

The table below illustrates how the Company’s Objective is supported by its Remuneration Policy. It sets out details of each

component of the pay package and the maximum amount receivable per annum by each Director. The Nomination and

Remuneration Committee and the Board review the fees paid to Directors annually in accordance with the Remuneration Policy set

out below and may decide that an increase in fees is appropriate in respect of subsequent years.

Director and Role Components of

Pay Package

Maximum Payment

per annum

Performance

Conditions

Ian Blackburn

Chairman of the Board

Chair of the Nomination and Remuneration Committee

Chair of the Management Engagement Committee

Director’s fee (incl.

fee for acting as

Chairman of the

Board) £38,000 None

Adam Kingdon

Chair of the Audit Committee Director’s fee £35,000 None

Sally Duckworth

Chair of the Investment Committee Director’s fee £35,000 None

Total maximum fees payable £108,000

Company Objective

To provide investors with a regular income stream, arising both from the income generated by companies selected for the

portfolio and from realising any growth in capital, while continuing at all times to qualify as a VCT.

Remuneration Policy

To ensure that the levels of remuneration paid are sufficient to attract, retain and motivate directors of the quality and

experience required to manage the Company in order to achieve the Company’s Objective.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

Nomination and Remuneration

Committee

The Committee is chaired by Ian

Blackburn with Sally Duckworth and

Adam Kingdon as its other members. All

members of the Committee were

considered to be independent of the

Investment Adviser during the year under

review. The Committee meets at least

once a year and is responsible for making

recommendations to the Board on

remuneration policy and reviewing the

policy’s ongoing appropriateness and

relevance. It carries out an annual review

of the remuneration of the Directors and

makes recommendations to the Board on

the level of Directors’ fees. The

Committee may, at its discretion,

recommend to the Board that individual

Directors should be awarded further

payments in respect of additional work

undertaken on behalf of the Company. It

is responsible for the appointment of

remuneration consultants, if this should

be considered necessary, including

establishing the selection criteria and

terms of reference for such an

appointment. The Committee met twice

during the year under review with full

attendance from all its members. The

Committee’s duties in respect of

Nominations to the Board are outlined on

page 40 of the Annual Report.

Directors’ attendance at Board and Committee meetings in the financial year ended 31 March 2022

The table below sets out the Directors’ attendance at quarterly Board meetings and Committee meetings held during the year to

31 March 2022. In addition to the quarterly Board meetings, the Board met on other occasions to consider specific issues as they

arose.

Directors

Board Meetings

(4)

Audit Committee

Meetings

(2)

Nomination and

Remuneration Committee

Meetings

(2)

Eligible Attended Eligible Attended Eligible Attended

Ian Blackburn 4 4 2 2 2 2

Adam Kingdon 4 4 2 2 2 2

Sally Duckworth 4 4 2 2 2 2

Total individual emoluments paid to

the Directors during the year (audited)

Year ended

31 March

Annual

change

2022 2021 2022 2021

£ £ (%) (%)

Ian Blackburn 39,000 36,000 8.3 0

Adam Kingdon 31,000 30,000 3.3 0

Sally Duckworth 31,000 30,000 3.3 0

Total 101,000 96,000

No sums were paid to third parties in

respect of any of the Director’s services

during the year under review.

Relative importance of spend on

Directors’ fees

Year to

31 March

2022

Year to

31 March

2021

£ £

Total directors’ fees 101,000 96,000

Dividends paid/payable in

respect of the year 8,726,149 9,547,059

Share Buybacks 643,810 292,568

Directors fees as a share of:

Closing net assets 0.1% 0.1%

Dividends paid and payable

in respect of the year 1.2% 1.0%

Total fees and expenses

3.3% 6.2%

1 - this figure is the combined total of Investment

Adviser’s fees (including performance fees) and Other

expenses disclosed in the Income Statement.

Directors’ remuneration: 5-year comparison

Director

2022

2017

£ Change

Chairman Fee* 39,000 26,000 50.0%

Directors' Fee (inc. committee chairman fee)* 31,000 23,000 34.8%

* A supplementary fee of £3,000 was paid to the Chairman and £1,000 payable to the other two

directors in respect of the year ended 31 March 2022. In the financial year ended 31 March 2022,

the Company no longer paid supplements to the chairmen of committees.

Directors’ interests in the Company’s shares (audited)

The Company does not require the Directors to hold shares in the Company.

The Directors, however, believe that it is in the best interests of the Company and

its Shareholders for each Director to maintain an interest in the Company. The

Directors who held office throughout the year under review and their interests as

at 31 March 2022 were:

31 March 2022 31 March 2021

Director

held

Percentage of

issued share

capital

held

Percentage of

issued share

capital

Ian Blackburn 48,463 0.06% 48,463 0.13%

Adam Kingdon 5,709 0.01% 5,709 0.01%

Sally Duckworth - - - -

There have been no further changes to the Directors’ share interests between the

year-end and the date of this Annual Report. The remuneration of the Directors is fixed

and contains no performance related variable element. As the Company has no

employees, the directors do not consider it relevant to compare director fees against

employee pay.

Directors’ Remuneration Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Reports of

the Directors

Company performance

The graph below charts the total

shareholder return of the Company’s

shares on a share price basis (assuming

all dividends are re-invested and

excluding the tax relief available to

Shareholders) over the past ten years

compared with that of an index of all

VCTs and an index of generalist VCTs

which are members of the AIC (based on

figures provided by Morningstar). The

Board considers these indices to be the

most appropriate to use to measure the

Company’s relative performance over the

medium to long term. The total

shareholder returns have each been

rebased to 100 pence at 30 April 2012.

An explanation of the performance of

the Company is given in the Chairman’s

Statement on page 3, the Performance

section of the Strategic Report on pages

8 to 11 and in the Investment Adviser’s

Review and Investment Portfolio

Summary on pages 12 to 26.

By order of the Board

Gresham House Asset Management

Limited

Company Secretary

29 June 2022

Mobeus Income & Growth 2 VCT plc NAV Cumulative total return

AIC Generalist VCTs NAV Cumulative total return

AIC ALL VCTs NAV Cumulative total return

Total return (pence)

100p

120p

140p

160p

180p

200p

220p

240p

260p

31 March

2019

31 March

2020

31 March

2021

31 March

2022

30 April

2012

30 April

2013

31 March

2014

31 March

2016

31 March

2015

31 March

2018

31 March

2017

Cumulative total return (NAV) basis

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Reports of

the Directors

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 year. Under that law the

directors are required to prepare the

financial statements and have elected to

prepare the company financial

statements in accordance with United

Kingdom Generally Accepted

Accounting Practice (United Kingdom

Accounting Standards, comprising

Financial Reporting Standard 102, the

Financial Reporting Standard applicable

in the UK and Republic of Ireland (‘FRS

102’) and applicable law). Under

company law the directors must not

approve the financial statements unless

they are satisfied that they give a true

and fair view of the state of affairs of the

company and of the profit or loss for 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 accounting

estimates that are reasonable and

prudent;

●● state whether the Financial

Statements have been prepared in

accordance with United Kingdom

accounting standards, subject to any

material departures disclosed and

explained in the Financial

Statements;

●● prepare the Financial Statements on

the going concern basis unless it is

inappropriate to presume that the

Company will continue in business;

and

●● prepare a Strategic Report, a

Directors’ Report and Directors’

Remuneration Report which comply

with the requirements of the

Companies Act 2006.

The Directors are responsible for

keeping adequate accounting records

that are sufficient to show and explain

the Company’s transactions and

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 2006. 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.

Website publication

The Directors are responsible for

ensuring the Annual Report and the

Financial Statements are made available

on a website. Financial Statements are

published on the Company’s website in

accordance with legislation in the United

Kingdom governing the preparation and

dissemination of Financial Statements,

which may vary from legislation in other

jurisdictions. The maintenance and

integrity of the Company’s website is the

responsibility of the Directors. The

Directors’ responsibility also extends to

the ongoing integrity of the Financial

Statements contained therein.

Directors’ responsibilities pursuant

to Disclosure and Transparency

Rule 4 of the UK Listing Authority

The Directors confirm to the best of their

knowledge that:

(a) The Financial Statements, which

have been prepared in accordance

with United Kingdom Generally

Accepted Accounting Practice, give

a true and fair view of the assets,

liabilities, financial position and the

profit of the Company.

(b) The Annual 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.

Having taken advice from the Audit

Committee, the Board considers the

Annual Report and Financial Statements,

taken as a whole, as fair, balanced and

understandable and that it provides the

information necessary for Shareholders

to assess the Company’s position,

performance, business model and

strategy.

Neither the Company nor the Directors

accept any liability to any person in

relation to the Annual Report except to

the extent that such liability could arise

under English law. Accordingly, any

liability to a person who has

demonstrated reliance on any untrue or

misleading statement or omission shall

be determined in accordance with

section 90A and schedule 10A of the

Financial Services and Markets Act

2000.

The names and functions of the

Directors are stated on page 34.

For and on behalf of the Board

Ian Blackburn

Chairman

29 June 2022

Statement of Directors’ Responsibilities

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Opinion on the financial statements

In our opinion the financial statements:

●● give a true and fair view of the state

of the Company’s affairs as at 31

March 2022 and of its profit for the

year then ended;

●● have been properly prepared in

accordance with United Kingdom

Generally Accepted Accounting

Practice; and

●● have been prepared in accordance

with the requirements of the

Companies Act 2006.

We have audited the financial

statements of Mobeus Income & Growth

2 VCT plc (“the Company”) for the year

ended 31 March 2022 which comprise

the Income statement, the Balance

Sheet, the Statement of Changes in

Equity, the Statement of Cash Flows and

notes to the financial statements,

including a summary of significant

accounting policies. The financial

reporting framework that has been

applied in their preparation is applicable

law and United Kingdom Accounting

Standards, including Financial Reporting

Standard 102 The Financial Reporting

Standard applicable in the UK and

Republic of Ireland (United Kingdom

Generally Accepted Accounting

Practice).

Basis for opinion

We conducted our audit in accordance

with International Standards on Auditing

(UK) (ISAs

(UK)) and applicable law. Our

responsibilities under those standards

are further described in the

Auditor’s responsibilities for the audit of

the financial statements section of our

report. We believe that the audit

evidence we have obtained is sufficient

and appropriate to provide a basis for

our opinion. Our audit opinion is

consistent with the additional report to

the audit committee.

Independence

Following the recommendation of the

audit committee, we were appointed by

the Board of Directors to audit the

financial statements for the year ended

30 September 2004 and subsequent

financial periods. The period of total

uninterrupted engagement, including

retenders and reappointments is 18

years, covering the years endied 30

September 2004 to 31 March 2022. We

remain independent of the Company in

accordance with the ethical

requirements that are relevant to our

audit of the financial statements in the

UK, including the FRC’s Ethical Standard

as applied to listed public interest

entities, and we have fulfilled our other

ethical responsibilities in accordance

with these requirements. The non-audit

services prohibited by that standard

were not provided to the Company.

Conclusions relating to going

concern

In auditing the financial statements, we

have concluded that the Directors’ use

of the going concern basis of accounting

in the preparation of the financial

statements is appropriate. Our

evaluation of the Directors’ assessment

of the Company’s ability to continue to

adopt the going concern basis of

accounting included:

●● Obtaining the VCT compliance

reports during the year and as at

year end and reviewing the

calculations therein to ensure that

the Company was meeting its

requirements to retain VCT status;

●● Reviewing the forecasted cash flows

that support the Directors’

assessment of going concern,

challenging assumptions and

judgements made in the forecasts,

and assessing them for

reasonableness. In particular, we

considered the available cash

resources relative to the forecast

expenditure which was assessed

against the prior year for

reasonableness;

●● Evaluating the Directors’ method of

assessing the going concern in light

of market volatility and the present

uncertainties in economic recovery

created by the ongoing matters

including the current situation in

Ukraine/Russia; and

●● Calculating financial ratios to

ascertain the financial health of the

Company.

Based on the work we have performed,

we have not identified any material

uncertainties relating to events or

conditions that, individually or

collectively, may cast significant doubt

on the Company’s ability to continue as

a going concern for a period of at least

twelve months from when the financial

statements are authorised for issue.

In relation to the Company’s reporting

on how it has applied the UK Corporate

Governance Code, we have nothing

material to add or draw attention to in

relation to the Directors’ statement in the

financial statements about whether the

Directors considered it appropriate to

adopt the going concern basis of

accounting.

Our responsibilities and the

responsibilities of the Directors with

respect to going concern are described

in the relevant sections of this report.

Overview

2022 2021

Key audit

matters

Valuation of

unquoted

investments

3 3

Materiality £1,040,000 (2021:£830,000)

based on 2% (2021: 2%) of

Gross investments

An overview of the scope of our

audit

Our company audit was scoped by

obtaining an understanding of the

company and its environment including

the company’s system of internal control,

and assessing the risk of material

misstatements in the financial

statements. We also addressed the risk

of management override of internal

controls, including assessing whether

there was evidence of bias by the

Directors that may have represented a

risk of material misstatement. All audit

work was performed by BDO LLP.

Key audit matters

Key audit matters are those matters that,

in our professional judgement, were of

most significance in our audit of the

financial statements of the current

period and include the most significant

assessed risks of material misstatement

(whether or not due to fraud) that we

identified, including those which had the

greatest effect on: the overall audit

strategy, the allocation of resources in

the audit, and directing the efforts of the

engagement team. This matter was

addressed in the context of our audit of

the financial statements as a whole, and

in forming our opinion thereon, and we

do not provide a separate opinion on

this matter.

Independent Auditor’s Report to the Members of

Mobeus Income & Growth 2 VCT plc

Independent

Auditor’s Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Independent

Auditor’s Report

Key audit matter How the scope of our audit addressed the key audit matter

Valuation of unquoted

investments

(Note 8)

We consider the

valuation of unquoted

investments to be the

most significant audit

area as investments is

the most significant

balance in the financial

statements and there

is a high level of

estimation involved in

the investment

valuations.

There is an inherent

risk of management

override arising from

the investments

valuations being

prepared by the

investment adviser,

who is remunerated

based on the net asset

value of the company.

For these reasons we

considered the

valuation of unquoted

investments to be a

key audit matter.

A breakdown of the investment portfolio valuation technique is shown

below.

Earnings multiple

Revenue multiple

Price of recent investment

Our sample for the testing of the unquoted investments was stratified

according to risk considering, inter alia, the value of the individual

investments, the nature of the investments, the extent of the fair value

movement and the subjectivity of the valuation technique.

For investments in our sample we:

Challenged whether the valuation methodology was the most appropriate in

the circumstances under the International Private Equity and Venture Capital

Valuation (“IPEV”) guidelines and applicable accounting standards;

Recalculated the value attributable to the company, having regard to the

application of enterprise value across the capital structures of the investee

companies.

For a sample of investments valued using less subjective valuation

techniques (price of recent investment reviewed for changes in fair value)

we:

●● Agreed the cost or price of the recent investment to supporting

documentation;

●● Considered whether the investment was an arms length transaction

through reviewing the parties involved in the transaction and checking

whether or not they were already investors of the investee company;

Considered whether there were any indications that the cost or price of the

recent investment was no longer representative of fair value considering,

inter alia the current performance of the investee company and the

milestones and assumptions set out in the investment proposal; and

Considered whether the price of the recent investment is supported by

alternative valuation techniques.

For a sample of investments that were valued using more subjective

techniques (earnings and revenue multiples) we:

●● Challenged and corroborated inputs to the valuation with reference to

management information of investee companies and market data,

including considering the impact of the Covid-19 pandemic and the

current situation in Ukraine/Russia on the valuation. We assessed the

impact of estimation uncertainty concerning these assumptions and the

disclosure of these uncertainties in the financial statements;

●● Reviewed the historical financial statements and any recent management

information available to support assumptions about maintainable

revenues and earnings used in the valuation;

●● Considered the revenue or earnings multiples applied by reference to

observable listed company market data; and

●● Challenged the consistency and appropriateness of adjustments made

to such market data in establishing the earnings or revenue multiple

applied in arriving at the valuations adopted by agreeing the adjusted

multiples to independent sources, the peer group, the market and sector

in which the investee company operates and obtaining independent

third party multiples.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Independent

Auditor’s Report

Our application of materiality

We apply the concept of materiality both

in planning and performing our audit,

and in evaluating the effect of

misstatements. We consider materiality

to be the magnitude by which

misstatements, including omissions,

could influence the economic decisions

of reasonable users that are taken on

the basis of the financial statements.

In order to reduce to an appropriately

low level the probability that any

misstatements exceed materiality, we

use a lower materiality level,

performance materiality, to determine

the extent of testing needed.

Importantly, misstatements below these

levels will not necessarily be evaluated

as immaterial as we also take account of

the nature of identified misstatements,

and the particular circumstances of their

occurrence, when evaluating their effect

on the financial statements as a whole.

Based on our professional judgement,

we determined materiality for the

financial statements as a whole and

performance materiality as follows:

Company

financial

statements

2022

£mn

2021

£mn

Materiality £1.04

£0.83

Basis for

determining

materiality

2% of

Gross

investments

2% of

Gross

investments

Rationale

for the

benchmark

applied

In setting materiality, we

have had regard to the

nature and disposition of

the investment portfolio.

Given that the VCT’s

portfolio is comprised of

unquoted investments

which would typically

have a wider spread of

reasonable alternative

possible valuations,

we have applied a

percentage of 2% of

gross investments, as

asset values are the

primary focus of the

user of these financial

statements

Performance

materiality

£0.78

£0.62

Basis for

determining

performance

materiality

75% of materiality on

the basis of our risk

assessment, together

with our assessment

of the entities overall

control environment,

the expected total value

of known and likely

misstatements and the

level of transactions in

the year.

Lower testing threshold

We determined that for Revenue return

before tax, a misstatement of less than

materiality for the financial statements as

a whole, could influence users of the

financial statements as it is a measure of

the Company’s performance of income

generated from its investments after

expenses. As a result, we determined a

lower testing threshold for those items

impacting revenue return of £104,000

(2021: £370,000) based on 10% of

Materiality (2021: 10% of revenue) of

revenue return before tax.

Reporting threshold

We agreed with the Audit Committee

that we would report to them all

individual audit differences in excess of

£53,000 (2021: £41,000). We also agreed

to report differences below this

threshold that, in our view, warranted

reporting on qualitative grounds.

Other information

The directors are responsible for the

other information. The other information

comprises the information included in

the annual report and financial

statements other than the financial

statements and our auditor’s report

thereon. Our opinion on the financial

statements does not cover the other

information and, except to the extent

otherwise explicitly stated in our report,

we do not express any form of

assurance conclusion thereon. Our

responsibility is to read the other

information and, in doing so, consider

whether the other information is

materially inconsistent with the financial

statements or our knowledge obtained

in the course of the audit, or otherwise

appears to be materially misstated. If we

Where appropriate, we performed a sensitivity analysis by developing our

own point estimate where we considered that alternative input assumptions

could reasonably have been applied and we considered the overall impact

to such sensitivities on the portfolio of investments in determining whether

the valuations as a whole are reasonable and free from bias.

Key observations:

Based on the procedures performed we did not identify any indicators to

suggest that the investment valuations are inappropriate considering the

level of estimation uncertainty, we have also not noted any indicators of

management override in the final valuations.

Key audit matter How the scope of our audit addressed the key audit matter

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

identify such material inconsistencies or

apparent material misstatements, we are

required to determine whether this gives

rise to a material misstatement in the

financial statements themselves. If,

based on the work we have performed,

we conclude that there is a material

misstatement of this other information,

we are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The Listing Rules require us to review

the Directors’ statement in relation to

going concern, longer-term viability and

that part of the Corporate Governance

Statement relating to the Company’s

compliance with the provisions of the UK

Corporate Governance Code specified

for our review.

Based on the work undertaken as part

of our audit, we have concluded that

each of the following elements of the

Corporate Governance Statement is

materially consistent with the financial

statements or our knowledge obtained

during the audit.

Going concern and longer-term

viability

●● The Directors’ statement with

regards to the appropriateness of

adopting the going concern basis of

accounting and any material

uncertainties identified; and

●● The Directors’ explanation as to their

assessment of the Company’s

prospects, the period this

assessment covers and why the

period is appropriate.

Other Code provisions

●● Directors’ statement on fair,

balanced and understandable;

●● Board’s confirmation that it has

carried out a robust assessment of

the emerging and principal risks;

●● The section of the annual report that

describes the review of

effectiveness of risk management

and internal control systems; and

●● The section describing the work of

the audit committee

Other Companies Act 2006

reporting

Based on the responsibilities described

below and our work performed during

the course of the audit, we are required

by the Companies Act 2006 and ISAs

(UK) to report on certain opinions and

matters as described below.

Strategic report and Directors’

report

In our opinion, based on the work

undertaken in the course of the audit:

●● the information given in the Strategic

report and the Directors’ report for

the financial year for which the

financial statements are prepared is

consistent with the financial

statements; and

●● the Strategic report and the

Directors’ report have been

prepared in accordance with

applicable legal requirements.

In the light of the knowledge and

understanding of the Company and its

environment obtained in the course of

the audit, we have not identified material

misstatements in the strategic report or

the Directors’ report.

Directors’ remuneration

In our opinion, the part of the Directors’

remuneration report to be audited has

been properly prepared in accordance

with the Companies Act 2006.

Matters on which we are required

to report by exception

We have nothing to report in respect of

the following matters in relation to which

the Companies Act 2006 requires us to

report to you if, in our opinion:

●● adequate accounting records have

not been kept, or returns adequate

for our audit have not been received

from branches not visited by us; or

●● the financial statements and the part

of the Directors’ remuneration report

to be audited are not in agreement

with the accounting records and

returns; or

●● certain disclosures of Directors’

remuneration specified by law are

not made; or

●● we have not received all the

information and explanations we

require for our audit.

Responsibilities of Directors

As explained more fully in the Statement

of Directors’ Responsibilities, the

Directors are responsible for the

preparation of the financial statements

and for being satisfied that they give a

true and fair view, and for such internal

control as the Directors determine is

necessary to enable the preparation of

financial statements that are free from

material misstatement, whether due to

fraud or error.

In preparing the financial statements, the

Directors are responsible for assessing

the Company’s ability to continue as a

going concern, disclosing, as applicable,

matters related to going concern and

using the going concern basis of

accounting unless the Directors either

intend to liquidate the Company or to

cease operations, or have no realistic

alternative but to do so.

Auditor’s responsibilities for the

audit of the financial statements

Our objectives are to obtain reasonable

assurance about whether the financial

statements as a whole are free from

material misstatement, whether due to

fraud or error, and to issue an auditor’s

report that includes our opinion.

Reasonable assurance is a high level of

assurance, but is not a guarantee that an

audit conducted in accordance with ISAs

(UK) will always detect a material

misstatement when it exists.

Misstatements can arise from fraud or

error and are considered material if,

individually or in the aggregate, they

could reasonably be expected to

influence the economic decisions of

users taken on the basis of these

financial statements.

Extent to which the audit was

capable of detecting irregularities,

including fraud

We gained an understanding of the legal

and regulatory framework applicable to

the Company and the industry in which it

operates, and considered the risk of

acts by the Company which were

contrary to applicable laws and

regulations, including fraud. The

significant laws and regulations were

considered to be the Companies Act

2006, the FCA listing and DTR rules, the

principles of the UK Corporate

Governance Code, industry practice

represented by the AIC SORP and

FRS102. We also considered the

Company’s qualification as a VCT under

UK tax legislation as any breach of this

would lead to the Company losing

various deductions and exemptions from

corporation tax.

Our procedures included:

●● obtaining an understanding of the

control environment in monitoring

compliance with laws and

regulations;

●● agreement of the financial statement

disclosures to underlying supporting

documentation;

●● enquiries of the investment adviser

and those charged with governance

Independent

Auditor’s Report

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

relating to the existence of any

non-compliance with laws and

regulations;

●● obtaining the VCT compliance

reports prepared by management’s

expert during the year and as at year

end and reviewing their calculations

to check that the Company was

meeting its requirements to retain

VCT status; and

●● reviewing minutes of board meetings

and legal correspondence and

invoices throughout the period for

instances of non-compliance with

laws and regulations and fraud.

We assessed the susceptibility of the

financial statement to material

misstatement including fraud and

considered the fraud risk areas to be the

valuation of unquoted investments and

management override of controls.

Our procedures included:

●● the procedures set out in the Key

audit matters section above;

●● obtaining independent evidence to

support the ownership of a sample

of investments;

●● recalculating investment

management fees in total;

●● made enquirires of the investment

advisor about any known, suspected

and alleged fraud;

●● obtaining independent confirmation

of bank balances; and

●● testing journals which met a defined

risk criteria by agreeing to

supporting documentation and

evaluating whether there was

evidence of bias by the Investment

Advisor and Directors that

represented a risk of material

misstatement due to fraud.

We also communicated relevant

identified laws and regulations and

potential fraud risks to all engagement

team members and remained alert to

any indications of fraud or non-

compliance with laws and regulations

throughout the audit.

Our audit procedures were designed to

respond to risks of material

misstatement in the financial statements,

recognising that the risk of not detecting

a material misstatement due to fraud is

higher than the risk of not detecting one

resulting from error, as fraud may involve

deliberate concealment by, for example,

forgery, misrepresentations or through

collusion. There are inherent limitations

in the audit procedures performed and

the further removed non-compliance

with laws and regulations is from the

events and transactions reflected in the

financial statements, the less likely we

are to become aware of it.

A further description of our

responsibilities is available on the

Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities.

This description forms part of our

auditor’s report.

Use of our report

This report is made solely to the

Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit

work has been undertaken so that we

might state to the Company’s members

those matters we are required to state to

them in an auditor’s report and for no

other purpose. To the fullest extent

permitted by law, we do not accept or

assume responsibility to anyone other

than the Company and the Company’s

members as a body, for our audit work,

for this report, or for the opinions we

have formed.

Vanessa Jayne Bradley

(Senior Statutory Auditor)

For and on behalf of BDO LLP,

Statutory Auditor

London, UK

29 June 2022

BDO LLP is a limited liability partnership

registered in England and Wales (with

registered number OC305127).

Independent

Auditor’s Report

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Year ended 31 March 2022 Year ended 31 March 2021

Notes Revenue Capital Total Revenue Capital Total

£ £ £ £ £ £

Net investment portfolio gains 8 -

12,095,784 12,095,784

25,356,908 25,356,908

Income 3 1,080,796 - 1,080,796 1,698,434 - 1,698,434

Investment Adviser's fees 4a (412,075) (1,236,223) (1,648,298) (299,284) (897,853) (1,197,137)

Investment Adviser's performance fees 4b - (1,014,703) (1,014,703) - - -

Other expenses 4d (403,366) - (403,366) (339,113) - (339,113)

Profit on ordinary activities before taxation 265,355 9,844,858 10,110,213 1,060,037 24,459,055 25,519,092

Taxation on profit/(loss) on ordinary activities 5 - - - (43,540) 43,540 -

Profit for the year and total

comprehensive income 265,355

9,844,858 10,110,213

1,016,497

24,502,595

25,519,092

Basic and diluted earnings

per ordinary share: 7 0.36p 13.42p 13.78p 1.38p 33.37p 34.75p

The revenue column of the Income Statement includes all income and expenses. The capital column accounts for the net

investment portfolio gains (unrealised gains/(losses) and realised gains on investments) and the proportion of the Investment

Adviser’s fee and performance fee charged to capital.

The total column is the Statement of Total Comprehensive Income of the Company prepared in accordance with Financial

Reporting Standards (“FRS”). In order to better reflect the activities of a VCT and in accordance with the 2014 Statement of

Recommended Practice (“SORP”) (updated in April 2021) by the Association of Investment Companies (“AIC”), supplementary

information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside

the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe

appropriate in assessing the Company’s compliance with certain requirements set out in Section 274 Income Tax Act 2007.

All the items in the above statement derive from continuing operations of the Company. No operations were acquired or

discontinued in the year.

The Notes on pages 59 to 77 form part of these Financial Statements.

Income Statement

for the year ended 31 March 2022

Financial Statements

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

Balance Sheet Company No. 03946235

as at 31 March 2022

31 March 2022 31 March 2021

Notes £ £

Fixed assets

Investments at fair value 8 52,161,122 41,832,061

Current assets

Debtors and prepayments 10 260,786 2,218,906

Current asset investments 11 23,458,496 27,633,496

Cash at bank 11 2,801,008 2,386,262

26,520,290 32,238,664

Creditors: amounts falling due within one year 12 (1,175,430) (171,857)

Net current assets 25,344,860 32,066,807

Net assets 77,505,982 73,898,868

Capital and reserves

Called up share capital 13 804,263 732,303

Share premium reserve 28,258,001 21,025,160

Capital redemption reserve 16,006 9,031

Revaluation reserve 24,455,488 16,598,524

Special distributable reserve 12,033,364 19,524,067

Realised capital reserve 10,521,719 13,397,234

Revenue reserve 1,417,141 2,612,549

Equity Shareholders’ funds 77,505,982 73,898,868

Basic and diluted net asset value per ordinary share 14 96.37p 100.91p

The Financial Statements were approved and authorised for issue by the Board of Directors on 29 June 2022 and are signed on

their behalf by:

Ian Blackburn

Chairman

The Notes on pages 59 to 77 form part of these Financial Statements.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Financial Statements

Statement of Changes in Equity

for the year ended 31 March 2022

Non-distributable reserves Distributable reserves

Called up Share Capital Special Realised Revenue

share premium redemption Revaluation distributable capital reserve

capital reserve reserve reserve reserve reserve Total

(Note a) (Note b) (Note b)

Notes £ £ £ £ £ £ £ £

At 1 April 2021 732,303 21,025,160 9,031 16,598,524 19,524,067 13,397,234 2,612,549 73,898,868

Comprehensive

income for the year

Profit for the year - - - 9,557,514 - 287,344 265,355 10,110,213

Total comprehensive

income for the year - - - 9,557,514 - 287,344 265,355 10,110,213

Contributions by and

distributions to owners

Shares issued

under Offer for

Subscription (Note c) 13 78,935 7,421,065 - - - - - 7,500,000

Issue costs on Offer for

Subscription (Note c) 13 - (188,224) - - (51,097) - - (239,321)

Shares bought

back (Note d) 13 (6,975) - 6,975 - (643,810) - - (643,810)

Dividends paid 6 - - - - (4,544,870) (7,114,335) (1,460,763) (13,119,968)

Total contributions

by and distributions

to owners 71,960 7,232,841 6,975 - (5,239,777) (7,114,335) (1,460,763) (6,503,099)

Other movements

Realised losses

transferred to special

reserve (Note a) - - - - (2,250,926) 2,250,926 - -

Realisation of previously

unrealised gains - - - (1,700,550) - 1,700,550 - -

Total other movements -

- (1,700,550) (2,250,926) 3,951,476 - -

At 31 March 2022 804,263 28,258,001 16,006 24,455,488 12,033,364 10,521,719 1,417,141 77,505,982

Notes

a): The Company’s special reserve is available to fund buybacks of shares as and when it is considered by the Board to be in the interests of

Shareholders, and to absorb any existing and future realised losses and for other corporate purposes. At 31 March 2022, the Company has a

special reserve of £12,033,364, all of which arises from shares issued more than three years ago. Reserves originating from share issues are

not distributable under VCT rules if they arise from share issues that are within three years of the end of an accounting period in which shares

were issued. The total transfer of £2,250,926 from the realised capital reserve to the special distributable reserve above is the total of realised

losses incurred by the Company in the year.

b): The realised capital reserve and the revenue reserve together comprise the Profit and Loss Account of the Company.

c): Under an Offer for Subscription launched on 20 January 2022, 7,893,544 ordinary shares were allotted on 9 March 2022, raising net funds of

£7,260,679 for the Company. This figure is net of issue costs of £188,224 and facilitation fees of £51,097.

d): During the year, the Company purchased 697,498 of its own shares at the prevailing market price for a total cost of £643,810, which were

subsequently cancelled.

The composition of each of these reserves is explained below:

Called up share capital

The nominal value of shares originally issued, increased for subsequent share issues either via an Offer for Subscription or reduced due to

shares bought back by the Company.

Capital redemption reserve

The nominal value of shares bought back and cancelled is held in this reserve, so that the Company’s capital is maintained.

The Notes on pages 59 to 77 form part of these Financial Statements.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

Statement of Changes in Equity

for the year ended 31 March 2021

Non-distributable reserves Distributable reserves

Called up Share Capital Special Realised Revenue

share premium redemption Revaluation distributable capital reserve

capital reserve reserve reserve reserve reserve Total

Notes £ £ £ £ £ £ £ £

At 1 April 2020 596,893 10,673,405 5,157 (3,206,720) 24,090,692 9,809,815 1,596,052 43,565,294

Comprehensive

income for the year

Profit for the year - - - 20,590,071 - 3,912,524 1,016,497 25,519,092

Total comprehensive

income for the year - - - 20,590,071 - 3,912,524 1,016,497 25,519,092

Contributions by and

distributions to owners

Shares issued via

Offer for Subscription 139,284 10,622,489 - - - - - 10,761,773

Issue costs and

facilitation fees on

Offer for Subscription - (270,734) - - (230,746) - - (501,480)

Shares bought back (3,874) - 3,874 - (292,568) - - (292,568)

Dividends paid - - - - (2,944,710) (2,208,533) - (5,153,243)

Total contributions by and

distributions to owners

135,410 10,351,755 3,874 - (3,468,024) (2,208,533) - 4,814,482

Other movements

Realised losses

transferred to

special reserve - - - - (1,098,601) 1,098,601 - -

Realisation of previously

unrealised gains - - - (784,827) - 784,827 - -

Total other movements -

- (784,827) (1,098,601) 1,883,428 - -

At 31 March 2021 732,303 21,025,160 9,031 16,598,524 19,524,067 13,397,234 2,612,549 73,898,868

Notes - continued from previous page

Share premium reserve

This reserve contains the excess of gross proceeds less issue costs over the nominal value of shares allotted under recent Offers for Subscription.

Revaluation reserve

Increases and decreases in the valuation of investments held at the year-end are accounted for in this reserve, except to the extent that the

diminution is deemed permanent. In accordance with stating all investments at fair value through profit and loss (as recorded in Note 8), all such

movements through both revaluation and realised capital reserves are shown within the Income Statement for the year.

Special distributable reserve

This reserve is created from cancellations of the balances upon the Share premium reserve, which are transferred to this reserve from time to time.

The cost of share buybacks and any realised losses on the sale or impairment of investments (excluding transaction costs) are charged to this

reserve. 75% of the Investment Adviser fee expense, and the related tax effect, that are charged to the realised capital reserve are transferred to

this reserve. This reserve will also be charged any facilitation payments to financial advisers, which arose as part of the Offer for Subscription.

Realised capital reserve

The following are accounted for in this reserve:

●● Gains and losses on realisation of investments;

●● Permanent diminution in value of investments;

●● Transaction costs incurred in the acquisition and disposal of investments;

●● 75% of the Investment Adviser’s fee (subsequently transferred to the Special distributable reserve along with the related tax effect) and 100%

of any performance fee payable, together with the related tax effect to this reserve in accordance with the policies, and

●● Capital dividends paid.

Revenue reserve

Income and expenses that are revenue in nature are accounted for in this reserve as well as 25% of the Investment Advisor fee together with the

related tax effect, as well as income dividends paid that are classified as revenue in nature.

The Notes on pages 59 to 77 form part of these Financial Statements.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Financial Statements

Statement of Cash Flows

for the year ended 31 March 2022

Notes

Year ended

31 March 2022

Year ended

31 March 2021

Cash flows from operating activities

Profit for the financial year 10,110,213 25,519,092

Adjustments for:

Net investment portfolio gains (12,095,784) (25,356,908)

Tax charge for the current year - -

Decrease in debtors 5,191 7,025

Increase/(decrease) in creditors and accruals 1,003,986 (18,957)

Net cash (outflow)/inflow from operations (976,394) 150,252

Corporation tax paid - (134,947)

Net cash (outflow)/inflow from operating activities (976,394) 15,305

Cash flows from investing activities

Purchase of investments 8 (4,728,594) (5,394,087)

Disposal of investments 8 8,447,833 8,838,927

Net cash inflow from investing activities 3,719,239 3,444,840

Cash flows from financing activities

Net proceeds as part of Offers for subscription 7,500,000 10,761,773

Issue costs (239,321) (501,480)

Equity dividends paid 6 (13,119,968) (5,153,243)

Purchase of own shares 13 (643,810) (353,488)

Net cash (outflow)/inflow from financing activities (6,503,099) 4,753,562

Net (decrease)/increase in cash and cash equivalents (3,760,254) 8,213,707

Cash and cash equivalents at start of year 30,019,758 21,806,051

Cash and cash equivalents at end of the year 26,259,504 30,019,758

Cash and cash equivalents comprise:

Cash equivalents 11 23,458,496 27,633,496

Cash at bank and in hand 11 2,801,008 2,386,262

The Notes on pages 59 to 77 form part of these Financial Statements.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

1 Company Information

Mobeus Income and Growth 2 VCT plc is a public limited company incorporated in England, registration number 03946235.

The registered office is 5 New Street Square, London, EC4A 3TW.

2 Basis of preparation

A summary of the principal accounting policies, all of which have been applied consistently throughout the year are set out at

the start of the related disclosure throughout the Notes to the Financial Statements. All accounting policies are included

within an outlined box at the top of each relevant Note.

These Financial Statements have been prepared in accordance with applicable United Kingdom accounting standards,

including Financial Reporting Standard 102 (“FRS102”), with the Companies Act 2006 and the 2014 Statement of

Recommended practice, ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (‘the SORP’)

(updated in April 2021) issued by the Association of Investment Companies (“AIC”). The Company has a number of financial

instruments which are disclosed under FRS102 s11/12 as shown in Note 15.

After performing the necessary enquiries, the Directors have undertaken an assessment of the Company’s ability to meet its

liabilities as they fall due. The Company has significant cash and liquid resources and no external debt or capital

commitments. The Company’s cash flow forecasts, which consider levels of anticipated new and follow-on investment, as

well as investment income and annual running cost projections, are discussed at each quarterly Board meeting and, in

particular, have been considered in light of other factors such as the ongoing impact of the COVID-19 pandemic, the war in

Ukraine and rising inflationary pressures. The Directors have also received assurances that the Company’s key suppliers’

ability to continue to service the Company has not been materially impacted by the COVID-19 pandemic. Following this

assessment, the Directors have a reasonable expectation that the Company will have adequate resources to continue to

meet its liabilities for at least 12 months from the date of these Financial Statements. The Directors therefore consider the

preparation of these financial statements on a going concern basis to be appropriate.

3 Income

Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on

unquoted equity shares 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.

Interest income on loan stock is accrued on a daily basis. Provision is made against this income where recovery is doubtful

or where it will not be received in the foreseeable future. Where the loan stocks only require interest or a redemption

premium to be paid on redemption, the interest and redemption premium is recognised as income or capital as appropriate

once redemption is reasonably certain. When a redemption premium is designed to protect the value of the instrument

holder’s investment rather than reflect a commercial rate of revenue return, the redemption premium is recognised as

capital. The treatment of redemption premiums is analysed to consider if they are revenue or capital in nature on a

company by company basis. Accordingly, the redemption premium recognised in the year ended 31 March 2022 has been

classified as capital and has been included within gains on investments.

2022 2021

£ £

Income from bank deposits 1,306 1,477

Income from investments

– from equities 279,501 830,882

– from overseas based OEICs 10,492 13,522

– from UK based OEICs 1,167 9,281

– from loan stock 788,330 795,761

– from interest on preference share dividend arrears - 41,533

1,079,490 1,690,979

Other income - 5,978

Total income 1,080,796 1,698,434

Total income comprises

Dividends 291,160 853,685

Interest 789,636 838,771

Other - 5,978

1,080,796 1,698,434

Total loan stock interest due but not recognised in the year was £336,436 (2021: £481,136). The decrease is due to the

removal of a number of investee company provisions that were considered appropriate in the previous year in light of the

COVID-19 pandemic.

Notes to the Financial Statements for the year ended 31 March 2022

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Financial Statements

4 Investment Adviser’s fees and Other expenses

All expenses are accounted for on an accruals basis.

a) Investment Adviser’s fees

25% of the Investment Adviser’s fees are charged to the revenue column of the Income Statement, while 75% is charged

against the capital column of the Income Statement. This is in line with the Board’s expected long-term split of returns from

the investment portfolio of the Company.

100% of any performance incentive fee payable for the year is charged against the capital column of the Income

Statement. This is because although the incentive fee is linked to an annual dividend target, it is ultimately based upon the

achievement of capital growth.

2022 2021

Revenue Capital Total Revenue Capital Total

£ £ £ £ £ £

Gresham House Asset

Management Limited

Investment Adviser’s fees 412,075 1,236,223 1,648,298 299,284 897,853 1,197,137

412,075 1,236,223 1,648,298 299,284 897,853 1,197,137

¹ On 30 September 2021, Mobeus sold its VCT fund and Investment management business to Gresham House. As a result,

the Company’s Investment advisory arrangements have been novated from Mobeus to Gresham House. The entire core

management, investment and operational teams involved with the Company all transferred to Gresham House in connection

with this transaction.

Under the terms of a revised investment management agreement dated 10 September 2010, (as amended and restated on

15September 2016) Mobeus (from 1 October 2021, Gresham House) provides investment advisory, administrative and

company secretarial services to the Company, for a fee of 2% per annum calculated on a quarterly basis by reference to the

net assets at the end of the preceding quarter, plus a fee of £113,589 per annum, the latter being subject to changes in the

retail prices index each year. In 2013, Mobeus agreed to waive such further increases due to indexation, until otherwise

agreed with the Board. In accordance with the policy statement published under “Management and Administration” in the

Company’s prospectus dated 10 May 2000, the Directors have charged 75% of the investment management expenses to the

capital account. This is in line with the Board’s expectation of the long-term split of returns from the investment portfolio of

the Company.

Under the terms of the management agreement the total Investment Adviser and administration expenses of the Company

excluding any irrecoverable VAT, exceptional costs and any performance incentive fee, are linked to a maximum of 3.6% of

the value of the Company’s closing net assets. For the year ended 31 March 2022, the expense cap has not been breached

(2021: £nil).

In accordance with general market practice, the Investment Adviser earned arrangement fees and fees for supplying

Directors and/or monitoring services from investee companies. The share of such fees attributable to the investments made

by the Company were £98,172 (2021: £137,298) and £190,095 (2021: £177,839) respectively. The fees for supplying directors

and/or monitoring services were from 33 (2021: 36) investee companies during the year.

Notes to the Financial Statements for the year ended 31 March 2022

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

b) Performance fees

2022 2021

Revenue Capital Total Revenue Capital Total

£ £ £ £ £ £

Gresham House Asset

Management Limited - 1,014,703 1,014,703 - - -

Performance incentive agreement

The following performance incentive fee arrangement dated 20 September 2005 continues to be in place, and operated as

detailed below:

New Ordinary and former C share fund shares

Basis of Calculation

The performance incentive fee payable is calculated as an amount equivalent to 20 per cent of the excess of a “Target rate”

comprising:-

i) an annual dividend target (indexed each year for RPI) and

ii) a requirement that any cumulative shortfalls below the annual dividend target must be made up in later years. Any excess

is not carried forward, whether a fee is payable for that year or not.

Payment of a fee is also conditional upon the average Net Asset Value (“NAV”) per share for each such year equalling or

exceeding the average “Base NAV” per share for the same year. Base NAV commenced at £1 per share when C fund shares

were first issued in 2005, which is adjusted for subsequent shares issued and bought back.

Any performance fee will be payable annually. It will be reduced to the proportion which the number of “Incentive Fee

Shares” represent of the total number of shares in issue at any calculation date. Incentive Fees Shares are the only shares

upon which an incentive fee is payable. They will be the number of C fund shares in issue just before the Merger of the two

former share classes on 10 September 2010, (which subsequently became Ordinary shares) plus Ordinary shares issued

under new fundraisings since the Merger. This total is then reduced by an estimated proportion of the shares bought back by

the Company since the Merger, that are attributable to the Incentive Fee Shares.

Clarifications to the agreement

During the year ended 31 March 2016, the Board and the Investment Adviser agreed to confirm and clarify in more detail a

number of principles and interpretations applied to the agreement. The principal ones are reflected in the paragraphs above

and explained below:-

First, the incentive fee is paid upon dividends paid in a year, not declared and paid in a year, as the original agreement

stated. Secondly, the average NAV referred to above is calculated on a daily weighted average basis throughout the year. In

turn, this average NAV is compared to a Base NAV that is also calculated on a daily weighted average basis throughout the

year. Thirdly, the methodologies to account for new shares issued and buybacks of shares, their inclusion in the incentive fee

calculations and to identify the proportion of all shares upon which an incentive fee is payable have been clarified.

Finally, it has been agreed that any excess of cumulative dividends paid over the cumulative annual dividend target is not

carried forward, whether a fee is paid for that year or not.

These clarifications have been incorporated in to the performance incentive agreement. The Board has been advised that, as

these and a number of more minor clarifications, are clarifications of the Incentive Agreement, rather than changes to it, there

was no need to seek Shareholder approval for them.

Position at 31 March 2022

The cumulative dividends paid exceeded the annual cumulative dividend target at 31 March 2022 by 7.62 Pence per share

(£5,034,803 in aggregate being 91.5% of the total excess) at the year-end, (where 91.5% is the proportion of Incentive Fee

Shares to the total number of shares in issue at the year-end date) and taking into account the target rate of dividends and

the dividends paid to Shareholders.

The 6.00 pence annual dividend hurdle was 9.07 pence per share at the year-end after adjustment for RPI. The Base NAV

was 98.26 pence per share at the year end, compared to an average NAV for the year of 102.25 pence per share.

Therefore there is an Incentive fee payable for the year of £1,014,703 (2021: £Nil).

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

c) Offer for subscription fees

2022 2021

£mn £mn

Funds raised by the Company 7.26 10.76

Offer costs payable to Gresham House at 3.00% of funds raised by the Company 0.22 0.32

Under the terms of an Offer for Subscription, with the other Mobeus VCTs, launched on 20 January 2022, Gresham House

was entitled to fees of 3.00% of the investment amount received from investors. This amount totalled £1.05 million across all

four VCTs, out of which all the costs associated with the allotment were met, excluding any payments to advisers facilitated

under the terms of the Offer.

d) Other expenses

Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an

investment, which are written off to the capital column of the Income Statement or deducted from the disposal proceeds as

appropriate.

2022 2021

£ £

Directors’ remuneration (including NIC of £6,278 (2021: £5,610)) (Note a) 107,278 101,610

IFA trail commission 67,648 66,663

Broker’s fees 12,000 6,000

Auditor’s fees – Audit of Company (Note b) (excluding VAT) 38,080 36,952

Registrar's fees 42,671 31,076

Printing 56,969 41,232

Legal & professional fees 22,768 4,074

VCT monitoring fees 8,400 8,400

Directors' insurance 9,659 7,378

Listing and regulatory fees 29,177 27,151

Sundry 8,716 8,577

Other expenses 403,366 339,113

a): Directors’ remuneration is a related party transaction, see analysis of Directors’ fees payable and their interests in the

shares of the Company in the Directors’ Remuneration Report on pages 45 to 46, which excludes NIC above. The key

management personnel are the three non-executive Directors. The Company has no employees. There were no amounts

outstanding and due to the Directors at 31 March 2022 (2021: £nil).

b): Included within this figure is £7,073 (2021: £6,868) relating to advanced audit procedures in respect of the Financial

Statements carried out at the Half-Year. The Audit Committee reviews the nature and extent of these services to ensure

that auditor independence is maintained.

5 Taxation on ordinary activities

The tax expense for the year comprises current tax and is recognised in profit or loss. The current income tax charge is

calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.

Any tax relief obtained in respect of Investment Adviser fees allocated to capital is reflected in the realised capital reserve

and a corresponding amount is charged against revenue. The tax relief is the amount by which corporation tax payable is

reduced as a result of these capital expenses.

Deferred tax 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 a right to pay less tax in the

future have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable profits

and its results as stated in the Financial Statements that arise from the inclusion of gains and losses in the tax assessments

in periods different from those in which they are recognised in the Financial Statements.

Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences

are expected to reverse based on tax rates and laws that have been enacted or substantively enacted at the balance

sheet date. Deferred tax is measured on a non-discounted basis.

A deferred tax asset would be recognised only to the extent that it is more likely than not that future taxable profits will be

available against which the asset can be utilised.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

2022 2021

Revenue Capital Total Revenue Capital Total

£ £ £ £ £ £

a) Analysis of tax charge:

UK Corporation tax on profits for

the year - - - 43,540 (43,540) -

Total current tax charge - - - 43,540 (43,540) -

Corporation tax is based on a rate

of 19% (2021: 19%)

b) Profit on ordinary activities

before tax 265,355 9,844,858 10,110,213 1,060,037 24,459,055 25,519,092

Profit on ordinary activities

multiplied by small company rate

of corporation tax in the UK of 19%

(2021: 19%) 50,417 1,870,523 1,920,940 201,407 4,647,220 4,848,627

Effect of:

UK dividends (53,105) - (53,105) (157,867) - (157,867)

Net investment portfolio gains not

taxable/deductible - (2,298,199) (2,298,199) - (4,817,813) (4,817,813)

Unrelieved expenditure 2,688 427,676 430,364 - 127,053 127,053

Actual tax charge - - - 43,540 (43,540) -

Tax relief relating to Investment Adviser fees is allocated between revenue and capital where such relief can be utilised.

No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the

Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a Venture Capital

Trust.

There is no potential liability to deferred tax (2021: £nil). There is an unrecognised deferred tax asset of £733,172 (2021

(restated): £127,053). The deferred tax asset relates to unrelieved management expenses and is not recognised because the

Company may not generate sufficient taxable income in the foreseeable future to utilise these expenses.

6 Dividends paid and payable

Dividends payable are recognised as distributions in the Financial Statements when the Company’s liability to pay them

has been established. This liability is established for interim dividends when they are paid, and for final dividends when

they are approved by the Shareholders, usually at the Company’s Annual General Meeting.

A key judgement in applying the above accounting policy is in determining the amount of minimum income dividend to be

paid in respect of a year. The Company’s status as a VCT means it has to comply with Section 274 of the Income Tax Act

2007, which requires that no more than 15% of the income from shares and securities in a year can be retained from the

revenue available for distribution for the year.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

Amounts recognised as distributions to equity Shareholders in the year:

Dividend Type

For year ended

31 March

Pence

per share Date paid

2022

2021

Interim Capital 2021 3.00p 19/06/2020 - 2,208,533

Interim Capital* 2021 4.00p 19/06/2020 - 2,944,710

Interim Income 2021 1.25p 30/07/2021 915,378 -

Interim Capital 2021 4.75p 30/07/2021 3,478,438 -

Interim Income 2022 0.75p 07/01/2022 545,385 -

Interim Capital 2022 5.00p 07/01/2022 3,635,897 -

Interim Capital* 2022 6.25p 07/01/2022 4,544,870 -

13,119,968 5,153,243

* These dividends were paid out of the Company’s special distributable reserve.

Set out below are the total income dividends payable in respect of the financial year, which is the basis on which the

requirements of section 274 of the Income Tax Act 2007 are considered.

Recognised income distributions in the Financial Statements for the year

Dividend Type

For year ended

31 March

Pence

per share

Date

paid/payable

2022

2021

Revenue available for distribution by way of dividends for the year 265,355 1,016,497

Interim Income 2021 1.25p 30/07/2021 - 915,379

Interim Income 2022 0.75p 07/01/2022 545,385 -

Total income dividends for the year 545,385 915,379

7 Basic and diluted earnings and return per share

2022 2021

£ £

Total earnings after taxation: 10,110,213 25,519,092

Basic and diluted earnings per share (Note a) 13.78p 34.75p

Net revenue earnings from ordinary activities after taxation 265,355 1,016,497

Basic and diluted revenue earnings per share (Note b) 0.36p 1.38p

Net investment portfolio gains 12,095,784 25,356,908

Capital Investment Adviser's fees (net of taxation) (1,236,223) (854,313)

Investment Adviser's performance fee (1,014,703) -

Total capital earnings 9,844,858 24,502,595

Basic and diluted capital earnings per share (Note c) 13.42p 33.37p

Weighted average number of shares in issue in the year 73,353,491 73,424,532

Notes:

a) Basic earnings per share is total earnings after taxation divided by the weighted average number of shares in issue.

b) Basic revenue earnings per share is the revenue return after taxation divided by the weighted average number of shares in issue.

c) Basic capital earnings per share is the total capital return after taxation divided by the weighted average number of shares in issue.

d) There are no instruments that will increase the number of shares in issue in future. Accordingly, the above figures currently represent

both basic and diluted returns.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

8 Investments at fair value

The most critical estimates, assumptions and judgements relate to the determination of the carrying value of investments at

“fair value through profit and loss” (FVTPL). All investments held by the Company are classified as FVTPL and measured in

accordance with the International Private Equity and Venture Capital Valuation (“IPEV”) guidelines, as updated in December

2018. This classification is followed as the Company’s business is to invest in financial assets with a view to profiting from their

total return in the form of capital growth and income.

Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

For investments actively traded on organised financial markets, fair value is generally determined by reference to Stock

Exchange market quoted bid prices at the close of business on the balance sheet date. Purchases and sales of quoted

investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame

determined by the relevant market. Where the terms of a disposal state that consideration may be received at some future

date and, subject to the conditionality and materiality of the amount of deferred consideration, an estimate of the fair value

discounted for the time value of money may be recognised through the Income Statement. In other cases, the proceeds will

only be recognised once the right to receive payment is established and there is no reasonable doubt that payment will be

received.

Unquoted investments are stated at fair value by the Directors at each measurement date in accordance with appropriate

valuation techniques, which are consistent with the IPEV guidelines:-

(i) Each investment is considered as a whole on a ‘unit of account’ basis, i.e. that the value of each portfolio company is

considered as a whole, alongside consideration of:-

The price of new or follow-on investments made, if deemed to be made as part of an orderly transaction, are considered to be

at fair value at the date of the transaction. The inputs that derived the investment price are calibrated within individual

valuation models and at every subsequent quarterly measurement date, are reconsidered for any changes in light of more

recent events or changes in the market performance of the investee company. The valuation bases used are the following:

- a multiple basis. The enterprise value of the investment may be determined by applying a suitable price-earnings

ratio, revenue or gross profit multiple to that company’s historic, current or forecast post-tax earnings before interest

and amortisation, or revenue, or gross profit (the ratio used being based on a comparable sector but the resulting

value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector

including, inter alia, scale and liquidity).

or:-

- where a company’s underperformance against plan indicates a diminution in the value of the investment, provision

against the price of a new investment is made, as appropriate.

(ii) Premiums, to the extent that they are considered capital in nature, and that they will be received upon repayment of loan

stock investments are accrued at fair value when the Company receives the right to the premium and when considered

recoverable.

(iii) Where a multiple or the price of recent investment less impairment basis is not appropriate and overriding factors apply, a

discounted cash flow, net asset valuation, realisation proceeds, or a weighted average of these bases may be applied.

Capital gains and losses on investments, whether realised or unrealised, are dealt with in the profit and loss and revaluation

reserves and movements in the period are shown in the Income Statement. All figures are shown net of any applicable

transaction costs incurred by the Company.

All investments are initially recognised and subsequently measured at fair value. Changes in fair value are recognised in the

Income Statement.

A key judgement made in applying the above accounting policy relates to investments that are permanently impaired. Where

the value of an investment has fallen permanently below the price of recent investment, the loss is treated as a permanent

impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such

investments and, after agreement with the Investment Adviser, will agree the values that represent the extent to which an

investment loss has become realised. This is based upon an assessment of objective evidence of that investment’s future

prospects, to determine whether there is potential for the investment to recover in value.

Accounting standards classify methods of fair value measurement as Levels 1, 2 and 3. This hierarchy is based upon the

reliability of information used to determine the valuation. All of the unquoted investments are Level 3, i.e. fair value is measured

using techniques using inputs that are not based on observable market data.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

Movements in investments during the year are summarised as follows:

Traded

on AIM

Level 1

Unquoted

equity shares

Level 3

Unquoted

preference

Level 3

Unquoted

Loan Stock

Level 3 Total

£ £ £ £

Cost at 31 March 2021 551,090 16,826,218 691,155 9,094,652 27,163,115

Permanent impairment at 31 March 2021 - (1,790,358) (170) (139,050) (1,929,578)

Unrealised gains/(losses) at 31 March 2021 8,250,506 9,983,516 63,770 (1,699,268) 16,598,524

Valuation at 31 March 2021 8,801,596 25,019,376 754,755 7,256,334 41,832,061

Purchases at cost (Note b) - 2,875,970 957,890 773,534 4,607,394

Sale proceeds (Note b) - (4,864,601) - (1,509,516) (6,374,117)

Reclassification at value (Note d) - 453,891 - (453,891) -

Net realised gains on investments (Note a) - 2,499,113 - 39,157 2,538,270

Net unrealised (losses)/gains on investments

(Note c) (4,738,742) 13,990,136 64,594 241,526 9,557,514

Valuation at 31 March 2022 4,062,854 39,973,885 1,777,239 6,347,144 52,161,122

Cost at 31 March 2022 551,090 19,279,388 1,649,045 8,155,689 29,635,212

Permanent impairment at 31 March 2022 - (1,790,358) (170) (139,050) (1,929,578)

Unrealised gains/(losses) at 31 March 2022 3,511,764 22,484,855 128,364 (1,669,495) 24,455,488

Valuation at 31 March 2022 4,062,854 39,973,885 1,777,239 6,347,144 52,161,122

Net realised gains on investments of £2,538,270 together with net unrealised gains on investments of £9,557,514 equal net

investment portfolio gains of £12,095,784 shown on the Income Statement.

A breakdown of the increases and the decreases in unrealised valuations of the portfolio is shown in the Investment Portfolio

Summary on pages 24 to 26.

Major movements in investments

Note a) Disposals of investment portfolio companies during the year were:

Company Type

Investment

Cost

Disposal

Proceeds

Opening

Valuation

Net realised

gain/(loss)

in year

£ £ £ £

Vian Marketing Limited (trading as Red

Paddle Co)

Realisation 629,255 3,467,752 1,250,675 2,217,077

MyTutorweb Limited Partial realisation 193,439 524,434 259,455 264,979

Media Business Insight Limited Loan repayment 499,045 499,045 459,881 39,164

MPB Group Limited Loan repayment 178,212 267,318 267,318 -

Proactive Holdings Inc. Realisation 635,346 1,593,315 1,598,518 (5,203)

Other capital proceeds Various - 22,253 - 22,253

2,135,297 6,374,117 3,835,847 2,538,270

Note b) The sale proceeds shown above of £6,374,117 is £2,073,716 less than that shown on the Statement of Cash Flows of

£8,447,833 due to proceeds received from the partial realisations of MPB Group Limited and Parsley Box Group Plc (formerly

Parsley Box Limited), as well as additional proceeds due from Vectair Holdings Limited at the beginning of this year.

The difference between the purchases at cost above of £4,607,394 and the cash flow statement of £4,728,594 is the

follow-on investment in Northern Bloc Ice Cream Limited which completed shortly after the year-end.

Note c) The major components of the net increase in unrealised valuations of £9,557,514 in the year were increases of

£5,022,119 in Preservica Limited, £2,995,533 in Bella & Duke Limited, £1,828,144 in Media Business Insight Holdings Limited,

£1,078,424 in MyTutorWeb Limited (trading as MyTutor) and £1,047,722 in Master Removers Group 2019 Limited (trading as

Anthony Ward Thomas, Bishopsgate and Aussie Man & Van). These increases were partly offset by falls of £3,016,498 in

Virgin Wines UK Plc, £1,722,244 in Parsley Box Group plc and £196,346 in Bleach London Holdings Limited.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

Note d) The amount of £453,891 transferred from unquoted loan stock to unquoted equity shares represents the conversion

of the loans held in two portfolio companies into equity shares during the year.

9 Significant interests

At 31 March 2022 the Company held significant investments, amounting to 3% or more of the equity capital of an undertaking,

in the following companies:

Equity

investment

(Ordinary

Shares)

Investment

in loan

stock and

preference

Total

investment

(at cost)

Percentage

of investee

company’s

total equity

% of equity

held by

all funds

advised by

Gresham

House

£ £ £

Preservica Limited 971,522 1,457,221 2,428,743 9.4% 57.9%

Bella & Duke Limited 2,062,146 - 2,062,146 10.2% 21.2%

MyTutorweb Limited (trading as MyTutor) 1,846,886 - 1,846,886 4.0% 22.6%

Manufacturing Services Investment

Limited (trading as Wetsuit Outlet)

858,496 858,496 1,716,992 4.7% 27.5%

Media Business Insight Holdings Limited

803,628 706,399 1,510,027 11.6% 67.5%

Arkk Consulting Limited (trading as Arkk Solutions) 545,395 754,470 1,299,865 5.5% 30.1%

End Ordinary Group Limited (trading

as Buster & Punch)

1,231,510 - 1,231,510 6.4% 34.6%

Data Discovery Solutions Limited

(trading as Active Navigation)

1,207,040 - 1,207,040 6.6% 35.1%

RDL Corporation Limited 173,932 826,068 1,000,000 8.9% 44.5%

CGI Creative Graphics International Limited 328,613 670,955 999,568 4.3% 26.9%

Veritek Global Holdings Limited 26,001 941,779 967,780 9.2% 65.6%

Spanish Restaurant Group Limited

(trading as Tapas Revolution)

315,896 631,749 947,645 5.2% 29.0%

Vivacity Labs Limited 876,541 - 876,541 4.2% 20.0%

Connect Childcare Group Limited 414,219 414,200 828,419 3.0% 14.4%

Tharstern Group Limited 245,115 544,700 789,815 9.2% 55.0%

Rota Geek Limited 733,200 - 733,200 3.7% 20.3%

Legatics Limited 605,374 - 605,374 5.5% 27.3%

Pet's Kitchen Limited (trading as Vets' Klinic) 320,960 240,720 561,680 4.0% 20.0%

IPV Limited 535,459 - 535,459 4.8% 26.6%

Caledonian Leisure Limited 313,507 209,002 522,509 6.3% 30.0%

Muller EV Limited (trading as Andersen EV) 381,500 - 381,500 8.1% 37.0%

Northern Bloc Ice Cream Limited 303,000 - 303,000 5.5% 27.3%

Master Removers Group 2019 Limited

(trading as Anthony Ward Thomas,

Bishopsgate and Aussie Man & Van)

251,763 - 251,763 4.8% 28.0%

Virgin Wines UK plc

30,541 - 30,541 5.5% 41.5%

- The percentage of equity held for these companies is the fully diluted figure if, in the event that, management of the investee company

exercises share options, where available.

- Includes a loan of £62,839 to Media Business Insight Limited.

³ - The proportion of equity held by the Mobeus VCTs is 36.1%. 5.4% is held by other funds held by Gresham House Asset Management.

It is considered that, under FRS102 s9.9, “Consolidated and Separate Financial Statements”, the above investments are held

as part of an investment portfolio and that accordingly, their value to the Company lies in their marketable value as part of

that portfolio and as such are not required to be consolidated. Also, the above investments are considered to be associates

that are held as part of an investment portfolio and are accounted for in accordance with FRS102 14.4B.

All of the above companies are incorporated in the United Kingdom.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

10 Debtors

2022 2021

£ £

Amounts due within one year:

Accrued income 122,391 130,169

Prepayments 17,195 13,505

Other debtors 121,200 2,075,232

260,786 2,218,906

Other debtors of £121,200 include a follow-on investment made into Northern Bloc Ice Cream Limited which completed

shortly after the year-end. The balance of £2,075,232 at the previous year-end included proceeds generated from the partial

realisations of Parsley Box Group plc and MPB Group Limited received during the year.

11 Current asset investments and Cash at bank

Cash equivalents, for the purposes of the Statement of Cash Flows, comprises bank deposits repayable on up to three

months’ notice and funds held in OEIC money-market funds. Current asset investments are the same but also include bank

deposits that mature after three months. Current asset investments are disposable without curtailing or disrupting the

business and are readily convertible into know amounts of cash at their carrying values at immediate of up to one year’s

notice. Cash, for the purposes of the Statement of Cash Flows is cash held with banks in accounts subject to immediate

access. Cash at bank in the Balance Sheet is the same.

2022 2021

£ £

OEIC Money market funds (Cash equivalents per Statement of Cash Flows) 23,458,496 27,633,496

Current asset investments 23,458,496 27,633,496

Cash at bank 2,801,008 2,386,262

12 Creditors: amounts falling due within one year

2022 2021

£ £

Trade creditors 11,934 5,824

Other creditors - 15,721

Accruals 1,163,496 150,312

1,175,430 171,857

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

13 Called up share capital

2022 2021

£ £

Allotted, called-up and fully paid:

Ordinary shares of 1p each: 80,426,321 (2021: 73,230,275) 804,263 732,303

Purchased Date of purchase Nominal value

299,932 09 July 2021 2,999

212,438 27 September 2021 2,124

79,304 15 December 2021 793

64,157 09 March 2022 642

41,667 29 March 2022 417

697,498 6,975

Under the Offer for Subscription launched on 20 January 2022 7,893,544 ordinary shares were allotted on 9 March 2022 at

an average effective offer price of 95.01 pence per share, raising net funds of £7,260,679.

During the year the Company repurchased 697,498 (2021: 387,471) of its own ordinary shares (representing 1.0% (2021: 0.7%)

of the ordinary shares in issue at the start of the year) at the prevailing market price for a total cost of £643,810 (2021:

£292,568). These shares were subsequently cancelled by the Company.

14 Basic and diluted net asset value per share

As at

31 March 2022

As at

31 March 2021

Net assets £77,505,982 £73,898,868

Number of ordinary shares in issue 80,426,321 73,230,275

Net asset value per share (pence) 96.37p 100.91p

15 Financial instruments

The Company’s financial instruments predominantly comprise investments held at fair value through profit and loss, namely

equity and preference shares and fixed and floating rate interest securities that are held in accordance with the Company’s

investment objective.

Other basic financial instruments are held at amortised cost comprising Cash at bank, Current asset investments and short

term debtors and financial liabilities being creditors, all that arise directly from the Company’s operations.

The principal purpose of these financial instruments is to generate revenue and capital appreciation for the Company’s

operations, although cash and current asset investments are held to yield revenue return only. The Company has no

gearing or other financial liabilities apart from short-term creditors. It is, and has been throughout the year under review,

the Company’s policy that no trading in derivative financial instruments shall be undertaken.

The accounting policy for determining the fair value of investments is set out in Note 8 to the Financial Statements. The

composition of investments held is shown below and in Note 8.

Other basic financial instruments such as cash at bank and current asset investments, and other financial liabilities are

stated at amortised cost which the Directors consider is equivalent to fair value.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

Classification of financial instruments

The Company held the following categories of financial instruments at 31 March 2022:

2022 2021

(Fair value) (Fair value)

£ £

Assets at fair value through profit and loss:

Investment portfolio 52,161,122 41,832,061

Other basic financial assets held at amortised cost

Current asset investments 23,458,496 27,633,496

Cash at bank 2,801,008 2,386,262

Accrued income 122,391 130,169

Other debtors 121,200 2,075,232

Financial liabilities held at amortised cost

Other creditors (1,175,430) (171,857)

Total for financial instruments 77,488,787 73,885,363

Non financial instruments 17,195 13,505

Net assets 77,505,982 73,898,868

There are no differences between book value and fair value as disclosed above.

The investment portfolio principally consists of unquoted investments – 92.2% (2021: 79.0%) and AIM quoted stocks – 7.8%

(2021: 21%). The investment portfolio has a 100.0% (2021: 100.0%) concentration of risk towards small UK based, sterling

denominated companies, and represents 67.3% (2021: 56.6%) of net assets at the year-end.

Current asset investments are money market funds and bank deposits which, along with Cash at bank are discussed under

credit risk below, which represent 33.9% (2021: 40.6%) of net assets at the year-end.

The main risks arising from the Company’s financial instruments are the investment risk and the liquidity risk of the unquoted

and quoted portfolio. Other important risks are credit risk, fluctuations in market prices (market price risk), and cash flow

interest rate risk, although currency risk is also discussed overleaf. The Board regularly reviews and agrees policies for

managing each of these risks and they are summarised overleaf. These have been in place throughout the current and

preceding years.

Investment risk

The Company’s investment portfolio is made up of predominantly UK companies which are not quoted on any recognised

stock exchange, although two assets are AIM listed making up 7.8% of the portfolio value at the year-end. The companies

held in the portfolio are usually smaller than those which are quoted on the main market of the London Stock Exchange. They

are therefore usually regarded as carrying more risk compared to larger companies, as they are more sensitive to changes in

key financial indicators, such as a reduction in its turnover or an increase in costs. The Board is of the view that the

Investment Adviser mitigates this risk as the investment in an investee company is held as part of a portfolio of such

companies so that the performance of one company does not significantly affect the value of the portfolio as a whole. The

Investment Adviser also usually takes a seat on the Board of each investee company such that it is able to monitor its

progress on a regular basis and contribute to the strategic direction of the company.

Liquidity risk

The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded, and

therefore they are not readily realisable. In the case of the Company’s quoted portfolio, the shares of these companies are

thinly traded and as such the prices are more volatile than those of more widely traded securities. The ability of the Company

to realise the investments at their carrying value may at times not be possible if there are no willing purchasers and, as the

Company owns minority stakes, could require a number of months and the co-operation of other shareholders to achieve at

a reasonable valuation. The Company’s ability to sell investments may also be constrained by the requirements set down for

VCTs. The maturity profile of the Company’s loan stock investments disclosed within the consideration of credit risk below

indicates that these assets are also not readily realisable until dates up to five years from the year-end.

To counter these risks to the Company’s liquidity, the Investment Adviser maintains sufficient cash and money market funds

to meet running costs and other commitments. The Company invests its surplus funds in high quality money market funds

and bank deposits of £26,259,504 (2021: £30,019,758) which are all accessible at varying points over the next 12 months.

The Board also receives regular cash flow projections in order to manage this liquidity risk.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

The table below shows a maturity analysis of financial liabilities:

2022

<3 months 3-6 months 6-12 months over 12 months Total

Financial liabilities £ £ £ £ £

Other creditors 91,405 1,084,025 - - 1,175,430

2021

<3 months 3-6 months 6-12 months over 12 months Total

Financial liabilities £ £ £ £ £

Other creditors 100,029 71,828 - - 171,857

The Company does not have any derivative financial liabilities.

Credit risk

Credit risk is the risk that a counterparty will fail to discharge an obligation or commitment that it has entered into with the

Company.

The Company’s maximum exposure to credit risk is:

2022

2021

Loan stock investments 6,347,144 7,256,334

Preference shares 1,777,239 754,755

Current asset investments 23,458,496 27,633,496

Accrued income 122,391 130,169

Other debtors 121,200 2,075,232

Cash at bank 2,801,008 2,386,262

 34,627,478 40,236,248

The Company has an exposure to credit risk in respect of the loan stock investments it has made into investee companies,

most of which have no security attached to them, and in a minority of cases, such security ranks beneath any bank debt that

an investee company may owe. The loan stock is held in companies with turnover under £50 million, which may be considered

less stable than larger, longer established businesses. The Investment Adviser undertakes extensive financial and commercial

due diligence before recommending an investment to the Board. The Investment Adviser usually takes a seat on the Board of

each investee company and the Board of the VCT receives regular updates on each company at each quarter end.

The accrued income shown above of £122,391 was all due within six months of the year-end.

The following table shows the maturity of the loan stock investments referred to above. In some cases, the loan maturities are

not the contractual ones, but are the best estimate using management’s expectations of when it is likely that such loans may

be repaid.

Repayable within

2022

2021

0 to 1 year 836,849 1,257,927

1 to 2 years 2,795,761 589,400

2 to 3 years 706,399 2,401,487

3 to 4 years 1,304,194 1,115,498

4 to 5 years 494,939 1,892,022

> 5 years 209,002 -

Total 6,347,144 7,256,334

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

Included within loan stock investments above are loans at a carrying value of £2,960,395 (2021: £3,393,580) which are past

their repayment date but have been renegotiated. A loan to one investee company with a value of £37,110 (2021: £37,110) is

now past its repayment date but has not yet been renegotiated. These loan stock investments are made as part of the

qualifying investments within the investment portfolio, and the risk management processes applied to the loan stock

investments have already been set out under market price risk below.

An aged analysis of the loan stock investments included above, which are past due but not individually impaired, is set out

below. For this purpose, these loans are considered to be past due when any payment due date under the loan’s contractual

terms (such as payment of interest or redemption date) is received late or missed. We are required to report in this format and

include the full value of the loan even though, in some cases it is only in respect of interest that they are in default.

0-6 months 6-12 months over 12 months

2022

Total

£ £ £ £

Loans to investee companies past due - - 1,256,736 1,256,736

0-6 months 6-12 months over 12 months

2021

Total

£ £ £ £

Loans to investee companies past due - - 1,851,469 1,851,469

Credit risk also arises from cash and cash equivalents, deposits with banks and amounts held in liquidity funds. There is a risk

of liquidity fund defaults such that there could be defaults within their underlying portfolios that could affect the values at

which the Company could sell its holdings. As the four OEIC money market funds holding £23,458,496 (2021: £27,633,496)

are all triple A rated funds, along with bank deposits of £2,801,008 (2021: £2,386,262) at four well-known financial institutions

with a minimum credit rating of A2, credit risk is considered to be relatively low in current circumstances. The Board manages

credit risk in respect of these money market funds and cash by ensuring a spread of such investments such that none should

exceed 15% of the company’s total investment assets. The Company’s current account included within the bank deposit

figure above is held with NatWest Bank plc, so the risk of default is low.

There could also be a failure by counter parties to deliver securities which the Company has paid for, or pay for securities

which the Company has delivered. This risk is considered to be small as most of the Company’s investment transactions are

in unquoted investments, where investments are conducted through solicitors, to ensure that payment matches delivery. In

respect of any quoted investment transactions that are undertaken, the Company uses brokers with a high credit quality, and

these trades usually have a short settlement period. Accordingly, counterparty risk is considered to be relatively low.

Market price risk

Market price risk arises from uncertainty about the future valuations of the unquoted portfolio held in accordance with the

Company’s investment objectives. These future valuations are determined by many factors but include the operational and

financial performance of the underlying investee companies (Investment risk), as well as market perceptions of the future

performance of the UK economy and its impact upon the economic environment in which these companies operate. This risk

represents the potential loss that the Company might suffer through holding its investment portfolio in the face of market

movements, which was a maximum of £52,161,122 (2021: £41,832,061) at the year-end, representing the fair value of the

investment portfolio.

The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded and as

such the prices are more uncertain than those of more widely traded securities. As, in a number of cases, the unquoted

investments are valued by reference to price earnings ratios prevailing in quoted comparable sectors (discounted for points

of difference from quoted comparators), their valuations are exposed to changes in the price earnings ratios that exist in the

quoted markets.

The Board’s strategy in managing the market price risk inherent in the Company’s portfolio of equities and loan stock

investments is determined by the requirement to meet the Company’s Objective, as set out on page [x] in the Strategic

Report. As part of the investment management process, the Board seeks to maintain an appropriate spread of market risk,

and also has full and timely access to relevant information from the Investment Adviser. No single investment is permitted to

exceed 15% of total investment assets at the point of investment. The Investment Committee meets regularly and reviews the

investment performance and financial results, as well as compliance with the Company’s objectives. The Company does not

use derivative instruments to hedge against market risk.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

Market price risk sensitivity

The Board believes that the Company’s assets are mainly exposed to market price risk, as the Company is required to hold

most of its assets in the form of sterling denominated investments in small companies.

Although a small proportion of these assets are quoted on AIM, the majority of these assets are unquoted. All of the

investments made by the Investment Adviser in unquoted companies, irrespective of the instruments the Company actually

holds, (whether shares, preference shares or loan stock) carry a full market risk, even though some of the loan stocks may be

secured on assets, but behind any prior ranking bank debt in the investee company.

The Board considers that the value of investments in equity and loan stock instruments are ultimately sensitive to changes in

their trading performance (discussed under investment risk above) and to changes in quoted share prices, insofar as such

changes eventually affect the estimated enterprise value of the portfolio’s unquoted companies. The table below shows the

impact on profit and net assets if there were to be a 20% (2021: 20%) movement in overall share prices, and has used a 20%

change in the quoted market comparator multiple as a proxy for this.

The sensitivity analysis below assumes the actual portfolio of investments held by the Company is perfectly correlated to this

overall movement in share prices. However, Shareholders should note that this level of correlation is unlikely to be the case

in reality, particularly in the case small, unquoted companies which may have other factors which may influence the extent of

the valuation change, e.g. a strong niche brand may limit the valuation fall compares to comparators, or may be more affected

by external market factors than larger companies.

For each of the companies in the investment portfolio that are valued on a multiple basis, the calculation below has applied

plus and minus 20% to the multiple (such as earnings or revenue) derived from quoted market comparators that are used to

value the companies. The companies valued on a multiple basis represent £47.51 million of the total investment portfolio of

£52.16 million. The remainder of the portfolio, valued at recent investment price or estimated realisation proceeds, has had a

20% variance applied. The impact of both calculations is shown below.

The impact of a change of 20% (2021: 20%) has been selected as this is considered reasonable given the level of volatility

observed both on a historical basis and market expectations for future movement.

2022 2021

Profit and net assets Profit and net assets

£ £

If overall share prices rose/fell by 20% (2021: 20%), with all

other variables held constant – increase/(decrease) 6,921,864 / (7,466,824) 4,695,166 / (4,514,267)

Increase/(decrease) in earnings, and net asset

value, per ordinary share (in pence) 8.61p / (9.28)p 6.41p / (6.16)p

Cash flow interest rate risk

The Company’s fixed and floating rate interest securities, its equity and preference equity investments and net revenue may

be affected by interest rate movements. Investments are often in relatively small businesses, which are relatively high risk

investments sensitive to interest rate fluctuations.

Due to the short time to maturity of some of the Company’s floating rate investments, it may not be possible to re-invest in

assets which provide the same rates as those currently held.

The Company’s assets include fixed and floating rate interest instruments, as shown below. The rate of interest earned is

regularly reviewed by the Board, as part of the risk management processes applied to these instruments, already disclosed

under market price risk above.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

The interest rate profile of the Company’s financial net assets at 31 March 2022 was:

Financial

net assets

on which no

interest paid

Fixed rate

financial

assets

Variable rate

financial

assets Total

Weighted

average

interest rate

Average

period to

maturity

£ £ £ £ % (years)

Equity shares 44,036,739 - - 44,036,739

Preference shares - 1,777,239 - 1,777,239 0.0 3.3

Loan stocks - 6,347,144 - 6,347,144 10.2 2.3

Current asset investments - - 23,458,496 23,458,496 0.5

Cash at bank - - 2,801,008 2,801,008 0.0

Debtors 243,591 - - 243,591

Creditors (1,175,430) - - (1,175,430)

Total for financial

instruments 43,104,900 8,124,383 26,259,504 77,488,787

Non-financial instruments 17,195 - - 17,195

Total net assets 43,122,095 8,124,383 26,259,504 77,505,982

The interest rate profile of the Company’s financial net assets at 31 March 2021 was:

Financial

net assets

on which no

interest paid

Fixed rate

financial

assets

Variable rate

financial

assets Total

Weighted

average

interest rate

Average

period to

maturity

£ £ £ £ % (years)

Equity shares 33,820,972 - - 33,820,972

Preference shares - 754,755 - 754,755 0.0 3.7

Loan stocks - 7,256,334 - 7,256,334 8.9 2.9

Current asset investments - - 27,633,496 27,633,496 0.0

Cash at bank - - 2,386,262 2,386,262 0.0

Debtors 2,205,401 - - 2,205,401

Creditors (171,857) - - (171,857)

Total for financial

instruments 35,854,516 8,011,089 30,019,758 73,885,363

Non-financial instruments 13,505 - - 13,505

Total net assets 35,868,021 8,011,089 30,019,758 73,898,868

Note: Weighted average interest rates above are derived by calculating the expected annual income that would be earned

on each asset (but only for those sums that are currently regarded as collectible and would therefore be recognised), divided

by the values for each asset class at the balance sheet date.

Floating rate cash earns interest based on SONIA rates.

The Company’s investments in equity shares and similar instruments have been excluded from the interest rate risk profile as

they have no maturity date and would thus distort the weighted average period information.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

Cash flow interest rate sensitivity

Although the Company holds investments in loan stocks that pay interest, the Board does not consider it appropriate to

assess the impact of interest rate changes in isolation upon the value of the unquoted investment portfolio, as interest rate

changes are only one factor affecting the market price movements that are discussed above under market price risk.

However, as the Company has a substantial proportion of its assets in cash and money market funds, the table below shows

the sensitivity of income earned to changes in interest rates in these instruments:

2022

Profit and

net assets

2021

Profit and

net assets

If interest rates rose/fell by 2% (2021: 1%), with all other

variables held constant – increase/(decrease) 425,404 / (425,404) 243,160 / (243,160)

If interest rates rose/fell by 2% (2021: 1%), with all other

variables held constant – increase/(decrease) 0.53p / (0.53)p 0.33p / (0.33)p

Currency risk

All assets and liabilities are denominated in sterling and therefore there is no currency risk, although a number of investee

companies do trade overseas, some do face some exposure to currency risk in their operations.

Fair value hierarchy

The tables below sets out fair value measurements using FRS 102 s11.27 fair value hierarchy.

Financial assets at fair value through profit and loss

At 31 March 2022

Level 1 Level 2 Level 3 Total

£ £ £ £

Equity investments 4,062,854 - 39,973,885 44,036,739

Preference shares - - 1,777,239 1,777,239

Loan stock investments - - 6,347,144 6,347,144

Total 4,062,854 - 48,098,268 52,161,122

Financial assets at fair value through profit and loss

At 31 March 2021

Level 1 Level 2 Level 3 Total

£ £ £ £

Equity investments 8,801,596 - 25,019,376 33,820,972

Preference shares - - 754,755 754,755

Loan stock investments - - 7,256,334 7,256,334

Total 8,801,596 - 33,030,465 41,832,061

There are currently no financial liabilities at fair value through profit and loss.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair

value measurement of the relevant asset as follows:

Level 1 – valued using quoted prices in active markets for identical assets

Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.

Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.

The valuation techniques used by the Company are explained in the accounting policies in Note 8.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Notes to the Financial Statements for the year ended 31 March 2022

Financial Statements

A reconciliation of fair value measurements is set out below:

Equity

investments

Preference

Loan stock

investments Total

£ £ £ £

Opening balance at 1 April 2021 25,019,376 754,755 7,256,334 33,030,465

Purchases 2,875,970 957,890 773,534 4,607,394

Sales (4,864,601) - (1,509,516) (6,374,117)

Reclassification at value 453,891 - (453,891) -

Total gains included in Income Statement:

- on assets sold 2,499,113 - 39,157 2,538,270

- on assets held at the year-end 13,990,136 64,594 241,526 14,296,256

Closing balance at 31 March 2022 39,973,885 1,777,239 6,347,144 48,098,268

As detailed in the accounting policy for Note 8, where investments are valued on an earnings-multiple basis, the main

input used for this basis of valuation is a suitable price-earnings ratio taken from a comparable sector on the quoted

market, which is then appropriately adjusted for points of difference. Thus any change in share prices can have a

significant effect on the fair value measurements of the Level 3 investments, as they may not be wholly offset by the

adjustment for points of difference.

Level 3 unquoted equity and loan stock investments are valued in accordance with the IPEV guidelines as follows:

2022 2021

£ £

Investment methodology

Multiple of earnings, revenues or gross margin, as appropriate 47,124,658 31,782,412

Recent investment price subsequently calibrated as appropriate 936,500 1,012,393

Net asset value - 198,550

Estimated realisation proceeds 37,110 37,110

48,098,268 33,030,465

The unquoted equity investments had the following movements between valuation methodologies between 31 March 2021

and 31 March 2022:

Change in investment

methodology (2021 to 2022)

Carrying value as at

31 March 2022

£ Explanatory note

Net asset basis to multiple basis 574,893 Multiple basis is a more appropriate basis for

determining fair value.

Recent investment price to multiple basis 1,635,870 Multiple basis is a more appropriate basis for

determining fair value.

Multiple basis to recent investment price 381,500 Recent investment price is a more appropriate basis for

determining fair value.

The valuation will be the most appropriate valuation methodology for an investment within its market, with regard to the

financial health of the investment and the December 2018 IPEV guidelines. The Directors believe that, within these

parameters, these are the most appropriate methods of valuation which would be reasonable as at 31 March 2022.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Financial Statements

16 Management of capital

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so

that it can continue to provide returns for Shareholders and to provide an adequate return to Shareholders by allocating its

capital to assets commensurate with the level of risk.

By its nature, the Company has an amount of capital, at least 80% (as measured under the tax legislation) of which is and must

be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being

subscribed. The Company accordingly has limited scope to manage its capital structure in the light of changes in economic

conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital

structure, the Board may adjust the amount of dividends paid to shareholders, return capital to Shareholders, issue new

shares, or sell assets if so required to maintain a level of liquidity to remain a going concern.

Although, as the Investment Policy implies, the Board would consider levels of gearing, there are no current plans to do so. It

regards the net assets of the Company as the Company’s capital, as the level of liabilities are small and the management of

them is not directly related to managing the return to shareholders. There has been no change in this approach from the

previous year.

17 Segmental analysis

The operations of the Company are wholly in the United Kingdom, from one class of business.

18 Post balance sheet events

On 6 April 2022, a further investment of £0.12 million was made into Northern Bloc Ice Cream Limited, an existing portfolio

company.

On 5 May 2022, a new investment of £0.43 million was made into Lads Store Limited (trading as Bidnamic).

On 23 May 2022, a further investment of £0.27 million was made into Muller EV Limited (trading as Andersen EV), an existing

portfolio company.

On 9 June 2022, the Company realised its investment in Media Business Insight Holdings Limited, generating proceeds of

£2.77 million.

On 15 June 2022, a further investment of £0.18 million was made into Rota Geek Limited, an existing portfolio company.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Shareholder Information

Communication with Shareholders

We aim to communicate regularly with our Shareholders. The annual general meetings provide a useful platform for the Board to

meet Shareholders and exchange views and we are pleased to be able to hold a physical meeting in 2022. We will also offer a

facility whereby you can view the Board, the Investment Adviser’s presentation and submit questions remotely via live stream.

Your Board welcomes your attendance at the September Annual General Meeting to give you the opportunity to meet the

Directors and representatives of the Investment Adviser. The Company releases Interim Management Statements in respect of

those quarters where it does not publish interim or full year accounts via the London Stock Exchange RNS service. The

Investment Adviser previously held an annual Shareholder event, though was unable to so during 2021 due to COVID-19

restrictions affecting prior plans. Gresham House was pleased present the Company’s first virtual Shareholder event on

25February 2022.

Shareholders wishing to follow the Company’s progress can visit its website at www.mig2vct.co.uk. The website includes

up-to-date details on fund performance and dividends as well as publicly available information on the Company’s portfolio of

investments and copies of company reports. There is also a link to the London Stock Exchange’s website at:

www.londonstockexchange.com, where Shareholders can obtain details of the share price and latest NAV announcements, etc.

Financial calendar

25 February 2022 Virtual Shareholder Event

29 June 2022 Announcement of Annual Results and circulation of Annual Report & Financial Statements for the

year ended 31 March 2022 to Shareholders

21 September 2022 Annual General Meeting

December 2022 Announcement of Interim Results and circulation of Interim Report for the six months ended

30 September 2022 to Shareholders

31 March 2023 Year-end

TBC 2023 Shareholder Event

Gresham House website

Shareholders can check the performance of the VCT by visiting the Investment Adviser’s website at www.greshamhouse.com.

This is regularly updated with information on your investment including case studies of portfolio companies.

The website includes relevant Shareholder literature, including previous Annual and Interim Reports and the Company’s Key

Information Document (“KID”) - Investors should note that the process for compiling the KID are prescribed by EU law and the

Company has no discretion over the format or content of the document. The illustrated performance returns in the KID cannot be

guaranteed and may not reflect figures for the Company derived using other methods. Accordingly, the Board recommends that

investors also take account of information from other sources, including the Annual Reports.

Annual General Meeting

The Company’s next Annual General Meeting will be held on Wednesday, 21 September 2022 at 11.00 am at the offices of

Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London EC3V 0HR. Shareholders will also be able to view the

meeting remotely by registering for access to a web stream link which can be found on the Company’s website at

www.mig2vct.co.uk. Shareholders will be able to vote on a show of hands and the meeting. Those Shareholders will also be able

to submit questions to the Board in advance of the meeting using the AGM@greshamhouse.com email address. Shareholders

attending virtually will not be able to vote at the meeting and therefore you are encouraged to lodge your proxy form, which is

included with Shareholders’ copies of this Annual Report, or online at www.signalshares.com before 19 September 2022 at

11.00am for your votes to be valid. A copy of the Notice of the Meeting is included on pages 83 to 85.

Dividends

Shareholders who wish to have dividends paid directly into their bank account, rather than sent by cheque to their registered

address, can complete a mandate for this purpose. Mandates can be obtained by contacting the Company’s Registrar, Link

Group, at the address given on page 87 or by completing the mandate form via www.mobeusvcts.co.uk under the ‘How can I

update my address details/dividend bank mandate’ tab and returning the form to the Registrar.

Shareholders are encouraged to ensure that the Registrar maintains up-to-date details for their account and to check

whether they have received all dividend payments. This is particularly important if a Shareholder has recently changed

address or changed their bank. We are aware that a number of dividends remain unclaimed by Shareholders and whilst we

will endeavour to contact them if this is the case, we cannot guarantee that we will be able to do so if the Registrar does not

have an up-to-date postal or email address.

Information for Shareholders

Information for

Shareholders

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Information for

Shareholders

Selling your shares

The Company’s Shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other

quoted company through a stockbroker. Shareholders are also advised to discuss their individual tax position with their financial

advisor before deciding to sell their shares.

The Company is unable to buy back shares direct from Shareholders, so you will need to use a stockbroker to sell your shares. If

you are considering selling your shares or trading in the secondary market, please contact the Company’s Corporate Broker,

Panmure Gordon (UK) Limited (“Panmure”). Panmure is able to provide details of close periods (when the Company is prohibited

from buying in shares) and details of the price at which the Company has bought in shares.

Panmure can be contacted as follows:

Chris Lloyd 0207 886 2716 chris.lloyd@panmure.com

Paul Nolan 0207 886 2717 paul.nolan@panmure.com

Common Reporting Standard (“CRS”) and Foreign Account Tax Compliance Act (“FATCA”)

Tax legislation was introduced with effect from 1 January 2016 under the Organisation for Economic Co-operation and

Development Common Reporting Standard for Automatic Exchange of Financial Account Information. The legislation requires

investment trust companies to provide personal information to HMRC on certain investors who purchase shares. As an affected

entity, the Company has to provide information annually to HMRC relating to a number of non-UK based certificated

Shareholders who are deemed to be resident for tax purposes in any of the 90 plus countries who have joined CRS. All new

Shareholders, excluding those whose shares are held in CREST, entered onto the share register from 1 January 2016 will be

asked to provide the relevant information. Additionally, HMRC’s policy on FATCA now means that, as a result of the restricted

secondary market in VCT shares, the Company’s shares are not considered to be “regularly traded”. The Company is therefore

also an affected entity for the purposes of this legislation and so has to provide information annually to HMRC relating to

Shareholders who are resident for tax purposes in the United States.

For further information, please see HMRC’s Quick Guide: Automatic Exchange of Information – information for account holders:

https://www.gov.uk/government /publications/exchange-of-information-account-holders.

Managing your shareholding online

For details on your individual shareholding and to manage your account online, Shareholders may log into or register with the

Link Group Shareholder Portal at: www.signalshares.com. You can use the Shareholder Portal to change and update your

preferences including changing your address details, check your holding balance and transactions, view the dividends you have

received, add and amend your bank details and manage how you receive communications from the Company.

Fraud Warning

Boiler Room fraud and unsolicited communications to Shareholders

We are aware of Shareholders being contacted in connection with sophisticated but fraudulent financial scams which purport to

come from the Company or to be authorised by it. This is often by a phone call or an email usually originating from outside of the

UK, often claiming or appearing to be from a corporate finance firm offering to buy your VCT shares at an inflated price.

Further information on boiler room scams and fraud advice plus who to contact, can be found first in the answer to a question

“What should I do if I receive an unsolicited offer for my shares?” within the VCT Investor area of the Investment Adviser’s website

in the A Guide to VCTs section: www.mobeusvcts.co.uk and secondly, in a link to the FCA’s ScamSmart site: www.fca.org.uk/

scamsmart

We strongly recommend that you seek financial advice before taking any action if you remain in any doubt. You can also contact

the Investment Adviser on 0207 382 0999, or email mobeusvcts@greshamhouse.com to check whether any claims made by a

caller are genuine.

Shareholders are also encouraged to ensure their personal data is always held securely and that data held by the Registrar of

the Company is up to date, to avoid cases of identity fraud.

Shareholder enquiries

For enquiries concerning the investment portfolio or the Company in general, please contact the Investment Adviser, Gresham

House Asset Management Limited. To contact the Chairman or any member of the Board, please contact the Company

Secretary, also Gresham House, in the first instance.

The Registrar, Link Group, may be contacted via their Shareholder portal, post or telephone for queries relating to your

shareholding or dividend payments, dividend mandate forms, change of address etc.

Full contact details for each of Gresham House and Link Group are included under Corporate Information on page 87 of this

Annual Report.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Information for

Shareholders

Performance Data at 31 March 2022

The two former ‘C’ and Ordinary classes of shares were merged on 10 September 2010, and the ‘C’ share class redesignated as

Ordinary Shares. The following tables show, for all investors in the former share classes and in the more recent fundraisings, how

their investments have performed since they were originally allotted shares in each fundraising.

Total return data, which includes cumulative dividends paid to date, is shown on both a share price and NAV basis as at 31 March

2022. The NAV basis enables Shareholders to evaluate more clearly the performance of the Investment Adviser, as it reflects the

underlying value of the portfolio at the reporting date. This is the most widely used measure of performance in the VCT sector.

Ordinary Share Fund

Share price as at 31 March 2022 87.50p

NAV per share as at 31 March 2022 96.37p

Total return per share to

Shareholders since allotment

Allotment date(s)

Allotment

price

Net allotment

price

Cumulative

dividends

paid

per share

% Change

since

31 March 2021

(Share

price basis)

(NAV

basis)

(NAV

basis)

(p) (p) (p) (p) (p)

Funds raised 2005/06

Between 5 January 2006 and 5 April

2006 100.00 60.00 134.00 221.50 230.37 6.2%

Funds raised 2008/09

Between 3 April 2009 and 5 May 2009 92.39 64.67 130.00 217.50 226.37 6.3%

Funds raised 2013/14

9 January 2014 117.92

82.54 116.00 203.50 212.37 6.8%

11 February 2014 118.22

82.75 116.00 203.50 212.37 6.8%

31 March 2014 119.28

83.49 111.00 198.50 207.37 6.9%

3 April 2014 119.82

83.87 111.00 198.50 207.37 6.9%

4 April 2014 119.08

83.36 111.00 198.50 207.37 6.9%

6 June 2014 118.66

83.06 111.00 198.50 207.37 6.9%

Funds raised 2014/15

14 January 2015 118.44

82.91 97.00 184.50 193.37 7.5%

17 February 2015 124.35

87.05 97.00 184.50 193.37 7.5%

10 March 2015 120.18

84.13 92.00 179.50 188.37 7.7 %

Funds raised 2017/2018

28 September 2017 104.73

73.31 65.00 152.50 161.37 9.1%

20 October 2017 105.07

73.55 65.00 152.50 161.37 9.1%

09 November 2017 105.79

74.05 65.00 152.50 161.37 9.1 %

20 November 2017 107.44

75.21 65.00 152.50 161.37 9.1%

21 November 2017 107.39

75.17 65.00 152.50 161.37 9.1%

24 January 2018 97.81

68.47 56.00 143.50 152.37 9.7%

13 March 2018 100.79

70.55 56.00 143.50 152.37 9.7%

Funds raised 2019/20

8 January 2020 93.03

65.12 36.00 123.50 132.37 11.3%

2 April 2020 77.26

54.08 25.00 112.50 121.37 12.5%

Funds raised 2022

9 March 2022 95.01

66.51 - 87.50 96.37 -

1 -

Source: Panmure Gordon & Co (mid-price basis) based upon the latest NAV announced of 91.98p at 28 February 2022.

2 -

Net allotment price is the allotment price less applicable income tax relief. The tax relief was 20% up to 5 April 2004, 40% from 6 April

2004 to 5 April 2006, and 30% thereafter.

3 -

For derivation, see table on following page.

4 -

Average effective offer price.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Information for

Shareholders

Former Ordinary Share Fund

Share price as at 31 March 2022 72.36p

NAV per share as at 31 March 2022 79.70p

Shareholders in the former Ordinary Share Fund received 0.827 shares in the Company for each former Ordinary share that they

held on 10 September 2010, when the two share classes merged. Both the share price and the NAV per share shown above have

been adjusted using this merger ratio.

Total return per share to

Shareholders since allotment

Allotment date(s)

Allotment

price

Net allotment

price

Cumulative

dividends

paid

per share

% Change

since 31

March 2021

(Share

price basis)

(NAV

basis)

(NAV

basis)

(p) (p) (p) (p) (p)

Funds raised 2000/01

Between 30 May 2000 and 11 December 2000 100.00 80.00 132.68 205.04 212.38 5.5%

- Net allotment price is the allotment price less applicable tax relief. The tax relief was 20% up to 5 April 2004.

- For derivation, see table below.

- Investors in this fundraising may also have enhanced returns if they had also deferred capital gains tax liabilities.

Cumulative dividends paid per share

Funds

raised

2000/01

Funds

raised

2005/06

Funds

raised

2008/09

Funds

raised

2013/14

Funds

raised

2014/15

Funds

raised

2017/18

Funds

raised

2019/20

Funds

raised

2020/21

Funds

raised

2022

(p) (p) (p) (p) (p) (p) (p) (p) (p)

7 January 2022 9.92 12.00 12.00 12.00 12.00 12.00 12.00 12.00 -

30 July 2021 4.96 6.00 6.00 6.00 6.00 6.00 6.00 6.00

19 June 2020 5.79 7.00 7.00 7.00 7.00 7.00 7.00 7.00

27 March 2020 9.10

11.00 11.00 11.00 11.00 11.00 11.00

20 September 2019 12.41

15.00 15.00 15.00 15.00 15.00

22 March 2019 4.14

5.00 5.00 5.00 5.00 5.00

22 January 2018 7.44

9.00 9.00 9.00 9.00 9.00

27 July 2017 5.79

7.00 7.00 7.00 7.00

31 March 2017 8.27

10.00 10.00 10.00 10.00

08 August 2016 4.14

5.00 5.00 5.00 5.00

18 March 2016 4.14

5.00 5.00 5.00 5.00

20 March 2015 4.14

5.00 5.00 5.00 5.00

20 October 2014 11.58

14.00 14.00 14.00

21 March 2014 4.14

5.00 5.00 5.00

19 April 2013 3.31

4.00 4.00

20 April 2012 3.31

4.00 4.00

20 April 2011 3.31

4.00 4.00

10 September 2010 - Merger of Ordinary Share Fund and C Share Fund

13 August 2010 - 1.00 1.00

19 September 2009 - 1.00 1.00

23 July 2008 6.00 2.50

19 September 2007 6.00 1.50

8 February 2006 6.00

20 October 2005 6.00

24 September 2003 0.51

16 September 2002 1.35

10 September 2001 0.93

Dividends Paid

132.68 134.00 130.00 116.00 97.00 65.00 36.00 25.00 -

- The dividends paid after the merger of the share classes on 10 September 2010 to former Ordinary Share Fund Shareholders have been

restated to reflect the merger conversion ratio of approximately 0.827.

- The above date relates to an investor in the first allotment of each fundraising. The precise amount of dividends paid to Shareholders by date

of allotment is shown on page 80 and above.

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Information for

Shareholders

Taxation benefits

VCTs provide investors with an attractive method of investing in small to medium-sized unquoted (including AIM listed) trading

companies in the UK that would otherwise be difficult to invest in directly. The VCT is itself exempt from paying corporation tax

on its chargeable gains. VCTs also offer substantial tax benefits to private investors.

Personal taxation benefits

The tax reliefs set out below are available to individuals aged 18 or over who subscribe for ordinary shares. Whilst there is no

specific limit in the amount of an individual’s acquisitions of shares in a VCT, each of the following tax reliefs will only be given to

the extent that the individual’s total acquisitions of shares in VCTs in any tax year do not exceed the specified limit, currently

£200,000 (see below).

Tax reliefs currently available to VCT investors:

(1) Relief from income tax on investments

An investor subscribing for new ordinary shares in a VCT is entitled to claim income tax relief on amounts subscribed up to a

maximum of £200,000 in any tax year. The relief is given at 30% of the amount subscribed provided that the relief is limited to

the amount which reduces the investor’s income tax liability to nil. Investments used as security for, or financed by, a loan

may not qualify for relief depending on the circumstances. The income tax relief for investments in new VCT shares was

decreased from 40% to 30% in relation to VCT shares issued on or after 6 April 2006. Tax relief on subscription for shares in

a VCT is restricted where, within six months (before or after) that subscription, the investor disposes of shares in the same

VCT, or a VCT which merges with that VCT at any time.

(2) Capital gains tax reinvestment relief

The ability to defer capital gains by reinvesting the gains in a VCT, where the VCT shares are issued in the two year period

beginning twelve months before the gain arises, has been abolished in respect of shares issued on or after 6 April 2004.

However, gains which were deferred by subscribing for VCT shares issued before 6 April 2004 remain deferred while the

investor continues to hold those VCT shares.

(3) Dividend relief

An investor who acquires VCT shares within the specified limit (currently £200,000 per annum) will not be liable to income

tax on dividends paid on those shares.

(4) Relief from capital gains tax on disposal

A disposal by an investor of ordinary shares in a VCT required within the annual limit of £200,000 will not be subject to UK

capital gains tax.

(5) Purchases in the market

An individual purchaser of existing VCT shares in the market will be entitled to claim dividend relief but not relief from income

tax on investment.

(6) Withdrawal of relief

Relief from income tax on subscription for shares in a VCT is withdrawn if the shares are disposed of (other than between

spouses) within five years of issue or if the VCT loses its approval within this period.

The above is only an outline of the tax reliefs available under current legislation. Investors are recommended to consult an

independent professional adviser as to the taxation consequences of investing in a VCT.

Company History

The Company was launched in May 2000 as Matrix e-Ventures Fund VCT. In October 2001 the Company changed its name to

Matrix Venture Fund VCT. In September 2005, the Company adopted a broader investment strategy, to invest in established,

profitable and cash generative businesses across any sector. It also changed its name to Matrix Income & Growth 2 VCT plc. In

June 2012 the Company changed its name to Mobeus Income & Growth 2 VCT plc to reflect the Investment Adviser’s change of

name. In September 2016, the Company formally changed its investment strategy to invest in growth capital investments. On

30 September 2021, the Mobeus Equity Partners LLP VCT investment advisory business was acquired by Gresham House.

VCT Tax Benefits for the Investor

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Information for

Shareholders

Notice of the Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Mobeus Income & Growth 2 VCT plc (“the Company”) will be held at

11.00 am on Wednesday, 21 September 2022, at the offices of Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street,

London, EC3V 0HR, for the purposes of considering and, if thought fit, passing the following resolutions of which resolutions 1 to 6 will

be proposed as ordinary resolutions and resolutions 7 and 8 will be proposed as special resolutions. An explanation of the main

business to be proposed is included in the Directors’ Report on pages 36 to 37 of this document:

1. To receive and adopt the annual report and financial statements of the Company for the year ended 31 March 2022 (“Annual

Report”), together with the auditor’s report thereon.

2. To approve the directors’ annual remuneration report as set out in the Annual Report.

3. To re-elect Ian Blackburn as a director of the Company.

4. To re-elect Sally Duckworth as a director of the Company.

5. To re-appoint BDO LLP of 55 Baker Street, London W1U 7EU, London, EC1A 4AB as auditor of the Company until the conclusion of

the next general meeting at which accounts are laid before the Company and to authorise the directors to determine the

remuneration of the auditor.

6. That, in substitution for any existing authorities, the directors of the Company be and hereby are generally and unconditionally

authorised pursuant to section 551 of the Companies Act 2006 (“the Act”) to exercise all the powers of the Company to allot

Ordinary shares of 1.00 penny each in the capital of the Company (“Shares”) and to grant rights to subscribe for, or convert, any

security into Shares (“Rights”) up to an aggregate nominal value of £268,088, provided that the authority conferred by this

resolution shall (unless renewed, varied or revoked by the Company in general meeting) expire on the date falling fifteen months

after the passing of this resolution or, if earlier, at the conclusion of the annual general meeting of the Company to be held in 2023,

but so that this authority shall allow the Company to make before the expiry of this authority offers or agreements which would or

might require Shares to be allotted or Rights to be granted after such expiry and the directors of the Company shall be entitled to

allot Shares or grant Rights pursuant to any such offers or agreements as if the authority conferred by this resolution had not

expired.

7. That, subject to the passing of resolution 6 set out in this notice and in substitution for any existing authorities, the Directors of the

Company be and hereby are empowered in accordance with sections 570 and 573 of the Act to allot or make offers or

agreements to allot equity securities (as defined in section 560(1) of the Act) for cash, pursuant to the authority conferred upon

them by resolution 6 set out in this notice, or by way of a sale of treasury shares, as if section 561(1) of the Act did not apply to any

such sale or allotment, provided that the power conferred by this resolution shall be limited to the allotment of equity securities:

(i) with an aggregate nominal value of up to, but not exceeding, £120,640 of the issued share capital of the Company from time to

time in connection with offer(s) for subscription; and

(ii) otherwise than pursuant to sub-paragraph (i) above, with an aggregate nominal value of up to 10% of the issued share capital

from time to time,

in each case where the proceeds of the allotment may be used, in whole or in part, to purchase the Company’s Shares in the

market and provided that this authority shall (unless renewed, varied or revoked by the Company in general meeting) expire on the

date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual general meeting of the

Company to be held in 2023, except that the Company may, before the expiry of this authority, make offers or agreements which

would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity

securities in pursuance of such offers or agreements as if the power conferred by this resolution had not expired.

8. That, in substitution for any existing authorities, the Company be and hereby is authorised pursuant to and accordance with

section 701 of the Act to make one or more market purchases (within the meaning of section 693(4) of the Act) of its own Shares

provided that:

(i) the aggregate number of Shares which may be purchased shall not exceed 12,055,905 or, if lower, such number of Shares

(rounded down to the nearest whole Share) as shall equal 14.99% of the Shares in issue at the date of passing of this resolution;

(ii) the minimum price which may be paid for a Share is 1 penny (the nominal value thereof);

(iii) the maximum price which may be paid for a Share (excluding expenses) shall be the higher of (a) an amount equal to 5% above

the average of the middle market quotations for a Share in the Company taken from the London Stock Exchange Daily Official

List for the five business days immediately preceding the day on which the Share is contracted to be purchased and (b) the

amount stipulated in Article 5(6) of the Market Abuse Regulation (EU) 596/2014 (as such Regulation forms part of UK law and as

amended);

(iv) the authority conferred by this resolution shall (unless renewed, varied or revoked by the Company in general meeting) expire

on the date falling fifteen months after the passing of this resolution or, if earlier, on the conclusion of the annual general

meeting of the Company to be held in 2023; and

(v) the Company may make a contract or contracts to purchase its own Shares under the authority hereby conferred prior to the

expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a

purchase of its own Shares in pursuance of any such contract.

BY ORDER OF THE BOARD

Registered Office Gresham House Asset Management Limited

5 New Street Square Company Secretary

London

EC4A 3TW

Dated: 29 June 2022

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Information for

Shareholders

Notice of the Annual General Meeting

Notes:

The following Notes explain your general rights as a Shareholder and your right to attend and vote at this Meeting or to appoint

someone else to vote on your behalf.

1. A member is entitled to attend, speak and vote at the Meeting in person or to appoint one or more other persons as their proxy to

exercise all or any of his rights on his behalf. Further details of how to appoint a proxy, and the rights of proxies, are given in the

Notes below. Where a member intends to join the Meeting by means of the webcast, they shall be permitted to ask questions at the

Meeting but shall not be entitled to vote on resolutions at the Meeting (and are, therefore, encouraged to submit their votes by way

of proxy). Note 16 below will apply to those who join the meeting (which would be in attendance only) by means of the webcast.

2. To be entitled to attend the Meeting (and for the purpose of the determination by the Company of the number of votes they may

cast) and to be able to lodge your proxy votes, Shareholders must be registered in the Register of Members of the Company at close

of trading on 19 September 2022. Changes to the Register of Members after the relevant deadline shall be disregarded in

determining the rights of any person to attend the Meeting and/or virtual meeting and vote by proxy.

3. In order for a proxy appointment to be valid it must be received by Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL

by 11.00 am on 19 September 2022.

4. A Shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the

rights attached to a different ordinary share or ordinary shares held by that Shareholder. A proxy need not be a Shareholder of the

Company.

5. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by

the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the

Company’s Register of Members in respect of the joint holding (the first named being the most senior).

6. A form of proxy for use in connection with the Meeting is enclosed with the document of which this Notice forms part. If you do not

have a form of proxy and would like a copy, please contact the Company’s registrar, Link Group at 10th Floor Central Square, 29

Wellington Street, Leeds LS1 4DL (“Registrar”), or on 0371 664 0391. Completion and return of a form of proxy form will not legally

prevent a Shareholder from attending and voting at the Meeting in person, or from joining the Meeting (which would be as an

attendee only) by means of the webcast. The Company requests all Shareholders to vote by proxy on the resolutions set out in this

Notice as soon as possible.

7. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the

resolution. If no voting indication is given, your proxy will vote or abstain from voting at their discretion. Your proxy will vote (or

abstain from voting) as they think fits in relation to any other matter which is put before the Meeting.

8. You can also vote either:

• by logging on to www.signalshares.com and following the instructions;

• if you need help with voting online, please contact our Registrar, Link Group, on 0371 664 0391 if calling from the UK, or +44 (0)

371 664 0391 if calling from outside of the UK, or email Link at shareholderenquiries@linkgroup.co.uk.

• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures

set out below.

We strongly recommend voting electronically at www.signalshares.com as your vote will automatically be counted. Given the

ongoing situation, of people working from home and delays in the postal system, there is a risk that your vote may not be counted if

you send a paper proxy.

9. If you return more than one proxy appointment, the appointment received last by the Registrar before the latest time for the receipt

of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication

facilities are open to all Shareholders and those who use them will not be disadvantaged.

10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the

Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from

www.euroclear.com/site/ public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members

who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take

the appropriate action on their behalf.

11. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST

Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must

contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to

be received by the issuer’s agent (ID RA10) by 11.00 am on 19 September 2022. For this purpose, the time of receipt will be taken to

mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’s

agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of

instructions to proxies appointed through CREST should be communicated to the appointee through other means.

12. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland

Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will,

therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take

(or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to

procure that their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is

transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their

CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical

limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set

out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

13. Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its

powers as a Shareholder provided that no more than one corporate representative exercises powers in relation to the same shares.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Information for

Shareholders

14. As at 28 June 2022 (being the latest practicable business day prior to the publication of this Notice), the Company’s ordinary issued

share capital consists of 80,426,321 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at

28 June 2022 are 80,426,321.

15. Under Section 527 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in that section have the

right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s

Financial Statements (including the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any

circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual

Financial Statements and reports were laid in accordance with Section 437 of the Companies Act 2006 (in each case) that the

Shareholders propose to raise at the relevant meeting. The Company may not require the Shareholders requesting any such

website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is

required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the

Company’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt

with at the Meeting for the relevant financial year includes any statement that the Company has been required under Section 527 of

the Companies Act 2006 to publish on a website.

16. Any Shareholder attending the Meeting has the right to ask questions. Any Shareholder may submit questions in relation to the

business to be transacted at the Meeting via email to: AGM@greshamhouse.com by 19 September 2022. The Company must cause

to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a)

to do so would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the

answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the

Company or the good order of the Meeting that the question be answered.

17. Copies of the directors’ letters of appointment will be available for inspection at the Company’s registered office during normal

business hours on any weekday (excluding Saturdays, Sundays and public holidays) and will also be available for inspection at the

place of the Meeting for at least 15 minutes before and during the Meeting.

18. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this

Notice or any related documents to communicate with the Company for any purposes other than those expressly stated.

A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the Company’s

website at www.mig2vct.co.uk

Mobeus Income & Growth 2 VCT plc Annual Report & Financial Statements 2022

Information for

Shareholders

Glossary of terms

Alternative performance measure (“APM”)

A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure

defined or specified in the Company’s financial reporting framework. These APMs tend to be industry specific terms which help

Shareholders to understand and assess the Company’s progress. A number of terms contained within this Glossary have been

identified as APMs.

Cumulative dividends paid (APM)

The total amount of dividend distributions by the Company over the time period specified. A list of all dividends paid since launch of

the Company is shown on the Company’s website www.mig2vct.co.uk. Dividends paid in the year and dividends paid/payable in

respect of the year are shown in Note 6.

Cumulative total return (APM)

Cumulative total return per share comprises the NAV per share (NAV basis) or the mid-market price per share (Share price basis), plus

cumulative dividends paid since launch of the existing share class in 2005.

Internal Rate of Return (“IRR”)

The internal rate of return is the annual discount rate that equates the original investment cost with the value of subsequent cash

flows (such as receipts/dividends or further investment) and the latest valuation/exit proceeds or net asset value. Generally speaking,

the higher an investment’s IRR, the more successful it is.

Net asset value or NAV

The value of the VCT’s total assets less its total liabilities. It is equal to the total equity Shareholders’ funds.

Net asset value per share or NAV per share

The net asset value per share is calculated as total equity Shareholders’ funds divided by the number of Ordinary shares in issue at

the year-end.

NAV Total Return (APM)

This measure combines two types of returns received by Shareholders. Firstly, as income in the form of dividends and secondly, as

capital movements (net asset value) of the value of the Fund.

It is a performance measure that adjusts for dividends that have been paid in a period or year. This allows Shareholders to assess the

returns they have received both in terms of the performance of the Company but also including dividends they have received from

the Company which no longer form part of the Company’s assets.

It is calculated as the percentage return achieved after taking the closing NAV per share and adding dividends paid in the year and

dividing the total by the opening NAV per share. The Directors feel that this is the most meaningful method for Shareholders to assess

the performance of the Company.

Ongoing charges ratio (APM)

This figure, calculated using the AIC recommended methodology, shows Shareholders the annual percentage reduction in

shareholder returns as a result of recurring operational expenses, assuming markets remain static and the portfolio is not traded.

Although the Ongoing Charges figure primarily is based upon historic information, it provides Shareholders with an indication of the

likely level of costs that will be incurred in managing the Company in the future. This is calculated by dividing the Investment Adviser’s

fees of £1,648,298 and running costs of £403,366 (per Notes 4a and 4d on pages 60 and 62), the latter being reduced by IFA trail

commission and one-off fees, by the average net assets throughout the year of £78,668,475.

Realised gains/(losses) in the year

This is the profit or loss that arises following the full or partial disposal of a holding in a portfolio company. It is calculated by deducting

the value of the holding as at the previous year-end from the proceeds received in respect of such disposal.

Share Price Total Return (APM)

As NAV Total Return, but the Company’s mid-market share price is used in place of NAV. This measure more accurately reflects the

actual return a Shareholder will have earned, were they to sell their shares at the year/period end date. It includes the impact of any

discounts or premiums at which the share price trades compared to the underlying net asset values of the Company. If the shares

trade at a discount, the returns could be less than the NAV Total Return, but if trading at a premium, returns could be higher than the

NAV Total Return.

Mobeus Income & Growth 2 VCT plc

Annual Report & Financial Statements 2022

Corporate Information

Directors (Non-executive)

Ian Blackburn

Sally Duckworth

Adam Kingdon

Investment Adviser, Company Secretary and Administrator

Gresham House Asset Management Limited

80 Cheapside

London

EC2V 6EE

Tel: +44(0) 20 7382 0999

info@greshamhouse.com

greshamhouse.com

Company’s Registered Office and Head Office

5 New Street Square

London

EC4A 3TW

Company Registration Number

03946235

LEI No: 213000LY62XLI1B4VX35

Website

www.mig2vct.co.uk

E-mail

mobeusvcts@greshamhouse.com

Independent Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

Solicitors

Shakespeare Martineau LLP

No 1 Colmore Square

Birmingham

B4 6AA

Corporate Brokers

Panmure Gordon (UK) Limited

1 New Change

London

EC4M 9AF

Receiving Agent

The City Partnership (UK) Limited

The Mending Rooms

Park Valley Mills

Meltham Road

Huddersfield

HD4 7BH

Registrar

Link Group plc

10th Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

VCT Status Adviser

Philip Hare & Associates LLP

6 Snow Hill

London

EC1A 2AY

Sponsor

Howard Kennedy Corporate

Services LLP

1 London Bridge Walk

London

SE1 9BG

Shareholder Portal

www.signalshares.com

Tel: +44 (0)371 664 0324

Bankers

National Westminster Bank plc

City of London Office

PO Box 12258

1 Princes Street

London

EC2R 8PA

Information for

Shareholders

Mobeus Income & Growth 2 VCT plc