Hargreave Hale AIM VCT 2 plc: Half-year Report

Hargreave Hale AIM VCT 2 Plc
Unaudited Interim Results for the six month period ending 31 August 2017

FINANCIAL HIGHLIGHTS

Ordinary Shares (as at 31 August):   31 August 2017 31 August 2016 28 February
                                                                         2017*
                                                                              
Net asset value per share                   115.47p        104.58p     109.86p
Cumulative  distributions  paid  per         53.00p         47.00p      49.00p
share since launch
Total return per share                      168.47p        151.58p     158.86p
                                                                              
                                                                              
Half Yearly/Annual Returns per share                                          
(basic and diluted):
Revenue return                              (0.18)p        (0.09)p     (0.43)p
Capital return                                9.75p          7.04p      14.97p
Combined return                               9.57p          6.95p      14.54p
                                                                              
Dividends per share:                                                          
Interim proposed/paid                         2.00p          2.00p       2.00p
Final paid                                    4.00p          4.00p       4.00p

 
Ongoing expense ratio**                       2.10%          2.09%       1.82%
                                                                              
Performance Benchmark:                                                        
FTSE AIM All-share Index (rebased to          87.34          68.38       78.38
100 at 6 April 2007)
                                                                              
                                                                              

* 28 February 2017 financial highlights represent annual results
** Calculated as total expenses (annualised for half yearly results) minus  ad 
hoc legal costs, divided by period end net assets

INVESTMENT OBJECTIVE
The objective  of the  VCT  is to  achieve long  term  capital growth  and  to 
maximise tax free distributions to shareholders by investing in a  diversified 
portfolio of small UK companies primarily traded  on AIM. At least 70% of  the 
Company's funds must be invested in qualifying holdings within three years  of 
raising the funds.  The balance  of the Company's  funds will  be invested  in 
liquid assets  (such  as  fixed  income  securities  and  bank  deposits)  and 
non-qualifying equity investments  on an opportunistic  basis. The Company  is 
managed as a Venture Capital Trust  in order that shareholders in the  Company 
may benefit from the tax relief available.

CHAIRMAN'S STATEMENT

INTRODUCTION
In the first half of the financial year the Net Asset Value per share (NAV)
increased from 109.86 pence to 115.47 pence equivalent to an increase of 8.7%
after adding back the 4 pence dividend distributed in July 2017. During the
same period the FTSE 100 Total Return Index gained 4.7% and the FTSE AIM All
Share Total Return Index gained 12.2%.

RESULTS
The gain per share for the period was 9.57 pence per share (comprising revenue
losses of 0.18 pence and capital gains of 9.75 pence). At 31 August 2017 the
total return since inception was 168.47 pence.

INVESTMENTS
The investment manager, Hargreave Hale Limited, invested a further £4.37
million in 12 qualifying companies during the period. The fair value of
qualifying investments at 31 August 2017 was £26.52 million invested in 58 AIM
companies and 10 private companies. The balance of the funds was held in a mix
of cash, fixed income and other non-qualifying equities.

At 31  August  2017  the  VCT  was  89.3%  invested  in  qualifying  companies 
calculated in accordance with HMRC guidelines.

DIVIDEND
A final dividend for the year ended 28 February 2017 of 4 pence was paid on 25
July 2017.

The Directors  continue to  maintain  their policy  of  targeting a  tax  free 
dividend yield equivalent to 5% of the year end NAV. An interim dividend of  2 
pence (2016 - 2p) will be paid on 1 December 2017, with an ex-dividend date of
9 November 2017 and a record date of 10 November 2017.

BUYBACKS
We have been able to maintain our policy of offering our shareholders an
efficient exit route through the buyback scheme. In total, 430,945 shares were
repurchased during the six month period ending 31 August 2017 at a weighted
average price of 109.28 pence per share. Since the period end a further 75,978
shares have been purchased at a cost of £85,845.

The Board continues  to target a  share price discount  of 5% of  the NAV  per 
share (as measured against the mid-price)  for market purchases. It should  be 
emphasised that  this target  is non-binding  and dependent  on  circumstances 
including the Company's liquidity from time to time and market conditions.
  
JOINT OFFER FOR SUBSCRIPTION
The Directors of the  Company announced on  14 December 2016  the launch of  a 
joint offer for  subscription for shares  in both Hargreave  Hale AIM VCTs  to 
raise up to £10 million in Hargreave Hale AIM VCT 1 plc and up to £10  million 
in the Company. The  offer was approved  by shareholders of  the Company at  a 
general meeting on  12 January  2017 and  was open  to both  new and  existing 
shareholders.

The offer was fully subscribed and  resulted in gross funds being received  of 
£10 million and the issue of 8.96 million new shares in the Company.

On 18 September 2017 the Company announced its intention to re-open the  Offer 
by making the  Over-Allotment facility available  and increasing the  facility 
from £5 million to £7.5 million. A Supplementary Prospectus was published on 2
October 2017 as increasing  the offer amount  constitutes a significant  event 
under the Prospectus Rules.

The Offer will close on 17 November 2017 unless fully subscribed before then.

AUDIT TENDER
As announced in the annual report and accounts for the year ended 28  February 
2017 mandatory audit tendering legislation states that the maximum period  for 
which a firm can be appointed auditor  of a public listed entity is 10  years. 
BDO LLP  were approaching  the maximum  term permitted  and as  such an  audit 
tender has been completed.

The process  was led  by the  Audit  Committee who  invited several  firms  to 
participate in  the  tender process.  Companies  were chosen  based  on  their 
reputation or by  recommendation/personal experience  and where  it was  known 
they had specific knowledge and experience of VCT/investment trust auditing.

The Committee documented the  Company's objectives and  agreed on a  selection 
criteria and  scorecard to  enable them  to assess  each applicant  on a  fair 
basis. Proposals  and  presentations were  reviewed  by the  committee  and  a 
recommendation made to the Board.

I am pleased  to announce that  the Board  agreed BDO LLP  were the  strongest 
candidate and re-appointed them as statutory auditor for the Company.

OUTLOOK
The progress we have made in recent months in identifying and increasing our
investment in the qualifying portfolio has encouraged us to re-open our
December 2016 share offer. In particular, we have completed investments in a
number of early stage private companies, many of whom have exciting and
'disruptive' business plans. The potential of some of these is considerable
but we recognise their higher risk profiles and illiquidity and will proceed
cautiously with this part of the fund.

Given the ever increasing uncertainty with  domestic politics we are a  little 
surprised at how benign  equity markets have been  over recent months and,  as 
our fund manager states in his  report, 'we remain cautious'. Nonetheless,  as 
long term investors we  will continue to build  our qualifying portfolio  when 
the right opportunities present themselves.

DAVID HURST-BROWN
Chairman

Date: 19 October 2017

INVESTMENT MANAGER'S REPORT

This report covers the first  half of the financial year,  1 March 2017 to  31 
August 2017. The manager's report contains references to movements in the  Net 
Asset Value (NAV) per  share and Total  Return per share  (NAV per share  plus 
distributed earnings  per  share). Movements  in  the  NAV per  share  do  not 
necessarily mirror the earnings per share  (EPS) reported in the accounts  and 
elsewhere, which convey  the profit after  tax within the  company within  the 
reported period as  a function  of the weighted  average number  of shares  in 
issue for the period.

INVESTMENT REPORT
The period under review has been generally positive with global equity markets
advancing off the back of  strong corporate earnings and encouraging  economic 
data. In contrast, the FTSE 100 was volatile over the period and ended flat as
investors grappled with the implications of the election result for  Sterling, 
for inflation and for Government policy  in several areas, most obviously  our 
path out of the  European Union. That aside,  small and mid-caps continued  to 
make ground as robust corporate news flow helped feed investors' appetite  for 
growth companies with large and global addressable markets, which in turn  fed 
through to some strong performance in the junior indices.

As we look towards the  second half of the  financial year we remain  cautious 
given the potential headwinds  approaching. UK inflation has  risen to 3%  and 
the Bank of England has insinuated that a rate rise is possible this year. The
potential impact on consumer spending and corporate investment is unknown  but 
potentially negative.  We have  witnessed weaker  trading from  several  'high 
street' brands,  particularly  in  retail  and  casual  dining,  as  companies 
struggle to manage  margin pressure  (input price  inflation, higher  business 
rates and the living  wage) against the backdrop  of an increasingly  cautious 
consumer. In parallel, the UK government  continues to try and navigate a  way 
out of the EU. We still  feel it is too early to  know the impact (if any)  of 
Brexit on our portfolio; that seems unlikely  to change in the short term.  By 
and large  we  have  left  the  portfolio  of  qualifying  and  non-qualifying 
investments untouched.  While we  are cautious  of certain  sectors,  consumer 
discretionary  for  example,  we  continue  to  find  interesting   investment 
opportunities in qualifying companies that  we believe can grow regardless  of 
the outcome. To that end, we intend  to continue with business as usual  while 
keeping a close eye  on events as  they unfold and,  perhaps, reducing at  the 
margin some of our non-qualifying equity risk.

Performance was  good  in the  six  months to  31  August 2017  with  the  NAV 
increasing from 109.86p  to 115.47p and  the payment  of a 4  pence per  share 
dividend. The total return  of 9.61 pence  per share translates  to a gain  of 
8.7%. During the same period the FTSE AIM All-Share Total Return gained 12.2%.

The qualifying investments  made a net  contribution of 5.54  pence per  share 
with the non-qualifying investments adding a further 4.83 pence per share. The
balance was a mixture of costs, income and small gains made through share  buy 
backs.

Zoo Digital, a recent investment, was the top performing qualifying investment
(+166.7%, +1.90 pence  per share) as  the shares responded  to strong  revenue 
growth and a significantly improved balance sheet. Gfinity also performed well
(+76.7%, +0.76 pence per share) after announcing broadcasting agreements  with 
BT Sport and the BBC and a partnership with Formula 1 to deliver the Formula 1
ESports Series. Other  stocks that  made a  significant contribution  included 
Faron Pharmaceuticals (+100.0%,  +0.74 pence  per share),  Eagle Eye  (+91.7%, 
+0.69 pence per share) and Tristel (+79.4%, +0.60 pence per share).

The biggest loss within  the period came from  Portr (-30.0%, -0.75 pence  per 
share), which we  marked to the  price of a  recent funding round  that saw  a 
large UK listed company make a strategic investment into the company. Although
the new mark was lower than the prior round, it remains above our entry price.
Commercial progress has  been made  through Portr's  partnership with  British 
Airways and we look forward to news  of progress with other airlines over  the 
coming months.  Other losses  came from  DP Poland  (-27.2%, -0.64  pence  per 
share) following a consolidation in the share price despite recent reports  of 
strong trading; Science in Sport (-14.1%, -0.28 pence per share), TLA (-50.0%,
-0.26 pence per share) and Creo Medical (-14.4%, -0.22 pence per share).

We made 12 qualifying investments over the period, which included 6 additional
investments into existing qualifying companies (1 private company), 2 IPOs,  2 
secondary placings  into  listed  companies  and  2  private  investments.  We 
invested a total of £4.37 million into qualifying investments over the period.

Within the qualifying portfolio, we reduced our investments in Gfinity,  Faron 
Pharma and Hardide  following strong runs  in their share  prices.  We  exited 
Electrical Geodesics, Kalibrate  and Electric  Word through  M&A activity  and 
disposed of all our shares in ECSC, Haydale Graphene, Audioboom, Directa  Plus 
and Synairgen following prolonged periods of poor news flow. We also sold  our 
shares in Free  Agent after a  disappointing update that  hinted at  potential 
weakness in their model.

PORTFOLIO STRUCTURE
The VCT is comfortably through the HMRC defined investment test and ended  the 
period at 89.3% invested  as measured by the  HMRC investment test. By  market 
value, the VCT had a 52.4% weighting to qualifying investments.

The allocation to non-qualifying equity investments increased marginally  from 
20.6% to  21.5%.   We  continued  to  make  use  of  the  Marlborough  Special 
Situations Fund  as  a  temporary  home for  proceeds  from  fundraising;  the 
allocation increased from 12.0% to 14.8%. Fixed income as a percentage of  the 
fund decreased from 0.4% to 0.3% and cash fell from 20.3% to 11.4%.

The HMRC investment tests are  set out in Chapter 3  of Part 6 Income Tax  Act 
2007, which should be read in conjunction with this section of the  investment 
manager's report. Funds raised  by VCTs are first  included in the  investment 
tests from the start of the accounting period containing the third anniversary
of the  date on  which the  funds were  raised. Therefore,  the allocation  of 
qualifying investments as defined by the  legislation can be different to  the 
portfolio weighting as measured by market value relative to the net assets  of 
the VCT.

POST PERIOD END UPDATE
Deal flow  has  been  good  since period  end  with  4  additional  qualifying 
investments being made in  Gfinity, Laundrapp, Faron  Pharma and Angle.  There 
are a number  of deals  in the  pipeline which we  expect to  complete in  the 
coming weeks. .

For further information, please contact:                            

 

STUART BROOKES
Company Secretary
 

Hargreave Hale AIM VCT 2 plc

 Date: 19 October 2017

INVESTMENT PORTFOLIO SUMMARY
As at 31 August 2017

Qualifying Investments Cost    Valuation Valuation Net      Sector
                       £000    £000      %         Assets
                                                   %
                           501                               Information
Zoo Digital Group plc              1,333      2.96     2.63 Technology
                           190                               Information
Ideagen plc                        1,238      2.75     2.44 Technology
Learning Technologies      534                               Information
Group plc                          1,195      2.65     2.36 Technology
Mexican Grill Ltd (A       277                               Consumer
Preference Shares)**               1,154      2.56     2.28 Discretionary
                           120                               Consumer
Quixant plc                        1,096      2.43     2.16 Discretionary
SCA Investments Ltd      1,002                               Consumer
(Gousto)**                         1,000      2.22     1.97 Discretionary
Eagle Eye Solutions        811                               Information
Ltd                                  997      2.21     1.97 Technology
                           574                               Consumer
DP Poland plc                        955      2.12     1.89 Discretionary
                           689                               Information
Portr Ltd**                          770      1.71     1.52 Technology
Science in Sport plc       518       760      1.69     1.50  Consumer Staples
                           701                               Information
Zappar Ltd**                         700      1.55     1.38 Technology
                           255                               Information
Gfinity plc                          693      1.54     1.37 Technology
AnimalCare Group plc       100       687      1.53     1.36  Health Care
                           618                               Consumer
Escape Hunt plc                      658      1.46     1.30 Discretionary
Hardide plc                224       656      1.46     1.30  Materials
Tristel plc                 81       591      1.31     1.17  Health Care
Creo Medical Group plc     559       565      1.25     1.12  Health Care
Fulcrum Utility            100
Services Ltd                         525      1.17     1.04  Utilities
Faron Pharmaceuticals      201
Oy                                   518      1.15     1.02  Health Care
                           501                               Consumer
Honest Brew Ltd**                    500      1.11     0.99 Discretionary
Infinity Reliance Ltd      501                               Consumer
(My 1st Years)**                     500      1.11     0.99 Discretionary
Maxcyte Inc Com Stk        142
USD0.01 (DI)                         487      1.08     0.96  Health Care
                           236                               Information
Loopup Group plc                     420      0.93     0.83 Technology
                           200                               Information
E G Solutions plc                    415      0.92     0.82 Technology
                           139                               Information
ULS Technology plc                   411      0.91     0.81 Technology
                           401                               Information
Aquis Exchange Ltd**                 400      0.89     0.79 Technology
                           301                               Information
Laundrapp Ltd**                      384      0.85     0.76 Technology
                           295                               Information
FairFX Group plc                     370      0.82     0.73 Technology
                            91                               Information
TrakM8 Holdings plc                  352      0.78     0.69 Technology
                           207                               Information
CentralNic Group plc                 347      0.77     0.69 Technology
Velocity Composites        332
plc                                  331      0.74     0.65  Industrials
Clearstar Inc              360       322      0.72     0.64  Industrials
Everyman Media Group       172                               Consumer
plc                                  320      0.71     0.63 Discretionary
Surface Transforms plc     301       318      0.71     0.63  Industrials
Osirium Technologies       301                               Information
plc                                  269      0.60     0.53 Technology
Belvoir Lettings plc       335       257      0.57     0.51  Real Estate
Lombard Risk                92                               Information
Management plc                       247      0.55     0.49 Technology
                           200                               Information
Sanderson Group plc                  240      0.53     0.47 Technology
EKF Diagnostics            150
Holdings plc                         235      0.52     0.46  Health Care
Plastics Capital plc       202       220      0.49     0.43  Materials
                            53                               Information
WANDisco plc                         216      0.48     0.43 Technology
Premaitha Health plc       330       190      0.42     0.37  Health Care
Omega Diagnostics          129
Group plc                            189      0.42     0.37  Health Care
                           234                               Telecommunication
Cloudcall Group plc                  181      0.40     0.36 Services
Satellite Solutions        103       166      0.37     0.33  Telecommunication
Worldwide Group plc                                         Services
Paragon Entertainment      200
Ltd                                  156      0.35     0.31  Industrials
The Property Franchise     113
Group                                152      0.34     0.30  Real Estate
Lidco Group plc            146       142      0.32     0.28  Health Care
Angle plc                  252       142      0.31     0.28  Health Care
Reneuron Group plc         262       139      0.31     0.27  Health Care
                            91                               Information
Intercede Group plc                  135      0.30     0.27 Technology
Mexican Grill Ltd           31                               Consumer
(Ordinary Shares)**                  128      0.28     0.25 Discretionary
Ilika plc                  203       126      0.28     0.25  Industrials
                           215                               Information
Imaginatik plc                       124      0.28     0.24 Technology
Maxcyte Inc Com Stk        141       123      0.27     0.24  Health Care
USD0.01 (DI/REG S)
APC Technology Group       350                               Information
plc                                  114      0.25     0.22 Technology
                           150                               Consumer
TLA Worldwide plc                    113      0.25     0.22 Discretionary
                           251                               Consumer
Medaphor Group plc                    78      0.17     0.15 Discretionary
Verona Pharma plc           71        75      0.17     0.15  Health Care
Mycelx Technologies        150        64      0.14     0.13  Industrials
Corporation plc (Com
SHS $0.025 REG S+
shares)
Porta Communications       200                               Consumer
plc                                   60      0.13     0.12 Discretionary
TP Group plc               125        57      0.13     0.11  Industrials
Genedrive plc              140        56      0.12     0.11  Health Care
Midatech Pharma plc        150        50      0.11     0.10  Health Care
                            95                               Information
Mirada plc                            42      0.09     0.08 Technology
Fusionex International      69                               Information
plc**                                 29      0.06     0.06 Technology
                            23                               Information
Mporium Group plc                     15      0.03     0.03 Technology
                            20                               Information
Microsaic Systems plc                 11      0.02     0.02 Technology
Flowgroup plc               54        10      0.02     0.02  Industrials
Brigantes Energy Ltd*      -         -         -        -    Energy
Total Qualifying
Investments             17,865    26,519     58.85    52.35  
                                                             
Non-Qualifying         Cost    Valuation Valuation Net      Sector
Investments            £000    £000      %         Assets
                                                   %
Scottish Amicable 8.5%                                       
2049                       154       159      0.35     0.31
Total - Corporate                                            
bonds                      154       159      0.35     0.31
Marlborough Special                                          
Situations Fund**        5,742     7,487     16.62    14.78
Total - Unit Trusts      5,742     7,487     16.62    14.78  
NMC Health plc             426       757      1.68     1.50  Health Care
Melrose Industries plc     444       682      1.51     1.35  Industrials
Royal Dutch Shell plc      582       648      1.44     1.28  Energy
Dechra Pharmaceuticals
plc                        461       612      1.36     1.21  Health Care
BP plc                     596       579      1.28     1.14  Energy
                                                             Consumer
On the Beach Group plc     391       574      1.28     1.13 Discretionary
Anglo American plc         373       421      0.93     0.83  Materials
Sanne Group plc            292       413      0.92     0.82  Financials
                                                             Consumer
Ascential plc              326       403      0.90     0.80 Discretionary
Merlin Entertainments                                        Consumer
plc                        386       401      0.89     0.79 Discretionary
Cohort plc                 176       394      0.87     0.78  Industrials
                                                             Consumer
Wizz Air Holdings plc      220       353      0.78     0.70 Discretionary
Medica Group plc           213       340      0.75     0.67  Health Care
RPC Group plc              289       296      0.66     0.59  Materials
                                                             Consumer
Hilton Food Group plc      252       291      0.65     0.57 Discretionary
XP Power Ltd               292       286      0.64     0.56  Industrials
FCFM Group Ltd**           150       283      0.63     0.56  Financials
                                                             Information
Renishaw plc               276       274      0.61     0.54 Technology
                                                             Consumer
Clipper Logistics plc      234       267      0.59     0.53 Discretionary
                                                             Consumer
JD Sports Fashion plc      274       259      0.57     0.51 Discretionary
Fulcrum Utility
Services Ltd                56       256      0.57     0.50  Utilities
Lloyds Banking Group
plc                        285       255      0.57     0.50  Financials
                                                             Consumer
Sportech plc               209       230      0.51     0.45 Discretionary
Learning Technologies                                        Information
Group plc                   80       207      0.46     0.41 Technology
Micro Focus                                                  Information
International plc          121       196      0.44     0.39 Technology
Horizon Discovery
Group plc                  124       167      0.37     0.33  Health Care
Everyman Media Group                                         Consumer
plc                         85       155      0.34     0.31 Discretionary
Eurocell plc               119       135      0.30     0.27  Industrials
Finsbury Food Group
plc                         70       129      0.29     0.26  Consumer Staples
Alfa Financial                                               Information
Software Holdings plc       92       128      0.29     0.25 Technology
                                                             Information
Just Eat plc                82       100      0.22     0.20 Technology
Egdon Resources plc        140        69      0.15     0.14  Energy
Eagle Eye Solutions                                          Information
Ltd                         44        64      0.14     0.13 Technology
                                                             Consumer
The Fulham Shore plc        38        57      0.13     0.11 Discretionary
Amerisur Resources plc     167        45      0.10     0.09  Energy
Midatech Pharma plc        134        44      0.10     0.09  Health Care
Regent Pacific Group
Ltd                         93        43      0.09     0.08  Health Care
Mycelx Technologies        170        40      0.09     0.08  Industrials
Corporation plc (Com
SHS $0.025 + (D1)
shares)
Reneuron Group plc          41        29      0.06     0.06  Health Care
Mexican Grill Ltd (A                                         Consumer
Preference Shares)**         3        10      0.02     0.02 Discretionary
Genagro Ltd**               22         2       -        -    Industrials
Mycelx Technologies
Corporation plc (Com
SHS $0.025 REG S+
shares)                      8         2       -        -    Industrials
Total - Non-Qualifying                                       
equities                 8,836    10,896     24.18    21.53
Total -Non-Qualifying                                        
Investments             14,732    18,542     41.15    36.62
Total investments       32,597    45,061    100.00    88.97  
Cash at bank                       5,773              11.40  
Prepayments & Accruals             (186)             (0.37)  
Net Assets                        50,648             100.00  

* Unquoted Company holding of less than £500
**Unquoted Companies

The majority of investments held within the portfolio are listed and/or
headquartered in the UK with the exception of the following:

                                      Listed    Headquartered  Registered
AIM listed Investments:                                         
Clearstar Inc                         UK        Cayman Islands Cayman Islands
DP Poland                             UK        Poland         UK
Faron Pharmaceuticals Oy              UK        Finland        Finland
Fulcrum Utility Services Ltd          UK        UK             Cayman Islands
Maxcyte Inc                           UK        USA            USA
Mycelx Technologies Corporation plc   UK        USA            USA
Paragon Entertainment Ltd             UK        UK             Cayman Islands
Regent Pacific Group Ltd              Hong Kong Hong Kong      Cayman Islands
Royal Dutch Shell plc                 UK        Netherlands    UK
Sanne Group plc                       UK        Jersey         Jersey
WANDisco plc                          UK        UK and USA     Jersey
Wizz Air Holdings plc                 UK        Switzerland    Jersey
XP Power Ltd                          UK        Singapore      Singapore
                                                                
Unlisted private companies:                                     
Aquis Exchange Ltd                      -       UK             UK
Brigantes Energy Ltd                    -       UK             UK
FCFM Group Ltd                          -       UK             UK
Fusionex International plc              -       UK             Jersey
Genagro Ltd                             -       Jersey         Jersey
Honest Brew Ltd                         -       UK             UK
Infinity Reliance Ltd (My 1^st Years)   -       UK             UK
Laundrapp Ltd                           -       UK             UK
Mexican Grill Ltd                       -       UK             UK
Portr Ltd                               -       UK             UK
SCA Investments Ltd (Gousto)            -       UK             UK
Zappar Ltd                              -       UK             UK
                                                                
Authorised unit trust:                                          
Marlborough Special Situations Fund     -       UK             UK

TOP TEN INVESTMENTS
As at 31 August 2017 (By Market Value)

The top 10 equity investments are shown below; each is valued by reference  to 
the bid price, or, in the case of unquoted companies, values are either  based 
on the last arm's length transaction or valuation techniques, such as earnings
multiples. Forecasts,  where given,  are drawn  from a  combination of  broker 
research and/or Bloomberg consensus forecasts and exclude amortisation,  share 
based payments and exceptional  items. Forecasts are in  relation to a  period 
end for which the company results are yet to be released. The net cash  values 
are drawn from published accounts in most cases.

Learning Technology Group plc                                            47.0p
Investment date         April 2014 Forecasts for the year to     December 2017
Equity held                  0.52% Turnover (£'000)                     51,500
Av Purchase Price            20.6p Profit/(loss)  before  tax           11,300
                                   (£'000)
Cost (£'000)                   614 Net Cash (£'000)                    (8,486)
Valuation (£'000)            1,402 Net Assets  December  2016           30,710
                                   (£'000)
 
COMPANY DESCRIPTION
Learning Technologies  Group (LTG)  provides  a comprehensive  and  integrated 
range of  e-learning services  and technologies  to corporate  and  government 
clients. LTG  is making  good  progress towards  its  goal of  establishing  a 
substantial global organisation of specialist digital learning businesses from
Europe, US,  Latin America  and  Asia to  form a  market-leading  technologies 
agency.

 

Zoo Digital Group plc                                                    24.0p
Investment date           April 2017 Forecasts for the year to      March 2018
Equity held                    7.56% Turnover ($'000)                   20,988
Av Purchase Price               9.0p Profit/(loss)  before   tax           347
                                     ($'000)
Cost (£'000)                     501 Net Cash ($'000)                    (300)
Valuation (£'000)              1,333 Net   Assets   March   2017         2,561
                                     ($'000)
 
COMPANY DESCRIPTION
Zoo is a leading provider of subtitling and digital distribution services  for 
the global  entertainment  industry. Zoo  combine  their own  technology  with 
talented client teams across the globe to translate original video  programmes 
into more than 50 foreign languages. Their technology helps process the edited
digital materials to  meet the  technical delivery requirements  of a  growing 
number of online video services.

Mexican Grill Ltd                                                     8,550.0p
Investment date         October 2009 Results for the year to     December 2016
Equity held                    4.25% Turnover (£'000)                   25,327
Av Purchase Price           2,059.0p Profit/(loss)  before  tax        (1,025)
                                     (£'000)
Cost (£'000)                     311 Net Cash (£'000)                  (2,862)
Valuation (£'000)              1,292 Net Assets  December  2016          3,312
                                     (£'000)
Income recognised  in              0                                          
period (£)
 
COMPANY DESCRIPTION
Mexican  Grill   is  a   private  company   that  operates   33  fast   casual 
California-Mexican restaurants that provide fresh,  made to order cuisine  for 
eat in or take-away, making it among the largest chains within its niche.

 

Ideagen  plc                                                             90.0p
Investment date           March 2011 Forecasts for the year to      April 2018
Equity held                    0.69% Turnover (£'000)                   34,900
Av Purchase Price              13.8p Profit/(loss)  before   tax         9,700
                                     (£'000)
Cost (£'000)                     190 Net Cash (£'000)                    4,205
Valuation (£'000)              1,238 Net   Assets   April   2017        46,419
                                     (£'000)
 
COMPANY DESCRIPTION
Ideagen is a supplier of compliance based information management software with
operations in  the  UK and  the  United  States. The  company  specialises  in 
enterprise governance,  risk  and  compliance  and  healthcare  solutions  for 
organisations operating within highly  regulated industries. Ideagen  provides 
complete content lifecycle solutions that  enable organisations to meet  their 
regulatory and quality compliance standards, helping them to reduce costs  and 
improve efficiency.

Quixant plc                                                             420.0p
Investment date         May 2013 Forecasts for the year to       December 2017
Equity held                0.40% Turnover ($'000)                      102,300
Av Purchase Price          46.0p Profit/(loss)   before    tax          15,800
                                 ($'000)
Cost (£'000)                 120 Net Cash ($'000)                         (69)
Valuation (£'000)          1,096 Net  Assets   December   2016          34,306
                                 ($'000)
 
COMPANY DESCRIPTION
Quixant designs  and  manufactures  complete advanced  hardware  and  software 
solutions for the  pay-for-play gaming  and slot  machine industry.  Quixant's 
specialised products provide  an all-in-one solution,  based on PC  technology 
but  with  additional  hardware  features  and  operating  software  developed 
specifically to address the requirements of the gaming industry. 

Eagle Eye Solutions plc                                                 255.0p
Investment date         April 2014 Forecasts for the year to         June 2018
Equity held                  1.64% Turnover (£'000)                     15,900
Av Purchase Price            205.7 Profit/(loss)    before    tax      (3,600)
                                   (£'000)
Cost (£'000)                   855 Net Cash (£'000)                      3,724
Valuation (£'000)            1,061 Net Assets June 2017 (£'000)          8,862
 
COMPANY DESCRIPTION
Eagle Eye  Solutions plc  operates  in the  e-commerce industry.  The  Company 
provides a digital platform that  enables retailers to connect with  customers 
to deliver offers, rewards and services that can be redeemed.

SCA Investments Ltd (Gousto)                                          2,988.0p
Investment date            July 2017 Results for the year to     December 2016
Equity held                    1.53% Turnover (£'000)                   12,755
Av Purchase Price           2,994.0p Profit/(loss) before  tax         (6,739)
                                     (£'000)
Cost (£'000)                   1,002 Net Cash (£'000)                    5,407
Valuation (£'000)              1,000 Net Assets December  2016           6,512
                                     (£'000)
Income  recognised   in            0                                          
period (£)
 
COMPANY DESCRIPTION
Founded in February 2012, Gousto is an e-commerce company offering recipe  kit 
boxes which include fresh ingredients  for step-by-step chef designed  recipes 
to be  made at  home.  Shoppers select  meals from  a  variety of  options  on 
Gousto's  e-commerce  platform.  Gousto  then  delivers  the  pre-proportioned 
ingredients to the  doorstep, along with  instructions on how  to prepare  the 
meal.

DP Poland plc                                                            40.8p
Investment date         November 2012 Forecasts for  the  year   December 2017
                                      to
Equity held                     1.57% Turnover (£'000)                  11,000
Av Purchase Price               24.5p Profit/(loss) before tax         (2,000)
                                      (£'000)
Cost (£'000)                      574 Net Cash (£'000)                   6,001
Valuation (£'000)                 955 Net Assets December 2016          11,210
                                      (£'000)
 
COMPANY DESCRIPTION
DP Poland  (Domino's Pizza  Poland) is  a fast  food company  that operates  a 
sub-franchise of the Domino's Pizza brand in Poland. The company operate in 14
Polish cities, with 16 corporate  and 23 sub-franchised stores. They  continue 
to roll out  and anticipate  finishing the  current year  with 50  operational 
sites, with a longer-term ambition of 100 stores by 2020.

Fulcrum Utility Services Ltd                                             52.5p
Investment date       December 2009 Forecasts for the year to       March 2018
Equity held                   0.85% Turnover (£'000)                    41,600
Av Purchase Price             10.5p Profit/(loss)   before    tax        7,400
                                    (£'000)
Cost (£'000)                    156 Net Cash (£'000)                    12,561
Valuation (£'000)               781 Net Assets March 2017 (£'000)       10,446
 
COMPANY DESCRIPTION
Fulcrum  Utility  Services  provides  utility  infrastructure  solutions.  The 
company offers solutions  that include  gas connection,  multi utility,  meter 
installation, outlet  pipe work,  and  gas disconnection  services,  renewable 
energy solutions and consulting services.

Portr Ltd                                                               741.0p
Investment date            July 2015 Results for the year to     December 2016
Equity held                    3.64% Turnover (£'000)                        -
Av Purchase Price             662.4p Profit/(loss) before  tax         (4,824)
                                     (£'000)
Cost (£'000)                     689 Net Cash (£'000)                      825
Valuation (£'000)                770 Net Assets December  2016           1,100
                                     (£'000)
Income  recognised   in            0                                          
period (£)
 
COMPANY DESCRIPTION
Portr run's AirPortr, London's same day luggage transfer service. In its  most 
basic form they deliver luggage from London Airports to your hotel, office  or 
home and vice versa. They recently  launched an off airport check in  solution 
in partnership with British  Airways, allowing you to  check in your bag  from 
your house, hotel or office for an outbound flight from London airports.
 

CO-INVESTMENT

As at 31  August 2017, other  funds managed  by Hargreave Hale  Ltd were  also 
invested in all of  the investments held within  the Company's portfolio  with 
the  exception  of  the  following:  Omega  Diagnostics  Group  plc,   Paragon 
Entertainment Ltd, Scottish Amicable 8.5% 2049 and Tristel plc.

For further information please contact:

STUART BROOKES
  Company Secretary
Hargreave Hale AIM VCT 2 plc
01253 754740

Date: 19 October 2017

STATEMENT OF DIRECTOR'S RESPONSIBILITIES
in respect of the half-yearly financial report

In  accordance  with   Disclosure  Transparency  Rule   (DTR)  4.2.10,   David 
Hurst-Brown (Chairman), Philip  Cammerman and Oliver  Bedford, the  Directors, 
confirm that to the best of their knowledge:  

  o The half yearly financial results have been prepared in accordance with UK
    GAAP and give a true and fair review of the assets, liabilities, financial
    position and profit of the Company as at 31 August 2017 as required by DTR
    4.2.4;
     
  o The interim management report included within the chairman's statement,
    investment manager's report, investment portfolio summary and notes to the
    half yearly report includes a fair review of the information required by
    the Financial Conduct Authority Disclosure and Transparency Rules, being;
     

       o an indication of the important events that have occurred during the
         first six months of the financial year and their impact on the
         condensed set of financial statements;
          
       o a description of the principal risks and uncertainties for the
         remaining six months of the year; and
          
       o a description of related party transactions that have taken place in
         the first six months of the current financial year, that may have
         materially affected the financial position or performance of the
         Company during that period and any changes in the related party
         transactions described in the last annual report that could do so.

On behalf of the Board

DAVID HURST-BROWN
Chairman

Date: 19 October 2017

CONDENSED INCOME STATEMENT
for the six month period to 31 August 2017 (unaudited)

                For the six month period to         For the six month period to
                31 August 2017 (unaudited)          31 August 2016 (unaudited)
                Revenue     Capital       Total     Revenue     Capital       Total
                   £000        £000        £000        £000        £000        £000
Realised              -         626         626          -          228         228
gains on
investments
held at
fair value
through
profit or
loss
Unrealised            -       3,936       3,936           -       2,328       2,328
gains on
investments
held at
fair value
through
profit or
loss
Income              184           -         184         164           -         164
            ----------- ----------- ----------- ----------- ----------- -----------
                    184       4,562       4,746         164       2,556       2,720
                                                                                   
Management         (93)       (280)       (373)        (60)       (179)       (239)
fee
Other             (172)        (13)       (185)       (134)           -       (134)
expenses
            ----------- ----------- ----------- ----------- ----------- -----------
                  (265)       (293)       (558)       (194)       (179)       (373)
            ----------- ----------- ----------- ----------- ----------- -----------
(Loss)/gain        (81)       4,269       4,188        (30)       2,377       2,347
on ordinary
activities                                                                         
before
taxation
Taxation              -           -           -           -           -           -
            ----------- ----------- ----------- ----------- ----------- -----------
(Loss)/gain        (81)       4,269       4,188        (30)       2,377       2,347
on ordinary
activities
after
taxation
            -----------  ----------  ---------- -----------  ----------  ----------
                                                                                   
(Loss)/gain     (0.18)p       9.75p       9.57p     (0.09)p       7.04p       6.95p
per share
basic and
diluted
(Note
2)      
                                                                                   

The total column of this statement is the income statement of the Company. All
revenue and  capital  items in  the  above statement  derive  from  continuing 
operations. The  Company has  no  other comprehensive  income other  than  the 
results for the six month period as set out above. The accompanying notes  are 
an integral part of these financial statements.

CONDENSED INCOME STATEMENT
for the year ended 28 February 2017 (audited)

                                                     For the year to
                                               28 February 2017 (audited)
                                               Revenue     Capital       Total
                                                  £000        £000        £000
Realised (losses) on investments held at             -       (339)       (339)
fair value through profit or loss
Unrealised gains on investments held at              -       5,876       5,876
fair value through profit or loss
Income                                             286          15         301
                                           ----------- ----------- -----------
                                                   286       5,552       5,838
                                                                              
Management fee                                   (129)       (387)       (516)
Other expenses                                   (305)        (28)       (333)
                                           ----------- ----------- -----------
                                                 (434)       (415)       (849)
                                           ----------- ----------- -----------
(Loss)/gain on ordinary activities before        (148)       5,137       4,989
taxation
Taxation                                             -           -           -
                                           ----------- ----------- -----------
(Loss)/gain after taxation                       (148)       5,137       4,989
                                           ----------- ----------- -----------
                                                                              
(Loss)/gain per share basic and diluted        (0.43)p      14.97p      14.54p
(Note 2)      
                                                                              

The total column of this statement is the income statement of the Company. All
revenue and  capital  items in  the  above statement  derive  from  continuing 
operations. The  Company has  no  other comprehensive  income other  than  the 
results for the year as set out above. The accompanying notes are an  integral 
part of these financial statements.

CONDENSED BALANCE SHEET
as at 31 August 2017 (unaudited)

                                             31 August   31 August 28 February
                                                  2017        2016        2017
                                           (unaudited) (unaudited)   (audited)
                                                  £000        £000        £000
Fixed assets                                                                  
Investments at fair value through profit        45,061      27,757      36,359
or loss
                                           ----------- ----------- -----------
Current assets                                                                
Prepayments and accrued income                      68          54          37
Cash at bank                                     5,773       8,096       9,190
                                           ----------- ----------- -----------
                                                 5,841       8,150       9,227
Creditors: amounts falling due within one                                     
year
Accruals and deferred income                     (254)       (183)       (219)
                                           ----------- ----------- -----------
Net current assets                               5,587       7,967       9,008
                                           ----------- ----------- -----------
Net assets                                      50,648      35,724      45,367
                                           ----------- ----------- -----------
                                                                              
Capital and Reserves                                                          
Called up share capital                            439         342         413
Share premium                                        -      26,509      34,246
Capital redemption reserve                          14           9          10
Special reserve                                 38,200       3,699       2,891
Capital reserve - realised                         961       1,416         628
Capital reserve - unrealised                    12,465       4,981       8,529
Revenue reserve                                (1,431)     (1,232)     (1,350)
                                           ----------- ----------- -----------
Total shareholders' funds                       50,648      35,724      45,367
                                           ----------- ----------- -----------
Net asset value per share basic and            115.47p     104.58p     109.86p
diluted (Note 4)
                                                                              

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

CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six month period to 31 August 2017 (unaudited)

Ordinary Shares              Called
                   up                     Share     Capital     Special    Capital     Capital     Revenue      Total
                      share             premium  redemption     reserve    reserve     reserve     reserve           
                            capital                 reserve               realised  unrealised                       
                               £000        £000        £000        £000       £000        £000        £000       £000
At 1 March                      413      34,246          10       2,891        628       8,529     (1,350)     45,367
2017              
Share buybacks                  (4)                       4       (475)                                         (475)
Share issues                     30       3,378                                                                 3,408
Issue costs                                (81)                                                                  (81)
Capital Reduction                      (37,543)                  37,543                                             -
Equity dividends                                                (1,759)                                       (1,759)
paid
Realised gains on                                                              626                                626
investments
Unrealised gains                                                                         3,936                  3,936
on investments
Management fee                                                               (280)                              (280)
charged to capital
Due diligence                                                                 (13)                               (13)
investment costs
Revenue loss after
taxation for the                                                                                      (81)       (81)
period
Total profit after                                                             333       3,936        (81)      4,188
taxation
                         ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
At 31 August 2017               439           -          14      38,200        961      12,465     (1,431)     50,648
                         ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------

The distributable reserves are capital  reserve realised, special reserve  and 
revenue reserve. Total distributable  reserves at 31  August 2017 were  £37.73 
million of  which  £6.91  million  is available  to  pay  dividends  now.  The 
accompanying notes are an integral part of these financial statements.

CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six month period to 31 August 2016 (unaudited)

Ordinary Shares             Called
                  up                     Share     Capital     Special    Capital     Capital     Revenue      Total
                     share             premium  redemption     reserve    reserve     reserve     reserve           
                           capital                 reserve               realised  unrealised                       
                              £000        £000        £000        £000       £000        £000        £000       £000
At 1 March                     295      21,484           7       5,250      1,367       2,653     (1,202)     29,854
2016             
Share buybacks                 (2)                       2       (198)                                         (198)
Share issues                    49       5,153                                                                 5,202
Issue costs                              (128)                                                                 (128)
Equity dividends                                               (1,353)                                       (1,353)
paid
Realised gains on                                                             228                                228
investments
Unrealised gains                                                                        2,328                  2,328
on investments
Management fee
charged to                                                                  (179)                              (179)
capital
Revenue loss
after taxation                                                                                       (30)       (30)
for the period
Total loss after                                                               49       2,328        (30)      2,347
taxation
                        ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
At 31 August 2016              342      26,509           9       3,699      1,416       4,981     (1,232)     35,724
                        ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
                                                                                                                    

Reserves available  for distribution  are  capital reserve  realised,  special 
reserve and revenue reserve.  Total distributable reserves  at 31 August  2016 
were £3.88  million. The  accompanying notes  are an  integral part  of  these 
financial statements.

CONDENSED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2017 (audited)

Ordinary Shares            Called                                                                                    
                 up                     Share     Capital     Special    Capital     Capital     Revenue      Total
                    share             premium  redemption     reserve    reserve     reserve     reserve             
                          capital                 reserve               realised  unrealised                         
                             £000        £000        £000        £000       £000        £000        £000       £000  
At 1 March                    295      21,484           7       5,250      1,367       2,653     (1,202)     29,854  
2016            
Share buybacks                (3)                       3       (313)                                         (313)  
Share issues                  121      13,034                                                                13,155  
Issue costs                             (272)                                                                 (272)  
Equity dividends                                              (2,046)                                       (2,046)  
paid
Realised gains                                                             (339)                              (339)  
on investments
Unrealised gains                                                                       5,876                  5,876  
on investments
Management fee                                                                                                       
charged to                                                                 (387)                              (387)
capital
Arrangement Fee                                                               15                                 15  
Income
Due Diligence                                                               (28)                               (28)  
investment cost
Revenue loss                                                                                                         
after taxation                                                                                     (148)      (148)
for the period
Total loss after                                                           (739)       5,876       (148)      4,989  
taxation
                       ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------  
At 28 February                413      34,246          10       2,891        628       8,529     (1,350)     45,367  
2017
                       ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------  

Reserves available  for distribution  are  capital reserve  realised,  special 
reserve and revenue reserve. Total distributable reserves at 28 February  2017 
were £2.17  million. The  accompanying notes  are an  integral part  of  these 
financial statements.

CONDENSED STATEMENT OF CASH FLOWS
for the six month period to 31 August 2017 (unaudited)

                                   31 August 2017  31 August 2016  28 February
                                                                         2017*
                                      (unaudited)     (unaudited)    (audited)
                                             £000            £000         £000
Return on ordinary activities               4,188           2,347        4,989
after taxation
Realised (gain)/loss on                     (626)           (228)          339
investments
Unrealised (gain) on investments          (3,936)         (2,328)      (5,876)
(Increase) in debtors                        (31)            (34)         (17)
Increase/(decrease) in creditors               35             (8)           28
                                      -----------     -----------  -----------
Net cash (outflow) from operating           (370)           (251)        (537)
activities
                                                                              
Cash flows from investing                                                     
activities
Purchase of investments                   (9,359)         (7,309)     (16,778)
Sale of investments                         5,219           5,139        8,987
                                      -----------     -----------  -----------
Net cash (outflow) from investing         (4,140)         (2,170)      (7,791)
activities
                                                                              
Cash flows from financing                                                     
activities
Proceeds from share issues                  3,408           5,202       13,155
Share issue costs                            (81)           (128)        (272)
Share buybacks                              (475)           (198)        (313)
Dividends paid                            (1,759)         (1,353)      (2,046)
                                      -----------     -----------  -----------
Net cash from financing                     1,093           3,523       10,524
activities           
                                      -----------     -----------  -----------
Increase in cash                          (3,417)           1,102        2,196
                                      -----------     -----------  -----------
Analysis of net funds                                                         
Opening cash                                9,190           6,994        6,994
Cash movement                             (3,417)           1,102        2,196
Closing cash                                5,773           8,096        9,190

* 28 February 2017 cash flow represents annual results

The accompanying notes are an integral part of these financial statements

EXPLANATORY NOTES
for the six month period to 31 August 2017 (unaudited)

 1. ACCOUNTING POLICIES

Basis of preparation
The Company has prepared its half-yearly financial results for the six month
period ending 31 August 2017 in accordance with Financial Reporting Standard
104 (FRS104) and the Statement of Recommended Practice for "Financial
Statements of Investment Trust Companies and Venture Capital Trusts" (the
SORP).

The same accounting policies  and methods of computation  are followed in  the 
half-yearly  financial  results  as  compared  with  the  most  recent  annual 
financial statements.

Investments
All investments are classified as fair value through profit or loss.
Investments are measured initially and subsequently at fair value which is
deemed to be bid market prices for listed investments and investments traded
on AIM. Unquoted investments are valued using the most appropriate methodology
recommended by the International Private Equity Venture Capital ("IPEV")
guidelines.

Where the classification of a financial instrument requires it to be stated at
fair value, this  is determined by  reference to  the quoted bid  price in  an 
active market wherever possible.  Where no such active  market exists for  the 
particular asset or liability the Company  holds the investment at cost for  a 
period where there is considered to be no change in fair value.

Valuations of unquoted  investments are reviewed  on a six  monthly basis  and 
more frequently  if events  occur that  could have  a material  impact on  the 
investment. Where cost is  no longer considered  appropriate the Company  will 
use a value indicated by a material arms-length transaction by an  independent 
third party in the shares of a company. Where no such transaction exists,  the 
Company will use the most appropriate valuation technique including discounted
cash flow  analysis, earnings  multiples, net  assets and  industry  valuation 
benchmarks. All inputs  are market observable  with the exception  of level  C 
financial instruments.

Investments are recognised and derecognised at trade date where a purchase  or 
sale is under a  contract whose terms require  delivery within the time  frame 
established  by  the  market  concerned.  Purchases  and  sales  of   unlisted 
investments are recognised when the  contract for acquisition or sale  becomes 
unconditional. Transaction  costs are  included in  the initial  book cost  or 
deducted from the disposal proceeds as appropriate.

These investments will be  managed and their performance  evaluated on a  fair 
value  basis  in  accordance  with   a  documented  investment  strategy   and 
information about them is provided internally on that basis to the Board.

Gains and losses arising from changes in fair value (realised and  unrealised) 
are included in the net profit or loss for the period as a capital item in the
income statement and are taken to  the unrealised capital reserve or  realised 
capital reserve as appropriate.

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 transferred to the capital reserve realised.

Financial Instruments - fair value measurement hierarchy
FRS 102 requires certain disclosures which require the classification of
financial assets and financial liabilities measured at fair value using a fair
value hierarchy that reflects the significance of the inputs used in making
the fair value measurement.
         
        The fair value hierarchy has the following levels:

Level Methodology
(a)   The best evidence of fair value is a quoted price for an identical asset
      in an active market.  Quoted in an active  market in this context  means 
      quoted prices  are  readily and  regularly  available and  those  prices 
      represent actual and regularly occurring market transactions on an arm's
      length basis. The quoted price is usually the current bid price.
(b)   When quoted prices are  unavailable, the price  of a recent  transaction 
      for an identical asset provides evidence of fair value as long as  there 
      has not  been  a  significant  change in  economic  circumstances  or  a 
      significant lapse  of time  since  the transaction  took place.  If  the 
      entity can demonstrate  that the last  transaction price is  not a  good 
      estimate of fair  value (e.g.  because it  reflects the  amount that  an 
      entity would  receive  or  pay  in  a  forced  transaction,  involuntary 
      liquidation or distress sale), that price is adjusted.
(c)   If the market for the asset is not active and recent transactions of  an 
      identical asset on their own are not  a good estimate of fair value,  an 
      entity estimates  the fair  value by  using a  valuation technique.  The 
      objective of  using  a  valuation  technique is  to  estimate  what  the 
      transaction price would have  been on the measurement  date in an  arm's 
      length exchange motivated by normal business considerations.

                                 Level (a)   Level (b)   Level (c)       Total
                               Investments Investments Investments Investments
                                     £'000       £'000       £'000       £'000
Six months ended 31 August          33,242       7,487       4,332      45,061
2017 (unaudited)
Year ended  28  February  2017      26,469       5,462       4,428      36,359
(audited)
Six months ended 31 August          21,421       3,921       2,415      27,757
2016 (unaudited)

Key judgements and estimates
The preparation  of  the  financial  statements requires  the  Board  to  make 
judgements and estimates that affect the application of policies and  reported 
amounts  of  assets,   liabilities,  income  and   expenses.  Key   estimation 
uncertainties mainly relate  to the  fair valuation  of unquoted  investments, 
which are based on historical experience and other factors that are considered
reasonable including the transfer price of  the most recent transaction on  an 
arm's length basis. The estimates are under continuous review with  particular 
attention paid  to the  carrying  value of  the  investments. The  process  of 
estimation is also affected by the determination of the fair value hierarchy.
         
        Income
        Equity dividends are taken into  account on the ex-dividend date,  net 
of any associated  tax credit.  Fixed returns  on non-equity  shares and  debt 
securities are recognised on a time  apportionment basis so as to reflect  the 
effective yield, provided there  is no reasonable doubt  that payment will  be 
received  in  due  course.  All  other  income,  including  deposit   interest 
receivable, is recognised on an accruals basis. All revenue and capital  items 
in the unaudited income statement derive from continuing operations. There are
no other  items of  comprehensive income  other than  those disclosed  in  the 
unaudited income statement.
         
        Expenditure
        All expenditure  is  accounted  for  on  an  accruals  basis.  75%  of 
management fees are allocated to the  capital reserve realised and 25% to  the 
revenue account  in  line  with  the  Board's  expected  long  term  split  of 
investment returns in the form of capital  gains to the capital column of  the 
income statement. All other expenditure is charged to the revenue account.
         
        Trail commission
        Trail commission previously due is held as a creditor until such  time 
as claims are made by  the relevant intermediary and supporting  documentation 
provided. If claims  are not received  these amounts are  written off after  a 
period of six years.
         
        Capital reserves
        Realised profits  and  losses  on the  disposal  of  investments,  due 
diligence costs and income in relation to private company investments,  losses 
realised on  investments considered  to  be permanently  impaired and  75%  of 
investment management fees are accounted for in the capital reserve realised.
         
        Increases and decreases in  the valuation of  investments held at  the 
year end are accounted for in the capital reserve unrealised.
         
        Operating Segments
        There is considered  to be one  operating segment as  reported to  the 
chief operating decision maker being investment in equity and debt securities.
         
        Taxation
        Deferred tax is recognised in  respect of all timing differences  that 
have originated but not yet reversed  at the balance sheet date. Deferred  tax 
assets are only  recognised to  the extent that  recovery is  probable in  the 
foreseeable future.
         
        Current tax is  expected tax payable  on the taxable  revenue for  the 
period using the current tax rate. The tax effect of different items of income
and expenditure is allocated between capital and revenue on the same basis  as 
the particular item to which it relates.
         
        Approved VCTs are exempt  from tax on capital  gains from the sale  of 
fixed asset investments. The Directors  intend that the Company will  continue 
to conduct its affairs to  maintain its VCT status,  no deferred tax has  been 
provided  in  respect  of  any  capital  gains  or  losses  arising  from  the 
revaluation or disposal of investments.
         
        Dividends
        Only dividends recognised during the period are deducted from  revenue 
or capital  reserves.  Final  and  interim dividends  are  recognised  in  the 
accounts when the Company's liability to pay them has been established.
         
        Summary of dividends paid in the six months to 31 August 2017 and  the 
financial year ending 28 February 2017 are detailed below:

                                          Six months ended 31    Year ended 28
                                      August 2017 (unaudited)    February 2017
                                                        £'000  (audited) £'000
Final capital dividend of 4 pence per
share for the year ended 29 February                        -            1,353
2016 paid on 20 July 2016
Interim capital dividend of 2 pence
per share for the half year ended 31                        -              693
August 2016 paid on 2 December 2016
Final capital dividend of 4 pence per
share for the year ended 28 February                    1,759                -
2017 paid on 25 July 2017
Total                                                   1,759            2,046

         
Functional Currency
In accordance  with  FRS 102  s.30,  the Company  is  required to  nominate  a 
functional currency, being  the currency  in which  the Company  predominantly 
operates. The Board has determined  that sterling is the Company's  functional 
currency. Sterling is also the currency in which these accounts are presented.

Repurchase of shares to hold in Treasury
The cost of  repurchasing shares  into treasury, including  the related  stamp 
duty and transaction costs is charged to the special reserve and dealt with in
the  statement  of  changes  in  equity.  Share  repurchase  transactions  are 
accounted for  on  a trade  date  basis. Where  shares  held in  treasury  are 
subsequently cancelled, the nominal value  of those shares is transferred  out 
of share capital and into capital redemption reserve.

Should shares held in treasury be reissued, the sale proceeds will be  treated 
as a realised profit up  to the amount of the  purchase price of those  shares 
and will be transferred to capital  reserves. The excess of the sale  proceeds 
over the purchase price will be transferred to share premium.

 Contingencies, guarantees and financial commitments
 There were  no  contingencies, guarantees  or  financial commitments  of  the 
Company at the 31 August 2017.

 Legal form and principal activities
The Company  was  incorporated and  registered  in  England and  Wales  on  20 
September 2006 under the Companies Act 1985, registered number 05941261.

The Company has been approved as a Venture Capital Trust by HMRC under section
259 of  the Income  Taxes  Act 2007.  The shares  of  the Company  were  first 
admitted to the Official List of the  UK Listing Authority and trading on  the 
London Stock Exchange on 16  April 2007 and can be  found under the TIDM  code 
"HHVT". The Company is premium listed.

The Company's principal activity  is to invest in  a diversified portfolio  of 
qualifying small UK based companies, primarily trading on AIM, with a view  to 
maximising tax free dividend distributions to shareholders.

The Company is  an externally managed  fund with a  Board comprising of  three 
non-executive directors. Hargreave  Hale Limited acts  as investment  manager, 
administrator and custodian to the Company and provide the company secretary.

The Board has overall responsibility  for the Company's affairs including  the 
determination of its investment policy, however, the Board may exercise  these 
responsibilities  through  delegation  to  Hargreave  Hale  as  it   considers 
appropriate.

The Directors have  managed and continue  to manage the  Company's affairs  in 
such a manner as to comply with Section 259 of the Income Taxes Act 2007.

The Company's registered office  is Accurist House,  44 Baker Street,  London, 
W1U 7AL.

CAPITAL STRUCTURE

Share capital
Ordinary shares are  classed as equity.  The ordinary shares  in issue have  a 
nominal value of one pence and carry one vote each.

Reserves
A description of each of the reserves follows:

Share premium
This reserve represents the difference between  the issue price of shares  and 
the nominal value of shares at the date of issue, net of related issue costs.

Capital redemption reserve
This reserve is  used for  the cancellation of  shares bought  back under  the 
buyback facility.

Special reserve
Distributable reserve used to pay  dividends and re-purchase shares under  the 
buyback facility.

Capital reserve realised
Gains/losses on disposal of investments,  due diligence costs and income  from 
private company investments, permanent impairment of financial assets and  75% 
of the investment  management fee  are accounted  for in  the capital  reserve 
realised.

Capital reserve unrealised
Unrealised gains and losses on investments  held at the year-end arising  from 
movements in fair value are taken to the capital reserve unrealised.

Revenue reserve
Net revenue returns and losses of the Company.

 2. EARNINGS PER SHARE (BASIC AND DILUTED)

The gain per ordinary share of 9.57  pence at 31 August 2017 (31 August  2016: 
gain 6.95 pence and 28 February 2017: gain 14.54 pence) is based on a net gain
for the period of £4,187,739 (31 August 2016: gain £2,347,000 and 28  February 
2017: gain £4,989,474) and the weighted  average number of ordinary shares  in 
issue over the  period of  43,776,326 (31 August  2016: of  33,764,458 and  28 
February 2017: 34,327,158).

 3. CAUTIONARY STATEMENT

The results should not be  taken as a guide to  the results for the  financial 
period ending  28  February 2018.  This  report may  contain  forward  looking 
statements with regards to the financial condition and results of the Company,
which are made in  the light of current  economic and business  circumstances. 
Nothing in this report should be considered as a profit forecast.

 4. NET ASSET VALUE PER SHARE

The net asset value per ordinary share  at 31 August 2017 of 115.47 pence  (31 
August 2016: 104.58 pence and 28 February 2017: 109.86 pence) is based on  net 
assets of  £50,648,374 (31  August  2016: £35,723,815  and 28  February  2017: 
£45,366,681) and on 43,863,946 shares  (31 August 2016: 34,159,249 shares  and 
28 February 2017: 41,296,035 shares), being  the number of ordinary shares  in 
issue as at 31 August 2017.

 5. PUBLICATION OF NON-STATUTORY ACCOUNTS

The financial information contained  in the 31  August 2017 income  statement, 
balance sheet, statement of cash flows and statement of changes in equity does
not constitute full financial statements and has not been audited.

 6. PRINCIPAL RISKS AND UNCERTAINTIES

The principal  risks facing  the Company  relate to  the Company's  investment 
activities and include  venture capital trust  approval, investment,  discount 
volatility, compliance, economic, fraud, operational, reputational,  liquidity 
and outsourcing  risk.  Other  risks  faced by  the  Company  include  market, 
currency, interest rate and credit risk. These risks and the way in which they
are managed are described  in more detail in  the Company's annual report  and 
accounts for the year  ended 28 February 2017.  The Company's principal  risks 
and uncertainties have not changed materially since the date of that report.

7.         TRANSACTIONS IN SHARES
 Buybacks
In total, the Company repurchased 430,945  shares during the six month  period 
ending 31 August  2017 at  a total cost  of £474,473.  The repurchased  shares 
represent 1.04% of  ordinary shares  in issue on  1 March  2017. The  acquired 
shares have been cancelled.

 Share Issues
In total, the Company issued 2,998,856 new shares during the six month  period 
ending 31 August 2017 raising net proceeds of £3,326,563.

 8. RELATED PARTY TRANSACTIONS

Hargreave Hale Limited  is considered to  be a related  party to the  Company. 
Oliver Bedford, a non-executive  director of the Company  and a member of  its 
key management  personnel,  is  an  employee of  Hargreave  Hale  Limited.  In 
addition, Hargreave Hale Limited acts as investment manager, administrator and
custodian to the  Company and it  provides the company  secretary. All of  the 
support functions  performed  by  Hargreave Hale  Limited  are  segregated  by 
department and location and are independent of each other.

        Hargreave Hale Limited in  its capacity as  investment manager of  the 
fund receives annual fees of 1.5% per annum of the net assets of the  Company, 
calculated and  payable  quarterly in  arrears.  Fees for  the  half-year  are 
£373,557  (2016:  £238,524).  In  relation  to  the  other  support  functions 
described above, Hargreave Hale Limited also provides administration services,
custody services, company secretarial services and one non-executive  director 
and receive fees of £50,000 per half-year (2016: £40,000) in relation to these
services. Of  those fees,  £192,975 (2016:  £137,010) was  still owed  at  the 
half-year end.
         
        Hargreave Hale Limited  has agreed  to indemnify  the Company  against 
annual running costs (such costs excluding VAT, any performance incentive  fee 
and any trail commissions  the payment of which  is the responsibility of  the 
Company) exceeding 3.5% of  its net assets. No  fees were waived by  Hargreave 
Hale in the first half of the financial year under the indemnity.
         
        During the half  year, the  Company issued  2,998,856 ordinary  shares 
(nominal value £29,989) in  a joint offer for  subscription which resulted  in 
gross funds being received of  £3,407,743. As marketing adviser and  receiving 
agent to the Company, and in return for covering the costs of the joint offer,
Hargreave Hale Limited was entitled to 3.5% of the gross proceeds  (£119,271), 
often referred to as the 'premium'. From this, Hargreave Hale Limited paid for
the allotment of additional  shares to investors with  a value of £38,091  and 
introducer commission of £990, resulting in net fees payable to Hargreave Hale
of £80,190.

 9. GOING CONCERN

After making enquires, the  Directors have a  reasonable expectation that  the 
Company has adequate resources  to continue in  operational existence for  the 
foreseeable future. For this reason, they continue to adopt the going  concern 
basis in preparing the financial statements.

10. POST BALANCE SHEET EVENTS

Buybacks
Since the period end, a further  75,978 ordinary shares have been  repurchased 
at a total value of £85,845.

New investments
An investment in the following company has been made since the period end:
Charter Court Financial Services Group plc

Qualifying companies
The Company  has made  additional investments  into the  following  qualifying 
companies since the period end:
Gfinity plc (£60k)
Laundrapp Ltd (£501k)
Faron Pharmaceuticals Oy (£469k)
Angle plc (£100k)

SHAREHOLDER INFORMATION

The Company's ordinary  shares (Code:  HHVT) are  listed on  the London  Stock 
Exchange.  Shareholders  can   visit  the  London   Stock  Exchange   website, 
www.londonstockexchange.com, for  the  latest news  and  share prices  of  the 
Company. Further information for  the Company can be  found on its website  at 
www.hargreaveaimvcts.co.uk.

NET ASSET VALUE PER SHARE
The Company's NAV per share as at 13 October 2017 was 120.80 pence per  share. 
The Company publishes its unaudited NAV per share on a weekly basis.

DIVIDENDS
The Board  has approved  the payment  of an  interim dividend  of 2  pence  in 
respect of the six months ended 31 August 2017.

Shareholders who wish to have future  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, Equiniti.

SELLING YOUR SHARES
Hargreave Hale AIM VCT 2 plc operates  a share buy-back policy to improve  the 
liquidity in its ordinary shares.  Share buy-back policies are subject to  the 
Act, the  Listing Rules  and tax  legislation, which  may restrict  the  VCTs' 
ability to  buy shares  back  in. The  policy is  non-binding  and is  at  the 
discretion of the Board.

The buy-back policy targets a 5% discount to the last published NAV per  share 
as announced on the  London Stock Exchange through  a regulatory news  service 
provider. The discount is measured against  the mid-price per share as  listed 
on the London Stock Exchange and reflects the price at which the Company  buys 
its shares off the market makers. The Company publishes its unaudited NAV  per 
share on a weekly basis.

VCT share disposals  settle two  business days post  trade if  the shares  are 
already dematerialised or placed  into CREST ahead of  the trade, or ten  days 
post trade if the stock is held in certificated form.

VCT share disposals are exempt of capital gains tax when the disposal is  made 
at arms' length, which means a shareholder must sell their shares to a  market 
maker through a stockbroker or  another share dealing service. Hargreave  Hale 
has particular expertise in the sale of VCT shares and is able to act for  VCT 
shareholders who wish to sell their shares. However, you are free to  nominate 
any stockbroker or share  dealing service to  act for you.  If you would  like 
Hargreave Hale to act for you as their client (as opposed to a shareholder  in 
the Company) then please contact Andrew Pang for further information (020 7009
4900, andrew.pang@hargreave.com).

Please note that Hargreave  Hale will need  to be in  possession of the  share 
certificate and a completed CREST transfer form before executing the sale.  If 
you have  lost your  share certificate,  then you  can request  a  replacement 
certificate from the Company's registrar Equiniti. The registrar will send out
an indemnity form, which you will need  to sign. The indemnity form will  also 
need to be countersigned by a UK insurance company or bank that is a member of
the Association  of  British Insurers.  Since  indemnification is  a  form  of 
insurance, the indemnifying body will ask for a payment to reflect their risk.
Fees will reflect the value of the potential liability.

SHAREHOLDER ENQUIRIES:
For general Shareholder  enquiries, please contact  Hargreave Hale Limited  on 
01253 754755 or by e-mail to aimvct@hargreave.com.

For enquiries concerning the  performance of the  Company, please contact  the 
investment manager on 0207 009 4937 or by e-mail to aimvct@hargreave.com.

Electronic copies of this report and other published information can be  found 
on the Company's website at www.hargreaveaimvcts.co.uk.

CHANGE OF ADDRESS
To notify the  Company of  a change of  address please  contact the  Company's 
registrar.

COMPANY INFORMATION

SECRETARY AND REGISTERED OFFICE                     DIRECTORS
Stuart Brookes                                      David         Hurst-Brown, 
Accurist House                                      Chairman
44 Baker Street                                     Philip Cammerman
London                                              Oliver Bedford
W1U 7AL
                                                     
 
MANAGER                                             AUDITORS
Hargreave Hale Limited                              BDO LLP
Accurist House                                      55 Baker Street
44 Baker Street                                     London
LONDON                                              W1U 7EU
W1U 7AL
                                                     

                                                     
REGISTRARS                                          VCT STATUS ADVISER
Equiniti                                            Philip Hare  &  Associates 
Aspect House                                        LLP
Spencer Road                                        4-6 Staple Inn
Lancing                                             High Holborn
West Sussex                                         London
BN99 6DA                                            WC1V 7QH

                                                     

                                                     

                                                     
SOLICITORS                                          BROKERS
Howard Kennedy                                      Singer   Capital   Markets 
No. 1 London Bridge                                 Limited
London                                              One Hanover Street
SE1 9BG                                             London
                                                    W1S 1YZ
 
                                                     

                                                     
                                                    COMPANY       REGISTRATION 
                                                    NUMBER
                                                    05941261  in  England  and 
                                                    Wales

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of
Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: Hargreave Hale AIM VCT 2 plc via Globenewswire
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