Payment of Dividend and Issue of Equity

British Smaller Companies VCT2 plc (the "Company")

Payment of Interim Dividend and Allotment of Shares

The Company announces that on 23 September 2019 it paid an interim dividend of 1.5 pence per ordinary share for the year ending 31 December 2019 to shareholders on the register of members of the Company as at the record date of 23 August 2019 ("Interim Dividend").

The Company further announces that on 23 September 2019 it issued and allotted 923,151 ordinary shares of 10 pence each pursuant to its dividend re-investment scheme ("DRIS") at a price of 49.31 pence per ordinary share to shareholders of the Company who elected to receive ordinary shares instead of the Interim Dividend. The subscription price of 49.31 pence per ordinary share was determined in accordance with the terms and conditions of the DRIS on the basis of the last reported net asset value of 53.4 pence per ordinary share as at 30 June 2019 (adjusted for the Interim Dividend of 1.5 pence per ordinary share paid today) less 5 per cent. As a result, 23 per cent of the Interim Dividend paid by the Company, was re-invested in ordinary shares in the Company via the DRIS.

Under this allotment the employees and members of the fund manager, YFM Private Equity Limited, have been allotted 141 ordinary shares of 10 pence each in the Company bringing their aggregate total holding to 85,121 ordinary shares.

Application is now being made for the ordinary shares which were issued and allotted as set out above to be admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Main Market for listed securities, and dealings are expected to commence on or around 7 October 2019.

Following such issue and allotment the Company's issued share capital consists of 132,435,546 ordinary shares of 10 pence each with voting rights ("Voting Capital") and 7,974,092 ordinary shares of 10 pence each held in treasury.

The above statement of Voting Capital may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure and Transparency Rules.

For further information please contact:

David Hall YFM Private Equity Limited Tel: 0113 244 1000

Robert Naylor Panmure Gordon (UK) Limited Tel: 0207 866 2768