Unicorn Asset Management Regulatory News (UAV)

Unicorn AIM VCT plc (the "Company" or the "VCT") Annual Results Announcement for the year ended 30 September 2013 INVESTMENT OBJECTIVE The Company's objective is to provide Shareholders with anattractive return from a diversified portfolio of investments, predominantlyin the shares of AIM quoted companies, by maximising the stream of dividenddistributions to Shareholders from the income and capital gains generated bythe portfolio. It is also the objective that the Company should continue toqualify as a Venture Capital Trust, so that Shareholders benefit from thetaxation advantages that this brings. To achieve this at least 70% of theCompany's total assets are to be invested in qualifying investments of which30% by value must be in ordinary shares carrying no preferential rights todividends or return of capital and no rights to redemption. FINANCIAL HIGHLIGHTS (for the year ended 30 September 2013) - Net asset value total return for the year ended 30 September 2013 was 31.8% - Dividend of 6p proposed, an increase of 20% over last year - Offer for subscription to raise £20 million launched Ordinary Shares Total Net asset Cumulative* Net asset Share price assets value per dividends value plus (p) (£ million) share (NAV) paid per cumulative (p) share (p)** dividends paid per share (p)**30th September 2013 73.7 129.8 14.0 143.8 111.031st March 2013 61.9 108.5 14.0 122.5 89.330th September 2012 59.0 102.3 9.0 111.3 86.031st March 2012 56.6 97.4 9.0 106.4 70.0 * The Board has recommended a dividend of 6.0p per share for the year ended 30September 2013. If approved by shareholders, this payment will bring totaldividends paid since the merger of the Company with Unicorn AIM VCT II plc on9 March 2010 to 20p. **Since the merger of the Company with Unicorn AIM VCT II plc on 9 March 2010. CHAIRMAN'S STATEMENT I am pleased to present the twelfth Annual Report of the Companyfor the financial year ended 30 September 2013. Investment Performance Review The Company has made significant progress over the past twelvemonths, resulting in a NAV total return for the year of 31.8%. The performanceof the investment portfolio has been robust, reflecting increasing shareprices from a substantial proportion of the investee companies. In the finalquarter of the period under review, there has also been a marked improvementin the performance of the FTSE AIM All-Share Index. The improvement in indexperformance appears to have been triggered by helpful legislative changesspecific to AIM listed companies, combined with a gradual improvement ininvestor sentiment as the UK economy began to grow again. Having endured a prolonged period of recession, during which it hasbeen particularly difficult for smaller companies to achieve growth, it ispleasing to see statistical evidence that the UK economy is now recovering.The IMF now expects the UK economy to grow next year by 1.9%, up from July'sprojection of 1.5%. The IMF's upgrade to its outlook on the UK is larger thanthose made for any other country in World Economic Outlook - its twice-yearlyassessment of the global economy. Higher consumer spending and increasedbusiness confidence were cited as being the key reasons behind the recentimprovement. The majority of the portfolio's investee companies have continuedto demonstrate commendable resilience. In the low growth environment of thepast five years, the businesses that have prospered have been those wheremanagement teams focused primarily on maintaining balance sheet strengththrough tight cost control and strict management of working capitalrequirements. The Company holds a portfolio of investments that follow thispolicy. As economic conditions improve it is to be hoped that the portfolioof investee companies can start to accelerate revenue growth, which should inturn have a more than proportionately beneficial impact on earnings and cashflow given the operational leverage inherent in lean and efficiently managedbusinesses. Portfolio Activity The past twelve months have seen an improvement in the number ofsuccessful Initial Public Offerings on AIM. Despite this increase in dealflow, the Investment Manager has maintained a highly selective approach to newinvestment. As in previous years, the Company has remained comfortably abovethe threshold required to retain VCT qualifying status and this has allowedthe Investment Manager to maintain a disciplined and cautious approach tomaking new investments. During the year under review, one new VCT qualifying investment wasmade and there were two follow-on subscriptions in existing portfoliocompanies in which a stake was already held. Existing positions were increasedin four non-qualifying investee companies during the year through secondarymarket purchases. Merger and acquisition activity resulted in three qualifyinginvestments being sold. In addition, fourteen non-qualifying investments weresold outright, while partial disposals were made in a number of bothqualifying and non-qualifying investments. A detailed report on the performance of both the qualifying and thenon-qualifying investments is contained in the Investment Manager's Reviewbelow. I refer you to the Board's first Strategic Report which has beenintroduced by the Companies Act 2006 (Strategic Report and Directors' Report)Regulations 2013. This new Report contains some of the information that I hadhistorically commented on and is designed to assist shareholders in assessingthe extent to which the Directors have performed their legal duty to promotethe success of the Company in accordance with section 172 of the Companies Act2006. Outlook If the rate of economic recovery in the UK continues to rise, it isanticipated that business and consumer confidence will also continue toimprove. The fact that the investment portfolio has successfully weathered theextremely tough trading conditions experienced since the start of thefinancial crisis in 2008 is reassuring. As economic conditions now appear tobe on an improving trend, it is reasonable to expect healthy revenue andearnings growth from the investee companies held within the portfolio. Thisshould translate into a further improvement in the Net Asset Value of theCompany, and in turn be accompanied by a positive movement in the share price. I am therefore optimistic that the portfolio can deliver furthercapital growth, while continuing to have the capacity to maintain anattractive and sustainable flow of tax-free dividends to shareholders. I would like to thank shareholders for their continued support ofthe Company and welcome you to attend the Company's AGM on 10 January 2014. Peter DicksChairman2 December 2013 STRATEGIC REPORT The purpose of this Strategic Report is to inform shareholders onseveral key matters and assist them in assessing the extent to which thedirectors have performed their legal duty to promote the success of theCompany in accordance with section 172 of the Companies Act 2006. This Reportsummarises: - the Company's business model and objective; - the Board's strategy to achieve those objectives; - performance during the year - key performance indicators; - key events during the year; - the principal risks and uncertainties faced by the Company; - the regulatory environment within which it operates; and - the Company's prospects. The Investment Manager's Review below also includes a balanced andcomprehensive analysis of the development of the business during the financialyear and the position on the Company's business at the end of the year. The Company's independent auditor is required to report byexception on whether the information given in the Strategic Report isconsistent with the financial statements. The Auditor's Report is set out inthe Annual Report. The Company and its business model The Company is registered in England and Wales as a Public LimitedCompany (registration number 04266437) and is approved as a Venture CapitalTrust (VCT) under section 274 of the Income Tax Act 2007 (the "ITA"). Incommon with many other VCTs, the Company revoked its status as an investmentcompany as defined in section 266 of the Companies Act 1985 on 17 August 2004to facilitate the ability to pay dividends from capital. The Company is an externally managed fund with a Board comprisingnon-executive Directors. Investment management and operational support areoutsourced to external service providers, with the strategic and operationalframework and key policies set and monitored by the Board as described in thediagram on page 4 of the Annual Report. Further information on each of theservice providers is outlined in the Corporate Governance Statement on page 34of the Annual Report. The Board has overall responsibility for the Company's affairsincluding the determination of its investment policy. Risk is spread byinvesting in a number of different businesses across different industrysectors. The Investment Manager is responsible for managing sector and stockspecific risk and the Board does not impose formal limits in respect of suchexposures. However, in order to maintain compliance with HMRC rules and toensure that an appropriate spread of investment risk is achieved, the Boardreceives and reviews comprehensive reports from the Investment Manager and theAdministrator on a monthly basis. When the Investment Manager proposes to makeany investment in an unquoted company, the prior approval of the Board isrequired. Mobeus Equity Partners LLP provides Company Secretarial andAccountancy services to the VCT. The Board's Strategy Investment objective and policy The Company's objective is to provide shareholders with anattractive return from a diversified portfolio of investments, predominantlyin the shares of AIM quoted companies, by maximising the stream of dividenddistributions to shareholders from the income and capital gains generated bythe portfolio. To achieve this objective, the Company's strategy is to invest incompanies which meet the criteria referred to in the investment policy, whichrequires the Investment Manager to identify and invest in a diversifiedportfolio, predominantly of VCT qualifying companies quoted on AIM. Furtherdetails can be found below. Performance during the year As at 30 September 2013, the audited Net Asset Value of the Companywas 129.8 pence per share, having risen by 27.5p from 102.3 pence per share atthe start of the financial year under review. After adding dividends of 5pence per share paid in the year, this is a total return to shareholders of32.5p per share for the year or 31.8% upon opening Net Asset Value for the year. Incomparison, the total return from the FTSE AIM All-Share Index over the sameperiod was 13.3%. The audited net assets of the Company were £73.7 million atthe financial year end. At the financial year end, there were 39 active quoted VCTqualifying companies held in the portfolio. Of these, over 60% have no netdebt on their balance sheets, while a further 30% are operating with netgearing of less than 25%. Encouragingly, 80% of these companies were cash flowpositive in their last reported financial year, while profit growth isanticipated from 62% of them in their current financial year. Another keyindicator of the financial and operating health of a business can be found inits ability to pay dividends. It is therefore particularly encouraging to notethat 62% of these companies held in the portfolio have paid a dividend withinthe past twelve months. In the year to 30 September 2013, a total of £9.6 million wasrealised through the sale of investments, of which £4.0 million was deployedin new investments and approximately £2.9 million spent on the dividend toshareholders, with the balance used to fund share buybacks and to meet theoperating costs of the Company. Over the 12 months to 30 September 2013 there was a net gain oninvestments of £18.4 million and the total profit on ordinary activities was£18.0 million, equivalent to earnings of 31.48 pence per share. The profit onthe revenue account was £440,000. At the financial year end, the portfolioconsisted of 39 qualifying and 14 non-qualifying quoted investments in activebusinesses. The longer term performance of the Company remains robust. Sincethe merger with Unicorn AIM VCT II plc, which was successfully completed inMarch 2010, the total return to shareholders has been 56.7%, including thepayment of 14 pence per share in tax free dividends. Key Performance Indicators The Board uses the following key indicators to measure theInvestment Manager's performance, thereby allowing shareholders to assess howthe Company is performing against its objective: - Net asset value ("NAV") per share, cumulative dividends paid & cumulative total shareholder return - Earnings per share - Running costs Further details can be found on pages 5 and 6 of the Annual Report. Key Events during the Year Enhanced Buyback & Top-Up Offer In January 2013, the Board announced the launch of an EnhancedBuyback Facility together with a separate Top-Up Offer for subscription. Theenhanced buyback was well supported. Participating shareholders in theEnhanced Buyback were able to tender their existing shares for repurchase bythe Company with the net proceeds from the buyback being immediatelyre-invested in new shares. Earlier in the year, HMRC announced a review ofsuch schemes and it seems likely that, following a period of consultation,restrictions on enhanced buybacks will be introduced. Accordingly, the Boardis not planning any further Enhanced Buybacks until the outcome of the HMRCreview is known. A total of £1.4 million in new capital was raised via subscriptionsunder the Top-Up Offer. Offer for Subscription The Board recently launched a new £20m Offer for Subscription. The Investment Manager is seeing attractive investmentopportunities in companies seeking finance in a broad spectrum of sectorsoffering good growth and income prospects. In order to take advantage of theseopportunities the Board is therefore seeking to raise further funds throughthe Offer. The Offer opened on 20 September 2013 and will close at 12.00 noonon 30 June 2014 (unless fully subscribed by an earlier date or otherwiseextended or closed at the Directors' discretion). Shareholders who wish toapply under the Offer for the 2013/2014 tax year should note that the deadlinefor such applications is 12.00 noon on 4 April 2014. A prospectus relating to this Offer has been issued andsubsequently mailed to all existing shareholders. Key Policies The Board sets the Company's policies and objectives and ensuresthat its obligations to the shareholders are met. Besides the Investmentpolicy already referred to, the other key policies set by the Board areoutlined below. - Dividend policy The Board remains committed to a policy of maintaining a steadyflow of dividend distributions to shareholders from the income and capitalgains generated by the portfolio. Dividend payments paid to shareholdersduring the period amounted to £2.9 million, being 5 pence per share. Since theoriginal launch of Unicorn AIM VCT in 2001, qualifying shareholders have, inaggregate, received approximately £30 million in tax free dividenddistributions. The Board has considered the payment of a final dividend for thefinancial year ended 30 September 2013 and, to reflect the Company's robustperformance during the year, is recommending a final dividend of 6 pence pershare (income: 0.75p; capital: 5.25p) to shareholders, payable on 31 January2014 to shareholders on the register on 27 December 2013. The ability to pay dividends and the amount of such dividends areinfluenced by the performance of the Company's investments, available reservesand cash, as well as the need to retain funds for further investment andongoing expenses. - Share buybacks and discount policy The Board believes that it is in the best interests of the Companyand its shareholders to make market purchases of its shares, given the limitedsecondary market for VCT shares generally, and to seek both to enhance NAV andto reduce to a degree any prevailing discount to NAV in the current marketprice that might otherwise prevail. The Board agrees the discount to NAV atwhich shares will be bought back and keeps this under regular review. TheBoard seeks to maintain a balance between the interests of those wishing tosell their shares and continuing shareholders. The Company has continued to buy back shares for cancellation atvarious points throughout the financial year. A total of 1,917,671 shares werepurchased for cancellation during the course of the year at an average priceof 92 pence per share and at an average discount to net assets of 17%. At thefinancial year end, the Company's shares were trading at a price of 111 pencerepresenting a discount to net asset value per share of 14.5%. The Board intends to continue with the above buyback policy. Anysuch future repurchases will be made in accordance with guidelines establishedby the Board from time to time and will be subject to the Company having theappropriate authorities from shareholders and sufficient funds available forthis purpose. Share buybacks will also be subject to the Listing Rules and anyapplicable law at the relevant time. Shares bought back in the market arenormally cancelled. Principal risks and uncertainties The Directors also review the principal risks faced by the Companyas part of the internal controls process, as outlined below. Risk Possible consequence How the Board guards against risk Investment and Unsuitable investment Regular review ofstrategic risk strategy or stock selection investment strategy by could lead to poor returns the Board. to shareholders. Careful consideration of the performance of the investment portfolio on a regular basis. Regulatory and tax The Company is required to Regulatory andrisk comply with the Companies legislative Act 2006, ITA, UKLA Rules developments are kept and UK Accounting under review by the Standards. Breaching these Board. rules may result in a public censure, suspension The Company's VCT from the Official List qualifying status is and/or financial penalties. continually reviewed There is a risk that the by the Investment Company may lose its VCT Manager. status under the ITA. Should this occur, shareholders may lose any PricewaterhouseCoopers upfront income tax relief LLP has been retained they received and be taxed by the Board to on any future dividends undertake an paid and capital gains independent VCT status received if they dispose of monitoring role. their shares. Operational risk The Company has no Internal control employees and is therefore reports are provided reliant on third party by service providers service providers. Failure on a regular basis. of the systems at third party service providers The Board considers could lead to inaccurate the performance of the reporting or monitoring. service providers Inadequate controls could annually. lead to the misappropriation of assets. Fraud and Fraud may occur involving Internal controldishonesty risks company assets perpetrated reports are provided by a third party, the by service providers Investment Manager or other on a regular basis. service provider. Financial The main risks arising from The Board regularlyInstrument risks the Company's financial reviews and agrees instruments are due to policies for managing fluctuations in their these risks. market prices, interest rates, credit risk and liquidity risk. Economic risk Events such as recession, Investment in a inflation or deflation and diversified portfolio movements in interest rates of companies, whilst could affect trading maintaining adequate conditions for smaller liquidity. companies and consequently the value of the Company's investments. The Regulatory Environment The Board and Investment Manager are required to consider theregulatory environment when setting the Company's strategy and makinginvestment decisions. A summary of the key considerations are outlined below. - Human rights The Board seeks to conduct the Company's affairs responsibly andexpects the Investment Manager to consider the human rights implications ofits decisions, as far as possible, particularly with regard to investmentdecisions. - Diversity The Directors are aware of the need to have a Board which, as awhole, comprises an appropriate balance of skills, experience and diversity.The Board currently comprises four male non-executive directors and the Boardhas confirmed that it is content with its current composition. The Board will,however, consider gender diversity in making future appointments. - Anti-bribery policy The Company has adopted a zero tolerance approach to bribery andwill not tolerate bribery under any circumstances in any transaction in whichit is involved. The Company values its reputation for ethical behaviour andfor financial probity and reliability and the Directors are committed toworking to the highest ethical standards. The Company expects and requires each of its service providers towork to the same standard and has obtained confirmation from them that this isthe case. - Environmental and social responsibility The Board seeks to conduct the Company's affairs responsibly andexpects the Investment Manager to consider relevant social and environmentalmatters when appropriate, particularly with regard to investment decisions.The Company has offered electronic communications where possible, to reducethe volume of paper it uses in sending communications to shareholders. Inaddition, Board and Committee meetings are held by conference call where it ispossible and appropriate to do so. The Company's Annual and Half-Yearlyreports are printed on paper sourced from forests certified by the ForestryStewardship Council that meet its environmental, social and economicstandards. Prospects The Company will continue to pursue its investment objective inline with its investment policy, which has allowed the payment of regulardividends to shareholders. The portfolio is composed of a diverse range ofbusinesses operating across a number of different sectors. In many cases theinvestee companies sell specialised products or services into niche andgrowing markets. The majority of these companies are sustainably profitable,soundly financed and well managed and should be well placed to prosper aseconomic conditions improve. The Board remains optimistic that the recentimprovement in market sentiment will continue. By order of the Board Peter DicksChairman2 December 2013 INVESTMENT POLICY In order to achieve the Company's Investment Objective, the Boardhas agreed an Investment Policy which requires the Investment Manager toidentify and invest in a diversified portfolio, predominantly of VCTqualifying companies quoted on AIM that display a majority of the followingcharacteristics: - experienced and well-motivated management; - products and services supplying growing markets; - sound operational and financial controls; and - good cash generation to finance ongoing development allied with a progressive dividend policy. Asset allocation and risk diversification policies, includingmaximum exposures, are to an extent governed by prevailing VCT legislation.Specific conditions for HMRC approval of VCTs include the requirement that nosingle holding may represent more than 15% (by value) of the Company's totalinvestments and cash, at the date of investment. VCT regulation The investment policy is designed to ensure that the Companycontinues to qualify and is approved as a VCT by HM Revenue & Customs("HMRC"). Amongst other conditions, the Company may not invest more than 15%at the time of its investments in a single company and throughout the periodmust have at least 70% by value of its investments in shares or securities inVCT qualifying holdings, of which a minimum overall of 30% by value (70% forfunds raised after 6 April 2011) must be in ordinary shares which carry nopreferential rights (save as may be permitted under VCT rules). In addition,the Company must have at least 10% by value of its investment in each VCTqualifying company in ordinary shares which carry no preferential rights (saveas may be permitted under VCT rules). The £1 million limit on the amount of investment a VCT may makeinto a particular company within a tax year has been abolished, except wherethat company trades in partnership or has a joint venture. A new rule requiresthat an investee company should not receive more than £5 million from StateAid sources, including VCTs, within any twelve month rolling period ending onthe date of the VCT's investment. Asset mix Where capital is available for investment while awaiting suitableVCT qualifying opportunities, or in excess of the 70% VCT qualificationthreshold, it may be invested in collective investment funds or innon-qualifying shares and securities in smaller listed UK companies. Cash andliquid resources are held in low risk bank accounts and money-market funds. Borrowing To date the Company has operated without recourse to borrowing. TheBoard may however consider the possibility of introducing modest levels ofgearing up to a maximum of 10% of the adjusted capital and reserves, shouldcircumstances suggest that such action is in the interests of shareholders. INVESTMENT MANAGER'S REVIEW Performance The audited net assets of the Company as at 30 September 2013totalled £73.7 million, equivalent to 129.8 pence per share. This compareswith an audited net asset value per share of 102.3 pence as at 30 September2012. After adding back the dividend paid of 5 pence per share in the period,the total return of 32.5 pence for the year amounted to 31.8% upon the openingnet asset value of 102.3 pence. Alternative Investment Market (AIM) review In the 12 month period ended 30 September 2013, the FTSE AIMAll-Share Index delivered a total return of 13.3%, compared to a total returnof 31.8% delivered by the Company. The total return of 18.9% from the FTSEAll-Share Index over the same period was also better than that produced by theFTSE AIM All- Share Index. Having traded within a 10% range for much of the year under review,the AIM Index rallied strongly over the summer period. In the 3 months to 30September 2013, the Index rose by over 100 points, equivalent to a totalreturn, over this traditionally quiet time for equities, of 15%. The catalystfor a resurgence of interest in AIM quoted companies was undoubtedly linked toa change in legislation, whereby the Government removed the restrictionpreventing private investors from holding AIM listed companies in their ISAs.This widely anticipated relaxation of the AIM holding rules was a welcomechange, which led to a significant increase in trading volumes on the AIMindices from early August onwards as private investors began to include AIMinvestments in their ISAs. Although the significant initial spike in tradingvolumes is likely to be a temporary phenomenon, the recent increased awarenessand interest in AIM quoted companies should prove beneficial over the longerterm. Negative investor sentiment toward AIM stocks developedsignificantly in the wake of the financial crisis - the FTSE AIM All-ShareIndex lost more than two thirds of its value during 2008 and, nearly fiveyears on, the Index remains considerably below its pre-crash peak. It isunderstandable therefore that many investors view AIM stocks as beinginherently high risk. While it is true that the share price performance ofindividual AIM stocks can be extremely volatile, it is by no means the casethat a portfolio of carefully chosen AIM investments is necessarily going tobe any more risky or volatile than that of a FTSE 100 equity portfolio. Toillustrate this, the annualised share price volatility of Unicorn AIM VCT inthe three year period to 30 September 2013 was 13.8%, while the volatility ofthe FTSE 100 Index over the same period was 15.2% (Source: Financial Express). AIM remains a vibrant and evolving market. Following a long andprotracted period of underperformance there are now clear signs of renewedinvestor interest at the smaller end of the UK equity market. It is particularly pleasing to note that companies are once againchoosing to list on AIM. The number of companies successfully listing on AIMhas risen significantly over the past twelve months. The fact that many ofthese companies have subsequently performed strongly, and seen their shareprices rise as a result, should continue to help rebuild investor confidencein AIM. Performance Review The financial year ended 30 September 2013, was one of consistentand solid progress for Unicorn's AIM focused VCT. The reported Net Asset Value(NAV) of the Company rose in eleven out of the twelve months under review(after taking into account the dividend paid to shareholders in February2013). Encouragingly, the growth in net assets accelerated in the finalquarter of the period and the NAV closed the year at a high point of 129.8pence per share. This steady progress is, to a large extent, a consequence ofcareful and conservative portfolio construction. The investment portfolio isdiversified both by number of holdings and by sector exposure. At thefinancial year end, the Company held shares in 39 quoted, active VCTqualifying companies together with 14 non-qualifying investments. Theseinvestments spanned a total of 14 different sectors. Although diverse bybusiness activity, the common theme linking the majority of our investeecompanies is that they are established, profitable and cash generativebusinesses selling specialist products and services into predominantly growingmarkets. As a result, the portfolio has performed solidly in spite of theextremely tough trading conditions experienced since the financial crisisbegan in 2008, which in turn has meant that the Company has been able tomaintain a consistent, attractive level of dividend payments to shareholderseach year. The recent return of economic growth is potentially a turning pointin the prospects for capital growth from AIM focused VCTs. It is pleasing tosee that, as evidence of UK economic stability and recovery has grown over thepast year, investor sentiment has strengthened. This more benign environmenthas noticeably started to feed through into improvements in the financial,operational and share price performance of many of our investee companies. Stock specific risk has again been managed closely throughout theperiod under review. Capital profits (proceeds less original cost) in excessof £1.8m have been realised during the year through a series of part-disposalsof continuing portfolio companies. The stock specific risk that arises as a consequence of having madeparticularly successful investments is managed by a practice of not allowingan individual investment to account for more than 15% of total assets at anytime. The primary example is Abcam, the single largest holding by valuewithin the portfolio, which has continued to perform well with its share pricerising by a further 26% in the past 12 months. In order to manage the riskexposure arising from this highly successful investment, we have made a seriesof share sales in the secondary market. A total of £1.3m in capital profitswas realised from the sale of Abcam shares during the period. The value of theretained holding in Abcam at the end of the period under review amounted to12.1% of total assets. The consequence of this approach is that stock specific risk hasbeen reduced, capital reserves have been topped up and, perhaps mostimportant, we remain in a position to 'run the winners' in the portfolio bymaintaining meaningful core holdings over the longer term. It is our beliefthat this method of managing risk is beneficial for all shareholders since itstrikes an appropriate balance between risk and reward - the `upside'potential from continued investment remains meaningful while the potentialdamage to overall net asset value, should an unforeseen stock specific problemarise, remains limited. In our view, this balance is especially important whenmanaging a portfolio of relatively early stage investments. Other larger individual holdings have also been subject to prudentprofit-taking as appropriate. A review of the main positive and negative contributors toperformance in the portfolio follows:- Qualifying investments (bracketed figures represent the share price movementfor the year under review on a mid price basis where quoted):- Abcam (+26%) is a global leader in the manufacture and supply oftherapeutic antibodies and protein research tools to the worldwide lifesciences research market. Despite pressures on research funding, Abcamcontinues to make excellent progress, reporting significant increases insales, profits and dividends in its financial year to 30 June 2013. Thisperiod was transformational for Abcam and included a first full year of profitcontribution from the acquisitions of Epitomics and Ascent Scientific. Abcamremains committed to its goal of becoming the world's leading supplier of lifescience research tools. Accumuli (+39%) is a provider of advanced IT security services.Having acquired a number of businesses in the recent past, the management teamat Accumuli is now focusing investment on expanding the range of servicesoffered while simultaneously growing the sales and marketing resource. Inaddition, the recent acquisition of Signify Solutions is reported to have beensuccessfully integrated, giving Accumuli an expanded customer base, whileadding further strong technical skills and product offerings together withimproved revenue visibility. Accumuli remains a highly cash generativebusiness and declared a maiden dividend in its financial results for theperiod ended 31 March 2013. Animalcare (+35%) is a leading supplier of veterinary medicinesfocused on three main product groups: licensed veterinary medicines, companionanimal identification and animal welfare products. Following a difficultperiod, the business has returned to growth and current trends in tradingappear encouraging. Animalcare successfully launched three new products in itsfinancial year ended 30 June 2013 and also completed a move to a newmanufacturing facility, which provides increased capacity. Revenue increasedby 11.6% to £12.1m during this period, while strong cash generation led togrowth of 17.8% in the total dividend for the year. Anpario (+91%) is an international supplier of natural, highperformance feed additives to enhance health, growth and sustainability inagriculture and aquaculture. In the past twelve months the management team hasintroduced a number of key operational initiatives to support the strategy ofachieving growth in both the product range and geographic reach of thebusiness. These initiatives include the formation of a wholly owned Chinesesubsidiary, the re-structuring of the UK Agriculture Division and theacquisition of Meriden Animal Health in 2012. Avingtrans (+56%) designs, manufactures and supplies criticalcomponents to the medical, energy and aerospace sectors. The financial yearended 31 May 2013 saw the business transformed with the disposal of one majorsubsidiary followed by the acquisition of Aerotech and PFW in Farnborough,which helped create a focused, specialist aerospace engineering division. Thegroup continues to make strong financial progress, with revenue increasing byover 40% and adjusted PBT growing by nearly 90% in most recently releasedfinancial year end results. The outlook also appears to be encouraging, withmanagement reporting that the business had entered its new financial year witha record order book. Cohort (+45%) is a technology consultancy group focused onproviding specialist technical products or services, primarily to the defencemarket. Despite difficult conditions in some parts of the defence market,Cohort continues to make good progress, reporting a record trading profit anda 21% dividend increase in relation to its financial year ended 30 April 2013. Crawshaw (+220%) is a chain of value-orientated retail butchers.The business has begun to recover from extremely challenging tradingconditions in recent years and has delivered a significant improvement inprofitability after also managing to maintain a tight control over costs. TheBoard declared a maiden final dividend in April 2013, followed by a furtherinterim dividend in September 2013, highlighting the management team'sconfidence in the prospects for the group. Driver Group (+77%) is a global, construction related consultancygroup. The business continues to benefit from strong trading conditions beingencountered across a wide range of geographic markets. This healthy backdrophas allowed management to deliver results in excess of market forecasts overthe past 12 months. Growth in revenues, improved gross margins and betterutilisation rates have all resulted in increased profitability and strong cashgeneration. This improved operational performance has meant the business isfree from debt with net cash of £90k held on the balance sheet as at 31 March2013. Hasgrove (+86%) is a digital and communications services group. InMay 2013, the management team decided that the business was of insufficientscale to support the costs of a listing on AIM and subsequently announced atender offer and proposed a de-listing of the shares. Unicorn AIM VCT did notparticipate in this offer and instead, the Investment Manager has chosen toretain the stake in Hasgrove as an investment in a privately owned, unquotedbusiness. Operationally, Hasgrove has delivered a good recovery in performancein the past 12 months and continues to generate a steady stream of newbusiness wins. HML Holdings (+41%) is a property management services group basedpredominantly in London and the South-East. The business has continued to makestrong progress during its most recent financial period. Highlights for itsfinancial year ended 31 March 2013 included revenue growth of 21% and anincrease in EPS of over 63% to 1.8 pence per share. The business also reacheda milestone of having 40,000 property units under management. The aim ofachieving geographic expansion was also met following the acquisition of aCheshire based property management partnership. The maximum totalconsideration for this deal will be £0.8m and is to be funded entirely fromexisting working capital resources. Instem (+37%) is a software developer focused on the life sciencesand biotechnology markets. The group has developed world leading softwareenabling pharmaceutical companies to collect, analyse and report large volumesof complex scientific data in an accurate and efficient manner. Instem hasenjoyed a return to growth in the period under review by successfullybroadening its range of products, extending its geographical reach and signingup a number of new clients. The acquisition of Logos Technologies in May 2013enhanced the group's capability in early phase clinical studies and is alreadyproving to be a successful addition to Instem's established range of softwaresolutions. In the six month period to 31 March 2013, Instem reported turnovergrowth of 13% with recurring revenues accounting for 76% of total sales.Operating profits grew by 133% to £700k. The strict regulatory environment inthe pharmaceutical sector continues to work in Instem's favour and thebusiness is now experiencing strong demand across the suite of productsoffered. Mattioli Woods (+71%) is a specialist pension consultancy andwealth management business. The business has made solid progress during aperiod of significant change for the financial services sector. In thefinancial year to 31 May 2013, Mattioli Woods' assets under management,administration and advice, increased by over 20% to £3.6bn. Other financialhighlights included an increase in turnover of 14.3%, EPS growth of 12.2% anda 26.1% rise in the total dividend. Pressure Technologies (+116%) is a designer and manufacturer ofhigh pressure stainless steel cylinders, which are used in a variety ofspecialised applications. The group continues to follow a strategy ofdiversification, from which it is now beginning to see a growing financialreturn. Opportunities across the group's diverse markets appear robust and aprogramme of investment in new products and services are further broadeningthe customer base. The Group's financial position remains strong with areported £2.7m of net cash on the balance sheet at its financial year end. Sanderson (+49%) is a software and IT services businessspecialising in delivering leading technology solutions to the retail andmanufacturing sectors. Despite the challenging conditions in the UK retailmarket in particular, the business continues to grow. The strongly cashgenerative nature of the business has allowed the management team to investheavily in product development while simultaneously strengthening service andsales and marketing resource. Sanderson recently announced that it was seekingto expand its presence in the fast growing e-commerce sector through theacquisition of `One Iota Limited' for a maximum consideration of £5.4m. Tracsis (+47%) is a provider of operational planning software andconsultancy services to the transport industry. During the year, Tracsisacquired an AIM quoted transport surveying competitor called `Sky High' in adeal that expands the customer base into related transport markets andprovides a foothold in new geographic regions. The deal was funded out ofTracsis' substantial cash resources and was immediately earnings enhancing.Tracsis also reported further substantial organic growth during the periodunder review, winning several new contracts both in the UK and abroad. Zetar (+32%), a manufacturer of confectionery and savoury snackswas acquired during the period by a German competitor at a price of 297p pershare, thereby realising a capital gain of £374k on original book cost. A small number of qualifying companies continued to encounteroperational or trading difficulties during the year:- Green Compliance (-85%) provides compliance services across thewater hygiene, pest prevention and fire protection segments to a wide range ofclients in both the UK public and private sectors. The period under reviewproved to be a challenging one, with the business requiring two rounds ofadditional fundraising (in both of which the Company participated). A new CEOhas been appointed and there is evidence that the business is starting tostabilise. Surgical Innovations (-19%) is a designer and manufacturer ofinnovative medical devices for use in minimally invasive surgery. Delays toorders at the end of 2012 had led to results being slightly below marketexpectations for the year. Encouragingly, trading conditions now appear to beimproving with significant opportunities for the company emerging,particularly in the lucrative US market. The share price performed poorlybetween February and August 2013, although it recovered in the final few weeksof the period under review as confidence in prospects for the business beganto improve. SnackTime (Ordinary Shares -23%) is an operator of vendingmachines. The business has undergone a period of significant management changeand cost reduction to counteract the continuing reduction in revenues. TheCompany participated in a further round of fundraising during the period,contributing £300k to a £1m re-financing, through the issue of new convertibleloan notes. Tangent Communications (-27%) is a digital marketing and printingspecialist with a blue chip corporate client base, a rapidly expanding onlineprint division and a growing reputation for service excellence. In the pastyear, the business has increased investment in its online digital printbusinesses; printed.com and goodprint (acquired in November 2012) are nowbeginning to develop traction in a growing consumer market for printedproducts. Tangent is a profitable business, as it has been since our originalinvestment in 2007, and it remains cash generative and debt free. Tangent hasstruggled in share price terms over the past 12 months, despite continuing todeliver to our expectations. New Qualifying Investments At the financial year end the Company held over 75% of total assetsin VCT qualifying businesses as calculated in accordance with HMRC taxvaluation rules. New VCT qualifying investments are only made if the companiesconcerned meet our clearly defined investment criteria. During the period onenew VCT qualifying company was introduced to the portfolio. Keywords Studio (-5% since investment) is a technical serviceprovider to the video game industry. The company floated on AIM in July 2013,raising £28m at a price of 123p per share. Following a relatively quiet startto life as a publicly quoted company, Keywords issued a slightly disappointingtrading statement in September 2013, highlighting delays in the launch of nextgeneration consoles from Sony and Microsoft. These delays will have a negativeimpact on trading in the second half of Keywords' current financial year. Thelonger term prospects for growth remain significant. Non-Qualifying Investments (bracketed figures represent the share pricemovement for the year under review on a mid price basis):- The non-qualifying portfolio also performed well during the year under review,although the total return was depressed by poor performance from twoinvestments:- Office2Office (-67%) is a provider of office supplies and businesssolutions. The business continues to experience challenging market conditionsand the office products market remains in long term decline. Management hasundertaken a number of initiatives to improve operational efficiency but itwill take some time before these changes are reflected in improvedprofitability. Stadium Group (-42%) is an electronic technologies group providingmanufacturing services, custom power supplies and control power assemblies.This non-qualifying holding was sold in full in November 2012 following a poortrading update. The contribution to performance from the investment in sub-funds ofthe Unicorn Investment Funds OEIC was particularly pleasing and more thanoffset the disappointing performance of Office2Office and Stadium Group. Thethree sub-funds generated total returns for the year of 47.9% from the UnicornUK Smaller Companies Fund, 36.8% from the Unicorn Free Spirit Fund and 29.6%from the Unicorn Mastertrust Fund, which translates to an aggregate, albeitlargely unrealised, capital gain of approximately £3m. It should be noted that investment management fees are based on thenet asset value of the Company excluding the value of the investments in theOEIC Funds, as Unicorn Asset Management Limited earns fees from managing theOEIC funds separately, thus ensuring there is no double counting of fees. Other meaningful contributors to performance of the non-qualifyingportfolio included:- Hayward Tyler Group (formerly Specialist Energy Group) (+264%) is aspecialist engineering group manufacturing a range of fluid filled electricmotors and pumps that are designed to operate in the harshest environments.Following a prolonged period of challenging operational and tradingconditions, it is pleasing to see the business begin to benefit from thepainful but necessary restructuring implemented by the management team overthe past two years. The introduction of a `continuous improvement programme',combined with material changes to the manufacturing process in operation attheir Luton factory have begun to deliver tangible benefits in the form ofimproved margins and profitability. At the same time, it appears that marketdemand for Hayward Tyler's specialist pumps is recovering. Macfarlane (+57%) is a designer and distributor of a comprehensiverange of protective packaging products and labels. Macfarlane is focusing onthe internet retail market and we expect it to be a beneficiary of increasede-commerce transactions as retail activity continues to move from the highstreet to the web. Macfarlane has increased profits on flat sales,demonstrating management's continued focus on managing cost. Mears Group (+49%) is a leading social housing repairs andmaintenance service provider to Local Authorities and Registered SocialLandlords in the UK. Mears also operates in the UK Local Authorities'outsourced care market, providing personal care services to people in theirown homes. The Group benefits from being a market leader in robust anddefensive markets. Mears continues to deliver healthy organic growth and hassuccessfully integrated both of its recent large acquisitions. The outlook forcontinued growth remains positive. Portmeirion (+40%) is a ceramic manufacturing business whichencompasses the Portmeirion, Spode, Royal Worcester and Pimpernel brands. Thebusiness enjoys particularly strong demand in the UK and US markets. For thesix month period to 30 June 2013, management reported revenue growth of 4% andan increase in the interim dividend of 11%. Renold (+57%) is a manufacturer of industrial chain and torquetransmission products. Following a prolonged period of poor operationalperformance, senior management changes have been made and a full strategicreview of the business has been undertaken by the new Chief Executive. Aprogramme to improve operational process and increase manufacturing efficiencyhas been introduced and is continuing. A cost reduction plan is also beingimplemented that will result in a significant reduction in overheads. Renoldalso successfully refinanced its debt during the period. Sagentia (+65%) is a science and technology consultancy servicesand product development business focused on the consumer, energy, industrialand medical markets. In the six month period to 30 June 2013, the businessdelivered strong operating performance, with reported revenues up by 36% andan increase in profits before tax of 49%. Sagentia also successfully completedtwo acquisitions during the period, strengthening the firm's capabilities inthe energy sector. Realisations Realisations totalling £9.6m were made in the year to 30 September2013. Merger and acquisition activity resulted in the disposal of four VCTqualifying investments: Maxima Holdings, Datong, Zetar and Vindon Healthcare. As stated above, Hasgrove was delisted from AIM following a tenderoffer. We chose not to participate in this tender offer and instead the shareshave been retained as an unquoted, VCT qualifying investment. In addition, 14 holdings in the non-qualifying portfolio were soldin the open market, while partial disposals were made in a number of otherholdings. Including partial disposals, the total net realised gain from thesale of investments amounted to £1.2m. At the financial year end, the Company held net cash balances andinvestments in money market funds, with the combined value of £2.56m. Prospects The investment portfolio contains a diverse range of predominantlyprofitable businesses that have successfully withstood difficult tradingconditions in recent years. The majority of these businesses have remained insound financial health and we are now receiving regular dividend income frommany of them. Recent evidence suggests that UK economic recovery is gatheringmomentum. Should this return to GDP growth be maintained, then it isreasonable to hope that our investee companies will benefit through increasedsales opportunities. If revenue growth does become more pronounced, the impactof this on well-managed and soundly financed businesses will be felt in theform of increased levels of profitability. This, in turn, ought to translateinto positive share price development. We are also now seeing an improved flow of attractive investmentopportunities and are therefore optimistic that we can successfully expand theportfolio over the next twelve months. Despite this welcome improvement indeal-flow, our established and selective approach to new investment will beretained. It remains the Investment Manager's belief that this strategy offersthe best prospect of delivering consistently attractive returns forshareholders over the longer term. Finally, it is pleasing to report that the new financial year hasbegun strongly with Net Asset Value per share rising by 5.2% in October 2013. Chris HutchinsonUnicorn Asset Management Limited2 December 2013 STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the annual report andthe financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statementsfor each financial year. Under that law the Directors are required and haveelected to prepare the financial statements in accordance with United KingdomGenerally Accepted Accounting Practice (United Kingdom Accounting Standardsand applicable law). Under company law the Directors must not approve thefinancial statements unless they are satisfied that they give a true and fairview of the state of affairs of the Company and of the profit or loss of theCompany for that period. In preparing these financial statements the Directors are requiredto: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accountingrecords that are sufficient to show and explain the Company's transactions, todisclose with reasonable accuracy at any time the financial position of theCompany and to enable them to ensure that the financial statements comply withthe Companies Act 2006. They are also responsible for safeguarding the assetsof the Company and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. The directors are responsible for ensuring the Annual Report andthe financial statements are made available on a website. Financial statementsare published on the company's website in accordance with legislation in theUnited Kingdom governing the preparation and dissemination of financialstatements, which may vary from legislation in other jurisdictions. Themaintenance and integrity of the company's website is the responsibility ofthe directors. The directors' responsibility also extends to the ongoingintegrity of the financial statements contained therein. The Directors confirm, to the best of their knowledge: (a) that the financial statements, which have been prepared inaccordance with UK Generally Accepted Accounting Practice and the 2009Statement of Recommended Practice, `Financial Statements of InvestmentCompanies and Venture Capital Trusts' give a true and fair view of the assets,liabilities, financial position and profit or loss of the Company; and (b) that the management report, comprising the Chairman'sStatement, the Strategic Report, the Investment Manager's Review, theInvestment Portfolio Summary and the Directors' Report includes a fair reviewof the development and performance of the business and the position of theCompany, together with a description of the principal risks and uncertaintiesthat it faces. Having taken advice from the Audit Committee, the Board considersthe report and accounts, taken as a whole, as fair, balanced andunderstandable and that it provides the information necessary for shareholdersto assess the Company's performance, business model and strategy. Neither the Company nor the directors accept any liability to anyperson in relation to the annual report except to the extent that suchliability could arise under English law. Accordingly, any liability to aperson who has demonstrated reliance on any untrue or misleading statement oromission shall be determined in accordance with section 90A and schedule 10Aof the Financial Services and Markets Act 2000. For and on behalf of the Board Peter DicksChairman2 December 2013 PRIMARY FINANCIAL STATEMENTS Income Statementfor the year ended 30 September 2013 Year ended Year ended 30 September 2013 30 September 2012 Notes Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Net unrealised gains on investments - 17,167 17,167 - 2,057 2,057 Net gains on realisation of investments - 1,191 1,191 - 364 364 Income 2 1,174 - 1,174 1,137 - 1,137 Investment management fees 3 (265) (795) (1,060) (249) (746) (995) Other expenses (469) - (469) (501) - (501)Profit on ordinary activities before taxation 440 17,563 18,003 387 1,675 2,062 Tax on profit on ordinary activities - - - - - -Profit on ordinary activities after taxationfor the financial year 440 17,563 18,003 387 1,675 2,062 Basic and diluted earnings per share:Ordinary Shares 5 0.77p 30.71p 31.48p 0.66p 2.88p 3.54p All revenue and capital items in the above statement derive from continuing operations of the Company. There were no other recognised gains or losses in the year. The total column of this statement is the profit and loss account of the Company. Other than revaluation movements arising on investments held at fair value through the Profit andLoss Account, there were no differences between the profit as stated above and at historical cost. The notes below form part of these financial statements. Balance Sheetas at 30 September 2013 30 September 2013 30 September 2012 Notes £'000 £'000 £'000 £'000Non-current assetsInvestments at fair value 70,596 57,806 Current assetsDebtors 836 183Current investments 154 720Cash at bank 2,406 532 3,396 1,435 Creditors: amounts fallingdue within one year (319) (244)Net current assets 3,077 1,191 Net assets 73,673 58,997 CapitalCalled up share capital 568 576Capital redemption reserve 4 332Share premium account 18 32,331Revaluation reserve 24,979 3,860Special reserve 38,104 12,940Profit and loss account 10,000 8,958 Equity shareholders' funds 73,673 58,997 Net asset value pershare of 1 pence each:Ordinary Shares 6 129.78p 102.34p The financial statements and authorised for issue by the Board of Directors on 2 December 2013 andwere signed on their behalf by: Peter DicksChairman The notes below form part of these financial statements. Reconciliation of Movements in Shareholders' FundsFor the year ended 30 September 2013 30 September 2013 30 September 2012 Notes £'000 £'000Opening Shareholders' fundsat 1 October 2012 58,997 60,447Share capital bought backin the year - includingexpenses (9,858) (4,487)Share capital raised - netof expenses 9,392 3,901Profit for the year 18,003 2,062Dividends paid 4 (2,861) (2,926)Closing Shareholders'funds at 30 September2013 73,673 58,997 The noted below form part of these financial statements. Cash Flow StatementFor the year ended 30 September 2013 30 September 2013 30 September 2012 Notes £'000 £'000 £'000 £'000Operating activitiesInvestment income received 1,203 1,115Investment managementfees paid (1,060) (994)Other cash payments (502) (538)Net cash outflow fromoperating activities (359) (417) Investing activitiesPurchase of investments (3,491) (1,586)Sale of investments 8,529 5,790 5,038 4,204 Equity dividendsDividends paid 4 (2,861) (2,926)Net cash inflow beforeliquid resourcemanagement andfinancing 1,818 861 Management of liquidresourcesDecrease in currentinvestments 566 59 FinancingShares issued as part ofOffer for Subscription 1,400 3,945Shares issued as part ofEnhanced Buyback Facility 250 -Shares bought back aspart of Enhanced BuybackFacility (including expenses) (391) -Shares bought back (1,769) (4,983) (510) (1,038)Net increase/(decrease)in cash 1,874 (118) The notes below form part of these financial statements. NOTES TO THE ACCOUNTS 1 Basis of accounting The accounts have been prepared under UK Generally AcceptedAccounting Practice (UK GAAP) and the Statement of Recommended Practice,`Financial Statements of Investment Trust Companies and Venture CapitalTrusts' ("the SORP") issued by the Association of Investment Companies inJanuary 2009. As a result of the Directors' decision to distribute capitalprofits by way of a dividend, the Company revoked its investment companystatus as defined under section 266(3) of the Companies Act 1985, on 17 August2004. 2 Income 2013 2012 £'000 £'000Interest receivable- from equities 984 964- from loan stocks 147 110- from money-market funds andUnicorn managed OEICs 43 63Total income 1,174 1,137 Total income comprises Dividends 1,027 1,027Interest 147 110 1,174 1,137Income from investments comprisesListed UK securities 178 338Listed Overseas securities 1 4Unlisted UK securities 995 795 1,174 1,137 3 Investment Manager's fees 2013 2013 2013 2012 2012 2012 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000Unicorn Asset Management Limited 265 795 1,060 249 746 995 Unicorn Asset Management Limited ("UAML")receives an annual management fee of 2% of the net asset value of the Company,excluding the value of the investments in the OEICs, which are also managed byUAML. The annual management fee charged to the Company is calculated andpayable quarterly in advance. In the year ended 30 September 2013, UAML alsoearned fees of £115,000 (2012: £98,000), being OEIC management fees calculatedon the value of the VCT's holdings in each OEIC on a daily basis. Thismanagement fee is 1.25% per annum of the OEIC value for each of UnicornSmaller Companies OEIC, Unicorn Free Spirit OEIC and Unicorn Mastertrust OEIC. The management fee will be subject to repaymentto the extent that there is an excess of the annual costs of the Companyincurred in the ordinary course of business over 3.6% of the closing netassets of the Company at the year end. Any amount repayable will be paid bythe Manager within 5 business days of the approval of the annual accounts forthe relevant year-end, or set off against the next quarterly fee instalmentpayable to the Manager following such approval. There was no excess ofexpenses for this year or the prior year. Under an Amended Incentive Agreement with UAML dated 12 April 2010 (which replacesall previous incentive agreements), the Investment Manager is entitled to a performanceincentive fee of 20% of any cash distributions (by dividend or otherwise) paid toshareholders in excess of 6 pence per Ordinary Share paid in any accounting period -"the target return" and subject to the maintenance of a net asset value (NAV) pershare of 125p or more, as calculated in the annual report and accounts for the yearrelating to such payments. The target return applies for accounting periodsstarting after 1 October 2010. In the event that the target return of 6 penceper share is not paid in a particular accounting period, the shortfall of suchdistributions will be carried forward to subsequent accounting periods and anyincentive fee will not be payable until this shortfall is met. No incentivefee is payable for the year ended 30 September 2013 and none was paid for theyear ended 30 September 2012. 4 Dividends 2013 2012 £'000 £'000Amounts recognised as distributionsto equity holders in the year: Ordinary SharesFinal capital dividend of 4.5p (2012: 4.25p)pershare for the year ended 30 September 2012paid on 8 February 2013 2,576 2,486Final income dividend of 0.5p (2012: 0.75p)pershare for the year ended 30 September 2012paid on 8 February 2013 285 440 2,861 2,926 Any proposed final dividend is subject to approval by shareholders at theAnnual General Meeting and has not been included as a liability in thesefinancial statements. Set out below are the total income dividends payable in respect of thefinancial year, which is the basis on which the requirements of Section 274 ofthe Income Tax Act 2007 are considered. 2013 2012 £'000 £'000 Revenue available for distribution by wayof dividends for the year 440 387Proposed final income dividend of 0.75p(2012: 0.5p) for the year ended30 September 2013 426 287 5 Basic and diluted earnings and return per share 2013 2012 £'000 £'000Total earnings after taxation: 18,003 2,062 Basic and diluted earningsper share (note a) 31.48p 3.54p Net revenue from ordinary activitiesafter taxation 440 387 Revenue earnings per share (note b) 0.77p 0.66p Net unrealised capital gains 17,167 2,057Net realised capital gains 1,191 364Capital expenses (795) (746)Total capital return 17,563 1,675 Capital earnings per share (note c) 30.71p 2.88p Weighted average number ofshares in issue in the year 57,190,640 58,206,100Notes a) Basic and diluted earnings per share is total earnings aftertaxation divided by the weighted average number of shares in issue. b) Revenue earnings per share is net revenue after taxation dividedby the weighted average number of shares in issue. c) Capital earnings per share is total capital return divided bythe weighted average number of shares in issue. There are no instruments in place that will increase the number ofshares in issue in future. Accordingly, the above figures currently representboth basic and diluted returns. 6 Net asset values 2013 2012 £'000 £'000 Net Assets 73,673 58,997 Number of shares in issue 56,767,691 57,646,506Net asset value per share 129.78p 102.34p 7 Dividends The Directors have proposed a final dividend of 6 pence per share. Thedividend will be paid on 31 January 2014 to Shareholders on the Register on 27December 2013. Shareholders who wish to have dividends paid directly intotheir bank account rather than sent by cheque to their registered address cancomplete a mandate for this purpose. Mandates can be obtained by telephoningthe Company's Registrars, Capita Asset Services on 0871 664 0324, (lines areopen 8.30 am - 5.30 pm Mon - Fri, calls cost 10p per minute plus networkextras - if calling from overseas please ring +44 208 639 2157) or by writingto them at Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham,Kent, BR3 4TU or emailing them at VCTS@capitaregistrars.com. 8 Post balance sheet events On 9 October 2013, £500,000 was invested in each of The City PubCompany (East) plc and The City Pub Company (West) plc, both of which areunquoted investments. On 6 November 2013, £1,750,000 was invested in Interactive Investorplc, an unquoted investment. On 8 November 2013, 575,416 Ordinary shares wereallotted at a price of 141.1 pence per share, raising net funds of £786,000. 9 Statutory information These are not full accounts in terms of section 434 of the Companies Act 2006.The Annual Report for the year to 30 September 2013 will be sent toshareholders shortly and will then be available for inspection at 30Haymarket, London SW1Y 4EX, the registered office of the Company. Copies ofthe Annual Report will shortly be available on the Company Secretary's and theInvestment Manager's websites, details of which can be found atwww.unicornaimvct.co.uk. Statutory accounts will be delivered to the Registrarof Companies after the Annual General Meeting. The audited accounts for theyear ended 30 September 2013 contain an unqualified audit report. 10 Annual General Meeting The Annual General Meeting of the Company will be held at 11.00 am on Friday,10 January 2014 at the offices of SGH Martineau LLP, One America Square,Crosswall, London, EC3N 2SG. Contact details for further enquiries: Chris Hutchinson of Unicorn Asset Management Limited (the Investment Manager),on 020 7253 0889. Robert Brittain at Mobeus Equity Partners LLP (the Company Secretary)on 020 7024 7600 or by e-mail on unicorn@mobeusequity.co.uk DISCLAIMER

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