Unicorn Asset Management Regulatory News (UAV)

Unicorn AIM VCT plc (the "Company" or the "VCT")

LEI: 21380057QDV7D34E9870

Annual Results Announcement for the year ended 30 September 2021

The full Annual Report and Accounts for the year ended 30 September 2021 can be found on the Company's website www.unicornaimvct.co.uk

FINANCIAL HIGHLIGHTS

(for the year ended 30 September 2021)

· Net asset value ("NAV") total return for the year ended 30 September 2021, after adding back the dividends of 6.5 pence per share paid in the year, rose by 42.8%

· Final dividend of 3.5 pence per share proposed for the financial year ended 30 September 2021

· Offer for Subscription raised £14.6 million (after costs)

· New offer for Subscription announced to raise up to £25.0 million

Fund performance

* Shareholders funds/net assets as shown on the Statement of Financial Position below.

+ The Board has recommended a final dividend of 3.5 pence per share for the year ended 30 September 2021 bringing total dividends for the year to 6.5 pence per share, unchanged from the previous year. If approved by Shareholders, this payment will bring total dividends paid since the merger with Unicorn AIM VCT II plc on 9 March 2010 to 71.0 pence per share.

# Since the merger of the Company with Unicorn AIM VCT II plc on 9 March 2010 and merger of all former share classes.

STRATEGIC REPORT

The purpose of this Strategic Report is to inform Shareholders of the Company's progress on key matters and assist them in assessing the extent to which the Directors have performed their legal duty to promote the success of the Company in accordance with section 172 of the Companies Act 2006.

The Investment Manager's Review also includes a comprehensive analysis of the development of the business during the financial year and the position of the Company's main investments at the end of the year.

Chairman's Statement

I am pleased to present the Company's Annual Report and Audited Financial Statements for the year ended 30 September 2021.

Introduction

The financial year ended 30 September 2021 was a particularly positive period for the Company. Despite all the obvious external challenges posed by Brexit and the Covid-19 pandemic, our investment performance was strong, we successfully raised £14.6 million net of costs in an oversubscribed Offer for Subscription and saw a significant uptake in the number of Shareholders opting to take advantage of the Dividend Reinvestment Scheme. We also continued to buyback shares offered by selling Shareholders.

The Alternative Investment Market (AIM) has enjoyed something of a renaissance over the past 12 months, with renewed interest in the advantages of listing on AIM coming from a diverse range of potentially high growth companies. The FTSE AIM All-Share Index rose by 30.8% during the 12 months to 30 September 2021 and the capital raised for companies also increased dramatically in comparison to recent years. In aggregate, a total of £7.5 billion in new and secondary capital was successfully raised on AIM during the year. This represents a significant increase on the £5.0 billion raised in the previous year and suggests that despite all the problems presented by the pandemic, there is a healthy and growing appetite for investing in early stage businesses. The number of new issues on AIM also increased noticeably throughout the year, many of which were VCT qualifying, enabling your Company to participate in the healthy flow of opportunities. It has been a particularly active period for new investment by the Company, with almost £30 million of VCT qualifying investments completed in the year.

Economic & Market Review

The financial year under review was characterised by a continuation of a steady recovery from the significant equity market falls experienced in March 2020. As at the end of September 2021, the FTSE 100 Index had recovered to a level not seen since the pandemic took hold in early 2020 whilst the broader FTSE 250 index was significantly ahead of pre-pandemic levels.

At the time of writing, the wide-ranging restrictions on social and economic activity imposed by the UK Government having been almost entirely removed are being reviewed in the light of the discovery of the Omicron variant. Whilst it might appear that the UK economy is operating in much the same manner as it did before the Covid-19 crisis struck, the after-effects of the national lockdown, combined with the, at times, fraught relations with our former partners in the European Union, are starting to manifest themselves in the form of significant supply chain disruption and labour shortages. Many essential goods and services are in short supply, energy costs and shipping costs have risen sharply and both skilled and casual labour is becoming increasingly hard to secure in a number of sectors that are of key importance to the health of the UK economy. The combined result of these problems is currently manifesting itself in a sharp increase in the rate of inflation. Consumers and companies are also facing tax increases from next March.

The significant increase in the price of everyday essentials such as food, petrol and gas are already starting to put a strain on discretionary consumer spending and, with further cuts to disposable income in the form of increased National Insurance contributions still to be felt, there can be little doubt that these combined effects will exert further pressure on consumer spending in the months ahead.

The impact on the UK equity market of a period of stagnant growth, combined with persistent inflation, is hard to estimate, but should this scenario develop, it is unlikely to lead to continued strong growth in equity markets.

As far as the performance of UK equity markets is concerned, investors largely appear to have regarded the pandemic and the associated lockdown as a 'black swan' event, from which UK listed companies should generally be quickly capable of recovering.

Notwithstanding the many and obvious external pressures, the Company's diverse portfolio of investments continues to mature and, in venture capital terms, the composition of the portfolio represents an attractive mix between high risk, early stage, scale-up businesses and established, profitable and dividend paying companies.

Net Assets

As at 30 September 2021, the net assets of the Company were £370.8 million. This represents an increase of just over £110 million, when compared with the end of the equivalent period last year. After adding back dividends paid in the year, the total return in the 12 month period under review was +42.8%.

Total net assets rose substantially in the year, partly due to the support received from new and existing Shareholders in the Offer for Subscription that closed in April 2021, but mainly because of the strong performances generated by many of the companies held within the portfolio.

Investment Performance Review

The Company's total return compared favourably to that generated by the FTSE All-Share Index, which increased by 27.9% over the same period, while the total return of +30.8% from the FTSE AIM All-Share Index was also considerably lower than that achieved by the Company.

The unique circumstances created by the national lockdown have meant that the performance of individual investee companies was again more polarised than normal, with some businesses thriving, while others were unable to operate, or were prevented from trading as a consequence of the Government's strict lockdown rules.

Stock specific factors therefore, once again, had a significant impact on performance, both positive and negative, and these are covered in more detail in the Investment Manager's review below.

Portfolio Activity

It is encouraging to report that the Investment Manager continues to access a plentiful and attractive supply of new investment opportunities.

During the year, twelve new VCT qualifying businesses were selected for initial investment. In addition, five follow-on investments were completed in companies already held in the portfolio, in order to support their planned growth. In total, almost £30 million was allocated to these VCT qualifying investments during the year. It is satisfying to report that most of these new investments have already made positive contributions to the portfolio's performance.

There were no investments in non-qualifying companies or funds during the year. As a reminder, the primary purpose of holding these shorter-term investments is to provide Shareholders with market exposure while the Investment Manager undertakes appropriate due diligence on potential VCT-qualifying investments.

A number of full and partial disposals were made during the course of the financial year. Total proceeds from disposals of qualifying investments amounted to £14.7 million, realising an overall capital gain of £10.9 million over the life of the investments. The Investment Manager also made a number of full and partial disposals in non-qualifying investments during the year. The total proceeds realised from these transactions was £1.6 million and, in aggregate, the overall capital gain realised amounted to £0.1 million.

Final Dividend & Declared Special Dividend

An interim dividend of 3.0 pence per share was paid to all Shareholders on 12 August 2021. This dividend is in addition to the 3.5 pence per share final dividend for the prior financial year, which was paid in February 2021.

The Directors are recommending a final dividend of 3.5 pence per share for approval at the Annual General Meeting to be held on 3 February 2022. This would bring total dividends to 6.5 pence per share for the year under review. If approved this will be payable on 10 February 2022 to Shareholders on the register on 6 January 2022.

On 22 November 2021, the Board declared a special interim dividend of 7.0 pence per share, which will be payable on 10 February 2022 to Shareholders on the register on 6 January 2022. This dividend will be in respect of the accounting year ending 30 September 2022.

The special dividend is a one off payment which was declared following the successful disposal of our investment in Augean, one of the portfolio's larger holdings, which has been acquired by a trade buyer and delisted.

Dividend Reinvestment Scheme

The Company's Dividend Reinvestment Scheme ("DRIS") was introduced in August 2019. A substantial number of Shareholders have already taken advantage of this opportunity. For investors who do not require income but value the additional tax relief on their reinvested dividends, this is an attractive scheme and the Board hopes that Shareholders will continue to find it a useful option. In the course of the year under review, 342,947 new shares have been issued under the DRIS. The DRIS will apply to the proposed final and special interim dividends referred to above.

Share Buybacks

The Board continues to believe that it is in the best interests of the Company and its Shareholders to make market purchases of its shares from time to time. During the financial year ended 30 September 2021, the Company continued to buy back and cancel shares in the market from selling Shareholders and purchased 3,204,997 Ordinary shares for a total consideration of £6.2 million.

Buybacks remain the main means by which selling Shareholders can realise their investments at a fair price and the Board therefore remains committed to offering this buyback facility. Future repurchases of shares will continue to be made, if deemed appropriate, in accordance with guidelines established by the Board and will be subject to the Company having the appropriate authorities from Shareholders and sufficient funds available for this purpose. Share buybacks will also be subject to the Listing Rules and any applicable law at the relevant time. Shares bought back in the market are normally cancelled.

Costs

The Board reviews the costs incurred by the Company on a regular basis and remains focused on maintaining a competitively low ongoing charges ratio. As at the year end, total costs amounted to 2.0% of net assets, as calculated in accordance with the AIC's "Ongoing Charges" methodology. As at 30 September 2021, the Company continued to be ranked in the lowest quartile when it comes to total ongoing charges imposed by VCTs across the entire sector. It should be noted that Shareholders are further protected by a reduction in the 'cost cap', which was introduced in 2018, meaning that total costs cannot rise above 2.75% of total assets, regardless of market conditions and/or NAV performance.

As described in more detail in note 3, the Investment Manager has recently agreed to a 1% fee on assets exceeding £450 million. Although this reduction does not have an immediate impact on the investment management fees paid by the Company the reduction will be triggered if and when net assets reach £450 million.

New Offer

On 26 October 2021, the Company announced the intention to launch an Offer for Subscription to raise up to £25 million through the issue of new ordinary shares. The prospectus, which will contain the full details and terms and conditions of the Offer, is expected to be available in January 2022.

Board Refresh

Jocelin Harris has served on the Board for fifteen years and has indicated his intention to stand down in 2022. He has agreed to stand for re-election at the Annual General Meeting ("AGM") in February 2022 but intends to stand down before the following AGM.

The Board have engaged an outside recruitment agency to identify a suitable candidate to replace Jocelin. At the time of writing this process continues and the Company will announce any appointment in the normal way.

VCT Status

There were no changes to VCT legislation during the year under review.

One of the key tests, from accounting periods commencing after 6 April 2019, is the requirement for at least 80% (previously 70%) of a Venture Capital Trust's total assets to be invested in VCT qualifying companies. I am pleased to report that, excluding new capital raised in Offers for Subscription within the last three years, the Company's VCT qualifying percentage rose to 87.3% of total assets as at 30 September 2021. All other HM Revenue & Customs tests have also been complied with, and the Board has been advised by its VCT status adviser, PwC, that the Company continues to maintain its VCT status. It will, of course, remain a key priority of the Board to ensure that the Company retains this VCT status.

Annual General Meeting

In view of the much improved environment in relation to Covid and the consequent lifting of lockdown rules, the Board is hopeful that the Company's forthcoming AGM can revert to its traditional 'in-person' format. Clearly, should circumstances change in between the writing of this report and the AGM date, then the Board may be required by government restrictions to revert to a closed meeting format, as was the case for last year's AGM.

Full details of the business to be conducted at the AGM are given in the Notice of the Meeting on pages 79 and 80 of the Annual Report. Shareholders' views are important, and the Board therefore encourages all Shareholders to vote on the resolutions within the Notice of Annual General Meeting on pages 79 and 80 of the Annual Report using the proxy form, or electronically at www.unicornaimvct.com. The Board has carefully considered the business to be approved at the AGM and recommends that Shareholders vote in favour of all the resolutions being proposed.

Outlook

From an investment performance perspective, the financial year under review was very strong.

The portfolio has further diversified, the core collection of established investee companies has continued to mature and the majority of the new investments made during the year have largely delivered positive returns in the short period since initial investment.

As ever, the Investment Manager's cautious and disciplined approach to investing and managing the Company's assets, which has proven successful over many years, will be maintained and the Board is therefore hopeful that further progress can be achieved during the remainder of the current financial year and beyond.

Tim Woodcock

Chairman

7 December 2021

Investment Manager's Review

Introduction

The year ended 30 September 2021 was characterised by the continuation of a slow but steady recovery in the UK equity market following the sharp correction experienced in March 2020. This recovery has been fuelled by an improvement in investor confidence triggered by a collective sense that the UK Government was beginning to get the upper hand in its battle against the Covid-19 virus.

The economic consequences of the Covid-19 crisis have yet to be fully felt and it remains to be seen whether the recent surge in consumer spending, that immediately followed the general lifting of lockdown restrictions, will be maintained.

Against this favourable backdrop, the performance of the portfolio was strong in both absolute and relative terms.

We are confident in the prospects for delivering further growth in net asset value over the longer term, due to the diverse nature of the investments and the increasing maturity of the businesses in which those investments have been made.

Net Asset Performance

In terms of net asset growth, the financial year under review was a highly successful period for the Company.

As at 30 September 2021, the audited net assets of the Company amounted to £370.8 million, which compares very favourably to the closing net assets of £260.2 million reported at the end of the previous financial year. This healthy increase in net assets was partly due to the proceeds of the fully subscribed Offer for Subscription, but predominantly due to the positive development of the Company's portfolio of investments as shown in the table on page 19 of the Annual Report.

It is very pleasing that the Offer for Subscription, which closed in February 2021, was again fully subscribed. Importantly, the new capital secured from the Offer for Subscription provided additional liquidity, which was subsequently fully and successfully deployed through meaningful participation in a significant number of exciting new investment opportunities. Encouragingly, a substantial majority of these new additions to the portfolio have already made a meaningfully positive contribution to overall performance.

In terms of Net Asset Value ("NAV") per share, which is obviously a particularly relevant measure of how well individual Shareholders have fared, this also progressed strongly. As at 30 September 2021, the audited NAV per share was 248.6 pence per share, which represents an increase of 39.2% on the closing NAV per share of 178.6 pence per share as at 30 September 2020.

As noted in the Chairman's Statement, after adding back dividends paid in the year, the total return in the year under review was +42.8%.

It is satisfying to report on such a positive period for the Company, especially given the multitude of external threats arising from the enduring Covid-19 crisis and a troublesome Brexit agreement.

Although a small number of investee companies struggled, either as a result of the UK 's departure from Europe, or because the impacts of Covid-19 continue to affect demand for their products or services, the negative effects on overall performance have been significantly outweighed by particularly powerful contributions from many of the AIM-listed holdings in the portfolio. In addition, uplifts to the fair values of two unquoted investee companies; Hasgrove and Interactive Investor, reflect their continued strong growth.

Performance Review

The year under review has exceeded expectations, with strong performances being delivered not only by the majority of established investee companies, but also from the new VCT qualifying investments made during the course of the year.

We are required by VCT legislation to make new qualifying investments in early-stage, scale-up businesses. Happily, there was a good selection of qualifying investment opportunities from which to choose during the year. Importantly, those companies that were selected for inclusion within the portfolio generally performed extremely well, albeit over a short period of ownership.

Despite the buoyant equity market conditions, there were inevitably a small number of investee companies that disappointed in share price terms during the year under review. Among those companies that did underperform, there were very few that did so as a result of poor management control. Indeed, it is difficult to identify any business held within the portfolio where the reason for poor performance was anything other than being due to the external pressures caused by Covid-19. As was the case last year, the negative impact of these setbacks was more than compensated for by impressive performances generated by a large number of the existing AIM traded holdings in the portfolio, together with a meaningfully positive contribution from the majority of the new investments made during the year. The level of revenue and profit growth delivered by both Hasgrove and Interactive Investor continued to exceed expectations over the course of the financial year. We are also confident that each of these businesses has the capability to generate further significant growth over the medium term and this bodes well for future NAV development.

The investment portfolio remains diversified both by number of holdings and by sector exposure. At the financial year end, the Company held investments in 83 active VCT qualifying companies and 18 non-qualifying investments.

These investments are spread across 30 different sectors.

Qualifying Investments

A review of the ten most meaningful contributors to performance from VCT qualifying investments (both positive and negative) follows:-

Largest Contributors

(bracketed figures represent the movement in value for the year under review or, if purchased during the year, since the date of investment)

MaxCyte (+£16.8 million) is a clinical-stage, cell-based therapies and life sciences business that has developed a leading, patented cell-engineering platform. MaxCyte's technology is employed by global pharmaceutical developers, biotechnology companies and academic institutions. MaxCyte has made good progress over the past year by substantially increasing sales of its proprietary Flow Electroporation platform to customers in the cell therapy market. Separately, the potential value of milestone payments, which may be earned by MaxCyte from licensing deals, now exceeds $950 million and represents the company's greatest potential revenue stream. MaxCyte has also made strong operational progress during 2021, as it works towards commercialising its large-scale cell-engineering platform and associated consumables under the ExPERT™ brand. In June 2021, MaxCyte completed a dual-listing on Nasdaq Global Select Stock Market, raising over $200 million in additional capital. Management now plan to direct future investment into high-value, expansion opportunities by supporting its partners' clinical trials and through the commercial launch of therapies enabled by MaxCyte's technology.

Interactive Investor ('ii') (+£13.0 million) is an award-winning online investment platform. In recent years, ii has grown substantially through a combination of organic and acquisitive growth.

ii continued to perform strongly in the year under review, achieving further growth in customer numbers, trading volumes and revenues. As at 30 June 2021, total assets under administration increased to approximately £55 billion, helped in part by the acquisitions of The Share Centre and EQi. Strong trading continued through the first half of ii's financial year, particularly in the first quarter of 2021, driven by volatile market conditions, which led to record daily average trading volumes. In the first half of its financial year, ii's total revenue increased by 12% to £70.7 million, while EBITDA before exceptional items, declined by 2% to £27.6 million. The decline in EBITDA was attributable to an increase in resources directed at client service and operational improvements, which were consciously expanded in order to ensure a smooth migration and high level of retention of acquired clients. ii's management team expects profit margins to improve markedly once the integration process is complete. As a consequence of an improving outlook for profitability, the fair value of the Company's holding in ii has been increased to £546.43 per share, representing a total uplift of +43.0% on the reported fair value of £382.06 per share as at 30 September 2020.

Tracsis (+£6.4 million) is a technology company and a leading provider of software, hardware and consultancy services for the rail industry. Tracsis' software products include data capture, data analytics and transport planning services for the public events sector. Tracsis delivered strong operational and financial performance over the past twelve months. The relatively new management team is focused on integrating and consolidating the group's business divisions, in conjunction with the launch of a new, group-wide, Tracsis brand. In terms of commercial progress, Tracsis was recently awarded a new multi-year UK rail contract for its RailHub software, which builds upon the already strong performance of its Rail Technology and Services division. Tracsis is a highly cash generative business with a debt-free and robust balance sheet and is well positioned to benefit from a rising level of investment in digital railway services.

Augean (+£6.3 million) is a UK based operator of sustainable and compliance-led waste recycling, recovery, treatment and disposal services. Augean serves customers in the hazardous waste management, oil and gas, nuclear and radioactive industries. Augean has continued to grow in its key market of Energy from Waste (EfW) treatment and seen a recovery in both the construction, treatment and radioactive waste sectors, which were adversely affected in 2020 as a result of the Covid-19 pandemic. In the year under review, Augean received competing takeover bids from two potential acquirers; Morgan Stanley Infrastructure Inc. and Eleia Limited (an investment vehicle indirectly owned by a consortium of investment funds managed by Ancala Partners and Fiera Infrastructure). Following an auction process, the Board of Augean accepted a cash offer of 372 pence per share from Eleia. After the year end, it was confirmed that this offer had been approved by shareholders and on 20 October 2021 it was announced that Eleia had completed the acquisition of Augean for a total consideration of approximately £390 million. The VCT's share of the proceeds of £11.7 million were received on 3 November 2021.

Hasgrove (+£6.0 million) is the holding company for a wholly owned subsidiary called Interact. Interact is a fast growing global provider of corporate intranet solutions that operates a Software as a Service (SaaS) business model. Interact has continued to record strong growth in the year under review as its customers recognise that company-wide adoption of the software can quickly and significantly improve productivity, while also increasing employee engagement through its intelligent social intranet platform. In particular, Interact's core market in North America has remained a source of significant new business wins, with new corporate clients signing lucrative SaaS contracts, which have typically been of greater scale than in previous years. As a consequence, Hasgrove reported impressive results for its most recent financial year, which ended on 31 December 2020. Highlights of these results included an increase of 22% in group revenue to £19.9 million, which resulted in pre-tax profit growth of 92% to £5.5 million. As a result of the decision to switch to a SaaS model a few years ago, Interact is now benefiting from high levels of recurring revenues, which provides the management team with a high degree of visibility and confidence over future revenue and profit. At the beginning of 2021, the total amount of contracted revenue, including deferred income to be recognised in future accounting periods, was in excess of £34 million. As a consequence, Interact's profitability in current and future financial year periods is relatively predictable and an increased Fair Value can therefore be reasonably accurately ascribed to the Company's holding in Hasgrove. In recognition of strong growth, the carrying fair value was therefore raised to £17.84 per share, representing an increase of +23.9% on the reported fair value of £14.40 per share, as at the Company's prior financial year end.

Largest Detractors

Avacta Group (-£1.6 million) is a clinical stage biopharmaceutical specialist and a developer of diagnostics tools based on innovative and proprietary Affimer® and pre|CISION™ platforms. At the end of September, Avacta released interim results, which confirmed that the business continues to struggle to achieve widespread commercial adoption of its high quality Lateral Flow Tests. Financial results were therefore below original expectations and Avacta's share price has been under considerable pressure as a result.

Omega Diagnostics (-£1.2 million) is a business focused on providing specialist products to immunoassay, in-vitro diagnostics (IVD) market within the Health & Wellbeing sector. During the year, Omega released results for its financial year ended 31 March 2021. Because of the severe disruption caused by the pandemic, revenues did not grow as quickly as originally anticipated and the share price has suffered accordingly.

Abingdon Health (-£1.1 million) is a developer and manufacturer of high-quality rapid lateral flow tests. Unfortunately, throughout the year under review, Abingdon has been embroiled in a commercial dispute with the Department of Health and Social Care (DHSC), which translated into significantly lower than expected demand for its AbC-19 rapid antibody testing product. In addition, the DHSC continues to withhold payments due to Abingdon that amount to £6.7 million. This dispute remains unresolved, despite Abingdon's insistence that the contract was delivered to the DHSC on time, on budget and in full. As a result, Abingdon has failed to meet growth expectations in the twelve months since its initial listing on the FTSE AIM All-Share Index.

Genedrive (-£0.9 million) is a molecular diagnostics company that develops and commercialises low cost, rapid, versatile, and simple to use testing platforms for the diagnosis of infectious diseases. In its half yearly report, covering the six months to 31 December 2020, Genedrive was only able to generate nominal revenues as Covid-19 headwinds continued to impact its commercial operations. In September 2021, Genedrive raised £6 million in additional capital in order to fund the launch of a point-of-care (POC) antibiotic induced hearing loss (AIHL) test and complete the development of its molecular Covid-19 test.

Verditek (-£0.8 million) is a technology company, which designs and manufactures lightweight, flexible solar panels for installation in a diverse range of environments. In its recently released interim results for the six month period ended 30 June 2021, Verditek reported that its order pipeline had weakened due to global economic disruption brought about by the Covid-19 pandemic. Verditek also suffered a stock theft during the period from its manufacturing plant in Italy, which cost the business around £300,000. On the basis that economic uncertainty continues to recede, Verditek's management have expressed confidence that the outlook for the second half of the company's financial year is improving.

Non-Qualifying Investments

The non-qualifying investments held by the Company, are typically in larger, more liquid quoted companies that are listed in the FTSE 350 Index. Non-qualifying investments are normally held in the portfolio in lieu of cash, in order to generate additional dividend income for future distribution to Shareholders, while awaiting suitable VCT qualifying investment opportunities. In the main, these investments performed satisfactorily.

Offer for Subscription

The fully subscribed Offer for Subscription that closed in February 2021, was a welcome endorsement, in challenging times, of our successful long term strategy. The new monies raised have enabled us to continue the established and successful strategy of selectively growing the existing portfolio of investments, while providing much needed capital to emerging 'scale-up' businesses, which, in turn, should create further employment opportunities and, over time, generate meaningful additional tax revenues for HM Treasury.

Investment Activity

In terms of investment activity, the number and quality of available VCT qualifying investment opportunities examined during the period was at a level not seen for several years. As a result, a total of seventeen investments were completed in the financial year under review. Of these, twelve investments were in companies new to the portfolio, while five were follow-on investments.

In total, just under £30 million was committed to these investments which has helped ensure that the Company ended the financial year with a record percentage of its total assets being invested in VCT Qualifying companies. Another consequence of the increased level of investment activity during the year is that the Company is comfortably ahead of target in complying with one of the key rules imposed by HMRC, whereby 30% of new capital raised in a single tax year must be invested in VCT qualifying companies within 12 months of the end of the financial year in which the money was raised. This target has also been comfortably exceeded in all previous fundraisings to which this rule applies. The Company's requirement to maintain its VCT Status is at all times a top priority for the Board. It is for this reason that the amount of new capital raised under Offers for Subscription is carefully considered and controlled. In the year to 30 September 2021, the Company successfully raised £14.6 million net of costs, all of which has since been successfully deployed in further VCT Qualifying investments.

As highlighted in the table below, the majority of the investments made during the course of the year delivered a positive contribution to overall performance. In many cases, the share price return has exceeded expectations; both in terms of the speed and size with which such returns have been achieved.

Each of these new investments appears capable of generating significant capital growth in future years. It is important to emphasise however that, because of the rules surrounding VCTs, we are required to invest in businesses that are typically at a very early stage in their development. Clearly, this increases the risk of incurring capital losses, especially given that progress toward sustainable and growing profitability is rarely straightforward. For this reason, we adopt a pragmatic and prudent approach to new investments and have therefore taken the opportunity to make partial disposals of a number of strongly performing investments during the course of the year.

Realisations

In aggregate, £16.3 million was raised from the full and partial disposal of holdings during the year. As a reminder, the normal purpose of disposals is threefold; to ensure stock specific risk is contained, to lock in capital profits for future distribution to Shareholders via dividend payments and to help manage liquidity requirements.

Two notable takeover approaches were also received during the year; Augean and Wey Education, each of which received recommended bids from trade buyers. The net proceeds from the realisation of Wey Education amounted to £4.6 million, realising a capital gain on investment cost of £2.5 million. In the case of Augean, the transaction did not complete until after the end of the financial year, but the cash proceeds have now been received and a healthy capital profit in excess of £10.2 million over the lifetime of the holding has been realised. As a consequence of this one-off windfall profit, the Board is proposing a special interim dividend of 7.0 pence per share. We fully support this decision and hope that corporate activity may trigger further significant gains in future years. Although it is normally unwise to attempt to predict such events, there is nonetheless a realistic prospect that, as other portfolio companies mature, they may also attract the attention of corporate buyers.

A number of partial disposals in qualifying holdings together with full and partial disposals of non-qualifying investments were also made. These transactions generated total proceeds of £11.7 million and an aggregate capital profit of £8.4 million.

The total value of all disposals made during the year, which excludes Augean, therefore amounted to £16.3 million. Including partial disposals, the total realised capital gain over the life of the investments from the sale of investments amounted to £10.9 million.

Prospects

The financial year ended 30 September 2021 was characterised by an increasing sense of optimism that the global Covid-19 pandemic was slowly but surely being brought under control. The approval for use by the medical regulator of a number of effective vaccines in late 2020, enabled the UK government to roll-out a mass vaccination programme, which began in earnest in December 2020. The key result of this mass vaccination programme was a reduction in recorded Covid-19 cases and, where Covid-19 has been contracted by vaccinated individuals, their symptoms have typically been markedly less severe than at the height of the pandemic. As a consequence, the pressure on the National Health Service has eased considerably as the rate of hospitalisations and the need for intensive care services has declined.

Against this improving backdrop and with the prospect of further economic recovery to come, it would be logical to anticipate further strength in equity markets. Unfortunately, the global pandemic and the near total economic shutdown that it created has generated significant pent-up demand in many sectors. The subsequent lifting of restrictions has been somewhat akin to a cork popping from a bottle of champagne. Across many sectors, demand for basic goods and services has exploded in the short term, causing significant dislocation in the worldwide supply chain and putting huge pressure on the ability of firms to satisfy the resurgence in demand for goods and services. While this spike in demand may well prove to be a temporary phenomenon, it has nonetheless triggered a serious and immediate surge in the rate of inflation as the cost of goods and labour in particular have inevitably risen sharply. It is perhaps doubtful that the shortages currently being experienced will persist, but it is far less likely that the increase in costs generally will quickly reverse now that the inflationary genie has been released from the bottle. In a gloomy, but realistic scenario, it may well turn out that the UK economy could experience a period of stagflation, in which economic growth is tepid at best and yet rising costs continue to put a real strain on consumers' discretionary spending power. This scenario would clearly be bad news, and it is for this reason that investors appear to have become increasingly risk averse in recent weeks.

In addition, the incidence of Covid-19 infection among the UK population has recently been climbing sharply. Although the severity of illness suffered generally appears to be less severe than at the height of the pandemic, there is nonetheless growing criticism of the Government's current policy, which is to try and avoid a reintroduction of restrictions and a possible return to national lockdowns.

As a consequence of these factors, the start of the current financial year has been somewhat challenging, with signs of profit-taking evident across a number of previously strongly performing sectors.

Shareholders should therefore be mindful that the prospects for delivering further progress in the Company's net asset value in the current financial year are less obvious, especially in view of the strong returns delivered in the financial year under review.

Despite the obvious challenges, the portfolio remains in good health, with the majority of investee companies continuing to trade strongly and operating with balance sheets that are sufficiently robust to ensure that they successfully navigate any short term turbulence.

As ever, we focus on nurturing the established and diverse portfolio of investee companies in order that they may continue to generate healthy returns for Shareholders over the longer term, while simultaneously seeking to support emerging businesses through the provision of much needed capital.

Chris Hutchinson

Unicorn Asset Management Limited

7 December 2021

Financial and Performance Review

Net Assets

As at 30 September 2021, the audited net assets of the Company were £370.8 million, compared to £260.2 million on 1 October 2020. The growth in total net assets was due to the support received from new and existing Shareholders under the Offer for Subscription, which raised £14.6 million net of costs, and the strong performance from the investment portfolio as shown in the Income Statement below.

Performance during the year

As at 30 September 2021, the audited NAV of the Company was 248.6 pence per share, having risen by 70.0 pence from 178.6 pence per share at the start of the financial year under review, compared with a rise of 24.7 pence per share in the year ended 30 September 2020. After adding back dividends of 6.5 pence per share paid in the year, the total return to Shareholders increased by 76.5 pence or 42.8% compared with an increase of 31.2 pence or 20.3% in the previous year. In comparison, the total return from the FTSE AIM All-Share Total Return Index was 30.8% over the year to 30 September 2021.

At the financial year end, there were 83 active VCT qualifying and 18 non-qualifying companies held in the portfolio. These investments are spread across 30 different sectors.

In the year to 30 September 2021, a total of £16.3 million was realised through the sale of investments, approximately £29.5 million was deployed in new investments and approximately £9.5 million was paid out as dividends to Shareholders. A further £6.8 million was spent on the operating costs of the Company and £6.3 million on share buybacks.

Share Issues and Buybacks

The Company raised £14.6 million (after costs) through the Offer for Subscription and issued 6,314,627 shares, details of which are given in note 13 on page 66 of the Annual Report.

In addition, the Company allotted 342,947 shares under the Dividend Reinvestment Scheme ("DRIS") at an average price of 229.0 pence per share.

During the year a total of 3,204,997 (2020: 3,072,006) shares were bought back for cancellation for a total cost of £6.3 million (2020: £4.1 million).

Total Return

The Company generates returns and losses from both capital growth and dividend income. For the year ended 30 September 2021, the total return was £111.1 million (2020: £47.5 million), of which there was a £111.6 million gain (2020: £47.7 milli0n gain) from capital and a £0.5 million loss (2020: £0.2 million loss) from revenue. Full details of the total return can be found in the Income Statement below. The Company's allocation of expenses is described in Note 1 (f) on page 59 of the Annual Report.

The total net earnings per share were 75.0p (2020: 34.6p). The total net return per share was made up of 75.4p from capital and a loss of 0.4p from revenue.

Revenue Return

The income of £1.7 million (2020: £1.6 million) represents dividend income derived from the Company's investments, interest on loan stocks and interest on cash balances.

Capital Return

At the year end the investment portfolio was valued at £368.6 million (2020: £239.6 million). The investment portfolio delivered a realised return on disposals of £6.7 million (2020: £0.3 million) and unrealised valuation gains on investment of £109.1 million (2020: £50.5 million). The valuation basis of the Company's investments is described in Note 1 (c) on page 58 of the Annual Report. On addition a capital dividend of £0.3 million was received.

Ongoing Charges and Running Costs

The Ongoing Charges of the Company for the financial year under review represented 2.0% (2020: 2.2%) of average net assets, which remains below the cap of 2.75%.

The total expenses amounted to £6.8 million (2020: £4.9 million) and include investment management fees of £6.1 million (2020: £4.2 million), administrative service fees of £0.2 million (2020: £0.2 million) and other third-party service providers fees of £0.2 million (2020: £0.2 million).

Under the revised management agreement effective from 1 October 2018 and as shown in note 3, the Investment Manager receives a management fee of 2% per annum of net assets up to £200 million and 1.5% per annum of net assets in excess of £200 million (other than on investments in OEICs managed by the Investment Manager). Other expenses are shown in note 4 on page 61 of the Annual Report.

Further information in respect of the Company's performance can be found in the Financial Highlights above.

Cash and Cash Equivalents

During the year the Company increased its cash balances through the Offer for Subscription and the sale of investments. The purchase of investments, the payment of running costs, share buybacks and dividends reduced the cash balance at the year end to 3.6 million (2020: £21.4 million).

Key Performance Indicators

The Board uses the key indicators below as Alternative Performance Measures ("APM's") to measure the Investment Manager's performance, thereby helping Shareholders to assess how the Company is performing against its objective.

- NAV per share, cumulative dividends paid and cumulative total Shareholder return

- Earnings per share

- Annual and cumulative total return

- 5 year NAV and share price comparison

- Running costs

Further details can be found on pages 20 and 21 of the Annual Report.

The Company and its Business Model

The Company is registered in England and Wales as a Public Limited Company (registration number 04266437) and is approved as a Venture Capital Trust ("VCT") under section 274 of the Income Tax Act 2007 (the "ITA"). In common with many other VCTs, the Company revoked its status as an investment company as defined in section 266 of the Companies Act 1985 on 17 August 2004, to make it possible to pay dividends from capital. A summary of the VCT regulations is shown on page 77 of the Annual Report.

The Company's shares are listed on the London Stock Exchange main market under the code UAV and ISIN GB00B1RTFN43.

The Company is an externally managed fund with a Board currently comprising four non-executive Directors. Investment management and operational support are outsourced to external service providers, with the strategic and operational framework and key policies set and monitored by the Board as described in the diagram on page 22 of the Annual Report. Further information on the service providers is outlined in the Corporate Governance Statement on pages 42 and 43 of the Annual Report.

The Board has overall responsibility for the Company's affairs including the determination of its investment policy. Risk is spread by investing in a number of different businesses across different industry sectors. The Investment Manager is responsible for managing sector and stock specific risk and the Board does not impose formal limits in respect of such exposures. However, in order to maintain compliance with HMRC rules and to ensure that an appropriate spread of investment risk is achieved, the Board receives and reviews comprehensive reports from the Investment Manager on a monthly basis. When the Investment Manager proposes to make any investment in an unquoted company, the prior approval of the Board is required.

A summary of the relationship between the Board, the Company's Shareholders and the external service providers is depicted on page 22 of the Annual Report.

The Board's Strategy

Investment Objective

The Company's objective is to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maintaining a steady flow of dividend distributions to Shareholders from the income as well as capital gains generated by the portfolio.

It is also the objective that the Company should continue to qualify as a Venture Capital Trust, so that Shareholders benefit from the taxation advantages that this brings. To achieve this at least 80% for accounting periods commencing after 6 April 2019 (previously 70%) of the Company's total assets are to be invested in qualifying investments of which 70% by VCT value (30% made in respect of investments made before 6 April 2018 from funds raised before 6 April 2011) must be in ordinary shares which carry no preferential rights (save as permitted under VCT rules) to dividends or return of capital and no rights to redemption.

Investment Policy

In order to achieve the Company's investment objective, the Board has agreed an investment policy which requires the Investment Manager to identify and invest in a diversified portfolio, predominantly of VCT qualifying companies quoted on AIM that display a majority of the following characteristics:

· experienced and well-motivated management;

· products and services supplying growing markets;

· sound operational and financial controls; and

· potential for good cash generation, in due course, to finance ongoing development and support for a progressive dividend policy.

Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. No single holding may represent more than 15% (by VCT value) of the Company's total investments and cash, at the date of investment.

There are a number of VCT conditions which need to be met by the Company which may change from time to time. The Investment Manager will seek to make qualifying investments in accordance with such requirements.

Asset mix

Where capital is available for investment while awaiting suitable VCT qualifying opportunities or is in excess of the 80% VCT qualification threshold for accounting periods commencing after 6 April 2019 (previously 70%), it may be held in cash or invested in money market funds, collective investment vehicles or non-qualifying shares and securities of fully listed companies registered in the UK.

Borrowing

To date the Company has operated without recourse to borrowing. The Board may, however, consider the possibility of introducing modest levels of gearing up to a maximum of 10% of the adjusted capital and reserves, should circumstances suggest that such action is in the interests of Shareholders.

The effect of any borrowing is discussed further on page 35 of the Annual Report under "AIFMD".

Key Policies

The Board sets the Company's policies and objectives and ensures that its obligations to Shareholders are met. Besides the Investment Policy already referred to, the other key policies set by the Board are outlined below.

Dividend policy

The Board remains committed to a policy of maintaining a steady flow of dividend distributions to Shareholders from the income and capital gains generated by the portfolio. Total dividends of 6.5 pence per share were paid during the year which amounted to approximately £9.6 million.

The ability to pay dividends and the amount of such dividends is at the Board's discretion and is influenced by the performance of the Company's investments, available distributable reserves and cash, as well as the need to retain funds for further investment and ongoing expenses.

The Company paid an interim dividend during the year of 3.0 pence per share on 12 August 2021.

The Directors are recommending a final dividend of 3.5 pence per share for approval at the Annual General Meeting to be held on 3 February 2022. This would bring total dividends to 6.5 pence per share for the year under review.

On 22 November 2021, the Board declared a special interim dividend of 7.0 pence per share, which will be payable on 10 February 2022 to Shareholders on the register on 6 January 2022. This dividend will be in respect of the accounting year ending 30 September 2022.

The special interim dividend is a one off payment which was declared following the successful disposal of our investment in Augean, one of the portfolio's larger holdings, which has been acquired by a trade buyer and delisted.

Details of the Company's Dividend Reinvestment Scheme are outlined on page 74 of the Annual Report.

Share buybacks and discount policy

The Board believes that it is in the best interests of the Company and its Shareholders to make market purchases of its shares from time to time.

There are three main advantages to be gained from maintaining a flexible approach to share buybacks; namely:

1. Regular share buybacks provide a reliable mechanism through which Shareholders can realise their investment in the Company, rather than being reliant on what is typically a very limited secondary market.

2. Share buybacks, when carried out at a discount to underlying net assets, help modestly to enhance NAV per share for continuing Shareholders.

3. Implementing share buybacks on a regular basis helps to control the discount to NAV.

The Board agrees the level of discount to NAV at which shares will be bought back and keeps this under regular review. The Board seeks to maintain a balance between the interests of those wishing to sell their shares and continuing Shareholders.

The Company has continued to buy back shares for cancellation at various points throughout the financial year in accordance with the above policy. Details of the shares purchased for cancellation are shown on pages 18 and 66 of the Annual Report. At the financial year end, the Company's shares were quoted at a mid-price of 219.0 pence per share representing a discount to NAV per share of 11.9%.

The Board intends to continue with the above buyback policy. Any future repurchases will be made in accordance with guidelines established by the Board from time to time and will be subject to the Company having the appropriate authorities from Shareholders and sufficient funds available for this purpose. Share buybacks will also be subject to prevailing market conditions, Market Abuse Rules and any other applicable law at the relevant time. Shares bought back are cancelled.

Principal and Emerging Risks

The Directors have carried out a review of the principal and emerging risks faced by the Company as part of the internal controls process, as outlined below. Note 17 to the Financial Statements on page 67 to 72 of the Annual Report also provides information on the Company's financial risk management objectives and exposure to risks. The Directors process for monitoring risks is shown below.

During the year the Board has reviewed in detail our approach to risk. We have added an additional key risk calling it 'Emerging Risks' and added detail to both the risks faced by the Company and the mitigating steps being taken by both the Board and the Company's service providers to reduce the impact of each risk. The results have been summarised in a heat map and are reviewed for sensitivity quarterly.

During the review with the key service providers evidence was requested of the mitigating actions being taken and on which the Board is relying. Balance sheet reconciliations, asset valuations and VCT qualification being examples of such reviews.

The Board is responsible for assessing the possibility of new and emerging risks and has identified climate change and possible labour and material shortages as emerging risks.

The Regulatory Environment

The Board and Investment Manager are required to consider the regulatory environment when setting the Company's strategy and making investment decisions. A summary of the key considerations is outlined below.

Human rights

The Board seeks to conduct the Company's affairs responsibly and expects the Investment Manager to consider human rights implications when making investment decisions.

Recruitment and succession planning

The Board undertakes a continuous review to assess its composition in the future and undertake succession planning. Jocelin Harris has served on the Board for fifteen years and has indicated his intention to stand down in 2022. The Board have engaged an outside recruitment agency with the view to identifying a suitable candidate for appointment to the Board.

The Board's policy on the tenure of the Chair is set out on page 42 of the Annual Report.

Diversity

The Directors are aware of the need to have a Board which, as a whole, comprises an appropriate balance of skills, experience and diversity. Appointments to the Board are made according to expertise and knowledge. Throughout the year under review the Board comprised three male and one female non-executive Directors.

Anti-bribery, corruption and tax evasion policy

The Company has a zero tolerance approach to bribery. It is the Company's policy to conduct all of its business in an honest and ethical manner and it is committed to acting professionally, fairly and with integrity in all its business dealings and relationships where it operates.

Directors and service providers must not promise, offer, give, request, agree to receive or accept a financial or other advantage in return for favourable treatment, to influence a business outcome or to gain any other business advantage on behalf of themselves or of the Company or encourage others to do so.

The Company has communicated its anti-bribery policy to each of its service providers. It requires each of its service providers to have policies in place which reflect the key principles of this policy and procedures and which demonstrate that they have adopted procedures of an equivalent standard to those instituted by the Company.

Further information relating to the Company's anti-bribery policy can be found on its website: www.unicornaimvct.co.uk. A full copy of the VCT's anti-bribery policy and procedures can be obtained from the Company Secretary by sending an email to: unicornaimvct@iscaadmin.co.uk.

Environmental and social responsibility

The Board has determined to be a responsible investor by which we mean choosing and working with investments that are sustainable, responsible and ethical. This we describe as ESG.

With the exception of our few unquoted investments our Investment Manager has the mandate to invest on our behalf and so we are reliant upon the processes and practices of Unicorn Asset Management ("UAM") to deliver our policy. Over the last 15 months Unicorn have developed their ESG processes signing up to the UN Principles of Responsible Investing ("UNPRI") and making progress towards meeting the requirements of the UK Stewardship Code managed by the Financial Reporting Council ("FRC"). This has resulted in defining certain 'no-go sectors', setting-up an ESG questionnaire for new investments and reviewing the practices of existing portfolio companies. During the coming year we will be reviewing our portfolio to confirm our compliance with these expectations and will update you on our findings.

In relation to the Company's own practices the Company encourages electronic communication to reduce paper usage, has withdrawn our dividend by cheque service and the printing of the Half Yearly Report and has taken advantage at times of electronic meetings. Where we are required to print the Annual Report we will use recycled paper and offset our carbon footprint.

Viability Statement

The Board' assessment of the ability of the Company to meet all liabilities when due and that it can continue to operate for a period of at least twelve months from the date of signing the Annual Report is shown on page 35 of the Annual Report.

Under the UK Corporate Governance code there is a requirement that the Board performs a robust assessment of the Company's principal and emerging risks and the disclosures in the Annual Report that describe the principal risks and the procedures in place to identify emerging risks and explain how they are being managed or mitigated. The last review was performed in November 2021.

The Directors have considered the viability of the Company as part of their continuing programme of monitoring risk and conclude that five years is a reasonable time horizon to consider the continuing viability of the Company. This is also in line with the requirement for the Company to continue in operation so investors subscribing for new shares issued by the Company can hold their shares for the minimum five year period to allow them to benefit from the tax incentives offered when those shares were issued. The last allotment of shares being in April 2021.

In order to maintain viability, the Company has a detailed heat map risk control framework which has the objective of reducing the likelihood and impact of: poor judgement in decision-making, risk-taking that exceeds the levels agreed by the Board, human error, or control processes being deliberately circumvented. These controls are reviewed by the Board on a regular basis to ensure that controls are working as prescribed. In addition, formal reviews of all service providers are undertaken annually and activity is monitored at least monthly.

In its assessment of the viability of the Company, the Board has recognised factors such as the continuation of the current State Aid regulations, the ability of the Company to raise money from future Offers for Subscription and there being sufficient VCT qualifying investment opportunities available.

The Directors consider that the Company is viable for the five year time horizon for the following reasons:

■ At the year end the Company had a diversified investment portfolio in addition to its VCT qualifying investments comprising: £14.1 million invested in non-qualifying, fully listed shares which are readily realisable and a further £11.2 million in open ended funds and cash. The Company therefore has sufficient immediate liquidity in the portfolio for any near-term requirements.

■ The ongoing charges ratio of the Company as calculated using the AIC recommended methodology equates to 2.0% of net assets.

■ The Board anticipates that there will continue to be suitable qualifying investments available that will enable the Company to maintain its operations successfully over the five year time horizon.

■ The Company has no debt or other external funding apart from its ordinary shares.

■ The payment of dividends and buybacks are at the discretion of the Board.

The Directors have also considered the viability of the Company should there be a slowdown in the economy or a correction of the markets leading to lower dividend receipts and asset values. As stated above Ongoing Charges equate to 2.0% of net assets of which the Investment Management fee (as reduced by the Company's investments in Unicorn funds) equates to 2.0% of net assets up to £200 million and 1.5% of net assets in excess of £200 million. In November 2021 the Company entered into an agreement with the Investment Manager to reduce fees to 1% for any assets exceeding £450 million. As these fees are based on a percentage of assets any fall in the value of net assets will result in a corresponding fall in the major expense of the Company.

The Directors have concluded that there is a reasonable expectation that the Company can continue in operation over the five year period.

The prospects for the Company are discussed in detail in the Outlook section of the Chairman's Statement above.

For and behalf of the Board

Tim Woodcock

Chairman

7 December 2021

EXTRACT FROM DIRECTORS' REPORT

Share Capital

At the year-end there were 149,185,118 (2020: 145,732,541) Ordinary shares of 1p each in issue, none of which are held in Treasury. The issues and buybacks of the Company's shares during the year are shown in note 13 on page 66 of the Annual Report. No shares have been bought back subsequent to the year end, therefore, at the date of this announcement the Company had 149,185,118 shares in issue. All shares are listed on the main market of the London Stock Exchange.

Going concern

After due consideration, the Directors believe that the Company has adequate resources for a period of at least 12 months from the date of the approval of the Financial Statements and that it is appropriate to apply the going concern basis in preparing the Financial Statements. As at 30 September 2021, the Company held cash balances of £3.6 million, £14.1 million in fully listed stocks and £7.6 million in Unicorn OEIC funds. The majority of the Company's investment portfolio remains invested in qualifying and non-qualifying AIM traded equities which may be realised, subject to the need for the Company to maintain its VCT status. The cash flow projections taking into account any assessable impacts of Covid-19 and covering a period of at least twelve months from the date of approving the Financial Statements have been reviewed and show that the Company has access to sufficient liquidity to meet both contracted expenditure and any discretionary cash outflows from buybacks and dividends. The Company has no borrowings in place and is therefore not exposed to any gearing covenants.

The full Annual Report and Accounts contains the following statement regarding responsibility for the Financial Statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the Company's Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP') (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period.

In preparing these Financial Statements the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- state whether they have been prepared in accordance with UK GAAP subject to any material departures disclosed and explained in the Financial Statements; and

- prepare a Director's Report, a Strategic Report and Director's Remuneration Report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report and accounts, taken as a whole, are fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

Website publication

The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.

Directors' responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

• The Financial Statements have been prepared in accordance with UK GAAP and give a true and fair view of the assets, liabilities, financial position and profit of the Company.

• The Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Tim Woodcock

Chairman

7 December 2021

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended 30 September 2021 or 30 September 2020 but is derived from those accounts. Statutory accounts for the year ended 30 September 2020 have been delivered to the Registrar of Companies and statutory accounts for the year ended 30 September 2021 will be delivered to the Registrar of Companies in due course. The Auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's reports can be found in the Company's full Annual Report and Accounts at www.unicornaimvct.co.uk.

PRIMARY FINANCIAL STATEMENTS

Income Statement

for the year ended 30 September 2021

All revenue and capital items in the above statement derive from continuing operations of the Company.

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with applicable Financial Reporting Standards ("FRS"). The supplementary revenue return and capital return columns are prepared in accordance with the Statement of Recommended Practice ("AIC SORP") issued in October 2019 by the Association of Investment Companies.

Other than revaluation movements arising on investments held at fair value through profit or loss, there were no differences between the profit as stated above and at historical cost.

The notes below form part of these financial statements.

Statement of Financial Position

as at 30 September 2021

The financial statements were approved and authorised for issue by the Board of Directors on 7 December 2021 and were signed on their behalf by:

Tim Woodcock

Chairman

The notes below form part of these financial statements.

Statement of Changes in Equity

for the year ended 30 September 2021

* The special reserve and profit and loss account are distributable to Shareholders. The cancellation of the Share premium account and Capital redemption reserve was approved by the Court on 26 March 2019.

The notes form part of these financial statements.

Statement of Cash Flows

for the year ended 30 September 2021

The notes below form part of these financial statements.

Notes to the Financial Statements

for the year ended 30 September 2021

1 Accounting policies

A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out on pages 58 and 59 of the Annual Report.

a) Basis of accounting

The Financial Statements have been prepared under FRS 102 and the SORP issued by the Association of Investment Companies in October 2019.

In accordance with the requirements of FRS 102, those undertakings in which the Company holds more than 20% of the equity as part of an investment portfolio are not accounted for using the equity method. In these circumstances the investment is measured at "fair value through profit or loss". The Company is exempt from preparing consolidated accounts under the investment entities exemption as permitted by FRS 102.

The Financial Statements have been prepared on a going concern basis under the historical cost convention, except for the measurement at fair value of investments designated as fair value through profit or loss. The Directors' assessment of the Company as a going concern is given on page 35 of the Annual Report.

As a result of the Directors' decision to distribute capital profits by way of a dividend, the Company revoked its investment company status as defined under section 266(3) of the Companies Act 1985, on 17 August 2004.

2 Income

3 Investment Management fees

With effect from 1 January 2022, the management fee will be amended as follows:

At 30 September 2021, employees of the Investment Manager held 1,402,965 shares in the Company.

During the year, Unicorn Asset Management Limited ("UAML") received an annual management fee of 2% of the net asset value of the Company, excluding the value of the investments in the OEICs, up to net assets of £200 million and 1.5% of net assets in excess of £200 million.

If the Company raises further funds during a quarter the net asset value for that quarter is reduced by an amount equal to the amount raised, net of costs, multiplied by the percentage of days in that quarter prior to the funds being raised. The annual management fee charged to the Company is calculated and payable quarterly in arrears. In the year ended 30 September 2021, UAML also earned fees of £52,000 (2020: £46,500), being OEIC management fees calculated on the value of the Company's holdings in each OEIC on a daily basis. This management fee is 0.75% per annum of the OEIC value for each of Unicorn UK Smaller Companies OEIC, Unicorn UK Growth OEIC (formerly Unicorn Free Spirit OEIC) and Unicorn UK Ethical Fund OEIC.

The management fee will be subject to repayment to the extent that the annual costs of the Company incurred in the ordinary course of business have exceeded 2.75% of the closing net assets of the Company at each year end. There was no excess of expenses for year 2020/21 or the prior year.

4 Dividends

* The amount paid in dividends for 2020 differs from that shown in last year's Annual Report as the dividend was allocated to capital.

# The difference between total dividends and that shown in the Cash Flow Statement is £785,000 which is the amount of dividends reinvested under the DRIS.

The proposed final dividend is subject to approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

Set out below are the total income dividends payable in respect of the 2020/21 financial year, which is the basis on which the requirements of Section 274 of the Income Tax Act 2007 are considered.

5 Basic and diluted earnings and return per share

Notes

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

b) Revenue earnings per share is net revenue after taxation divided by the weighted average number of shares in issue during the year.

c) Capital earnings per share is total capital return divided by the weighted average number of shares in issue during the year.

There are no instruments in place that will increase the number of shares in issue in future. Accordingly, the above figures currently represent both basic and diluted returns.

6 Investments at fair value

Transaction costs on the purchase and disposal of investments of £11,000 were incurred in the year. These have not been deducted from realised gains shown above of £6,752,000 but have been deducted in arriving at gains on realisation of investments disclosed in the Income Statement of £6,741,000.

The shares delisted during the year relates to HML Holdings.

Note: Permanent impairments of £7,075,000 were held in respect of losses on quoted investments held at the previous year end. Additional impairments of £2,164,000 provided for in the year relate to Crawshaw Group, £1,539,000 and Syndicate Room, £625,000. A reduction in impairments of £2,275,000 was made relating to the sale of APC Technologies.

Reconciliation of cash movements in investment transactions

The difference between the purchases in Note 6 and that shown in the Cash Flows is £23,000 which represents the reinvested dividends on the Unicorn Ethical Fund. The difference between the sale proceeds in Note 6 and that shown in the Cash Flows is £524,000 which represents settlement of the trade outstanding included in debtors at 30 September 2020.

7 Net asset value

8 Post balance sheet events

On 20 October 2021, Augean announced its Scheme of Arrangement became effective and Shareholders would receive 372 pence per share, payable on 3 November 2021. The Company received proceeds of £11.7 million on 3 November 2021.

On 22 November 2021, the Board declared a special interim dividend of 7.0 pence per share, which will be payable on 10 February 2022 to Shareholders on the register on 6 January 2022. This dividend will be in respect of the accounting year ending 30 September 2022.

On 2 December 2021, abrdn plc announced plans for the acquisition of Interactive Investor for a consideration of £1.49 billion. The transaction is subject to regulatory and other approvals being received. Should this acquisition be successfully concluded, the Company's holding in Interactive Investor would be valued at approximately £54.5 million against a value of £43.2 million at 30 September 2021.

9 Capital commitments and contingent liabilities

There were no capital commitments or contingent liabilities at 30 September 2021 (2020: nil).

10 Shareholder information

Dividend

The special interim dividend declared by the Board on 22 November 2021 of 7.0 pence per share, will be paid on 10 February 2022, to Shareholders on the register on 6 January 2022.

In addition, the Directors have proposed a final dividend of 3.5 pence per share. Subject to Shareholder approval, the dividend will also be paid on 10 February 2022 to Shareholders on the Register on 6 January 2022.

The Board has previously decided the Company will in future pay all cash dividends by bank transfer rather than by cheque.

Shareholders will have the following options available for future dividends:

 • Complete a bank mandate form and receive dividends via direct credit to a UK domiciled bank account.

 • Reinvest the dividends for additional shares in the Company through the Dividend Reinvestment Scheme (DRIS).

For those Shareholders who previously received their dividend by cheque and who have not provided their bank details to the Registrar, a bank mandate form will be available on the Company's website. Once completed the form should be sent to the Company's Registrars, City Partnership at the address shown on page 78 of the Annual Report. If Shareholders have any questions regarding the completion of the form, they are advised to contact the City Partnership on 01484 240910 or by email: registrars@city.uk.com.

Dividend Reinvestment Scheme

Shareholders may elect to reinvest their dividends by subscribing for new shares in the Company. Shares will be issued at the latest published Net Asset Value prior to the allotment. For details of the scheme see the Company's website www.unicornaimvct.co.uk/dividend-reinvestment-scheme or contact the scheme administrators, The City Partnership, on 01484 240910.

11 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 2021 will be sent to Shareholders shortly and will then be available for inspection at Suite 8, Bridge House, Courtenay Street, Newton Abbot TQ12 2QS, the registered office of the Company. Copies of the Annual Report will shortly be available on the Company's website, www.unicornaimvct.co.uk. Statutory accounts will be delivered to the Registrar of Companies after the Annual General Meeting.

12 Annual General Meeting

The Annual General Meeting of the Company will be held at 11.30 am on Thursday, 3 February 2022 at The Great Chamber, The Charterhouse, Charterhouse Square, London EC1M 6AN. It is hoped that Shareholders will be able to attend this meeting in person, arrangements for the meeting are detailed on pages 35 and 36 of the Annual Report. Voting on all Resolutions will be conducted on a poll including all proxy votes submitted. The Notice of the meeting is included on pages 79 to 83 of the Annual Report and a separate proxy form has been included with Shareholders' copies of the Annual Report. Proxy forms should be completed in accordance with the instructions printed thereon and sent to the Company's Registrars, The City Partnership (UK) Limited, at the address given on the form, to arrive no later than 11.30am on 1 February 2022. Please note that you can vote your shares electronically athttps://proxy-unicorn.cpip.io/.

13 National Storage Mechanism

A copy of the 2021 Annual Report and Accounts will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Contact details for further enquiries:

Chris Hutchinson of Unicorn Asset Management Limited (the Investment Manager), on 020 7253 0889.

Jon Carslake at ISCA Administration Services Limited (the Company Secretary) on 01392 487056 or by e-mail on unicornaimvct@iscaadmin.co.uk 

DISCLAIMER

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