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 2020

The full Annual Report and Accounts for the year ended 30 September 2020 can be found on the Company's website www.unicornaimvct.co.uk

FINANCIAL HIGHLIGHTS

(for the year ended 30 September 2020)

· Net asset value ("NAV") total return for the year ended 30 September 2020, after adding back the dividends of 6.5p paid in the year, rose by 20.3%

· Final dividend of 3.5p proposed for the financial year ended 30 September 2020

· Offer for Subscription raised £24.2 million (after costs)

Fund performance

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

+ The Board has recommended a final dividend of 3.5p per share for the year ended 30 September 2020 bringing total dividends for the year to 6.5 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 64.5p.

# 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 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 2020.

Introduction

This is my first Annual Report since taking over the Chair following the Annual General Meeting (AGM) in January 2020. At the time of the AGM, the global economy was functioning in a relatively normal fashion, albeit the emergence of a Coronavirus ("Covid-19") was just beginning to be discussed as a possible threat to health. Within a very short space of time however, any expectation of 2020 being considered a 'normal' year had been abandoned. As we all now fully appreciate, the Covid-19 pandemic has had a dramatic impact on all countries around the world. Your Board, alongside every other business, has had to respond and adapt to the new environment. The Company's key service providers, including the Company Secretary and the Investment Manager, have successfully adapted to remote working. The adoption of video-conferencing technology has helped us to successfully conduct scheduled Board Meetings. As a consequence of these changes, all important aspects of the day to day running of the Company continue to function as normal.

While a more detailed analysis of performance is contained within the Investment Manager's Review, I am delighted to report that the Company has enjoyed an exceptionally strong year in terms of both absolute and relative performance as shown in the Investment Performance Review section below.

Economic & Market Review

The year under review has been remarkable in so many respects. The period commenced in fairly standard fashion, dominated by the usual concerns surrounding political division and economic uncertainty. By the time of the Company's AGM in January however, the world had started to change dramatically. Clearly, the effects of what rapidly developed into a worldwide pandemic have been enormous and are now much more clearly understood. Restrictions on social and economic activity have inevitably had a major impact on economies, on businesses and, most important, on people around the world. Many governments have sought to mitigate these effects by introducing unprecedented levels of financial support to businesses and individuals. In the UK, these measures have provided much needed protection to some of the hardest hit sectors of the economy.

As far as the performance of equity markets was concerned, the initial response by investors to the pandemic was distinctly negative, resulting in a rapid and steep decline in the value of indices worldwide. For example, by the time your Company reached the half way point of its financial year at 31 March 2020, the FTSE AIM All-Share Index had fallen by 21.3% on a total return basis. Equity markets soon began a sustained recovery however, as global asset allocators generally began to reduce exposure to bonds and direct property investment, while increasing their allocation to equities. In addition, it became evident that businesses operating in certain sectors, including technology and life sciences, were likely to benefit from the pandemic, which, helped to further fuel the rally in global equity markets.

By the end of the financial year, the FTSE AIM All-Share Index had recovered all of the losses incurred during the main sell-off in March.

The upturn in equity markets was driven by a number of key sectors, to which the Company is fortunate to have good exposure, most notably: financial services, healthcare, life-sciences, technology and computer gaming businesses. On the other hand, those businesses dependent on consumer spending, especially those in the retail, hospitality and leisure sectors, suffered great hardship, mainly because their ability to generate revenues was severely curtailed as a consequence of the imposition of national lockdown measures. It is therefore of some small comfort that the Company has limited exposure to the most vulnerable sectors of the economy. Inevitably however, the investments made in businesses that operate in these areas have performed poorly.

Economic and market prospects over the course of the next few months are likely to remain highly unpredictable given the obvious risks, which include: the economic fallout from the re-introduction of lockdown restrictions, the consequences of the outcome from the BREXIT negotiations, and the potential consequences for UK/US trade following the recent presidential election in North America.

Investment Performance Review

Despite the social and economic disruption, the investment portfolio during the year ended 30 September 2020 has performed well. In absolute terms, Net Asset Value per share rose from 153.9 pence to 178.6 pence during the course of the financial year. After adding back the 6.5 pence per share of dividends paid during the year, this represents a positive total return of 20.3%. In relative terms, the total return of the Company out-performed that of the FTSE AIM All-Share Index by 9.3% and significantly outshone the negative total return of 18.1% generated by the FTSE 100 Index over the same period.

Given that the year under review was an extremely challenging one for all businesses, it is unsurprising that the NAV of the Company was more than usually volatile. Over the course of the financial year, NAV per share fluctuated significantly. Having started the financial year at 153.9 pence per share, NAV rose steadily to 173.6 pence per share on 31 December 2019. By 31 March 2020, the NAV had fallen to 128.4 pence. In the following six months, the Company's NAV recovered strongly to end the financial year at an all-time high of 178.6 pence per share.

Although, the financial year under review has been incredibly challenging, such difficult periods underline the benefits of a long-term approach to investment. This is especially true when applied to investment in venture capital funds. Over the nineteen years since launch, the Investment Manager has constructed a diverse portfolio of investments in businesses operating across a variety of sectors and at different stages of development. Many of these investee companies are relatively mature and have developed to the extent that they have become substantial in size. The core portfolio of VCT qualifying investments is made up of meaningful stakes held in relatively mature businesses that, in normal circumstances, would be expected to be profitable, cash generative, dividend paying and debt free. Despite the headwinds encountered during 2020, most of these businesses are therefore well-positioned to survive the tough times currently being experienced and, in time, ought to return to strong growth.

The level of dividend income received from investee companies has sadly, but inevitably, declined. During the year under review, dividends were paid, or proposed, by 37.9% of the companies held in the portfolio and total dividend income received amounted to £1.4 million. This figure represents a decline of 41.7% or £1.0 million when compared to the dividend income received in the previous financial year. In view of the changes to VCT legislation made in recent years, it is also no longer realistic to expect businesses, in which the Investment Manager now invests, to be mature enough initially to pay dividends; nor should they be expected to for a number of years.

In terms of liquidity and stock specific risk, the portfolio continues to be prudently managed. All of the investee companies in the top fifteen by value have a market capitalisation in excess of £65 million, while the largest is capitalised at more than £2 billion. The largest single holding accounts for around 11.6% of total net assets, while only 2 of the top fifteen investments are in unquoted companies and therefore categorised as being illiquid.

At the financial year end, the investment portfolio consisted of 74 active VCT qualifying companies and 20 non-qualifying companies.

Unquoted Investments

As you may have noted, the strong increase in NAV during the year was helped by the outstanding performance of two of our unquoted holdings, Interactive Investor and Hasgrove. As an AIM VCT we are conscious that this has increased our unquoted holdings to over 20% of NAV. Valuation of unquoted securities is initially proposed by the Investment Manager and is subject to review and final approval by the Board. It is inevitably more subjective than when there is a market quote to refer to and because the valuation exercise involves a great deal of work by all concerned it is only carried out at the end of each quarter as is the case with other VCTs. While we continue to announce an updated valuation each month end based on closing quoted market prices the full portfolio valuations at the quarter ends are disproportionally impacted by the changes in the unquoted valuations. Our policy is only to adjust the valuation of an unquoted holding at an intervening month end if it has been the subject of an announcement of a significant event or corporate action since the previous quarter end. We are of course delighted with the progress made by Interactive Investor and Hasgrove and hope that at some point the management teams at both may consider a flotation on the AIM market but in the meantime the Board feels it is important that all Shareholders understand how valuation of these two holdings and other unquoted investments are dealt with. The valuation process is described on page 41 of the Annual Report.

Net Assets

As at 30 September 2020, the audited net assets of the Company were £260.2 million, as compared to £201.1 million at the start of October 2019. Total net assets rose substantially in the year, partly due to the support received from new and existing Shareholders in the Offer for Subscription which raised £24.2 million, and partly because of strong share price performance delivered by a number of companies held within the portfolio.

Portfolio Activity

During the period, 3 new VCT qualifying investments were made, at a total cost of £4.2 million. In addition, £2.7 million of VCT qualifying capital was allocated across 8 of the existing investee companies, in order to support their further planned growth.

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 £4.7 million, realising an overall capital loss of £1.2 million. The Investment Manager also made a number of full and partial disposals of non-qualifying investments during the year. The total amount realised from these transactions was £6.1 million and the overall capital gain realised amounted in aggregate to £0.1 million.

The portfolio generated unrealised gains of £50.5 million in the year under review.

A more detailed analysis of investment activity and performance can be found in the Investment Manager's Review below.

Dividends

An interim dividend of 3.0 pence per share, for the half year ended 31 March 2020, was paid to Shareholders on 12 August 2020.

The Board is recommending a final dividend for the financial year ended 30 September 2020 of 3.5 pence per share (income: 0.0 pence; capital: 3.5 pence), payable on 11 February 2021 to Shareholders on the register as at 8 January 2021.

Subject to receiving Shareholders' approval for payment of the proposed final dividend, total dividends in respect of the financial year ended 30 September 2020, will be 6.5 pence per share. This represents a tax free yield to eligible UK Shareholders of 3.6% based on the year-end Net Asset Value of 178.6 pence per share and 4.6% based on a share price of 142.5 pence per share as at 30 September 2020.

Share Buybacks & Share Issues

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 period from 1 October 2019 to 30 September 2020, the Company bought back 3,072,006 of its own Ordinary Shares for cancellation, at an average price of 135.0 pence per share including costs.

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 continue to be subject to the Listing Rules and any applicable law at the relevant time. Shares bought back in the market are cancelled.

The Offer for Subscription mentioned above was launched and closed, fully subscribed, on 11 June 2020. The total raised, net of all costs, was £24.2 million and resulted in the issue of 17,832,898 new shares. On behalf of the Board, I would like to welcome all new Shareholders and to thank existing Shareholders for their continued support. As at 30 September 2020, there were 145,732,541 Ordinary Shares in issue.

Costs

The Board reviews the costs incurred by the Company on a regular basis and we remain focused on maintaining a competitively low ongoing charges ratio. During the year, total costs amounted to 2.2% of net assets, as calculated in accordance with the AIC's "Ongoing Charges" methodology. As at 30 September 2020, the Company was ranked in the lowest quartile for total ongoing charges by all VCTs.

VCT Status

No major changes to VCT legislation were announced during the year under review.

The most recent rule changes came into effect in the 2019/2020 tax year and were designed to ensure that capital is directed at young, developing businesses, which might otherwise find it difficult to secure funding to finance their plans for growth. One of the key tests, from accounting periods commencing after 6 April 2019, is the requirement for at least 80% (previously 70%) of net assets to be invested in qualifying companies. I am pleased to report that, excluding new capital raised in Offers for Subscription within the last three years, the Company's qualifying percentage at 30 September 2020 was 87.86% of assets by VCT value. 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 status. It will, of course, remain a key priority of the Board to ensure that the Company retains this status.

Annual General Meeting

The Board has been considering the potential impact of the Covid-19 pandemic on the arrangements for the Company's forthcoming AGM. Given current restrictions and the considerable uncertainty surrounding the future evolution of the pandemic, the Board has concluded that, in the interests of safety, the AGM will not follow the format of previous years. Instead, the AGM will be held on 4 February 2021, behind closed doors, without Shareholders being able to attend in person or online.

The Board will organise a Zoom presentation by the Investment Manager at 12 noon on 4 February 2021 and Shareholders are invited to view the presentation and submit questions to the Directors via email.

Further details of how Shareholders can vote, ask questions, and listen to this presentation are set out on page 32 of the Annual Report.

Outlook

The latest NAV at 30 November 2020 was 187.3 pence per share.

While preserving life and maintaining health will remain the UK Government's top priority, it is also attempting to: i) negotiate an acceptable trade deal with the European Union; and ii) manage the economy at a moment of extreme pressure and somehow provide sufficient fiscal and monetary support to keep households and businesses afloat.

It is therefore impossible to predict accurately the outcome of the current crisis, other than that political and economic concerns will continue to be overshadowed by the overwhelming imperative to bring the Covid-19 pandemic under control. The uncertainty surrounding when and how this will be achieved may well continue to unsettle equity markets and it is therefore probable that the Company's NAV performance will remain volatile.

As at the year end, the Company continued to hold substantial cash balances, which will enable the Investment Manager to continue providing financial support to the best VCT qualifying opportunities. It is particularly heartening to know that the Investment Manager has previously backed several businesses that are now actively engaged in the battle against Covid-19. As a consequence of all these factors, there is good reason to be optimistic that your Company will continue to thrive over the longer term.

Offer for Subscription for shares

The Company announced on 7 December 2020 that it intended to launch an Offer for Subscription to raise up to £15 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 2021.

Finally, I would like to wish you all continued good health during these difficult times.

Tim Woodcock

Chairman

16 December 2020

Investment Manager's Review

Introduction

The year under review will be remembered for the emergence of Covid-19. In view of the global crisis that has continued to unfold over the course of 2020, together, with the considerable attendant uncertainties that it has created, we are pleased with the positive performance generated during the year.

Performance Review

The year under review has been difficult for equity markets around the world, as the full implications of the pandemic started to become clear. Investor sentiment deteriorated markedly from the beginning of March 2020 as markets reacted to the inevitability of major economic disruption. During periods of heightened volatility, it is normal to see levels of risk aversion increase. In March 2020, most global equity markets went into freefall, as investors panicked about the emerging pandemic and its potentially devastating impact on the valuation of quoted companies around the world. In the UK, all FTSE Indices fell heavily. The Company's portfolio of quoted investments did not escape the carnage and, by the end of March, NAV had fallen by 16.6%. In the following six months to 30 September 2020, equity markets stabilised and the value of the portfolio recovered even more strongly, with NAV per share increasing by 39.1% from this reduced value.

The investment environment has been extremely challenging for well-understood and thoroughly discussed reasons. It is therefore heartening that the Company was able to end the financial year so strongly. In the face of such extreme challenges, the portfolio demonstrated remarkable resilience. Although a number of our investee companies inevitably suffered badly as the virus spread and the incidence of profit warnings increased, the negative impact of these setbacks was more than offset by strong performances from a meaningful proportion of the AIM-listed holdings in the portfolio. In addition, significant uplifts to the carrying values of two unquoted investee companies were made: Hasgrove and Interactive Investor, reflecting their strong and continued growth.

During the financial year, we invested in one AIM Initial Public Offering and in two businesses already listed on AIM, that had not previously been in the portfolio. In addition, 8 VCT-qualifying follow-on investments were made. Encouragingly, the share price performance of these new investments has been good, with all but three making a positive contribution to performance.

The investment portfolio remains diversified both by number of holdings and by sector exposure. At the financial year end, the Company held investments in 74 active VCT qualifying companies and 20 non-qualifying investments. These investments are spread across 27 different sectors.

Major Contributors to Performance

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

Interactive Investor (+£15.9 million) is an online investment platform, which provides retail investors with independent financial information, together with trading and portfolio management services for managing their investments. Interactive Investor has delivered strong growth in customer numbers, revenues and profits over the past 12 months, benefiting in part from significant economies of scale achieved from its acquisition of Alliance Trust Savings in June 2019 and The Share Centre in July 2020. Strong trading continued throughout the first half of Interactive's financial year, as volatile market conditions led to a sharp increase in daily average trading volumes. During this period, revenues increased by 62% to £63 million, while underlying pre-tax profit grew 295% to £26.2 million, reflecting high levels of operational leverage across the platform. Active customer numbers also grew strongly, increasing by 154% to over 340,000, while assets under administration are now in excess of £31 billion, making it the second largest online investment platform in the UK. As a consequence of this rapid growth, the Fair Value of the Company's holding in Interactive Investor, was increased to £382.06 per share, representing an increase of +111.1% on the reported Fair Value as at your Company's previous financial year end. To put this uplift in value in context, the Board of Interactive Investor issued new shares in July 2020 in part consideration for the acquisition of The Share Centre, which valued the acquiror at £675 million or £441.62 per share. The discount applied reflects the fact that Unicorn AIM VCT is a minority shareholder in a privately owned business, controlled by the private equity firm J C Flowers, and the illiquid nature of the investment. We are delighted with the progress made by Interactive Investor in the past twelve months and hope to be in a position to report on further positive developments during the current financial year.

Hasgrove (+£9.4 million) is a holding company, with 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's intranet service offers customers the benefits of a highly secure communication platform, which can improve efficiency and productivity and provides substantially better employee engagement. Interact continues to grow rapidly by winning ever larger contracts, especially in its core market in North America. The company reported strong trading in its most recent financial year and this momentum has continued into the current financial year. Interact benefits from high levels of recurring revenues, which results in a high degree of visibility over revenues and profits. The rate of growth in recurring revenues puts Interact in a strong position to deliver double-digit growth in sales and profits in its current financial year. The business is cash generative and has no debt. The board of Hasgrove recently decided to return a proportion of the company's surplus cash to shareholders via a Tender Offer, which was announced in September 2020. As a result, we elected to tender a percentage of the Company's holding in Hasgrove. Following significant oversubscription, the tender was scaled back. The transaction completed subsequent to your Company's financial year end at a price of £18 per share. The partial sale of the Company's stake in Hasgrove generated proceeds of £358,326 and realised a capital profit of £342,432. In recognition of this recent transaction, the carrying Fair Value of the Company's holding in Hasgrove was marked up to £14.40 per share, representing an increase of +64.4% on the reported Fair Value as at the Company's prior financial year end. The difference between the Tender Offer price and the Fair Value represents a discount of 20%, which is designed to take into account the continuing illiquidity of the remaining stake held.

Avacta (+£7.4 million) develops innovative cancer therapies and diagnostics, based on its proprietary Affimer® and pre|CISION™ platforms. Avacta also provides reagents, for research and diagnostics purposes, to other Biotech and Life Sciences businesses. Avacta made significant progress during the six month period ended 30 June 2020, largely driven by its diagnostics division, which has been at the forefront of developing diagnostic testing kits related to the Covid-19 virus. Avacta has successfully developed tests, via collaborative agreements with several life sciences companies, which are designed to commercialise its Affimer reagents for use in high throughput antigen tests for mass population screening. In addition, preliminary findings by the Centre for Virus Research at the University of Glasgow showed that certain Affimer reagents could act as a potential therapy to combat Covid-19 in humans by binding to the virus spike protein and thereby preventing the spread of infection. Avacta's therapeutics division also made notable progress, by establishing and announcing a joint venture with a leading South Korean pharmaceutical company to develop stem cell treatments for patients who are seriously ill with Covid-19. In June 2020, Avacta successfully raised an additional £48 million, through an equity funding round, in order to accelerate investment in, and development of, its diagnostics and therapeutics programmes, together with its Covid-19 antigen testing programme.

MaxCyte (+£7.5 million) is a clinical-stage cell-based therapies and life sciences business that has developed a leading, patented cell-engineering platform. Over the past year, MaxCyte has gained significant commercial momentum in its cell therapies business and now counts amongst its customer base the world's ten largest global pharmaceutical companies. In the past twelve months, the business has also agreed three new commercial licences with leading cell therapy partners, which should drive significant growth in its pipeline opportunities over the next three years. These licences together with the company's existing commercial agreements are expected to deliver a series of substantial milestone payments as programmes progress through the clinical and commercialisation stages of their development. Existing group revenues grew by 30.1% to $10.9 million in the company's first half-year period, driven by recurring annual fees as well as up-front instrument sales. MaxCyte has a wholly-owned subsidiary CARMA Cell Therapies which has developed a novel mRNA-based cell therapy platform to treat solid tumours. Having successfully established the CARMA platform, management intend to establish CARMA as a stand-alone and independently financed company, in order to prioritise growth in MaxCyte's core cell-engineering.

Tristel (+£3.1 million) is a manufacturer of infection prevention, contamination control and hygiene products. Tristel has been a direct beneficiary of the extraordinary circumstances resulting from the Covid-19 pandemic. Sales of its hospital surface disinfectant products increased sharply during its financial year to the end of June 2020, although growth was held back by disruption in sales of medical device decontamination products as hospitals deferred non-critical surgical procedures. In the financial year ended 30 June 2020, Tristel reported an increase in sales of 21% to £31.7 million, while underlying pre-tax profit grew by 27% to £7.1 million. Strong growth was driven by the expansion of international operations, which now account for around 60% of total group revenues. Notwithstanding the possibility of further disruption to hospital procedures from a prolonged resurgence of Covid-19 cases during the critical winter months, Tristel remains well positioned to deliver further growth in its current financial year.

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

City Pub Group (-£4.2 million) owns and operates an estate of premium quality pubs across the southern parts of England and Wales. Clearly, the market backdrop during the year under review has been extremely challenging for all hospitality businesses, as the sector bore the brunt of the UK Government's lockdown measures. City Pub Group has recently been forced into a full shutdown of all its pubs and hotels for the second time and this has prevented the Group from generating revenues. In order to mitigate the financial damage, the management team of City Pub Group was quick to strengthen the company's balance sheet by raising £22 million through an equity placing and open offer, which immediately reduced its debt burden by approximately two thirds. In addition, swift action was taken to manage costs by using a combination of available Government support mechanisms and through internally generated savings. Despite such difficult market conditions, the decisive actions taken, combined with the asset backing provided by its estate of predominantly freehold properties, ought to ensure that City Pub Group can survive the current crisis.

Bonhill Group (£-1.8 million) is a media company providing business information, live events and data & insight propositions to its customers. The global pandemic has clearly had a significantly negative impact on the Group's financial performance during the year under review, with revenues falling by 28% in the six month period to the end of June. This decline in sales was predominantly a result of the forced cancellation of all live events. The outlook for a recovery in revenues from Bonhill's events division remains bleak, but this is being partially offset by a growing level of subscription revenues from the Group's media brands. As at 30 June 2020, the Group reported a net cash position of £3.4 million, which was better than expected due to a significant reduction in costs and the suspension of dividends.

Hardide (-£1.6 million) is a provider of advanced tungsten carbide coatings that significantly increase the life of metal components. Hardide's patented technology is particularly applicable for prolonging the useful life of machinery that operates in abrasive, erosive, corrosive and chemically aggressive environments. In its interim results for the period ended 31 March 2020, Hardide reported 29% growth in revenues to a record £3 million. Unfortunately, as Covid-19 spread across the world, demand for Hardide's highly specialised coatings suffered a rapid and significant decline and caused delays to the delivery of existing orders. Hardide's management team has taken decisive action to preserve cash and reduce costs, which has enabled the business to remain financially strong. In a trading update released on 23 September, the company reported that cash at bank was expected to be £2.7 million as at the end of September 2020.

Immotion Group (-£1.1 million) is an entertainment business focused on creating virtual reality content. Immotion's products are typically sold to leisure operators such as: aquariums, theme parks and retail centres. Needless to say, the leisure sector has faced particularly difficult trading conditions as many operators have been forced to close their doors to the public for extended periods. As a consequence, Immotion's ability to generate meaningful revenues has been curtailed. In a recently released Interim Results statement, Immotion reported that it had cash on hand of £1.2 million as at 25 September 2020.

Escape Hunt (-£0.9 million) is a provider of live 'escape the room' experiences. The emergence and rapid spread of Covid-19 has caused the forced closure of all of Escape Hunt's venues around the world. Although some sites have been allowed to re-open, most remain closed for the foreseeable future. The management team has taken action to reduce costs and preserve cash, enabling the company to report a cash balance of £4.3 million as at the end of August 2020 and providing some confidence that the business will survive the current crisis.

Fully Listed and Other Investments

 (bracketed figures represent the total return for the year under review)

The non-qualifying investments held by the Company, are typically in larger, more liquid quoted companies that are listed on 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 poorly as the full effects of the pandemic unfolded. The largest detractors from performance were: HSBC (-£0.7 million), Babcock International (-£1.0 million) and Lloyds Banking Group (-£1.2 million).

Investment Activity

In terms of new investment activity, the number and quality of available VCT qualifying investment opportunities increased steadily during the course of the year. At the financial year end, the investment pipeline was particularly strong and the expectation is that significant levels of capital will continue to be deployed across a number of new, AIM-listed, VCT qualifying companies in the coming months. At the same time, the rate of follow-on investment opportunities remains healthy. The Company's requirement and ability to maintain its VCT Status at all times is a top priority. The Company is comfortably on target to meet one of the key rules imposed, 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.

During the period under review, three new VCT qualifying investments were made in Feedback Medical, Ilika and The British Honey Company, at a total cost of £4.2 million.

Feedback Medical is a specialist technology company providing innovative software and systems to benefit those working in the field of medical imaging. Feedback's products assist the work of radiologists, clinicians and medical researchers by improving workflows and giving unique insights into diseases, such as cancer. Feedback's core product, Bleepa, is a revolutionary medical imaging communications app. Following a potentially transformative year during which a substantial equity funding round was successfully completed, including a £2 million investment from your Company, Feedback is well placed to generate strong revenue streams and further enhance the Bleepa service.

Ilika is a pioneer in solid state battery technology, enabling solutions for many different customers that require, safe, portable, flexible, fast charging, high energy battery solutions. Ilika's solid state battery technology, in both miniaturised and large scale formats is designed to power wireless sensors across a wide range of applications, from hostile industrial environments to medical implants.

The British Honey Company is a UK based producer of spirits, honey and jams. The business initially focused on honey production and, later, expanded into honey infused spirits. The British Honey Company now produces 13 honey products and 16 spirits including gin, vodka, rum and whiskey, many of which have won awards in the UK and abroad. The company's facilities provide it with a scalable platform from which their directors plan to expand operations through organic growth and acquisition both in the UK and overseas. The company has invested significantly in its infrastructure which includes a fully operational distillery and a bottling facility capable of processing the equivalent of approximately 1.5 million bottles a year.

Each of these businesses appears capable of generating significant growth in future years, although it is important to emphasise that they are all at relatively early stages in their development. It is also relevant to note that the current crisis may be adversely affecting their development plans.

Follow-on investments were made in a number of existing investments, which remained eligible for further State Aided funding. A total of £2.7 million of new capital was allocated to these investee companies in order to help finance their expansion plans.

In aggregate, almost £10.8 million was raised from the full and partial disposal of a number of holdings during the year. As a reminder, the normal purpose of such 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.

Realisations

Four AIM-listed companies were taken over during the year, following receipt of recommended offers. The net proceeds from these realisations amounted to £4.4 million, realising an aggregate capital loss on investment cost of £1.3 million. A number of other partial disposals in qualifying holdings together with full and partial disposals in non-qualifying investments were also made. These transactions generated total proceeds of £6.4 million and an aggregate capital profit of £0.2 million. The total value of all disposals made during the year therefore amounted to £10.8 million. Including partial disposals, the total realised capital loss over the lifetime of the holding from the sale of investments amounted to £1.1 million.

Prospects

In the context of the difficulties experienced during the year, the Company's positive NAV performance was pleasing. In overall terms, the new financial year has also started satisfactorily for the Company's diverse portfolio of investments.

It is possible that prospects for the wider economy may start to improve once rapid and accurate Covid-19 testing kits and, more important, effective vaccines are made available to the UK population. The timing related to reaching these milestones remains unpredictable however, despite it becoming increasingly clear that progress is being achieved.

In the meantime, an extended period of economic contraction and a significant increase in unemployment appear certain. In addition, the financial burden of the UK Government's response to the pandemic will surely be felt for many years to come. As a result, investor sentiment toward UK equities may remain weak for some time. This heightened level of caution and negativity may well be maintained if an acceptable trade agreement following Britain's exit from the European Union cannot be reached.

The outlook for the remainder of the current financial year therefore remains uncertain. As a result, we are focused on monitoring the health of the Company's portfolio, while also seeking to identify and support emerging businesses through the provision of much needed capital. We look forward to the moment when it becomes clear that Covid-19 has been successfully brought under control. In the meantime, we would like to thank all Shareholders for their continued support and wish you and your families continued good health.

Chris Hutchinson

Unicorn Asset Management Limited

16 December 2020

Financial and Performance Review

Net Assets

As at 30 September 2020, the audited net assets of the Company were £260.2 million, as compared to £201.1 million on 1 October 2019. The growth in total net assets was due to the support received from new and existing Shareholders under the Offer for Subscription, which raised £24.2 million net of costs, and the strong performance from the investment portfolio.

Performance during the year

As at 30 September 2020, the audited NAV of the Company was 178.6 pence per share, having risen by 24.7 pence from 153.9 pence per share at the start of the financial year under review, compared with a decline of 17.9 pence per share in the year ended 30 September 2019. After adding back dividends of 6.5 pence per share paid in the year, the total return to Shareholders increased by 31.2 pence or 20.3% compared with an decline of 11.4 pence or 6.6% in the previous year. In comparison, the total return from the FTSE AIM All-Share Total Return Index was 11.0% over the year to 30 September 2020.

At the financial year end, there were 74 active VCT qualifying and 20 non-qualifying companies held in the portfolio. These investments are spread across 27 different sectors.

In the year to 30 September 2020, a total of £10.8 million was realised through the sale of investments, approximately £6.9 million was deployed in new investments and approximately £9.0 million was paid out as dividends to Shareholders. A further £4.9 million was spent on the operating costs of the Company and £4.1 million on share buybacks.

Share Issues and Buybacks

The Company raised £24.2 million (after costs) through the Offer for Subscription and issued 17,832,898 shares, details of which are given in note 13 on page 62 of the Annual Report.

In addition, the Company allotted 311,578 shares under the Dividend Reinvestment Scheme ("DRIS") at an average price of 163.6 pence per share.

Throughout the year a total of 3,072,006 (2019: 3,273,771) shares were bought back for cancellation for a total cost of £4.1 million (2019: £4.4 million).

Total Return

The Company generates returns from both capital growth and dividend income. For the year ended 30 September 2020, the total return was £47.5 million (2019: £12.2 million loss), of which there was a £47.7 million gain (2019: £13.2 milli0on loss) from capital and a £0.2 million loss (2019: £1.0 million gain) 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 55 of the Annual Report.

The total net earnings per share were 34.6p (2019: loss 9.8p). The total net return per share was made up of 34.7p from capital and a loss of 0.1p from revenue.

Revenue Return

The income of £1.6 million (2019: £2.7 million) represents dividend income derived from the Company's investments, interest on loan stocks and interest on cash balances. The decrease in investment income of 40.6% for the year was mainly due to investee companies reducing their dividend distributions as a result of the Covid-19 pandemic.

Capital Return

At the year end the investment portfolio was valued at £239.6 million (2019: £192.6 million). The investment portfolio delivered a realised return on disposals of £0.3 million (2019: £0.7 million) and unrealised valuation gains on investment of £50.5 million (2019: £11.1 million losses). The valuation basis of the Company's investments is described in Note 1 (c) on page 54 of the Annual Report.

Ongoing Charges and Running Costs

The Ongoing Charges of the Company for the financial year under review represented 2.2% (2019: 2.3%) of average net assets, which remains below the agreed cap of 2.75%.

The total expenses amounted to £4.9 million (2019: £4.4 million) and include investment management fees of £4.2 million (2019: £3.7 million), administrative service fees of £0.2 million (2019: £0.2 million) and other third-party service providers fees of £0.2 million (2019: £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 57 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 has increased its cash balances through the Offer for Subscription and the sale of investments. These were partially offset by the purchase of investments and the payment of running costs, share buybacks and dividends. The cash balance at the year end was £21.4 million (2019: £9.4 million).

Key Performance Indicators

The Board uses the key indicators below to measure the Investment Manager's performance, thereby helping Shareholders to assess how the Company is performing against its objective. A number of these ae classified as Alternative Performance Measures (APM's) in line with Financial Reporting Council guidelines.

- 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 19 and 20 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 73 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 21 of the Annual Report. Further information on the service providers is outlined in the Corporate Governance Statement on pages 38 and 39 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 21 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 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 32 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 £9.0 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 2020.

The Directors are recommending a final dividend of 3.5 pence for approval at the Annual General Meeting to be held on 4 February 2021. This would bring total dividends to 6.5 pence for the year under review.

Details of the Company's Dividend Reinvestment Scheme are outlined on page 70 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 17 and 62 of the Annual Report. At the financial year end, the Company's shares were quoted at a mid-price of 142.5 pence per share representing a discount to NAV per share of 20.2%. This was before the announcement of the upward revaluation in unquoted investments following the year end.

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 risks and uncertainties

The Directors have carried out a review of the principal risks faced by the Company as part of the internal controls process, as outlined below. Note 17 to the Financial Statements on page63 to 68 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.

The Board is also responsible for assessing the possibility of new and 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

As announced last year, Peter Dicks stood down as Chairman following the Annual General Meeting in January 2020. In May 2020, he stood down as a Director. The Board will continue to assess its composition in the future and undertake succession planning. The Board's policy on the tenure of the Chair is shown on page 38 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. Following the retirement of Peter Dicks during the year, the Board comprises three male and one female non-executive Directors.

The Board's operational and entrepreneurial skills have been extended by the appointment of Tim Woodcock as Chairman. His extensive experience in the development of fast growth companies complements the considerable investment industry experience possessed by other members of the Board.

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 seeks to conduct the Company's affairs responsibly and expects the Investment Manager to consider relevant social and environmental matters when appropriate, particularly with regard to investment decisions. The Company offers electronic communications to reduce the volume of paper it uses in sending communications to Shareholders. In addition, Board and Committee meetings are held by video or voice conference call where it is appropriate to do so. The Company's Annual and Half-Yearly reports are printed on paper sourced from forests certified by the Forestry Stewardship Council ("FSC") that meet environmental, social and economic standards.

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 32 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 September 2020.

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 June 2020.

In order to maintain viability, the Company has a detailed 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: £10.7 million invested in non-qualifying, fully listed shares which are readily realisable and a further £27.1 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 2.2% 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 collapse of the markets leading to lower dividend receipts and asset values. As stated above Ongoing Charges equate to 2.2% 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. Therefore, 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

16 December 2020

EXTRACT FROM DIRECTORS' REPORT

Share Capital

At the year-end there were 145,732,541 (2019: 130,660,071) 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 62 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 145,732,541 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 2020, the Company held cash balances of £21.4 million, £10.7 million in fully listed stocks and £5.7 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 the impact 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

16 December 2020

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended 30 September 2020 or 30 September 2019 but is derived from those accounts. Statutory accounts for the year ended 30 September 2019 have been delivered to the Registrar of Companies and statutory accounts for the year ended 30 September 2020 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 2020

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 2020

The financial statements were approved and authorised for issue by the Board of Directors on 16 December 2020 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 2020

* 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 2020

The notes below form part of these financial statements.

Notes to the Financial Statements

for the year ended 30 September 2020

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 54 and 55 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.

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

Unicorn Asset Management Limited ("UAML") receive 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 2020, UAML also earned fees of £46,500 (2019: £37,000), 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 there is an excess of the annual costs of the Company incurred in the ordinary course of business over 2.75% of the closing net assets of the Company at the year end. There was no excess of expenses for year 2019/20 or the prior year.

4 Dividends

* The amount actually paid in dividends for 2019 differs from that shown in last year's Annual Report as 572,375 shares were bought back between 15 October 2019 and the record date of 9 January 2020.

# The difference between total dividends and that shown in the Cash Flow Statement is £510,000 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 2019/20 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 £6,000 were incurred in the year. These have not been deducted from realised gains shown above of £343,000 but have been deducted in arriving at gains on realisation of investments disclosed in the Income Statement of £337,000.

The shares delisted during the year relates to Brady (£17,000), Lightwave RF (£1,451,000), Reach4Entertainment (£nil) and Synnovia (£842,000).

Note: Permanent impairments of £7,186,000 continue to be held in respect of losses on quoted investments held at the year end. There were no additional impairments provided for in the year. The reduction in impairments of £2,000,000 relates to Blue Inc. which was dissolved in August 2019.

Reconciliation of cash movements in investment transactions

The difference between the purchases in Note 6 and that shown in the Cash Flows is £19,000 which represents the reinvested dividends on the Unicorn Ethical Fund. The difference between the sales in Note 6 and that shown in the Cash Flows is £524,000 which represents a trade outstanding for settlement which is shown in debtors.

7 Net asset value

8 Post balance sheet events

The Company was advised on 30 October 2020 that its shareholding in Synnovia had been compulsory purchased following a takeover in January 2020.

9 Capital commitments and contingent liabilities

There were no capital commitments or contingent liabilities at 30 September 2020 (2019: nil).

10 Shareholder information

Dividend

The Directors have proposed a final dividend of 3.50 pence per share. Subject to Shareholder approval, the dividend will be paid on 11 February 2021 to Shareholders on the Register on 8 January 2021.

The Board has made the decision that after the payment of the dividend in February 2021 the Company will move to paying 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 currently receive their dividend by cheque a bank mandate form will be included with the dividend payment in February 2021. The mandate form will also 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 74 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 2020 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 on Thursday, 4 February 2021 at 11.30 am at the offices of Unicorn Asset Management, Preacher's Court, The Charterhouse, Charterhouse Square, London EC1M 6AU. Due to Covid-19 restrictions Shareholders will not be permitted to attend the meeting in person.

13 National Storage Mechanism

A copy of the 2020 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.