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

LEI: 21380057QDV7D34E9870

Annual Results Announcement for the year ended 30 September 2022

The full Annual Report and Accounts for the year ended 30 September 2022 can be found on the Company's website www.unicornaimvct.co.uk

FINANCIAL HIGHLIGHTS

(for the year ended 30 September 2022)

·    Special interim dividends of 7.0 pence per share and 32.0 pence per share paid during the year.

·    Net asset value ("NAV") total return for the year ended 30 September 2022, after adding back the dividends of 45.5 pence per share paid in the year, fell by 27.5%.

·    Offer for Subscription raised £24.4 million (after costs).

·    Final dividend of 3.5 pence per share proposed for the financial year ended 30 September 2022.

·    New offer for Subscription announced to raise up to £15.0 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 2022 bringing total dividends for the year to 45.5 pence per share. If approved by Shareholders, this payment will bring total dividends paid in the last ten years from 30 September 2012 to 107.5 pence per share.

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.

Chair's Statement

I am pleased to present the Company's Annual Report and Audited Financial Statements for the year ended 30 September 2022.

Introduction

The financial year ended 30 September 2022 has been a challenging period for the Company. Mounting economic pressures and significant political upheaval have combined to create a highly volatile investment environment. This has resulted in poor performance from UK and global equity markets in general, and from smaller, quoted companies in particular.

Many smaller, listed businesses have commanded a valuation premium in recent years, which has largely been predicated upon the belief that they will, in time, deliver materially stronger earnings growth than their larger quoted peers. However, the global economic and political landscape has changed dramatically during the past twelve months, and this has triggered a general re-appraisal of investment risk. In the UK, this process has resulted in investment being withdrawn from smaller, less liquid businesses and directed instead towards larger, more liquid quoted companies. Inevitably, this shift in focus has led to a significant decline in the overall valuation of the Alternative Investment Market ("AIM"), which in turn, has also had a materially negative impact on the value of the Company's portfolio.

Economic & Market Review

Economic growth in the UK has been weak for several years and we are now entering a period of economic recession. The period under review was problematic for many reasons, including the return of inflation, the outbreak of a major conflict in Eastern Europe, a growing energy crisis, serious issues in the global supply of key goods and materials and political instability in the UK. Each of these factors in isolation would have a negative impact on economic growth but, taken together, a painful downturn seems inevitable.

Consumer spending, upon which much of Britain's economic growth is based, has already been badly affected as people struggle to cope with rapidly rising, food, energy and mortgage costs. The challenges ahead remain significant and will become even more serious than they are currently. Sadly, it is difficult to identify any obvious and imminent solutions to the problems we all now face.

Global equity markets have not been immune to the effects of global and domestic upheaval and, as is often the case, it has been the smaller, earlier stage listed businesses that have suffered the most. During the period under review, the FTSE AIM All-Share Index fell by 34.3% after reaching a 20 year high on 3 September 2021.

Although certain sectors of the equity market, notably biotechnology and life sciences, had begun a process of derating during the first half of 2021, the world's leading equity markets remained resilient until December last year. However, as 2022 began, major events such as the Russian invasion of Ukraine, disruption to supply chains around the world, the global energy crisis, and political turmoil in the UK, all contributed to the rapid increase in the rate of inflation, while simultaneously reducing the prospect of a sustained, post-Covid economic recovery.

The re-emergence of inflation; after more than a decade of 'cheap' money, has understandably led to a marked shift in investor attitudes. Investors have become increasingly risk averse and, when this happens, capital tends to flow toward areas of the equity market that appear to offer greater protection from capital loss. Consequently, sectors such as Oil & Gas, Mining and Commodities have all delivered strong relative outperformance during the year, while the valuations of companies operating in higher growth areas such as consumer retail, information technology, biotechnology and life sciences have all been under severe pressure.

Net Assets

As at 30 September 2022, the audited net assets of the Company were £221.1 million. This represents a decline of £149.7 million over the course of the financial year under review.

The major factors impacting net assets were as follows:

• Net losses of the investment portfolio of £100.9 million.

• A return of capital to Shareholders by way of ordinary and special dividends of £71.7 million.

• Buybacks of £4.4 million.

• An increase in assets of £24.4 million following the capital raise in March 2022.

After adding back all dividends paid, the total return per share in the period was -27.5%.

Investment Performance Review

The decline in Net Asset Value experienced during the period under review has been significant and is in stark contrast to the positive outcome delivered in the previous financial year. Although this year's 27.5% decline in the Net Asset Value is a disappointing outcome, it is less severe than the decline registered by the FTSE AIM All-Share Index of -34.3%.

The companies held in the portfolio are largely well-funded. The portfolio consists of 85 active VCT qualifying companies, of which 44 had a carrying value in excess of £500,000 at the financial year end. The value of these 44 companies represents circa 82% of the VCT's total Net Asset Value as at 30 September 2022. The Investment Manager estimates that approximately 43% of these 44 companies are profitable, a further 14% are funded through to profitability based on broker cashflow forecasts, while 20% continue to operate with a 'cash runway' of at least two years duration. Of the remaining 23%, the Investment Manager believes that they will require future external funding.

The investment portfolio is highly diversified both by the number of holdings and by sector exposure. Many of the Company's longer-standing investments are in established, profitable and cash generative businesses that sell highly specialised products and services for which there is continuing demand. These businesses typically operate with strong balance sheets and are often free of debt.

The long-established and consistently profitable businesses held within the investment portfolio have been more resilient than our earlier-stage investee companies, which tend to be loss-making and therefore often require to raise more capital. This combination of mature, profitable, cash generative businesses and younger companies in the early stages of their development provides a good balance between risk and reward. In favourable market conditions it is reasonable to anticipate strong returns from those businesses that are in the scale-up phase of their development, while it is logical that investment in profitable, established businesses offers a degree of defensive protection in more volatile market conditions.

Portfolio Activity

Given the circumstances, the year under review was subdued in terms of investment in new qualifying investments. During the period, two new VCT qualifying investments were made, at a total cost of £4.9 million. In addition, a further £4.9 million of VCT qualifying capital was invested in six existing portfolio companies, to support their growth.

No non-qualifying investments were made during the financial year.

A number of full and partial disposals were also made during the course of the financial year. Total proceeds from disposals of qualifying investments amounted to £20.2 million, realising an overall capital profit over the original cost of £18.5 million. There were also a number of full and partial disposals of non-qualifying investments during the period. The amount realised from these non-qualifying transactions was £58.8 million and the overall capital profit over the original cost amounted in aggregate to £47.8 million.

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

Dividends

A special interim dividend of 7.0 pence per share was paid in February 2022 at the same time as the final dividend of 3.50 pence per share for the year ended 30 September 2021.

An interim dividend of 3.0 pence per share, for the half year ended 31 March 2022, was paid to Shareholders on 11 August 2022 together with a special interim dividend of 32.0 pence per share.

Details of the special interim dividends are given on pages 8 and 40 in the Annual Report.

Despite the market difficulties and the resulting decline in the Company's net assets, the Board is pleased to recommend to Shareholders a final dividend of 3.5 pence per share for the financial year ended 30 September 2022. This dividend, if approved at the Company's forthcoming AGM, will be payable on 14 February 2023 to Shareholders on the register as at 6 January 2023.

Total dividends in respect of the financial year ended 30 September 2022, are therefore expected to be 45.5 pence per share.

The Board is pleased to have delivered a significant return of cash, which is tax-free to eligible UK Shareholders. However, it is important to note that payments to Shareholders by way of special dividends are unusual, unpredictable and dependent upon the realisation of significant capital gains from the disposal of successful individual investments.

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. Between 1 October 2021 and 30 September 2022, the Company bought back 2,515,309 of its own Ordinary Shares for cancellation, being 1.7% of the opening share capital, at an average price of 176.5 pence per share (including costs) and an average discount from net asset value of 13.4%.

Future repurchases of shares will continue to be made 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 have, to date, been cancelled.

An Offer for Subscription was launched on 24 January 2022. The Offer was again strongly supported and closed, fully subscribed, on 8 February 2022. The total raised, net of all costs, was £24.4 million and resulted in the issue of 12.6 million 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 2022, there were 164,023,203 Ordinary Shares in issue.

New Offer

On 8 December 2022, the Company announced its intention 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 2023.

VCT Status

There were no changes to VCT legislation during the year.

The Government last introduced new legislation pertaining to Venture Capital Trusts in November 2017. The most important of these new rules came into effect in the 2019/2020 tax year and are designed to ensure that capital is directed at young, developing businesses, which might otherwise find it difficult to secure funding to finance their planned growth.

One of the key tests, from accounting periods commencing after 5 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, Unicorn AIM VCT's qualifying percentage was 98.7% of total assets as of 30 September 2022. The Board has been advised by its VCT status adviser, PWC, that the Company continues to maintain its Venture Capital Trust status. It will, of course, remain a key priority of the Board to ensure that the Company retains this VCT status.

Under existing legislation the tax benefits enjoyed by VCTs are due to expire in April 2025. We are delighted that the Government has stated that it plans to legislate to extend these benefits beyond that date.

ESG Policy

Whilst this is not a 'sustainable' fund, the Board expects the Investment Manager to invest in line with its ESG principles. Further we support the Investment Manager in developing a dialogue with our investee companies that will increasingly result in transparent and comprehensive ESG reporting on the one hand, and developing sound environmental, social and governance strategies on the other. Considerable progress has been achieved by the Investment Manager in this area during the last financial year.

The Board continues to take steps to reduce paper use (previously withdrawing the dividend cheque service and the printing of the Half-Yearly Report) and continues to encourage service providers to do the same. During the year our Investment Manager has migrated to fully renewable energy suppliers and initiated its own carbon offset programme through tree planting.

The Board continues to adopt best practice in good governance in line with AIC guidelines.

Annual General Meeting

I would like to take this opportunity to thank all Shareholders for their continued support of the Company and to invite you to attend the Company's Annual General Meeting, which is to be held on 7 February 2023. Full details of the AGM including location, timing, and the business to be conducted, are given in the Notice of the Meeting on page 91 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 page 91 of the Annual Report using the proxy form, or electronically at www.unicornaimvct.com. The Board has carefully considered the business to be submitted to Shareholders for approval at the AGM and recommends that Shareholders vote in favour of all the resolutions being proposed.

Board Changes

As reported on page 40 of the Annual Report, Jocelin Harris will not seek re-election at the AGM and will therefore step down as a Director of the Company. The Board wishes to thank Jocelin for his long and diligent service over the last 17 years and wishes him well for the future. Josie Tubbs joined the Board on 24 May 2022 and I would like to welcome her to the Board.

Outlook

The year under review has been a particularly challenging one for equity markets and for the Company itself. In absolute return terms, this has been both painful and disappointing for all concerned. However, the Company has performed with greater resilience than the equity market with which it is most closely aligned, the Alternative Investment Market.

At the time of writing, the short-term outlook remains weak. The considerable turmoil experienced during the period under review has eroded market confidence and weakened the prospects of a rapid and sustainable economic recovery. It is therefore prudent to anticipate that, while high levels of political instability and economic uncertainty persist, it is likely that the Company's NAV performance will remain under pressure.

Financial markets continue to experience bouts of extreme volatility, and consequently, the Company continues to hold higher than usual levels of liquidity. At approximately £21.9 million, the amount of net cash currently held is more than would be expected in more stable conditions. This provides a measure of protection against the effects of a falling market and keeps capital available for deployment by the Investment Manager when the economy improves and confidence returns.

Our Investment Manager is confident that, once economic and political stability return the FTSE AIM All-Share Index and the Company's carefully selected portfolio of investments will recover in value. The Investment Manager continues to nurture the promising portfolio of existing investments, and the Board is confident that most of the investee companies can withstand an extended period of economic hardship, and, in many cases, have the potential to become valuable businesses within the next 5-10 years.

Tim Woodcock

Chair

13 December 2022

Investment Manager's Review

Introduction

The financial year ended 30 September 2022 was an extremely challenging period for the Company.

In response to multiple threats to global economic growth, investor sentiment weakened significantly throughout the year under review. This steady erosion of confidence in the economic outlook, exacerbated by the emergence of serious inflationary pressures, saw both Bond and Equity markets suffer significant declines during the period.

In the US, the Dow Jones and the S&P 500 Indices both fell by over 13% in the twelve months to 30 September 2022, while the technology and growth focused Nasdaq Index declined by 26% over the same period. Stock market indices in Japan, Europe and in emerging markets such as China and India, also recorded heavy losses. Unusually, government bonds have simultaneously also been under severe pressure, with most fixed income indices experiencing significant declines during the period.

At first glance, it might appear that the UK stock market somehow managed to escape the wider equity market sell-off, because the FTSE 100 Index recorded a marginally positive total return of 0.9% in the year ended 30 September 2022. However, the performance of the FTSE 100 Index is misleading, given its significant weighting in sectors such as Oil & Gas, Mining and Banking, all of which have been beneficiaries of inflation and/or rising interest rates and the weak pound.

Unfortunately, it was a very different story for the many hundreds of smaller listed businesses, whose valuations have, in many cases, been decimated as investors increasingly sought the perceived safety of larger, more liquid investments.

The FTSE AIM All-Share Index was particularly negatively impacted, with its total return for the period being -34.3%.

In the context of a complex economic, financially challenging, and politically turbulent landscape, it is unsurprising that the Company also endured a significant decline in Net Asset Value per share during the period. Indeed, the financial year under review represents one of the most difficult periods the Company has faced in the 21 years since its launch in 2001.

Net Asset Performance

The decline in total Net Assets per share during the financial year was disappointing and painful.

As noted in the Chair's Statement the total return per share in the period under review was, after adding back all dividends paid, -27.5%.

It is disheartening to have to report on a negative year for the Company, and there is only slim comfort to be derived from the fact that the returns recorded by the FTSE AIM All-Share Index were somewhat worse.

As at 30 September 2022, the audited net assets of the Company amounted to £221.1 million, which equates to a reduction in total assets of £149.7 million during the twelve months. Of this decline £71.7 million was due to the dividend payments made during the period. A large portion of this dividend return was in the form of one-off special interim dividends, made possible by the realisation of our highly successful investments in Augean and Interactive Investor ("ii") as stated below.

The weakness of equity markets during the year meant that most companies in the portfolio lost considerable value which inevitably led to a big reduction in the value of the Company's portfolio. This reduction in Net Assets was partially offset by a limited number of positive returns from investee companies and also thanks to the proceeds received from a fully subscribed Offer for Subscription during the first quarter of 2022. In the circumstances, it is particularly gratifying that this Offer for Subscription was strongly supported, having closed in February 2022 after quickly reaching full subscription. Given the difficult market conditions, we have been cautious in deploying this new capital. Until such time as the investment environment shows signs of improvement, this highly selective and cautious approach to deploying your capital will be maintained.

Performance Review

The period under review witnessed a significant reversal of fortunes for many sectors of the equity market. Listed businesses operating in high growth areas such as Biotech, Life Sciences, Software and Technology all suffered dramatic falls in value, as investors lost confidence in their ability to deliver the high levels of forecasted growth required to sustain their previously lofty valuations.

In recent years, the managers of VCT portfolios have been required by VCT legislation to ensure that all new qualifying investments are directed toward early-stage, scale-up businesses. Such businesses typically operate in the sectors described above. Unfortunately, they have therefore been particularly badly affected by the market falls experienced over the past 12 months.

The investment portfolio remains diversified both by number of holdings and by sector exposure. At the financial year end, the Company held investments in 85 active VCT qualifying companies and 8 non-qualifying companies.

These investments are spread across 25 different sectors.

A review of the most meaningful contributors to performance from VCT qualifying companies (both positive and negative) follows.

Largest Detractors

Hasgrove (8.6% of net assets, -£10.2 million) is an unquoted holding company, whose only operating subsidiary, Interact, is a fast-growing Software as a Service (SaaS) provider of corporate intranet solutions. In the first eight months of its current financial year Hasgrove's revenues increased to £18.4 million which represents growth of 25% when compared to the prior year period. Profitability also increased significantly, with EBITDA growing by £1.3m to £6.5 million. New business wins in North America have continued to be the primary driver of growth, with high profile customers increasingly attracted by the numerous benefits offered by Interact's market leading internal communications software. Perhaps most notably, Interact recently secured a two-and-ahalf- year contract with the US House of Representatives, which acts as a strong endorsement for the high levels of functionality and security offered by the platform. Despite healthy operational and financial progress, the carrying value of the Company's investment in Hasgrove was marked down in the period under review. This decrease in value reflects the downward pressure on valuation multiples experienced by comparable software companies that are listed on the public markets. As at 30 September 2022, the Fair Value of the Company's holding in Hasgrove was assessed as being £18.9 million, which represents a decrease of £10.2 million when compared to the previous financial year end.

MaxCyte (6.3% of net assets, -£8.2 million) is a leading cell engineering company focused on providing a unique and patented cell engineering platform to advance innovative research into the treatment of cancer. At the end of August 2022, MaxCyte released half-year results for the period ended 30 June 2022, which reported on encouraging growth across all areas of its operations. Revenues generated from new cell therapy customer licensing deals were particularly notable. MaxCyte has now signed 17 Strategic Platform Licenses, which includes two major new licences with LG Chem and Intima Biosciences. Other areas of progress include a strengthening of the senior management team and the completion of new headquarters, which has resulted in a threefold increase in manufacturing capacity. From a financial perspective, MaxCyte remains well-resourced with cash or cash equivalents of over $240 million on the balance sheet as at 30 June 2022. For its financial year ending 31 December 2022, MaxCyte's revenues are expected to grow by more than 30% when compared to the prior financial year. Despite achieving further significant operational progress, while retaining a strong financial base, MaxCyte's share price has nonetheless suffered badly during the period under review as the Biotechnology and Life Sciences sectors experienced a savage derating.

Renalytix (0.3% of net assets, -£7.6 million) is a business focused on harnessing the power of artificial intelligence to enable early detection of kidney disease. To date, thirty-three State Medicaid programmes in the US have contracted to use Renalytix's technology. The company's commercial focus for the remainder of 2022 is to expand the availability of its core KidneyIntelX software, into other health system partnerships across the United States. However, despite strong progress in signing new contracts, translating this into regular revenue generating orders for KidneyIntelX has proved elusive. The reasons for the delay in generating meaningful revenues appear to be procedural rather than structural and the company is working hard to reduce bureaucratic hurdles between the signing of contracts and the implementation of KidneyIntelX tests. There are several potential catalysts that could materially increase the pace of testing including; adoption of the tests by new Health Systems, full FDA approval, the release of further data confirming clinical utility data and the signing of strategic partnerships.

In April 2022, Renalytix raised $26.8 million in further funding via a convertible bond issue and the management team is now actively looking at the cost base in order to reduce monthly cash burn. However, as a result of the disappointing delay to the commercialisation of KidneyIntelX, the share price has experienced a dramatic fall in the period under review.

Surface Transforms (3.1% of net assets, -£4.6 million) is a manufacturer of carbon fibre ceramic brake discs for the automotive industry. Surface Transforms has continued to achieve its objectives over the past twelve months, growing revenues through multi-year contracts, delivering on plans to secure new and high-profile customers and significantly expanding the total order book to almost £200 million. Importantly, Surface Transforms has also successfully raised a further £16 million of new capital, which will help fund required capacity expansion. With significant contracts and necessary funding now in place, the company's management team can focus on the fulfilment of existing orders. Subject to the successful delivery of existing contracts, the expectation is that the business becomes profitable and self-sustaining from a cashflow perspective during 2023. The disappointing share price decline therefore reflects the general decline in the value of AIM-listed stocks, rather than being caused by any operational or financial disappointments during the period.

Tristel (2.3% of net assets, -£4.7 million) is a manufacturer of infection-prevention products, which help to prevent the transmission of microbe infections using proprietary chemistry based on chlorine dioxide. With hospitals gradually returning to normal levels of service post the COVID crisis, Tristel is set to benefit from an increasing sales volume. It recorded revenues of £31.1 million in its financial year ended 30 June 2022, while profitability declined against the prior year by 16% to £4.5 million. The decline in profitability was in line with management forecasts and is accounted for by a period of destocking in the NHS following the COVID pandemic, which had caused surgical procedures to be put on hold. Tristel remains a highly cash generative business and held net cash balances of £8.9 million at its financial year end on 30 June 2022. Subject to receiving FDA approval, Tristel intends to launch its growing range of infection prevention products in the US market during 2023. If successful, this new area of activity could transform the growth prospects of the business.

Access Intelligence (2.8% of net assets, -£3.5 million) operates a Software as a Service (SaaS) business model focused on providing senior management teams with the tools necessary to enable them to control and manage the reputations of the businesses they lead. Throughout the financial year to the end of November 2022, Access Intelligence has continued to accelerate the development of its product offering and to extend its global footprint. Most recently, the acquisition of Isentia has provided Access Intelligence with a significant opportunity to expand in the Asia Pacific region. However, with an increasingly difficult economic backdrop to contend with, the market has taken a cautious view on the short-term growth prospects for the business and, as a result, its share price has been weak.

Directa Plus (2.0% of net assets, -£3.3 million) is a leading producer and supplier of graphene-based products for use in consumer and industrial markets. In its most recent half-year period ended 30 June 2022, Directa Plus delivered revenues of €5.5 million, which represents growth of 39% on the equivalent half year period in 2021. The business continues to develop and deliver market leading products in three key business verticals; Industrial, Environmental Remediation and Textiles and its management remains confident of delivering further growth in revenues in the second half of the financial year, despite the uncertainty surrounding the macro-economic outlook.

Trackwise Designs (0.0% of net assets, -£3.4 million) is a manufacturer and distributor of electronic components, designing printed circuit technology for a range of telecommunications, aviation, automotive, and defence applications. In September 2022, Trackwise Designs announced that it expected to deliver significantly lower production volumes in its current financial year, compared to previous estimates. It is also highly likely that the company will require additional funding in order to complete the development of a new manufacturing facility. The company's share price has suffered accordingly, and the management team is now actively exploring possible strategic partnerships in order to support the future development and growth of the business.

Trellus Health (0.2% of net assets, -£3.3 million) is a wellness and fitness services company that provides a care platform for the management of complex medical conditions. In early 2022, Trellus Health successfully launched its Direct-to-Consumer offering in the New York tri-state area, which led to accelerated commercial progress. During 2022, Trellus Health also advanced the launch of its product to tackle irritable bowel syndrome, offering a comprehensive gastrointestinal solution ahead of original expectations. The business continues to receive increasing interest from pharmaceutical companies, as well as prospective B2B2C insurance partners that would potentially allow it to become part of their offered health plans. Despite this positive progress, Trellus Health remains some way from achieving sustainable profitability. As a result, the share price has remained under pressure and the management team has begun to implement cost savings to reduce the company's cash-burn rate.

Anpario (3.5% of net assets, -£3.2 million) is an international manufacturer and distributor of natural feed additives for animal health, nutrition, and biosecurity. Anpario reported a slight decline of -3% in adjusted earnings per share during the first half of its financial year ended 30 June 2022. This modest decline in profitability was due to a significant increase in the price of raw materials, together with increased shipping costs for both raw materials and finished goods. Management has put prices up across Anpario's product range and customers have accepted these price increases, which has helped to mitigate the impact of inflationary cost pressures. Anpario's customers in the farming industry are also under strain given the current economic environment but, given the key health and growth benefits offered by Anpario's natural feed additives, an increased cost in this area should be justifiable. Anpario's management team remains cautious in their outlook for profitability for the full financial year due to the uncertain macro-economic outlook, but the business itself remains in sound financial health with no debt, significant levels of cash and with healthy profit margins that are expected to improve further as recently introduced price rises work through the order book.

The British Honey Company (British Honey) (0.0% of net assets, -£3.2 million) is a UK based producer of spirits, honey and jams. The company began trading in 2014, initially focused on honey production and subsequently expanding into honey infused spirits. In February 2021, British Honey completed the acquisition of Union Distillers Limited, which is a Leicestershire based independent producer and distributor of spirits, for £10 million in an effort to build scale in the craft spirit market. In June 2022 however, the business was forced to suspend its shares, because its auditors required additional time to complete and reconcile an inventory stock-take. A subsequent update in August 2022 reported that the company was experiencing more difficult trading conditions due to the challenging consumer environment, exacerbated by further supply chain disruption and raw material cost inflation. As a result, the Investment Manager took the decision to write down the holding in British Honey to nil value. This cautious approach reflects our concern about the business' ongoing viability. Following the end of the period under review, the board of British Honey announced that it was undertaking a strategic review and placing the business into a formal sale process. British Honey remains debt free and while it has been a disappointing investment, we remain cautiously optimistic that the board of British Honey can, and must, recover some value for its long-suffering shareholders, albeit that the timing and quantum of any value recovery remains uncertain.

Largest Contributors

Aurrigo International (1.5% of net assets, +£0.3 million) is a leading international provider of transport technology solutions and is highly regarded as a developer of specialised autonomous and semi-autonomous vehicles. Aurrigo's patented products and services tackle the complex issues that the global aviation industry faces. On 15 September 2022, Aurrigo International listed on AIM and successfully raised gross proceeds of £8 million at a price of 48p per share and a market capitalisation of approximately £20 million. The Company invested £3 million in the initial public offering. The public listing and the injection of substantial new capital will help Aurrigo to further develop and commercialise autonomous vehicles for use in ground handling at airports around the world.

Gama Aviation (0.1% of net assets, +£0.1 million) offers fleet management services to business jet owners, often managing all aspects of running and maintaining an aircraft on behalf of its owner. Gama provides services to multiple sectors such as, special mission, technology, outsourcing and business aviation. In its interim results, which were announced during September 2022, Gama Aviation reported strong revenue growth of 30% to $139.3 million and a return to profitability, despite the turbulent macro-economic conditions. While business jet aviation activity is expected to continue to recover, Gama Aviation's management team remains cautious about future growth, given inflationary cost pressures and global economic instability.

Augean (+£0.1 million) is a leading UK provider of sustainable waste recycling, recovery, treatment and disposal services. The group operates in the hazardous waste management sector, oil and gas industry, and nuclear and radioactive industry. At the beginning of 2022, long-term investors in the waste management sector, Ancala Partners and Fiera Infrastructure, successfully completed their acquisition of Augean for £390 million, which realised a capital profit of more than £10 million on the Company's investment. Following this, the Board declared a special interim dividend of 7.0 pence per share, which was paid on 10 February 2022.

Interactive Investor ("ii") (+£11.8 million) is an award-winning online investment platform which, in recent years, has grown substantially through a combination of organic and acquisitive growth. ii is now the largest "flat-fee" investment platform in the UK with over £50 billion of assets under administration and over 400,000 customers. ii was founded over twenty-five years ago as a digital retail investing information service and continued to evolve slowly until a new Chief Executive was appointed in 2017. The Company first acquired shares in ii in November 2013, buying a stake in what was then a small private company with a sub-scale customer base and a little known brand name. However, the new CEO came with a clear vision to create an innovative, user friendly investment platform that would be best in class in terms of information and functionality, thereby properly meeting the needs of its retail customers.

Between 2017 and 2021, ii delivered rapid and sustained organic growth, which was augmented through the acquisition and successful integration of four competitors in the mid-size, UK investment platform market. The largest of these acquisitions were TD Waterhouse and Alliance Trust Savings, each of which helped ii to achieve critical mass in terms of its active customer base. As a result, ii rapidly achieved healthy and growing levels of profitability, while also becoming highly cash generative. In December 2021, the Board of ii agreed to a cash offer from abrdn plc, for a price approaching £1.5 billion, Following approval from the Financial Conduct Authority and other regulatory bodies, the sale to abrdn was completed in May 2022. Total cash proceeds of approximately £55 million were received for the Company's shares in ii, which represents a capital gain of more than £51 million on our total investment cost and equates to a fifteen-fold return on investment. As a result of this exceptionally successful outcome and, taking into consideration the cash already held on the Company's Balance Sheet, your Board resolved to distribute the entire realised gain of £51.6 million to Shareholders by way of a special interim dividend of 32.0 pence per share. This was paid to Shareholders on 11 August 2022. We are delighted with this positive result as it further endorses our long-term approach to investment, while also returning significant value to Shareholders in the form of tax-free dividends. Such events, albeit rare, also demonstrate that the Venture Capital Trust structure is an ideal one for investing in small, early-stage, high growth businesses. With the benefit of appropriate levels of funding, advice and encouragement a number of the investee companies held in the portfolio already have the potential to follow the same development path as ii, and over time, could create further significant value for Shareholders.

Non-Qualifying Investments

The non-qualifying investments made 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, to generate additional dividend income for future distribution to Shareholders, while awaiting suitable VCT qualifying investment opportunities. In the main, these investments performed satisfactorily during the period under review.

Offer for Subscription

The fully subscribed Offer for Subscription that closed in February 2022, was a welcome endorsement, in challenging times, of the Company's long-term strategy. The new funds raised will enable us to continue the established and successful strategy of selectively growing the existing portfolio of investments, while continuing to provide much needed capital to emerging 'scale-up' businesses. The deployment of capital into new investment opportunities will continue to be rigorously controlled, especially in view of the difficult investment landscape.

Investment Activity

In terms of investment activity, the number and quality of available VCT qualifying investment opportunities examined during the period was much lower than in previous years. As a result, just two investments were completed in new VCT Qualifying companies in the financial year.

In addition, six follow-on investments were completed in companies already held in the portfolio. In total, just under £9.8 million of capital was committed to these eight investments.

As highlighted in the table below, the investments made during the financial year failed to deliver a positive contribution to overall performance. Clearly, this is a disappointing outcome, but, with the exception of British Honey as discussed above, it is more a function of equity market weakness than because any of these investee companies under-achieved from an operational or financial perspective.

Although we remain confident that most of these new investments retain the potential to generate significant capital growth in future years, it is nonetheless disappointing that most of them have struggled to generate positive returns in the period since capital support was initially provided.

However, because of the strict rules surrounding Venture Capital Trusts, we are required to invest in businesses that are typically at a very early stage in their development. The rules, which we believe are justified, do however increase the risk of incurring capital losses, especially given that progress towards sustainable and growing profitability is rarely straightforward. In testing macroeconomic conditions, such as those currently being experienced, it is unsurprising that the new investments made have struggled to perform in share price terms.

We will continue to adopt a prudent approach to committing capital to new investment opportunities during the current financial year.

Realisations

In aggregate, £79.0 million was raised from the full and partial disposal of holdings during the period.

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 exits were completed during the financial year; Augean and Interactive Investor, each of which received recommended bids from trade buyers. The net proceeds from these realisations amounted to £66.9 million, realising an aggregate capital gain on investment cost of £61.9 million over the life of the holdings. As a result, the Board was able to propose the payment of two special interim dividends, which were distributed to Shareholders in February and August 2022.

A number of full and partial disposals in qualifying and non-qualifying investments were also made during the period. These transactions generated total proceeds of £12.1 million and an aggregate capital profit of £4.4 million.

The total value of all disposals made during the period therefore amounted to £79.0 million. Including partial disposals, the total realised capital gain from the sale of investments over the life of the holdings amounted to £66.3 million.

Outlook

For almost 15 years, Central Banks have injected massive amounts of liquidity into the market in an attempt to support their faltering economies. This programme of 'liquidity easing' created a sea of cheap money which, in turn, enabled interest rates to remain at historically and, perhaps artificially, low levels.

The realisation, in early 2020, that the world's population was facing a dangerous pandemic, caused most governments to introduce stringent lockdown measures designed to protect their citizens and prevent health systems from becoming overwhelmed. This policy, while it may well have saved many lives, also resulted in an enormous additional burden of national debt, while placing many economies into a form of hibernation.

As economies slowly emerged from this government-enforced hibernation during 2021, the pent-up consumer demand that lockdown had created, was unleashed. This unusual phenomenon created an illusion that economic growth had been restored and could be sustained without negative consequences. Unfortunately, this 'relief rally' was short-lived and also firmly laid the foundations for the subsequent return of inflation.

Most economies are now facing spiralling levels of inflation and Central Banks are trying to raise interest rates sufficiently quickly to control the rate of inflation, without killing off the prospects of a return to economic growth.

The issue of inflation is a huge and seemingly intractable problem, which may well culminate in a global recession despite the best efforts of Governments and Central Banks around the world.

The current financial year has therefore begun in the same difficult fashion as the previous calendar year ended. Mr Putin's war in Eastern Europe grinds on, causing misery to millions of Ukrainians; constrictions in the global supply chain continue to create shortages of key goods and services, energy costs remain at elevated levels, and the UK Government has lurched from one political crisis to the next.

Against this backdrop it is unsurprising that equity markets remain volatile, and that investor sentiment is fragile at best. Shareholders should therefore be mindful that we see only a slim prospect of short-term recovery in equity markets, which means that the Company's investment portfolio may well struggle to deliver positive returns during the remainder of the current financial year.

Despite all the obvious challenges however, most of the portfolio remains in good health, with the majority of investee companies continuing to trade reasonably well. More importantly, despite their market valuations having fallen dramatically over the past year, many of these businesses remain well-funded and are operating with balance sheets that are sufficiently robust to ensure that they should successfully navigate the current turbulence.

In difficult circumstances, we remain focused 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 also selectively seeking to support emerging businesses through the provision of much needed capital.

Finally, with the benefit of many decades of fund management experience, the team at Unicorn recognises that there is little value in attempting to second-guess the direction of equity markets, which often begin to recover long before there are any tangible signs of economic recovery. As the proverb states, 'the darkest hour is just before the dawn'. Shareholders should therefore take comfort from the fact that equity markets should inevitably regain their poise in due course. It is also worth noting that the capital declines experienced by the Company's investment portfolio in recent months are almost entirely represented by unrealised losses. As such, once investor confidence returns, the recovery in asset value should be significant. More importantly, we firmly believe that some of the investee companies held have the potential to become world-leading businesses which, like Interactive Investor, should help to create further significant value for Shareholders in the coming years.

Chris Hutchinson

Unicorn Asset Management Limited

13 December 2022

Financial and Performance Review

Net Assets

As at 30 September 2022, the audited net assets of the Company were £221.1 million, compared to £370.8 million on 1 October 2021. The decline in total net assets was due mainly to the fall in value of the portfolio and the distribution of dividends to Shareholders. These were partially offset by the support received from new and existing Shareholders under the Offer for Subscription, which raised £24.4 million net of costs.

Performance during the year

As at 30 September 2022, the audited NAV of the Company was 134.8 pence per share, having fallen by 113.8 pence from 248.6 pence per share at the start of the financial year under review, compared with a rise of 70.0 pence per share in the year ended 30 September 2021. After adding back dividends of 45.5 pence per share paid in the year, the total return to Shareholders decreased by 68.3 pence or 27.5% compared with an increase of 76.5 pence or 42.8% in the previous year. In comparison, the total return from the FTSE AIM All-Share Total Return Index was a decline of 34.3% over the year to 30 September 2022 (2021: 30.8% increase).

At the financial year end, there were 85 active VCT qualifying and 8 non-qualifying companies held in the portfolio. These investments are spread across 25 different sectors.

In the year to 30 September 2022, a total of £79.0 million was realised through the sale of investments, approximately £9.8 million was deployed in new investments and approximately £71.7 million was paid out as dividends to Shareholders. A further £6.1 million was spent on the operating costs of the Company and £4.4 million on share buybacks.

Share Issues and Buybacks

The Company raised £24.4 million (after costs) through an Offer for Subscription and issued 12,647,039 shares, details of which are given in Note 13 on page 77 of the Annual Report.

In addition, the Company allotted 4,706,355 shares under the Dividend Reinvestment Scheme ("DRIS") at an average price of 154.24 pence per share.

During the year a total of 2,515,309 (2021: 3,204,997) shares were bought back for cancellation for a total cost of £4.4 million (2021: £6.3 million).

Total Return

The Company generates returns and losses from both capital growth and dividend income. For the year ended 30 September 2022, the total loss was £105.2 million (2021: £111.1 million gain), of which there was a £104.8 million loss (2021: £111.6 million gain) from capital and a £0.4 million loss (2021: £0.5 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 (g) on pa69 of the Annual Report.

The total net losses per share were 67.3p (2021: 75.0p earnings). The total net losses per share was made up of 67.1p from capital and 0.2p from revenue.

Revenue Return

The income of £1.7 million (2021: £1.7 million) represents dividend income derived from the Company's investments and interest on cash balances.

Capital Return

At the year end the investment portfolio was valued at £198.5 million (2021: £368.6 million). The investment portfolio delivered a realised return on disposals of £12.8 million (2021: £6.7 million) and unrealised valuation losses on investment of £113.6 million (2021: £109.1 million gain). The valuation basis of the Company's investments is described in Note 1 (d) on pages 68  and 69 of the Annual Report.

Ongoing Charges and Running Costs

The Ongoing Charges of the Company for the financial year under review was 2.0% (2021: 2.0%) of average net assets, which remains below the cap of 2.75%.

The total expenses amounted to £6.1 million (2021: £6.8 million) and include investment management fees of £5.3 million (2021: £6.1 million), Directors' fees of £0.1 million (2021: £0.1 million), administrative service fees of £0.2 million (2021: £0.2 million) and other third-party service providers fees of £0.2 million (2021: £0.2 million).

Under the revised management agreement effective from 1 October 2018 and the side letter effective from 1 January 2022 and as shown in Note 3, the Investment Manager receives a management fee of 2% per annum of net assets up to £200 million, 1.5% per annum of net assets in excess of £200 million and 1% in excess of £450 million (other than on investments in OEICs managed by the Investment Manager). Other expenses are shown in Note 4 on page 72 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. This was partially offset by the purchase of investments, the payment of running costs, share buybacks and dividends and at the year end the cash balance had increased to £23.8 million (2021: £3.6 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 22 and 23 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 89 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 five 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 24 of the Annual Report. Further information on the service providers is outlined in the Corporate Governance Statement on page 50 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 24 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 41 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.

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.

Details of the Company's Dividend Reinvestment Scheme are outlined on page 86 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 20 and 77 of the Annual Report. At the financial year end, the Company's shares were quoted at a mid-price of 126.5 pence per share representing a discount to NAV per share of 6.2%.

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 79 to 85 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 its approach to risk. It has sought to identify new and 'Emerging Risks' alongside the principal 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 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 reported last year Jocelin Harris indicated his intention to step down from the Board and will not seek re-election at the AGM. During the year the Board engaged an outside recruitment company to assist in finding a suitable candidate to join as a new Director. The process involved the identification of key skills a candidate should possess, the recruitment agency then assisted with the drawing up of a long-list of possible candidates which the Board acting as a nomination committee reduced to a short-list of candidates who were interviewed. Following this process the Board were pleased to announce that Josephine Tubbs accepted the offer to join the Board on 24 May 2022.

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. Upcoming regulation applicable from April 2023 will require a Company to report on a comply or explain basis against three key indicators. 40% of the Board should be comprised of women. The Company meets this requirement at the year end and the percentage of women will represent 50% of the Board once Jocelin Harris retires at the AGM. When Charlotta Ginman is appointed as the Senior Independent Director after the AGM, this will meet the requirement that one senior board position is held by a woman. Although not currently meeting the requirement that one Director should be from an ethnic minority background this is something the Board will be mindful of in any future recruitment, providing a suitable candidate possesses the key skills and experience required for the position.

From the beginning of the year until May 2022 the Board consisted of three males and one female. When Josephine Tubbs joined the Board, the Board consisted of three male and two female Directors. All Directors identified themselves as caucasian by ethnic background.

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

Full details of the Company's ESG approach can be found on page 30 of the Annual Report.

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 Annual Reports 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 in the Corporate Governance Statement on page 41 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 2022.

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 took place in March 2022.

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: £6.1 million invested in non-qualifying, fully listed shares which are readily realisable, a further £3.3 million in a daily dealing open ended fund and £23.7 million in 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.

In order to maintain viability, the Company has a 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 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 investment 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.

Prospects

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

For and behalf of the Board

Tim Woodcock

Chair

13 December 2022

EXTRACT FROM DIRECTORS' REPORT

Share Capital

At the year-end there were 164,023,203 (2021: 149,185,118) 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 77 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 164,023,203 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 2022, the Company held cash balances of £23.7 million, £6.1 million in fully listed stocks and £3.3 million in the Unicorn Ethical OEIC fund. 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, 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 loss 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

Chair

13 December 2022

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's statutory accounts for the years ended      30 September 2022 or 30 September 2021 but is derived from those accounts. Statutory accounts for the year ended 30 September 2021 have been delivered to the Registrar of Companies and statutory accounts for the year ended 30 September 2022 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 2022

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 July 2022 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 (loss)/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 2022

The financial statements were approved and authorised for issue by the Board of Directors on 13 December 2022 and were signed on their behalf by:

Tim Woodcock

Chair

The notes below form part of these financial statements.

Statement of Changes in Equity

for the year ended 30 September 2022

* 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 2022

The notes below form part of these financial statements.

Notes to the Financial Statements

for the year ended 30 September 2022

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 68 to 70 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 July 2022.

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 41 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

The management fee is calculated as follows:

At 30 September 2022, officers and employees of the Investment Manager held 1,482,754 shares in the Company.

During the year, Unicorn Asset Management Limited ("UAML") received an annual management fee, as detailed above, of the net asset value of the Company, excluding the value of the investments in the OEICs.

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 2022, UAML also earned fees of £36,000 (2021: £52,000), 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 Ethical Fund OEIC and, until sold, Unicorn UK Smaller Companies OEIC, Unicorn UK Growth OEIC (formerly Unicorn Free Spirit 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 2021/22 or the prior year.

4        Dividends

* The difference between total dividends and that shown in the Cash Flow Statement is £7,259,000 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 2021/22 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 £5,000 were incurred in the year. These have not been deducted from realised gains shown above of £12,776,000 but have been deducted in arriving at gains on realisation of investments disclosed in the Income Statement of £12,771,000.

The shares delisted during the year relate to Kellan Group.

Note: Permanent impairments of £7,075,000 held in respect of losses on investments remain unchanged from the previous year end.

Reconciliation of cash movements in investment transactions

The difference between the purchases in Note 6 and that shown in the Cash Flows is £16,000 which represents the reinvested dividends on the Unicorn Ethical Fund.

7        Net asset value

8        Post balance sheet events

On 8 December 2022, the Company announced an Offer for Subscription as detailed in the Chair's Statement above.

9        Capital commitments and contingent liabilities

There were no capital commitments or contingent liabilities at 30 September 2022 (2021: nil).

10     Shareholder information

Dividend

The Directors have proposed a final dividend of 3.5 pence per share. Subject to Shareholder approval, the dividend will also be paid on 14 February 2023 to Shareholders on the Register on 6 January 2023.

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 90 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 2022 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 Tuesday, 7 February 2023 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 41 and 42 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 91 to 95 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 3 February 2023. Please note that you can vote your shares electronically athttps://proxy-unicorn.cpip.io/.

13     National Storage Mechanism

A copy of the 2022 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.

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.