Half-yearly Report

UNICORN AIM VCT plc ("the Company") Half-Yearly Report for the six months ended 31 March 2013 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 maximising the stream of dividend distributions to Shareholders from the income and 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 70% of the Company's total assets are to be invested in qualifying investments of which 30% (70% for funds raised from 6 April 2011) by value must be in ordinary shares carrying no preferential rights to dividends or return of capital and no rights to redemption. KEY DATA As at 31 March 2013 Ordinary Shares Net Net asset Cumulative NAV total Share price assets value per dividends return to as at share (NAV) paid per shareholders (p) (£ (p) share since launch* million) per share (p) (p) 31 March 2013 61.9 108.5 15.0 123.5 89.3 30 September 2012 59.0 102.3 10.0 112.3 86.0 31 March 2012 56.6 97.4 10.0 107.4 70.0 30 September 2011 60.4 103.3 5.0 108.3 86.3 31 March 2011 64.6 109.5 5.0 114.5 97.5 * Launch of the S3 shares on 22 February 2007. The majority of shareholders in the Company originally invested in one of the five former share classes of either the Company and/or Unicorn AIM VCT II plc. As a result of the merger of all five former share classes in March 2010, all shareholders now only hold Ordinary shares. These were formerly called S3 shares. To enable shareholders in each former share class to monitor the performance of their original investment, the tables below show the NAV total return at 31 March 2013 for a shareholder who invested £10,000 at £1 per share at the date of launch of a particular fundraising, excluding any initial income tax relief received: Unicorn AIM VCT plc Funds Share class and year of No. of NAV at 31 Dividends Dividends NAV fundraising shares March paid paid total held post 2013 pre-merger post-merger return merger (£) (£) (£) (£) Ordinary Shares (raised in 9,957 10,806 n/a 498 11,304 2012, issued at average price of 1.0043p) Ordinary Shares (raised in 8,620 9,355 n/a 1,207 10,562 2011, issued at average price of 116p) Ordinary Shares (formerly S3 10,000 10,853 100 1,400 12,353 Shares raised in 2006/07) Former Funds: Original Ordinary Shares 6,078 6,596 4,550 851 11,997 (raised in 2001) Original Ordinary Shares 2007 8,442 9,162 903 1,182 11,247 /08 top-up (13,890 shares issued for £10,000 investment at 72p per share) Series 2 Shares (raised in 7,750 8,411 2,125 1,085 11,621 2004) Series 2 Shares 2007/08 8,424 9,143 489 1,179 10,811 top-up (10,870 shares issued for £10,000 investment at 92p per share) Former Unicorn AIM VCT II plc Funds Share class and year of No. NAV at 31 Dividends Dividends NAV fundraising shares March paid paid total held post 2013 pre-merger post-merger return merger (£) (£) (£) (£) Ordinary Shares (raised in 8,283 8,990 1,300 1,160 11,450 2005) Ordinary Shares 2007/08 8,452 9,173 1,225 1,183 11,581 top-up (10,205 shares issued for £10,000 investment at 98p per share) C Shares (raised in 2006) 7,267 7,887 245 1,017 9,149 C Shares 2007/08 top-up 8,165 8,861 169 1,143 10,173 (11,235 shares issued for £ 10,000 investment at 89p per share) Initial income tax relief of up to 20% was available for shareholders who invested in tax years 2001/2002 to 2003/2004, 40% for shareholders who invested in 2004/2005 and 2005/2006 and 30% for shareholders who invested in tax years since 2006/2007. Additional capital gains tax deferral relief was also available for shareholders who invested between 2001/2002 and 2003/2004. Dividend history Graph can be found in the Half- Yearly Report. Dividends paid Financial Ordinary Original S2 Shares Unicorn VCT Unicorn VCT year paid (formerly Ordinary II Ordinary II C Shares S3) Shares Shares Shares (p) (p) (p) (p) (p) 2013* 5.00 3.04* 3.88* 4.14* 3.63* 2012* 5.00 3.04* 3.88* 4.14* 3.63* 2011* 4.00 2.43* 3.10* 3.31* 2.91* 2010 - 3.50 2.50 6.00 0.45 2009 1.00 3.00 2.00 1.00 - 2008 - - 5.00 5.00 1.00 2007 - 12.55 10.00 0.50 1.00 2006 - 10.00 1.00 0.50 - 2005 - 5.00 0.75 - - 2004 - 10.45 - - - 2003 - 1.00 - - - 15.00 54.01 32.11 24.59 12.62 Merger 1.00000000 0.60781764 0.77503076 0.82830102 0.72677686 conversion ratio** * The dividends in the 2011 to 2013 years on the Ordinary (formerly S3) shares are also shown for each of the former share classes, calculated in proportion to the merger conversion ratios shown at the foot of the table above. ** The merger conversion ratio was applied at the date of the merger on 8 March 2010, to calculate entitlement to the new Ordinary shares. CHAIRMAN'S STATEMENT I am pleased to present the Half-Yearly Report (the "Report") of the Company for the six months ended 31 March 2013. I would like to take this opportunity to welcome all new shareholders and to thank existing shareholders for their continued support. In both absolute and relative performance terms, the period under review has been encouraging. In the six months to 31 March 2013, the Company's investment portfolio generated capital gains of 11.5%, which compares favourably with a capital return of 3.6% from the FTSE AIM All-Share Index. The broader UK equity market also performed strongly with capital gains of 11.7%, 12.7% and 18.4% from the FTSE 100, FTSE All-Share and FTSE Small Cap indices respectively. The net assets of the Company as at 31 March 2013 were £61.9m which translates into Net Asset Value of 108.5p per share. This represents growth in net assets of £2.9m and a total return per share to shareholders of 10.93%, after adding back dividends paid in the period. During this six month period, a total of £ 2.9m was paid to shareholders by way of dividends, whilst a further £0.6m was applied to fund share buybacks. Enhanced Buyback Facility and a Top-Up Offer An Enhanced Buyback Facility and a Top Up Offer were also announced during the period. Over seven million shares were tendered under the Enhanced Buyback Facility, with the net proceeds being applied to the allotment and issue of new shares to participating shareholders. This allotment took place on 3 April 2013. A further 773,620 new ordinary shares were subsequently allotted and issued to investors applying for shares under the Top Up Offer. The Top Up Offer currently remains open for subscription until 31 July 2013, and has received subscriptions totalling £863,400 to date. Despite continuing economic uncertainties, it is pleasing to report that many of the businesses in which the Company has invested are trading robustly and remain in sound financial health. In turn, this has translated into solid share price gains from many holdings in the portfolio. As in previous periods, overall performance was held back by share price declines from a small number of VCT qualifying holdings. A review of the main contributors to performance (on a mid market price basis) follows:- Qualifying Investments Abcam (+12%) is a global leader in the manufacture and supply of therapeutic antibodies and protein research tools. In March 2013, the company released financial results for the six month period ended 31 December 2012, which revealed 28% revenue growth to £57.5m, whilst adjusted operating profits increased by 25.8% to £21.3m. Abcam remains a highly cash generative business and net cash balances at the period end amounted to £24.4m after accounting for cash outflows of £48.3m related to the acquisition of a competitor. Abcam remains the largest single holding in the portfolio, accounting for 14% of total assets, and in absolute terms it again delivered the largest contribution to performance. In order to manage stock specific risk prudently, partial disposals continue to be made on a regular basis. A further 100,000 Abcam shares were sold in the period realising a capital gain of £305,000. Anpario (+23%) is a specialist producer of natural feed additives for animal health, hygiene and nutrition, which is successfully growing its operations internationally. For the financial year ended 31 December 2012, Anpario reported revenue growth of 22% to £23.5m, which translated into a 24% increase in profit after tax to £2.1m. Despite a cash outlay of £2.6m to fund an acquisition, Anpario's balance sheet remains strong and debt free with a year-end cash balance of £3.7m. A final dividend of 3p per share has been proposed which represents an increase of 25% over the previous year's payment of 2.4p. Avingtrans (+20%) designs, manufactures and supplies critical components to the global aerospace, energy and medical sectors. In February 2013, Avingtrans announced interim results for the six month period ended 30 November 2012, which highlighted continued strong growth. Revenues from continuing operations increased by 19% to £16.9m, whilst profit after tax was £6.5m, which included a £6.1m profit on disposal of Jena Tec, a non-core subsidiary. The sale of Jena Tec to Kuroda of Japan for £12.4m eliminates group debt and means that management can now focus on the aerospace, energy & medical sectors. Datong (+62%), a leading provider of covert intelligence gathering solutions is currently in an offer period having received a bid approach in February 2013. As a result of this approach, the Board of Datong is conducting a formal sale process with a view to maximising shareholder value. Datong's share price rose markedly in the period as a consequence. Driver Group (+22%) is a global construction consultancy which continues to expand both its scope of operations and its international reach. A recently released trading update confirmed that, given continued strong trading and a healthy secured workload, results for the current financial year will exceed management expectations. Green Compliance (-76%) provides compliance services across the water hygiene, pest control and fire protection segments to a wide range of clients in both the UK public and private sectors. Following an extended period during which trading conditions became increasingly challenging, the Board of Green Compliance prudently sought to refinance and reposition the business. Bob Holt, the Chairman of Green Compliance, has now been appointed Chief Executive and cost savings have been implemented amounting to £1m on an annualised basis. Trading conditions have begun to improve, bank debt has been successfully renegotiated, and a fund raising with institutional shareholders has further strengthened the balance sheet. Unicorn AIM VCT has supported this latest fund raising by investing an additional £200,000. Trading in the quarter to 31 March 2013 has been encouraging, with sales growth month on month in each of the first three months of 2013. Revenue was 5% greater in the quarter to 31 March 2013 than in the quarter to 31 December 2012. In addition, sales and cash collections during March were reported as being at their highest levels since October 2012. Although the turnaround of this business is still in its early stages, the progress achieved to date is encouraging. Mattioli Woods (+36%) is a specialist pensions consultancy and wealth management business. Interim results for the period ended 30 November 2012 revealed a return to strong growth with revenues up 29.4% to £11.2m and adjusted profit before tax increasing by 26% to £2.5m. The interim dividend was increased by 25.9% to 2.33p per share. Mattioli Woods is a conservatively managed business which has established an enviable track record for delivering steady, sustainable growth since floating on AIM over seven years ago. Recurring revenues account for 64.4% of total turnover, which provides a solid platform on which to build further organic growth. In addition, the financial position remains strong with net cash amounting to £3.9m, despite significant investment in the people and systems required to continue delivering growth. SnackTime (-67%) is the third largest vending company in the UK. The business operates in a competitive market and has also needed to adapt to an increasingly challenging economic environment. In recent months it became apparent that SnackTime would need to be refinanced in order to avoid breaching bank covenants and to support short-term working capital requirements. New banking facilities and a successful loan note issue were announced on 5 April 2013. Unicorn AIM VCT invested £300,000 of the £1m loan note issue on 5 April 2013. With a strengthened balance sheet, the new management team is in a position to build on the progress already made in stabilising the business and recovering value for shareholders. Zetar (+32%), a manufacturer of confectionery and savoury snacks was acquired in the period by a German based competitor generating a realised capital gain on original book cost of £374,000. Non-Qualifying Investments Non-qualifying investments continued to perform satisfactorily, with particularly strong contributions delivered through the Company's exposure to the Unicorn OEIC Fund range, with the UK Smaller Companies, Mastertrust and Free Spirit Funds, gaining in value by 20%, 21% and 15% respectively in the period under review. Other notable share price gains in the period were delivered by Macfarlane Group (+22%), Mears Group (+21%) and Portmeirion Group (+14%). Investment Activity During the period, no new VCT qualifying companies were introduced to the portfolio. A total of £1.5m was committed to secondary VCT qualifying investments in Green Compliance, Hangar 8 and Tangent Communications. Full and partial disposals of a number of holdings were made in order to raise cash to meet the dividend payment to shareholders made in February 2013. These disposals were predominantly made of non-qualifying holdings. VCT Status In aggregate, the Company remains well above the VCT qualifying threshold required by HM Revenue & Customs, with approximately 79.5% of total assets being invested in VCT qualifying companies. All other HM Revenue & Customs tests have been complied with and your Board has been advised by PWC that the Company has maintained its venture capital trust status. Dividends The Board is not proposing an interim dividend, but will consider the payment of dividends when reviewing the Annual Report and Accounts after the end of the current financial year. Auditors As a result of PKF (UK) LLP entering a business combination with BDO LLP on 28 March 2013, PKF (UK) LLP resigned as auditor on 16 May 2013 and the directors have appointed BDO LLP as auditor to fill the casual vacancy. The Board Malcolm Diamond stood down as one of the Directors of the Company immediately after the annual general meeting held on 7 February 2013. I would like to repeat my observation in the Annual Report that Malcolm has been an invaluable source of experience, knowledge and wisdom. I would again like to take this opportunity to pay tribute to his important contribution and, personally, to thank him for his constant support and advice. Shareholder communications May I remind you that information on the Company is available on the Manager's website at www.unicornam.com. Outlook Equity markets have been generally buoyant during the period under review. The continued rally has been helped by a slowly improving economic outlook, especially in the United States of America. Economic recovery in the UK, however, remains particularly fragile. Our Investment Manager therefore continues to focus on identifying well managed, profitable and cash generative businesses with strong leadership positions in niche, growing markets. Conclusion The Board is pleased with the progress made by the Company in the period under review. The rise in Net Asset Value from 102.3p per share to 108.5p per share is encouraging. In addition, a dividend of 5p per share was paid in the period. As a consequence of this steady development, Unicorn AIM VCT has consolidated its position as the largest AIM-focused VCT in the market with net assets of £ 61.9m at the period end. The dividend payment of 5p per share represents a 4.6% tax free yield based on the period end Net Asset Value of 108.5 p per share and an even more attractive yield of 5.6% on the recent quoted share price of 89.25p. Given the current number of shares in issue, together with healthy capital and income reserves, annual dividend distributions at a similar level should be achievable over the medium term. The Investment Manager's fundamental objective is to deliver an attractive and sustainable stream of dividend distributions to shareholders whilst seeking to achieve meaningful capital gains over the longer term. The investment portfolio is managed accordingly and consists of a diverse range of companies operating across a broad spectrum of sectors. Trading conditions appear to be improving and the majority of investee companies are now generating growth in both sales and profits. As a consequence, balance sheets have been strengthening, dividend distributions from retained investments have been growing and management teams have begun to express a more confident view on the prospects for their businesses. Economic recovery remains fragile at best and, as an obvious example, another financial bailout in the Eurozone could have damaging implications, especially for equity markets in the UK and Europe. In the absence of such setbacks, the Investment Manager remains confident of delivering further progress in the second half of our financial year. Peter Dicks Chairman 16 May 2013 PRINCIPAL RISKS AND UNCERTAINITIES In accordance with DTR 4.2.7, the Board confirms that the principal risks and uncertainties facing the Company have not materially changed since the publication of the Annual Report and Accounts for the year ended 30 September 2012. The Board acknowledges that there is regulatory risk and continues to manage the Company's affairs in such a manner as to comply with section 274 Income Tax Act 2007. The principal risks faced by the Company include: * investment and strategic * regulatory and tax * operational * fraud and dishonesty * financial instruments * economic A more detailed explanation of these risks can be found in the Directors' Report on page 22 of the 2012 Annual Report and Accounts - copies can be found on www.unicornam.com. GOING CONCERN After due consideration, the Directors believe that the Company has adequate resources for the foreseeable future and that it is appropriate to apply the going concern basis in preparing the financial statements. As at 31 March 2013, the Company held cash balances and investments in money market funds with a combined value of £1,335,000. The majority of the Company's investment portfolio also remains invested in fully listed and AIM quoted equities which may be realised, subject always to the requirement for the Company to maintain its VCT status. Cash flow projections have been reviewed and show that the Company has sufficient funds to meet both contracted expenditure and any discretionary cash outflows from buybacks and dividends. The Company has no external loan finance in place and is therefore not exposed to any gearing covenants. CAUTIONARY STATEMENT This Report may contain forward looking statements with regards to the financial condition and results of the Company, which are made in the light of current economic and business circumstances. Nothing in this Report should be construed as a profit forecast. For and on behalf of the Board: Peter Dicks Chairman 16 May 2013 RESPONSIBILITY STATEMENT In accordance with Disclosure and Transparency Rule (DTR) 4.2.10, Peter Dicks (Chairman), James Grossman, Jeremy Hamer (Chairman of the Audit Committee) and Jocelin Harris (Senior Independent Director), the Directors, confirm that to the best of their knowledge: a. the condensed set of financial statements, which have been prepared in accordance with the statement "Half-Yearly Reports" issued by the Accounting Standards Board, give a true and fair view of the assets, liabilities, financial position and profit of the Company as at 31 March 2013, as required by DTR 4.2.4; b. the interim management report included within the Chairman's Statement and Investment Portfolio Summary includes a fair review of the information required by DTR 4.2.7 being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; c. a description of the principal risks and uncertainties facing the Company for the remaining six months is set out below, in accordance with DTR 4.2.7; and d. There were no related party transactions in the first six months of the current financial year that are required to be disclosed in accordance with DTR 4.2.8. 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 * good cash generation to finance ongoing development allied with a progressive dividend policy. Asset allocation and risk diversification policies, including maximum exposures, are to an extent governed by prevailing VCT legislation. Specific conditions for HM Revenue & Customs ("HMRC") approval of VCTs include the requirement that no single holding may represent more than 15% (by value) of the Company's total investments and cash, at the date of investment. VCT regulation The investment policy is designed to ensure that the Company continues to qualify and is approved as a VCT by HMRC. Amongst other conditions, the Company may not invest more than 15% at the time of its investments in a single company and throughout the period must have at least 70% by value of its investments in shares or securities in VCT qualifying holdings, of which a minimum overall of 30% by value (70% for funds raised after 6 April 2011) must be in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). In addition, the Company must have at least 10% by value of its investment in each VCT qualifying company in ordinary shares which carry no preferential rights (save as may be permitted under VCT rules). The £1 million limit on the amount of investment a VCT may make into a particular company within a tax year has been abolished, except where that company trades in partnership or has a joint venture. The VCT legislation requires that an investee company should not receive more than £5 million from State Aid sources, including VCTs, within any twelve month rolling period. Asset mix Where capital is available for investment while awaiting suitable VCT qualifying opportunities, or in excess of the 70% VCT qualification threshold, it may be invested in collective investment funds or in non-qualifying shares and securities in smaller listed UK companies. Cash and liquid resources are held in bank accounts and money-market funds. 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. Management of the Company 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. In order to maintain compliance with HMRC rules the Company may not invest more than 15% of its assets at the time of making any investment in a single company and it also ensures that all other VCT regulatory requirements are fulfilled. To ensure that an appropriate spread of investment risk is achieved, the Board receives and reviews comprehensive reports from the Investment Manager and the Administrator on a monthly basis. When the Investment Manager proposes to make any investment in an unquoted company and/or instrument, the prior approval of the Board is required. The Administrator, Mobeus Equity Partners LLP, also provides company secretarial, administration and accountancy services to the Company. INVESTMENT PORTFOLIO SUMMARY as at 31 March 2013 Book cost Valuation % of net assets by £'000 £'000 value Qualifying investments AIM/ISDX quoted investments: Abcam plc 1,986 8,940 14.5% Tracsis plc 838 3,410 5.5% Anpario plc 1,766 3,118 5.0% Mattioli Woods plc 1,680 2,768 4.5% Idox plc 500 2,500 4.0% Cohort plc 1,414 1,729 2.8% Avingtrans plc 996 1,693 2.7% Animalcare Group plc 1,476 1,526 2.5% Surgical Innovations plc 331 1,030 1.7% Tangent Communications plc 963 948 1.5% Hangar 8 plc 760 901 1.5% Hasgrove plc 975 875 1.4% Driver Group plc 552 832 1.3% Sanderson Group plc 770 816 1.3% Pressure Technologies plc 980 770 1.2% Accumuli plc 400 723 1.2% Sinclair IS Pharma plc 704 674 1.1% Instem plc 985 647 1.0% Access Intelligence plc 1,467 642 1.0% Redstone plc 436 605 1.0% Omega Diagnostics plc 500 573 0.9% HML Holdings plc 431 536 0.9% eg solutions plc 406 488 0.8% Vindon Healthcare plc 475 439 0.7% Vianet plc 584 404 0.7% Datong Electronics plc 784 367 0.6% Tristel plc 878 343 0.6% Dillistone Group plc 106 204 0.3% PHSC plc 153 187 0.3% Crawshaw Group plc 538 184 0.3% Fourteen investments, each valued at less 7,415 1,124 1.8% than 0.3% of net assets 32,249 39,996 64.6% Unlisted investments Access Intelligence plc - loan stock 750 750 1.2% SnackTime plc - loan stock 550 550 0.9% Five investments, each valued at less than 2,657 141 0.2% 0.2% of net assets 3,957 1,441 2.3% Total qualifying investments 36,206 41,437 66.9% Non-qualifying investments Listed UK equities 4,981 5,527 9.0% Unicorn UK Smaller Companies Fund (OEIC) 3,000 5,155 8.3% AIM quoted investments 4,039 4,377 7.1% Unicorn Mastertrust Fund (OEIC) 1,228 2,221 3.6% Unicorn Free Spirit Fund (OEIC) 827 1,553 2.5% Money market funds 1 154 154 0.2% Invu plc - loan stock 200 100 0.2% Green Compliance - loan stock 250 250 0.4% Unlisted investments 5 - 0.0% Total non-qualifying investments 14,684 19,337 31.3% Total investments 50,890 60,774 98.2% Other assets 1,288 2.1% Current liabilities (208) (0.3%) Net assets 61,854 100.0% 1 Disclosed within 'Current investments' under Current assets in the Balance Sheet UNAUDITED INCOME STATEMENT for the six months ended 31 March 2013 Six months ended Six months ended 31 March 2013 31 March 2012 (unaudited) (unaudited) Notes Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Unrealised gains/ 7 - 6,351 6,351 - (583) (583) (losses) on investments Realised gains on 7 - 297 297 - 173 173 investments Income 4 467 - 467 528 - 528 Investment 2 (131) (392) (523) (125) (376) (501) management fees Other expenses (235) - (235) (283) - (283) Profit/(loss) on 101 6,256 6,357 120 (786) (666) ordinary activities before taxation Tax on profit/ 3 - - - - - - (loss) on ordinary activities Profit/(loss) on 101 6,256 6,357 120 (786) (666) ordinary activities after taxation Basic and diluted earnings per share: Ordinary shares 5 0.18p 10.92p 11.10p 0.21p (1.35)p (1.14)p Year ended 30 September 2012 (audited) Notes Revenue Capital Total £'000 £'000 £'000 Unrealised gains/ 7 - 2,057 2,057 (losses) on investments Realised gains on 7 - 364 364 investments Income 4 1,137 - 1,137 Investment 2 (249) (746) (995) management fees Other expenses (501) - (501) Profit/(loss) on 387 1,675 2,062 ordinary activities before taxation Tax on profit/ 3 - - - (loss) on ordinary activities Profit/(loss) on 387 1,675 2,062 ordinary activities after taxation Basic and diluted earnings per share: Ordinary shares 5 0.66p 2.88p 3.54p All revenue and capital items in the above statement derive from continuing operations of the Company. There were no other recognised gains or losses in the period. The total column of this statement is the profit and loss account of the Company. Other than revaluation movements arising on investments held at fair value through Profit and Loss Account, there were no differences between the profit/(loss) as stated above and at historical cost. The notes on pages 15 to18 form part of these Half-Yearly financial statements. UNAUDITED BALANCE SHEET as at 31 March 2013 As at As at As at 31 March 31 March 30 September 2013 2012 2012 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 Fixed assets Investments at fair value 1c,7 60,620 56,380 57,806 Current assets Debtors and prepayments 107 159 183 Current investments 8 154 147 720 Cash at bank 1,181 650 532 1,442 956 1,435 Creditors: amounts falling (208) (721) (244) due within one year Net current assets 1,234 235 1,191 Net assets 61,854 56,615 58,997 Share capital and reserves Share capital 9 570 581 576 Capital redemption reserve 9 338 328 332 Share premium account 9 32,313 32,330 32,331 Revaluation reserve 9 11,546 1,319 3,860 Special distributable 9 9,219 14,250 12,940 reserve Profit and Loss account 9 7,868 7,807 8,958 Equity shareholders' funds 61,854 56,615 58,997 Basic and diluted net asset value per share of 1p each Ordinary shares 10 108.53p 97.41p 102.34p The financial information for the six months ended 31 March 2013 and the six months ended 31 March 2012 has not been audited. The notes on pages 15 to18 form part of these Half-Yearly financial statements. Unaudited Reconciliation of Movements in Shareholders' Funds for the six months ended 31 March 2013 Six months Six months Year ended ended ended 31 March 2013 31 March 2012 30 September 2012 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 Opening shareholders' 58,997 60,447 60,447 funds Net share capital 9 (574) (4,139) (4,487) bought back in the period Net share capital 9 - 4,107 4,110 subscribed in the period Expenses incurred in 9 (64) (209) (209) respect of the Enhanced Buyback Facility and Top up Offer Profit/(loss) for the 6,357 (666) 2,062 period Dividends paid in 6 (2,862) (2,925) (2,926) period Closing Shareholders' 61,854 56,615 58,997 funds The financial information for the six months ended 31 March 2013 and the six months ended 31 March 2012 has not been audited. The notes on pages 15 to18 form part of these Half-Yearly financial statements. Unaudited Statement of Cash Flows for the six months ended 31 March 2013 Six months Six months Year ended ended ended 31 March 2013 31 March 2012 30 September 2012 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 Operating activities Investment income received 531 529 1,115 Investment management fees (523) (501) (994) paid Other cash payments (279) (181) (538) Net cash outflow from (271) (153) (417) operating activities Investing activities Purchase of investments 7 (1,959) (409) (1,586) Sale of investments 7 5,807 3,547 5,790 Net cash inflow from 3,848 3,138 4,204 investing activities Dividends Equity dividends paid 6 (2,862) (2,925) (2,926) Cash inflow before financing 715 60 861 and liquid resource management Financing Share Capital raised - net of - 3,942 3,945 issue expenses Expenses relating to shares (48) - - to be issued Share capital bought back (586) (4,634) (4,983) (634) (692) (1,038) Management of liquid resources Decrease in monies held 568 632 59 pending investment Increase/(decrease) in cash 649 - (118) Reconciliation of net cash flow to movement in net funds Increase/(decrease) in cash 649 - (118) for the period Net funds at start of period 532 650 650 Net funds at end of period 1,181 650 532 Reconciliation of operating profit/ (loss) to net cash outflow from operating activities Profit/(loss) on ordinary 6,357 (666) 2,062 activities before taxation Net gains on realisations of (297) (173) (2,057) investments Net unrealised (gains)/losses (6,351) 583 (364) on investments Transaction costs (14) (10) (17) Decrease/(increase) in 76 514 (14) debtors Decrease in creditors (42) (401) (27) Net cash outflow from (271) (153) (417) operating activities NOTES to the unaudited financial statements for the six months ending 31 March 2013 1. Principal accounting policies The following accounting policies have been applied consistently throughout the period. Full details of principal accounting policies will be disclosed in the Annual Report. a) Basis of accounting The unaudited results cover the six months to 31 March 2013 and have been prepared under UK Generally Accepted Accounting Practice (UK GAAP), consistent with the accounting policies set out in the statutory accounts for the year ended 30 September 2012 and the 2009 Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('the SORP') issued by the Association of Investment Trust Companies. The Half-Yearly report has not been audited nor has it been reviewed by the auditor pursuant to the Auditing Practices Board (APB) guidance on Review of Interim Financial Information. b) Presentation of the Income Statement In order to better reflect the activities of a VCT and in accordance with the SORP, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. The revenue column of profit attributable to equity shareholders is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 274 Income Tax Act 2007. c) Investments Investments are accounted for on a trade date basis. All investments held by the Company are classified as "fair value through profit and loss" as the Company's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. For investments actively traded in organised financial markets, recognition and fair value is determined by reference to Stock Exchange market trading rules and quoted bid prices at the close of business on the balance sheet date. Unquoted investments are valued by the Directors at `fair value through profit and loss'. Accordingly, in the absence of a market price, the Directors have valued unquoted investments in accordance with International Private Equity Venture Capital Valuation (IPEVCV) guidelines as updated in September 2009. All unquoted investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in fair value. Where such a basis is no longer considered appropriate, the following factors will be considered: (i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company, this value will be used. (ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to either:- a) an earnings multiple basis. The shares may be valued by applying a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Manager compared to the sector including, inter alia, a lack of marketability). or:- b) where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate. Where the value of an investment has fallen permanently below cost, the loss is treated as a permanent impairment and as a realised loss, even though the investment is still held. The Board assesses the portfolio for such investments and, after agreement with the Investment Manager, will agree the values that represent the extent to which an investment loss has become realised. This is based upon an assessment of objective evidence of that investment's future prospects, to determine whether there is potential for the investment to recover in value. (iii) Premiums on loan stock investments are accrued at fair value when the Company receives the right to the premium and when considered recoverable. (iv) Where an earnings multiple or cost less impairment basis is not appropriate and overriding factors apply, discounted cash flow or net asset valuation bases may be applied. 2. The Directors have charged 75% of the investment management fee to the capital reserve. 3. Taxation * There is no tax charge for the period, as the Company has incurred taxable losses in the period. No tax is payable as most of the Company's income is dividends, which is not taxable. 4. Income receivable Six months Six months Year ended 30 ended 31 March ended 31 September 2012 2013 March 2012 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Dividends 399 432 964 Money-market funds 1 44 63 and Unicorn managed OEICs Loan stock interest 67 52 110 467 528 1,137 5. Basic and diluted earnings and return per share Six months Six months Year ended ended 31 March ended 31 March 30 September 2013 2012 2012 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Total earnings after 6,357 (666) 2,062 taxation: Basic and diluted earnings 11.10p (1.14)p 3.54p per share Net revenue from ordinary 101 120 387 activities after taxation Revenue return per share 0.18p 0.21p 0.66p Net unrealised capital 6,351 (583) 2,057 gains/(losses) Net realised capital gains 297 173 364 Capital expenses (net of (392) (376) (746) taxation) Total capital return 6,256 (786) 1,675 Capital return per share 10.92p (1.35)p 2.88p Weighted average number of 57,295,560 58,445,366 58,206,100 shares in issue in the period 6. Dividends Six months ended Six months Year ended 30 31 March 2013 ended 31 September 2012 March 2012 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Final capital 2,862 - - dividend of 4.5p per share and final income dividend of 0.5p per share for the year ended 30 September 2012 paid on 8 February 2013. Final capital - 2,925 2,926 dividend of 4.25p and final income dividend of 0.75p per share for the year ended 30 September 2011 paid on 10 February 2012. 2,862 2,925 2,926 7. Investments at fair value Fully Traded on Unlisted Unlisted Unicorn Total Listed AIM/ISDX ordinary Loan stock OEIC Market shares funds £'000 £'000 £'000 £'000 £'000 £'000 Book cost at 30 6,432 39,438 2,662 1,750 5,340 55,622 September 2012 Unrealised (losses) (197) 2,442 (845) (100) 2,560 3,860 /gains at 30 September 2012 Permanent - - (1,676) - - (1,676) impairment in value of investments Valuation at 30 6,235 41,880 141 1,650 7,900 57,806 September 2012 Purchases at cost - 2,395 - - - 2,395 Sale proceeds (1,331) (4,412) - - (500) (6,243) Realised gains 92 191 - - 28 311 Unrealised gains in 531 4,319 - - 1,501 6,351 the period Closing valuation 5,527 44,373 141 1,650 8,929 60,620 at 31 March 2013 Book cost at 31 4,979 36,290 2,662 1,750 5,055 50,736 March 2013 Unrealised gains/ 548 8,083 (859) (100) 3,874 11,546 (losses) at 31 March 2013 Permanent - - (1,662) - - (1,662) impairment in value of investments Valuation at 31 5,527 44,373 141 1,650 8,929 60,620 March 2013 Investment purchases above of £2,395,000 and investment disposals above of £ 6,243,000 are each greater than that shown in the Cash flow Statement, by £ 436,000. This difference is due to a share for share exchange whereby the Company's holding of shares in Maxima Holdings plc were exchanged for shares in Redstone plc. The value of the Company's holding in Maxima Holdings at the date of the transaction was £436,000, thereby treated as the purchase cost and sale proceeds. Realised gains above of £311,000 differ from net realised gains per the Income Statement of £297,000, due to transaction costs of £14,000. 8. Current Investments These comprise investments in two Dublin based OEIC money market funds, managed by Royal Bank of Scotland and Blackrock Investment Management UK Ltd and amount to £154,000 (31 March 2012: £147,000; 30 September 2012: £720,000). All of this sum is subject to same day access. These sums are regarded as monies held pending investment. 9. Reserves Called Capital Share Revaluation Special Profit Total up redemption premium reserve distributable and share reserve account reserve loss capital account £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 October 576 332 32,331 3,860 12,940 8,958 58,997 2012 Shares issued - - - - - - - Shares bought (6) 6 - - (574) - (574) back Expenses of - - (18) - (46) - (64) Enhanced Buyback Facility and Top Up Offer (see note below) Transfer to - - - - (3,101) 3,101 - special distributable reserve Gains on - - - - - 297 297 disposal of investments (net of transaction costs) Realisation - - - 1,335 - (1,335) - of previously unrealised gains Unrealised - - - 6,351 - - 6,351 gains in the period Loss for the - - - - - (291) (291) period Dividends - - - - - (2,862) (2,862) paid At 31 March 570 338 32,313 11,546 9,219 7,868 61,854 2013 Note: The expenses of the Enhanced Buyback Facility ("EBF") and Top Up Offer are third party costs of the Facility and Top Up Offer of £64,000, incurred up to 31 March 2013. These costs are borne by those shareholders who participated in the EBF and the Top Up Offer after the period end. Details of shares issued and bought back under the EBF and the Top Up Offer are disclosed in Note 11. No fees were charged by the Manager. 10. Net asset value At 31 March 2013 At 31 March At 30 September 2012 2012 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net assets 61,854 56,615 58,997 Number of 56,994,433 58,117,481 57,646,506 shares in issue Net asset 108.53p 97.41p 102.34p value per share 11. Post Balance Sheet Events On 3 April 2013, as part of the Company's Enhanced Buyback Facility, 7,365,558 Ordinary Shares were repurchased for cancellation at a price of 108.5 p per share. Immediately following this, 7,141,491 Ordinary Shares were allotted at 111.9 p per share. As part of the Company's Top Up Offer for Subscription, on 5 April 2013, 690,536 Ordinary Shares were allotted at 112.2 p per share raising net funds amounting to £749,840 from cash subscribed of £770,400, and on 3 May 2013, 83,084, Ordinary Shares were allotted at 112.6 p per share raising net funds amounting to £90,537 from cash subscribed of £93,000. 12. The financial information for the six months ended 31 March 2013 and the six months ended 31 March 2012 has not been audited. The financial information contained in this half-yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial statements for the year ended 30 September 2012 have been filed with the Registrar of Companies. The auditors have reported on these financial statements and that report was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006. Copies of this statement are being sent to all shareholders. Further copies are available free of charge from the Company's registered office, 30 Haymarket, London, SW1Y 4EX, or from www.unicornam.com. * Shareholder Information The Company's Ordinary Shares (Code: UAV) are listed on the London Stock Exchange. Shareholders can visit the London Stock Exchange website, www.londonstockexchange.com, for the latest news and share prices of the Company. The share price is also quoted in the Financial Times. Net asset value per share The Company's NAV per share as at 30 April 2013 was 108.91p. The Company announces its unaudited NAV on a monthly basis. Dividends The Board is not recommending the payment of an interim dividend in respect of the six months ended 31 March 2013 to Ordinary Shareholders. The Directors will consider the payment of a dividend when approving the year end accounts. Shareholders who wish to have future dividends paid directly into their bank account rather than sent by cheque to their registered address can complete a mandate for this purpose. Mandates can be obtained by contacting the Company's Registrar, Capita Registrars. Selling your shares The Company's shares are listed on the London Stock Exchange and as such they can be sold in the same way as any other quoted company through a stockbroker. Shareholders wishing to sell their shares are advised to contact the Company's stockbroker, Panmure Gordon (UK) Limited, by telephoning 020 7886 2716 or 2717 before agreeing a price with their stockbroker. Shareholders are also advised to discuss their individual tax position with their financial advisor before deciding to sell their shares. * Shareholder enquiries: For general Shareholder enquiries, please contact Robert Brittain of Mobeus Equity Partners LLP (the Company Secretary) on 020 7024 7600 or by e-mail on unicorn@mobeusequity.co.uk. For enquiries concerning the performance of the Company, please contact the Investment Manager, Unicorn Asset Management Limited, on 020 7253 0889 or by e-mail on info@unicornam.com. Electronic copies of this report and other published information can be found on the Manager's website at www.unicornam.com. Change of Address To notify the Company of a change of address please contact the Company's Registrars at the address on page 20 of the Half Yearly Report. Information rights for beneficial owners of shares Please note that beneficial owners of shares who have been nominated by the registered holder of those shares to receive information rights under section 146 of the Companies Act 2006 are required to direct all communications to the registered holder of their shares, rather than to the Company's registrar, Capita Registrars, or to the Company directly. Auditors As a result of PKF UK LLP entering a business combination with BDO LLP on 28 March 2013, PKF (UK) LLP resigned as auditor on 16 May 2013 and the directors have appointed BDO LLP as auditor to fill the casual vacancy.

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