TIDMILV1
RNS Number : 9720P
Ingenious Live VCT 1 plc
02 April 2009
2 April 2009
INGENIOUS LIVE VCT 1 plc ("the Company")
PRELIMINARY STATEMENT OF ANNUAL RESULTS
For the year ended 31 December 2008
CHAIRMAN'S STATEMENT
I am delighted to present the Company's second annual report covering the year
to 31 December 2008 (the "Reporting Period").
Overview of activities
The Company has continued to actively source and review investment opportunities
during the Reporting Period and I am pleased to report that 4 further deals have
been closed; a 3 day music concert at Powderham Castle; the dance music festival
Creamfields; Gordon Ramsay's Taste of Christmas, a festive food event attracting
over 20,000 food lovers for live cookery classes; and the 80s Rewind Festival, a
2 day music festival to be held in Henley-upon-Thames.
In addition, following the sell-out success of the Underage and Field Day
festivals in the summer of 2007, the Company also agreed to provide further
funding to co-promote the 2008 events.
Since the end of the Reporting Period, the Company made one further investment
to back a new television format, Let's Dance, which was commissioned by the BBC
for Comic Relief and was a great success gaining over 8 million viewers for its
final episode.
Given its existing portfolio of investments, the Company is well positioned to
ensure the VCT is fully committed within the required timescales. Please refer
to the Manager's Review for a more detailed description of the Company's
investment activities.
Results
The Reporting Period has been dominated by new investments, with GBP2.6m
invested and committed to qualifying investments. The Company made a profit on
ordinary activities of GBP33k in the period to 31 December 2008 (2007: GBP21k
loss) . The Company's net asset value moved in line with the operating profit,
from 95.6 pence (2007) to 96 pence per share. The directors do not recommend the
payment of a dividend in respect of the reporting period.
Outlook
The unprecedented economic environment has led the manager to consider the
potential for increasing the minimum revenue arrangements to cover in excess of
75% of the Company's investment in certain instances, whilst still potentially
maintaining a strong equity share in each project.
The Manager continues to see a good flow of high-quality investment
opportunities and looks forward to updating shareholders with details of further
investments in the near future.
I would like to take this opportunity to thank all shareholders for their
continued support of the Company and I look forward to seeing those of you that
are able to attend the AGM, scheduled for 14 May 2009.
Patrick McKenna
Chairman
1 April 2009
MANAGER's REVIEW
Investment Objective
Our objective is to invest in a portfolio of live event companies engaged in the
production of new and established events which will provide shareholders with an
attractive return. This will be achieved by maximising the opportunities for
making tax-free dividends to shareholders from both the income received and
capital profits on the sale of the Investee Companies or their assets.
A further 4 deals have been made during the Reporting Period, together with an
additional investment in January 2009, and we expect that a number of investment
opportunities already in the pipeline will lead to new deals being made in the
next financial year. We continue to focus our efforts on identifying projects
that will support the development of exciting live opportunities which have the
potential to deliver premium returns for our investors.
Underage and Field Day Festivals
Following the sell-out success of 2007's Underage and Field Day festivals, the
Company agreed to provide further funding of GBP162,500 (GBP325,000 across both
the Ingenious Live VCTs) to co-promote the second year of the festivals. This
brings the total investment made in the festivals to-date to GBP325,000
(GBP650,000 across both the Ingenious Live VCTs).
In August 2008, the events returned to Victoria Park, London for another
weekend. Underage attracted an impressive line up of artists including Dizzee
Rascal, Gallows, Foals, The Horrors, The Rascals, Bonde Do Role and The
Maccabees, whilst Field Day resumed the charm of a village fête and featured
artists including Simian Mobile Disco, Laura Marling, Fionn Regan and Lightspeed
Champion. Field Day sold out its 20,000 capacity and Underage attracted nearly
7,000 attendees.
We believe that the Underage and Field Day brands both have strong potential to
be "rolled out", both in the UK and overseas. This would also assist in the
creation of an enhanced capital value for the events which is the key to our
investment strategy.
The Rival Organisation - Powderham Castle
In January 2008, the Company agreed an investment of GBP402,100 (GBP804,200
across both the Ingenious Live VCTs) with The Rival Organisation to co-promote
an exciting 3 day music concert at Powderham Castle in Devon. The event, held
from 25 to 27 July, provided a long weekend of music with performances from
artists as diverse as Boyzone, Katie Melua and the Greatest 80s Party with
classic acts such as Toyah, Rick Astley, Bananarama, Paul Young and Belinda
Carlisle. Over 10,000 tickets were sold for The Greatest 80s Party which proved
to be particularly popular.
Creamfields
In July 2008, the Company agreed an investment of GBP850,000 (GBP1,700,000
across both the Ingenious Live VCTs) to back the second day of leading dance
music festival Creamfields. Celebrating its tenth anniversary, the event, held
on 23 and 24 of August, boasted a line up that included Kasabian, Fatboy Slim,
Underworld and Paul Van Dyk. Creamfields has established itself as arguably the
world's leading dance festival, and is the only music festival concept to be
successfully exported globally with events staged in over 12 countries.
Brand Events - Gordon Ramsay's Taste of Christmas
In September 2008, the Company agreed an investment of GBP902,488 (GBP1,804,977
across both the Ingenious Live VCTs) to co-promote Gordon Ramsay's Taste of
Christmas, a festive food event, alongside event management company Brand
Events. The festival was held from 4 to 7 December at ExCel London, attracting
over 20,000 food lovers and featuring live demonstration cookery master classes
by Gordon Ramsay and other celebrity chefs, cookery seminars, guest interviews,
audience participation, wine and spirit tasting classes and over 250 food, drink
and gift exhibitors.
The Rival Organisation - 80s Rewind Festival
In December 2008, the Company made its first investment of GBP272,598
(GBP1,090,390 across both the Ingenious Live VCTs and the Ingenious
Entertainment VCTs) to co-promote the 80s Rewind Festival in conjunction with
The Rival Organisation. The 80s Rewind Festival is a 2 day music festival to be
held in August 2009 in Henley-upon-Thames.
The event expects to attract over 20,000 people with a line up including Kim
Wilde, Rick Astley, Bananarama, Billy Ocean, Belinda Carlisle, Kid Creole,
Heaven 17, Dr & The Medics, Cutting Crew, Toyah, The Real Thing, Gloria Gaynor,
Sister Sledge, ABC, Paul Young, Go West, Midge Ure, Howard Jones, Nik Kershaw,
T'Pau, The Christians, The Blockheads with Phill Jupitus and Chas 'n' Dave.
This is the second time the Manager has worked with The Rival Organisation, the
first being the investment in the 3 day 2008 Powderham Castle music concert. The
most popular evening of the Powderham event proved to be the Greatest 80s Party
with close to 10,000 tickets sold.
In addition to extending our strong relationship with The Rival Organisation,
this was the first co-investment between the Ingenious Live and Ingenious
Entertainment VCTs.
Let's Dance
The second co-investment between the Ingenious Live and Entertainment VCTs, saw
the Company invest GBP500,000 (GBP2 million across both the Ingenious Live VCTs
and the Ingenious Entertainment VCTs) in January 2009 to back an exciting new
entertainment format, Let's Dance, which was commissioned by the BBC for Comic
Relief.
The programme, hosted by Claudia Winkleman and Steve Jones, saw some of the
nation's favourite celebrities paying homage to iconic dance routines. Over its
four week run on Saturday evenings on BBC One in February and March the show's
ratings increased week on week peaking at 8.6 million viewers for the final.
This marked an impressive 35% share of people watching television on Saturday
evening, substantially more than ITV's Ant and Dec's Saturday Night Takeaway.
This is a terrific result for a new series and discussions are already underway
about rolling out the show internationally. The format is being represented by
Fremantle Media who produce programming in numerous territories around the
world.
Outlook
The volatile economic environment presents challenges for the Company as
consumers become more cautious about their discretionary spending on
entertainment. However, we are confident that our portfolio of live events is
sufficiently robust to withstand the economic factors facing the industry for
the following reasons.
Firstly, in times of recession, strong brands gain greater market share whilst
weak brands of lower quality often disappear. With brand names such as
Creamfields, which enjoyed its tenth anniversary year last summer, and Gordon
Ramsay, we believe that investment opportunities still remain for compelling,
well-organised and brand-focused live events.
Secondly, our investments are backed by management teams with vast experience in
the live events sector. For example, Brand Events, the event production company
behind Gordon Ramsay's Taste of Christmas, has experience of managing multiple
international events including the Top Gear Live shows and the Taste food
festivals.
Contact
If you have any questions on this review or would like to speak with a member of
the management team, please do not hesitate to contact us on 0207 319 4000.
Ingenious Ventures
1 April 2009
BUSINESS REVIEW
The purpose of this review is to provide shareholders with a summary setting out
the business objectives of the Company, the Board's strategy to achieve those
objectives, the risks faced, the regulatory environment and the key performance
indicators (KPIs) used to measure performance.
1. Strategy for Achieving Objectives
Ingenious Live VCT 1 plc is a tax efficient company listed on The London Stock
Exchange.
The investment objective is to achieve a combination of a high degree of
downside protection in an otherwise potentially high risk proposition and
long-term capital growth, maximising distributions in order to take advantage of
tax-free dividends.
The Board has delegated day-to-day investment management and administration of
the Company to Ingenious Ventures under the terms of a management deed.
The Manager's review provides a review of the investment portfolio and the
market outlook.
2. Investment Policy
The Company's investment policy is to invest in Investee Companies that will
produce and promote new and established Events whose revenues will be
underpinned by warranties or other similar contractual arrangements. The
Ingenious Live VCTs will invest in Investee Companies which are expected to
participate in the revenues and growth of Events. The Events produced and
promoted by the Investee Companies are likely to be held primarily in the UK and
may include concerts, festivals, exhibitions, theatrical shows, conferences,
trade fairs and sporting events.
The Company will only invest in an Investee Company:
* where the Event has been approved by the Manager through its selection process;
and
* where the Investee Company has obtained performance warranties or similar
contractual arrangements that will provide for the Investee Company to receive
minimum revenues equivalent to at least 70 per cent of the Company's investment,
although the Manager is currently endeavouring to secure higher levels of
minimum revenues in the current economic environment.
The initial capital required by an Investee Company will be provided by the
Company. The majority of this initial capital will be provided through loan
finance which should provide additional capital protection. The Company can
invest, under current venture capital trust legislation, up to GBP1million per
tax year in any one Investee Company.
The Company has the flexibility to retain up to 30 percent of its assets in cash
and cash equivalent instruments which the Directors believe should provide a
significant degree of downside protection whilst preserving the upside potential
of the Events within the portfolio.
At 31 December 2008 the Company had made five investments in qualifying
companies, with contractual arrangements that provide for the Investee Company
to receive minimum revenues equivalent to at least 70 per cent of the Company's
investment, all of which had received the prior approval of the Manager's
Investment Committee.
3. Principal Risks, Risk Management and Regulatory Environment
The Board believes that the principal risks faced by the Company are:
* Investment and strategic - an investment in an Event is tied to a certain degree
to the fortunes of the industry generally. In particular, there is a risk that
the Company will not identify opportunities where the commercial success of the
Event is sufficient to earn revenues over and above the minimum contractual
income negotiated.
* Loss of approved status as a Venture Capital Trust - the Company must comply
with section 274 of the ITA which allows it to be exempted from capital gains
tax on investment gains realised by shareholders. Any breach of these rules may
lead to the Company losing its approval as a VCT, qualifying shareholders who
have not held their shares for the designated holding period would have to repay
the income tax relief they obtained and future dividends paid by the Company
would become subject to tax. The Company would also lose its exemption from
corporation tax on capital gains.
* Regulatory - the Company is required to comply with the Companies Acts, the
rules of the UK Listing Authority and United Kingdom Accounting Standards.
Breach of any of these regulatory rules might lead to suspension of the
Company's Stock Exchange listing, financial penalties or a qualified audit
report.
* Financial - inadequate internal controls might lead to misappropriation of
assets. Inappropriate accounting policies might lead to misreporting or breaches
of regulations.
* External inherent risks - the Company's investments will be in unquoted
companies which by their nature involve a higher degree of risk than investment
in the main market due to the fact there is no liquid market and may, therefore,
be difficult to realise. Furthermore, there may be further constraints imposed
on realisations because of the requirement to satisfy certain conditions
necessary for the Company to maintain its VCT status (such as the obligation to
have at least 70 per cent by value of its investments in qualifying holdings by
the beginning of the accounting period commencing three years after provisional
VCT approval).
The Board seeks to mitigate the internal risks by setting clear policies,
including establishing a funding structure which provides for minimum revenues
equivalent to at least 70 per cent of the investment, regular reviews of
performance, monitoring progress and compliance. Details of the Company's
internal controls are contained in the Corporate Governance Report.
4. Key Performance Indicators (KPIs)
The primary key performance indicator on which the Board assesses the
performance of the Manager in meeting the Company's objective is the change in
Net Asset Value per share.
A review of the Company's performance during the period, the position of the
Company at the year end and the outlook for the coming year is contained within
the Chairman's Statement and Manager's Review.
INCOME STATEMENT
for the year ended 31 December 2008
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | 2008 | 2008 | 2008 | | 2007 | 2007 | 2007 |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | Revenue | Capital | Total | | Revenue | Capital | Total |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| |Note | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Gain on disposal of | | - | 87 | 87 | | - | - | - |
| investments | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Increase in fair value | | - | 141 | 141 | | - | 186 | 186 |
| of investments held | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Investment income | 2 | 8 | 76 | 84 | | 69 | 63 | 132 |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Arrangement fees | 3 | - | - | - | | (92) | - | (92) |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Investment management | 4 | (80) | (80) | (160) | | (70) | (70) | (140) |
| fees | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Other expenses | 5 | (106) | (13) | (119) | | (103) | (4) | (107) |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Profit/(loss) on | | (178) | 211 | 33 | | (196) | 175 | (21) |
| ordinary activities | | | | | | | | |
| before taxation | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Tax on ordinary | 6 | - | - | - | | - | - | - |
| activities | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Profit/(loss) on | | (178) | 211 | 33 | | (196) | 175 | (21) |
| ordinary activities | | | | | | | | |
| after taxation | | | | | | | | |
| attributable to equity | | | | | | | | |
| shareholders | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| Basic and diluted return | 7 | (1.9) | 2.3 | 0.4 | | (3.8) | 3.4 | (0.4) |
| per share (pence) | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | | |
+--------------------------+------+---------+---------+---------+--+---------+---------+---------+
The Company has no recognised gains and losses other than those disclosed above.
The total column is the profit and loss for the year.
All operations are considered to be continuing.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December 2008
+------------------------------------------------+--+--------+----+---------+---------+
| | | | | 2008 | 2007 |
+------------------------------------------------+--+--------+----+---------+---------+
| | | | | GBP'000 | GBP'000 |
+------------------------------------------------+--+--------+----+---------+---------+
| Opening shareholders' funds | | | | 8,836 | - |
+------------------------------------------------+--+--------+----+---------+---------+
| Capital subscribed | | | | - | 9,227 |
+------------------------------------------------+--+--------+----+---------+---------+
| Issue costs | | | | - | (370) |
+------------------------------------------------+--+--------+----+---------+---------+
| Profit/(loss) attributable to equity | | | | 33 | (21) |
| shareholders for the year | | | | | |
+------------------------------------------------+--+--------+----+---------+---------+
| | | | | | |
+------------------------------------------------+--+--------+----+---------+---------+
| Closing shareholders' funds | | | | 8,869 | 8,836 |
+------------------------------------------------+--+--------+----+---------+---------+
The accompanying notes form an integral part of these financial statements.
BALANCE SHEET
As at 31 December 2008
+-----------------------------------------------+------+--+----------+----------+
| | | | 2008 | 2007 |
+-----------------------------------------------+------+--+----------+----------+
| |Note | | GBP'000 | GBP'000 |
+-----------------------------------------------+------+--+----------+----------+
| Fixed assets | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Qualifying investments | 8 | | 2,752 | 163 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Current assets | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Debtors | 10 | | 6 | 15 |
+-----------------------------------------------+------+--+----------+----------+
| Non-Qualifying investments | 11 | | 6,045 | 8,514 |
+-----------------------------------------------+------+--+----------+----------+
| Cash at bank and in hand | | | 92 | 174 |
+-----------------------------------------------+------+--+----------+----------+
| | | | 6,143 | 8,703 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Creditors: amounts falling due within one | 12 | | (26) | (30) |
| year | | | | |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Net current assets | | | 6,117 | 8,673 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Net assets | | | 8,869 | 8,836 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Capital and reserves | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Called-up share capital | 13 | | 92 | 92 |
+-----------------------------------------------+------+--+----------+----------+
| Share premium account | 14 | | 4,383 | 8,765 |
+-----------------------------------------------+------+--+----------+----------+
| Other reserve account | 14 | | 4,382 | - |
+-----------------------------------------------+------+--+----------+----------+
| Capital reserves | | | | |
+-----------------------------------------------+------+--+----------+----------+
| realised | 14 | | 59 | (11) |
+-----------------------------------------------+------+--+----------+----------+
| unrealised | 14 | | 327 | 186 |
+-----------------------------------------------+------+--+----------+----------+
| Revenue reserve | 14 | | (374) | (196) |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Equity shareholders' funds | | | 8,869 | 8,836 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
| Net asset value (pence per share) | 15 | | 96.0 | 95.6 |
+-----------------------------------------------+------+--+----------+----------+
| | | | | |
+-----------------------------------------------+------+--+----------+----------+
The financial statements were approved by the Board of Directors on 1 April
2009.
Signed on behalf of the Board of Directors:
Patrick McKenna
Chairman
CASH FLOW STATEMENT
for the year ended 31 December 2008
+-------------------------------------------+-------------+----------+----------+
| | | 2008 | 2007 |
+-------------------------------------------+-------------+----------+----------+
| | | GBP'000 | GBP'000 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Net cash outflow from operating | | (103) | (192) |
| activities | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Capital expenditure | | | |
+-------------------------------------------+-------------+----------+----------+
| Purchase of qualifying investments | | (2,589) | (163) |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Net cash outflow from capital expenditure | | (2,589) | (163) |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Management of liquid resources | | | |
+-------------------------------------------+-------------+----------+----------+
| Purchase of non-qualifying investments | | (2,536) | (8,559) |
+-------------------------------------------+-------------+----------+----------+
| Disposal of non-qualifying investments | | 5,146 | 230 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Net cash inflow/(outflow) from liquid resources | 2,610 | (8,329) |
+---------------------------------------------------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Financing | | | |
+-------------------------------------------+-------------+----------+----------+
| Issue of redeemable preference shares | | - | 50 |
+-------------------------------------------+-------------+----------+----------+
| Repurchase of redeemable preference | | - | (50) |
| shares | | | |
+-------------------------------------------+-------------+----------+----------+
| Issue of ordinary shares | | - | 9,227 |
+-------------------------------------------+-------------+----------+----------+
| Expenses of the issue of ordinary shares | | - | (369) |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Net cash inflow from financing | | - | 8,858 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| (Decrease)/Increase in cash | | (82) | 174 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Reconciliation of Profit/(Loss) Before Taxation to Net | | |
| Cash Flow from Operating Activities | | |
+---------------------------------------------------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | GBP'000 | GBP'000 |
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Profit/(loss) on ordinary activities | | 33 | (21) |
| before taxation | | | |
+-------------------------------------------+-------------+----------+----------+
| Increase in fair value of investments | | (141) | (186) |
| held | | | |
+-------------------------------------------+-------------+----------+----------+
| Decrease/(increase) in receivables | | 9 | (15) |
+-------------------------------------------+-------------+----------+----------+
| (Decrease)/increase in payables | | (4) | 30 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Net cash outflow from operating | | (103) | (192) |
| activities | | | |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Reconciliation of Net Cash Flow to Movement in Net | | |
| Funds | | |
+---------------------------------------------------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| | | GBP'000 | GBP'000 |
+-------------------------------------------+-------------+----------+----------+
| Opening cash balances | | 174 | - |
+-------------------------------------------+-------------+----------+----------+
| Net cash (outflow)/inflow | | (82) | 174 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| Closing cash balances | | 92 | 174 |
+-------------------------------------------+-------------+----------+----------+
| | | | |
+-------------------------------------------+-------------+----------+----------+
| The accompanying notes form an integral part of these | | |
| financial statements. | | |
+-------------------------------------------+-------------+----------+----------+
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2008
1. Accounting policies
(a) Basis of Accounting
The financial statements for the year ended 31 December 2008 have been prepared
in accordance with UK Generally Accepted Accounting Practice, and with the
Statement of Recommended Practice (the SORP) entitled "Financial Statements of
Investment Trust Companies" which was issued in January 2003 and revised in
December 2005.
The comparative figures are for the period from the Company's date of
incorporation, 22 September 2006 to 31 December 2007.
These financial statements have been prepared on the historical cost basis,
except for the measurement at fair value of investments.
The preliminary results for the year ended 31 December 2008 are audited. The
financial information included in this statement does not constitute the Group's
statutory accounts within the meaning of Section b240 of the Companies Act 1985.
(b) Valuation of Investments
The Company's business is investing in financial assets with a view to profiting
from their total return in the form of income and capital growth. As set out in
the Prospectus all investments are designated at fair value.
Investee Companies
Unquoted investments including equity and loan investments are stated at fair
value in accordance with the International Private Equity and Venture Capital
Guidelines and Financial Reporting Standard 26 "Financial Instruments:
Recognition and Measurement" (FRS 26). They are designated at fair value through
profit and loss in accordance with FRS 26.
The guidelines set out six permissible valuation methodologies, of these the two
methodologies most applicable to the Company's investments are:
1 - Price of recent investment. Where the investment being valued was made
recently, its cost will generally provide a good indication of value. It is
generally considered that this would only apply for a limited period, in
practice a period of up to a year is often applied as the long stop date for
such a valuation.
2 - Discounted cash flows/earnings of the underlying business, calculating the
net present value of expected future cashflows of the Investee Companies. In
relation to the Company's investments, anticipating future cashflows in excess
of the guaranteed amounts would clearly require highly subjective judgements to
be made in the early stage of each investment and therefore would not be an
appropriate methodology to apply in the early stage of the investment.
The adopted approach fair values the investments at the "price of recent
investment" (i.e. cost) in their first year of investment. Subsequently, the
portfolio of investments is fair valued on the discounted cash flow/earnings
basis using the latest available information on the performance of the live
event.
Open Ended Investment Companies
The Company's non qualifying investments in interest bearing money market open
ended investment companies (OEICs) are valued at fair value, this is bid price.
They have been designated as fair value through profit and loss for the purposes
of FRS 26.
Gains and losses arising from changes in fair value of qualifying and
non-qualifying investments are recognised as part of the capital return within
the income statement and allocated to the realised or unrealised capital reserve
as appropriate. Transaction costs attributable to the acquisition or disposal of
investments are charged to capital within the income statement.
(c) Investment Income
Interest income is recognised in the income statement as it accrues.
(d) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged to the
revenue account within the income statement except that:
* expenses which are incidental to the acquisition or disposal of an investment
are charged to capital in the income statement as incurred; and
* expenses are split and presented partly as capital items where a connection with
the maintenance or enhancement of the value of the investments held can be
demonstrated.
(e) Deferred Taxation
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or a right to pay less, tax in
the future have occurred at the balance sheet date. This is subject to deferred
tax assets only being recognised if it is considered more likely than not that
there will be suitable profits from which the future reversal of the underlying
timing differences can be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the financial
statements which are capable of reversal in one or more subsequent periods.
2. Investment Income
+-------------------------+--------+----------------+-----------+-----------+
| | | | 2008 | 2007 |
+-------------------------+--------+----------------+-----------+-----------+
| | | | GBP'000 | GBP'000 |
+-------------------------+--------+----------------+-----------+-----------+
| Bank deposit interest | | | 8 | 68 |
+-------------------------+--------+----------------+-----------+-----------+
| Reinvested interest | | | 76 | 63 |
| from OEICs | | | | |
+-------------------------+--------+----------------+-----------+-----------+
| Profit share from Sounds Alive | | - | 1 |
| Ltd | | | |
+----------------------------------+----------------+-----------+-----------+
| | | | 84 | 132 |
+-------------------------+--------+----------------+-----------+-----------+
3. Arrangement Fees
+-------------------------+--------+----------------+-----------+-----------+
| | | | 2008 | 2007 |
+-------------------------+--------+----------------+-----------+-----------+
| | | | GBP'000 | GBP'000 |
+-------------------------+--------+----------------+-----------+-----------+
| Arrangement fees | | | - | 92 |
+-------------------------+--------+----------------+-----------+-----------+
In the period ended 31 December 2007 all costs arising out of the Offer,
including listing expenses and commissions, were incurred by the
Promoter (Ingenious Media Investments Limited) and a fee of 5% of the gross
proceeds of the Offer was paid in consideration of the service provided. The
Directors believe that 80% of these fees relate directly to the raising of
capital and have classified this proportion as issue costs. In accordance with
the Companies Act 1985, the issue costs have been deducted from the share
premium account. The remaining 20% reflected above has been taken to revenue.
4. Investment Management Fee
+----------------------+---------+---------+---------+--+---------+---------+---------+
| | 2008 | 2008 | 2008 | | 2007 | 2007 | 2007 |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| Investment | 96 | 96 | 192 | | 60 | 60 | 120 |
| management fee | | | | | | | |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| Irrecoverable VAT | - | - | - | | 10 | 10 | 20 |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| Reclaimed VAT | (16) | (16) | (32) | | - | - | - |
+----------------------+---------+---------+---------+--+---------+---------+---------+
| | 80 | 80 | 160 | | 70 | 70 | 140 |
+----------------------+---------+---------+---------+--+---------+---------+---------+
For the purposes of the revenue and capital columns in the income statement, the
management fee has been allocated 50% to revenue and 50% to capital, which
represents the proportion of the fee attributable to the management of the
investments of the Company.
5. Other Expenses
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| | 2008 | 2008 | 2008 | | 2007 | 2007 | 2007 |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| Directors' | 31 | - | 31 | | 35 | - | 35 |
| remuneration | | | | | | | |
| (including Employers | | | | | | | |
| National Insurance) | | | | | | | |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| Auditors' | | | | | | | |
| remuneration | | | | | | | |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| - Audit fees | 11 | - | 11 | | 11 | - | 11 |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| Legal & professional | 7 | 11 | 18 | | 7 | 3 | 10 |
| fees | | | | | | | |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| Other administration | 45 | - | 45 | | 41 | - | 41 |
| expense | | | | | | | |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| Irrecoverable VAT | 12 | 2 | 14 | | 9 | 1 | 10 |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
| | 106 | 13 | 119 | | 103 | 4 | 107 |
+-----------------------+---------+---------+---------+--+---------+---------+---------+
All figures include irrecoverable VAT, where applicable. The Company is not
registered for VAT. Fees payable to the Company's auditor for the audit of the
Company's financial statements are GBP11k excluding VAT. Further details on the
Directors' fee disclosures are given in the Directors' Remuneration Report.
6. Tax Charge on Ordinary Activities
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| | 2008 | 2008 | 2008 | | 2007 | 2007 | 2007 |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Profit/(loss) on | (178) | 211 | 33 | | (196) | 175 | (21) |
| ordinary activities | | | | | | | |
| before tax | | | | | | | |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Profit/(loss) on | (51) | 60 | 9 | | (59) | 53 | (6) |
| ordinary activities | | | | | | | |
| by tax rate 28.5% | | | | | | | |
| (2007: 30%) | | | | | | | |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Adjustments: | | | | | | | |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Non taxable gains on | - | (87) | (87) | | - | (75) | (75) |
| investments | | | | | | | |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Disallowed expenses | - | 27 | 27 | | 3 | 1 | 4 |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| Unutilised losses | 51 | - | 51 | | 56 | 21 | 77 |
| for the current year | | | | | | | |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
| | - | - | - | | - | - | - |
+----------------------+-----------+---------+---------+--+---------+---------+---------+
As the Company is a VCT its capital gains are not taxable.
At 31 December 2008 the Company had surplus management expenses of GBP444k
(2007: GBP267k). A deferred tax asset has not been recognised in respect of
these surplus management expenses as the Company has only been investing for a
short period of time, and future taxable income can not be predicted with
reasonable certainty. Due to the Company's status as a VCT, and the intention to
continue meeting the conditions required to obtain approval in the foreseeable
future the Company does not recognise deferred tax on any capital gains or
losses which arise on the revaluation of investments.
7. Basic and Diluted Return per Share
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| | 2008 | 2008 | 2008 | | 2007 | 2007 | 2007 |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| (Loss)/Profit on | (178) | 211 | 33 | | (196) | 175 | (21) |
| ordinary | | | | | | | |
| activities after | | | | | | | |
| taxation | | | | | | | |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| Weighted average | 9,242,845 | 9,242,845 | 9,242,845 | | 5,156,960 | 5,159,960 | 5,156,960 |
| shares in issue | | | | | | | |
| (number) | | | | | | | |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
| (Loss)/Profit | (1.9) | 2.3 | 0.4 | | (3.8) | 3.4 | (0.4) |
| attributable per | | | | | | | |
| share (pence) | | | | | | | |
+------------------+--------------+-----------+-----------+--+--------------+-----------+-----------+
There are no dilutive potential ordinary shares, including convertible
instruments, options or contingent share agreements in issue for the Company.
The basic return per share is therefore the same as the diluted return per
share.
8. Fixed Asset Investments
+----------------------+------------+------------------------+---------+---------+
| | | | 2008 | 2007 |
+----------------------+------------+------------------------+---------+---------+
| | | | GBP'000 | GBP'000 |
+----------------------+------------+------------------------+---------+---------+
| Unquoted investments | | | 2,752 | 163 |
+----------------------+------------+------------------------+---------+---------+
| | | | | |
+----------------------+------------+------------------------+---------+---------+
| Equity shares | | | 826 | 49 |
+----------------------+------------+------------------------+---------+---------+
| Unsecured loan notes | | | 1,926 | 114 |
+----------------------+------------+------------------------+---------+---------+
| | | | 2,752 | 163 |
+----------------------+------------+------------------------+---------+---------+
| | | | | |
+----------------------+------------+------------------------+---------+---------+
| | | | Qualifying |
| | | | Investments |
+----------------------+------------+------------------------+-------------------+
| | | | GBP'000 | GBP'000 |
+----------------------+------------+------------------------+---------+---------+
| Opening valuation | | | 163 | - |
+----------------------+------------+------------------------+---------+---------+
| Purchases at cost | | | 2,589 | 163 |
+----------------------+------------+------------------------+---------+---------+
| Closing valuation | | 2,752 | 163 |
+----------------------+------------+------------------------+---------+---------+
9. Significant Interests
The Company has interests of greater than 20% of the nominal value of the
allotted shares in the following Investee Companies incorporated in the United
Kingdom as at 31 December 2008:
+---------------------------------+-------+----------------+--------------+
| Trading Companies | | % class and | % voting |
| | | share type | rights |
+---------------------------------+-------+----------------+--------------+
| Aurem Ltd | | 24.95% A | 24.95% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
| Sounds Alive Ltd | | 24.95% A | 24.95% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
| CFDT Ltd | | 24.95% A | 24.95% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
| IR Productions Ltd | | 24.95% A | 24.95% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
| Taste Xmas Live Ltd | | 24.95% A | 24.95% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
+---------------------------------+-------+----------------+--------------+
| Dormant Companies | | % class and | % voting |
| | | share type | rights |
+---------------------------------+-------+----------------+--------------+
| Into the Grove Ltd | | 100% A | 100% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
| Strongmania Live Ltd | | 100% A | 100% |
| | | Ordinary | |
+---------------------------------+-------+----------------+--------------+
The investments made by the Company are part of its portfolio of investments. As
a VCT, the Company values those investments at fair value in accordance with FRS
26.
10. Debtors
+-------------------------+---------+----------+----------------+----------+
| | | | 2008 | 2007 |
+-------------------------+---------+----------+----------------+----------+
| | | | GBP'000 | GBP'000 |
+-------------------------+---------+----------+----------------+----------+
| Trade Debtors | | - | 12 |
+-----------------------------------+----------+----------------+----------+
| Prepayments and accrued income | | 6 | 3 |
+-----------------------------------+----------+----------------+----------+
| | | 6 | 15 |
+-------------------------+---------+----------+----------------+----------+
11. Current Asset Investments
+-------------------------+---------+----------+----------------+-----------+
| | | | 2008 | 2007 |
+-------------------------+---------+----------+----------------+-----------+
| | | | GBP'000 | GBP'000 |
+-------------------------+---------+----------+----------------+-----------+
| Funds held in listed money market | 6,045 | 8,514 |
| instruments | | |
+-------------------------+---------+----------+----------------+-----------+
+-------------------------+---------+----------+----------------+-----------+
| Non-Qualifying | | | |
| Investments | | | |
+-------------------------+---------+----------+----------------------------+
| | | | GBP'000 | GBP'000 |
+-------------------------+---------+----------+----------------+-----------+
| Opening valuation | | | 8,514 | - |
+-------------------------+---------+----------+----------------+-----------+
| Purchases at cost | | | 2,536 | 8,559 |
+-------------------------+---------+----------+----------------+-----------+
| Disposal proceeds | | | (5,146) | (231) |
+-------------------------+---------+----------+----------------+-----------+
| Unrealised change in value of | | 141 | 186 |
| investment | | | |
+-----------------------------------+----------+----------------+-----------+
| Closing valuation and book cost | 6,045 | 8,514 |
+-------------------------+---------+----------+----------------+-----------+
In order to safeguard the capital available for investment in Qualifying
Investments and balance this with the need to provide good returns to investors,
available funds from the net proceeds are invested in appropriate securities
(money market securities and cash funds) until required for Qualifying
Investment purposes.
12. Creditors: Amounts Falling Due Within One Year
+-------------------------+---------+----------+-----------------+----------+
| | | | 2008 | 2007 |
+-------------------------+---------+----------+-----------------+----------+
| | | | GBP'000 | GBP'000 |
+-------------------------+---------+----------+-----------------+----------+
| Trade creditors | | | - | 4 |
+-------------------------+---------+----------+-----------------+----------+
| Accruals and deferred | | | 26 | 26 |
| income | | | | |
+-------------------------+---------+----------+-----------------+----------+
| | | | 26 | 30 |
+-------------------------+---------+----------+-----------------+----------+
| | | | | |
+-------------------------+---------+----------+-----------------+----------+
13. Called-Up Share Capital
+---------------------------+----------+-----------+-------------+----------+
| | | | 2008 | 2007 |
+---------------------------+----------+-----------+-------------+----------+
| Authorised | | | GBP'000 | GBP'000 |
+---------------------------+----------+-----------+-------------+----------+
| 35,000,000 ordinary shares 1p each | | 350 | 350 |
+--------------------------------------+-----------+-------------+----------+
| | | | | |
+---------------------------+----------+-----------+-------------+----------+
| Allotted, called-up and | | | | |
| fully paid | | | | |
+---------------------------+----------+-----------+-------------+----------+
| 9,242,845 ordinary shares 1p each | | 92 | 92 |
+---------------------------+----------+-----------+-------------+----------+
In the period ended 31 December 2007, 9,242,843 shares were issued and allotted
in accordance with the terms of the Prospectus. The two subscriber shares
created upon incorporation was issued at par. Share issue costs amounting to
GBP369k have been set off against share premium.
The entire issued ordinary share capital of the Company has been admitted to the
official list maintained by the Financial Services Authority and to trading on
the London Stock Exchange.
14. Reserves
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| | | Share | Other | Capital | Capital | Revenue | Total |
| | | premium | reserve | realised | unrealised | reserve | reserves |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| At 1 January 2008 | | 8,765 | - | (11) | 186 | (196) | 8,744 |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| Reduction of share | | (4,382) | 4,382 | - | - | - | - |
| premium account | | | | | | | |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| Gain on disposal of | | - | - | 87 | - | - | 87 |
| investments | | | | | | | |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| Increase in fair value of | - | - | - | 141 | - | 141 |
| investments held | | | | | | |
+----------------------------+---------+---------+----------+------------+---------+-----------+
| Investment income | | - | - | 76 | - | 8 | 84 |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| Investment management | | - | - | (80) | - | (80) | (160) |
| fees | | | | | | | |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| Other expenses | | - | - | (13) | - | (106) | (119) |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
| At 31 December 2008 | | 4,383 | 4,382 | 59 | 327 | (374) | 8,777 |
+-------------------------+--+---------+---------+----------+------------+---------+-----------+
On 31 January 2008, the Company registered the court order dated 19 December
2007 with the Registrar of Companies confirming the reduction of the Company's
share premium account by GBP4,382k. The purpose of the reduction was to enable
the company to create a distributable reserve for the purpose of purchasing
shares in the market.
15. Net Asset Value Per Share
+----------+----------+----------+----------+----------+---------------+-----------------+
| | | | | | 2008 | 2007 |
+----------+----------+----------+----------+----------+---------------+-----------------+
| Net assets attributable to shareholders (GBP'000) | 8,869 | 8,836 |
| | | |
+------------------------------------------------------+---------------+-----------------+
| Shares in issue (number) | | | 9,242,845 | 9,242,845 |
+--------------------------------+----------+----------+---------------+-----------------+
| Net asset value per share (pence) | | 96.0 | 95.6 |
+----------+----------+----------+----------+----------+---------------+-----------------+
16. Financial Instruments and Risk Management
The Company's financial instruments comprise equity and floating rate debt
investments in unquoted companies, cash balances and listed money market
instruments. The Company holds financial assets in accordance with its
investment policy.
Fixed asset investments (see note 8) are valued at fair value. For quoted
securities included in current asset non qualifying investments, this is bid
price. In respect of unquoted investments, these are fair valued in accordance
with the International Private Equity and Venture Capital Valuation Guidelines.
The fair value of all other financial assets and liabilities is represented by
their carrying value on the Balance Sheet.
The Company's investing activities expose it to various types of risk that are
associated with the financial instruments and markets in which it invests. The
most important types of financial risk to which the Company is exposed are:
* Market risk;
* Interest rate risk;
* Credit risk; and
* Liquidity risk
The nature and extent of the financial instruments outstanding at the balance
sheet date and the risk management policies employed by the Company are
discussed below:
a) Market risk
Market risk embodies the potential for both losses and gains and includes
interest rate risk and price risk.
The Company's strategy on the management of investment risk is driven by the
Company's investment objective. Investments in unquoted companies, by their
nature, involve a higher degree of risk than investments in larger "blue chip"
companies.
The risk of loss in value is managed through careful selection in accordance
with a formalised investment decision process, with each investment proposal
evaluated by the investment committee as part of the due diligence stage. The
Company's investment policy can be found in the Business Review. The risk is
also managed through continuous monitoring of the performance of investments and
changes in their risk profile.
b) Interest rate risk
Some of the Company's financial assets are interest bearing, all of which are at
floating rates. As a result, the Company is subject to exposure to interest rate
risk due to fluctuations in the prevailing levels of market interest rate.
When the Company retains cash balances, the majority of cash is held within an
interest bearing money market open ended investment company (OEIC). This is the
Non-Qualifying Investments amount on the Balance Sheet being GBP6,045k (2007:
GBP8,514k). The benchmark rate which determines the interest payments received
on interest bearing cash balances and debt investments in unquoted companies is
the bank base rate which was 2 per cent as at 31 December 2008 (31 December
2007: 5.5 per cent).
The following table illustrates the sensitivity of the loss on ordinary
activities for the year before taxation and total equity to a change in interest
rates of 100 basis points, with effect from the beginning of the year. These
changes are considered to be reasonably possible based on observation of current
market conditions. The calculations are based on the Company's Non-qualifying
investments held at each balance date. All other variables are held constant.
+-----------------------+-+--------------+---+---------------+---------------+
| | | | | 31 December | 31 December |
| | | | | 2008 | 2007 |
+-----------------------+-+--------------+---+---------------+---------------+
| | | | | GBP '000 | GBP '000 |
+-----------------------+-+--------------+---+---------------+---------------+
| | | +/- 100 basis | +/- 100 basis |
| | | points | points |
+----------------------------------------+---+---------------+---------------+
| Profit on ordinary activities for the | | | |
| year before taxation | | | |
+----------------------------------------+---+---------------+---------------+
| Total Equity | | 60 | 85 |
+-----------------------+-+--------------+---+---------------+---------------+
c) Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation or commitment that it has entered into with the
company.
Whilst the Company is exposed to credit risk due to its GBP1,926k unsecured loan
note instruments (2007: GBP114k), this risk is mitigated by the Company
requiring that minimum royalty arrangements are in place prior to the investment
as set out in the Company's investment policy. In addition, and in accordance
with the Company's monitoring procedure, the Manager, closely monitors progress
(including financial expenditure) against the Investee Companies' agreed
business plans.
The GBP191k unsecured loan note is the contractually agreed 70% of initial
investments.
d) Liquidity risk
The Company's financial instruments include equity and debt investments in
unquoted companies, which are not traded in an organised public market and which
generally may be illiquid. As a result, the Company may not be able to liquidate
quickly some of its investment in these instruments at an amount close to fair
value.
The Company maintains sufficient reserves of cash and readily realisable
marketable securities to meet its liquidity requirements at all times.
17. Contingencies, Guarantees and Financial Commitments
There is currently interest income accruing on the unsecured loan note
instruments at a rate of 3.0 per cent, being 1 per cent over the bank base rate
which was 2.0 per cent as at 31 December 2008 (2007: 5.5%), totalling GBP48k
(2007: GBP3k). The repayment of this interest is contingent on future profits
being derived by the Investee Companies, which currently can not be determined
with any certainty, therefore the Directors have not recognised it in the
financial statements.
18. Related Party Transactions
The Company appointed Ingenious Media Investments Limited, a company of which
Patrick McKenna is a director, to be their promoter. Ingenious Media Investments
Limited is a wholly owned subsidiary of the Ingenious Group which is controlled
by Patrick McKenna.
The Company has appointed Ingenious Ventures to provide investment management
services. Ingenious Ventures Limited was the manager until 1 March 2008, when
the investment management agreement was novated to Ingenious Asset Management
Limited, and Ingenious Ventures became a trading division of Ingenious Asset
Management Limited. Patrick McKenna is a director of Ingenious Ventures Limited
and Ingenious Asset Management Limited, which are both wholly owned subsidiaries
within the Ingenious Group, which is controlled by Patrick McKenna.
During the Reporting Period the Company has carried out a number of transactions
with the above-mentioned related parties in the normal course of the business
and on an arm's length basis:
+-------------------------+-------------+------------+-------------+------------+
| | 2008 | 2008 | 2007 | 2007 |
+-------------------------+-------------+------------+-------------+------------+
| Entity | Expenditure | Amounts | Expenditure | Amounts |
| | paid | due | paid | due |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Ventures | | | | |
| Limited | | | | |
+-------------------------+-------------+------------+-------------+------------+
| - Investment management | 52 | - | 140 | - |
| fee | | | | |
+-------------------------+-------------+------------+-------------+------------+
| - Administration fee | 5 | - | 15 | - |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Asset Management Limited | | | |
+---------------------------------------+------------+-------------+------------+
| - Investment management | 140 | - | - | - |
| fee | | | | |
+-------------------------+-------------+------------+-------------+------------+
| - Administration fee | 14 | - | - | - |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Media Investments Limited | | | |
+---------------------------------------+------------+-------------+------------+
| - Arrangement fee | - | - | 461 | - |
+-------------------------+-------------+------------+-------------+------------+
| | | Amounts | | Amounts |
| | | receivable | | receivable |
| | | GBP'000 | | GBP'000 |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Ventures Limited | | | |
+---------------------------------------+------------+-------------+------------+
| - VAT reclaimed on | | 26 | | - |
| Management and | | | | |
| Administration fee | | | | |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Asset Management Limited | | | |
+---------------------------------------+------------+-------------+------------+
| - VAT reclaimed on | | 8 | | - |
| Management and | | | | |
| Administration fee | | | | |
+-------------------------+-------------+------------+-------------+------------+
| Ingenious Media Investments Limited | | | |
+---------------------------------------+------------+-------------+------------+
| - Expenses recharged | | - | | 12 |
+-------------------------+-------------+------------+-------------+------------+
Ingenious Media Consulting Limited, a company of which Patrick McKenna is a
director and which is a wholly owned subsidiary in the Ingenious Group, has
entered into consultancy agreements with each of the Investee Companies to
provide management services. For the provision of such services, consulting fees
totalling GBP151k including VAT (2007: nil) have been invoiced in the year,
GBP10k of which remains outstanding as at 31 December 2008.
The funds invested in OEICs, are managed by Ingenious Asset Management Limited,
a company of which Patrick McKenna is a director. Ingenious Asset Management is
a wholly owned subsidiary in the Ingenious Group which is controlled by Patrick
McKenna.
Brand Events Limited who hold 49.9% of the equity of Taste Xmas Live Limited is
a subsidiary of Ingenious Media Active Capital Limited (IMAC), a company of
which Patrick McKenna is a director. Ingenious Media Ltd is also a shareholder
of IMAC. Ingenious Live VCT 1 plc has invested GBP902k in Taste Xmas Live
Limited during the year.
Cream Holdings Limited, a company of which Patrick McKenna is chairman, holds
49.9% of the equity of CFDT Limited. Cream Holdings Limited is 46.9% owned by
Ingenious Ventures Limited Partnership (IVLP).
IVLP is a partnership between IMAC which owns 90% and Ingenious Media Ltd
holding the remaining 10%. Patrick McKenna is a director of IMAC. Ingenious
Media Ltd is also a shareholder of IMAC. Ingenious Live VCT 1 plc has invested
GBP850k in CFDT Limited during the year.
Patrick McKenna is a director and chairman of The Young Vic Company (a
registered charity) which holds 0.2% of the equity in each of the Investee
Companies.
19. Events after the Balance Sheet Date
The Company invested GBP500k in Dance Floor Limited on 14 January 2009. The
newly formed company has provided funding for a new television format called
Let's Dance, which was commissioned by the BBC for Comic Relief. Whizz Kid Dance
Limited who hold 49.9% of the equity of Dance Floor Limited is a subsidiary of
Whizz Kid Entertainment Limited which is a subsidiary of IMAC, a company in
which Patrick McKenna is a director and Ingenious Media Ltd is also a
shareholder of IMAC.
20. Capital Management
The capital management objectives of the Company are:
* To safeguard its ability to continue as a going concern so that it can continue
to provide returns of shareholders.
* To ensure sufficient liquid resources are available to meet the funding
requirements of its investments and to fund new investments where identified.
The company has no external debt; consequently all capital is represented
by the value of share capital, distributable and other reserves. Total
shareholder equity at 31 December 2008 was GBP8,869k (2007: GBP8,836k)
In order to maintain or adjust its capital structure the Group may
adjust the amount of dividends paid to the shareholders, return capital to
shareholders, issue new shares or sell assets.
There have been no
changes to the capital management objectives or the capital structure of the
business from the previous period.
The group is subject to the following
externally imposed capital requirements:
* As a public company Ingenious Live VCT 1 plc must have a minimum of GBP50k of
share capital.
The level of dividends may be influenced by the need to comply with the VCT
legislation which stated that no more than 15% of income from shares and
securities may be retained.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSFFUFSUSEFL
Ingenious 1 (LSE:ILV1)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Ingenious 1 (LSE:ILV1)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
