LONDON--()--
“Financial Statements of Investment Trust Companies and Venture Capital Trusts”
INGENIOUS ENTERTAINMENT VCT 2 plc (“the Company”)
STATEMENT OF ANNUAL RESULTS
For the year ended 31 December 2010
CHAIRMAN’S STATEMENT
I am delighted to present the Company’s third Annual Report and Accounts covering the year to 31 December 2010 (the Reporting Period).
Overview of Activities
The Company has now completed its investment strategy and is fully invested under the VCT regulations for the Ordinary Shares and the management team will now focus on maximising the returns from these investments.
The Company continued to actively source and review investment opportunities during the Reporting Period for the C Shares and D Shares. In total, the Company made eight investments across the Ordinary Shares and C Shares during the Reporting Period. Details of all investments can be found in the Manager’s Review.
I am pleased to announce that the first investment made by the Ordinary Shares, 80s Rewind Festival, performed well attracting in excess of 35,000 people, making a good profit in its second year.
Fund Raising
In October 2010, the Ingenious Entertainment VCTs launched the E and F Share offers for subscription. As at 7 April 2011 the Ingenious Entertainment VCTs have raised over £8 million in respect of the E and F Share offers. The Ingenious Entertainment VCTs have now raised in excess of £46 million through their Ordinary, C Share, D Share, E Share and F Share classes. The E and F Share offer will remain open for subscription until 29 July 2011.
Following the end of the Reporting Period, the Company made further investments to back two new festivals, one based in Bournemouth and the other in Brighton. These were the first deals entered into through a co-investment of the funds raised by the C Shares and the D Shares.
Results
The Ordinary Shares, C Shares and D Shares are accounted for as separate pools of funds necessitating separate reporting.
The Ordinary Shares made a loss on ordinary activities of £105,000 (31 December 2009: £173,000), the C Shares made a loss on ordinary activities of £66,000 (31 December 2009: £83,000) and the D Shares made a loss on ordinary activities of £163,000 (31 December 2009: £Nil) in the Reporting Period.
The net asset value per Ordinary Share is 87.6 pence (31 December 2009: 93.6 pence) although this is after the deduction of the interim dividend of 5.0 pence per share.
The net asset value per C Share is 84.4 pence (31 December 2009: 91.8 pence) although this is after the deduction of the interim dividend of 5.0 pence per share.
The net asset value of each D Share is 92.9 pence (31 December 2009: £Nil).
The Directors do not recommend the payment of a final dividend in respect of the Reporting Period.
Outlook
It was noted in our review of the market in the Annual Report and Accounts for the year ended 31 December 2009 that the challenging economic environment would be likely to adversely affect the live events sector as consumers became more cautious about their discretionary spending. However, I am pleased to report that the live events sector has performed resiliently in the downturn and we anticipate the expansion of the digital media sector creating new markets for content creators.
We believe that the strategy of the Ingenious Live VCTs, which are managed by Ingenious Ventures, shows strong signs of commercial success. It is one that successfully balances equity risk with a strong level of downside protection through minimum revenue arrangements of at least 70% in respect of each investment. The Ingenious Entertainment VCTs will very much continue to replicate this strategy, albeit with the ability to diversify the investment portfolio.
I would like to take this opportunity to thank all Shareholders for their support of the Company and I look forward to seeing those of you that are able to attend the AGM, scheduled for 18 May 2011.
Paul Gregg
Chairman
7 April 2011
MANAGER’S REVIEW
Investment Objective
The Company’s main objective is to invest in companies established to create and bring to market live events and premium entertainment content which will provide Shareholders with an attractive return. This strategy will aim to maximise the opportunities for making tax-free dividends to Shareholders from both the actual income received and capital profits on the sale of the Investee Companies or their assets.
Festivals
80s Rewind Festival & 80s Rewind North
Investment amount (80s Rewind Festival): £272,598 (£545,196 across the Ingenious Entertainment VCTs, and £693,696 across the Ingenious Live VCTs).
Investment amount (80s Rewind North): £500,000 (£1,000,000 across the Ingenious Entertainment VCTs).
In December 2008, the Company, alongside The Rival Organisation, co-promoted 80s Rewind Festival, a two-day music event in Henley-Upon-Thames. The 2010 event held in August experienced an impressive increase in attendance figures, with a total audience of over 35,000 across both days. Highlights included performances by Boy George, Tony Hadley, Go West and Rick Astley.
We remain confident that 80s Rewind will continue to perform strongly in the future. This year’s event is to be held between 19 and 21 August and attendance levels are forecast at over 20,000 per day.
The latest investment in the 80s Rewind brand was made in October 2010 in order to co-promote 80s Rewind North, which will take place between 29 and 31 July 2011 at Scone Palace in Perthshire, Scotland. There is a star studded line up at both events, including The Human League, Holly Johnson, Billy Ocean, The Bluebells, Ali Campbell’s UB40, along with many more. Tickets are now on sale and have already exceeded their target at this stage.
With the Rewind brand developing from strength to strength, we are now looking at an international rollout. It is anticipated that 2011 will see 80s Rewind festivals take place in Holland, South Africa and Australia.
London Electronic Dance Festival (L.E.D.)
Investment amount: £500,000 (£1,000,000 across the Ingenious Entertainment VCTs).
In August 2010 the Ingenious Entertainment VCTs agreed to co-promote the London Electronic Dance Festival (L.E.D.) in partnership with AEG Live, Cream and Loudsound. This year the event hosted performances by some of the world’s top dance acts including David Guetta, Calvin Harris, Leftfield, Goldfrapp, Annie Mac and many more.
The L.E.D. Festival was held over the August bank holiday weekend in London’s Victoria Park and attracted over 25,000 people. However, these numbers were not enough to secure a profit for the opening year. With such an impressive range of partners behind this event, the Company is confident that this festival will prove a success in coming years.
The Apple Cart Festival
Investment amount: £125,000 (£250,000 across the Ingenious Entertainment VCTs).
In June 2010, the Company made an investment in The Apple Cart Festival Limited to promote a one-day music and arts festival in London. The Apple Cart Festival is a broader type of festival combining music, comedy, art, cinema, magic and spoken word. Planning is currently underway for the first festival in London’s Victoria Park, during the summer of 2011.
Exhibitions
O2 Golf Live
Investment amount: £275,000 (£1,100,000 across the Ingenious Entertainment VCTs and the Ingenious Live VCTs).
O2 Golf Live is a new three-day interactive golf event which was staged at Stoke Park in Buckinghamshire between 14 and 16 May 2010. O2 Golf Live returns in 2011 and will be held at the prestigious London Golf Club in Kent from 20 to 22 May. In conjunction with our co-promoters Brand Events and IMG, the event will again be hosted by last year’s Ryder Cup captain, Colin Montgomerie. The 2010 event was described by those who attended as the most exciting and dynamic event to be added to the golfing calendar.
IMG invested into the event as an equity partner giving Brand Events access to worldwide sporting talent. IMG Worldwide is a global sports, fashion and media business and is excited to be working with Brand Events, who together aim to roll the event out to further prestigious golf courses around the world. O2, Jaguar and the European Tour were amongst the partners for the initial UK launch and have all agreed to continue to sponsor and support the event in 2011.
The event made a loss in the first year, however it was extremely well received by both the corporate partners and the paying public. Sponsorship and exhibitor income are already ahead of this year’s budget and 2011 ticket sales are also ahead of where they were in 2010. Both Brand Events and IMG are confident that the event will move into profit in 2011, building on the significant brand awareness that was created in its first year.
Live Venues
Scarborough Open Air Theatre
Investment amount: £1,000,000 (£4,000,000 across the Ingenious Entertainment VCTs and the Ingenious Live VCTs).
The Ingenious Live VCTs along with Apollo Resorts and Leisure Scarborough joined forces to co-promote a new venue in 2009 known as the Scarborough Open Air Theatre. The theatre was originally opened in 1932 and in 2009 Scarborough Council entered into a major restoration programme as part of the North Bay Project to reinstate the theatre, reopening it to the public in 2010. Further funding of £2,000,000 was introduced by the Ingenious Entertainment VCTs in December 2010.
Scarborough now has the largest open air theatre in Europe. It was opened by the Queen on 20 May 2010 and this ceremony was followed by a series of sell out events throughout the summer season. These included the Gala Opening with performances by José Carreras and Dame Kiri Te Kanawa as well as the 80s Rewind concert, which included performances from Boy George, Rick Astley and Paul Young. The second half of the season showcased an impressive range of events, one of which included a number of shows by Justin Fletcher, the Bafta award winning children’s presenter and star of CBeebies. This new venue also hosted some less successful events, meaning that in its opening year the Scarborough theatre did not generate a profit. Nonetheless, following the encouraging reception the Scarborough theatre received over its first year, we are confident that this venue will move into profit in 2011.
XOYO
Investment amount: £400,000 (£800,000 across the Ingenious Entertainment VCTs).
In March 2010 the Company made an investment with Assorted Works Limited to co-promote events at a new live venue on Cowper Street, in London’s Shoreditch district.
XOYO is a 900 capacity live entertainment venue split over two floors which books and promotes a broad and exciting range of live music acts, club nights, visual art and other creative media events. XOYO has a prime location in Shoreditch; the hub of London's music, art and party scene.
The venue opened in September 2010 and has proved to be very popular with an average of up to six shows a week, with over 14,000 people coming through the doors every month.
Jongleurs Comedy Live
Investment amount: £1,000,000 (£2,000,000 across the Ingenious Entertainment VCTs).
In October 2010, it was agreed that the Ingenious Entertainment VCTs would co-promote a variety of live comedy events throughout the UK with Jongleurs Comedy Live. Over a period of 25 years Jongleurs has grown to become one of the biggest names in the comedy industry and the brand has helped to launch the careers of some of the best names in show business including Eddie Izzard, Harry Enfield, Al Murray, Jack Dee and Graham Norton.
Jongleurs is currently rolling out its brand through a number of club partnerships and franchises across the UK. The Company expects this development to generate positive returns in the course of 2011.
Television Format and Distribution
Let’s Dance
Investment amount: £500,000 (£2,000,000 across the Ingenious Entertainment VCTs and the Ingenious Live VCTs).
Originally commissioned by the BBC for Comic Relief in 2009 and Sport Relief in 2010, the TV format Let’s Dance is the celebrity packed dance spectacular which sees well known celebrities such as Rufus Hound and Jo Brand pay homage to some of the world’s most iconic dance routines in front of a live audience. Let's Dance has started its international roll-out with deals in Russia, Holland, Germany, Slovakia, Indonesia and Sweden.
In 2010 the show had a peak audience of over eight million viewers and as a result, the programme has been recommissioned for the third year, once again in conjunction with Comic Relief. The series aired on 19 February 2011 and ran over four weeks, comprised of three heats and culminated in a spectacular final dance off on Red Nose Day weekend.
Digital Rights Group
Investment amount: £1,000,000 (£2,000,000 across the Ingenious Entertainment VCTs).
In June 2009, the Ingenious Entertainment VCTs agreed with independent television distributor Digital Rights Group Limited (“DRG”) to jointly acquire, market and distribute a series of television programmes.
DRG is the leading independent distributor of content in the UK with eight brands in the DRG group supporting all genres from drama to reality and formats to entertainment. DRG has worked on shows as diverse as The Inbetweeners, Kingdom starring Stephen Fry, the Martin Clunes drama Doc Martin, Australian series Sea Patrol, a wide variety of children’s programmes and factual documentaries. The investment is anticipated to generate a small return for the Company.
SuperVision
Investment amount: £1,000,000 (£2,000,000 across the Ingenious Entertainment VCTs).
In 2010, an investment was made in SuperVision Media to co-promote and co-distribute alternative content. SuperVision is one of the leading owners and distributors of alternative content for cinemas around the globe in both the sport and entertainment fields. Their aim is to provide people with experiences that are the next best thing to being at the event whilst screening live, uninterrupted content mainly in 3D format, accompanied by surround sound.
SuperVision has secured the exclusive rights to stage Formula 1 racing in cinemas and was also able to distribute the Football World Cup in 3D in the UK during July 2010.
The company has more recently secured the exclusive rights to screen Michael Flatley’s Lord of the Dance in 3D which was released on 17 March 2011. Major theatre chains in the US, UK, and Europe supported the movie and SuperVision had a screen goal of roughly 1,500 locations (half in the US, with the balance in the UK and Europe).
Saturn Explosion
Investment amount: £1,000,000 (£2,000,000 across Ingenious Entertainment VCTs).
In December 2010, Ingenious Entertainment VCTs agreed with the directors of Supervision Media to form a new company, Saturn Explosion Limited, to carry on the trade of the production, promotion and exploitation of alternative digital content (including but not limited to event based entertainment and sport content such as music concerts, festivals, theatrical productions and sporting events) across a range of media including television and cinema.
Supervision Media has recently acquired the rights to distribute Michael Flatley’s Lord of the Dance in 3D and is one of the leading owners and distributors of alternative content for cinemas around the globe. Saturn Explosion anticipates that it will be able to acquire the rights to alternative digital content in respect of live entertainment events either as a result of working with third parties to create and develop the alternative digital content, such as the 3D rights to theatrical shows, or by acquiring the rights to exploit such content from third parties.
Outlook
The economic environment continues to display challenges for the Company as a whole. However, we are pleased to report that the live and entertainment events sector has performed resiliently in the downturn. In addition the expansion of the digital media sector has created new markets for content creators.
It appears that the industry’s expectations in relation to the pace of consumers’ migration to the new digital platform are progressing well ahead of what was originally expected. Changing consumer behaviour is impacting on all segments of the entertainment and media industry, and as a result the Company’s search for revenue positioning in the digital value chain is extremely important. Therefore the decision was made to invest into SuperVision Media who are one of the leading owners and distributors of digital content. We therefore remain confident that our ability to invest in the diverse portfolio of sectors coupled with our proactive measures to further mitigate risk will continue to stand us, and our investors, in good stead.
As a result, we are confident that the Company will continue to add to its portfolio of good quality investments as the entertainment industry is constantly expanding.
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
7 April 2011
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 Entertainment VCT 2 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 agreement.
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 focus on investing in companies established to create and bring to market live events and premium entertainment content. These investments should be Qualifying Investments for the purposes of the VCT legislation. Each share class of each of the Ingenious Entertainment VCTs (‘the VCTs’) represents a separate pool of capital and each such pool has its own separate performance record and dividend history.
For the Ordinary Shares, C Shares and D Shares the Manager intends to balance the risk profile by investing no more than 30% of the respective funds raised under the respective offers in a blend of low risk money market funds (OEICs) (which are non-qualifying for the purposes of VCT legislation) and at least 70% of funds raised in VCT qualifying media content investments.
For the E Shares, the Manager intends to balance the risk profile of the fund by investing no more than 30% of funds raised into a blend of low risk money market funds (which are non-qualifying for the purposes of VCT legislation) in the same way as for funds raised in the Ordinary Share Offer, the C Share Offer and the D Share Offer and at least 70% of funds raised in VCT qualifying media content investments.
In respect of F Shares, the Manager will deploy no more than 30% of the funds in a balanced multi-asset management portfolio (which is non-qualifying for the purposes of VCT legislation) and at least 70% of funds raised in VCT qualifying media content investments.
The investment policy for VCT qualifying media content investments is the same for all share classes, and is based upon a rigorous selection process, together with a funding structure and minimum revenue contractual arrangements specifically designed to offer Investors downside protection whilst preserving the considerable upside potential of the live events and entertainment content within the portfolio.
Asset Allocation
The Manager will focus on investing in companies producing live events or creating branded entertainment content with a view to achieving a broad allocation of the VCTs’ assets across the entertainment sector. Investments could include the production and promotion of a theatrical show or the launch of a music festival, the development and exploitation of new formats or the creation of online or mobile games. The Manager’s objective will be to identify projects in which the VCTs can participate in the revenues and in the capital value of the content once the market is established.
Ordinary Shares, ‘C’ Shares and ‘D’ Shares
The Directors believe that pending deployment into Qualifying Investments funds should be deployed in a low risk, liquid investment, which also provides moderate returns to VCT Shareholders. The Manager intends to invest such capital raised in the Ordinary Share Offer, the C Share Offer and the D Share Offer and not deployed in Qualifying Investments in a number of low risk money market funds (OEICs) with a rating of at least AAAm (S&P) or Aaa/MR1+ (Moody’s) or, where the fund is not rated by these agencies, the average credit quality of portfolio is not less than AA+ (S&P).
‘E’ Shares
Of the funds raised from the E Share Offer, at least 70% will be invested in Qualifying Investments (companies in the media and entertainment sector). The remaining 30% of the funds raised by the E Share Offer will be retained in a blend of low risk money market funds (OEICs) throughout the life of the VCT, creating a lower risk profile for the E Shares than for the F Shares.
‘F’ Shares
Of the funds raised from the F Share Offer, at least 70% will be invested in Qualifying Investments (companies in the media and entertainment sector). The remaining 30% of the funds raised by the F Share Offer will be retained in a balanced multi-asset management portfolio throughout the life of the VCT.
Diversification
The Manager will seek to diversify the risk of Qualifying Investments through investment in media content and live events chosen from a broad spectrum of opportunities in the media and entertainment sector. However, the principal focus will be on the quality of the proposition, the experience of the production partner and the returns that can be generated. There is, therefore, no limitation on investments in any specific segment of the entertainment sector. There will, however, be restrictions on the size of investments (both Qualifying Investments and other investments) made by the VCTs as set out in the VCT Status and Maximum Exposures paragraph below.
Risk Mitigation
The following risk mitigation strategies will be utilised by the Investee Companies, and in common with industry practice:
- Each Investee Company will be required to put into place pre-sales or similar minimum revenue arrangements providing for the Investee Company to receive at least 75% of the VCTs’ investment (Base Revenues).
- Each Investee Company will engage the services of an experienced producer or promoter with a proven track record in bringing media projects to market and delivering the returns targeted by the VCTs.
- Each Investee Company will be required, where appropriate, to obtain relevant insurance policies in order to protect against normal industry risks. After completion of its first project, each Investee Company may seek to undertake further projects (with at least the same level of downside protection) from its existing cash-flows. However, Investee Companies will not be permitted to undertake further projects which could reduce the Base Revenues generated from its first project. Each Investee Company will be expected to realise the capital value of its rights and goodwill after five years. This investment policy should ensure a high degree of downside protection whilst preserving the considerable upside potential of the premium media content within the portfolio.
Funding Structure, Gearing and Contractual Arrangements
Each Investee Company will initially be formed for the purpose of engaging in the production and exploitation of premium media content or a live event. At present, the VCTs’ intention is to invest in Qualifying Companies by subscribing for a minimum of 30% of their investment in share capital and the remaining 70% through loan stock instruments. However, there is legislation being introduced this year by way of the Finance Bill (No 3) 2010 which provides that at least 70% by value of Qualifying Investments must be in equity. Depending on when this legislation comes into force it will mean that the VCTs will instead invest a minimum of 70% of their investment in share capital and the remaining 30% through loan stock instruments. The VCTs will have a non-controlling interest in each Investee Company and other shareholders may include, amongst others, promoters, record labels, game developers and charities. It is expected that the initial capital provided by the VCTs will be sufficient to cover the Investee Company’s budgeted costs of creating and bringing to market the initial project.
The VCTs can invest, under current VCT legislation, up to £1 million each (and, therefore, £2 million in aggregate) per tax year in any one Investee Company and will always co-invest on equal terms pro rata to the capital in each VCT. This should have the advantage of enabling the VCTs to co-invest in larger projects than if one VCT was investing by itself. The VCTs will not borrow money in relation to their activities.
Liquidity
As was the case with each of the Ordinary Share Offer, the ‘C’ Share Offer and the ‘D’ Share Offer, each of the VCTs intends to create an ‘E’ Share reserve and an ‘F’ Share reserve which will enable it to make share buy-backs in the market, subject to liquidity restraints. The VCTs will operate a discount policy for repurchasing Shares, which will be determined by the boards of the VCTs at their discretion.
The VCTs intend to return funds to Shareholders after five years if Shareholders so desire. In any event, the Articles of Association of each of the VCTs currently contain a provision requiring the Directors to propose an ordinary resolution at the tenth annual general meeting of the VCTs to continue the life of the VCTs. If any such resolution is not passed, the Directors will draw up proposals for the re-organisation, reconstruction or voluntary winding up of the VCTs for consideration of members at a general meeting on a date not more than nine months after such general meeting. Implementation of such proposals will require the approval of Shareholders by special resolution.
VCT Status and Maximum Exposures
In order to obtain venture capital trust status, the VCTs must be approved by HM Revenue & Customs. The conditions which must be satisfied to obtain and retain such status include the following restrictions on the maximum exposure of each VCT:
- no holding in a company will represent more than 15% by value of each VCT’s total investments; and
- each VCT is limited to investing up to £1 million per Investee Company in any one tax year or in any six month period straddling two tax years.
The limits stated in the policy above in relation to the percentage amount of the funds invested in Qualifying Investments and non-qualifying investments will need to be met within the three year VCT investment period in accordance with the VCT qualifying rules. The boards of the VCTs do not intend to vary the VCTs’ investment policy, however, should a material change in the investment policy (including the conditions above) be deemed appropriate this will be done with Shareholders’ approval and in accordance with the Listing Rules.
3. Principal Risks, Risk Management and Regulatory Environment
The Board believes that the principal risks faced by the Company are:
- Investment and strategic – the performance of 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 live event or created branded content 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 Act, 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% 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 75% of the investment, regular reviews of performance, monitoring progress and compliance.
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 year, the position of the Company at the year end and the outlook for the coming year is contained within the Chairman’s Statement and the Manager’s Review.
INCOME STATEMENT
for the year ended 31 December 2010
|
Year ended 31 December 2010 |
Year ended 31 December 2009 |
||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 211 | 211 | - | 1 | 1 | |||||||||
| (Decrease)/increase in fair value of investments held | - | (244) | (244) | - | 72 | 72 | |||||||||
| Investment income | 2 | 208 | - | 208 | 40 | - | 40 | ||||||||
| Arrangement fees | 3 | (74) | - | (74) | (31) | - | (31) | ||||||||
| Investment management fees | 4 | (140) | (140) | (280) | (100) | (100) | (200) | ||||||||
| Other expenses | 5 | (155) | - | (155) | (127) | (11) | (138) | ||||||||
| Loss on ordinary activities before taxation | (161) | (173) | (334) | (218) | (38) | (256) | |||||||||
| Tax on ordinary activities | 6 | - | - | - | - | - | - | ||||||||
| Loss attributable to equity shareholders | (161) | (173) | (334) | (218) | (38) | (256) | |||||||||
| Basic and diluted return per share (pence) | |||||||||||||||
| Ordinary Share | 7 | 0.3 | (1.3) | (1.0) | (1.4) | (0.3) | (1.7) | ||||||||
| C Share | 7 | (1.8) | (0.5) | (2.3) | (3.9) | (0.3) | (4.2) | ||||||||
| D Share | 7 | (3.0) | (0.4) | (3.4) | - | - | - | ||||||||
The Company has no recognised gains and losses other than those disclosed above.
The total column is the Income Statement of the Company for the year. The supplementary capital and revenue columns are prepared following guidance published by the Association of Investment Companies (AIC).
All operations are considered to be continuing.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
for the year ended 31 December 2010
|
|
Year ended
31 December 2010 |
Year ended
31 December 2009 |
||
| £'000 | £'000 | |||
| Opening shareholders' funds | 12,135 | 9,728 | ||
| Capital subscribed | 6,714 | 2,784 | ||
| Issue costs | (295) | (121) | ||
| Dividends | (651) | - | ||
| Loss for the year | (334) | (256) | ||
| Closing shareholders' funds | 17,569 | 12,135 |
The accompanying notes form an integral part of these financial statements.
NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY, C AND D SHARE FUNDS
INCOME STATEMENT
for the year ended 31 December 2010
| Ordinary Shares | C Shares | D Shares | |||||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||||
| Gain on disposal of investments | - | 202 | 202 | - | 7 | 7 | - | 2 | 2 | ||||||||||
| (Decrease)/increase in fair value of investments held | - | (260) | (260) | - | (1) | (1) | - | 17 | 17 | ||||||||||
| Investment income | 203 | - | 203 | 5 | - | 5 | - | - | - | ||||||||||
| Arrangement fees | - | - | - | - | - | - | (74) | - | (74) | ||||||||||
| Investment management fees | (81) | (81) | (162) | (22) | (22) | (44) | (37) | (37) | (74) | ||||||||||
| Other expenses | (88) | - | (88) | (33) | - | (33) | (34) | - | (34) | ||||||||||
| Profit/(loss) on ordinary activities before taxation | 34 | (139) | (105) | (50) | (16) | (66) | (145) | (18) | (163) | ||||||||||
| Tax on ordinary activities | - | - | - | - | - | - | - | - | - | ||||||||||
| Profit/(loss) attributable to equity shareholders | 34 | (139) | (105) | (50) | (16) | (66) | (145) | (18) | (163) | ||||||||||
| Basic and diluted return per share (pence) | 0.3 | (1.3) | (1.0) | (1.8) | (0.5) | (2.3) | (3.0) | (0.4) | (3.4) | ||||||||||
The Company has no recognised gains and losses other than those disclosed above.
The supplementary capital and revenue columns are prepared following guidance published by the Association of Investment Companies (AIC).
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
for the year ended 31 December 2010
| Ordinary Shares | C Shares | D Shares | Total Shares | |||||
| £'000 | £'000 | £'000 | £'000 | |||||
| Opening shareholders' funds | 9,555 | 2,580 | - | 12,135 | ||||
| Capital subscribed | - | - | 6,714 | 6,714 | ||||
| Issue costs | - | - | (295) | (295) | ||||
| Dividends | (510) | (141) | - | (651) | ||||
| Loss for the year | (105) | (66) | (163) | (334) | ||||
| Closing shareholders' funds | 8,940 | 2,373 | 6,256 | 17,569 |
NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY, C AND D SHARE FUNDS
INCOME STATEMENT
for the year ended 31 December 2009
| Ordinary Shares | C Shares | D Shares | |||||||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |||||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||||||
| Gain on disposal of investments | - | 1 | 1 | - | - | - | - | - | - | ||||||||||||
| Increase in fair value of investments held | - | 63 | 63 | - | 9 | 9 | - | - | - | ||||||||||||
| Investment income | 40 | - | 40 | - | - | - | - | - | - | ||||||||||||
| Arrangement fees | - | - | - | (31) | - | (31) | - | - | - | ||||||||||||
| Investment management fees | (85) | (85) | (170) | (15) | (15) | (30) | - | - | - | ||||||||||||
| Other expenses | (96) | (11) | (107) | (31) | - | (31) | - | - | - | ||||||||||||
| Loss on ordinary activities before taxation | (141) | (32) | (173) | (77) | (6) | (83) | - | - | - | ||||||||||||
| Tax on ordinary activities | - | - | - | - | - | - | - | - | - | ||||||||||||
| Loss attributable to equity shareholders | (141) | (32) | (173) | (77) | (6) | (83) | - | - | - | ||||||||||||
| Basic and diluted return per share (pence) | (1.4) | (0.3) | (1.7) | (3.9) | (0.3) | (4.2) | - | - | - | ||||||||||||
The Company has no recognised gains and losses other than those disclosed above.
The supplementary capital and revenue columns are prepared following guidance published by the Association of Investment Companies (AIC).
The Company had no D Shares in issue for the year ended 31 December 2009.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
For the year ended 31 December 2009
|
|
Ordinary Shares | C Shares | D Shares | Total Shares | ||||
| £'000 | £'000 | £'000 | £'000 | |||||
| Opening shareholders' funds | 9,728 | - | - | 9,728 | ||||
| Capital subscribed | - | 2,784 | - | 2,784 | ||||
| Issue costs | - | (121) | - | (121) | ||||
| Loss for the year | (173) | (83) | - | (256) | ||||
| Closing shareholders' funds | 9,555 | 2,580 | - | 12,135 |
BALANCE SHEET
as at 31 December 2010
| 31 December 2010 | 31 December 2009 | ||||||
| Note | £'000 | £'000 | |||||
| Fixed assets | |||||||
| Qualifying investments | 8 | 7,670 | 2,048 | ||||
| Current assets | |||||||
| Debtors | 10 | 81 | 31 | ||||
| Non-qualifying investments | 11 | 9,753 | 10,029 | ||||
| Cash at bank and in hand | 149 | 69 | |||||
| 9,983 | 10,129 | ||||||
| Creditors: amounts falling due within one year | 12 | (84) | (42) | ||||
| Net current assets | 9,899 | 10,087 | |||||
| Net assets | 17,569 | 12,135 | |||||
| Capital and reserves | |||||||
| Called-up share capital | 13 | 198 | 130 | ||||
| Share premium account | 14 | 6,351 | - | ||||
| Other reserve account | 14 | 11,615 | 12,266 | ||||
| Capital reserve | 14 | 12 | 185 | ||||
| Revenue reserve | 14 | (607) | (446) | ||||
| Shareholders' funds | 17,569 | 12,135 |
| Net asset value per Ordinary Share | 15 | 87.6 | 93.6 | ||||
| Net asset value per C Share | 15 | 84.4 | 91.8 | ||||
| Net asset value per D Share | 15 | 92.9 | - |
The accompanying notes form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 7 April 2011.
Signed on behalf of the Board of Directors:
Lionel Martin
Director
NON-STATUTORY ANALYSIS BETWEEN THE ORDINARY, C AND D SHARE FUNDS
BALANCE SHEET
| As at 31 December 2010 | As at 31 December 2009 | |||||||||||||
| Ordinary | C | D | Ordinary | C | D | |||||||||
| Shares | Shares | Shares | Shares | Shares | Shares | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Fixed assets | ||||||||||||||
| Qualifying investments | 6,698 | 972 | - | 2,048 | - | - | ||||||||
| Current assets | ||||||||||||||
| Debtors | 59 | - | 22 | 26 | 5 | - | ||||||||
| Non-qualifying investments | 2,135 | 1,369 | 6,249 | 7,471 | 2,558 | - | ||||||||
| Cash at bank and in hand | 73 | 35 | 41 | 46 | 23 | - | ||||||||
| 2,267 | 1,404 | 6,312 | 7,543 | 2,586 | - | |||||||||
| Creditors: amounts falling due within one year | (25) | (3) | (56) | (36) | (6) | - | ||||||||
| Net current assets | 2,242 | 1,401 | 6,256 | 7,507 | 2,580 | - | ||||||||
| Net assets | 8,940 | 2,373 | 6,256 | 9,555 | 2,580 | - | ||||||||
| Capital and reserves | ||||||||||||||
| Called-up share capital | 102 | 28 | 68 | 102 | 28 | - | ||||||||
| Share premium account | - | - | 6,351 | - | - | - | ||||||||
| Other reserve account | 9,121 | 2,494 | - | 9,631 | 2,635 | - | ||||||||
| Capital reserve | 52 | (22) | (18) | 191 | (6) | - | ||||||||
| Revenue reserve | (335) | (127) | (145) | (369) | (77) | - | ||||||||
| Shareholders' funds | 8,940 | 2,373 | 6,256 | 9,555 | 2,580 | - | ||||||||
| Net asset value (pence per share) | 87.6 | 84.4 | 92.9 | 93.6 | 91.8 | - | ||||||||
The Company had no D Shares in issue for the year ended 31 December 2009.
CASH FLOW STATEMENT
for the year ended 31 December 2010
| Ordinary Shares | C Shares | D Shares | Total Shares | ||||||||
| Note | £'000 | £'000 | £'000 | £'000 | |||||||
| Net cash outflow from operating activities | (76) | (68) | (146) | (290) | |||||||
| Financial investment | |||||||||||
| Purchase of qualifying investments | 8 | (4,553) | (972) | - | (5,525) | ||||||
| Net cash outflow from financial investment | (4,553) | (972) | - | (5,525) | |||||||
| Management of liquid resources | |||||||||||
| Purchase of non-qualifying investments | 11 | (1,762) | (564) | (7,335) | (9,661) | ||||||
| Disposal of non-qualifying investments | 11 | 6,928 | 1,757 | 1,103 | 9,788 | ||||||
| Net cash inflow/(outflow) from liquid resources | 5,166 | 1,193 | (6,232) | 127 | |||||||
|
|
|||||||||||
| Financing | |||||||||||
| Issue of D Shares | - | - | 6,714 | 6,714 | |||||||
| Issue costs of D Shares | - | - | (295) | (295) | |||||||
| Net cash inflow from financing | - | - | 6,419 | 6,419 | |||||||
| Dividends | |||||||||||
| Payment of dividends | (510) | (141) | - | (651) | |||||||
| Net cash outflow from dividends | (510) | (141) | - | (651) | |||||||
| Increase in cash | 27 | 12 | 41 | 80 | |||||||
Reconciliation of loss before taxation to net cash flow from operating activities
| £'000 | £'000 | £'000 | £'000 | |||||||
| Loss on ordinary activities before tax | (105) | (66) | (163) | (334) | ||||||
| (Increase)/decrease in fair value of investments held | 260 | 1 | (17) | 244 | ||||||
| Investment income | (187) | (5) | - | (192) | ||||||
| (Increase)/decrease in receivables | (33) | 5 | (22) | (50) | ||||||
| Increase/(decrease) in payables | (11) | (3) | 56 | 42 | ||||||
| Net cash outflow from operating activities | (76) | (68) | (146) | (290) |
Reconciliation of net cash flow to movement in net funds
| £'000 | £'000 | £'000 | £'000 | |||||||
| Opening cash balances | 46 | 23 | - | 69 | ||||||
| Net cash inflow | 27 | 12 | 41 | 80 | ||||||
| Closing cash balances | 73 | 35 | 41 | 149 |
Total net funds is cash of £149k (Ordinary Shares: £73k; C Shares: £35k and D Shares £41k) and non-qualifying investments of £9,753k (Ordinary Shares: £2,135k; C Shares: £1,369k and D Shares: £6,249k). The accompanying notes form an integral part of these financial statements.
CASH FLOW STATEMENT
for the year ended 31 December 2009
| Ordinary Shares | C Shares | D Shares | Total Shares | ||||||||
| Note | £'000 | £'000 | £'000 | £'000 | |||||||
| Net cash outflow from operating activities | (247) | (91) | - | (338) | |||||||
| Financial investment | |||||||||||
| Purchase of qualifying investments | 8 | (1,775) | - | - | (1,775) | ||||||
| Net cash outflow from financial investment | (1,775) | - | - | (1,775) | |||||||
| Management of liquid resources | |||||||||||
| Purchase of non-qualifying investments | 11 | (2,333) | (2,549) | - | (4,882) | ||||||
| Disposal of non-qualifying investments | 11 | 4,294 | - | - | 4,294 | ||||||
| Net cash inflow/(outflow) from liquid resources | 1,961 | (2,549) | - | (588) | |||||||
|
|
|||||||||||
| Financing | |||||||||||
| Issue of C Shares | - | 2,784 | - | 2,784 | |||||||
| Issue costs of C Shares | - | (121) | - | (121) | |||||||
| Net cash inflow from financing | - | 2,663 | - | 2,663 | |||||||
| Increase/(decrease) in cash | (61) | 23 | - | (38) | |||||||
Reconciliation of loss before taxation to net cash flow from operating activities
| £'000 | £'000 | £'000 | £'000 | ||||||||
| Loss on ordinary activities before tax | (173) | (83) | - | (256) | |||||||
| Gain on investments | (1) | - | - | (1) | |||||||
| Increase in fair value of investments held | 11 | (63) | (9) | - | (72) | ||||||
| Increase in receivables | (19) | (5) | - | (24) | |||||||
| Increase in payables | 9 | 6 | - | 15 | |||||||
| Net cash outflow from operating activities | (247) | (91) | - | (338) |
Reconciliation of net cash flow to movement in net funds
| £'000 | £'000 | £'000 | £'000 | |||||||
| Opening cash balances | 107 | - | - | 107 | ||||||
| Net cash inflow/(outflow) | (61) | 23 | - | (38) | ||||||
| Closing cash balances | 46 | 23 | - | 69 |
Total net funds is cash of £69k (Ordinary Shares: £46k; C Shares: £23k) and non-qualifying investments of £10,029k (Ordinary Shares: £7,471k; C Shares: £2,558k).
The accompanying notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2010
1. Accounting Policies
a) Basis of Accounting
The financial statements for the year ended 31 December 2010 have been prepared in compliance with UK Generally Accepted Accounting Practice, and with the Statement of Recommended Practice (the SORP) entitled "Financial Statements of Investment Trust Companies and Venture Capital Trusts" which was issued in January 2009.
The comparative figures are for the year, 1 January 2009 to 31 December 2009.
The financial statements have been prepared on a going concern basis under the historical cost convention, except for the measurement at fair value for investments. The principal accounting policies have remained unchanged from those set out in the Company’s 2009 annual report and financial statements.
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 designated at fair value and valued in accordance with the International Private Equity and Venture Capital Guidelines and Financial Reporting Standard 26 “Financial Instruments: Recognition and Measurement” (FRS 26). Investments are initially recognised at fair value. The investments are subsequently re-measured at fair value, as estimated by the Directors with prudence and good faith. Investments holding gains or losses arising from the revaluation of investments are taken directly to the Income Statement. Fair value is determined as follows:
- Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
- In estimating fair value for an investment, the Investment Manager will apply a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio and will use reasonable assumptions and estimations.
- An appropriate methodology incorporates available information about all factors that are likely to materially affect the fair value of the investment. The valuation methodologies are applied consistently from period to period, except where a change would result in a better estimate of fair value. Any changes in valuation methodologies will be clearly disclosed in the financial statements.
The most widely used methodologies are listed below. In assessing which methodology is appropriate, the Directors are predisposed towards those methodologies that draw upon market based measures of risk and return.
- Price of recent investment
- Earnings multiple
- Net assets
- Available market prices
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 up to the start of the first live event or entertainment content which forms the investment is often applied as the long stop date for such a valuation.
2 - Discounted cash flows/earnings of the underlying business
Investments can be valued by calculating the net present value of expected future cashflows of the companies in which the Company will invest (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.
In the period prior to the second live event or entertainment content it is considered appropriate to use the price paid for the recent investment as the latest available information. Thereafter, the portfolio of investments is fair valued on the earnings multiple basis using the latest available information on the performance of the live event or entertainment content. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the Income Statement in the period in which they arise.
As a result of the above basis of valuation, there is significant judgement associated with the valuation of investments.
Non-qualifying Investments - 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 relating to loan note premiums is recognised in the Income Statement as accrued on a time-apportionment basis so as to reflect the effective interest rate. Where those loan note premiums are charged in lieu of higher interest then they are credited to income over the life of the advance to the extent those premiums are anticipated to be collected.
d) Dividend Income
Dividend income is recognised in the Income Statement once declared by any investee company.
e) 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.
- the management fee has been allocated 50% to revenue and 50% to capital, which represents the split of the Company’s long term returns.
f) 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.
g) Ordinary Shares, C Shares and D Shares
The Company has three classes of shares; Ordinary Shares, C Shares and D Shares. Each share class has a separate pool of income and expenses as well as assets and liabilities attributable to it. Ordinary Shares, C Shares and D Shares rank pari passu with each other in terms of voting and other rights.
2. Investment Income
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Bank deposit interest | - | 4 | |||
| Interest from non-qualifying investments | - | 24 | |||
| Dividend income from qualifying investments | 8 | - | |||
| Loan note interest from qualifying investments | 200 | 12 | |||
| 208 | 40 |
3. Arrangement Fees
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Arrangement fees | 74 | 31 |
All costs arising out of the relevant Offer, including listing expenses and commissions, were incurred by the Promoter (Ingenious Media Investments Limited) and a fee of 5.5% of the gross proceeds of the relevant 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 Company law, 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
| 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Investment management fee | 140 | 140 | 280 | 100 | 100 | 200 |
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 split of the Company’s long term returns.
5. Other Expenses
| 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Directors’ remuneration (including employer’s national insurance) | 36 | - | 36 | 39 | - | 39 | |||||||||
| Auditors’ remuneration | |||||||||||||||
| - Audit fees | 13 | - | 13 | 12 | - | 12 | |||||||||
| Legal & professional fees | 16 | - | 16 | - | 4 | 4 | |||||||||
| Other administration expense | 87 | - | 87 | 66 | 5 | 71 | |||||||||
| Irrecoverable VAT | 3 | - | 3 | 10 | 2 | 12 | |||||||||
| 155 | - | 155 | 127 | 11 | 138 |
The Company is not registered for VAT. Fees payable to the Company’s auditor for the audit of the Company’s financial statements are £13k (2009: £12k) excluding VAT.
6. Tax Charge on Ordinary Activities
| 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | ||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Loss on ordinary activities before tax | (161) | (173) | (334) | (218) | (38) | (256) | |||||||||
| Loss on ordinary activities by tax rate 28% (2009: 28%) | (45) | (48) | (93) | (61) | (11) | (72) | |||||||||
| Adjustments: | |||||||||||||||
| Non taxable (gains)/losses on investments | - | 9 | 9 | - | (20) | (20) | |||||||||
| Disallowed expenses | 1 | 42 | 43 | 1 | 31 | 32 | |||||||||
| Unutilised losses for the current year | 46 | (3) | 43 | 60 | - | 60 | |||||||||
| UK dividends not taxable | (2) | - | (2) | - | - | - | |||||||||
| - | - | - | - | - | - |
As the Company is a VCT its capital gains are not taxable.
At 31 December 2010 the Company had surplus management expenses of £602k (2009: £445k). 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
| Ordinary Shares | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Profit/(loss) on ordinary activities after taxation | 34 | (139) | (105) | (141) | (32) | (173) | |||||||
| Weighted average shares in issue (number) | 10,205,011 | 10,205,011 | 10,205,011 | 10,205,011 | 10,205,011 | 10,205,011 | |||||||
| Profit/(loss) attributable per share (pence) | 0.3 | (1.3) | (1.0) | (1.4) | (0.3) | (1.7) |
| C Shares | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Loss on ordinary activities after taxation | (50) | (16) | (66) | (77) | (6) | (83) | |||||||
| Weighted average shares in issue (number) | 2,810,596 | 2,810,596 | 2,810,596 | 1,980,118 | 1,980,118 | 1,980,118 | |||||||
| Loss attributable per share (pence) | (1.8) | (0.5) | (2.3) | (3.9) | (0.3) | (4.2) |
| D Shares | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Loss on ordinary activities after taxation | (145) | (18) | (163) | - | - | - | |||||||
| Weighted average shares in issue (number) | 4,773,028 | 4,773,028 | 4,773,028 | - | - | - | |||||||
| Loss attributable per share (pence) | (3.0) | (0.4) | (3.4) | - | - | - |
There are no dilutive potential Ordinary, C or D Shares, including convertible instruments, options or contingent share agreements in issue for the Company.
8. Fixed Asset Investments
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Unquoted investments | 7,670 | 2,048 | |||
| Equity shares | 2,177 | 614 | |||
| Unsecured loan notes | 5,493 | 1,434 | |||
| 7,670 | 2,048 | ||||
| Qualifying Investments | |||||
| £'000 | £'000 | ||||
| Opening valuation | 2,048 | 273 | |||
| Purchases at cost | 5,525 | 1,775 | |||
| Fair value adjustment | 97 | - | |||
| Closing valuation | 7,670 | 2,048 | |||
9. Significant Interests
The Ordinary Shares have interests of greater than 10% of the nominal value of the allotted shares in the following Investee Companies incorporated in the United Kingdom as at 31 December 2010:
| Trading Companies | % class and share type | % voting rights | ||||
| Jetstream Events Limited | 24.95% A Ordinary | 24.95% | ||||
| Essential Experience Limited | 24.95% A Ordinary | 24.95% | ||||
| Crystal Star Limited | 24.95% A Ordinary | 24.95% | ||||
| Saturn Explosion Limited | 16.50% A Ordinary | 16.50% | ||||
| DRG Media Assets Limited | 24.95% A Ordinary | 24.95% | ||||
| Dance Floor Limited | 12.48% A Ordinary | 12.48% | ||||
| Golfmania Limited | 12.48% A Ordinary | 12.48% | ||||
| Into The Groove Limited | 10.99% A Ordinary | 10.99% | ||||
| The Apple Cart Festival Limited | 12.50% A Ordinary | 12.50% | ||||
| CLS Concerts Limited | 16.67% A Ordinary | 16.67% | ||||
| Supervision Media Holdings Limited | 10.00% A Ordinary | 10.00% | ||||
| Jongleurs Live Limited | 20.00% A Ordinary | 20.00% |
It is considered that, as permitted by FRS9, "Associates and Joint Ventures", the above investments are held as part of an investment portfolio, and that, accordingly, their value to the Company lies in their marketable value as part of that portfolio. In view of this, it is not considered that any of the above represents investments in associated undertakings.
| Dormant Companies | % class and share type | % voting rights | ||||
| Tremor Events Limited | 100% A Ordinary | 100% | ||||
| Electric Ventures Limited | 100% A Ordinary | 100% | ||||
| Diamond Ventures Limited | 100% A Ordinary | 100% | ||||
| Callisto Moon Limited | 100% A Ordinary | 100% | ||||
| Mercury Events Limited | 100% A Ordinary | 100% | ||||
| Moda Events Limited | 100% A Ordinary | 100% | ||||
| Neptune Nine Limited | 100% A Ordinary | 100% | ||||
| Oscar Moment Limited | 100% A Ordinary | 100% | ||||
| Saturn Six Limited | 100% A Ordinary | 100% | ||||
| Solar Experience Limited | 100% A Ordinary | 100% | ||||
| Total Definition Limited | 100% A Ordinary | 100% |
The investments made by the Company are part of its portfolio of investments and the table above includes all portfolio investments. As a VCT, the Company values those investments at fair value in accordance with FRS 26.
The Company is not required to prepare consolidated accounts as any remaining amounts in the above companies are dormant are immaterial.
10. Debtors
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Trade debtors | 22 | 5 | |||
| Prepayments and accrued income | 59 | 26 | |||
| 81 | 31 |
11. Current Asset Investments
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Funds held in listed money market instruments | 9,753 | 10,029 |
| Non-Qualifying Investments | |||||
| £'000 | £'000 | ||||
| Opening valuation | 10,029 | 9,368 | |||
| Purchases at cost | 9,661 | 4,882 | |||
| Disposal proceeds | (9,788) | (4,293) | |||
| Unrealised change in value of investment | (149) | 72 | |||
| Closing valuation | 9,753 | 10,029 | |||
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
| 2010 | 2009 | ||||
| £'000 | £'000 | ||||
| Trade creditors | 10 | 6 | |||
| Accruals and deferred income | 74 | 36 | |||
| 84 | 42 |
13. Called-Up Share Capital
| 2010 | 2009 | |||
| Allotted, called-up and fully paid | £'000 | £'000 | ||
| 10,205,011 Ordinary Shares 1p each | 102 | 102 | ||
| 2,810,596 C Shares 1p each | 28 | 28 | ||
| 6,735,624 D Shares of 1p each | 68 | - | ||
| 198 | 130 |
In the current year 6,785,624 D Shares were issued and allotted in accordance with the terms of the relevant Prospectus of which 6,735,624 D Shares were fully paid at year end. Share issue costs amounted to £369k of which £295k has been set off against the share proceeds.
In the year ended 31 December 2009, 2,810,596 C Shares were issued and allotted in accordance with the terms of the relevant Prospectus. Share issue costs amounting to £121k have been set off against the share proceeds.
In the period ended 31 December 2008, 10,205,011 Ordinary Shares were issued and allotted in accordance with the terms of the relevant Prospectus. The one subscriber share created upon incorporation was issued at par. Share issue costs amounting to £448k have been set off against the share proceeds.
Ordinary Shares, C Shares and D Shares rank pari passu with each other in terms of voting and other rights. The entire issued Ordinary, C and D 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.
|
Number of D
Shares allotted and fully paid |
Aggregate nominal value allotted | Aggregate consideration received net of issue costs | |||||
| £'000 | £'000 | ||||||
| 1 April 2010 | 4,192,080 | 42 | 3,941 | ||||
| 3 April 2010 | 1,635,734 | 17 | 1,569 | ||||
| 30 July 2010 | 907,810 | 9 | 835 | ||||
| 6,735,624 | 68 | 6,345 |
During the year 21,230 additional D Shares were issued and fully paid in accordance with the terms of the relevant Prospectus.
14. Reserves
| Share premium | Other reserve | Capital reserve | Revenue reserve | Total reserves | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| At 1 January 2010 | - | 12,266 | 185 | (446) | 12,005 | |||||||
| Issue of equity | 6,646 | - | - | - | 6,646 | |||||||
| Dividends paid | - | (651) | - | - | (651) | |||||||
| Gain on disposal of investments | - | - | 211 | - | 211 | |||||||
| Decrease in fair value of investments held | - | - | (244) | - | (244) | |||||||
| Investment income | - | - | - | 208 | 208 | |||||||
| Arrangement fees | (295) | - | - | (74) | (369) | |||||||
| Investment management fees | - | - | (140) | (140) | (280) | |||||||
| Other expenses | - | - | - | (155) | (155) | |||||||
| At 31 December 2010 | 6,351 | 11,615 | 12 | (607) | 17,371 |
The capital reserve includes realised investment holding losses of £1k and unrealised investment holding gains of £13k.
As an investment company under section 833 of the Companies Act 2006, the other reserve account is the only distributable reserve of the Company.
On 13 April 2010 and 28 May 2010, the Company paid dividends amounting to £510k on Ordinary Shares (2009: £Nil) and £141k on C Shares (2009: £Nil) respectively. Although the Company had applied to the High Court to reduce its share premium account and create distributable reserves, the Company had not complied with certain technical requirements of the Companies Act 2006. Specifically, prior to the payment of the dividends from capital reserves, the Company was required to revoke to its investment company status. The payments of the dividends received appropriate pre-clearance from HMRC, to confirm the Company's VCT status was not affected by the dividend payments. The Company is taking advice from its advisors and will inform shareholders as soon as practicable. The accounts have been drawn up on the basis that the issue referred to above is regularised. The proposals do not affect the results of the Company for the year to 31 December 2010, its net assets at 31 December 2010, nor its ability to pay future dividends.
15. Net Asset Value Per Share
| 2010 | 2009 | ||||
| Net assets attributable to Ordinary Shareholders (£'000) | 8,940 | 9,555 | |||
| Ordinary Shares in issue (number) | 10,205,011 | 10,205,011 | |||
| Net asset value per Ordinary Share (pence) | 87.6 | 93.6 |
| 2010 | 2009 | ||||
| Net assets attributable to C Shareholders (£'000) | 2,373 | 2,580 | |||
| C Shares in issue (number) | 2,810,596 | 2,810,596 | |||
| Net asset value per C Share (pence) | 84.4 | 91.8 |
| 2010 | 2009 | ||||
| Net assets attributable to D Shareholders (£'000) | 6,256 | - | |||
| D Shares in issue (number) | 6,735,624 | - | |||
| Net asset value per D Share (pence) | 92.9 | - |
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.
Fair Value Hierarchy
| 2010 | 2009 | ||||||||
| £'000 | £'000 | ||||||||
| Listed money market instruments (note 11) | Level 1 | 9,753 | 10,029 | ||||||
| Unquoted investments (note 8) | Level 3 | 7,670 | 2,048 | ||||||
| 17,423 | 12,077 | ||||||||
Level 3 investments include a £97k revaluation gain on Into The Groove Limited during the period.
In accordance with Financial Reporting Standard 29 “Financial Instruments: Disclosures”, the above table provides an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value:
- Level 1 - investments with quoted prices in active markets;
- Level 2 - investments whose fair value is based directly on observable market prices or is indirectly drawn from observable market prices; and
- Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.
The valuation techniques used by the Company are explained in note 1 of the accounting policies.
Risk Management
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 interest bearing money market open ended investment companies (OEICs). This is the Non-Qualifying Investments amount on the Balance Sheet of £9,753k (2009: £10,029k). 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 0.5% as at 31 December 2010 (31 December 2009: 0.5%).
The following table illustrates the sensitivity of the impact on ordinary activities for the year before taxation and total equity to a change in interest rates of 50 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 sheet date. All other variables are held constant.
|
|
31 December 2010 | 31 December 2009 | ||||||
|
£ '000
+/- 50 basis points |
£ '000
+/- 50 basis points |
|||||||
| Impact on profit/(loss on ordinary activities for the year | ||||||||
| before taxation and total equity | 49 | 50 | ||||||
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 £5,493k (2009: £1,434k) unsecured loan note instruments, 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 £5,493k (2009: £1,434k) unsecured loan notes are the contractually agreed 75% 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. No numerical disclosures have been provided in respect of liquidity risk as this is not considered to be material.
17. Contingencies, Guarantees and Financial Commitments
There is currently interest income accruing on the unsecured loan note instruments at a rate of 4.5% (2009: 1.5%, amended to 4.5% in April 2010), being 4% over the bank base rate which was 0.5% as at 31 December 2010 (2009: 0.5%), totalling £38k (2009: £8k). The repayment of this interest is not deemed recoverable based on current 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
a. The Company has appointed Ingenious Media Investments Limited, a company of which Patrick McKenna is a director, to be its promoter. Ingenious Media Investments Limited is a wholly-owned subsidiary within the Ingenious Media Holdings plc group of companies (the Ingenious Group) which is controlled by Patrick McKenna. The Company paid Ingenious Media Investments Limited a fee of 5.5% of the gross proceeds of the D Share offer, amounting to £369k (2009: C Share fee amounting to £152k) which was paid in consideration for services provided as promoter.
b. Ingenious Ventures Limited was the Company’s investment manager until 28 February 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 Asset Management Limited and was a director of Ingenious Ventures Limited until 1 June 2009, which are subsidiaries within the Ingenious Group, which is controlled by Patrick McKenna.
Ingenious Ventures (the Manager), as per the investment management agreement, receives a management fee of 0.4375% of the net asset value payable quarterly in advance. This amounted to £280k as at 31 December 2010 (2009: £200k). The Manager also charges an administration fee of £53k (2009: £35k) per annum and irrecoverable VAT.
c. The funds invested in OEICs are managed by the Asset Management division of Ingenious Asset Management Limited, of which Patrick McKenna is a director. Ingenious Asset Management Limited is a subsidiary of the Ingenious Group, which is controlled by Patrick McKenna. There is no fee associated with this transaction.
d. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have jointly agreed with Assorted Works Limited to form a new company, Essential Experience Limited, to co-promote a new live venue called XOYO. In March 2010 the Company invested £400k for a total of 24.95% of the equity in Essential Experience Limited. Ingenious Entertainment VCT 1 plc also invested £400k for 24.95% of the equity in Essential Experience Limited.
The investment of £400k in Essential Experience Limited is the first joint investment between the Ordinary Shares (£315k) and the C Shares (£85k).
Patrick McKenna is a director and chairman of The Young Vic Company (a registered charity) which holds 0.2% of the equity of Essential Experience Limited.
e. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have invested in an existing company, The Apple Cart Festival Limited, which will promote a festival in London called The Apple Cart. In June 2010 the Company invested £125k for a total of 12.5% of the equity in The Apple Cart Festival Limited. Ingenious Entertainment VCT 1 plc also invested £125k for 12.5% of the equity in The Apple Cart Festival Limited.
The investment of £125k in The Apple Cart Festival Limited is a joint investment between the Ordinary Shares (£98k) and the C Shares (£27k).
f. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in an existing company, CLS Concerts Limited, to promote a dance music festival called L.E.D. Festival. In August 2010 the Company invested £500k for a total of 16.67% of the equity in CLS Concerts Limited. Ingenious Entertainment VCT 1 plc invested £500k for 16.67% of the equity in CLS Concerts Limited.
The investment of £500k in CLS Concerts Limited is a joint investment between the Ordinary Shares (£391k) and the C Shares (£109k).
g. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in an existing company, Supervision Media Holdings Limited, to provide digital content to cinemas in both the sport and entertainment fields. In August 2010 the Company invested £1,000k for a total of 10.00% of the equity in Supervision Media Holdings Limited. Ingenious Entertainment VCT 2 plc invested £1,000k for 10.00% of the equity in Supervision Media Holdings Limited.
The investment of £1,000k in Supervision Media Holdings Limited is a joint investment between the Ordinary Shares (£779k) and the C Shares (£221k).
h. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in a new company, Crystal Star Limited, to promote a music festival in Scotland called 80s Rewind North. In October 2010 the Company invested £500k for a total of 24.95% of the equity in Crystal Star Limited. Ingenious Entertainment VCT 1 plc invested £500k for 24.95% of the equity in Crystal Star Limited.
The investment of £500k in Crystal Star Limited is a joint investment between the Ordinary Shares (£391k) and the C Shares (£109k).
i. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in an existing company, Jongleurs Live Limited, to promote live comedy venues. In October 2010 the Company invested £1,000k for a total of 20.00% of the equity in Jongleurs Live Limited. Ingenious Entertainment VCT 1 plc invested £1,000k for 20.00% of the equity in Jongleurs Live Limited.
The investment of £1,000k in Jongleurs Live Limited is a joint investment between the Ordinary Shares (£779k) and the C Shares (£221k).
j. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in a new company, Saturn Explosion Limited, to provide digital content to cinemas. In December 2010 the Company invested £1,000k for a total of 16.50% of the equity in Saturn Explosion Limited. Ingenious Entertainment VCT 1 plc invested £1,000k for 16.50% of the equity in Saturn Explosion Limited.
The investment of £1,000k in Saturn Explosion Limited is a joint investment between the Ordinary Shares (£800k) and the C Shares (£200k).
k. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 1 plc. The Company and Ingenious Entertainment VCT 1 plc have agreed to invest in a new company, Jetstream Events Limited, to promote an event called Scarborough Open Air Theatre. In December 2010 the Company invested £1,000k for a total of 24.95% of the equity in Jetstream Events Limited.
Ingenious Entertainment VCT 1 plc invested £1,000k for 24.95% of the equity in Jetstream Events Limited.
Transactions Between Related Parties
| 2010 | 2010 | 2009 | 2009 | |||||||
| Entity |
Expenditure paid
£’000 |
Amounts due
£’000 |
Expenditure paid/(received)
£’000 |
Amounts due
£’000 |
||||||
| Ingenious Media Investments Limited | ||||||||||
| - Arrangement fee | 369 | - | 152 | - | ||||||
| Ingenious Asset Management Limited | ||||||||||
| - Investment management fee | 280 | - | 200 | - | ||||||
| - Administration fee | 53 | - | 35 | - | ||||||
| - Irrecoverable VAT | - | 3 | 9 | 3 |
During the year the Company has entered into transactions with the above-mentioned related parties in the normal course of business and on an arm's length basis.
Ingenious Media Consulting Limited, a company which is a wholly-owned subsidiary in the Ingenious Group, which is controlled by Patrick McKenna, has entered into consultancy agreements with each of the Company’s investee companies to provide management services. For the provision of such services, consulting fees totalling £89k excluding VAT (31 December 2009: £48k), have been invoiced in the period, no amounts remain outstanding as at 31 December 2010 (31 December 2009: £3k).
19. Events After the Balance Sheet Date
The Company declared an interim dividend of 5.0 pence per Ordinary Share on 17 January 2011 (2010: 5.0 pence). The dividend was paid on 11 February 2011 by way of a capital distribution reducing the Company’s other reserves.
The Company declared an interim dividend of 5.0 pence per C Share on 17 January 2011 (2010: 5.0 pence). The dividend was paid on 11 February 2011 by way of a capital distribution reducing the Company’s other reserves.
Following the end of the Reporting Period, the Company made further investments to back two new festivals, one based in Bournemouth and the other in Brighton. These were the first deals entered into through a co-investment of both the C Share and the D Share funds.
On 5 April 2011, the Company allotted 51,662 E Shares of 1p and 51,662 F Shares of 1p to Patrick McKenna, a director and a related party, for a consideration of £1 per share. On 5 April 2011 the Company also allotted 25,875 E Shares of 1p and 25,875 F shares of 1p to Patrick McKenna’s wife, Margaret McKenna for a consideration of £1 per share.
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 to 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 2010 was £17,569k (2009: £12,135k).
In order to maintain or adjust its capital structure the Company 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 of the business from the previous period.
The capital structure of the Company was changed by the issue of D Shares (see note 13) during the year.
The Company is subject to the following externally imposed capital requirements:
- As a public company Ingenious Entertainment VCT 2 plc must have a minimum of £50k of share capital.
The level of dividends may be influenced by the need to comply with the VCT legislation which states that no more than 15% of income from shares and securities may be retained.
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