LONDON--(BUSINESS WIRE)--
INGENIOUS ENTERTAINMENT VCT 1 PLC
20 August 2014
Half-yearly results for the six months to 30 June 2014
INTERIM MANAGEMENT REPORT
We are delighted to present the half-yearly financial report of Ingenious Entertainment VCT 1 plc (the Company) covering the six months ended 30 June 2014 (the Reporting Period).
Overview of Activities
In December 2013, the Company cancelled all of its Ordinary shares and completed the full distribution of capital in January 2014 in relation to those shares.
The Company has now completed its investment strategy and is fully invested under the VCT regulations for its C, D, E and F share classes. The Manager will now focus upon maximising the returns from the investments made from these investments.
The Company continues to actively source and review investment opportunities for its remaining share classes and two investments were made during the six month period by the G share class.
The first investment was made in March 2014 into The Zoo Project Festival Limited in the sum of £600,000 (£300,000 by the Company and £300,000 by Ingenious Entertainment VCT 2 plc). The Zoo Project Festival Limited was incorporated to stage the third Zoo Project Festival which will take place at Donington Park in the East Midlands in September 2014.
The second investment was also made in March 2014 into FM3 2013 Limited, a company that has been set up to produce and distribute live entertainment content, particularly in the area of music festivals. The investment amount was £1,400,000 (£700,000 by the Company and £700,000 by Ingenious Entertainment VCT 2 plc).
The Company is maintaining the 31 December 2013 valuation of its remaining qualifying investment portfolio with the exception of a provision in the sum of £62,500 against the investment in Liverpool Sound City Limited. The company remains loss making, although the management team believe that the company’s fresh strategy of centralising its Liverpool Sound City event will help to transform its fortunes in 2015 and beyond.
The C share class reached its five year anniversary on 5 August 2014 and the intention is to distribute any funds remaining in this share class shortly.
Results
The Ordinary shares, C shares, D shares, E shares, F shares, G shares and H shares are all accounted for as separate pools of funds necessitating separate reporting.
Each of the share classes reported a loss, as expected. This is a reflection of the running costs as well as the fact that there were no significant fluctuations in the fair value of investments during the Reporting Period.
The Ordinary shares made a loss on ordinary activities of £Nil (31 December 2013: loss of £51,000; 30 June 2013: loss of £22,000). The C shares made a loss of £35,000 (31 December 2013: loss of £86,000; 30 June 2013: loss of £12,000). The D shares made a loss of £87,000 (31 December 2013: loss of £269,000; 30 June 2013: loss of £34,000). The E shares made a loss of £29,000 (31 December 2013: loss of £120,000; 30 June 2013: loss of £31,000). The F shares made a loss of £18,000 (31 December 2013: loss of £34,000; 30 June 2013: profit of £5,000). The G shares made a loss of £31,000 (31 December 2013: loss of £58,000; 30 June 2013: loss of £47,000). The H shares made a loss of £7,000 (31 December 2013: loss of £43,000; 30 June 2013: loss of £23,000).
The unaudited net asset value per Ordinary share at 30 June 2014 was £Nil pence (31 December 2013: £Nil pence; 30 June 2013: 54.6 pence). On 18 December 2013 the High Court of Justice of England and Wales made an order sanctioning the resolutions passed by the Company in general and class meetings held on 28 November 2013 by which the Company’s shareholders approved the reduction of the Company’s share capital by the cancellation and extinguishment of all of its Ordinary shares. Up to 31 December 2013, the Company returned 88.3371 pence to investors, with the final distribution of 1 pence per Ordinary share paid to investors on 21 January 2014.
The unaudited net asset value per C share is 39.5 pence (31 December 2013: 60.7 pence; 30 June 2013: 63.4 pence) although this is after the deduction of an interim dividend of 20.0 pence per share in the Reporting Period and the deduction of a total of 20.0 pence per share in previous periods. The net asset value including distributions to date is therefore 79.5 pence per share (31 December 2013: 80.7 pence per share; 30 June 2013: 83.4 pence per share).
The unaudited net asset value per D share is 63.2 pence (31 December 2013: 69.5 pence; 30 June 2013: 73.0 pence) although this is after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 15.0 pence per share in previous periods. The net asset value including distributions to date is therefore 83.2 pence per share (31 December 2013: 84.5 pence per share; 30 June 2013: 88.0 pence per share).
The unaudited net asset value per E share is 70.9 pence (31 December 2013: 76.9 pence; 30 June 2013: 80.0 pence) although this is after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 10.0 pence per share in previous periods. The net asset value including distributions to date is therefore 85.9 pence per share (31 December 2013: 86.9 pence per share; 30 June 2013: 90.0 pence per share).
The unaudited net asset value per F share is 73.9 pence (31 December 2013: 80.0 pence; 30 June 2013: 82.5 pence) although this is after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 10.0 pence per share in previous periods. The net asset value including distributions to date is therefore 88.9 pence per share (31 December 2013: 90.0 pence per share; 30 June 2013: 92.5 pence per share).
The unaudited net asset value per G share is 80.8 pence (31 December 2013: 86.6 pence; 30 June 2013: 87.0 pence) although this is after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 5.0 pence per share in previous periods. The net asset value including distributions to date is therefore 90.8 pence per share (31 December 2013; 91.6 pence per share; 30 June 2013: 92.0 pence per share).
The unaudited net asset value per H share is 88.2 pence (31 December 2013: 93.5 pence; 30 June 2013: 93.8 pence) although this is after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period. The net asset value including distributions to date is therefore 93.2 pence per share (31 December 2013; 93.5 pence per share; 30 June 2013: 93.8 pence per share).
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 paying tax-free dividends to shareholders from both the actual income received and capital profits on the sale of investments in the companies that the Company and Ingenious Entertainment VCT 2 (the Ingenious Entertainment VCTs) invest in (Investee Companies).
The current investment portfolio includes:
Festivals
Shakedown
Initial Funding: February 2011
Entertainment VCT 1 Investment amount £750,000 (C share £225,000 and D share £525,000)
(£1,500,000 across the Ingenious Entertainment VCTs)
Further Funding: December 2012
Entertainment VCT 1 Investment amount £500,000 (D share)
(£1,000,000 across the Ingenious Entertainment VCTs)
The first Shakedown festival was held in September 2011 in Stanmer Park, Brighton. The event is now four years old and firmly entrenched in Brighton’s busy live events schedule. Shakedown 2014 was held on 19 July 2014 (Basement Jazz, Groove Armada and numerous other artists) and attracted an audience in excess of 11,000 people (event breakeven 10,000) to the Waterhall site which is also situated in Brighton.
The event is now consistently profitable, although returns are not currently at the level the promoters believe can be achieved by the brand and so they will seek to improve the event’s performance in 2015. Shakedown now appears to have a stable base in terms of both site and date in the calendar and the Manager believes that this will help to push the brand forward once again.
Two other events that were promoted by the Investee Company (We The People in June 2011 and SD2 in September 2013) were loss making and neither of these events has been repeated.
Love Supreme Jazz Festival
Initial Funding: December 2011
Entertainment VCT 1 Investment amount £1,000,000 (C share £375,000, D share £375,000, E share £125,000 and F share £125,000)
(£2,000,000 across the Ingenious Entertainment VCTs)
Further Funding: December 2013
Entertainment VCT 1 Investment amount £500,000 (E share £320,000 and F share £180,000)
(£1,000,000 across the Ingenious Entertainment VCTs)
The first Love Supreme Jazz Festival, which is promoted by a company in which the Ingenious Entertainment VCTs, Jazz FM and Neapolitan Music invested, was staged in early July 2013 and received critical acclaim. The Guardian commented that ‘they may have invented the British jazz world’s Glastonbury’.
The 2014 event held on 4 to 6 July built on the success of the first year. The event traded profitably, having incurred a significant loss in its initial year and the management team believe that they have a brand that can now go from strength to strength. Headline slots from Jamie Cullum and De La Soul were supported by the likes of Gregory Porter, Imelda May and Soul to Soul. Attendance was around 10,000 per day, an increase of roughly 30% on the initial Love Supreme event.
Field Day Festival
Initial Funding: November 2012
Entertainment VCT 1 Investment amount £1,000,000 (D share)
(£2,000,000 across the Ingenious Entertainment VCTs)
Further Funding: December 2013
Entertainment VCT 1 Investment amount £500,000 (E share £353,000 and F share £147,000)
(£1,000,000 across the Ingenious Entertainment VCTs)
Field Day was held for the eighth time on the weekend of 5 to 7 June 2014. Held in Victoria Park, London, this year’s event marked a watershed as the event moved from one day to two. The main Field Day Saturday attracted 30,000 fans, but the promoters were particularly excited that the new Sunday event, headlined by The Pixies, attracted 18,000 fans (breakeven 11,000) which far exceeded expectations.
The event is now making a significant level of profits and has also been granted a four year licence by Tower Hamlets Council, which further solidifies its position and value. Field Day events have also been held in Paris, Turin and Amsterdam this summer as the promoters look to broaden the brand’s horizons internationally.
Conferences
Liverpool Sound City Limited
Ingenious Entertainment VCT 1 Investment amount: £600,000 (D share)
(£1,200,000 across the Ingenious Entertainment VCTs)
Sound City 2014 took place in early May. The brand has somewhat stagnated in the last three years and the company has incurred a loss estimated to be around £70,000 in the current financial year. The management team has drawn up a new plan to relocate the event to a site over which they have full commercial control and the belief is that this can reinvigorate the Sound City brand. Over 100 bands played at Sound City 2014 with headline performances by The Kooks, Kodaline and Clean Bandit.
A provision has now been made in the sum of £62,500 as the continued losses in this event call into doubt the ability to recover full value even given the fresh strategy of the company.
Outlook
The economic climate is beginning to see signs of recovery appear and the live entertainment sector continues to show the robustness that very much characterises the sector.
The Manager’s focus remains very firmly upon ensuring that each investment is carefully sourced and structured in order to balance potential upside against capital risk. We also believe that the Company’s strategy, which aims to balance equity risk with a significant level of downside protection through minimum revenue arrangements in respect of each investment, continues to work well and a number of the Company’s investments are beginning to perform positively while others still need focus in order to deliver the success that the Manager has always believed could be achieved.
Ingenious Ventures
19 August 2014
CONDENSED INCOME STATEMENT (UNAUDITED)
for the six months ended 30
June 2014
| Six months ended | Six months ended | Year ended | ||||||||||||||||||||||
| 30 June 2014 | 30 June 2013 | 31 December 2013 | ||||||||||||||||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||||||||
| Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||||||||
| Gain on disposal of investments | - | 46 | 46 | - | 57 | 57 | - | 52 | 52 | |||||||||||||||
| Decrease in fair value of investments held | - | (124) | (124) | - | (101) | (101) | - | (387) | (387) | |||||||||||||||
| Investment income | 99 | - | 99 | 195 | - | 195 | 260 | - | 260 | |||||||||||||||
| Arrangement fees | - | - | - | (10) | - | (10) | (16) | - | (16) | |||||||||||||||
| Investment management fees | (65) | (65) | (130) | (94) | (94) | (188) | (165) | (165) | (330) | |||||||||||||||
| Other expenses | (98) | - | (98) | (117) | - | (117) | (240) | - | (240) | |||||||||||||||
| Loss on ordinary activities before taxation | (64) | (143) | (207) | (26) | (138) | (164) | (161) | (500) | (661) | |||||||||||||||
| Tax on ordinary activities | - | - | - | - | - | - | - | - | - | |||||||||||||||
| Loss attributable to equity shareholders | (64) | (143) | (207) | (26) | (138) | (164) | (161) | (500) | (661) | |||||||||||||||
| Basic and diluted return per share (pence) | ||||||||||||||||||||||||
| Ordinary share | 2 | - | - | - | 0.4 | (0.6) | (0.2) | 0.2 | (0.7) | (0.5) | ||||||||||||||
| C share | 2 | (0.6) | (0.6) | (1.2) | (0.2) | (0.2) | (0.4) | (0.4) | (2.6) | (3.0) | ||||||||||||||
| D share | 2 | 0.5 | (1.8) | (1.3) | 0.3 | (0.8) | (0.5) | 0.2 | (4.2) | (4.0) | ||||||||||||||
| E share | 2 | (0.4) | (0.7) | (1.1) | (0.6) | (0.5) | (1.1) | (1.2) | (3.0) | (4.2) | ||||||||||||||
| F share | 2 | (0.5) | (0.6) | (1.1) | (0.6) | 1.0 | 0.4 | (1.3) | (0.8) | (2.1) | ||||||||||||||
| G share | 2 | (0.9) | - | (0.9) | (1.1) | (0.3) | (1.4) |
(2.0) |
0.4 |
(1.6) |
||||||||||||||
| H share | 2 | (1.1) | 0.8 | (0.3) | (2.3) | (0.5) | (2.8) |
(3.3) |
0.6 |
(2.7) |
||||||||||||||
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Income Statement of all share classes for the period. The supplementary capital and revenue columns are prepared following guidance published by the Association of Investment Companies (AIC).
The accompanying notes form an integral part of these financial statements.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED INCOME STATEMENT (UNAUDITED)
for
the six months ended 30 June 2014
| Ordinary shares | C shares | ||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Loss on disposal of investments | - | - | - | - | (8) | (8) | |||||||||
| Decrease in fair value of investments held | - | - | - | - | (4) | (4) | |||||||||
| Investment income | - | - | - | 4 | - | 4 | |||||||||
| Arrangement fees | - | - | - | - | - | - | |||||||||
| Investment management fees | - | - | - | (6) | (6) | (12) | |||||||||
| Other expenses | - | - | - | (15) | - | (15) | |||||||||
| Loss on ordinary activities before taxation | - | - | - | (17) | (18) | (35) | |||||||||
| Tax on ordinary activities | - | - | - | - | - | - | |||||||||
| Loss attributable to equity shareholders | - | - | - | (17) | (18) | (35) | |||||||||
| Basic and diluted return per share (pence) | - | - | - | (0.6) | (0.6) | (1.2) | |||||||||
| D shares | E shares | ||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Gain on disposal of investments | - | 7 | 7 | - | 2 | 2 | |||||||||
| Decrease in fair value of investments held | - | (106) | (106) | - | (12) | (12) | |||||||||
| Investment income | 77 | - | 77 | 11 | - | 11 | |||||||||
| Arrangement fees | - | - | - | - | - | - | |||||||||
| Investment management fees | (20) | (20) | (40) | (9) | (9) | (18) | |||||||||
| Other expenses | (25) | - | (25) | (12) | - | (12) | |||||||||
| Profit/(loss) on ordinary activities before taxation | 32 | (119) | (87) | (10) | (19) | (29) | |||||||||
| Tax on ordinary activities | - | - | - | - | - | - | |||||||||
| Profit/(loss) attributable to equity shareholders | 32 | (119) | (87) | (10) | (19) | (29) | |||||||||
| Basic and diluted return per share (pence) | 0.5 | (1.8) | (1.3) | (0.4) | (0.7) | (1.1) | |||||||||
| F shares | G shares | ||||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||||
| Gain on disposal of investments | - | 20 | 20 | - | 26 | 26 | |||||||||
| Decrease in fair value of investments held | - | (24) | (24) | - | (12) | (12) | |||||||||
| Investment income | 7 | - | 7 | - | - | - | |||||||||
| Arrangement fees | - | - | - | - | - | - | |||||||||
| Investment management fees | (6) | (6) | (12) | (13) | (13) | (26) | |||||||||
| Other expenses | (9) | - | (9) | (19) | - | (19) | |||||||||
| (Loss)/profit on ordinary activities before taxation | (8) | (10) | (18) | (32) | 1 | (31) | |||||||||
| Tax on ordinary activities | - | - | - | - | - | - | |||||||||
| (Loss)/profit attributable to equity shareholders | (8) | (10) | (18) | (32) | 1 | (31) | |||||||||
| Basic and diluted return per share (pence) | (0.5) | (0.6) | (1.1) | (0.9) | - | (0.9) | |||||||||
| H shares | |||||||||||||||
| Revenue | Capital | Total | |||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||
| Loss on disposal of investments | - | (1) | (1) | ||||||||||||
| Increase in fair value of investments held | - | 34 | 34 | ||||||||||||
| Investment income | - | - | - | ||||||||||||
| Arrangement fees | - | - | - | ||||||||||||
| Investment management fees | (11) | (11) | (22) | ||||||||||||
| Other expenses | (18) | - | (18) | ||||||||||||
| (Loss)/profit on ordinary activities before taxation | (29) | 22 | (7) | ||||||||||||
| Tax on ordinary activities | - | - | - | ||||||||||||
| (Loss)/profit attributable to equity shareholders | (29) | 22 | (7) | ||||||||||||
| Basic and diluted return per share (pence) | (1.1) | 0.8 | (0.3) | ||||||||||||
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Income Statement per share class for the period. The supplementary capital and revenue columns are prepared following guidance published by the AIC.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED INCOME STATEMENT (UNAUDITED)
for
the six months ended 30 June 2013
| Ordinary shares | C shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 26 | 26 | - | 11 | 11 | ||||||||
| Decrease in fair value of investments held | - | (60) | (60) | - | (9) | (9) | ||||||||
| Investment income | 104 | - | 104 | 17 | - | 17 | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (29) | (29) | (58) | (8) | (8) | (16) | ||||||||
| Other expenses | (34) | - | (34) | (15) | - | (15) | ||||||||
| Profit/(loss) on ordinary activities before taxation | 41 | (63) | (22) | (6) | (6) | (12) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| Profit/(loss) attributable to equity shareholders | 41 | (63) | (22) | (6) | (6) | (12) | ||||||||
| Basic and diluted return per share (pence) | 0.4 | (0.6) | (0.2) | (0.2) | (0.2) | (0.4) | ||||||||
| D shares | E shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 6 | 6 | - | 4 | 4 | ||||||||
| Decrease in fair value of investments held | - | (41) | (41) | - | (6) | (6) | ||||||||
| Investment income | 66 | - | 66 | 4 | - | 4 | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (22) | (22) | (44) | (11) | (11) | (22) | ||||||||
| Other expenses | (21) | - | (21) | (11) | - | (11) | ||||||||
| Profit/(loss) on ordinary activities before taxation | 23 | (57) | (34) | (18) | (13) | (31) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| Profit/(loss) attributable to equity shareholders | 23 | (57) | (34) | (18) | (13) | (31) | ||||||||
| Basic and diluted return per share (pence) | 0.3 | (0.8) | (0.5) | (0.6) | (0.5) | (1.1) | ||||||||
| F shares | G shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 10 | 10 | - | - | - | ||||||||
| Increase in fair value of investments held | - | 10 | 10 | - | 5 | 5 | ||||||||
| Investment income | 4 | - | 4 | - | - | - | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (5) | (5) | (10) | (15) | (15) | (30) | ||||||||
| Other expenses | (9) | - | (9) | (22) | - | (22) | ||||||||
| (Loss)/profit on ordinary activities before taxation | (10) | 15 | 5 | (37) | (10) | (47) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| (Loss)/profit attributable to equity shareholders | (10) | 15 | 5 | (37) | (10) | (47) | ||||||||
| Basic and diluted return per share (pence) | (0.6) | 1.0 | 0.4 | (1.1) | (0.3) | (1.4) | ||||||||
| H shares | ||||||||||||||
| Revenue | Capital | Total | ||||||||||||
| £'000 | £'000 | £'000 | ||||||||||||
| Gain on disposal of investments | - | - | - | |||||||||||
| Increase/(decrease) in fair value of investments held | - | - | - | |||||||||||
| Investment income | - | - | - | |||||||||||
| Arrangement fees | (10) | - | (10) | |||||||||||
| Investment management fees | (4) | (4) | (8) | |||||||||||
| Other expenses | (5) | - | (5) | |||||||||||
| Loss on ordinary activities before taxation | (19) | (4) | (23) | |||||||||||
| Tax on ordinary activities | - | - | - | |||||||||||
| Loss attributable to equity shareholders | (19) | (4) | (23) | |||||||||||
| Basic and diluted return per share (pence) | (2.3) | (0.5) | (2.8) | |||||||||||
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Income Statement per share class for the period. The supplementary capital and revenue columns are prepared following guidance published by the AIC.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED INCOME STATEMENT (UNAUDITED)
for
the year ended 31 December 2013
| Ordinary shares | C shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 29 | 29 | - | 12 | 12 | ||||||||
| Decrease in fair value of investments held | - | (63) | (63) | - | (70) | (70) | ||||||||
| Investment income | 103 | - | 103 | 35 | - | 35 | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (33) | (33) | (66) | (16) | (16) | (32) | ||||||||
| Other expenses | (54) | - | (54) | (31) | - | (31) | ||||||||
| Profit/(loss) on ordinary activities before taxation | 16 | (67) | (51) | (12) | (74) | (86) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| Profit/(loss) attributable to equity shareholders | 16 | (67) | (51) | (12) | (74) | (86) | ||||||||
| Basic and diluted return per share (pence) | 0.2 | (0.7) | (0.5) | (0.4) | (2.6) | (3.0) | ||||||||
| D shares | E shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain on disposal of investments | - | 6 | 6 | - | 12 | 12 | ||||||||
| Decrease in fair value of investments held | - | (246) | (246) | - | (77) | (77) | ||||||||
| Investment income | 104 | - | 104 | 11 | - | 11 | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (43) | (43) | (86) | (20) | (20) | (40) | ||||||||
| Other expenses | (47) | - | (47) | (26) | - | (26) | ||||||||
| Profit/(loss) on ordinary activities before taxation | 14 | (283) | (269) | (35) | (85) | (120) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| Profit/(loss) attributable to equity shareholders | 14 | (283) | (269) | (35) | (85) | (120) | ||||||||
| Basic and diluted return per share (pence) | 0.2 | (4.2) | (4.0) | (1.2) | (3.0) | (4.2) | ||||||||
| F shares | G shares | |||||||||||||
| Revenue | Capital | Total | Revenue | Capital | Total | |||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Gain/(loss) on disposal of investments | - | 14 | 14 | - | (12) | (12) | ||||||||
| (Decrease)/increase in fair value of investments held | - | (15) | (15) | - | 53 | 53 | ||||||||
| Investment income | 7 | - | 7 | - | - | - | ||||||||
| Arrangement fees | - | - | - | - | - | - | ||||||||
| Investment management fees | (12) | (12) | (24) | (28) | (28) | (56) | ||||||||
| Other expenses | (16) | - | (16) | (43) | - | (43) | ||||||||
| (Loss)/profit on ordinary activities before taxation | (21) | (13) | (34) | (71) | 13 | (58) | ||||||||
| Tax on ordinary activities | - | - | - | - | - | - | ||||||||
| (Loss)/profit attributable to equity shareholders | (21) | (13) | (34) | (71) | 13 | (58) | ||||||||
| Basic and diluted return per share (pence) | (1.3) | (0.8) | (2.1) | (2.0) | 0.4 | (1.6) | ||||||||
| H shares | ||||||||||||||
| Revenue | Capital | Total | ||||||||||||
| £'000 | £'000 | £'000 | ||||||||||||
| Loss on disposal of investments | - | (9) | (9) | |||||||||||
| Increase in fair value of investments held | - | 31 | 31 | |||||||||||
| Investment income | - | - | - | |||||||||||
| Arrangement fees | (16) | - | (16) | |||||||||||
| Investment management fees | (13) | (13) | (26) | |||||||||||
| Other expenses | (23) | - | (23) | |||||||||||
| (Loss)/profit on ordinary activities before taxation | (52) | 9 | (43) | |||||||||||
| Tax on ordinary activities | - | - | - | |||||||||||
| (Loss)/profit attributable to equity shareholders | (52) | 9 | (43) | |||||||||||
| Basic and diluted return per share (pence) | (3.3) | 0.6 | (2.7) | |||||||||||
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Income Statement per share class for the period. The supplementary capital and revenue columns are prepared following guidance published by the AIC.
CONDENSED BALANCE SHEET (UNAUDITED)
as at 30 June 2014
| 30 June | 30 June | 31 December | ||||||
| 2014 | 2013 | 2013 | ||||||
| (unaudited) | (unaudited) | (audited) | ||||||
| Note | £'000 | £'000 | £'000 | |||||
| Fixed assets | ||||||||
| Qualifying Investments | 7,311 | 8,782 | 7,228 | |||||
| Current assets | ||||||||
| Debtors | 76 | 137 | 39 | |||||
| Non-qualifying Investments | 3 | 5,663 | 8,772 | 8,130 | ||||
| Cash at bank and in hand | 732 | 2,894 | 155 | |||||
| 6,471 | 11,803 | 8,324 | ||||||
| Creditors: amounts falling due within one year | (49) | (54) | (81) | |||||
| Net current assets | 6,422 | 11,749 | 8,243 | |||||
| Net assets | 13,733 | 20,531 | 15,471 | |||||
| Capital and reserves | ||||||||
| Called-up share capital | 202 | 294 | 202 | |||||
| Share premium account | - | 1,634 | - | |||||
| Other reserve account | 15,993 | 20,361 | 17,524 | |||||
| Capital reserve | (1,418) | (913) | (1,275) | |||||
| Revenue reserve | (1,044) | (845) | (980) | |||||
| Shareholders’ funds | 13,733 | 20,531 | 15,471 | |||||
| Net asset value per Ordinary share | 4 | - | 54.6 | - | ||||
| Net asset value per C share | 4 | 39.5 | 63.4 | 60.7 | ||||
| Net asset value per D share | 4 | 63.2 | 73.0 | 69.5 | ||||
| Net asset value per E share | 4 | 70.9 | 80.0 | 76.9 | ||||
| Net asset value per F share | 4 | 73.9 | 82.5 | 80.0 | ||||
| Net asset value per G share | 4 | 80.8 | 87.0 | 86.6 | ||||
| Net asset value per H share | 4 | 88.2 | 93.8 | 93.5 | ||||
The accompanying notes form an integral part of these financial statements.
The condensed set of financial statements were approved by the Board of Directors on 19 August 2014 and signed on its behalf by:
David Munns
Director
Company Registration Number: 6395011 (England & Wales)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED BALANCE SHEET (UNAUDITED)
| As at 30 June 2014 (unaudited) | ||||||||||||||
| Ordinary | C | D | E | F | G | H | ||||||||
| shares | shares | shares | shares | shares | shares | shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Fixed assets | ||||||||||||||
| Qualifying Investments | - | 375 | 3,526 | 1,542 | 868 | 1,000 | - | |||||||
| Current assets | ||||||||||||||
| Debtors | - | 37 | 39 | - | - | - | - | |||||||
| Non-qualifying Investments | - | - | 697 | 479 | 296 | 1,843 | 2,348 | |||||||
| Cash at bank and in hand | - | 722 | - | 1 | - | 3 | 6 | |||||||
| - | 759 | 736 | 480 | 296 | 1,846 | 2,354 | ||||||||
| Creditors: amounts falling due within one year | - | (24) | (7) | (4) | (3) | (5) | (6) | |||||||
| Net current assets | - | 735 | 729 | 476 | 293 | 1,841 | 2,348 | |||||||
| Net assets | - | 1,110 | 4,255 | 2,018 | 1,161 | 2,841 | 2,348 | |||||||
| Capital and reserves | ||||||||||||||
| Called-up share capital | - | 28 | 68 | 28 | 16 | 35 | 27 | |||||||
| Share premium account | - | - | - | - | - | - | - | |||||||
| Other reserve account | 617 | 1,509 | 5,003 | 2,267 | 1,250 | 2,976 | 2,371 | |||||||
| Capital reserve | (538) | (228) | (572) | (122) | (4) | 15 | 31 | |||||||
| Revenue reserve | (79) | (199) | (244) | (155) | (101) | (185) | (81) | |||||||
| Shareholders’ funds | - | 1,110 | 4,255 | 2,018 | 1,161 | 2,841 | 2,348 | |||||||
| Net asset value excluding distributions to date (pence per share) | - | 39.5 | 63.2 | 70.9 | 73.9 | 80.8 | 88.2 | |||||||
| Net asset value including distributions to date (pence per share) | - | 79.5 | 83.2 | 85.9 | 88.9 | 90.8 | 93.2 | |||||||
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED BALANCE SHEET (UNAUDITED)
| As at 30 June 2013 (unaudited) | ||||||||||||||
| Ordinary | C | D | E | F | G | H | ||||||||
| shares | shares | shares | shares | shares | shares | shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Fixed assets | ||||||||||||||
| Qualifying Investments | 2,252 | 1,273 | 3,757 | 927 | 573 | - | - | |||||||
| Current assets | ||||||||||||||
| Debtors | 108 | - | 29 | - | - | - | - | |||||||
| Non-qualifying Investments | 417 | 491 | 1,130 | 1,353 | 725 | 3,040 | 1,616 | |||||||
| Cash at bank and in hand | 2,832 | 19 | 4 | 1 | 1 | 23 | 14 | |||||||
| 3,357 | 510 | 1,163 | 1,354 | 726 | 3,063 | 1,630 | ||||||||
| Creditors: amounts falling due within one year | (35) | (2) | (6) | (3) | (2) | (4) | (2) | |||||||
| Net current assets | 3,322 | 508 | 1,157 | 1,351 | 724 | 3,059 | 1,628 | |||||||
| Net assets | 5,574 | 1,781 | 4,914 | 2,278 | 1,297 | 3,059 | 1,628 | |||||||
| Capital and reserves | ||||||||||||||
| Called-up share capital | 102 | 28 | 68 | 28 | 16 | 35 | 17 | |||||||
| Share premium account | - | - | - | - | - | - | 1,634 | |||||||
| Other reserve account | 6,060 | 2,071 | 5,340 | 2,409 | 1,329 | 3,152 | - | |||||||
| Capital reserve | (534) | (142) | (227) | (31) | 34 | (9) | (4) | |||||||
| Revenue reserve | (54) | (176) | (267) | (128) | (82) | (119) | (19) | |||||||
| Shareholders’ funds | 5,574 | 1,781 | 4,914 | 2,278 | 1,297 | 3,059 | 1,628 | |||||||
| Net asset value excluding distributions to date (pence per share) | 54.6 | 63.4 | 73.0 | 80.0 | 82.5 | 87.0 | 93.8 | |||||||
| Net asset value including distributions to date (pence per share) | 89.6 | 83.4 | 88.0 | 90.0 | 92.5 | 92.0 | 93.8 | |||||||
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
CONDENSED BALANCE SHEET (UNAUDITED)
| As at 31 December 2013 (audited) | ||||||||||||||
| Ordinary | C | D | E | F | G | H | ||||||||
| shares | shares | shares | shares | shares | shares | shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Fixed assets | ||||||||||||||
| Qualifying Investments | - | 1,229 | 3,589 | 1,542 | 868 | - | - | |||||||
| Current assets | ||||||||||||||
| Debtors | - | 33 | - | - | - | - | 6 | |||||||
| Non-qualifying Investments | - | 471 | 1,094 | 649 | 391 | 3,050 | 2,475 | |||||||
| Cash at bank and in hand | 115 | 8 | 4 | 3 | 2 | 4 | 19 | |||||||
| 115 | 512 | 1,098 | 652 | 393 | 3,054 | 2,500 | ||||||||
| Creditors: amounts falling due within one year | (13) | (34) | (8) | (5) | (3) | (6) | (12) | |||||||
| Net current assets | 102 | 478 | 1,090 | 647 | 390 | 3,048 | 2,488 | |||||||
| Net assets | 102 | 1,707 | 4,679 | 2,189 | 1,258 | 3,048 | 2,488 | |||||||
| Capital and reserves | ||||||||||||||
| Called-up share capital | - | 28 | 68 | 28 | 16 | 35 | 27 | |||||||
| Share premium account | - | - | - | - | - | - | - | |||||||
| Other reserve account | 719 | 2,071 | 5,340 | 2,409 | 1,329 | 3,152 | 2,504 | |||||||
| Capital reserve | (538) | (210) | (453) | (103) | 6 | 14 | 9 | |||||||
| Revenue reserve | (79) | (182) | (276) | (145) | (93) | (153) | (52) | |||||||
| Shareholders’ funds | 102 | 1,707 | 4,679 | 2,189 | 1,258 | 3,048 | 2,488 | |||||||
| Net asset value excluding distributions to date (pence per share) | - | 60.7 | 69.5 | 76.9 | 80.0 | 86.6 | 93.5 | |||||||
| Net asset value including distributions to date (pence per share) | - | 80.7 | 84.5 | 86.9 | 90.0 | 91.6 | 93.5 | |||||||
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS (UNAUDITED)
for
the six months ended 30 June 2014
| Six months ended | Six months ended | Year ended | ||||||||
| 30 June 2014 | 30 June 2013 | 31 December 2013 | ||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||
| £'000 | £'000 | £'000 | ||||||||
| Opening shareholders’ funds | 15,471 | 21,960 | 21,960 | |||||||
| Capital subscribed | - | 1,693 | 2,596 | |||||||
| Issue costs | - | (42) | (65) | |||||||
| Dividends | (1,429) | (2,916) | (8,359) | |||||||
| Capital distribution | (102) | - | - | |||||||
| Loss for the period | (207) | (164) | (661) | |||||||
| Closing shareholders’ funds | 13,733 | 20,531 | 15,471 | |||||||
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’
FUNDS (UNAUDITED)
for the six months ended 30 June 2014
| Ordinary | ||||||||||||||
| shares | C shares | D shares | E shares | F shares | G shares | H shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Opening shareholders’ funds | 102 | 1,707 | 4,679 | 2,189 | 1,258 | 3,048 | 2,488 | |||||||
| Dividends | - | (562) | (337) | (142) | (79) | (176) | (133) | |||||||
| Capital distribution | (102) | - | - | - | - | - | - | |||||||
| Loss for the period | - | (35) | (87) | (29) | (18) | (31) | (7) | |||||||
| Closing shareholders’ funds | - | 1,110 | 4,255 | 2,018 | 1,161 | 2,841 | 2,348 | |||||||
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’
FUNDS (UNAUDITED)
for the six months ended 30 June 2013
| Ordinary | ||||||||||||||
| shares | C shares | D shares | E shares | F shares | G shares | H shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Opening shareholders’ funds | 7,637 | 1,934 | 5,285 | 2,451 | 1,371 | 3,282 | - | |||||||
| Capital subscribed | - | - | - | - | - | - | 1,693 | |||||||
| Issue costs | - | - | - | - | - | - | (42) | |||||||
| Dividends | (2,041) | (141) | (337) | (142) | (79) | (176) | - | |||||||
| (Loss)/profit for the period | (22) | (12) | (34) | (31) | 5 | (47) | (23) | |||||||
| Closing shareholders’ funds | 5,574 | 1,781 | 4,914 | 2,278 | 1,297 | 3,059 | 1,628 | |||||||
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D, E, F, G
AND H SHARE FUNDS
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’
FUNDS (UNAUDITED)
for the year ended 31 December 2013
| Ordinary | ||||||||||||||
| shares | C shares | D shares | E shares | F shares | G shares | H shares | ||||||||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||||
| Opening shareholders’ funds | 7,637 | 1,934 | 5,285 | 2,451 | 1,371 | 3,282 | - | |||||||
| Capital subscribed | - | - | - | - | - | - | 2,596 | |||||||
| Issue costs | - | - | - | - | - | - | (65) | |||||||
| Dividends | (7,484) | (141) | (337) | (142) | (79) | (176) | - | |||||||
| Loss for the period | (51) | (86) | (269) | (120) | (34) | (58) | (43) | |||||||
| Closing shareholders’ funds | 102 | 1,707 | 4,679 | 2,189 | 1,258 | 3,048 | 2,488 | |||||||
CASH FLOW STATEMENT (UNAUDITED)
for the six months ended 30 June
2014
| 30 June 2014 | 30 June 2013 | 31 December 2013 | ||||
| (unaudited) | (unaudited) | (audited) | ||||
| £'000 | £'000 | £'000 | ||||
| Net cash flow from operating activities | (215) | (206) | (374) | |||
| Financial investment | ||||||
| Purchase of Qualifying Investments | (1,000) | (1,625) | (2,625) | |||
| Return of Qualifying Investments | 854 | 4,792 | 7,062 | |||
| Net cash flow from financial investment | (146) | 3,167 | 4,437 | |||
| Management of liquid resources | ||||||
| Purchase of Non-qualifying Investments | - | (2,018) | (5,874) | |||
| Disposal of Non-qualifying Investments | 2,469 | 1,991 | 6,569 | |||
| Net cash flow from liquid resources | 2,469 | (27) | 695 | |||
|
|
||||||
| Financing | ||||||
| Issue of shares | - | 1,693 | 2,596 | |||
| Issue costs of shares | - | (42) | (65) | |||
| Net cash flow from financing | - | 1,651 | 2,531 | |||
| Dividends | ||||||
| Payment of dividends/capital distribution | (1,531) | (2,916) | (8,359) | |||
| Net cash flow from dividends | (1,531) | (2,916) | (8,359) | |||
| Increase/(decrease) in cash | 577 | 1,669 | (1,070) | |||
|
Reconciliation of loss before taxation to net cash flow from operating activities |
||||||
| £'000 | £'000 | £'000 | ||||
| Loss on ordinary activities before tax | (207) | (164) | (661) | |||
| Decrease in fair value of investments held | 124 | 101 | 387 | |||
| Investment income | (63) | (112) | (194) | |||
| (Increase)/decrease in receivables | (37) | 2 | 100 | |||
| Decrease in payables | (32) | (33) | (6) | |||
| Net cash flow from operating activities | (215) | (206) | (374) | |||
|
Reconciliation of net cash flow to movement in net funds |
||||||
| £'000 | £'000 | £'000 | ||||
| Increase/(decrease) in cash in the period | 577 | 1,669 | (1,070) | |||
| (Disposal)/purchase of Non-qualifying investments | (2,469) | 317 | (405) | |||
| Fair value adjustment on Non-qualifying investments | 2 | 11 | 91 | |||
| Change in net funds | (1,890) | 1,997 | (1,384) | |||
| Opening net funds | 8,282 | 9,666 | 9,666 | |||
| Closing net funds | 6,392 | 11,663 | 8,282 | |||
Net funds comprise of cash of £732,000 (31 December 2013: £155,000; 30 June 2013: £2,894,000) and Non-qualifying assets, excluding Investment in Investee Companies, of £5,660,000 (31 December 2013: £8,127,000; 30 June 2013: £8,769,000).
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
for the six months
ended 30 June 2014
1. Accounting Policies
a) Basis of Accounting
The financial statements for the Reporting Period have been prepared in compliance with UK Generally Accepted Accounting Practice, the Companies Act 2006 and with the Statement of Recommended Practice (the SORP) entitled “Financial Statements of Investment Trust Companies and Venture Capital Trusts” (with the exception of paragraph 80 of the SORP regarding detailed disclosure of financial and operational performance of the Company’s unquoted investments due to their confidential nature) which was issued in January 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 2013 Annual Report and Accounts.
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 each Prospectus all investments are designated at fair value.
International Private Equity and Venture Capital Valuation Guidelines
Unquoted investments, including equity and loan investments, are designated at fair value through profit and loss and are 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 fair value is subsequently re-measured, as estimated by the Directors. Investment 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 the fair value for an investment, the 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
- Discounted cash flows/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 cash flows of the Investee Companies. In relation to the Company’s investments, anticipating future cash flows 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 discounted cash flow/earnings 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 - OEICs
The Company’s Non-qualifying Investments in interest bearing money market OEICs are valued at fair value which is bid price. They have been designated as fair value through profit or 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 under the effective interest method. The effective interest rate is the rate required to discount the expected future income streams over the life of the loan to its initial carrying amount. The main impact for the Company in that regard is the accounting treatment of the loan note premiums. 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 it is declared by the Investee Companies.
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;
- 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; and
- the management fee has been allocated 50% to revenue and 50% to capital, which represents the split of the Company’s long term returns.
General expenses were paid for by the Ordinary share class until 31 July 2013 and from 1 August 2013 by the C share class and have been recharged on a quarterly basis to the other share classes based on the proportional net asset value per share class as at the last day of the previous quarter.
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, D shares, E shares, F shares, G shares and H shares
The Company had seven share classes up to 17 December 2013: Ordinary shares, C shares, D shares, E shares, F shares, G shares and H shares. On 20 December 2013 the Company’s capital was reduced by the cancellation and extinguishment of all of its Ordinary shares. Each share class has a separate pool of income and expenses as well as assets and liabilities attributable to it. All share classes rank pari passu with each other in terms of voting rights.
2. Basic and Diluted Return per share
The calculation of the basic return per Ordinary share is based on the return on ordinary activities after tax for the period and on a weighted average of Nil Ordinary shares in issue for the six months ended 30 June 2014 (31 December 2013: Nil; 30 June 2013: 10,205,011). The basic return per C share has been calculated on a weighted average of 2,810,596 C shares in issue for the six months ended 30 June 2014 (31 December 2013: 2,810,596; 30 June 2013: 2,810,596). The basic return per D share has been calculated on a weighted average of 6,735,624 D shares in issue for the six months ended 30 June 2014 (31 December 2013: 6,735,624; 30 June 2013: 6,735,624). The basic return per E share has been calculated on a weighted average of 2,846,122 E shares in issue for the six months ended 30 June 2014 (31 December 2013: 2,846,122; 30 June 2013: 2,846,122). The basic return per F share has been calculated on a weighted average of 1,572,095 F shares in issue for the six months ended 30 June 2014 (31 December 2013: 1,572,095; 30 June 2013: 1,572,095). The basic return per G share has been calculated on a weighted average of 3,518,044 G shares in issue for the six months ended 30 June 2014 (31 December 2013: 3,518,044; 30 June 2013: 3,518,044). The basic return per H share has been calculated on a weighted average of 2,660,842 H shares in issue for the six months ended 30 June 2014 (31 December 2013: 1,590,411; 30 June 2013: 834,393).
There are no dilutive potential C shares, D shares, E shares, F shares, G shares or H 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.
3. Non-qualifying Investments
In order to safeguard the capital available for investment in VCT 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.
4. Net Asset Value per share
The unaudited net asset value per C share has been calculated based on 2,810,596 C shares being the number of C shares in issue as at 30 June 2014 (31 December 2013: 2,810,596; 30 June 2013: 2,810,596).
The unaudited net asset value per D share has been calculated based on 6,735,624 D shares being the number of D shares in issue as at 30 June 2014 (31 December 2013: 6,735,624; 30 June 2013: 6,735,624).
The unaudited net asset value per E share has been calculated based on 2,846,122 E shares being the number of E shares in issue as at 30 June 2014 (31 December 2013: 2,846,122; 30 June 2013: 2,846,122).
The unaudited net asset value per F share has been calculated based on 1,572,095 F shares being the number of F shares in issue as at 30 June 2014 (31 December 2013: 1,572,095; 30 June 2013: 1,572,095).
The unaudited net asset value per G share has been calculated based on 3,518,044 G shares being the number of G shares in issue as at 30 June 2014 (31 December 2013: 3,518,044; 30 June 2013: 3,518,044).
The unaudited net asset value per H share has been calculated based on 2,660,842 H shares being the number of H shares in issue as at 30 June 2014 (31 December 2013: 2,660,842; 30 June 2013: 1,735,921).
5. 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.
b. The Company has appointed Ingenious Ventures as Manager. Ingenious Ventures is a trading division of Ingenious Capital Management Limited. Patrick McKenna is a director of Ingenious Capital Management Limited which is a subsidiary of Ingenious Capital Management Holdings Limited, which is controlled by Patrick McKenna.
The Manager, as per the management agreement, receives a management fee of 0.4375% of the net asset value payable quarterly in advance (1.75% annualised). The Manager also receives an administration fee of £87,000 per annum from the Company.
c. The funds invested in OEICs are managed by Ingenious Asset Management Limited, a company 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 to the Company associated with this transaction.
d. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 2 plc. The Company and Ingenious Entertainment VCT 2 plc have jointly agreed to form a new company, The Zoo Project Festival Limited, to stage the third Zoo Project Festival which will take place at Donington Park in the East Midlands in September 2014. In March 2014, the Company invested £300,000 in The Zoo Project Festival Limited - £210,000 for an 18.75% equity stake together with a £90,000 loan note instrument. Ingenious Entertainment VCT 2 plc also invested £300,000 in The Zoo Project Festival Limited - £210,000 for an 18.75% equity stake and a £90,000 loan note instrument.
e. Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 2 plc. The Company and Ingenious Entertainment VCT 2 plc have jointly agreed to form a new company, FM3 2013 Limited, to produce and distribute live entertainment content, particularly in the area of music festivals. In March 2014 the Company invested £700,000 in FM3 2013 Limited - £490,000 for a 20% equity stake together with a £210,000 loan note instrument. Ingenious Entertainment VCT 2 plc also invested £700,000 in FM3 2013 Limited - £490,000 for a 20% equity stake together with a £210,000 loan note instrument.
During the period the Company has carried out a number of transactions with the above-mentioned related parties in the normal course of business and on an arm’s length basis:
| Expenditure Paid | Amounts Due | |||||||||||||||
| 30 June | 30 June | 31 December | 30 June | 30 June | 31 December | |||||||||||
| 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | |||||||||||
| Entity | Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||||||||
| Ingenious Capital Management Limited | ||||||||||||||||
| - Investment management fee | b | 130 | 188 | 330 | - | - | - | |||||||||
| - Administration fee | b | 48 | 53 | 102 | - | - | - | |||||||||
| - Irrecoverable VAT | b | (6) | - | - | - | 6 | 6 | |||||||||
| Ingenious Media Investments Limited | ||||||||||||||||
| - Arrangement fee | a | - | 52 | 81 | - | - | - | |||||||||
Transactions Between Related Parties
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 £107,000 excluding VAT (31 December 2013: £202,000; 30 June 2013: £188,000) have been invoiced in the period of which £74,000 remained outstanding as at 30 June 2014 (31 December 2013: £Nil; 30 June 2013: £5,000).
6. Events After the Balance Sheet Date
In July 2014, the only remaining investment in the C share class, Hop Farm Comedy Limited, was successfully realised.
The Company’s statutory financial statements for the year ended 31 December 2013 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified and did not contain statements under Section 498 (2) or section 498 (3) of the Companies Act 2006.
This condensed interim information for the period does not constitute statutory financial statements within the meaning of s434 of the Companies Act 2006.
Copies of the half-yearly financial report are being sent, or made available electronically, to all shareholders. Further copies can be downloaded from the Company’s website: www.ingeniousvcts.co.uk