Ingenious Live VCT 2 plc Statement re Annual -5-

At 31 December 2010 the Company had surplus management expenses of GBP382k (2009: GBP582k). 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.

6. Basic and Diluted Return per Share

 
                      2010        2010        2010        2009        2009        2009 
                   Revenue     Capital       Total     Revenue     Capital       Total 
                   GBP'000     GBP'000     GBP'000     GBP'000     GBP'000     GBP'000 
--------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Profit/(loss) 
 on ordinary 
 activities 
 after 
 taxation              223       (134)          89       (126)         230         104 
Weighted 
 average 
 shares in 
 issue 
 (number)        9,242,845   9,242,845   9,242,845   9,242,845   9,242,845   9,242,845 
--------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Profit/(loss) 
 attributable 
 per share 
 (pence)               2.4       (1.4)         1.0       (1.4)         2.5         1.1 
--------------  ----------  ----------  ----------  ----------  ----------  ---------- 
 

There are no dilutive potential ordinary shares, including convertible instruments, options or contingent share agreements in issue for the Company. The basic return per share is therefore the same as the diluted return per share.

7. Fixed Asset Investments

 
                               2010       2009 
 Unquoted investments       GBP'000    GBP'000 
------------------------  ---------  --------- 
 Equity shares                2,037      2,074 
 Unsecured loan notes         4,484      4,168 
------------------------  ---------  --------- 
                              6,521      6,242 
------------------------  ---------  --------- 
 
 Qualifying Investments     GBP'000    GBP'000 
------------------------  ---------  --------- 
 Opening valuation            6,242      2,752 
 Fair value adjustment          279        287 
 Purchases at cost               74      3,203 
 Repayment of loan note        (74)          - 
------------------------  ---------  --------- 
 Closing valuation            6,521      6,242 
------------------------  ---------  --------- 
 

8. Significant Interests

The Company has 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 
--------------------------  ------------------------  ---------------- 
Aurem Limited                      24.95% A Ordinary            24.95% 
IR Productions Limited             24.95% A Ordinary            24.95% 
CFDT Limited                       24.95% A Ordinary            24.95% 
Taste Xmas Live Limited            24.95% A Ordinary            24.95% 
Brand Events Live Limited          24.95% A Ordinary            24.95% 
Annie Films Limited                24.95% A Ordinary            24.95% 
Jetstream Events 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            13.97% A Ordinary            13.97% 
--------------------------  ------------------------  ---------------- 
 

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.

9. Debtors

 
                                       2010       2009 
                                    GBP'000    GBP'000 
--------------------------------  ---------  --------- 
 Prepayments and accrued income         138         68 
--------------------------------  ---------  --------- 
 

10. Current Asset Investments

 
                                                      2010       2009 
                                                   GBP'000    GBP'000 
-----------------------------------------------  ---------  --------- 
 Funds held in listed money market instruments       1,717      2,598 
-----------------------------------------------  ---------  --------- 
 
 Non-Qualifying Investments                        GBP'000    GBP'000 
-----------------------------------------------  ---------  --------- 
 Opening valuation                                   2,598      6,045 
 Disposal proceeds                                   (828)    (3,338) 
 Unrealised change in value of investment             (53)      (109) 
-----------------------------------------------  ---------  --------- 
                              Closing valuation      1,717      2,598 
-----------------------------------------------  ---------  --------- 
 

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.

11. Creditors: Amounts Falling Due Within One Year

 
                                   2010      2009 
                                GBP'000   GBP'000 
-----------------------------  --------  -------- 
Trade creditors                       -         7 
Accruals and deferred income         24        21 
-----------------------------  --------  -------- 
                                     24        28 
-----------------------------  --------  -------- 
 

12. Called-Up Share Capital

 
                                          2010       2009 
Allotted, called-up and fully paid     GBP'000    GBP'000 
-----------------------------------  ---------  --------- 
9,242,845 ordinary shares 1p each           92         92 
-----------------------------------  ---------  --------- 
 

The entire issued ordinary share capital of the Company has been admitted to the official list maintained by the Financial Services Authority and to trading on the London Stock Exchange.

13. Reserves

 
                            Share      Other    Capital    Revenue       Total 
                          premium    reserve    reserve    reserve    reserves 
                          GBP'000    GBP'000    GBP'000    GBP'000     GBP'000 
----------------------  ---------  ---------  ---------  ---------  ---------- 
 At 1 January 2010          4,383      4,382        616      (500)       8,881 
 Dividend payments              -      (647)          -          -       (647) 
 Gain on disposal of 
  investments                   -          -         63          -          63 
 Decrease in fair 
  value of investments 
  held                          -          -      (111)          -       (111) 
 Investment income              -          -          -        410         410 
 Investment management 
  fees                          -          -       (86)       (86)       (172) 
 Other expenses                 -          -          -      (101)       (101) 
----------------------  ---------  ---------  ---------  ---------  ---------- 
 At 31 December 2010        4,383      3,735        482      (277)       8,323 
----------------------  ---------  ---------  ---------  ---------  ---------- 
 

The capital reserve includes realised investment holding gains of GBP88k and unrealised investment holding gains of GBP394k. 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, the Company paid dividends amounting to GBP647k (2009: GBPNil). 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 its investment company status. The payment of the dividends received appropriate pre-clearance from HMRC, to confirm the Company's VCT status was not affected by the dividend payment. The Company is taking advice from its advisers as to any remedial action that is required, 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.

14. Net Asset Value per Share

 
                                                         2010       2009 
--------------------------------------------------  ---------  --------- 
Net assets attributable to shareholders (GBP'000)       8,415      8,973 
Shares in issue (number)                            9,242,845  9,242,845 
--------------------------------------------------  ---------  --------- 
Net asset value per share (pence)                        91.0       97.1 
--------------------------------------------------  ---------  --------- 
 

15. 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.