We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ingenious 2 G | LSE:IEVG | London | Ordinary Share | GB00B6S3D702 | G SHS 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMIEVG
INGENIOUS ENTERTAINMENT VCT 2 PLC
24 August 2018
Half-yearly results for the six months to June 2018
INTERIM MANAGEMENT REPORT
We are delighted to present the half-yearly financial report of Ingenious Entertainment VCT 2 plc (the Company) covering the six months ended 30 June 2018 (the Reporting Period). The half-yearly financial report has not been audited.
Overview of Activities
The D share class reached its five year anniversary on 30 July 2015. The D shares were cancelled and extinguished on 18 January 2017, with all residual funds repaid to the relevant shareholders.
Each of the E and F share classes reached their five year anniversaries on 4 August 2016. The E and F shares were cancelled and extinguished on 18 January 2017, with all residual funds repaid to the relevant shareholders.
The Company has completed its investment strategy and is fully invested under VCT regulations for its G and H share classes. No further investments have been made during the Reporting Period and the Manager is now focused upon maximising the returns from the investments made from the G and H share classes.
Directors
The directors who served during the Reporting Period and subsequently were:
Paul Fenn (appointed 1 May 2018)
Paul Gregg (resigned 27 April 2018)
Lionel Martin
Patrick McKenna
Paul Gregg was asked to step down as a director and Chairman of the Company with effect from 27 April 2018 following noticed served upon him by the Company in accordance with his letter of appointment and the Company's Articles of Association. Subsequently, Lionel Martin was appointed Chairman of Company with effect from 27 April 2018 and Paul Fenn was appointed as an independent director (in accordance with the UK Corporate Governance Code, including being independent of the Manager) and member of the Audit Committee, with effect from 1 May 2018.
Results
The G shares and H shares are accounted for as separate pools of funds necessitating separate reporting. The G shares made a loss of GBP15,000 (year ended 31 December 2017: loss of GBP197,000; six months ended 30 June 2017: loss of GBP39,000) during the Reporting Period. The H shares made a loss of GBP86,000 (31 December 2017: loss of GBP82,000; 30 June 2017: loss of GBP46,000).
The unaudited net asset value per G share is 19.1 pence (31 December 2017: 19.5 pence; 30 June 2017: 24.0 pence) after the deduction of a total of 35.0 pence per share of dividends in previous periods. The net asset value per G share including distributions to date is 54.1 pence (31 December 2017: 54.5 pence; 30 June 2017: 59.0 pence).
The unaudited net asset value per H share is 57.4 pence (31 December 2017: 60.7 pence; 30 June 2017: 62.0 pence) after the deduction of a total of 20.0 pence per share of dividends in previous periods. The net asset value per H share including distributions to date is 77.4 pence (31 December 2017: 80.7 pence; 30 June 2017: 82.0 pence).
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 1 plc (the Company and Ingenious Entertainment VCT 1 plc together the Ingenious Entertainment VCTs) have invested in (Investee Companies).
Investments
The current investment portfolio includes:
Festivals
Brighton Boundary Limited
In May 2016 the Ingenious Entertainment VCTs made an investment of GBP500,000 into Brighton Boundary Limited to produce an annual music festival in Brighton.
Brighton Boundary Limited produced, promoted and managed a new music festival called Boundary Brighton, held in Stamner Park in Brighton.
Although the festival was well received in its first year in 2016 it did not sell enough tickets to break-even. The event returned to Stamner Park on 30 September 2017 and almost doubled ticket sales to 11,500 which meant the event was much closer to breaking even. The Manager believes this is a great improvement year-on-year.
Plans are under way for 2018 with a view to increasing capacity and ticket prices with a view to making a profit. Ticket sales have already reached 8,000 which is 1,500 more than this time last year.
The Manager believes that any losses made in years one and two will be recouped in future years and therefore it is deemed appropriate for the Company to hold this investment at cost.
Just For London Limited
In October 2014 an investment of GBP750,000 was made by the Ingenious Entertainment VCTs into Just For London Limited to create a new comedy festival in central London.
The first event was held in July 2016 in Russell Square and Logan Hall which is part of University College London and although it was well-received by the press and public, it did not sell the required amount of tickets to break-even. The show made a significant loss which has been taken into account in the valuation of the investment.
In line with standard procedures, the Company has made a provision of GBP200,000 against this investment.
Whilst the company continues to look for opportunities to further its trade, there are no current plans to stage another event. Therefore the Manager is considering whether it is in the best interests of the investors to realise its investment.
SWG Power Limited
In November 2015 the Ingenious Entertainment VCTs made an investment of GBP500,000 into SWG Power Limited which was established to provide onsite power to festivals, live events, conferences and exhibitions.
The company exploits the growing market for festivals and live events and looks to sign multi-year deals to provide a reliable source of income.
Power supply contracts encompass fees for the supply of power, service fees for staff operating the power equipment and maintaining the equipment on site along with a mark-up on fuel costs charged to traders on the event site. The investment has performed according to expectations.
Live Venues
Event Spaces Limited
In December 2014, an investment of GBP1,250,000 was made by the Ingenious Entertainment VCTs into Event Spaces Limited to promote a wide range of events to be hosted from a semi-permanent events structure situated in London.
A large semi-permanent structure was purchased that was situated on the Pontoon Dock site. However this project was abandoned due to unresolvable issues with the landowner over the length of time the site could be leased for. The structure was sold for a loss and the directors of Event Spaces Limited decided to reinvest the capital into a new project called 'Art of the Brick'.
Art of the Brick was a Lego Exhibition based behind the National Theatre on the Southbank in London with life size imitations of DC Comic Superheroes. The exhibition ran from February to September 2017.
Ticket sales were going well, however the terrorist attacks in London dramatically affected ticket sales and the event suffered heavy losses.
It was contractually agreed between all of the shareholders of Event Spaces Limited that if the company suffered losses then one of the shareholders, Paul Gregg, would agree to pay to the company an amount equal to certain losses of the company. Event Spaces Limited is currently in the process of enforcing these contractual arrangements against Paul Gregg.
The Company has factored professional fees to be paid by the company in enforcing the contractual arrangements into its assessment of the amount that may be realised from its investment.
Counterculture Bars Limited
In September 2015 an investment of GBP500,000 was made by the Ingenious Entertainment VCTs into Counterculture Bars Limited (Counterculture) to operate the multi-purpose bar/kitchen and live venue, 'Haunt' in Stoke Newington with Alexander Brooks.
'Haunt' opened in November 2015 and is a multi-faceted and vibrant space which serves as a functioning bar and kitchen, and a multi-purpose event space for promoted, co-promoted and externally hired activities.
Counterculture had a tough first few months opening too late for Christmas bookings then suffering from adverse weather conditions experienced in the months of January and February. Following this period, the operation steadied and popularity grew in the local community. A decision was made to cut costs by outsourcing the food function.
Since opening, the financial accounts are showing significant trading losses so the lease has been offered to the market to compare the value of it with the results of ongoing trading. However, no serious bids have been made to date, and the company has continued to trade.
Market prices for the lease have indicated that the investment is impaired. As a result, in line with standard procedures, the Company has made a provision of GBP232,000 against its investment.
Genius Star Limited
In December 2015 an investment by the Ingenious Entertainment VCTs of GBP750,000 was made into Genius Star Limited to operate a pub which serves as a multi-functioning bar and kitchen with a function room for promoted, co-promoted and externally hired activities.
'The Leyton Star' opened in June 2016 and is a multi-faceted and vibrant space which capitalises on the premises' location and experience of the founder, Rob Star.
Genius Star Limited (continued)
The pub also benefits from a garden area where nine heated wooden cabanas were fitted to hold over 100 people as well as a further 75 people outside these areas.
The Ingenious Entertainment VCTs made a further investment in the company in November 2017 of GBP250,000 to create a similar style venue called the 'The Heathcote & Star' in Leytonstone which operates the same entertainment as 'The Leyton Star'.
The valuation reports from the external surveyors confirm that the market value of the property assets of Genius Star is in line with the Manager's expectations.
Outlook
The Brexit referendum result has caused a significant level of uncertainty in the UK economy. Anecdotally, the expectation is that there will be a measure of downturn economically which may adversely impact the performance of the portfolio.
The Manager's focus remains very firmly upon ensuring that the investments made by the Company are carefully managed and structured in order to balance potential upside against capital risk. The Manager also believes 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, remains entirely relevant in an uncertain economic environment.
Ingenious Ventures
23 August 2018
Hot Features
Premium
CONDENSED
STATEMENT
OF
COMPREHENSIVE
INCOME
(UNAUDITED)
for the six
months
ended 30 June
2018
Six months ended Six months ended Year ended
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on - - - - - - - (1) (1)
disposal
of investments
(Decrease)/increase - (140) (140) - (145) (145) - (369) (369)
in fair
value
of investments
held
Investment 10 77 87 20 125 145 25 169 194
income
Investment - - - (9) (8) (17) - - -
management
fees
Other expenses (48) - (48) (68) - (68) (105) - (105)
(Loss)/profit (38) (63) (101) (57) (28) (85) (80) (201) (281)
on ordinary
activities
before
taxation
Tax - - - - - - - - -
on ordinary
activities
(Loss)/profit (38) (63) (101) (57) (28) (85) (80) (201) (281)
attributable
to
equity
shareholders
Other - - - - - - - - -
Comprehensive
Income
Total (38) (63) (101) (57) (28) (85) (80) (201) (281)
Comprehensive
Income
for
the financial
period
Basic and
diluted
return
per share
(pence)
G share 5 (0.4) - (0.4) (0.7) (0.5) (1.1) (0.8) (4.8) (5.6)
H share 5 (0.8) (2.4) (3.2) (1.3) (0.5) (1.7) (1.9) (1.2) (3.1)
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Statement of Comprehensive Income 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 G AND
H SHARE FUNDS
STATEMENT
OF COMPREHENSIVE
INCOME (UNAUDITED)
for the six months
ended 30 June 2018
G shares H shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on - - - - - -
disposal
of investments
(Decrease)/increase - - - - (140) (140)
in fair
value
of investments
held
Investment income 1 - 1 9 77 86
Investment - - - - - -
management
fees
Other expenses (16) - (16) (32) - (32)
Profit/(loss) (15) - (15) (23) (63) (86)
before
taxation
Tax - - - - - -
on profit/(loss)
Total comprehensive (15) - (15) (23) (63) (86)
income
attributable
to
equity shareholders
Basic and diluted (0.4) - (0.4) (0.8) (2.4) (3.2)
return
per share (pence)
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Statement of Comprehensive Income 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 G AND
H SHARE FUNDS
STATEMENT
OF COMPREHENSIVE
INCOME (UNAUDITED)
for the six months
ended 30 June 2017
G shares H shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on - - - - - -
disposal
of investments
(Decrease)/increase - (82) (82) - (63) (63)
in fair
value
of investments
held
Investment income 12 70 82 8 55 63
Investment (5) (4) (9) (4) (4) (8)
management
fees
Other expenses (30) - (30) (38) - (38)
Profit/(loss) (23) (16) (39) (34) (12) (46)
before
taxation
Tax - - - - - -
on profit/(loss)
Total comprehensive (23) (16) (39) (34) (12) (46)
income
attributable
to
equity shareholders
Basic and diluted (0.7) (0.5) (1.1) (1.3) (0.5) (1.7)
return
per share (pence)
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Statement of Comprehensive Income 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 D, E,
F, G AND
H SHARE FUNDS
STATEMENT
OF COMPREHENSIVE
INCOME
(UNAUDITED)
for the year
ended
31 December 2017
D shares E shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on - - - - - -
disposal
of investments
(Decrease)/increase - - - - - -
in fair
value
of investments
held
Investment income - - - - - -
Investment - - - - - -
management
fees
Other expenses (2) - (2) - - -
Profit/(loss) (2) - (2) - - -
before
taxation
Tax - - - - - -
on profit/(loss)
Total (2) - (2) - - -
comprehensive
income
attributable
to
equity shareholders
Basic and diluted - - - - - -
return
per share (pence)
F shares G shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain/(loss) on - - - - (1) (1)
disposal
of investments
(Decrease)/increase - - - - (226) (226)
in fair
value
of investments
held
Investment income - - - 9 58 67
Investment - - - - - -
management
fees
Other expenses - - - (37) - (37)
Profit/(loss) - - - (28) (169) (197)
before
taxation
Tax - - - - - -
on profit/(loss)
Total - - - (28) (169) (197)
comprehensive
income
attributable
to
equity shareholders
Basic and diluted - - - (0.8) (4.8) (5.6)
return
per share (pence)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN
THE D, E, F, G AND H SHARE FUNDS
STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED) (CONTINUED)
for the year ended 31 December 2017
H shares
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Gain/(loss) on disposal of investments - - -
(Decrease)/increase in fair - (143) (143)
value of investments held
Investment income 16 111 127
Investment management fees - - -
Other expenses (66) - (66)
(Loss)/profit on ordinary activities (50) (32) (82)
before taxation
Tax on ordinary activities - - -
(Loss)/profit attributable (50) (32) (82)
to equity shareholders
Basic and diluted return per share (pence) (1.9) (1.2) (3.1)
The Company had no recognised gains and losses other than those disclosed above.
The total column is the Statement of Comprehensive Income per share class for the period. The supplementary capital and revenue columns are prepared following guidance published by the AIC.
BALANCE SHEET
(UNAUDITED)
as at 30 June 2018
30 June 30 June 31 December
2018 2017 2017
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Fixed assets
Qualifying 6 1,690 2,206 2,027
Investments
held at fair value
Non-qualifying 6 3 214 3
Investments
held at fair value
Current assets
Debtors 82 34 45
Cash at bank 458 133 281
and in hand
540 167 326
Creditors: amounts (34) (93) (56)
falling
due within one year
Net current assets 506 74 270
Total assets 2,199 2,494 2,300
less current
liabilities
Capital and reserves
Called-up share 62 62 62
capital
Share premium account - - -
Other reserve account 4,068 4,068 4,068
Capital reserve (1,290) (1,054) (1,227)
Revenue reserve (641) (582) (603)
Total shareholders' 2,199 2,494 2,300
funds
Net asset value per 7 19.1 24.0 19.5
G share (pence)
Net asset value per 7 57.4 62.0 60.7
H share (pence)
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 23 August 2018 and signed on its behalf by Lionel Martin.
Lionel Martin
Chairman
Company Registration Number: 06395025 (England & Wales)
NON-STATUTORY ANALYSIS (UNAUDITED)
BETWEEN THE G AND H SHARE FUNDS
BALANCE SHEET (UNAUDITED)
As at 30 June 2018 (unaudited)
G H
shares shares
GBP'000 GBP'000
Fixed assets
Qualifying Investments 469 1,221
held at fair value
Non-qualifying Investments 3 -
held at fair value
Current assets
Debtors 66 38
Cash at bank and in hand 155 303
221 341
Creditors: amounts falling (22) (34)
due within one year
Net current assets 199 307
Total assets less current 671 1,528
liabilities
Capital and reserves
Called-up share capital 35 27
Share premium account - -
Other reserve account 2,096 1,972
Capital reserve (1,112) (178)
Revenue reserve (348) (293)
Total shareholders' funds 671 1,528
Net asset value excluding 19.1 57.4
distributions
to date (pence per share)
Net asset value including 54.1 77.4
distributions
to date (pence per share)
NON-STATUTORY ANALYSIS (UNAUDITED)
BETWEEN THE G AND H SHARE FUNDS
BALANCE SHEET (UNAUDITED)
As at 30 June 2017 (unaudited)
G H
shares shares
GBP'000 GBP'000
Fixed assets
Qualifying Investments 852 1,355
held at fair value
Non-qualifying Investments 3 211
held at fair value
Current assets
Debtors - 34
Cash at bank and in hand 48 85
48 119
Creditors: amounts falling (58) (34)
due within one year
Net current (liabilities)/assets (11) 85
Total assets less current 844 1,650
liabilities
Capital and reserves
Called-up share capital 35 27
Share premium account - -
Other reserve account 2,096 1,972
Capital reserve (959) (95)
Revenue reserve (328) (254)
Total shareholders' funds 844 1,650
Net asset value excluding 24.0 62.0
distributions
to date (pence per share)
Net asset value including 59.0 82.0
distributions
to date (pence per share)
NON-STATUTORY ANALYSIS (AUDITED)
BETWEEN THE G AND H SHARE FUNDS
BALANCE SHEET (AUDITED)
As at 31 December 2017 (audited)
G H
shares shares
GBP'000 GBP'000
Fixed assets
Qualifying Investments 564 1,463
held at fair value
Non-qualifying Investments 3 -
held at fair value
Current assets
Debtors 20 34
Cash at bank and in hand 127 154
147 188
Creditors: amounts falling (28) (37)
due within one year
Net current (liabilities)/assets 122 151
Total assets less current 686 1,614
liabilities
Capital and reserves
Called-up share capital 35 27
Share premium account - -
Other reserve account 2,096 1,972
Capital reserve (1,112) (115)
Revenue reserve (333) (270)
Total shareholders' funds 686 1,614
Net asset value excluding 19.5 60.7
distributions
to date (pence per share)
Net asset value including 54.5 80.7
distributions
to date (pence per share)
STATEMENT OF
CHANGES IN
EQUITY
(UNAUDITED)
for the six
months
ended 30
June
2018
Share Capital Other reserve Capital reserve Revenue reserve Total reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 62 4,068 (1,227) (603) 2,300
2018
Total - - (63) (38) (101)
Comprehensive
Income
Transactions
with owners
Capital - - - - -
reduction
for
D, E and
F shares
Dividends - - - - -
paid
At 30 June 62 4,068 (1,290) (641) 2,199
2018
for the six
months
ended 30
June
2017
Share Capital Other reserve Capital reserve Revenue reserve Total reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 174 6,069 (1,756) (1,133) 3,354
2017
Total - - (28) (57) (85)
Comprehensive
Income
Transactions
with owners
Capital (112) (1,340) 730 608 (114)
reduction
for
D, E and
F shares
Dividends - (661) - - (661)
paid
At 30 June 62 4,068 (1,054) (582) 2,494
2017
for the
twelve
months ended
31 December
2017
Share Capital Other reserve Capital reserve Revenue reserve Total reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 174 6,069 (1,756) (1,133) 3,354
2017
Total - - (201) (80) (281)
Comprehensive
Income
Transactions
with owners
Capital (112) (1,340) 730 610 (112)
reduction
for
D, E and
F shares
Dividends - (661) - - (661)
paid
At 62 4,068 (1,227) (603) 2,300
31 December
2017
STATEMENT OF CASH FLOWS
(UNAUDITED)
for the six months
ended 30 June 2018
Period ended Period ended Year ended
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit/(loss) before (101) (85) (281)
taxation
Adjustments for:
Investment income (87) (145) (194)
Loss/(gain) on disposal - - 1
of investments
Decrease/(increase) 140 145 369
in fair
value of investments held
Decrease /(increase) (37) 25 -
in debtors
and prepayments
Increase/(decrease) (22) 29 6
in other
creditors and accruals
Net cash used in operating (107) (33) (99)
activities
Cash flows from investing
activities
Purchase of Investments - - (125)
held at fair value
Proceeds on disposal of 284 400 529
Qualifying Investments
Proceeds on disposal - - 211
of Non-qualifying
Investments
Net cash from investing 284 400 615
activities
Cash flows from financing
activities
Payment of dividends - (661) (661)
Capital cancelled - (112) (112)
Net cash used in financing - (773) (773)
activities
Net increase/(decrease) in 177 (405) (257) cash and cash equivalents Opening cash and 281 538 538 cash equivalents Closing cash and 458 133 281 cash equivalents
Closing cash and cash equivalents comprise of cash in hand and cash at the bank.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
for the six months ended 30 June 2018
1. Accounting Policies
a) Company Information
Ingenious Entertainment VCT 2 plc is a venture capital trust company resident in the United Kingdom and incorporated in England and Wales on 10 October 2007. The address of the registered office is 15 Golden Square, London, W1F 9JG. Company number: 06395025.
b) Statement of Compliance
Basis of Accounting
The financial statements for the Reporting Period have been prepared in compliance with UK Generally Accepted Accounting Practice, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS 102'), with the Companies Act 2006 and with the Statement of Recommended Practice entitled "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP 2014').
Under FRS102, currently fair value hierarchy is categorised as 'a', 'b' and 'c' rather than '1', '2', '3'. However, the Financial Reporting Council published amendments on 8 March 2016 which have been adopted, and early application has been permitted to align disclosures with International Financial Reporting Standard 13 (IFRS 13).
The financial statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value. The principal accounting policies have remained unchanged from those set out in the Company's 2017 Annual Report and Accounts.
Key sources of economic uncertainty:
Many of the Company's financial instruments are measured at fair value in the balance sheet and it is usually possible to determine their fair values within a reasonable range of estimates.
For the majority of the Company's financial instruments, such as unlisted securities, fair value is derived from using valuation techniques, as recommended by International Private Equity and Venture Capital Valuation Guidelines (IPEVC). Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgements (e.g. interest rates, volatility, estimated cash flows) and therefore cannot be determined with precision.
Investments are recognised as financial assets on legal completion of the investment contract and are derecognised on legal completion of the sale of investment.
c) 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. In accordance with FRS 102 investments by the Company are held at fair value through profit and loss.
International Private Equity and Venture Capital Valuation Guidelines
Unquoted investments, including equity and loan investments, are stated at fair value through profit and loss and are valued in accordance with the IPEVC Guidelines and FRS 102. Investments are initially recognised at cost. The value of investments is subsequently re-measured to current fair value, as estimated by the Directors. Gains or losses arising from the revaluation of investments are taken directly to the Statement of Comprehensive Income. 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 of an investment, the Manager will apply
a methodology that is appropriate for 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 methodologies most applicable to the Company's investments are:
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.
All investments are held at the price of a recent investment for an appropriate period where there is considered to have been no change in the fair value. Where such a basis is no longer considered appropriate, each investment is considered as a whole on a 'unit of account' basis, alongside consideration of:
(i) Where a value is indicated by a material arms-length transaction by an independent third party in the shares of a company this value will be used.
(ii) In the absence of i), and depending upon both the subsequent trading performance and investment structure of an Investee Company, the valuation basis will usually move to either:-
a. A multiple basis. The shares may be valued by applying a suitable price-earnings ratio, revenue or gross profit multiple to that company's historic, current or forecast post-tax earnings before interest and amortisation, or revenue, (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified by the Investment Adviser compared to the sector including, inter alia, a lack of marketability).
Or:-
b. Where a company's underperformance against plan indicates a diminution in the value of the investment, provision against cost is made, as appropriate.
d) Investment Income
Interest income is recognised in the Statement of Comprehensive Income under the effective interest method.
Under the effective interest method the interest income in the period equals the carrying amount of the loan at the beginning of a period multiplied by the effective interest rate for that period.
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 effective interest rate is determined on the basis of the carrying amount of the loan at initial recognition.
In accordance with FRS 102, when calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the loans (e.g. prepayments) and known credit losses that have been incurred, but it does not consider possible future credit losses not yet incurred. The main impact for the Company in that regard is the estimation of any loan note premiums.
When calculating the effective interest rate, the Company amortises any related fees, finance charges received, transaction costs and other premiums or discounts over the expected life of the loan. However, the Company uses a shorter period if that is the period to which the fees, finance charges paid or received, transaction costs, premiums or discounts relate.
The amount of redemption premium in revenue is in line with reasonable commercial expectations of interest chargeable on similar commercial loans. Gains and losses arising from changes in the fair value of the investments are included as a capital item in the statement of comprehensive income for the relevant period.
e) Dividend Income
Dividend income is recognised in the Statement of Comprehensive Income once it is declared by the Investee Companies.
f) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged to the revenue account within the Statement of Comprehensive Income except that:
-- expenses which are incidental to the acquisition or disposal of an
investment are charged to capital in the Statement of Comprehensive
Income 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 are paid for by H share class and have been recharged on a quarterly basis to the G share class based on the proportional net asset value per share class as at the last day of the previous quarter.
In any financial year, if the total fees and expenses of the Company in that financial year, excluding the performance related incentive fee and irrecoverable VAT on such total fees and expenses exceed 3.5% of the average net asset value in the relevant financial year, then the Manager shall bear the expenses in excess of such amount. This first offsets against the management and administration fees charged by the Manager. It is then recognised as a deduction against the overheads.
g) Taxation
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
h) Financial Instruments
The Company's financial assets are its investments and receivables. Receivables and payables are carried at amortised cost. There are no financial liabilities other than payables.
i) G Shares and H Shares
The Company had two share classes as at 30 June 2018: G shares and H shares. Both share classes have a separate pool of income and expenses as well as assets and liabilities attributable to it. Both share classes rank pari passu with each other in terms of voting and other rights.
j) Cash and Cash equivalents
Cash, for the purpose of the cash flow statement comprises cash at bank.
k) Dividend Policy
Dividends by the Company are accounted for in the period in which the dividend is paid or when the dividends proposed by the Board are approved by the shareholders.
l) Remuneration of key management personnel
The remuneration of the Directors, who are key management personnel of the Company, is disclosed in the Directors' Remuneration Report.
2. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company's accounting policies, which are described in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
3. Loss on ordinary activities before taxation
Loss on ordinary activities before taxation is stated after charging:
Period ended Period ended Year ended
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Audit fees 12,000 13,400 25,000
12,000 13,400 25,000
4. Directors' remuneration and employees
Period ended Period Ended Year ended
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Aggregate Directors' 14,322 18,750 37,500
remuneration
14,322 18,750 37,500
The Company had no employees during the financial period ended 30 June 2018 (year ended 31 December 2017: nil; six months ended 30 June 2017: nil).
5. Basic and Diluted Return per share
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 2018 (31 December 2017: 3,518,044; 30 June 2017: 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 2018 (31 December 2017: 2,660,842; 30 June 2017: 2,660,842).
There are no dilutive potential 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.
6. 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 OEICs. The Company holds financial assets in accordance with its investment policy.
Fixed asset investments 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
30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Investment in Level 3 3 214 3
Investee
Companies
Unquoted Level 3 1,690 2,206 2,027
investments
1,693 2,420 2,030
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.
Level 3 unquoted investments have been valued at fair value. Fair
value is estimated by assessing the financial performance of the
Company's investee and adjusting upwards or writing down the cost of
the Company's investment using IVCA valuation techniques as described
in note 1(c) - valuation of investments.
7. Net Asset Value per share
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 2018 (31 December 2017: 3,518,044; 30 June 2017: 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 2018 (31 December 2017: 2,660,842; 30 June 2017: 2,660,842).
8. Related Party Transactions
The Company has an investment management agreement with Ingenious Capital Management Limited of which Patrick McKenna is a director.
The Manager, as per the investment management agreement, receives a management fee of 0.4375% of the net asset value per share class, payable quarterly in advance. The Manager did not charge an administration fee for the period (31 December 2017: GBPnil). Further to this the Manager bears any expenses of the Company over and above 3.5% of the net asset value at 31 December in the relevant financial year.
In December 2014, an investment of GBP625,000 was made by the Company into Event Spaces Limited to promote a wide range of events to be hosted from a semi-permanent events structure situated in London. On 9 December 2016, 450 B Ordinary Shares in Event Spaces Limited were transferred to Paul Gregg by one of the founder shareholders (not the Company or Ingenious Entertainment VCT 1 plc) which he continues to hold and Paul Gregg also became a director of Event Spaces Limited on 9 December 2016. During the year ended 31 December 2017 Paul Gregg was a director and shareholder of Event Spaces Limited and a Director of the Company. The original commercial contracts to operate the event 'Art of the Brick' were between Kuma Entertainment Limited and various third parties; however the contracts with the various third parties to operate the event were novated to Event Spaces Limited. Paul Gregg is a director and shareholder of Kuma Entertainment Limited. It was contractually agreed between all of the shareholders of Event Spaces Limited that if the company suffered losses then Paul Gregg would pay to the company an amount equal to certain losses of the company. Paul Gregg was Chairman of VCT 2 until 27 April 2018. Event Spaces Limited is currently in the process of enforcing these contractual arrangements against Paul Gregg.
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
Entity Note 30 June 30 June 2017 31 December 2017 30 June 30 June 2017 31 December 2017
2018 (unaudited) (audited) 2018 (unaudited) (audited)
(unaudited) GBP'000 GBP'000 (unaudited) GBP'000 GBP'000
GBP'000 GBP'000
Ingenious
Capital
Management
Limited
- Investment - 17 - - - -
management
fee
- - 9 - - - -
Administration
fee
- Rebate - - - - - (9)
Ingenious Capital Management Limited, a company which is a wholly-owned subsidiary of Ingenious Capital Management Holdings Limited, which is controlled by Patrick McKenna, has entered into consultancy agreements with each of the Company's Investee Companies to provide management services.
During the period, Ingenious Capital Management Limited did not charge any consulting fees for the provision of such services (31 December 2017: GBPnil; 30 June 2017: GBPnil).
The Company's statutory financial statements for the year ended 31 December 2017 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 section 434 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20180823005746/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
August 24, 2018 02:00 ET (06:00 GMT)
1 Year Ingenious 2 G Chart |
1 Month Ingenious 2 G Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
