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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ingenious Med | LSE:IMAC | London | Ordinary Share | GB00B0YBXT88 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.625 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMIMAC
RNS Number : 4488V
Ingenious Media Active Capital Ltd
13 December 2013
13 December 2013
INGENIOUS MEDIA ACTIVE CAPITAL LIMITED (the Company)
Unaudited half-yearly results for the period 1 April 2013 to 30 September 2013
Ingenious Media Active Capital Limited today announces its half-yearly results for the period from 1 April 2013 to 30 September 2013.
CHAIRMAN'S STATEMENT
I am pleased to present the Half-Yearly Report and Accounts in respect of Ingenious Media Active Capital Limited for the six months ended 30 September 2013.
Investments
As Shareholders are aware, the Company has not been making new investments but has been pursuing a strategy whereby existing investments will be realised as soon as practicable. In addition, the Board will continue to distribute surplus cash to Shareholders at appropriate times, subject to the ongoing needs of the Company.
The Board and the Manager have reviewed this strategy and concluded that no changes should be made.
The Company's Net Asset Value per Share as at 30 September 2013 was 18.64 pence (including 14.95 pence per Share of cash) compared to 19.27 pence (including 6.07 pence per Share of cash) as at 31 March 2013.
In line with the above policy, the Board has resolved to make a further return of cash to the Shareholders of ten pence per Share. The distribution is expected to be paid by 10 January 2014 to Shareholders on the register at 5.30pm on 27 December 2013. The corresponding ex-distribution date will be 23 December 2013.
The Manager will continue to seek exits for the remaining companies in the portfolio in a timely manner and further returns of capital will be made as and when the Board considers appropriate.
The Board will notify Shareholders of any proposed arrangements for the disposal of the remaining investments and the subsequent winding-up of the company in due course.
Non-Consolidation of Investee Company Results under International Financial Reporting Standards (IFRS)
In accordance with IFRS, the Company presented its financial statements for the Company and consolidated financial statements for the Group up to 30 September 2012. For the periods ended 31 March 2013 and beyond, IMAC has adopted IFRS 10 "Consolidated Financial Statements" and under that standard is classified as an investment entity as defined in IFRS 10 and is therefore not required to prepare and present consolidated financial statements. Instead, IMAC accounts for its investments at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement", and only presents Company financial statements.
Cash Distribution
As stated above, the Board will keep the level of cash on the Statement of Financial Position under constant review. It is our intention to distribute surplus cash to Shareholders subject to a reserve for follow-on investments, contingencies and running costs as and when appropriate (keeping in mind also any costs or liabilities that may need to be provided for during a winding-up process), and in consultation with the Manager.
Mike Luckwell
Chairman
12 December 2013
MANAGER'S REVIEW
Market Review and Prospects
The Manager will continue to seek exits for the remaining companies in the portfolio at the appropriate time. Individual company performance remains subject to the impact of adverse economic and financial conditions. The Manager has accordingly reserved some funds to cover any contingency requirements of the portfolio.
Investment Activity
As mentioned in the Chairman's Statement, the Manager is no longer making investments in new investee companies, but will continue to manage the existing investee companies including making additional investments in these companies where appropriate.
Committed Funds
It should be noted that all outstanding funding commitments are at the discretion of the Company and the Manager.
Portfolio Management
This Manager's Review contains all investments in which IMAC has a significant interest. There are no further undrawn commitments to other investments held by IMAC.
Investments
Whizz Kid Entertainment Limited
Whizz Kid Entertainment Limited (Whizz Kid) is an independent TV production company formed by Malcolm Gerrie, former Chief Executive and co-founder of Initial, which was sold in 1992 to what became Endemol. Whizz Kid creates and produces audio-visual content across a range of genres including music, events and entertainment. The company is able to exploit opportunities in digital content through its digital arm, Tough Cookie, and in advertiser--funded content through its investment in Precious Media Limited with Peter Christiansen.
The Company continues to expand both the number of broadcasters it serves, as well as the genres of programming it makes, for example, the delivery of Talks Music to Sky Arts and Animal Honours for ITV.
Digital Rights Group Limited
Digital Rights Group Limited (DRG) is a TV sales and rights distribution group which provides TV producers with international distribution for their rights and programmes, independently of the major broadcasters or other TV--producer-owned distributors. DRG is now the largest independent TV distributor in the UK, having acquired Portman Film and Television Limited, Zeal Entertainment Limited, i-Rights Limited, iD Distribution Limited and Channel 4 International Limited.
IMAC's ownership position in DRG was successfully sold to Modern Times Group on 12 June 2013, producing an overall return on this investment for IMAC of 2.0x cash invested.
Brand Events Holdings Limited
A leader in the consumer exhibitions market, Brand Events Limited, the trading company, established a strong reputation within the UK for successfully launching new consumer shows. The company's established operating model borrows skills and techniques from the entertainment, media and leisure sectors and combines them with traditional exhibition skills. The company established two key shows: the Taste Festivals, food festivals celebrating different foods; and Top Gear Live, the Top Gear branded live motoring theatre format.
Brand Events successfully sold the Taste Festivals business to IMG in February 2013 for GBP5 million and the remainder of the Brand Events business was sold to management in October 2013.
brandRapport Group Limited (www.brand-rapport.com)
brandRapport Group Limited focuses on sports sponsorship, sports and consumer PR through its offices in London, Singapore and Hong Kong. The group represents a number of high profile clients, including Barclays, Prudential and Samsung.
The UK business continues to successfully deliver activation for brands around sports such as Barclays with the FA Premiership Football League, and Prudential's Ride London campaign. The agencies in Asia continue to work for a wide range of new consumer PR clients on a retainer basis.
Review Centre Limited
Review Centre Limited (www.reviewcentre.com), a leading consumer-generated review site, was acquired in June 2008 by IMAC in a management buy-in (MBI) deal.
Review Centre was established in 1999 to allow internet users to post their product reviews on online bulletin boards. It now provides reviews across a very broad base of different products and services, encompassing automotive, electrical, entertainment, finance, lifestyle, sport and travel.
Since investment, the MBI team has pressed ahead with redesigning the website and enhancing the user experience for both writing and reading reviews. The new site build has allowed Review Centre to generate several new revenue streams. These include price comparison, voucher codes and cash back revenues, display advertising as well as the ability to deliver more targeted commercial deals.
Ingenious Ventures L.P.
The investment by IMAC was made via its limited partnership interest in Ingenious Ventures L.P. (IVLP). This interest was purchased from UBS (Jersey) Limited in August 2008. Ingenious Media Limited remains the other (minority) partner in IVLP.
IMAC's last active investment via IVLP - its residual shareholding in Cream Holdings Limited - was sold in May 2013.
Ingenious Ventures
12 December 2013
CONDENSED COMPANY STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2013
Six months Six months ended 30 ended 30 September September Year ended 31 2013 2012 March 2013 (unaudited) (unaudited) (audited) Note GBP '000 GBP '000 GBP '000 ============================================================== ====== ============== ============== ============== Revenue 1e 69 91 172 Other operating expenses 1f (331) (365) (714) Investment revenue 1e 23 56 69 Fair value (loss)/profit on investments in subsidiaries 1c, 4 (903) (2,000) 7,136 Other operating income 120 - - Gain on disposal of investments 4 170 3,111 1,843 Investment management fees 10 (57) (127) (229) (Loss)/profit before taxation (909) 766 8,277 Income tax expense 2 - - - (Loss)/profit for the period/year (909) 766 8,277 ============================================================== ====== ============== ============== ============== (Loss)/earnings per Share (basic and diluted pence per Share) 3 (0.63) 0.54 5.78
All income is attributable to the Ordinary Shareholders of the Company unless otherwise stated.
All revenue and expenses are derived from continuing operations unless otherwise stated.
The notes are an integral part of these condensed financial statements.
CONDENSED COMPANY STATEMENT OF FINANCIAL POSITION
as at 30 September 2013
30 September 30 September 31 March 2013 (unaudited) 2012 (unaudited) 2013 (audited) Note GBP '000 GBP '000 GBP '000 Non current assets Investment in subsidiaries 4 5,300 16,476 19,006 5,300 16,476 19,006 Current assets Trade and other receivables 180 246 33 Cash and cash equivalents 5 21,409 3,557 8,689 21,589 3,803 8,722 Current liabilities Trade and other payables (206) (144) (136) Net current assets 21,383 3,659 8,586 =================================== ===== ================== ================== ================ Net assets 26,683 20,135 27,592 =================================== ===== ================== ================== ================ Equity Share premium account 8 6,530 6,530 6,530 Distributable reserve 70,663 70,663 70,663 Shares held in treasury 7 (515) (515) (515) Retained earnings (49,995) (56,543) (49,086) =================================== ===== ================== ================== ================ Total equity 26,683 20,135 27,592 =================================== ===== ================== ================== ================ Net Asset Value (basic and diluted pence per Share) 9 18.64 14.06 19.27 =================================== ===== ================== ================== ================
The notes are an integral part of these condensed financial statements.
The financial statements were approved by the Board and authorised for issue on 12 December 2013.
Signed on behalf of the Board:
David Jeffreys Serena Tremlett
Director Director
CONDENSED COMPANY STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2013 (unaudited)
Share Shares premium held account Distribut-able in treasury Retained Total GBP reserves GBP earnings equity Note '000 GBP '000 '000 GBP '000 GBP '000 ------------------------------ ------ --------- --------------- ------------- ---------- ---------- Balance at 1 April 2013 6,530 70,663 (515) (49,086) 27,592 Retained loss for the period - - - (909) (909) Balance at 30 September 2013 6,530 70,663 (515) (49,995) 26,683 -------------------------------------- --------- --------------- ------------- ---------- ----------
for the six months ended 30 September 2012 (unaudited)
Share premium Shares Retained account Distribut-able held earnings Total GBP reserves in treasury GBP equity Note '000 GBP '000 GBP '000 '000 GBP '000 -------------------------------- ----- --------- --------------- ------------- ---------- ---------- Balance at 1 April 2012 20,860 70,663 (515) (57,363) 33,645 Recognition in respect of share-based payments - - - 54 54 Retained profit for the period - - - 766 766 Capital distribution 8 (14,317) - - - (14,317) Capital distribution costs 8 (13) - - - (13) Balance at 30 September 2012 6,530 70,663 (515) (56,543) 20,135 -------------------------------- ----- --------- --------------- ------------- ---------- ----------
for the year ended 31 March 2013 (audited)
Share premium Shares Retained account Distribut-able held earnings Total GBP reserves in treasury GBP equity Note '000 GBP '000 GBP '000 '000 GBP '000 ------------------------------ ----- --------- --------------- ------------- ---------- ---------- Balance at 1 April 2012 20,860 70,663 (515) (57,363) 33,645 Retained profit for the year - - - 8,277 8,277 Capital distribution 8 (14,317) - - - (14,317) Capital distribution costs 8 (13) - - - (13) Balance at 31 March 2013 6,530 70,663 (515) (49,086) 27,592 ------------------------------ ----- --------- --------------- ------------- ---------- ----------
The notes are an integral part of these condensed financial statements.
CONDENSED COMPANY STATEMENT OF CASH FLOWS
for the six months ended 30 September 2013
Six months Six months ended ended Year ended 30 September 30 September 31 March 2013 (unaudited) 2012 (unaudited) 2013 (audited) Note GBP '000 GBP '000 GBP '000 ======================================== ===== ================== ================== ================= Net cash flow from operating activities (253) (228) (434) ======================================== ===== ================== ================== ================= Investing activities Additional investment in existing portfolio 4 - (1,687) (2,379) Disposal of investments 4 12,973 13,432 19,462 Net cash flow from investing activities 12,973 11,745 17,083 ======================================== ===== ================== ================== ================= Financing activities Capital distribution 8 - (14,317) (14,317) Capital distribution costs 8 - (13) (13) Net cash flow from financing activities - (14,330) (14,330) ======================================== ===== ================== ================== ================= Net increase/(decrease) in cash and cash equivalents 12,720 (2,813) 2,319 ======================================== ===== ================== ================== ================= Cash and cash equivalents at beginning of period/year 8,689 6,370 6,370 ======================================== ===== ================== ================== ================= Cash and cash equivalents at end of period/year 21,409 3,557 8,689 ======================================== ===== ================== ================== ================= Cash flow from operating activities (Loss)/profit before taxation (909) 766 8,277 Fair value loss/(gain) on investment in subsidiaries 4 903 2,000 (7,136) Gain on disposal of investment 4 (170) (3,111) (1,843) Recognition of share based payment - 54 - (Increase)/decrease in amounts receivable (147) 88 301 Increase/(decrease) in amounts payable 70 (25) (33) Net cash flow from operating activities (253) (228) (434) ======================================== ===== ================== ================== =================
The notes are an integral part of these condensed financial statements.
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
for the six months ended 30 September 2013
1. Summary of significant accounting policies
Reporting entity
IMAC is a closed-end investment company with limited liability formed under the Companies Law and its Shares are admitted to trading on AIM. The Company was incorporated on 17 February 2006 and dealings on AIM commenced on 11 April 2006. The Company's registered office is Old Bank Chambers, La Grande Rue, St Martin's, Guernsey, GY4 6RT. The Group is defined as the Company and its subsidiaries.
Basis of preparation
This set of financial statements of the Company have been prepared in accordance with IFRS, which comprise standards and interpretations approved by the International Accounting Standards Board (the IASB), and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee (IASC) that remain in effect, together with applicable legal and regulatory requirements of Guernsey Law and the AIM Rules.
The financial statements have been prepared on the historical cost basis, as modified by the measurement at fair value of investments and financial instruments.
IMAC early adopted IFRS 10 "Consolidated Financial Statements".
Under the revised IFRS 10, IMAC is classified as an investment entity and therefore is not required to prepare and present consolidated financial statements. Instead, IMAC accounts for its investments at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement".
IMAC has always presented separate and consolidated financial statements, hence this does not constitute a change in accounting policy under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors".
There have been no material changes in accounting policies during the period.
Going concern
As stated in the Chairman's Statement, the Manager will continue to seek exits for the remaining companies in the portfolio of investments and further returns of capital will be made as and when the Board considers appropriate. The Board expects this process to complete in the next 12 months.
The financial statements have therefore been prepared on a basis other than going concern. However, there is no change in the accounting treatment of transactions compared to previous periods/years.
The Company has adequate cash resources to fund the operating expenses of the Company until such time that the remaining investments have been disposed of and the Company wound up. The cash levels will be closely monitored over the next 12 months to ensure adequate cash levels for payment of creditors should the wind up process stretch beyond the expected 12 month period. In the meantime, further returns of capital will only be made when the Board considers it appropriate.
Use of estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and contingencies at the date of the Company's financial statements, and revenue and expenses during the reporting period. Actual results could differ from those estimated. A significant estimate in the Company's financial statements includes the amounts recorded for the fair value of the investments. By its nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Company's financial statements of changes in estimates in future periods could be significant. In the current economic conditions the number of transactions and market prices are depressed. In these circumstances the fair value of the Company's investments cannot be estimated as easily as when there are greater levels of market activity.
The current market conditions are such that some of the Company's investments remain loss making and may require further cash injection in the future. In each case, the Manager has implemented measures to reduce operating costs and stimulate revenue growth for these investments in order to limit future funding requirements and increase investment value with a view to realisation in an orderly fashion over an extended period. As explained in note 1c, the valuations undertaken by the Company are based upon a mixture of bases using revenue, earnings and contribution multiples, net assets and cash in light of the measures noted above.
Financial instruments
Financial assets
Financial assets are divided into the following categories:
-- loans and receivables, including cash and cash equivalents; and -- fair value through profit or loss.
Financial assets are assigned to the different categories on initial recognition depending on the characteristics of the instrument and its purpose. A financial instrument's category is relevant for the way it is measured and whether resulting income and expenses are recognised in the Statement of Comprehensive Income or charged directly against equity. All income and expenses in respect of financial assets held by the Company in the period under review are recognised in the Statement of Comprehensive Income. Generally the Company recognises all financial assets using trade date accounting. An assessment of whether the value of a financial asset is impaired is made at least at each reporting date. All income relating to financial assets is recognised in the Statement of Comprehensive Income under the heading "revenue" and interest payable is recognised under the heading "finance costs".
The Company's loans and receivables comprise trade and other receivables in the Statement of Financial Position.
Cash and cash equivalents include cash in hand and deposits held on call with banks.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
The Company's trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method. Discounting is omitted where its effect is immaterial. Individual receivables are considered for impairment when they are overdue or when there is objective evidence that the debtor will default.
Financial assets at fair value through profit or loss include financial assets that are classified as held for trading. The Company's remaining financial assets fall into this category and include its investment in investee companies. Fair values of securities listed in active markets are determined by the current bid prices. Where independent prices are not available, fair values have been determined with reference to financial information available at the time of the original investment updated to reflect all relevant changes to that information at the reporting date. This may include, among other factors, changes in the business outlook affecting a particular investment, performance of the underlying business against original projections and valuations of similar quoted companies.
Financial liabilities
Financial liabilities are divided into the following categories:
-- other financial liabilities; and -- fair value through profit or loss.
Other financial liabilities include the Company's trade and other payables and are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method.
Financial liabilities at fair value through profit or loss are carried on the Statement of Financial Position at fair value determined by current market prices.
Fair value measurement hierarchy
IFRS 7, "Financial Instruments: Disclosures", requires certain disclosures which require a classification of financial assets and liabilities measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement. The fair value hierarchy has the following levels:
-- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
-- level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level in the fair value hierarchy of the financial asset or liability is determined on the basis of the lowest level input that is significant to the fair value measured. Financial assets and liabilities are classified in their entirety into only one of the three levels.
Six months Six months Year ended ended ended 31 March 30 September 30 September 2013 2013 2012 GBP '000 GBP '000 GBP '000 ========= ============== ============== =========== Level 1 - - - Level 2 - - - Level 3 5,300 16,476 19,006 ========= ============== ============== =========== 5,300 16,476 19,006 ========= ============== ============== ===========
Adoption of new and revised standards
At the date of approval of the financial statements, there were no Standards and Interpretations which have not been applied in the financial statements.
Principal accounting policies
a. Basis of non-consolidation
In accordance with IFRS, the Company presented its financial statements for the Company and consolidated financial statements for the Group up to 30 September 2012. For the year/period ended 31 March 2013 and beyond, IMAC is classified as an investment entity as defined in IFRS 10 "Consolidated Financial Statements", as it meets the criteria stated in the standard, and therefore is not required to prepare and present consolidated financial statements. Instead, IMAC accounts for its investments at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement, and only presents Company financial statements.
b. Functional currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in GBP (GBP), which is the Company's functional and presentational currency.
Transactions in currencies other than sterling are translated at the foreign exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the period end are translated into sterling at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into sterling at foreign exchange rates ruling at the dates the fair value was determined.
c. Financial assets at fair value through profit or loss
Investments, including equity and loan investments, including subsidiaries, are designated as fair value through profit or loss in accordance with International Accounting Standard 39 (IAS 39) "Financial Instruments: Recognition and Measurement", as the Company is an investment company whose business is investing in financial assets with a view to profiting from their total return in the form of interest and changes in fair value. Investments are initially recognised at cost. The investments are subsequently re-measured at fair value, as determined by the Directors. Unrealised gains or losses arising from the revaluation of investments are taken directly to the Statement of Comprehensive Income.
Fair value is determined as follows:
Unquoted securities are valued based on the realisation value which is estimated by the Directors with prudence and good faith. The Directors will take into account the guidelines and principles for valuation of investee companies set out by the International Private Equity and Venture Capital association, with particular consideration of the following factors:
-- Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
-- In estimating fair value for an investment, the Company 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.
-- Cost of recent investment -- Earnings multiple -- Net assets -- Available market prices
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 Statement of Comprehensive Income in the period in which they arise.
The Company has determined that the valuations are most sensitive to changes in the following key assumptions:
-- Annual budgets and cash flow projections for each individual investment. These are based on actual budgets and cash flows and projections discussed with and approved by management for a period of one year to five years depending on the investment;
-- Comparable earnings multiples. A number of investments are valued using comparable listed and other industry multiples which range from 5 to 7 times earnings depending on the investment.
As a result of the above basis of valuation, there is significant judgement associated with the valuation of investments.
d. Arrangement fees
Under the terms of the investment agreements between the Company and its investee companies, the investee companies are required to pay to the Company an arrangement fee in consideration for its services in arranging financing for the investee company. In accordance with IAS 39, this arrangement fee is deducted from the cost of the investment. A corresponding increase in the fair value of the investment is then recorded so that the investment is valued at the gross amount paid.
e. Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods andservices provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Where appropriate, revenue is recorded in the Statement of Comprehensive Income on the basis that there is a legally binding contract in place and there is virtual certainty of fulfilment of any conditionality attached to the contract.
Interest income is included on an accruals basis using the effective interest method.
Dividend income from investments is recognised when the Company's right to receive payment has been established.
f. Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the Statement of Comprehensive Income except where they relate to capital expenditure or the raising and maintenance of capital.
g. Trade and other receivables
Trade and other receivables are initially recognised at fair value. A provision for impairment of trade receivables is established when there is objective evidence the Company will not be able to collect all amounts due according to the original terms of the receivables.
h. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, on-demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
i. Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently, where necessary, re-measured at amortised cost using the effective interest method.
j. Financial instruments
Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.
k. Equity instruments
Equity instruments issued by the Company are recorded as the proceeds are received, net of direct issue costs.
2. Income tax expense
The Company has been granted exemption from income tax in Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable to pay an annual fee (currently GBP600) under the provisions of the Ordinance. As such it will not be liable to income tax in Guernsey other than on Guernsey source income (excluding deposit interest on funds deposited with a Guernsey bank). No withholding tax is applicable to distributions to Shareholders by the Company.
The subsidiary companies are resident in the UK and liable to UK Corporation Tax. Group relief on operating losses may be available between those United Kingdom resident investee companies in which the Company holds not less than 75 per cent. of the ordinary share capital.
3. Earnings/(loss) per Share
The calculation of basic and diluted return per Share is based on the return on ordinary activities and on 143,168,463 Ordinary Shares (six months ended 30 September 2012: 143,168,463, year ended 31 March 2013: 143,168,463), being the weighted average number of Shares for the purpose of the earnings per Share calculation.
4. Investment in subsidiaries Six months Year ended Six months ended 30 Sep 2013 ended 31 March 30 Sep 2012 2013 GBP '000 GBP '000 GBP '000 ===================================== ============= ============= ========== Opening fair value at the beginning of the period/year 19,006 27,110 27,110 Additional investment in existing subsidiaries - 1,687 2,379 Disposal proceeds (12,973) (13,432) (15,762) Gain on disposal of investment 170 3,111 1,843 Return of investment - - (3,700) Fair value adjustment (903) (2,000) 7,136 ===================================== ============= ============= ========== Closing fair value at the end of the period/year 5,300 16,476 19,006 ===================================== ============= ============= ==========
Disposal proceeds in the period ended 30 September 2013 relate to the liquidation proceeds from Cream Holdings Limited (GBP387k), Trinity Universal Holdings Limited (GBP170k) and Digital Rights Group Limited (GBP12,416k).
An investee company is classified as a subsidiary where the Company can achieve control either:
-- by obtaining more than 50 per cent. of the equity of the investee company; or
-- where there is sufficient power to govern the financial and operating policies of the investee company so as to obtain the economic benefits from its activities.
Undrawn commitments
All outstanding funding commitments are at the discretion of the Board and the Manager.
Paid Paid Paid as at as at as at Name of % of Country Full 30 Sep 30 Sep 31 March subsidiary Class class of Principal commitment 2013 2012 2013 undertaking of share held incorpo-ration activity GBP'000 GBP'000 GBP'000 GBP'000 =============== ============ ======= =============== ============= ============ ========= ========= ========== Whizz Kid Entertainment Television Limited Ordinary 47.3% UK production 4,250 2,750 2,750 2,750 =============== ============ ======= =============== ============= ============ ========= ========= ========== Brand Events Consumer Holdings events Limited Ordinary 69.5% UK business 10,601 10,601 10,055 10,601 =============== ============ ======= =============== ============= ============ ========= ========= ========== brandRapport Marketing Group Limited Preference 86.1% UK services 12,867 12,867 12,867 12,867 =============== ============ ======= =============== ============= ============ ========= ========= ========== Review Centre Internet/new Limited Ordinary 71.5% UK media 7,034 7,034 7,034 7,034 =============== ============ ======= =============== ============= ============ ========= ========= ========== Total 34,752 33,252 32,706 33,252 ============================ ======= =============== ============= ============ ========= ========= ========== 5. Cash and cash equivalents
Cash and cash equivalents held by the Company amount to GBP21,409k (year ended 31 March 2013: GBP8,689k, six months ended 30 September 2012: GBP3,557k). Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less. The cash equivalents are currently invested in quoted cash funds. The carrying amount of these assets approximates to their fair value.
6. Share capital Six months Six months Year ended ended 30 ended 30 Sep 31 March Sep 2013 2012 2013 Authorised Share capital No. No. No. -------------------------------- ----------- ------------- ----------- Ordinary Shares of no par value Unlimited Unlimited Unlimited -------------------------------- ----------- ------------- ----------- Issued and fully paid No. No. No. -------------------------------- ----------- ------------- ----------- Ordinary Shares of no par value 144,402,402 144,402,402 144,402,402 -------------------------------- ----------- ------------- -----------
Share options
On 4 April 2006, 750,000 share options were issued in respect of ongoing services, granting rights to Neil Blackley to subscribe for 750,000 Ordinary Shares. On 24 January 2008, Mike Luckwell was awarded 750,000 share options.
The Share options had an exercise price equal to the placing price (GBP1) and vested over five years, (one fifth of the options vested each year). The Share options will expire ten years from each date of grant unless there is an early expiration in accordance with the terms of each grant.
7. Shares held in treasury
The Company held 1,233,939 Ordinary Shares purchased at an average price of 41.72 pence in 2009.
Six months Six months ended 30 ended 30 Sep Year ended Sep 2013 2012 31 March 2013 Shares held in treasury No. No. No. -------------------------------- ---------- ------------- -------------- Ordinary Shares of no par value 1,233,939 1,233,939 1,233,939 -------------------------------- ---------- ------------- -------------- 8. Share premium account Six months Six months Year ended ended 30 ended 30 Sep 31 March Sep 2013 2012 2013 GBP '000 GBP '000 GBP '000 ====================================== ========== ============= ========== Balance at the beginning of the period/year 6,530 20,860 20,860 Capital distribution - (14,317) (14,317) Capital distribution costs - (13) (13) -------------------------------------- ---------- ------------- ---------- Balance at the end of the period/year 6,530 6,530 6,530 ====================================== ========== ============= ==========
Following a strategic review of the Company, the Board proposed changes to the Company's investing policy, the Investment Management Agreement, its Articles, and a reduction of capital. The proposed changes were approved by the Shareholders at an Extraordinary General Meeting on 12 May 2010.
The new Articles of the Company were adopted in order to extend the duration of the life of the Company until at least the eighth anniversary following Admission; and to allow greater freedom for the Company to distribute both income and capital to Shareholders. The term of the Investment Management Agreement was extended for a further three years so that it expires no earlier than 11 April 2014 (rather than 11 April 2011). The Investment Management Agreement was also changed to permit the Manager (and its subsidiaries and associated companies) to make investments for itself, or on behalf of its clients or other funds it may manage that would otherwise be caught within the Current Investing Policy.
The investing policy was amended to halt any new investments, other than investments relating to the investee companies and to remove the investment restriction which prevents more than 15 per cent. of the Company's net assets being invested in any one investee company at the time of that investment. Subject to Companies Law and the Company's ongoing working capital requirements, the revised investing policy permits the Company to make distributions to Shareholders as and when the appropriate situations arise following the realisation of its investee companies.
It was agreed to return cash to Shareholders in an amount of GBP50.1 million in May 2010 and GBP14.3 million in September 2012 by way of a reduction of the Company's Share Premium (the Returned Capital). The Returned Capital was distributed to Shareholders on 28 May 2010 and 19 September 2012 respectively.
As noted in the Chairman's Statement, the Board has resolved to make a further return of cash to the Shareholders of ten pence per Share, to be distributed to those Shareholders on the register at 27 December 2013. Any return in excess of the Share Premium amount of GBP6,530k would be accounted for as a reduction of the Distributable Reserve of GBP70,663k as stated on the face of the Statement of Financial Position.
9. Net Asset Value per Share No. of Shares Pence ------------------ ------------- ----- 30 September 2013 Ordinary Shares Basic and diluted 143,168,463 18.64 ------------------ ------------- ----- 30 September 2012 Ordinary Shares Basic and diluted 143,168,463 14.06 ------------------ ------------- ----- 31 March 2013 Ordinary Shares Basic and diluted 143,168,463 19.27 ------------------ ------------- ----- 10. Related party transactions
a. The Company has appointed Ingenious Ventures to provide investment management services. 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 within the Ingenious Group, which is controlled by Patrick McKenna. William Simpson is also a non-executive director of Ingenious Asset Management International Limited (IAMI) and FP Holdings Limited, both Guernsey registered companies within the Ingenious Group. Ogier, of which William Simpson is a partner, has provided legal advice to the Company during the current financial period.
At the Extraordinary General Meeting on 12 May 2010, the terms of the Manager's Investment Management Agreement with the Company were varied, reducing the Manager's fee to 1.25 per cent. of the Company's NAV minus the cash held by the Company, payable monthly in arrears. If the Company were to be unable to pay fees owing to the Manager due to having insufficient cash, the Manager has agreed to defer such payments until such time as the Company has sufficient cash following the realisation of investee companies.
The Company has incurred a management fee of GBP57,436 (six months to 30 September 2012: GBP126,588; 31 March 2013: GBP228,544) of which GBP12,600 was still outstanding at the period end (six months to 30 September 2012: GBP4,464; 31 March 2013: GBP12,472).
b. Ingenious Ventures provides administrative support to the Company which is outside the scope of the Investment Management Agreement. The recharge is made at cost and has been approved by the Board at a value of GBP85,500 for the current financial period (six months to 30 September 2012: GBP85,500; 31 March 2013: GBP171,000). Ingenious Ventures invoices for this quarterly in arrears. Ingenious Capital Management Limited is a subsidiary within the Ingenious Group which is controlled by Patrick McKenna.
c. Serena Tremlett is the Managing Director of Morgan Sharpe Administration Limited which receives fees for providing secretarial and administrative services to the Company. Morgan Sharpe has invoiced IMAC GBP36,080 for the current financial period (six months to 30 September 2012: GBP36,303; 31 March 2013: GBP72,577) in fees for company secretarial and administration services. At 30 September 2013, no fees were unpaid (six months to 30 September 2012: GBP6,002; 31 March 2013: GBPNil).
d. William Simpson is a partner of Ogier which may receive fees for providing legal advice and other services to the Company from time to time. In the current period, fees of GBP726 have been invoiced by Ogier for legal advice (six months to 30 September 2012: GBP9,258; 31 March 2013: GBP10,127). At 30 September 2013, no fees were unpaid (six months to 30 September 2012: GBPNil; 31 March 2013: GBPNil).
e. The Company has delegated discretionary treasury management responsibilities to IAMI, a company of which William Simpson is a non-executive director, to manage the uninvested funds of the Company. As at 30 September 2013, IAMI held GBP21,316,496 (six months to 30 September 2012: GBP3,537,000; 31 March 2013: GBP6,693,952) on behalf of the Company. IAMI is a subsidiary within the Ingenious Group, which is controlled by Patrick McKenna. The fees for the services provided by IAMI to the Company are met by Ingenious Ventures.
f. IAMI has further delegated its treasury management responsibilities to Ingenious Asset Management Limited which is a subsidiary within the Ingenious Group, which is controlled by Patrick McKenna.
g. Some subsidiaries of IMAC appointed Ingenious Corporate Finance Limited (ICF), a company of which Patrick McKenna is a director, to provide corporate finance services. All such appointments were approved by the Board members of the Company who are independent of the Manager. ICF is a wholly-owned subsidiary within the Ingenious Group, which is controlled by Patrick McKenna. During the current financial period, ICF charged a success fee of GBP560k for the sale of DRG (six months to 30 September 2012: GBPNil; 31 March 2013: GBPNil).
During the period/year, the Group 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 as listed in the table below.
Expenditure paid Amounts due Six months Six months Six months Six months Year ended ended Year ended ended ended ended 30 Sep 30 Sep 31 March 30 Sep 30 Sep 31 March 2013 2012 2013 2013 2012 2013 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 ------------------------------ ---- ---------- ---------- ------------ ---------- ---------- ---------- Ingenious Ventures - Investment management fee a 56 150 244 13 4 12 - Administrative support b 86 86 171 43 43 43 Morgan Sharpe Administration Limited - Company secretarial, administration & accounting c 36 30 72 - 6 - Ogier - Legal advice d 1 9 10 - - - Ingenious Corporate Finance Limited - Corporate finance g - - - - - - ============================== ==== ========== ========== ============ ========== ========== ========== 11. Events after 30 September 2013 a. The remaining investment in Brand Events was sold to Brand Events' management.
b. As noted in the Chairman's Statement, the Board has resolved to make a further return of cash to the Shareholders of ten pence per Share, to be distributed to those Shareholders on the register at 27 December 2013.
12. Contingent liabilities
The Company received a claim for GBP2.8 million in relation to the sale of one of the Company's investments. Having assessed the Company's position, the Directors strongly believe that this claim is without basis and hence do not believe any material liability will be incurred. The Company is in the process of appointing an independent expert to resolve this dispute and resolution is expected to occur in the first quarter of 2014.
SHAREHOLDER INFORMATION
1. Share price
All of the issued Shares have been admitted to trading on AIM. Share price information can be obtained from many financial websites including www.londonstockexchange.com
2. Share trading
Shares can be bought and sold in the same way as any other AIM admitted company via a stockbroker. The primary market maker for the Shares is Beaumont Cornish Limited.
Selling your Shares may have tax consequences. You should contact your financial adviser if you are in any doubt as to such potential consequences.
3. Change of Shareholder address
Communications with Shareholders are sent to the registered address held on the register of members. In the event of a change of address or any other relevant amendments, please notify the Company's registrar, Capita Registrars, under the signature of the registered holder of the Shares in question.
4. Investor relations
The Company and the Manager are committed to maintaining excellent investor relations. If you have any questions about the Company's progress please contact:
IMAC
Patrick McKenna/Patrick Bradley 020 7319 4000
Beaumont Cornish Limited
(Nominated Adviser and Broker)
Michael Cornish 020 7628 3396
Powerscourt Group
Justin Griffiths 020 7250 1446
A copy of this announcement is available from the Company's website, www.imaclimited.com
The Report and Accounts will be posted to shareholders shortly.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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