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Name | Symbol | Market | Type |
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Ish � Cobd 1-5 | LSE:IE1G | London | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.0125 | 0.24% | 5.2155 | 5.211 | 5.22 | 0 | 16:35:16 |
TIDMIE1G
INGENIOUS ENTERTAINMENT VCT 1 PLC
9 September 2016
Half- yearly results for the six months to June 2016
INTERIM MANAGEMENT REPORT
We are delighted to present the half-yearly financial report of Ingenious Entertainment VCT 1 plc (the Company) covering the six months ended 30 June 2016 (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 final investment held in the D share class is Liverpool Sound City. An agreement for the sale of Liverpool Sound City has been signed, and the sale is due to complete shortly. The intention is to distribute the funds from this sale together with the remaining funds in the D share class shortly.
Each of the E and F share classes reached its five year anniversary on 30 July 2016. The final investment held in each of those share classes was Love Supreme. The sale of Love Supreme completed on 30June 2016 and the Company is due to receive the funds from this sale shortly. Once received, the Company intends to distribute these funds together with the remaining funds in the E and F share classes.
The Company has completed its investment strategy and is fully invested under VCT regulations for its G and H share classes. The Manager is now focused upon maximising the returns from the investments made from those share classes.
No further investments have been made during the Reporting Period.
Results
The D shares, E shares, F shares, G shares and H shares are all accounted for as separate pools of funds necessitating separate reporting. The D shares made a profit of GBP50,000 (31 December 2015: loss of GBP153,000; 30 June 2015: loss of GBP14,000). The E shares made a profit of GBP26,000 (31 December 2015: loss of GBP100,000; 30 June 2015: profit of GBP7,000). The F shares made a profit of GBP21,000 (31 December 2015: loss of GBP60,000; 30 June 2015: GBPNil). The G shares made a loss of GBP60,000 (31 December 2015: loss of GBP264,000; 30 June 2015: loss of GBP44,000). The H shares made a loss of GBP26,000 (31 December 2015: loss of GBP41,000; 30 June 2015: loss of GBP6,000).
The unaudited net asset value per D share is 2.7 pence (31 December 2015: 2.0 pence; 30 June 2015: 44.1 pence) after the deduction of a total of 80.0 pence per share of dividends in previous periods. The net asset value including distributions to date is 82.7 pence per share (31 December 2015: 82.0 pence per share; 30 June 2015: 84.1 pence per share).
The unaudited net asset value per E share is 44.6 pence (31 December 2015: 63.7 pence; 30 June 2015: 67.4 pence) after the deduction of an interim dividend of 20.0 pence per share in the Reporting Period and the deduction of a total of 20.0 pence per share of dividends in previous periods. The net asset value including distributions to date is 84.6 pence per share (31 December 2015: 83.7 pence per share; 30 June 2015: 87.4 pence per share).
The unaudited net asset value per F share is 47.2 pence (31 December 2015: 65.9 pence; 30 June 2015: 69.7 pence) after the deduction of an interim dividend of 20.0 pence per share in the Reporting Period and the deduction of a total of 20.0 pence per share of dividends in previous periods. The net asset value including distributions to date is 87.2 pence per share (31 December 2015: 85.9 pence per share; 30 June 2015: 89.6 pence per share).
The unaudited net asset value per G share is 60.5 pence (31 December 2015: 67.2 pence; 30 June 2015: 73.4 pence) after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 15.0 pence per share of dividends in previous periods. The net asset value including distributions to date is 80.5 pence per share (31 December 2015; 82.2 pence per share; 30 June 2015: 88.4 pence per share).
The unaudited net asset value per H share is 75.4 pence (31 December 2015: 81.4 pence; 30 June 2015: 82.7 pence) after the deduction of an interim dividend of 5.0 pence per share in the Reporting Period and the deduction of a total of 10.0 pence per share of dividends in previous periods. The net asset value including distributions to date is 90.4 pence per share (31 December 2015; 91.4 pence per share; 30 June 2015: 92.7 pence per share).
Investment Objective
The Company's main objective is to invest in companies established to create and bring to market live events and premium entertainment content which will provide shareholders with an attractive return. This strategy will aim to maximise the opportunities for paying tax-free dividends to shareholders from both the actual income received and capital profits on the sale of investments in the companies that the Company and Ingenious Entertainment VCT 2 plc (together the Ingenious Entertainment VCT's) invest in (Investee Companies).
Investments
The current investment portfolio includes:
Brighton Boundary Festival
Ingenious Entertainment VCT 1 investment amount: GBP250,000 (H share)
(GBP500,000 across the Ingenious Entertainment VCTs)
The Ingenious Entertainment VCTs joined forces with LWE, SWG and Matt Priest to produce and promote a new music festival called Boundary in Brighton.
The first event is due to be held in September 2016 in Stamner Park in Brighton and will form part of Fresher's Week for the University of Sussex and Brighton as well as being aimed at the local audience in and around Brighton and London.
Tickets are on sale and well ahead of forecast.
Genius Star Limited
Ingenious Entertainment VCT 1 investment amount: GBP375,000 (H share)
(GBP750,000 across the Ingenious Entertainment VCTs)
The Ingenious Entertainment VCTs teamed up with Electric Star Ltd, a company run by Rob Star that runs 4 successful multi-purpose bar/kitchen style venues in East London and Kings Cross, to invest in a new company, Genius Star Limited.
The concept is a multi-faceted and vibrant space which will capitalise on the premises' location and the experience of Rob Star.
The venue serves as a functioning bar and kitchen, and a multi-purpose event space for promoted, co-promoted and externally hired activities.
The opening night on the 21st July was a great success and the venue hit its weekly target after just 3 days trading and week on week the venue continues to exceed its targets.
Outlook
The recent 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 hopes that discretionary spend increases, and that live event attendances at least hold firm. What is becoming evident is that the so-called 'headliner driven' events are showing signs of customer fatigue and the events that deliver more of a broad ranging customer experience are benefitting from this. The Manager believes that it has created a portfolio that delivers this enhanced customer experience.
The Manager's focus remains very firmly upon ensuring that the investments made by the Company are carefully sourced 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
8 September 2016
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
for the six months ended 30 June 2016
Six months ended Six months ended Year ended 30 June 2016 30 June 2015 31 December 2015 (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 - 202 202 - 60 60 - 103 103 on disposal of investments (Decrease)/increase - (81) (81) - (2) (2) - (484) (484) in fair value of investments held Investment 29 - 29 79 - 79 128 - 128 income Arrangement - - - - - - - - - fees Investment (30) (29) (59) (52) (52) (104) (92) (92) (184) management fees Other expenses (80) - (80) (90) - (90) (181) - (181) (Loss)/profit (81) 92 11 (63) 6 (57) (145) (473) (618) on ordinary activities before taxation Tax - - - - - - - - - on ordinary activities (Loss)/profit (81) 92 11 (63) 6 (57) (145) (473) (618) attributable to equity shareholders Other - - - - - - - - - Comprehensive Income Total (81) 92 11 (63) 6 (57) (145) (473) (618) Comprehensive Income for the financial period Basic and diluted return per share (pence) D share 5 - 0.7 0.7 - (0.2) (0.2) - (2.2) (2.3) E share 5 (0.7) 1.7 0.9 (0.3) 0.5 0.2 (0.8) (2.7) (3.5) F share 5 (0.8) 2.1 1.3 (0.4) 0.4 - (1.0) (2.9) (3.8) G share 5 (0.7) (1.1) (1.7) (0.6) (0.7) (1.3) (1.3) (6.2) (7.5)
H share 5 (0.9) (0.1) (1.0) (1.1) 0.8 (0.3) (2.2) 0.6 (1.5)
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 D, E, F, G AND H SHARE FUNDS
STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
for the six months ended 30 June 2016
D shares E shares Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Gain on disposal - 50 50 - 57 57 of investments (Decrease)/increase - - - - (4) (4) in fair value of investments held Investment income - - - 4 - 4 Arrangement fees - - - - - - Investment management - - - (7) (6) (13) fees Other expenses - - - (18) - (18) Profit/(loss) - 50 50 (21) 47 26 on ordinary activities before taxation Tax on ordinary - - - - - - activities Profit/(loss) - 50 50 (21) 47 26 attributable to equity shareholders Basic and diluted - 0.7 0.7 (0.7) 1.7 0.9 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 on disposal - 40 40 - 1 1 of investments Increase/(decrease) - (3) (3) - (28) (28) in fair value of investments held Investment income 3 - 3 13 - 13 Arrangement fees - - - - - - Investment management (4) (4) (8) (10) (10) (20) fees Other expenses (11) - (11) (26) - (26) (Loss)/profit (12) 33 21 (23) (37) (60) on ordinary activities before taxation Tax on ordinary - - - - - - activities (Loss)/profit (12) 33 21 (23) (37) (60) attributable to equity shareholders Basic and diluted (0.8) 2.1 1.3 (0.7) (1.1) (1.7) return per share (pence) H shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Profit on disposal of investments - 54 54 (Decrease)/Increase in fair - (46) (46) value of investments held Investment income 9 - 9 Arrangement fees - - - Investment management fees (9) (9) (18) Other expenses (25) - (25) (Loss)/profit on ordinary activities (25) (1) (26) before taxation Tax on ordinary activities (Loss)/profit attributable (25) (1) (26) to equity shareholders Basic and diluted return per share (pence) (0.9) (0.1) (1.0)
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 six months ended 30 June 2015
D shares E shares Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Gain on disposal - 8 8 - 3 3 of investments (Decrease)/Increase - (6) (6) - 19 19 in fair value of investments held Investment income 44 - 44 15 - 15 Arrangement fees - - - - - - Investment management (16) (16) (32) (9) (9) (18) fees Other expenses (28) - (28) (12) - (12) Profit/(loss) - (14) (14) (6) 13 7 on ordinary activities before taxation Tax on ordinary - - - - - - activities Profit/(loss) - (14) (14) (7) 14 7 attributable to equity shareholders Basic and diluted - (0.2) (0.2) (0.2) 0.5 0.2 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 on disposal - 11 11 - 2 2 of investments (Decrease)/Increase - 1 1 - (13) (13) in fair value of investments held Investment income 8 - 8 12 - 12 Arrangement fees - - - - - - Investment management (5) (5) (10) (12) (12) (24) fees Other expenses (10) - (10) (21) - (21) (Loss)/profit (7) 7 - (21) (23) (44) on ordinary activities before taxation Tax on ordinary - - - - - - activities (Loss)/profit (7) 7 - (21) (23) (44) attributable to equity shareholders Basic and diluted (0.4) 0.4 - (0.6) (0.7) (1.3) return per share (pence) H shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Gain on disposal of investments - 36 36 (Decrease)/Increase in fair - (3) (3) value of investments held Investment income - - - Arrangement fees - - - Investment management fees (10) (10) (20) Other expenses (19) - (19) (Loss)/profit on ordinary activities (29) 23 (6) before taxation Tax on ordinary activities - - - (Loss)/profit attributable (28) 22 (6) to equity shareholders Basic and diluted return per share (pence) (1.1) 0.8 (0.3)
The Company had no recognised gains and losses other than those disclosed above.
The total column is the 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 2015
D shares E shares Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Gain on disposal - 35 35 - 13 13 of investments (Decrease)/increase - (163) (163) - (74) (74) in fair value of investments held Investment income 55 - 55 29 - 29 Arrangement fees - - - - - - Investment management (22) (22) (44) (16) (17) (33) fees Other expenses (36) - (36) (35) - (35) Profit/(loss) (3) (150) (153) (22) (78) (100) on ordinary activities before taxation Tax on ordinary - - - - - - activities Profit/(loss) (3) (150) (153) (22) (78) (100) attributable to equity shareholders Basic and diluted (0.0) (2.2) (2.2) (0.8) (2.7) (3.5) 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 on disposal - 13 13 - 2 2 of investments (Decrease)/Increase - (48) (48) - (198) (198) in fair value of investments held Investment income 16 - 16 25 - 25 Arrangement fees - - - - - - Investment management (10) (10) (20) (23) (23) (46) fees Other expenses (21) - (21) (47) - (47) Loss on ordinary (15) (45) (60) (45) (219) (264) activities before taxation Tax on ordinary - - - - - - activities Loss attributable to (15) (45) (60) (45) (219) (264) equity shareholders Basic and diluted (0.9) (2.9) (3.8) (1.3) (6.2) (7.5) return
per share (pence) H shares Revenue Capital Total GBP'000 GBP'000 GBP'000 Gain on disposal of investments - 39 39 (Decrease)/Increase in fair - (2) (2) value of investments held Investment income 2 - 2 Arrangement fees - - - Investment management fees (19) (20) (39) Other expenses (41) - (41) (Loss)/profit on ordinary activities (58) 17 (41) before taxation Tax on ordinary activities - - - (Loss)/profit attributable (58) 17 (41) to equity shareholders Basic and diluted return per share (pence) (2.2) 0.6 (1.5)
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 2016
30 June 30 June 31 December 2016 2015 2015 (unaudited) (unaudited) (audited) Note GBP'000 GBP'000 GBP'000 Fixed assets Qualifying 6 3,548 7,240 5,332 Investments held at fair value Non Qualifying 6 212 - - Investments held at fair value Current assets Debtors 977 50 28 Non-qualifying 6 369 3,147 1,038 Investments Cash at bank 1,377 398 1,219 and in hand 2,723 3,595 2,285 Creditors: amounts (155) (69) (109) falling due within one year Net current assets 2,568 3,526 2,176 Total assets 6,328 10,766 7,508 less current liabilities Capital and reserves Called-up share 174 174 174 capital Share premium account - - - Other reserve account 8,104 13,048 9,295 Capital reserve (919) (1,298) (1,011) Revenue reserve (1,031) (1,158) (950) Total shareholders' 6,328 10,766 7,508 funds Net asset value per 7 2.7 44.1 2.0 D share (pence) Net asset value per 7 44.6 67.4 63.7 E share (pence) Net asset value per 7 47.2 69.7 65.9 F share (pence) Net asset value per 7 60.5 73.4 67.2 G share (pence) Net asset value per 7 75.4 82.7 81.4 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 8 September 2016 and signed on its behalf by Keith Turner.
Keith Turner
Director
Company Registration Number: 6395011 (England & Wales)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE D, E, F, G AND H SHARE FUNDS
BALANCE SHEET (UNAUDITED)
As at 30 June 2016 (unaudited) D E F G H shares shares shares shares shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Qualifying Investments 110 - - 1,938 1,500 held at fair value Non Qualifying Investments - - - - 212 held at fair value Current assets Debtors 50 528 345 - 54 Non-qualifying Investments - - - 176 193 held at fair value Cash at bank and in hand 133 766 399 23 56 183 1,294 744 199 303 Creditors: amounts falling (110) (26) (3) (8) (8) due within one year Net current assets 73 1,268 741 191 295 Total assets less current 183 1,268 741 2,129 2,007 liabilities Capital and reserves Called-up share capital 68 28 16 35 27 Share premium account - - - - - Other reserve account 961 1,557 857 2,624 2,105 Capital reserve (589) (134) (7) (257) 68 Revenue reserve (257) (183) (125) (273) (193) Total shareholders' funds 183 1,268 741 2,129 2,007 Net asset value excluding 2.7 44.6 47.2 60.5 75.4 distributions to date (pence per share) Net asset value including 82.7 84.6 87.2 80.5 90.4 distributions to date (pence per share)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE D, E, F, G AND H SHARE FUNDS
BALANCE SHEET (UNAUDITED)
As at 30 June 2015 (unaudited) D E F G H shares shares shares shares shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Qualifying Investments 2,570 1,637 908 2,125 - held at fair value Current assets Debtors 50 - - - - Non-qualifying Investments - 286 190 465 2,206 Cash at bank and in hand 383 4 2 5 4 433 290 192 470 2,210 Creditors: amounts falling (34) (9) (4) (12) (10) due within one year Net current assets 399 281 188 458 2,200 Total assets less current 2,969 1,918 1,096 2,583 2,200 liabilities Capital and reserves Called-up share capital 68 28 16 35 27 Share premium account - - - - - Other reserve account 3,657 2,124 1,173 2,800 2,238 Capital reserve (503) (90) 12 (25) 74 Revenue reserve (253) (144) (105) (227) (139) Total shareholders' funds 2,969 1,918 1,096 2,583 2,200 Net asset value excluding 44.1 67.4 69.7 73.4 82.7 distributions to date (pence per share) Net asset value including 84.1 87.4 89.6 88.4 92.7 distributions to date (pence per share)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE D, E, F, G AND H SHARE FUNDS
BALANCE SHEET (UNAUDITED)
As at 31 December 2015 (audited) D E F G H shares shares shares shares shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Fixed assets Qualifying Investments 110 1,099 670 1,953 1,500 held at fair value Current assets Debtors - 28 - - - Non-qualifying Investments - 243 183 420 192 held at fair value Cash at bank and in hand 59 486 192 1 481 59 757 375 421 673 Creditors: amounts falling (36) (47) (9) (9) (8) due within one year Net current assets 23 710 366 412 665 Total assets less current 133 1,809 1,036 2,365 2,165 liabilities Capital and reserves Called-up share capital 68 28 16 35 27 Share premium account - - - - - Other reserve account 961 2,125 1,171 2,800 2,238 Capital reserve (640) (181) (39) (220) 69 Revenue reserve (256) (163) (112) (250) (169) Total shareholders' funds 133 1,809 1,036 2,365 2,165 Net asset value excluding 2.0 63.7 65.9 67.2 81.4 distributions to date (pence per share) Net asset value including 82.0 83.7 85.9 82.2 91.4 distributions to date (pence per share)
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
for the six months ended 30 June 2016
Share Capital Other reserve Capital Revenue Total reserve reserve reserves GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 174 9,295 (1,011) (950) 7,508 1 January 2016 Dividends - (1,192) - - (1,192) paid Gain - - 202 - 202 on disposal of investments Increase in - - (81) - (81) fair value of investments held Investment - - - 29 29 income Investment - - (29) (30) (59) management fees Other - - - (80) (80) expenses At 30 June 174 8,104 (919) (1,031) 6,328 2016
for the six months ended 30 June 2015
Share Capital Other reserve Capital Revenue Total reserve reserve reserves GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 174 14,923 (1,304) (1,095) 12,698 1 January 2015 Dividends - (1,875) - - (1,875) paid Gain - - 60 - 60 on disposal of investments Increase in - - (2) - (2) fair value of investments held Investment - - - 79 79 income Investment - - (52) (52) (104) management fees Other - - - (90) (90) expenses At 30 June 174 13,048 (1,298) (1,158) 10,766 2015
for the twelve months ended 31 December 2015
Share Capital Other reserve Capital Revenue Total reserve reserve reserves GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 174 14,923 (1,304) (1,095) 12,698 1 January 2015 Elimination - (1,056) 766 290 - of reserves for Ordinary and C shares Dividends - (4,572) - - (4,572) paid Gain - - 103 - 103 on disposal of investments Increase in - - (484) - (484) fair value of investments held Investment - - - 128 128 income Investment - - (92) (92) (184) management fees Other - - - (181) (181) expenses At 174 9,295 (1,011) (950) 7,508 30 December 2015
STATEMENT OF CASH FLOWS (UNAUDITED)
for the six months ended 30 June 2016
Period ended Period ended Year ended 30 June 2016 30 June 2015 31 December 2015 (unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 Cash flows from operating activities Profit/(loss) on ordinary 11 (57) (618) activities before tax Investment Income (29) (79) (128) Gain on disposal (202) (80) (103) of investments Decrease in fair value 81 2 484 of investments held Increase in debtors (949) (28) (6) and prepayments Increase in other 46 15 55 creditors and accruals Net cash flows (1,042) (227) (316) from operating activities Cash flows from investing activities Purchase of Investments (250) (1,500) held at fair value Proceeds on disposal of 1,973 1,137 4,144 Qualifying Investments Proceeds from sale 670 60 3,409 of bonds and similar investments Net cash inflows from 2,393 1,197 6,053 investing activities Cash flows from financing activities Payment of dividends (1,192) (1,875) (4,572) Net cash outflow flow from (1,192) (1,875) (4,572) financing activities Net increase/(decrease) in 159 (905) 1,165 cash and cash equivalents Opening cash and 1,219 4,447 54 cash equivalents Closing cash and 1,378 3,542 1,219 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 2016
1. Accounting Policies
a) Company Information
Ingenious Entertainment VCT 1 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.
b) Statement of Compliance
Basis of Accounting
The financial statements for the Reporting Period have been prepared in compliance with applicable UK Accounting Standards, being FRS 102 - The Financial Reporting Standard, the Companies Act 2006 and with the Statement of Recommended Practice (the SORP) entitled "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (with the exception of paragraph 82 of the SORP regarding detailed disclosure of financial and operational performance of the Company's unquoted investments due to their confidential nature) which was issued in November 2014. The half year accounts are prepared in accordance with Financial Reporting Standards 104 - Interim Financial Reporting.
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 2015 Annual Report and Accounts.
c) Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
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.
As a result of the above basis of valuation, there is significant judgement associated with the valuation of investments.
Non-qualifying Investments - OEICs
The Company's Non-qualifying Investments in interest bearing money market OEICs are valued at fair value which is bid price.
Gains and losses arising from changes in the fair value of Qualifying and Non-qualifying Investments are recognised as part of the capital return within the Statement of Comprehensive Income and allocated to the realised or unrealised capital reserve as appropriate. Transaction costs attributable to the acquisition or disposal of investments are charged to capital within the Statement of Comprehensive Income.
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.
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 were paid for by the D share class until 5 August 2015 and from 6 August 2015 by the E share class and have been recharged on a quarterly basis to the other share classes based on the proportional net asset value per share class as at the last day of the previous quarter.
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) D Shares, E Shares, F Shares, G Shares and H Shares
The Company had five Share classes up to 30 June 2016: D shares, E shares, F shares, G shares and H shares. Each Share class has a separate pool of income and expenses as well as assets and liabilities attributable to it. All Share classes rank pari passu with each other in terms of voting and other rights.
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:
30 June 2016 30 June 2015 31 December 2015 GBP GBP GBP Audit fees 11,000 8,850 21,000 11,000 8,850 21,000 4. Directors' remuneration and employees 30 June 2016 30 June 2015 31 December 2015 GBP GBP GBP Aggregate Directors' 18,750 18,750 37,500 remuneration 18,750 18,750 37,500
The Company had no employees during the financial period ended 30 June 2016 (31 December 2015: Nil, 30 June 2015: Nil).
5. Basic and Diluted Return per share
The basic return per D share has been calculated on a weighted average of 6,735,624 D shares in issue for the six months ended 30 June 2016 (31 December 2015: 6,735,624; 30 June 2015: 6,735,624).
The basic return per E share has been calculated on a weighted average of 2,846,122 E shares in issue for the six months ended 30 June 2016 (31 December 2015: 2,846,122; 30 June 2015: 2,846,122).
The basic return per F share has been calculated on a weighted average of 1,572,095 F shares in issue for the six months ended 30 June 2016 (31 December 2015: 1,572,095; 30 June 2015: 1,572,095).
The basic return per G share has been calculated on a weighted average of 3,518,044 G shares in issue for the six months ended 30 June 2016 (31 December 2015: 3,518,044; 30 June 2015: 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 2016 (31 December 2015: 2,660,842; 30 June 2015: 2,660,842).
There are no dilutive potential D shares, E shares, F shares, G shares or H shares, including convertible instruments, options or contingent share agreements in issue for the Company. The basic return per share is therefore the same as the diluted return per share.
6. Investments
30 June 2016 30 June 2015 31 December 2015 GBP'000 GBP'000 GBP'000 Fixed Assets Level c (ii) Qualifying Investments: 3,548 7,240 5,332 Non Qualifying Investments: 212 Current Assets Non-qualifying Investments: 369 3,147 1,038 4,129 10,387 6,370
a) Qualifying Investments
Quoted market prices in active markets - "Level a"
Level a: quoted prices in active markets for an identical asset. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held is the current bid price.
Valued using models with significant observable market parameters - "Level b"
Level b: where quoted prices are not available, the price of a recent transaction for an identical asset, providing there has been no significant change in economic circumstances or a significant lapse in time since the transaction took place.
Valued using models with observable parameters - "Level c (i)"
Level c(i): fair values where the value estimate relies on observable market data. The fair value is determined by using valuation techniques. These valuation techniques maximise the use of observable data where it is available and rely as little as possible on entity specific estimates. If all the inputs required to fair value an instrument are observable, the instruments is included in level c (i).
Valued using models with significant unobservable parameters - "Level c (ii)"
Level c(ii): fair values are not traded in an active market and the fair value is determined by using valuation techniques such as less recent third party transactions or earnings multiples. If one or more of the significant inputs is not based on observable market data, the instrument is included in level c (ii). The Company's unquoted investments all fall into this category.
There have been no transfers between these classifications in the year. The change in fair value for the current and previous year is recognised through the statement of comprehensive income.
b) Non-qualifying Investments
In order to safeguard the capital available for investment in VCT Qualifying Investments and balance this with the need to provide good returns to investors, available funds from the net proceeds are invested in appropriate securities (money market securities and cash funds) until required for Qualifying Investment purposes.
7. Net Asset Value per share
The unaudited net asset value per D share has been calculated based on 6,735,624 D shares being the number of D shares in issue as at 30 June 2016 (31 December 2015: 6,735,624; 30 June 2015: 6,735,624).
The unaudited net asset value per E share has been calculated based on 2,846,122 E shares being the number of E shares in issue as at 30 June 2016 (31 December 2015: 2,846,122; 30 June 2015: 2,846,122).
The unaudited net asset value per F share has been calculated based on 1,572,095 F shares being the number of F shares in issue as at 30 June 2016 (31 December 2015: 1,572,095; 30 June 2015: 1,572,095).
The unaudited net asset value per G share has been calculated based on 3,518,044 G shares being the number of G shares in issue as at 30 June 2016 (31 December 2015: 3,518,044; 30 June 2015: 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 2016 (31 December 2015: 2,660,842; 30 June 2015: 2,660,842).
8. Related Party Transactions
a) The Company has appointed Ingenious Ventures as Manager. Ingenious Ventures is a trading division of Ingenious Capital Management Limited. Patrick McKenna is a director of Ingenious Capital Management Limited which is a subsidiary of Ingenious Capital Management Holdings Limited, which is controlled by Patrick McKenna.
The Manager, in accordance with the management agreement, receives a management fee of 0.4375% of the net asset value payable quarterly in advance (1.75% annualised). The Manager also receives an administration fee of GBP56,000 per annum from the Company.
b) Since April 2016 the funds invested in OEICs are managed by Tilney Asset Management Ltd. Before this Ingenious Asset Management Limited, a company of which Patrick McKenna was a director managed the funds invested in OEICs. Ingenious Asset Management Limited was a subsidiary of Ingenious Asset Management Group Limited, which was also controlled by Patrick McKenna. There is no fee payable by the Company in relation to this transaction.
c) Patrick McKenna is a director and a shareholder of Ingenious Entertainment VCT 2 plc. The Company and Ingenious Entertainment VCT 2 plc both invested in Brighton Boundary Festival Limited, to stage the first Brighton Boundary Festival which is due to take place in September 2016. In May 2016, the Company invested GBP250,000 in Brighton Boundary Festival Limited - GBP175,000 for a 15% equity stake with a GBP75,000 loan note instrument. Ingenious Entertainment VCT 2 also invested GBP250,000 in Brighton Boundary Festival Limited - GBP175,000 for a 15% equity stake and GBP75,000 loan note instrument.
During the period the Company has carried out a number of transactions with the above-mentioned related parties in the normal course of business and on an arm's length basis:
Expenditure Paid Amounts Due Entity Note 30 June2016 30 June2015 31 December2015 30 June2016 30 June2015 31 December2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Ingenious Capital Management Limited - Investment b 59 104 184 - - - management fee - b 29 38 71 - - - Administration fee - b - - - - - - Irrecoverable VAT
Transactions between Related Parties
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 charged consulting fees for the provision of such services totalling GBP35,000 excluding VAT (31 December 2015: GBP137,000; 30 June 2015: GBP103,000), of which GBPNIL remained outstanding as at 30 June 2016 (31 December 2015: GBP45,000; 30 June 2015: GBPNIL).
The Company's statutory financial statements for the year ended 31 December 2015 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: http://www.businesswire.com/news/home/20160909005377/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
September 09, 2016 08:30 ET (12:30 GMT)
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