TIDMIEVD
INGENIOUS ENTERTAINMENT VCT 2 PLC
19 August 2015
Half-yearly results for the six months to 30 June 2015
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 2015 (the Reporting Period).
Overview of Activities
In December 2014, the Company cancelled all of its C shares and
completed the full distribution of capital in relation to those
shares in January 2015.
The Company has now completed its investment strategy and is
fully invested under VCT regulations for its D, E, F and G share
classes. The Manager will now focus upon maximising the returns
from the investments made from those share classes.
The Company continues to actively source and review investment
opportunities for the H share class. No further investments were
made during the Reporting Period, although the Company has agreed
principal terms on three commercial opportunities which it is
looking to close in the third quarter of 2015.
During the Reporting Period two live events were undertaken by
two of the Company's investee companies. Liverpool Sound City took
place from 22 to 24 May 2015 with a new 'Festival style' format
that took place in the docklands area of Liverpool.
Field Day 2015 was staged on 7 and 8 June and once again
delivered both increased attendances and increased profits. In June
2015, the Company accepted an offer to acquire its 15% stake in
Waxarch Limited (the investee company that stages Field Day). The
purchase price agreed is at a six times multiple of the event's
2015 profits with the deal scheduled to complete in September 2015.
The capital growth over the life of the investment equates to an
unaudited six pence per share uplift for the D share class (an
unaudited three pence per share uplift since the previous valuation
as at 31 December 2014) and an unaudited three pence per share
uplift for each of the E and F share classes (an unaudited one
pence per share uplift since the previous valuation as at 31
December 2014).
The D Share class reached its five year anniversary on 30 July
2015 and the intention is to distribute any funds remaining in this
share class shortly.
Results
The C shares, D shares, E shares, F shares, G shares and H
shares are all accounted for as separate pools of funds
necessitating separate reporting.
The C shares did not trade during the Reporting Period and,
therefore, had no profit or loss to report (31 December 2014: loss
of GBP47,000; 30 June 2014: loss of GBP35,000). The D shares made a
loss of GBP14,000 (31 December 2014: loss of GBP13,000; 30 June
2014: loss of GBP87,000). The E shares made a profit of GBP7,000
(31 December 2014: profit of GBP7,000; 30 June 2014: loss of
GBP29,000). The F shares made a loss of GBPNil (31 December 2014:
loss of GBP6,000; 30 June 2014: loss of GBP18,000). The G shares
made a loss of GBP44,000 (31 December 2014: loss of GBP69,000; 30
June 2014: loss of GBP31,000). The H shares made a loss of GBP6,000
(31 December 2014: loss of GBP16,000; 30 June 2014: loss of
GBP7,000).
The unaudited net asset value per C share at 30 June 2015 was
GBPNil pence (31 December 2014: GBPNil; 30 June 2014: 39.5). On 17
December 2014 the High Court of Justice of England and Wales made
an order sanctioning the resolutions passed by the Company in
general and class meetings held on 27 November 2014 by which the
Company's shareholders approved the reduction of the Company's
share capital by the cancellation and extinguishment of all of its
C shares. Up to 31 December 2014, the Company returned 78.0729
pence to investors, with the final distribution of 1 pence per C
share paid to investors on 14 January 2015.
The unaudited net asset value per D share is 44.1 pence (31
December 2014: 64.3 pence; 30 June 2014: 63.2 pence) although this
is after the deduction of an interim dividend of 20.0 pence per
share in the Reporting Period and the deduction of a total of 20.0
pence per share in previous periods. The net asset value including
distributions to date is therefore 84.1 pence per share (31
December 2014: 84.3 pence per share; 30 June 2014: 83.2 pence per
share).
The unaudited net asset value per E share is 67.4 pence (31
December 2014: 72.2 pence; 30 June 2014: 70.9 pence) although this
is after the deduction of an interim dividend of 5.0 pence per
share in the Reporting Period and the deduction of a total of 15.0
pence per share in previous periods. The net asset value including
distributions to date is therefore 87.4 pence per share (31
December 2014: 87.2 pence per share; 30 June 2014: 85.9 pence per
share).
The unaudited net asset value per F share is 69.7 pence (31
December 2014: 74.7 pence; 30 June 2014: 73.9 pence) although this
is after the deduction of an interim dividend of 5.0 pence per
share in the Reporting Period and the deduction of a total of 15.0
pence per share in previous periods. The net asset value including
distributions to date is therefore 89.7 pence per share (31
December 2014: 89.7 pence per share; 30 June 2014: 88.9 pence per
share).
The unaudited net asset value per G share is 73.4 pence (31
December 2014: 79.7 pence; 30 June 2014: 80.8 pence) although this
is after the deduction of an interim dividend of 5.0 pence per
share in the Reporting Period and the deduction of a total of 10.0
pence per share in previous periods. The net asset value including
distributions to date is therefore 88.4 pence per share (31
December 2014; 89.7 pence per share; 30 June 2014: 90.8 pence per
share).
The unaudited net asset value per H share is 82.7 pence (31
December 2014: 87.9 pence; 30 June 2014: 88.2 pence) although this
is after the deduction of an interim dividend of 5.0 pence per
share in the Reporting Period and the deduction of a total of 5.0
pence per share in previous periods.. The net asset value including
distributions to date is therefore 92.7 pence per share (31
December 2014; 92.9 pence per share; 30 June 2014: 93.2 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 1 plc (together the Ingenious Entertainment
VCT's) invest in (Investee Companies).
The current investment portfolio includes:
Festivals
Liverpool Sound City Limited
Ingenious Entertainment VCT 2 investment amount: GBP600,000 (D
share)
(GBP1,200,000 across the Ingenious Entertainment VCTs)
The 2015 event was held between 22 and 24 May. The new style
'Music Festival' based event proved popular with its audience.
Headliners included The Flaming Lips and Belle and Sebastian, and
the event delivered a profit for the investee company.
Field Day Festival
Ingenious Entertainment VCT 2 investment amount: GBP1,000,000 (D
share)
Ingenious Entertainment VCT 2 investment Amount: GBP500,000 (E
Share GBP320,000 and F Share GBP180,000)
(GBP3,000,000 across the Ingenious Entertainment VCTs)
The ninth Field Day Festival was held on 7 and 8 June 2015. The
Saturday sold out a week in advance of the staging event, having
reached its 40,000 licenced capacity and the Sunday sold 16,000
tickets. The performance on Saturday saw the event deliver an
increase in profits and, with capacity to grow Sunday
significantly, the event is now well established with further
potential growth still achievable. Saturday headliners included
Caribou and FKA Twiggs with Sunday being fronted by Ride and Patti
Smith.
Love Supreme Jazz Festival
Ingenious Entertainment VCT 2 investment amount: GBP375,000 (D
share)
Ingenious Entertainment VCT 2 investment amount: GBP750,000 (E
share GBP445,000 and F share GBP305,000)
(GBP2,250,000 across the Ingenious Entertainment VCTs)
The third Love Supreme Jazz Festival took place from 3 to 5 July
2015. Headliners included Van Morrison, Chaka Khan and Lisa
Stansfield and the event took another step forward with paying
attendances in the region of 9,000 per day.
The Festival is promoted by a company in which the Ingenious
Entertainment VCTs, Jazz FM and Neapolitan Music invested and, with
the 2015 event making a GBP150,000 profit for the investee company,
the brand looks well positioned for further growth in future
years.
Outlook
As the economy continues to slowly recover and discretionary
spend increases, the Manager would hope that live event attendances
at least hold firm. What is becoming evident is that the so-called
'headliner driven' event are showing signs of customer fatigue and
the events that deliver more of a broad ranging customer experience
are benefitting from this scenario. The Manager believes that it
has created a portfolio that very much delivers this enhanced
customer experience.
The Manager's focus remains very firmly upon ensuring that each
new investment made by the Company is 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 economic environment
where recovery remains sluggish.
Ingenious Ventures18 August 2015
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
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for the six months ended 30 June 2015
Six months ended Six months ended Year ended
30 June 2015 30 June 2014 31 December 2014
(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 - 60 60 - 46 46 - 64 64
on disposal
of investments
(Decrease)/increase - (2) (2) - (124) (124) - 28 28
in fair
value
of investments
held
Investment 79 - 79 99 - 99 203 - 203
income
Arrangement - - - - - - - - -
fees
Investment (52) (52) (104) (65) (65) (130) (121) (121) (242)
management
fees
Other expenses (90) - (90) (98) - (98) (197) - (197)
(Loss)/profit (63) 6 (57) (64) (143) (207) (115) (29) (144)
on ordinary
activities
before
taxation
Tax - - - - - - - - -
on ordinary
activities
(Loss)/profit (63) 6 (57) (64) (143) (207) (115) (29) (144)
attributable
to
equity
shareholders
Other - - - - - - - - -
Comprehensive
Income
Total (63) 6 (57) (64) (143) (207) (115) (29) (144)
Comprehensive
Income
for
the financial
period
Basic and
diluted
return
per share
(pence)
Ordinary share 5 - - - - - - - - -
C share 5 - - - (0.6) (0.6) (1.2) (1.1) (0.7) (1.8)
D share 5 - (0.2) (0.2) 0.5 (1.8) (1.3) 0.3 (0.5) (0.2)
E share 5 (0.3) 0.5 0.2 (0.4) (0.7) (1.1) 0.3 - 0.3
F share 5 (0.4) 0.4 - (0.5) (0.6) (1.1) (0.3) (0.1) (0.4)
G share 5 (0.6) (0.7) (1.3) (0.9) - (1.4) (1.5) (0.5) (2.0)
1.1 1.1
(1.0) (1.0)
H share 5 (1.1) 0.8 (0.3) (1.1) 0.8 (0.3) (2.2) 1.6 (0.6)
1.1 1.1
(1.0) (1.0)
The Company had no recognised gains and losses other than those
disclosed above.
The total column is the Income Statement of all share classes
for the period. The supplementary capital and revenue columns are
prepared following guidance published by the Association of
Investment Companies (AIC).
The accompanying notes form an integral part of these financial
statements.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED INCOME STATEMENT (UNAUDITED)for
the six months ended 30 June 2015
Ordinary shares C shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit on disposal - - - - - -
of investments
Increase in - - - - - -
fair value
of investments held
Investment income - - - - - -
Arrangement fees - - - - - -
Investment management - - - - - -
fees
Other expenses - - - - - -
Profit on ordinary - - - - - -
activities
before taxation
Tax on ordinary - - - - - -
activities
Profit attributable - - - - - -
to
equity shareholders
Basic and diluted - - - - - -
return
per share (pence)
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
Increase/(decrease) - 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
Profit on disposal - 36 36
of investments
Decrease in - (3) (3)
fair value
of investments held
Investment income - - -
Arrangement fees - - -
Investment management (10) (10) (20)
fees
Other expenses (19) - (19)
(Loss)/profit (29) 23 (6)
on ordinary
activities
before taxation
Tax on ordinary - - -
activities
(Loss)/profit (28) 22 (6)
attributable
to
equity shareholders
Basic and diluted (1.1) 0.8 (0.3)
return
per share (pence)
The Company had no recognised gains and losses other than those
disclosed above.
The total column is the Income Statement per share class for the
period. The supplementary capital and revenue columns are prepared
following guidance published by the AIC.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED INCOME STATEMENT (UNAUDITED)for
the six months ended 30 June 2014
Ordinary shares C shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on disposal - - - - (8) (8)
of investments
Decrease in - - - - (4) (4)
fair value
of investments held
Investment income - - - 4 - 4
Arrangement fees - - - - - -
Investment management - - - (6) (6) (12)
fees
Other expenses - - - (15) - (15)
Loss on ordinary - - - (17) (18) (35)
activities
before taxation
Tax on ordinary - - - - - -
activities
Loss attributable to - - - (17) (18) (35)
equity shareholders
Basic and diluted - - - (0.6) (0.6) (1.2)
return
per share (pence)
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 - 7 7 - 2 2
of investments
Decrease in - (106) (106) - (12) (12)
fair value
of investments held
Investment income 77 - 77 11 - 11
Arrangement fees - - - - - -
Investment management (20) (20) (40) (9) (9) (18)
fees
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Other expenses (25) - (25) (12) - (12)
Profit/(loss) 32 (119) (87) (10) (19) (29)
on ordinary
activities
before taxation
Tax on ordinary - - - - - -
activities
Profit/(loss) 32 (119) (87) (10) (19) (29)
attributable
to
equity shareholders
Basic and diluted 0.5 (1.8) (1.3) (0.4) (0.7) (1.1)
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 - 20 20 - 26 26
of investments
Decrease in - (24) (24) - (12) (12)
fair value
of investments held
Investment income 7 - 7 - - -
Arrangement fees - - - - - -
Investment management (6) (6) (12) (13) (13) (26)
fees
Other expenses (9) - (9) (19) - (19)
(Loss)/profit (8) (10) (18) (32) 1 (31)
on ordinary
activities
before taxation
Tax on ordinary - - - - - -
activities
(Loss)/profit (8) (10) (18) (32) 1 (31)
attributable
to
equity shareholders
Basic and diluted (0.5) (0.6) (1.1) (0.9) - (0.9)
return
per share (pence)
H shares
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Loss on disposal - (1) (1)
of investments
Increase in - 34 34
fair value
of investments held
Investment income - - -
Arrangement fees - - -
Investment management (11) (11) (22)
fees
Other expenses (18) - (18)
(Loss)/profit (29) 22 (7)
on ordinary
activities
before taxation
Tax on ordinary - - -
activities
(Loss)/profit (29) 22 (7)
attributable
to
equity shareholders
Basic and diluted (1.1) 0.8 (0.3)
return
per share (pence)
The Company had no recognised gains and losses other than those
disclosed above.
The total column is the Income Statement per share class for the
period. The supplementary capital and revenue columns are prepared
following guidance published by the AIC.
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED INCOME STATEMENT (UNAUDITED)for
the year ended 31 December 2014
Ordinary shares C shares
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on disposal - - - - (6) (6)
of investments
Decrease in - - - - (5) (5)
fair value
of investments held
Investment income - - - 4 - 4
Arrangement fees - - - - - -
Investment management - - - (7) (7) (14)
fees
Other expenses - - - (26) - (26)
- - -
Loss on ordinary - - - (29) (18) (47)
activities
before taxation
Tax on ordinary - - - - - -
activities
Loss attributable to - - - (29) (18) (47)
equity shareholders
Basic and diluted - - - (1.1) (0.7) (1.8)
return
per share (pence)
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 - 8 8 - (8) (8)
disposal
of investments
(Decrease)/increase - (6) (6) - 26 26
in fair
value of investments
held
Investment income 116 - 116 49 - 49
Arrangement fees - - - - - -
Investment management (38) (38) (76) (18) (18) (36)
fees
Other expenses (55) - (55) (24) - (24)
Profit/(loss) 23 (36) (13) 7 - 7
on ordinary
activities
before taxation
Tax on ordinary - - - - - -
activities
Profit/(loss) 23 (36) (13) 7 - 7
attributable
to
equity shareholders
Basic and diluted 0.3 (0.5) (0.2) 0.3 - 0.3
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 - 14 14 - 61 61
of investments
Decrease in - (4) (4) - (51) (51)
fair value
of investments held
Investment income 23 - 23 11 - 11
Arrangement fees - - - - - -
Investment management (11) (11) (22) (26) (26) (52)
fees
Other expenses (17) - (17) (38) - (38)
Loss on ordinary (5) (1) (6) (53) (16) (69)
activities
before taxation
Tax on ordinary - - - - - -
activities
Loss attributable to (5) (1) (6) (53) (16) (69)
equity shareholders
Basic and diluted (0.3) (0.1) (0.4) (1.5) (0.5) (2.0)
return
per share (pence)
H shares
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Loss on disposal - (5) (5)
of investments
Increase in - 68 68
fair value
of investments held
Investment income - - -
Arrangement fees - - -
Investment management (21) (21) (42)
fees
Other expenses (37) - (37)
(Loss)/profit (58) 42 (16)
on ordinary
activities
before taxation
Tax on ordinary - - -
activities
(Loss)/profit (58) 42 (16)
attributable
to
equity shareholders
Basic and diluted (2.2) (1.6) (0.6)
return
per share (pence)
The Company had no recognised gains and losses other than those
disclosed above.
The total column is the Income Statement per share class for the
period. The supplementary capital and revenue columns are prepared
following guidance published by the AIC.
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)as at 30
June 2015
30 June 30 June 31 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
Fixed assets
Qualifying 6 7,240 7,311 8,280
Investments
Current
assets
Debtors 50 76 22
Non-qualifying 6 3,147 5,663 4,396
Investments
Cash at bank 398 732 54
and in hand
3,595 6,471 4,472
Creditors: (69) (49) (54)
amounts
falling
due within
one year
Net current 3,526 6,422 4,418
assets
Total assets 10,766 13,733 12,698
less current
liabilities
Capital and
reserves
Called-up 174 202 174
share
capital
Share premium - - -
account
Other reserve 13,048 15,993 14,923
account
Capital (1,298) (1,418) (1,304)
reserve
Revenue (1,158) (1,044) (1,095)
reserve
Total 10,766 13,733 12,698
shareholders'
funds
Net asset 7 - - -
value
per Ordinary
share (pence)
Net asset 7 - 39.5 -
value
per
C
share (pence)
Net asset 7 44.1 63.2 64.3
value
per
D
share (pence)
Net asset 7 67.4 70.9 72.2
value
per
E
share (pence)
Net asset 7 69.7 73.9 74.7
value
per
F
share (pence)
Net asset 7 73.4 80.8 79.7
value
per
G
share (pence)
Net asset 7 82.7 88.2 87.9
value
per
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 18 August 2015 and signed on its behalf
by:
Lionel Martin
Director
Company Registration Number: 6395025 (England & Wales)
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NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 30 June 2015 (unaudited)
Ordinary C D E F G H
shares shares shares shares shares shares shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Qualifying - - 2,570 1,637 908 2,125 -
Investments
Current assets
Debtors - - 50 - - - -
Non-qualifying - - - 286 190 465 2,206
Investments
Cash at bank - - 383 4 2 5 4
and in hand
- - 433 290 192 470 2,210
Creditors: - - (34) (9) (4) (12) (10)
amounts
falling
due within
one year
Net current - - 399 281 188 458 2,200
assets
Total assets - - 2,969 1,918 1,096 2,583 2,200
less current
liabilities
Capital and
reserves
Called-up share - - 68 28 16 35 27
capital
Share premium - - - - - - -
account
Other reserve 617 439 3,657 2,124 1,173 2,800 2,238
account
Capital reserve (538) (228) (503) (90) 12 (25) 74
Revenue reserve (79) (211) (253) (144) (105) (227) (139)
Total - - 2,969 1,918 1,096 2,583 2,200
shareholders'
funds
Net asset value - - 44.1 67.4 69.7 73.4 82.7
excluding
distributions
to date (pence
per share)
Net asset value - - 84.1 87.4 89.6 88.4 92.7
including
distributions
to date (pence
per share)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 30 June 2014 (unaudited)
Ordinary C D E F G H
shares shares shares shares shares shares shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Qualifying - 375 3,526 1,542 868 1,000 -
Investments
Current assets
Debtors - 37 39 - - - -
Non-qualifying - - 697 479 296 1,843 2,348
Investments
Cash at bank - 722 - 1 - 3 6
and in hand
- 759 736 480 296 1,846 2,354
Creditors: - (24) (7) (4) (3) (5) (6)
amounts
falling
due within
one year
Net current - 735 729 476 293 1,841 2,348
assets
Total assets - 1,110 4,255 2,018 1,161 2,841 2,348
less current
liabilities
Capital and
reserves
Called-up share - 28 68 28 16 35 27
capital
Share premium - - - - - - -
account
Other reserve 617 1,509 5,003 2,267 1,250 2,976 2,371
account
Capital reserve (538) (228) (572) (122) (4) 15 31
Revenue reserve (79) (199) (244) (155) (101) (185) (81)
Total - 1,110 4,255 2,018 1,161 2,841 2,348
shareholders'
funds
Net asset value - 39.5 63.2 70.9 73.9 80.8 88.2
excluding
distributions
to date (pence
per share)
Net asset value - 79.5 83.2 85.9 88.9 90.8 93.2
including
distributions
to date (pence
per share)
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSCONDENSED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
As at 31 December 2014 (audited)
Ordinary C D E F G H
shares shares shares shares shares shares shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Fixed assets
Qualifying - - 3,660 1,602 893 2,125 -
Investments
Current assets
Debtors - - 22 - - - -
Non-qualifying - - 637 451 282 683 2,343
Investments
Cash at bank - 6 39 6 1 1 1
and in hand
- 6 698 457 283 684 2,344
Creditors: - (6) (29) (5) (3) (6) (5)
amounts
falling
due within
one year
Net current - - 669 452 280 678 2,339
assets
Total assets - - 4,329 2,054 1,173 2,803 2,339
less current
liabilities
Capital and
reserves
Called-up share - - 68 28 16 35 27
capital
Share premium - - - - - - -
account
Other reserve 617 439 5,003 2,267 1,250 2,976 2,371
account
Capital reserve (538) (228) (489) (103) 5 (2) 51
Revenue reserve (79) (211) (253) (138) (98) (206) (110)
Total - - 4,329 2,054 1,173 2,803 2,339
shareholders'
funds
Net asset value - - 64.3 72.2 74.7 79.7 87.9
excluding
distributions
to date (pence
per share)
Net asset value - - 84.3 87.2 89.7 89.7 92.9
including
distributions
to date (pence
per share)
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)for the six months
ended 30 June 2015
Six months ended30 Six months ended30 Year ended31
June June December
2015(unaudited) 2014(unaudited) 2014(audited)
GBP'000 GBP'000 GBP'000
Opening 12,698 15,471 15,471
shareholders'
funds
Capital - - -
subscribed
Issue costs - - -
Dividends (1,875) (1,429) (2,629)
Capital - (102) -
distribution
Total (57) (207) (144)
comprehensive
loss
for the period
Closing 10,766 13,733 12,698
shareholders'
funds
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSSTATEMENT OF CHANGES IN EQUITY
(UNAUDITED)for the six months ended 30 June 2015
Ordinary C shares D shares E shares F shares G shares H shares
shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening - - 4,329 2,054 1,173 2,803 2,339
shareholders'
funds
Dividends - - (1,346) (143) (77) (176) (133)
Capital - - - - - - -
distribution
(Loss)/profit - - (14) 7 - (44) (6)
for
the
period
Closing - - 2,969 1,918 1,096 2,583 2,200
shareholders'
funds
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSSTATEMENT OF CHANGES IN EQUITY
(UNAUDITED)for the six months ended 30 June 2014
Ordinary C shares D shares E shares F shares G shares H shares
shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening 102 1,707 4,679 2,189 1,258 3,048 2,488
shareholders'
funds
Dividends - (562) (337) (142) (79) (176) (133)
Capital (102) - - - - - -
distribution
Loss for - (35) (87) (29) (18) (31) (7)
the
period
Closing - 1,110 4,255 2,018 1,161 2,841 2,348
shareholders'
funds
NON-STATUTORY ANALYSIS (UNAUDITED) BETWEEN THE ORDINARY, C, D,
E, F, G AND H SHARE FUNDSSTATEMENT OF CHANGES IN EQUITY
(UNAUDITED)for the year ended 31 December 2014
Ordinary C shares D shares E shares F shares G shares H shares
shares
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening 102 1,707 4,679 2,189 1,258 3,048 2,488
shareholders'
funds
Capital - - - - - - -
subscribed
Issue - - - - - - -
costs
Dividends (102) (1,660) (337) (142) (79) (176) (133)
(Loss)/profit - (47) (13) 7 (6) (69) (16)
for
the
period
Closing - - 4,329 2,054 1,173 2,803 2,339
shareholders'
funds
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STATEMENT OF CASH FLOWS (UNAUDITED)for the six months ended 30
June 2015
30 June 2015 30 June 2014 31 December 2014
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Net cash flows (227) (264) (396)
from operating
activities
Cash flows from
investing
activities
Purchase of Qualifying - (1,000) (2,625)
Investments
Return of Qualifying 1,137 854 1,729
Investments
Purchase - - -
of Non-qualifying
Investments
Disposal 60 51 86
of Non-qualifying
Investments
Net cash in/(outflow) 1,197 (95) (810)
from
investing activities
Cash flows from
financing
activities
Issue of shares - - -
Issue costs of shares - - -
Payment (1,875) (1,531) (2,629)
of dividends/capital
distribution
Net cash outflow (1,875) (1,531) (2,629)
flow from
financing activities
Net decrease in cash (905) (1,890) (3,835)
and cash equivalents
Opening cash and 4,447 8,282 8,282
cash equivalents
Closing cash and 3,542 6,392 4,447
cash equivalents
Reconciliation of loss before taxation to net cash flow from
operating activities
GBP'000 GBP'000 GBP'000
Loss on ordinary activities before tax (57) (207) (144)
(Increase)/decrease in fair value of investments held (78) 75 (108)
Investment income (79) (63) (134)
(Increase)/decrease in receivables (28) (37) 17
Increase/(decrease) in payables 15 (32) (27)
Net cash flow from operating activities (227) (264) (396)
Closing cash and cash equivalents comprise of cash of GBP398,000
(31 December 2014: GBP54,000; 30 June 2014: GBP732,000) and
Non-qualifying assets, excluding Investment in Investee Companies,
of GBP3,144,000 (31 December 2014: GBP4,393,000; 30 June 2014:
GBP5,660,000).
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)for the six months
ended 30 June 2015
1. Accounting Policies
a) 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 2014 Annual
Report and Accounts.
b) 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.
(i) Valuation of Investments
The Company's business is investing in financial assets with a
view to profiting from their total return in the form of income and
capital growth. As set out in each Prospectus all investments are
designated at fair value.
International Private Equity and Venture Capital Valuation
Guidelines
Unquoted investments, including equity and loan investments, are
designated at fair value through profit and loss and are valued in
accordance with the International Private Equity and Venture
Capital (IPEVC) Guidelines. Investments are initially recognised at
fair value. The fair value is subsequently re-measured, as
estimated by the Directors. Investment holding gains or losses
arising from the revaluation of investments are recognised in the
profit and loss. Fair value is determined as follows:
-- Fair value is the amount for which an asset could be exchanged between
knowledgeable, willing parties in an arm's length
transaction.
-- In estimating the fair value for an investment, the Manager will apply
a methodology that is appropriate in light of the nature, facts
and
circumstances of the investment and its materiality in the
context of
the total investment portfolio and will use reasonable
assumptions and
estimations.
-- An appropriate methodology incorporates available information about
all factors that are likely to materially affect the fair value
of the
investment. The valuation methodologies are applied consistently
from
period to period, except where a change would result in a
better
estimate of fair value. Any changes in valuation methodologies
will be
clearly disclosed in the financial statements.
The most widely used methodologies are listed below. In
assessing which methodology is appropriate, the Directors are
predisposed towards those methodologies that draw upon market-based
measures of risk and return.
-- Price of recent investment
-- Discounted cash flows/earnings multiple
-- Net assets
-- Available market prices
Of these the two methodologies most applicable to the Company's
investments are:
1 - Price of recent investment
Where the investment being valued was made recently, its cost
will generally provide a good indication of value. It is generally
considered that this would only apply for a limited period; in
practice a period up to the start of the first live event or
entertainment content which forms the investment is often applied
as the long stop date for such a valuation.
2 - Discounted cash flows/earnings of the underlying
business
Investments can be valued by calculating the net present value
of expected future cash flows of the Investee Companies. In
relation to the Company's investments, anticipating future cash
flows in excess of the guaranteed amounts would clearly require
highly subjective judgements to be made in the early stage of each
investment and therefore would not be an appropriate methodology to
apply in the early stage of the investment.
In the period prior to the second live event or entertainment
content it is considered appropriate to use the price paid for the
recent investment as the latest available information. Thereafter,
the portfolio of investments is fair valued on the discounted cash
flow/earnings basis using the latest available information on the
performance of the live event or entertainment content. Gains or
losses arising from changes in the fair value of the 'financial
assets at fair value through profit or loss' category are presented
in the Income Statement in the period in which they arise.
As a result of the above basis of valuation, there is
significant judgement associated with the valuation of
investments.
Non-qualifying Investments - OEICs
The Company's Non-qualifying Investments in interest bearing
money market OEICs are valued at fair value which is bid price.
They have been designated as fair value through profit or loss for
the purposes of FRS 102.
Gains and losses arising from changes in fair value of
Qualifying and Non-qualifying Investments are recognised as part of
the capital return within the profit or loss 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 profit or loss.
(ii) Financial assets and liabilities
All financial assets and liabilities are initially measured at
transaction price (including transaction costs), except for those
financial assets classified as at fair value through profit or
loss, which are initially measured at fair value (which is normally
the transaction price excluding transaction costs), unless the
arrangement constitutes a financing transaction. If an arrangement
constitutes a finance transaction, the financial asset or financial
liability is measured at the present value of the future payments
discounted at a market rate of interest for a similar debt
instrument.
Financial assets and liabilities are only offset in the balance
sheet when there exists a legally enforceable right to set off the
recognised amounts and the Company intends either to settle on a
net basis, or to realise the asset and settle the liability
simultaneously.
Debt instruments which meet the following conditions are
subsequently measured at amortised cost using the effective
interest method:
(a) Returns to the holder are (i) a fixed amount; or (ii) a
fixed rate of return over the life of the instrument; or (iii) a
variable return that, throughout the life of the instrument, is
equal to a single referenced quoted or observable interest rate; or
(iv) some combination of such fixed rate and variable rates,
providing that both rates are positive.
(b) There is no contractual provision that could, by its terms,
result in the holder losing the principal amount or any interest
attributable to the current period.
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(c) Contractual provisions that permit the issuer to prepay a
debt instrument or permit the holder to put it back to the issuer
before maturity are not contingent on future events, other than to
protect the holder against the credit deterioration of the issuer
or a change in control of the issuer, or to protect the holder or
issuer against changes in relevant taxation or law.
(d) There are no conditional returns or repayment provisions
except for the variable rate return described in (a) and prepayment
provisions described in (c).
Debt instruments that are classified as payable or receivable
within one period and which meet the above conditions are measured
at the undiscounted amount of the cash or other consideration
expected to be paid or received, net of impairment.
Other debt instruments not meeting these conditions are measured
at fair value through profit or loss.
Commitments to make and receive loans which meet the conditions
mentioned above are measured at cost (which may be nil) less
impairment.
Financial assets are derecognised when and only when a) the
contractual rights to the cash flows from the financial asset
expire or are settled, b) the Company transfers to another party
substantially all of the risks and rewards of ownership of the
financial asset, or c) the Company, despite having retained some
significant risks and rewards of ownership, has transferred control
of the asset to another party and the other party has the practical
ability to sell the asset in its entirety to an unrelated third
party and is able to exercise that ability unilaterally and without
needing to impose additional restrictions on the transfer.
Financial liabilities are derecognised only when the obligation
specified in the contract is discharged, cancelled or expires.
c) Investment Income
Interest income is recognised in the profit or loss under the
effective interest method. The effective interest rate is the rate
required to discount the expected future income streams over the
life of the loan to its initial carrying amount. The main impact
for the Company in that regard is the accounting treatment of the
loan note premiums. Where those loan note premiums are charged in
lieu of higher interest then they are credited to income over the
life of the advance to the extent those premiums are anticipated to
be collected.
d) Dividend Income
Dividend income is recognised in the profit or loss once it is
declared by the Investee Companies.
e) Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the revenue account within the Income Statement
except that:
-- expenses which are incidental to the acquisition or disposal of an
investment are charged to capital in the Income Statement as
incurred;
-- expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of
the
investments held can be demonstrated; and
-- the management fee has been allocated 50% to revenue and 50% to
capital, which represents the split of the Company's long term
returns.
General expenses were paid for by the Ordinary share class until
31 July 2013, by the C share class until 31 July 2014 and from the
D share class 1 August 2014 onwards. The expenses have been
recharged on a quarterly basis to the other share classes based on
the proportional net asset value per share class as at the last day
of the previous quarter.
f) Taxation
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the Balance
Sheet date where transactions or events that result in an
obligation to pay more, or a right to pay less, tax in the future
have occurred at the Balance Sheet date. This is subject to
deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the
future reversal of the underlying timing differences can be
deducted. Timing differences are differences arising between the
Company's taxable profits and its results as stated in the
financial statements which are capable of reversal in one or more
subsequent periods.
g) Ordinary shares, C shares, D shares, E shares, F shares, G
shares and H shares
The Company had seven share classes up to 17 December 2013:
Ordinary shares, C shares, D shares, E shares, F shares, G shares
and H shares. On 20 December 2013 the Company's capital was reduced
by the cancellation and extinguishment of all of its Ordinary
shares. On 17 December 2014 the Company's capital was reduced by
the cancellation and extinguishment of all of its C shares. Each
share class has a separate pool of income and expenses as well as
assets and liabilities attributable to it. All share classes rank
pari passu with each other in terms of voting rights.
2. 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 2015 30 June 2014 31 December 2014
GBP'000 GBP'000 GBP'000
Audit fees 8,850 8,850 16,500
8,850 8,850 16,500
4. Directors remuneration and employees
30 June 2015 30 June 2014 31 December 2014
GBP'000 GBP'000 GBP'000
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 2015 (31 December 2014: Nil, 30 June 2014: Nil).
5. Basic and Diluted Return per share
The calculation of the basic return per Ordinary share is based
on the return on ordinary activities after tax for the period and
on a weighted average of Nil Ordinary shares in issue for the six
months ended 30 June 2015 (31 December 2014: Nil; 30 June 2014:
10,205,011). The basic return per C share has been calculated on a
weighted average of 2,810,596 C shares in issue for the six months
ended 30 June 2015 (31 December 2014: 2,810,596; 30 June 2014:
2,810,596). The basic return per D share has been calculated on a
weighted average of 6,735,624 D shares in issue for the six months
ended 30 June 2015 (31 December 2014: 6,735,624; 30 June 2014:
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 2015 (31 December 2014: 2,846,122; 30 June 2014:
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 2015 (31 December 2014: 1,572,095; 30 June 2014:
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 2015 (31 December 2014: 3,518,044; 30 June 2014:
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 2015 (31 December 2014: 2,660,842; 30 June 2014:
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 2015 30 June 2014 31 December 2014
GBP'000 GBP'000 GBP'000
Fixed Assets
Level c (ii)
Qualifying Investments: 7,240 7,311 8,280
Current Assets
Non-qualifying Investments: 3,147 5,663 4,396
10,387 12,974 12,676
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)"
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