TIDMLLT
RNS Number : 8766R
Limelight VCT plc
08 May 2009
For immediate release Friday 8 May 2009
Limelight VCT PLC
Audited annual results for the year ended 31st March 2009 and Notice of AGM
Limelight VCT plc announces its audited results for the year ended 31 March
2009. The Company's Annual General Meeting will be held at 11am on 10 September
2009 at the offices of BMS Finance, First Floor, 41-44 Great Queen Street,
London, WC2B 5AD. A full copy of the Company's Report and Accounts will be
posted to Shareholders on 8 May 2009.
In this press release the Company is Limelight VCT PLC and the Group includes
the Company, its investment management subsidiary, Limelight Investment
Management Limited and its sales agency subsidiary Limelight Film Sales Ltd.
CHAIRMAN'S STATEMENT
For the year ended 31 March 2009
I am delighted to present the third annual report for Limelight VCT for the year
to 31 March 2009 (the "Reporting Period").
Investment Progress and Key Events
I am pleased to confirm that during the Reporting Period the Company has
satisfied its key investment target by making six further qualifying investments
which take our total investments to more than 70% of net funds raised, as
required to apply for confirmation of our status as a Venture Capital Trust
("VCT").
Please refer to the Investment Manager's review on page 3 for more details on
investments made.
Financial Results
The loss in the period is GBP66,000. The net asset value per share at 31 March
2009 was 92.14 pence.
Whilst the global economic downturn has had limited impact on cinema attendance,
there has been some slowdown in film sales activities with distributors having
less cash available to purchase rights and exhibiting increased caution,
offering low guarantees for all but the more obviously commercial films. This
has resulted in some write down of investment values where anticipated future
income streams from film sales are below previously anticipated levels. Full
details of the investment valuations are given on page 27.
Investment income was on target at GBP472,000 and administrative costs were
contained within budget resulting in a revenue profit before tax of GBP256,000.
However this was outweighed by the adjustment in fair value of the investments
and investment transaction expenses and after taking into account the
corporation tax charge on the revenue profits this has resulted in an overall
loss for the year of GBP66,000.
Dividend
No dividend is proposed.
Outlook
The focus in the coming financial year will be to monitor returns on existing
investments as the film production companies complete, deliver and market their
films.
Annual General Meeting
The AGM will be held at 11am on 10 September 2009 at the offices of BMS Finance
Ltd, First Floor, 41-44 Great Queen Street, London, WC2B 5AD. We urge all
shareholders who are able to attend to join us for this occasion.
Stuart Stradling
7 May 2009
INVESTMENT MANAGER'S REVIEW
For the year ended 31 March 2009
New Investments
During the year six new investments were made in accordance with our investment
objectives at a total cost of GBP2.597m. Each investment was made in a British
independent film Company which had been formed with the intention of making a
British Qualifying Film. Each Company will generate income from the exploitation
of the worldwide intellectual property rights in the films they own.
The investments in the period are as follows:
+--------------------------+------------------+--+---------+---+---------+---+---------+
| | Date of | | Equity | | Debt | | Total |
| | Investment | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| Kasander (Andrea | 11 July 2008 | | 125 | | 250 | | 375 |
| Untitled) Ltd | | | | | | | |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| Generator (Cherry) Ltd | 16 July 2008 | | 93 | | 125 | | 218 |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| Mirrorball Films | 11 August 2008 | | 139 | | 260 | | 399 |
| (Nativity) Ltd | | | | | | | |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| Generator (Ghost) Ltd | 15 September | | 100 | | 183 | | 283 |
| | 2008 | | | | | | |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| Skellig Productions Ltd | 3 October 2008 | | 242 | | 430 | | 672 |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| From Time to Time Ltd | 12 November 2008 | | 75 | | 575 | | 650 |
+--------------------------+------------------+--+---------+---+---------+---+---------+
| | | | 774 | | 1,823 | | 2,597 |
+--------------------------+------------------+--+---------+---+---------+---+---------+
The percentage ownership held in each Company varies, however in every case
Limelight VCT plc is entitled to 2% of the net profits of each film produced.
Each of the investee companies above is recently incorporated and relevant
financial information is not yet available. However details of their individual
film productions are as follows:
Kasander (Andrea Untitled) Ltd are currently in post production on the film
Fishtank directed by Andrea Arnold (Red Road) and starring Michael Fassbender
(Hunger). This is a contemporary drama about a 15 year old girl and how her life
changes when her mother brings home a new boyfriend. It has been selected for
the Cannes Film Festival in May 2009.
Generator (Cherry) Ltd have delivered the film Cherrybomb which premiered at the
Berlin Film Festival in February and will be marketed at the Cannes Film
Festival. Set in Ireland this drama thriller follows the exploits of three
teenagers as they embark on a wild weekend of drink and drugs that turns deadly
serious. It stars Rupert Grint (Harry Potter) and James Nesbitt (Cold
Feet/Murphy's Law).
Mirrorball Films (Nativity) Ltd are in post production on an improvised comedy
film Nativity directed by Debbie Isitt (Confetti) and starring Martin Freeman
(The Office/Hitchhikers Guide to the Galaxy) and Ashley Jensen (Extras). It is
the story of two schools competing for the best nativity play and the attentions
of a Hollywood film studio. The film is intended for a Christmas 2009 release.
Generator (Ghost) Ltd are in post production on the film Ghost Machine, a
thriller set in a virtual reality world where soldiers get themselves wrapped up
in a game with deadly consequences.
Skellig Productions Ltd have recently delivered a film adaptation of the
best-selling children's book by David Almond, Skellig, starring Tim Roth
(Incredible Hulk/Youth Without Youth), John Simm (Life on Mars/Doctor Who) and
Kelly Macdonald (No Country for Old Men/Trainspotting).
From Time to Time Ltd are currently in post production on the film From Time to
Time based on the novel "The Chimneys of Green Knowe" by Lucy M. Boston. The
film stars Dame Maggie Smith and is directed and adapted by Julian Fellowes
(Gosford Park).
Performance of Existing Investment Portfolio
The investments made prior to the start of the current Reporting Period are now
in various stages of delivery and/or release.
Adulthood Ltd released the film Adulthood in June 2008. It performed very well
at the UK box office, breaking box office records for an urban drama of this
kind and winning an Orange Rising Star BAFTA award for its director, Noel
Clarke. It has continued to perform well on DVD in the UK. However the very
British nature of the subject matter means that few international sales deals
have been agreed to date, which may impact on the long term profit earning
potential for this project.
Abrahams Point Ltd completed and delivered the film Abrahams Point, a drama
starring Mackenzie Crook, during the summer of 2008. It is being actively
marketed but has so far failed to achieve a theatrical distribution deal. Work
will continue to secure a theatrical release but television and DVD distribution
is now also being sought.
I Know You Know (Parallax) Ltd delivered their film, I Know You Know, during the
summer of 2008. This has achieved a number of international sales to date and
has been screened at various film festivals.
Dark North Ltd delivered their horror film Red Mist in late 2008 and this has
recently gone on DVD release in the USA. They continue to seek other
international distribution deals.
Lunar Industries Ltd delivered the film Moon in January and this has been sold
to Sony for a full theatrical release in summer 2009 in the US and UK. Some
other territories have also been sold after a high profile screening and good
reviews at Sundance Film Festival.
Rounding Up Donkeys Ltd are in the final stages of delivering their film
Rounding Up Donkeys and hope to attract distribution deals during the Cannes
Film Festival.
All the films listed on this page were monitored closely during their various
production stages and were completed on time and on budget in line with the
production plans in place at the time of investment. All have made successful
applications under the current film tax credit scheme.
Investments are valued in accordance with the investment policy detailed on page
23. Full details of the investment portfolio and the current carrying values are
given in note 6 on page 26.
Christopher Figg
7 May 2009
REPORT OF THE DIRECTORS
For the year ended 31 March 2009
The Directors present their report and the audited financial statements for the
year ended 31 March 2009.
Principal Activity
The principal activity of the Company is to provide growth for shareholders
whilst maintaining its status as an approved VCT through investing in a
diversified portfolio of British film production companies.
The Company is a public limited Company registered in England and Wales, trading
and domiciled in the United Kingdom.
Directors
The following were Directors throughout the period:
Stuart Stradling
Stuart was involved in investment banking for over 30 years and was a senior
executive at Dresdner Kleinwort prior to retiring in 2006. He played a leading
part in many high profile transactions in the City of London over these years.
He now holds a number of non-executive positions in small companies in several
different fields, including media and technology. Born in 1944 he joined the
Board in 2005.
Michael Henry
Michael is a solicitor who has over 25 years of experience advising in the area
of film financing. He has a substantial amount of experience in film production
and distribution and has acted for a number of well known film industry
corporations, bodies, film producers and production companies. Born in 1955 he
joined the Board in 2005.
David Parfitt
David is a London based independent film producer who has produced a number of
successful British films including the multi award winning Shakespeare in Love
(winner of seven Academy Awards including Best Picture and four British Academy
Awards including Best Film). David is Chairman of BAFTA and is a trustee of the
Chicken Shed Theatre Company. Born in 1958 he joined the Board in 2005.
All Directors retired and were re-appointed at the Annual General Meeting on 6
September 2007. David Parfitt retired by rotation and was re-appointed at the
Annual General Meeting on 11 September 2008. Michael Henry will retire by
rotation at the forthcoming Annual General Meeting on 10 September 2009 in
accordance with the Articles of Association and will offer himself for
re-appointment.
Directors Interests
As at 31 March 2009 and 31 March 2008 the interests of the Directors in the
issued ordinary share capital of the Company were as follows:
Number of Shares held % of issued share capital
Stuart Stradling 100,000 1.78
Michael Henry 100,002 1.78
David Parfitt Nil Nil
The interest of Michael Henry includes 2 subscriber shares held by Park Place
Financial Strategy LLP.
All interests are beneficial.
Except for the two subscriber shares held by Park Place Financial Strategy LLP,
the Directors subscribed for the shares during the period of the Offer and on
the terms set out in the Prospectus.
There have been no changes to the above interests between 31 March 2009 and the
date of this report.
Disclosure of Information to Auditors
In so far as the Directors are aware:
* there is no relevant audit information of which the Company's auditors are
unaware; and
* the Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
Share Capital Structure
Note 18 to the accounts on page 33 sets out the share capital structure of the
Company. There are no shares in issue other than ordinary shares.
There are no restrictions on the transfer of ordinary shares other than certain
restrictions which may from time to time be imposed by law (for example insider
trading law) or pursuant to the Listing Rules of the Financial Services
Authority.
Rights Attaching to Shares
Full details of rights attaching to shares are set out in the Company's Articles
of Association.
Members may attend and vote at general meetings. Each member present at a
general meeting in person or by proxy shall have one vote for each share held.
To be present by proxy, a proxy form must have been delivered to the registered
office not less than 48 hours before the appointed time for the meeting.
Members can pass an ordinary resolution to declare a dividend, although the
amount of the dividend cannot exceed the amount recommended by the Board.
In the event of the winding up of the Company, the liquidator can, with the
sanction of the members, divide amongst the members all or any part of the
assets of the Company and determine how the divisions shall be carried out
between the members. The liquidator can also transfer the whole or any part of
the assets to trustees upon any trusts for the benefit of the members. No member
shall be compelled to accept any assets on which there is a liability.
Appointment and Replacement of Directors
The Company's Articles of Association provide that each director will seek
re-election at the Annual General Meeting at least every three years.
Additionally new Directors may be appointed by the Board but are subject to
re-election by the members at the first opportunity after their appointment.
The members can pass an ordinary resolution to appoint a person who is willing
to become a director, and who satisfies eligibility requirements set out in the
Company's Articles of Association, as long as the total number of Directors does
not exceed the maximum total number of Directors fixed in accordance with the
Articles of Association (currently six).
Amendment of the Articles of Association
The Articles of Association may be amended by the members passing a special
resolution at a general meeting.
Major Interests in Shares
Set out below are the names of those persons who, insofar as the Company is
aware, are interested directly or indirectly in 3% or more of the issued share
capital of the Company:
+---------------------------------+------------------------------+----------------+
| Christopher Anthony Richard | | 3.56% |
| Bowen | | |
+---------------------------------+------------------------------+----------------+
| David John Stuart Burnett | | 3.56% |
+---------------------------------+------------------------------+----------------+
| Douglas Gabriel Conn | | 3.56% |
+---------------------------------+------------------------------+----------------+
| Peggy Ann Fordham | | 3.56% |
+---------------------------------+------------------------------+----------------+
| Martin Hartmann | | 3.56% |
+---------------------------------+------------------------------+----------------+
| David Alexander McCall | | 3.56% |
| Hutchison | | |
+---------------------------------+------------------------------+----------------+
| Simon Charles Yarborough Parker | | 3.56% |
+---------------------------------+------------------------------+----------------+
All the above have held their shares since the initial launch of the Company in
April 2006.
There have been no changes to the above interests between 31 March 2009 and the
date of this report.
Dividend
The Directors do not propose payment of a dividend.
Business Review
The Directors have included their business review on pages 9 to 10.
Post Balance Sheet Events
There have been no significant events since the balance sheet date.
Related Parties
Related party disclosures are given in note 17 on page 32.
Future Developments
In the coming year we intend to concentrate on monitoring existing investments
to ensure maximum returns for our investors, although we will continue to
consider future investments in line with our investment policy where cashflow
permits. There are no undrawn commitments to make further investments.
The VCT Group has adequate financial resources and low operational costs and
having made the appropriate enquiries the Directors continue to adopt the going
concern basis in preparing the annual report and accounts.
Indemnities
Pursuant to the Articles of Association and to the extent permitted by the
Companies Act, every Director or other officer of the Company is entitled to be
indemnified out of the assets of the Company against all liabilities which may
be incurred in the execution of their duties. In certain circumstances Directors
and other officers of the Company are also entitled to be indemnified out of the
assets of the Company against liabilities incurred by them in defending
proceedings brought against them. These indemnities have been in force
throughout the period under review and will continue to remain in force.
Financial Risk Management
Details of the Company's financial instruments and risk management policies and
objectives are provided in note 16 on pages 30 to 32.
Re-Appointment of Auditors
The auditors Grant Thornton UK LLP have indicated their willingness to continue
in office and a resolution to re-appoint them will be put to the shareholders at
the annual general meeting.
VCT Status Monitoring
The Company has retained PricewaterhouseCoopers LLP (PwC) to advise it on
compliance with the legislative requirements for Venture Capital Trusts (VCTs).
PwC review new investments as appropriate and report directly to the Board on a
regular basis.
Policy and Practice on Payment of Creditors
It is the Company's policy to settle the terms of payment with suppliers when
agreeing the terms of each transaction, to ensure that suppliers are made aware
of the terms of payment and to abide by the terms thereof. Suppliers are paid
within 30 days of submitting accurate invoices. No creditors were unpaid at year
end.
Annual General Meeting
The notice convening the Annual General Meeting can be found on page 35.
On behalf of the Board
Stuart Stradling
7 May 2009
BUSINESS REVIEW
For the year ended 31 March 2009
Business Objectives
The business objectives of the Company are to maximize growth for the investors
through investing in a diversified portfolio of British film production
companies whilst ensuring compliance with legislation required to maintain VCT
status.
Strategy for Achieving Business Objectives and Investment Policy
The Company and its investment manager (a wholly owned subsidiary of the
Company, Limelight Investment Management Ltd) actively pursue investment
opportunities which will further the business objectives outlined above. To help
achieve its objectives the VCT Group uses companies controlled by BMS Finance
Ltd ("BMS") to provide administrative and advisory services. BMS have a full
time film financier with widespread contacts in the UK film industry who works
alongside our Board. BMS also provide accounting, financial modeling and film
production accounting expertise.
The Company has considered carefully the risks which are inherent in film
production and distribution and formulated an investment policy which it is
believed should insulate investors in the Company from some of the principal
sector risks. Investments are only made in film companies where, in the view of
the Investment Manager and the Company:
? there is a significant chance that the Company's investment will be repaid
out of income generated from the production, sale, or other exploitation of the
relevant film or films;
? the completion of the film is guaranteed by a reputable completion
guarantor;
? film sales companies can demonstrate satisfactory title to the films they
are selling;
? production insurances are in place;
? errors and omissions insurance will be available for films being produced;
? all other film financing agreements in relation to the relevant film and
film production Company have unconditionally completed.
The Company will not invest in any film production Company if in the opinion of
the Investment Manager and the Company:
? the ability of the relevant film to qualify as British is doubtful;
? the project appears to have an unacceptable level of risk;
? the project depends on financial support from a financier whose credit
rating is doubtful, or whose ability to proceed within the required timescale is
not certain.
All distribution arrangements in relation to any film project in which the
Company invests must be approved by the Investment Manager and the Company.
The Board of the Company require appropriate security arrangements to be entered
into by any Company in which the Company invests, including mortgages or charges
and will require a reputable Company to be appointed to manage the collection of
all sums due under agreements exploiting rights in any relevant film.
Both in order to ensure a diversified portfolio and in order to maintain its
status as a Venture Capital Trust, no one investment may comprise more than 15%
of total investments.
The Company and the Investment Manager will be free to depart from the
investment policy in individual cases only where in the opinion of the Company
and the Investment Manager such departure is not material.
Limelight VCT plc is a Venture Capital Trust listed on the London Stock Exchange
and investors who subscribed for new shares in the Company prior to 6 April 2006
are entitled to income tax relief of 40% of the amount subscribed provided the
shares are held for at least three years. Capital gains made by investors on a
disposal of shares in a VCT are exempt from capital gains tax and dividends
would, if paid, be free from income tax. In order to secure these tax benefits
for investors the Board is required to ensure that the Company complies with the
rules and regulations for VCTs as set out by the UK tax authorities.
Principal Risks
The Board believes that the principal risks facing the Company are:
* failure of sales agents to achieve sales at the levels of original estimates
* delays on return on individual investments
* loss of VCT status
* changes in tax legislation
Failure of Sales Agents to Achieve Sales at the Levels of Original Estimates
Prior to making any investment the Company ensures that investee companies are
represented by reputable sales agents with good track records in selling films
of a similar kind. Estimates of anticipated sales are drawn up by the sales
agents and investments are only made where these estimates indicate sufficient
revenues will be earned from the exploitation of the film to repay the Company's
investment. However the changes in the economic environment during the latter
part of 2008 have caused a general slowdown in the international film sales
market which may mean that films now sell more slowly or for less than original
estimates which were provided before that date. This has been reflected in the
value of investments (see note 6).
Delays on Return on Individual Investments
The investment period on each transaction may be longer than expected due to the
operational circumstances of each film production or delays in the UK tax
authorities paying the tax credit back to the film's producers. The Company has
arrangements in place to monitor the progress of each film production on a
weekly basis and ensures that each film is covered by a completion bond which
guarantees delivery of the film by an agreed date. Each production Company is
also required to retain a reputable tax advisor to submit appropriate
documentation within an agreed timescale. To date these aspects of our
investments have been performing well.
Loss of VCT Status
Loss of VCT status may occur if the Company breaches any of the requirements set
out in section 274 Income Tax Act 2007. The Company liaises closely with its
professional advisors to assist in complying with all VCT requirements.
Changes in Tax Legislation
The business objectives depend partially on the current system of film tax
credits. The Board maintain close relationships with the industry Groups and
firms of advisors that work with the government to represent the views of film
makers. It is considered unlikely that the new tax credit system will be
withdrawn or altered significantly in the short term but this area is kept under
constant review.
Key Performance Indicators
The key performance indicators the Board uses to assess performance are:
* the value of investments made and proportion of total capital deployed
* the change in the net asset value per share
* maintenance of status as a VCT
During the Reporting Period the Company has exceeded its investment target of
being 70% invested by 31 March 2009.
Net Asset Value per share has fallen very slightly across the financial year to
92.14p (2008:93.30p).
PwC have reported to the Board that, in their opinion, the Company has
maintained its status as a Venture Capital Trust under the VCT legislation.
Future Developments
As stated in the Chairman's Report, now that we have achieved our investment
targets the priority in the coming year is to monitor the progress of the
investments as these companies complete and market their films. 2008 saw a
slowdown in film sales activity in the international market as distributors and
sales agents experienced cashflow shortages and reduced their purchasing with a
shift to more obvious commercial product. We intend to remain in close contact
with producers and sales agents to ensure that they create the best possible
sales and marketing strategies for 2009.
GROUP INCOME STATEMENT
For the year ended 31 March 2009
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+--------+
| | Note | Year ended 31 March 2009 | | Year ended 31 March 2008 |
| | | | | |
+----------------+--------+-----------------------------+--------+--------------------------------------+
| | | Revenue | Capital | Total* | | Revenue | Capital | Total* |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| (Loss)/Gain | 6 | - | (11) | (11) | | - | - | - |
| on disposal | | | | | | | | |
| of | | | | | | | | |
| investments | | | | | | | | |
| designated | | | | | | | | |
| as | | | | | | | | |
| available | | | | | | | | |
| for sale | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Decrease | 6 | - | (171) | (171) | | - | - | - |
| in fair | | | | | | | | |
| value of | | | | | | | | |
| investments | | | | | | | | |
| designated | | | | | | | | |
| at fair | | | | | | | | |
| value | | | | | | | | |
| through | | | | | | | | |
| profit or | | | | | | | | |
| loss | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Investment | 2 | 472 | - | 472 | | 288 | 3 | 291 |
| and other | | | | | | | | |
| income | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Administrative | 3 | (216) | (70) | (286) | | (238) | - | (238) |
| expenses | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Profit/(loss) | | 256 | (252) | 4 | | 50 | 3 | 53 |
| before | | | | | | | | |
| taxation | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Taxation | 5 | (70) | - | (70) | | (10) | - | (10) |
| | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Profit/(loss) | | 186 | (252) | (66) | | 40 | 3 | 43 |
| attributable | | | | | | | | |
| to equity | | | | | | | | |
| shareholders | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+
| Earnings | 7 | 3.3p | (4.5p) | (1.2p) | | 0.71p | 0.05p | 0.76p |
| per | | | | | | | | |
| ordinary | | | | | | | | |
| share | | | | | | | | |
| (basic | | | | | | | | |
| and | | | | | | | | |
| diluted) | | | | | | | | |
+----------------+--------+---------+---------+---------+--------+---------+---------+---------+--------+
*The total column represents the Income Statement under IFRS. The revenue and
capital columns are supplementary to this and are prepared under guidance
published by the Association of Investment Companies.
BALANCE SHEETS OF THE GROUP AND COMPANY
As at 31 March 2009
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | Group | | Group | | Company | | Company |
| | | as at | | as at | | as at | | as at |
| | | 31 | | 31 | | 31 | | 31 |
| | | March | | March | | March | | March |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | Note | 2009 | | 2008 | | 2009 | | 2008 |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Non | | | | | | | | |
| current | | | | | | | | |
| assets | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Financial | | | | | | | | |
| investments | | | | | | | | |
| designated | | | | | | | | |
| at fair | | | | | | | | |
| value | | | | | | | | |
| through | | | | | | | | |
| profit or | | | | | | | | |
| loss: | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Film | 6 | 3,909 | | 1,504 | | 3,909 | | 1,504 |
| Company | | | | | | | | |
| investments | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Intercompany | 6 | - | | - | | - | | 740 |
| loan | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | 3,909 | | 1,504 | | 3,909 | | 2,244 |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Current | | | | | | | | |
| assets | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Trade | 10 | 799 | | 274 | | 799 | | 37 |
| and | | | | | | | | |
| other | | | | | | | | |
| receivables | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Cash | 11 | 565 | | 3,507 | | 550 | | 2,954 |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | 1,364 | | 3,781 | | 1,349 | | 2,991 |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Current | | | | | | | | |
| liabilities | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Trade | 12 | (25) | | (31) | | (21) | | (20) |
| and | | | | | | | | |
| other | | | | | | | | |
| payables | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Current | | (70) | | (10) | | (68) | | (3) |
| tax | | | | | | | | |
| liabilities | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | (95) | | (41) | | (89) | | (23) |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Net | | 1,269 | | 3,740 | | 1,260 | | 2,968 |
| current | | | | | | | | |
| assets | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Net | | 5,178 | | 5,244 | | 5,169 | | 5,212 |
| assets | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Shareholders' | | | | | | | | |
| funds | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Called | 13 | 562 | | 562 | | 562 | | 562 |
| up | | | | | | | | |
| share | | | | | | | | |
| capital | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Share | 14 | 4,619 | | 4,619 | | 4,619 | | 4,619 |
| premium | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Revenue | 14 | 246 | | 60 | | 220 | | 28 |
| reserve | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Capital | 14 | (249) | | 3 | | (232) | | 3 |
| reserve | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Total | | 5,178 | | 5,244 | | 5,169 | | 5,212 |
| equity | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Net | | 92.14 | | 93.30 | | 91.98 | | 92.74 |
| asset | | | | | | | | |
| value | | | | | | | | |
| per | | | | | | | | |
| share | | | | | | | | |
| (pence) | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------+--------+---------+--------+---------+--------+---------+--------+---------+
The financial statements were approved by the Board of Directors on 7 May 2009
and signed on its behalf by:
Stuart Stradling
Chairman
STATEMENT OF CHANGES IN EQUITY - GROUP
For the year ended 31 March 2009
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | Called | | Share | | Revenue | | Capital | | Total |
| | | | | premium | | reserve | | reserve | | |
| | | up | | | | | | | | |
| | | share | | | | | | | | |
| | | capital | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 1 April 2008 | | 562 | | 4,619 | | 60 | | 3 | | 5,244 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Profit/(Loss) for the | | - | | - | | 186 | | (252) | | (66) |
| period | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 31 March 2009 | | 562 | | 4,619 | | 246 | | (249) | | 5,178 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | Called | | Share | | Revenue | | Capital | | Total |
| | | | | premium | | reserve | | reserve | | |
| | | up | | | | | | | | |
| | | share | | | | | | | | |
| | | capital | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 1 April 2007 | | 562 | | 4,619 | | 54 | | - | | 5,235 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Dividends relating to March | | - | | - | | (34) | | - | | (34) |
| 2007 | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Profit for the period | | - | | - | | 40 | | 3 | | 43 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 31 March 2008 | | 562 | | 4,619 | | 60 | | 3 | | 5,244 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
STATEMENT OF CHANGES IN EQUITY - COMPANY
For the year ended 31 March 2009
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | Called | | Share | | Revenue | | Capital | | Total |
| | | up | | premium | | reserve | | reserve | | |
| | | share | | | | | | | | |
| | | capital | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 1 April 2008 | | 562 | | 4,619 | | 28 | | 3 | | 5,212 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Profit/(loss) for the | | - | | - | | 192 | | (235) | | (43) |
| period | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 31 March 2009 | | 562 | | 4,619 | | 220 | | (232) | | 5,169 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | Called | | Share | | Revenue | | Capital | | Total |
| | | up | | premium | | reserve | | reserve | | |
| | | share | | | | | | | | |
| | | capital | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 1 April 2007 | | 562 | | 4,619 | | 54 | | - | | 5,235 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Dividends | | - | | - | | (34) | | - | | (34) |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| Profit for the period | | - | | - | | 8 | | 3 | | 11 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| At 31 March 2008 | | 562 | | 4,619 | | 28 | | 3 | | 5,212 |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
| | | | | | | | | | | |
+-----------------------------+--+---------+--+---------+--+---------+--+---------+--+---------+
GROUP AND COMPANY CASHFLOW STATEMENT
For the year ended 31 March 2009
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | Group | | Group | | Company | | Company |
+---------------------+------------------+--------+---------+--------+---------+--------+---------+
| | 2009 | | 2008 | | 2009 | | 2008 |
+---------------------+------------------+--------+---------+--------+---------+--------+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Cash | | | | | | | | |
| flows | | | | | | | | |
| from | | | | | | | | |
| operating | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Profit | | 4 | | 53 | | 24 | | 13 |
| before | | | | | | | | |
| tax | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Corporation | | (10) | | (13) | | (2) | | (13) |
| tax paid | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Increase | | (525) | | (239) | | (762) | | (2) |
| in other | | | | | | | | |
| receivables | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Decrease | | 171 | | - | | 171 | | - |
| in fair | | | | | | | | |
| value of | | | | | | | | |
| qualifying | | | | | | | | |
| investments | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Decrease | | 21 | | - | | 21 | | - |
| in | | | | | | | | |
| capitalised | | | | | | | | |
| transaction | | | | | | | | |
| costs | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Loss/on | | 11 | | - | | 11 | | - |
| disposal | | | | | | | | |
| of | | | | | | | | |
| non-qualifying | | | | | | | | |
| investments | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| (Decrease)/increase | | (6) | | 3 | | 1 | | (7) |
| in other payables | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Net | | (334) | | (196) | | (536) | | (9) |
| cash | | | | | | | | |
| inflow | | | | | | | | |
| from | | | | | | | | |
| operating | | | | | | | | |
| Activities | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Cash | | | | | | | | |
| flows | | | | | | | | |
| from | | | | | | | | |
| investing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Acquisition | | (2,597) | | (1,504) | | (2,597) | | (1,504) |
| of | | | | | | | | |
| qualifying | | | | | | | | |
| investments | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Acquisition | | (1,501) | | - | | (1,501) | | (740) |
| of | | | | | | | | |
| non-qualifying | | | | | | | | |
| investments | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Disposal | | 1,490 | | - | | 2,230 | | - |
| of | | | | | | | | |
| non-qualifying | | | | | | | | |
| investments | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Cash | | | | | | | | |
| flows | | | | | | | | |
| from | | | | | | | | |
| financing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Dividend | | - | | (34) | | - | | (34) |
| paid | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Decrease | | (2,942) | | (1,734) | | (2,404) | | (2,287) |
| in cash | | | | | | | | |
| and cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Opening | | 3,507 | | 5,241 | | 2,954 | | 5,241 |
| cash | | | | | | | | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| Closing | | 565 | | 3,507 | | 550 | | 2,954 |
| cash | | | | | | | | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
| | | | | | | | | |
+---------------------+--------+---------+--------+---------+--------+---------+--------+---------+
NOTES TO THE ACCOUNTS
For the year ended 31 March 2009
1. ACCOUNTING POLICIES
The financial statements of the Group and Company have been prepared in
accordance with International Financial Reporting Standards ("IFRS") as adopted
by the EU. These comprise standards and interpretations approved by the
International Accounting Standards Board ("IASB"), together with interpretations
of the International Accounting Standards and Standing Interpretations
Committee approved by the International Accounting Standards Committee ("IASC")
that remain in effect, to the extent that IFRS have been adopted by the European
Union.
As permitted by Section 230 of the Companies Act 1985, an income statement for
the Company has not been presented in the financial statements.
The financial information set out does not constitute statutory accounts for the
purposes of section 240 of the Companies Act 1985. The Company's statutory
accounts for the year ended 31 March 2009 will be delivered to the Registrar of
Companies following the Annual General Meeting. The Company's statutory accounts
for the year ended 31 March 2008, have been delivered to the Registrar of
Companies. The auditors' report on both those accounts was unqualified and does
not contain a statement under Companies Act 1985 sections 237(2) or (3) and or
an emphasis of matter paragraph.
Basis of Preparation
These financial statements have been prepared in accordance with the historical
cost convention modified to include the measurement at fair value of
investments.
The Directors consider that the Group has only one business segment and
disclosure of segmental information is not therefore provided. The Group only
invests in British films and has only one geographical segment as a result.
At the date of approval of this annual report the following Standards and
Interpretations were in issue but not yet mandatory and have not been applied in
the annual report:
* IAS 1 Presentation of Financial Statements (revised 2007) (effective 1 January
2009)
* IAS 23 Borrowing Costs (revised 2007) (effective 1 January 2009)
* Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation
of Financial Statements - Puttable Financial Instruments and Obligations Arising
on Liquidation (effective 1 January 2009)
* IAS 27 Consolidated and Separate Financial Statements (revised 2008) (effective
1 July 2009)
* Amendment to IFRS 2 Share-based Payment - Vesting Conditions and Cancellations
(effective 1 January 2009)
* Amendments to IFRS 1 First-time Adoption of International Financial Reporting
Standards and IAS 27 Consolidated and Separate Financial Statements - Costs of
Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1
January 2009)
* Amendment to IAS 39 Financial Instruments: Recognition and Measurement -
Eligible Hedged Items (effective 1 July 2009)
* IFRS 3 Business Combinations (revised 2008) (effective 1 July 2009)
* IFRS 8 Operating Segments (effective 1 January 2009)
* IFRIC 15 Agreements for the Construction of Real Estate (effective 1 January
2009)
* IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective 1 October
2008)
* IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1 July 2009)
The directors do not anticipate that the adoption of the Standards and
Interpretations will have a material impact on the consolidated financial
statements in the period of initial application.
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
the balance sheet date. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
The accounting policies of the subsidiary companies are consistent with those of
the Group.
Key Estimates and Judgements
The estimates and assumptions that have had the most significant effect on the
carrying value of assets and liabilities in the financial statements are as
follows:
Valuation of unquoted equity investments - The judgements required to determine
the valuation of unquoted equity investments mean that there is a risk of
material adjustment to the carrying amount of assets and liabilities. The method
used to establish carrying values are described in the investments accounting
policy.
Investment Trust SORP
Where presentational guidance set out in the Statement of Recommended Practice
(SORP) for investment trusts, issued by the Association of Investment Companies
in January 2009, is consistent with the requirements of IFRS, the Directors have
sought to prepare the financial statements on a basis compliant with the SORP.
Investments
Investments comprise shares and debt in unquoted companies. Shares and debt are
valued as one investment and are designated at fair value through profit or
loss. The fair value is established using International Private Equity and
Venture Capital Valuation Guidelines (IPEVC). These guidelines set out a number
of permissible valuation methodologies but the two which are most appropriate
given the nature of our investments are as follows:
1) Price of recent investment. Where the investment being valued was itself made
recently, its cost will generally provide a good indication of fair value. It is
generally agreed that this method can apply only for a limited period. In
practice a period of up to one year is often applied as a stop date for such a
valuation. In the case of Limelight VCT investments are generally held at cost
until the film has been produced and delivered and made available for marketing.
This period is approximately one year although this does depend upon the
complexity of the film involved. At this point we gain valuable new information
about the prospects of that film which provide more guidance as to fair value of
our investment.
2) Discounted cash flow. Once a film has been delivered and the marketing
process is underway, we are able to make a calculation of the net present values
of the expected future cashflows arising from the investment based on film
market reports provided by sales agents and distributors. Investments are
recorded at fair value in accordance with the results of these estimated future
cashflows. Longer term net profits of films to which there is a 2% entitlement
are not taken into consideration as these are considered too difficult to
predict with any accuracy at this stage.
As the Group's business is investing in financial assets with a view to
profiting from their total return in the form of increases in fair value,
financial assets are designated at fair value through profit or loss on initial
recognition in accordance with IAS 39. The Group manages and evaluates the
performance of these investments on a fair value basis in accordance with its
investment strategy and information about the investments is provided on this
basis to the Board of Directors.
Investments in subsidiary undertakings are reflected in the Company's accounts
at cost less impairments.
Investment transaction costs are expensed through the profit and loss (capital
column) as incurred.
Investment Income
Income from fixed interest debt securities is recognised on a time-apportionment
basis and, if material, so as to reflect the effective yield on these
securities.
Fee income on film investment transactions is taken to the income statement in
the period contractually due.
Interest income on cash and cash equivalents is recognised in the income
statement using the effective interest rate applicable.
Expenses
Return on investments is primarily revenue in nature and therefore general
expenses have been allocated 100% to revenue. Expenses directly related to
investment transactions have been allocated 100% to capital.
Limelight Investment Management Limited, a wholly owned subsidiary of Limelight
VCT plc is the investment manager of Limelight VCT plc and therefore the Group
income statement does not include the investment management fee charged by
Limelight Investment Management Limited.
Cash and Cash Equivalents
Cash and cash equivalents include cash at bank, short term deposits held with
banks and money market funds which are highly liquid investments, readily
convertible to known amounts of cash and subject to insignificant risk of change
in value.
Taxation
Deferred tax is recognised in full, using the liability method, on all temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is measured using
rates of tax that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profits will be available against which the temporary differences can be
utilised.
Due to the Company's status as a venture capital trust, and the intention to
continue meeting the conditions required to obtain approval in the foreseeable
future, the Company will not provide for deferred tax on any capital gains and
losses arising on the revaluation or disposal of investments.
Current tax is the tax currently payable based on taxable profit for the year.
2. INVESTMENT AND OTHER INCOME
+----------------------------------------------------------+---------+---+---------+
| | Revenue | | Revenue |
+----------------------------------------------------------+---------+---+---------+
| | 2009 | | 2008 |
+----------------------------------------------------------+---------+---+---------+
| | GBP'000 | | GBP'000 |
+----------------------------------------------------------+---------+---+---------+
| Income from investments designated at fair value through | 392 | | 116 |
| profit or loss | | | |
+----------------------------------------------------------+---------+---+---------+
| Interest receivable on cash and cash equivalents | 58 | | 126 |
+----------------------------------------------------------+---------+---+---------+
| Interest on gilts held as assets available for sale | 22 | | 45 |
+----------------------------------------------------------+---------+---+---------+
| | 472 | | 288 |
+----------------------------------------------------------+---------+---+---------+
3. ADMINISTRATIVE EXPENSES
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| | 2009 | 2009 | 20009 | | 2008 | 2008 | 2008 |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Directors remuneration | 11 | - | 11 | | 29 | - | 29 |
| (see page 14) | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Auditors remuneration: | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Fees payable | 13 | - | 13 | | 11 | - | 11 |
| to Company's | | | | | | | |
| auditor for | | | | | | | |
| the audit of | | | | | | | |
| the parent | | | | | | | |
| Company and | | | | | | | |
| consolidated | | | | | | | |
| financial | | | | | | | |
| statements | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Fees payable | | | | | | | |
| to the | | | | | | | |
| Company's | | | | | | | |
| auditor for | | | | | | | |
| other | | | | | | | |
| services: | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Audit of | 6 | - | 6 | | 8 | - | 8 |
| subsidiaries | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Other services | - | - | - | | 12 | - | 12 |
| pursuant to | | | | | | | |
| legislation | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Tax services | 4 | - | 4 | | 5 | - | 5 |
| for the Group | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Legal costs | - | 70 | 70 | | - | - | - |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| Other administrative | 182 | - | 182 | | 173 | - | 173 |
| expenses | | | | | | | |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
| | 216 | 70 | 286 | | 238 | - | 238 |
+----------------------------+---------+---------+---------+--+---------+---------+---------+
Limelight Investment Management Limited, a wholly owned subsidiary of Limelight
VCT plc is the investment manager of Limelight VCT plc and therefore the Group
income statement does not include the investment management fee charged by
Limelight Investment Management Limited. It is replaced on consolidation by the
underlying costs, including payments to BMS for administrative and advisory
services provided to the investment management subsidiary included in note 17.
As at 31 March 2009 the Group and Company had no employees. In addition to the
directors of the Company, one of whom is also a director of the investment
management subsidiary, the Group retained one director of the investment
management subsidiary. Fees payable to this director for the year ended 31 March
2009 totalled GBP10,750 (2008: GBP10,750).
4. DIVIDENDS
No dividends are declared for the financial year ended 31 March 2009 (2008: nil)
as the Company has no distributable profits (note 14).Dividends paid during the
year to 31 March 2008 were in respect of dividends declared for the period to 31
March 2007.
5. TAXATION CHARGE ON ORDINARY ACTIVITIES
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | Revenue | Capital | Total | | Revenue | Capital | Total |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | 2009 | 2009 | 2009 | | 2008 | 2008 | 2008 |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| UK corporation tax at 28% | 70 | - | 70 | | 10 | - | 10 |
| (2008: 20%) | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Analysis of tax charge: | Revenue | Capital | Total | | Revenue | Capital | Total |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | 2009 | 2009 | 2009 | | 2008 | 2008 | 2008 |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Profit on ordinary activities | 256 | (252) | 4 | | 50 | 3 | 53 |
| before taxation | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Tax on profit on ordinary | 72 | (71) | 1 | | 10 | 1 | 11 |
| activities at 28% (2008: 20%) | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Effects of non taxable gains on | - | - | - | | - | (1) | (1) |
| investments | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Disallowed expenses | - | 71 | 71 | | - | - | - |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Effect of small companies | (2) | - | (2) | | - | - | - |
| relief | | | | | | | |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
| Current tax charge | 70 | - | 70 | | 10 | - | 10 |
+---------------------------------+---------+---------+---------+--+---------+---------+---------+
There is no requirement to make a provision for deferred taxation in the current
accounting period.
6. INVESTMENT PORTFOLIO
+-----------------------------------------+-----+---------------+----+---------------+
| Group | | Qualifying | | Non |
| | | Investments | | Qualifying |
| | | 2009 | | Investments |
| | | | | 2009 |
+-----------------------------------------+-----+---------------+----+---------------+
| | | GBP'000 | | GBP'000 |
+-----------------------------------------+-----+---------------+----+---------------+
| Opening valuation at 1 April | | 1,504 | | - |
+-----------------------------------------+-----+---------------+----+---------------+
| | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| Purchases at cost | | 2,597 | | 1,501 |
+-----------------------------------------+-----+---------------+----+---------------+
| Adjustment to write off previously | | (21) | | - |
| capitalised transaction expenses | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| Fair value adjustment | | (171) | | - |
+-----------------------------------------+-----+---------------+----+---------------+
| Disposal proceeds | | - | | (1,490) |
+-----------------------------------------+-----+---------------+----+---------------+
| Loss realised on disposal of | | - | | (11) |
| investments | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| At 31 March 2009 | | 3,909 | | - |
+-----------------------------------------+-----+---------------+----+---------------+
| | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
| | | | | |
+-----------------------------------------+-----+---------------+----+---------------+
The non-qualifying investments acquired and disposed of during the year were
gilts and were accounted for as investments available for sale.
Direct transaction costs of GBP21,000 that were capitalised in the year to 31
March 2008 have been written off in the year to 31 March 2009.
The current valuations of individual qualifying investments are shown in the
table below:
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| | Date of | | Equity | | Debt | | Total | | Fair | | Fair |
| |Investment | | GBP'000 | | GBP'000 | | at | | Value | | Value |
| | | | | | | | cost | |Adjusted | | GBP'000 |
| | | | | | | |GBP'000 | | GBP'000 | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Adulthood Ltd | 26/09/07 | | 65 | | 133 | | 198 | | (36) | | 162 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Abrahams Point Ltd | 09/10/07 | | 60 | | 118 | | 178 | | (59) | | 119 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Parallax (IKYK) Ltd | 29/11/07 | | 75 | | 150 | | 225 | | - | | 225 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Dark North Ltd | 11/02/08 | | 95 | | 160 | | 255 | | (22) | | 233 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Lunar Industries Ltd | 22/02/08 | | 172 | | 300 | | 472 | | - | | 472 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Rounding up Donkeys | 26/02/08 | | 60 | | 95 | | 155 | | (26) | | 129 |
| Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Kasander (Andrea | 11/07/08 | | 125 | | 250 | | 375 | | - | | 375 |
| Untitled) Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Generator (Cherry) | 16/07/08 | | 93 | | 125 | | 218 | | (28) | | 190 |
| Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Mirrorball Films | 11/08/08 | | 139 | | 260 | | 399 | | - | | 399 |
| (Nativity) Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Generator (Ghost) | 15/09/08 | | 100 | | 183 | | 283 | | - | | 283 |
| Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Skellig Productions | 03/10/08 | | 242 | | 430 | | 672 | | - | | 672 |
| Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| From Time to Time | 12/11/08 | | 75 | | 575 | | 650 | | - | | 650 |
| Ltd | | | | | | | | | | | |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
| Total | | | 1,301 | | 2,779 | | 4,080 | | (171) | | 3,909 |
+----------------------+------------+--+---------+--+---------+--+---------+--+----------+--+----------+
The Company no longer has any debt investment in Limelight Film Sales Ltd, a
wholly owned subsidiary of Limelight VCT plc (2008: GBP740,000).
7. EARNINGS PER SHARE
+----------------------------------------------+----------+--+----------+--+-----------+
| | 2009 | | 2009 | | 2009 |
+----------------------------------------------+----------+--+----------+--+-----------+
| | Revenue | | Capital | | Total |
+----------------------------------------------+----------+--+----------+--+-----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------------------------+----------+--+----------+--+-----------+
| Earnings attributable to equity shareholders | 186 | | (252) | | (66) |
+----------------------------------------------+----------+--+----------+--+-----------+
| Earnings per share (basic and diluted) | 3.3p | | (4.5p) | | (1.2p) |
+----------------------------------------------+----------+--+----------+--+-----------+
+----------------------------------------------+----------+--+----------+--+-----------+
| | 2008 | | 2008 | | 2008 |
+----------------------------------------------+----------+--+----------+--+-----------+
| | Revenue | | Capital | | Total |
+----------------------------------------------+----------+--+----------+--+-----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------------------------+----------+--+----------+--+-----------+
| Earnings attributable to equity shareholders | 40 | | 3 | | 43 |
+----------------------------------------------+----------+--+----------+--+-----------+
| Earnings per share (basic and diluted) | 0.71p | | 0.05p | | 0.76p |
+----------------------------------------------+----------+--+----------+--+-----------+
The earnings per share is based on 5,620,002 shares, being the weighted average
number of shares in issue during the period.
8. PROFIT OF THE COMPANY ATTRIBUTABLE TO SHAREHOLDERS
The loss for the period after taxation dealt with in the accounts of the Company
is GBP42,000. (2008: profit of GBP11,000) As permitted by Section 230 of the
Companies Act 1985, no separate income statement for the Company has been
included in these accounts.
9. SHARES IN GROUP UNDERTAKINGS
The Company owns 100% of the Ordinary share capital and voting rights of
Limelight Investment Management Limited, the Group's investment management
company, which is registered and operates in England.
The Company also owns 100% of the Ordinary share capital and voting rights
of Limelight Film Sales Limited, a film sales agency which is registered and
operates in England.
10. TRADE AND OTHER RECEIVABLES
+------------------------------------+---------+--+---------+---+---------+---+---------+
| | Group | | Company | | Group | | Company |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| | 2009 | | 2009 | | 2008 | | 2008 |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| Trade debtors | 47 | | 47 | | 11 | | - |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| Prepayments and accrued income | 379 | | 379 | | 47 | | 37 |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| Sales advances | 372 | | 372 | | 190 | | - |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| Other taxes and social security | 1 | | 1 | | 26 | | - |
+------------------------------------+---------+--+---------+---+---------+---+---------+
| | 799 | | 799 | | 274 | | 37 |
+------------------------------------+---------+--+---------+---+---------+---+---------+
11. CASH AND CASH EQUIVALENTS
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | Group | | Company | | Group | | Company |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | 2009 | | 2009 | | 2008 | | 2008 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Short term bank deposits | - | | - | | 3,388 | | 2,908 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Money market funds | 500 | | 500 | | - | | - |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Cash at bank | 65 | | 50 | | 119 | | 46 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | 565 | | 550 | | 3,507 | | 2,954 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
12. TRADE AND OTHER PAYABLES
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | Group | | Company | | Group | | Company |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | 2009 | | 2009 | | 2008 | | 2008 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Accruals and deferred income | 25 | | 21 | | 30 | | 20 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Other tax and social security | - | | - | | 1 | | - |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| Corporation tax payable | 70 | | 68 | | 10 | | 3 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
| | 95 | | 89 | | 41 | | 23 |
+------------------------------------+---------+---+---------+--+---------+--+----------+
13. SHARE CAPITAL
There were no movements in share capital during the year.
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| | | | | | Group | | Group |
| | | | | | and | | and |
| | | | | | Company | | Company |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| | | | | | 2009 | | 2008 |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| | | | | | GBP'000 | | GBP'000 |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| Authorised | | | | | 2,500 | | 2,500 |
| 25,000,000 ordinary shares of 10p | | | | | | | |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| | | | | | | | |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
| Allotted, called up and fully paid | | | | | 562 | | 562 |
+-------------------------------------+---------+---+-------+--+---------+---+---------+
14. RESERVES
+-------------------------------+----------+--+------------+---+----------+---+----------+
| | Share | | Revenue | | Capital | | Total |
| | premium | | reserve | | reserve | | |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| Group | | | | | | | |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| At 31 March 2008 | 4,619 | | 60 | | 3 | | 4,682 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| Profit for the year | - | | 186 | | (252) | | (66) |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| At 31 March 2009 | 4,619 | | 246 | | (249) | | 4,616 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| | | | | | | | |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| | Share | | Revenue | | Capital | | Total |
| | premium | | reserve | | reserve | | |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| Company | | | | | | | |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| At 31 March 2008 | 4,619 | | 28 | | 3 | | 4,650 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| Profit for the year | - | | 192 | | (235) | | (43) |
+-------------------------------+----------+--+------------+---+----------+---+----------+
| At 31 March 2009 | 4,619 | | 220 | | (232) | | 4,607 |
+-------------------------------+----------+--+------------+---+----------+---+----------+
The share premium reserve is the excess of the consideration received for the
share capital over the nominal value of the share capital issued.
The revenue reserve is the accumulated retained earnings. The capital reserve is
the accumulated capital gains (less any capital losses) arising on investments.
The Company is not an investment company under section 833 of the Companies Act
2006. Its revenue and capital reserves are distributable reserves.
15. NET ASSET VALUE PER SHARE
+-----------------------------------------------+-------------------+---+-----------+
| Group | 2009 | | 2008 |
+-----------------------------------------------+-------------------+---+-----------+
| Net assets attributable to shareholders | 5,178 | | 5,244 |
| (GBP'000) | | | |
+-----------------------------------------------+-------------------+---+-----------+
| Shares in issue (number) | 5,620,002 | | 5,620,002 |
+-----------------------------------------------+-------------------+---+-----------+
| Net asset value per share (pence) | 92.14 | | 93.30 |
+-----------------------------------------------+-------------------+---+-----------+
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
In this note references to the Group also refer to the Company.
The Group's financial instruments comprise cash balances, cash equivalents,
receivables and payables that arise directly from its operations. Through its
film financing investment activity it is also invested in equity and debt
investments in unquoted companies.
The Group has no derivative financial instruments and no financial asset or
liability for which hedge accounting has been used in either year. The Group
classifies its financial assets at either fair value through profit or loss or
loans and receivables.
Investments are valued in accordance with the policy as stated in note 1. It is
the Directors' opinion that the carrying value of trade receivables and trade
payables approximates their fair value due to their short term maturity.
Therefore, the Directors consider all assets to be carried at a valuation which
equates to fair value.
Investments are made in a combination of equity, fixed rate and variable rate
financial instruments so as to comply with venture capital trust legislation and
provide high returns.
Surplus funds are held in cash or cash equivalents until suitable qualifying
investment opportunities arise.
In accordance with IAS 39, all contracts have been reviewed to identify embedded
derivatives that are required to be separately accounted for if they do not meet
certain criteria set out in the standard. No embedded derivatives have been
identified.
The accounting policies for financial instruments have been applied to the items
below:
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| Per Balance Sheet | Group | | Company | | Group | | Company |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| | 2009 | | 2009 | | 2008 | | 2008 |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| Cash and cash equivalents (note 11) | 565 | | 550 | | 3,507 | | 2,954 |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| Trade and other receivables (note 10) | 799 | | 799 | | 274 | | 37 |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| Investments designated at fair value | 3,909 | | 3,909 | | 1,504 | | 2,244 |
| through profit or loss (note 6) | | | | | | | |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
| Trade and other payables (note 12) | (95) | | (89) | | (41) | | (23) |
+---------------------------------------+---------+--+---------+---+---------+--+---------+
The Group's investing activities expose it to various types of risk that are
associated with the financial instruments and markets in which it invests. The
most important types of financial risk to which the Group is exposed are market
risk (equity price and interest rate risk), credit risk and liquidity risk.
There is no exposure to currency risk. The nature and extent of the financial
instruments outstanding at the balance sheet date and the risk management
policies employed by the Group are discussed below.
Market Risk
The Group invests in British film production companies, the shares of which are
not traded on a stock market. Consequently, exposure to market factors in
relation to investments stems from market based measures that may be used to
value unlisted investments.
The market also defines the value at which investments may be realised. Returns
are therefore maximised when investments are bought or sold at appropriate times
in the economic cycle.
Risk of a fall in investment value is mitigated to some extent by the fact that
film tax credits are available to investee companies. Future upside cannot
reasonably be forecast as it is dependent on the commercial success of the
films.
Equity Price Risk
Market price risk arises from uncertainty about the future prices of financial
instruments held in accordance with the Groups investment objectives. It
represents the potential loss that the Group might suffer through holding market
positions in the face of market movements. In addition, the ability of the
Company to purchase or sell investments is constrained by requirements set down
for VCTs.
To manage price risk arising from investments in equity securities, the Group
and Company diversifies its portfolio and monitors the status of all investments
on an ongoing basis. Diversification of the portfolio is managed in accordance
with the limits set for VCTs. Exposure to any one stock is limited to 15% of the
total cost of investments.
The largest single concentration of risk relates to the Company's investment in
Skellig Productions Ltd which currently constitutes 13% of the net assets
attributable to the Company's shareholders. The average investment is 6% of the
value of net assets. Full information on the portfolio is provided in note 6.
The Group is not exposed to commodity price risk.
Interest Rate Risk
Group investments include GBP2,779,000 of loan stock in unquoted companies. The
loan stock is at fixed rates to guard against fluctuations in interest rates.
The loan stock had a weighted average interest rate across the period of 17%
(2008: 19%).
The Group has some exposure to interest rates as a result of interest earned on
bank deposits. Compliance with the rules governing the investment income of VCTs
has meant that the Company has not always been able to maximise potential bank
interest earnings during the period.
Based on the Group's average cash balances during the year, a 1%
increase/decrease in interest rates would have increased/decreased net assets
attributable to shareholders by GBP20,000.
Other financial assets, being prepayments and accrued income and other financial
liabilities, being accrued expenses, attract no interest and have an expected
maturity date of less than 1 year.
Credit Risk
Credit risk is the risk that a counterparty to a financial instrument will fail
to discharge an obligation or commitment that it has entered into with the
Group. The Group's financial assets that are exposed to credit risk are
summarised as follows:
+-----------------------------------------------+-------------------+---+-----------+
| Group | 2009 | | 2008 |
+-----------------------------------------------+-------------------+---+-----------+
| | GBP'000s | | GBP'000s |
+-----------------------------------------------+-------------------+---+-----------+
| Cash and Cash Equivalents | 565 | | 3,507 |
+-----------------------------------------------+-------------------+---+-----------+
| Investment in Loan Stock | 2,779 | | 956 |
+-----------------------------------------------+-------------------+---+-----------+
| Trade and Other Receivables | 799 | | 274 |
+-----------------------------------------------+-------------------+---+-----------+
Cash is held at Barclays Bank which has a Standard and Poors rating of AA- and a
Moody's rating of AA3.
Cash Equivalents are investments in money market funds which have a Moody's
rating of AAA/MR1+.
Investments in loan stock comprise a fundamental part of the Group's venture
capital investments and the Investment Manager has in place a thorough
monitoring procedure in respect of counterparty risk which is described in more
detail on page 9. These procedures also cover accrued interest, fees and sales
advances which comprise the majority (94%) of Trade and Other Receivables.
Liquidity Risk
The Company invests in financial assets to comply with the VCT legislation and
provide capital growth for shareholders. Unquoted venture capital investments
normally take a number of years to mature and are, by their nature, illiquid.
Therefore, realised capital gains on these investments are a medium-to-long
term aim. As a result, the Company may not be able to liquidate quickly some of
its investments in these instruments at an amount close to their fair value in
order to meet its liquidity requirements, or to respond to specific events such
as deterioration in the creditworthiness of any particular issuer.
The Company also needs to retain enough liquid resources to support the
financing needs of its investment business and to pay accounts payable and
accrued expenses.
At 31 March 2009 11% of the Company's assets and 11% of the Group's assets are
in the form of liquid cash or cash equivalents (2008: 57% of the Company and 67%
of the Group).
The Company invests its surplus funds in highly liquid money market funds whilst
waiting for suitable qualifying investment opportunities to arise.
Due to the nature of the investments, loan stock repayments may occur during the
term of the investment. These are not usually at scheduled or fixed dates but
the investee Company has the option of early repayment at any time.
The Company's liquidity risk is managed on an ongoing basis by the Investment
Manager in accordance with policies and procedures in place. The cash
requirements of the Company in respect of each investment are assessed regularly
as required.
17. RELATED PARTY TRANSACTIONS
The Group uses companies controlled by BMS Finance Ltd, a Company of which the
chairman is a non-executive director, to provide administrative and advisory
services.
The Company uses Thurloe and Lyndhurst LLP, a limited liability partnership in
which a director is a member, to be its solicitor and legal advisor in respect
of film investments.
During the period the Group has carried out a number of transactions with the
above related parties in the normal course of business and on an arms length
basis. These transactions are shown in the table below.
The following points should also be noted:
Fees paid to BMS Finance Ltd in the prior period to 31 March 2008 reflect a half
year as they were appointed in October 2007.
In the prior period to 31 March 2008, the Company reimbursed some publicity
expenses incurred on its behalf by Park Place Law LLP, a limited liability
partnership of which a director of the Company is a member. No payments have
been made to Park Place Law LLP in the current Reporting Period.
The Company uses Park Place Financial Strategy LLP, a limited liability
partnership in which a director of the Company is a member, as its promoter. All
fees due in the current Reporting Period have been waived.
+------------------------------------------------------+-----------+--+-----------+
| | 2009 | | 2008 |
+------------------------------------------------------+-----------+--+-----------+
| | GBP'000 | | GBP'000 |
+------------------------------------------------------+-----------+--+-----------+
| BMS Finance Ltd & Group companies | | | |
+------------------------------------------------------+-----------+--+-----------+
| Administrative and advisory services | 128 | | 64 |
+------------------------------------------------------+-----------+--+-----------+
| Thurloe & Lyndhurst | | | |
+------------------------------------------------------+-----------+--+-----------+
| Legal services in respect of film investments | 53 | | 26 |
+------------------------------------------------------+-----------+--+-----------+
| Park Place Law | | | |
+------------------------------------------------------+-----------+--+-----------+
| Reimbursement of publicity expenses | - | | 4 |
+------------------------------------------------------+-----------+--+-----------+
| Park Place Financial Strategy LLP | | | |
+------------------------------------------------------+-----------+--+-----------+
| Annual promoters fees | - | | 18 |
+------------------------------------------------------+-----------+--+-----------+
The Company has also carried out transactions with subsidiary companies as
follows:
Limelight Investment Management Limited is paid a management fee of GBP54,000
per annum for investment management services.
During the Reporting Period a loan was in place with Limelight Film Sales Ltd to
provide working capital for that subsidiary. This loan had a fixed interest rate
of 5% and interest of GBP34,000 was paid during the year. The loan was fully
repaid prior to year end.
18. CAPITAL MANAGEMENT
The Group's capital management objectives are:
* To safeguard its ability to continue as a going concern so that it can continue
to provide returns for shareholders.
* To ensure sufficient liquid resources are available to meet the funding
requirements of its investments and to fund new investments where identified.
The Group has no external debt, consequently all capital is represented by the
value of share capital, distributable and other reserves. Total shareholder
equity at 31 March 2009 was GBP5,178,000 (2008: GBP5,244,000).
In order to maintain or adjust its capital structure the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue
new shares or sell assets.
There have been no changes to the capital management objectives or the capital
structure of the business from the previous period.
The Group is subject to the following externally imposed capital requirements:
* As a public Company Limelight VCT plc must have a minimum of GBP50,000 share
capital.
* The level of dividends may be influenced by the need to comply with VCT
legislation which states that no more than 15% of income from shares and
securities may be retained.
19. CONTINGENCIES, GUARANTEES AND FINANCIAL COMMITMENTS
The Group has no contingencies, guarantees or financial commitments as at the
year end.
LIMELIGHT VCT PLC
Notice is hereby given that the second Annual General Meeting of Limelight VCT
PLC (the Company) will be held at 11.00 am on 10 September 2009 at the offices
of BMS Finance Ltd, First Floor, 41-44 Great Queen Street, LondonWC2B 5AD for
the following purposes:
To consider and, if thought fit, pass resolutions 1 to 4 as ordinary
resolutions.
1. Annual Report and Accounts
To receive the audited financial statements for the period ended 31 March 2009
together with the reports of the Directors and the auditors therein.
2. Directors' Remuneration Report
To approve the Directors' remuneration report contained in the audited financial
statements.
3. Re-election of Directors
To re-elect Michael Henry who is retiring in accordance with the Articles of
Association:
A short biography of Mr Henry is given on page 5 of the annual report.
4. Re-appointment of Auditor
To re-appoint Grant Thornton UK LLP, as auditor and authorise the Directors to
agree the auditor's remuneration.
BY ORDER OF THE BOARD
+---------------------------------------------------------+---------------------+
| Cargil Management Services Limited | Registered Office |
| Secretary | 27/28 Eastcastle |
| 7 May 2009 | Street |
| | London |
| | W1W 8DH |
| | |
+---------------------------------------------------------+---------------------+
Notes:
1. A member entitled to attend and vote at the meeting is entitled to
appoint a proxy or proxies to attend, and to vote in his /her stead. A proxy
need not be a member of the Company. Completion of a form of proxy does not
preclude a member from attending the meeting and voting thereat.
2. To appoint more than one proxy you may photocopy this proxy form.
Please indicate the proxy holder's name and the number of shares in relation to
which they are authorised to act as your proxy (which, in aggregate, should not
exceed the number of shares held by you). Please also indicate if the proxy
instruction is one of the multiple instructions being given. All forms must be
signed and should be returned together in the same envelope.
3. Any form of proxy and power of attorney or other authority under which
it is signed, or notarially certified or office copy of such power or authority,
in order to be valid, must reach the Company's Registrars, Share Registrars Ltd,
Craven House, West Street, Farnham, Surrey GU9 7EN not later than 11am on 8
September 2009 before the time appointed for the meeting.
4. Copies of all Directors' service contracts of more that one year's
duration will be available for inspection at the Registered Office during usual
business hours until the date of the Annual General Meeting and at the place of
the meeting for at least 15 minutes before the meeting and until the conclusion
of the meeting.
5. In accordance to Regulation 41 of the Uncertificated Securities
Regulations 2001, only those members entered on the Company's register of
members not later than at 6:00 pm on 8 September 2009 or, if the meeting is
adjourned, shareholders entered on the Company's register of member not later
than 6:00 pm two days before the time fixed for the adjourned meeting, shall be
entitled to attend and vote at the meeting or any adjournment thereof.
6. In order to facilitate voting by Corporate Representative at the AGM,
arrangements will be put in place at the AGM so that (i) if a corporate
shareholder has appointed the chairman of the meeting as its corporate
representative to vote on a poll in accordance with the directions of all of the
other corporate representatives for that shareholder at the meeting, then on a
poll those corporate representative will give voting directions to the chairman
and the chairman will vote (or withhold a vote) as corporate representative in
accordance with those directions; and (ii) if more than one corporate
representative for the same corporate shareholder attends the meeting but the
corporate shareholder has not appointed the chairman of the meeting as its
corporate representative, a designated corporate representative will be
nominated, from those corporate representatives who attend, who will vote on a
poll and the corporate representatives will give voting directions to the
designated corporate representative. Corporate shareholders are referred to the
guidance issued by the Institute of Chartered Secretaries and Administrators on
proxies and corporate representatives (www.icsa.org.uk) for further details of
this procedure. The guidance includes a sample form of appointment letter if the
chairman is being appointed as described in (i) above.
Copies of the documents listed below will be submitted to the UK Listing
Authority and will be available for inspection in the UK Listing Authority's
Document Viewing Facility which is situated at:
The Financial Services Authority
25 The North Colonnade,
Canary Wharf
London E14 5HS
Documents:
· Report and Accounts for the year ended 31 March 2009
· Chairman's Explanatory Letter and Notice of Annual General Meeting
Enquiries to:
Michael Henry, Limelight VCT PLC
+44 (0)20 7478 9144
Roland Cornish, Beaumont Cornish Limited
+44 (0)20 7628 3396
This information is provided by RNS
The company news service from the London Stock Exchange
END
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