TIDMIMAC
RNS Number : 1040U
Ingenious Media Active Capital Ltd
16 December 2011
16 December 2011
INGENIOUS MEDIA ACTIVE CAPITAL LIMITED
Unaudited half-yearly results for the period 1 April 2011 to 30
September 2011
Ingenious Media Active Capital Limited today announces its
half-yearly results for the period from 1 April 2011 to 30
September 2011.
CHAIRMAN'S STATEMENT
I am pleased to present the Half-Yearly Report and Accounts in
respect of Ingenious Media Active Capital Limited (the Company) for
the six month period ended 30 September 2011.
During this period, in line with the Company's investment
policy, the portfolio has been actively managed, whilst
opportunities for exit of the underlying companies are kept under
review.
Investments
The Manager is not considering any new investments, only limited
follow-on investments into existing portfolio companies where
appropriate.
The Company's net asset value per share as at 30 September 2011
was 22.90 pence (including 4.89 pence of cash) compared to 26.41
pence (including 4.55 pence of cash) at 30 September 2010 and 25.88
pence (including 3.99 pence of cash) at 31 March 2011.
A description of the market and the Company's investment
activities to date can be found in the Manager's Review which
follows this statement.
Realisation of Investments
Outside Line Limited was sold to its management team on 6 April
2011. In addition, IMAC's holding in Two Way Media Holdings Limited
was sold to its management team on 28 October 2011.
Mike Luckwell
Chairman
15 December 2011
MANAGER'S REVIEW
Market Review and Prospects
Market conditions remain uncertain as austerity and tax rises
impact consumer confidence. The Manager is cautious as to the
future performance of the underlying investee companies, which may
be impacted by these conditions worsening and/or a return to a
recessionary economic environment.
Investment Activity
As mentioned in the Chairman's Statement, the Manager is no
longer making investments in new investee companies, but will
continue to manage the existing investee companies including making
additional investments in these companies where appropriate.
Investments and Committed Funds
It should be noted that all outstanding funding commitments are
at the discretion of the Company and the Manager.
Portfolio Management
This Manager's Review contains only subsidiaries in which the
Company has a controlling interest. There are no further undrawn
commitments to other investments held by the Company.
Investments and Committed Funds
Whizz Kid Entertainment Limited
Whizz Kid Entertainment Limited is an independent TV production
company formed by Malcolm Gerrie, former Chief Executive and
co-founder of Initial, which was sold in 1992 to what became
Endemol. Whizz Kid Entertainment Limited creates and produces
audio-visual content across a range of genres including music,
events and entertainment. The company is able to exploit
opportunities in digital content through its digital arm, Tough
Cookie, and in advertiser--funded content through its investment in
Precious Media with Peter Christiansen.
The company continues to perform well, with successful and
highly-rated productions of the third series of Let's Dance for
BBC1 and second series of Being N-Dubz completed. Recent
assignments include live coverage of Camp Bestival and Bestival in
3D.
Whizz Kid Entertainment Limited continues to maintain a strong
pipeline of projects in development across music, events and
entertainment.
Digital Rights Group Limited
Digital Rights Group Limited (DRG) is a TV sales and rights
distribution group which provides TV producers with international
distribution for their rights and programmes, independently of the
major broadcasters or other TV--producer-owned distributors. DRG is
now the largest independent TV distributor in the UK, having
acquired Portman Film & Television Group, Zeal Entertainment
Limited, i-Rights Limited, iD Distribution and Channel 4
International.
Market conditions have been steadily improving, with
broadcasters' increasing budgets feeding through into higher
programming sales. DRG has been successful in acquiring the rights
to leading programming including Doc Martin, Collision, Underbelly
and Sea Patrol.
The management team is continuing to work on operational
synergies within the business and is also examining new investment
opportunities in both TV and digital rights.
Two Way Media Holdings Limited
Two Way Media Limited, the trading company, is a UK-based
interactive television company which has transitioned itself from
being a supplier of red-button technology and professional services
to UK cable operators and channels to being a multiplatform
interactive TV production and distribution company.
Subsequent to IMAC's investment, Two Way Media Limited
established a cross-platform gambling production company with the
delivery of the Challenge Jackpot gambling channel on TV/online in
partnership with Virgin Media. This joint venture was sold to
NetPlay TV plc in April 2009.
Due to uncertainty regarding the future red-button revenue of
Two Way Media Holdings Limited, a strategic review was undertaken
by the Manager, resulting in a decision to seek a sale of the
business.
IMAC's holding in Two Way Media Holdings Limited was sold to its
management team on 28 October 2011.
Brand Events Holdings Limited
A leader in the consumer exhibitions market, Brand Events
Limited, the trading company, has established a strong reputation
within the UK for successfully launching new consumer shows. The
company's established operating model borrows skills and techniques
from the entertainment, media and leisure sectors and combines them
with traditional exhibition skills. The company has now established
two key shows: the Taste Festivals, food festivals celebrating
different foods; and Top Gear Live, the Top Gear branded live
motoring theatre format. An international network has been built
allowing Brand Events Limited to license or run the shows in
Australia, South Africa, The Netherlands, New Zealand, Ireland and
Dubai. Visitors to Taste Festivals have now reached the 1 million
visitor milestone, with Brand Events recently buying out their JV
partner in Taste Festivals.
A further working capital injection of GBP2.06 million was
agreed with management in order to expand the Top Gear Live shows
into new territories such as Scandinavia and other major cities in
Australasia, as well as creating a car festival format. A new Golf
Live show was launched in May 2010 with joint venture partner IMG,
adding to the portfolio of shows that can then be licensed
internationally through Brand Events Limited's network. Brand
Events also launched Masterchef Live in Australia.
brandRapport Group Limited (formerly QobliQ Limited)
brandRapport Group Limited provides sponsorship and marketing
services to clients in the UK and internationally.
In December 2007, brandRapport Group Limited completed its first
acquisition of brandRapport Limited, an independent sponsorship
agency in the UK. In May 2008, IMAC invested a further GBP2.3
million in brandRapport Group Limited allowing the company to
acquire Paris--based experiential marketing agency, Nouveau Jour
SAS, and SponsorClick France SAS, an independent sponsorship
marketing consultancy based in Paris (which have subsequently gone
into voluntary liquidation in August 2011). IMAC invested an
additional GBP2.8 million in November 2008 in order for the company
to acquire Arena International Limited and Arena Sports Marketing
Limited together (Arena), a UK sponsorship consultancy specialising
in football. The acquisition of Arena, re-branded brandRapport
Arena, extended brandRapport's already impressive track record into
football partnerships through its work with the Barclaycard
Premiership and FA Cup (E.ON). A further investment of GBP0.5
million was made in May 2010 to fund the acquisition of Fulford PR
in Singapore, which focuses on consumer and sports PR in the
region.
The business currently has a presence specialising in sports
sponsorship and consumer PR in the UK, Hong Kong and Singapore.
Review Centre Limited
Review Centre Limited (www.reviewcentre.com), a leading
consumer-generated review site, was acquired in June 2008 by IMAC
in a management buy-in (MBI) deal.
The MBI team was led by Nick Hynes as non-executive chairman and
Glen Collins as Chief Executive Officer. Nick Hynes was previously
Chief Executive Officer of The Search Works, the search engine
marketing provider sold to Tradedoubler in July 2007 for GBP56
million, and prior to that headed Overture Europe, Yahoo's search
advertising business. Glen Collins is a career online marketer who
founded and ran pioneering online marketing and web development
agency Digital Outlook, until exiting the business in 2006.
Review Centre was established in 1999 to allow internet users to
post their product reviews on online bulletin boards. It now
provides reviews across a very broad base of different products and
services, encompassing automotive, electrical, entertainment,
finance, lifestyle, sport and travel.
Since investment, the MBI team has pressed ahead with
redesigning the website and enhancing the user experience for both
writing and reading reviews. The new site build has allowed Review
Centre to generate several new revenue streams. These include price
comparison, voucher codes and cash back revenues, display
advertising as well as the ability to deliver more targeted
commercial deals.
Recent changes to Google's algorithms and search engines have
had a negative impact on both traffic to the site and therefore
revenues. This has led to a concerted plan by management to reduce
overheads where possible, and bring the business back to a
break-even position.
Ingenious Ventures L.P.
IMAC's investment in Cream is via its Limited Partnership
interest in the Ingenious Ventures L.P. (IVLP) fund. This interest
was purchased from UBS (Jersey) Limited in August 2008. Ingenious
Media Limited remains the other (minority) partner in the Limited
Partnership. No monitoring fees are charged by the Manager to IMAC
for management of its interest in IVLP.
Cream Holdings Limited
Cream Holdings Limited is a live events company based around the
Cream dance brand and is run by James Barton. Its main activities
are festivals in the UK and licensed shows overseas. The company
also operates club nights in both Liverpool and Ibiza and a
compilation record label.
Its best known event, Creamfields, is held in August every year.
The 2011 festival was again a success, selling out in advance of
the event. The club nights business in Ibiza also enjoyed a strong
season this summer.
Ingenious Ventures
15 December2011
Condensed Company Statement of Comprehensive Income
for the six months ended 30 September 2011
Six months ended 30 September 2010
Six months ended 30 September 2011 (unaudited) (unaudited) Year ended 31 March 2011 (audited)
Note GBP '000 GBP '000 GBP '000
=================== ===== =============================================== =================================== ===================================
Revenue 1f 117 145 292
Other operating
expenses 1g (320) (643) (689)
Investment revenue 1f 25 97 113
Fair value loss on
investments in
subsidiaries 1d (4,032) - (343)
Loss on investments
at fair value
through profit or 1d,
loss 12 - (853) (853)
Gain/(loss) on
disposal of
investments 72 (353) (438)
Investment
management fees 20 (179) (209) (405)
Loss before
taxation (4,317) (1,816) (2,323)
Income tax expense 3 - - -
Loss for the
period/year (4,317) (1,816) (2,323)
=================== ===== =============================================== =================================== ===================================
Loss per share
(basic and diluted
pence per share) 4 (3.02) (1.27) (1.62)
=================== ===== =============================================== =================================== ===================================
All income is attributable to the Ordinary Shareholders of the
Company unless otherwise stated.
All revenue and expenses are derived from continuing operations
unless otherwise stated.
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2011
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2011 (unaudited) 2010 (unaudited) 2011 (audited)
Note GBP '000 GBP '000 GBP '000
====================================== ======= ================== ================== ================
Continuing operations
Revenue 1f 27,716 21,526 51,190
Cost of sales 1g (20,159) (13,459) (35,838)
Other operating expenses 1g (9,215) (10,058) (18,443)
Investment revenue 1f 218 97 141
Share of results from associates (227) - 1,392
Profit/(loss) on investments
at fair value through profit
or loss 1d, 12 3,491 (853) (853)
Loss on disposal of investment 12 - (347) (432)
Impairment of goodwill 5 (5,763) - -
Impairment of intangible assets 6 (240) (75) (75)
Investment management fees 20 (179) (209) (405)
Profit on disposal of a foreign 610 - -
operation
Finance costs (318) (319) (637)
Loss before taxation (4,066) (3,697) (3,960)
Income tax expense 3 (264) (281) (1,242)
Loss for the period/year from
continuing operations (4,330) (3,978) (5,202)
Discontinued operations
Profit for the period/year from
discontinued operations 10 324 - 289
Non-controlling interests 19 470 1,551 1,065
====================================== ======= ================== ================== ================
Loss for the period/year attributable
to the owners of the parent (3,536) (2,427) (3,848)
Loss per share on continuing
operations
(basic and diluted pence per
share) 4 (2.69) (1.70) (2.69)
Earnings per share on discontinued
operations
(basic and diluted pence per
share) 4 0.22 - -
Loss per share
(basic and diluted pence per
share) 4 (2.47) (1.70) (2.69)
====================================== ======= ================== ================== ================
All income is attributable to the Ordinary Shareholders of the
Company unless otherwise stated.
All revenue and expenses are derived from continuing operations
unless otherwise stated.
Condensed Company Statement of Financial Position
as at 30 September 2011
30 September 30 September 31 March
2011 (unaudited) 2010 (unaudited) 2011 (audited)
Note GBP '000 GBP '000 GBP '000
Non current assets
Investment in subsidiaries 7 25,755 31,284 31,438
Financial assets at fair value
through profit or loss 12 - 256 -
25,755 31,540 31,438
Current assets
Trade and other receivables 188 157 141
Cash and cash equivalents 13 7,003 6,519 5,718
7,191 6,676 5,859
Current liabilities
Trade and other payables (158) (406) (246)
Net current assets 7,033 6,270 5,613
=================================== ===== ================== ================== ================
Net assets 32,788 37,810 37,051
=================================== ===== ================== ================== ================
Equity
Share premium account 17 20,860 21,166 20,860
Distributable reserve 70,663 70,663 70,663
Shares held in treasury 16 (515) (515) (515)
Retained earnings (58,220) (53,504) (53,957)
=================================== ===== ================== ================== ================
Total equity 32,788 37,810 37,051
=================================== ===== ================== ================== ================
Net asset value (basic and diluted
pence per share) 18 22.90 26.41 25.88
=================================== ===== ================== ================== ================
The financial statements were approved by the Board and
authorised for issue on 15 December 2011.
Signed on behalf of the Board:
David Jeffreys Serena Tremlett
Director Director
Condensed Consolidated Statement of Financial Position
as at 30 September 2011
30 September 30 September 31 March
2011 (unaudited) 2010 (unaudited) 2011 (audited)
Note GBP '000 GBP '000 GBP '000
Non current assets
Goodwill 5 10,669 14,842 15,090
Other intangible assets 6 5,554 8,058 7,382
Fixtures, fittings and equipment 417 568 393
Financial assets at fair value
through profit or loss 12 6,920 4,062 3,806
Investments in associates (482) (13) (147)
23,078 27,517 26,524
Current assets
Inventories 1l 2,227 1,329 1,239
Trade and other receivables 26,891 24,877 21,676
Cash and cash equivalents 13 15,352 14,668 17,497
Assets classified as held for
sale - - 2,103
44,470 40,874 42,515
Current liabilities
Trade and other payables (34,894) (31,966) (31,971)
Short term third party loans 14 (1,332) - -
Current tax liabilities (144) (428) (287)
Liabilities associated with assets
classified as held for sale - - (641)
(36,370) (32,394) (32,899)
=================================== ===== ================== ================== ================
Net current assets 8,100 8,480 9,616
Non current liabilities
Long term third party loans 14 (3,020) (2,777) (2,895)
Deferred tax - (5) -
Deferred consideration (3,527) (3,187) (4,366)
Net assets 24,631 30,028 28,879
=================================== ===== ================== ================== ================
Equity
Share premium account 17 20,860 21,166 20,860
Distributable reserve 70,663 70,663 70,663
Shares held in treasury 16 (515) (515) (515)
Retained earnings (68,215) (63,319) (65,148)
Foreign currency translation
reserve 92 (71) 58
=================================== ===== ================== ================== ================
Equity attributable to equity
holders of the parent 22,885 27,924 25,918
Amounts recognised in equity
relating to assets held for sale - - 462
Non-controlling interests 19 1,746 2,104 2,499
Total equity 24,631 30,028 28,879
=================================== ===== ================== ================== ================
Net asset value (basic and diluted
pence per share) 18 15.98 19.50 18.10
=================================== ===== ================== ================== ================
The financial statements were approved by the Board and
authorised for issue on 15 December 2011.
Signed on behalf of the Board:
David Jeffreys Serena Tremlett
Director Director
Condensed Company Statement of Changes in Equity
for the six months ended 30 September 2011 (unaudited)
Share
premium Shares
account Distribut-able held Retained Total
GBP reserves in treasury earnings equity
Note '000 GBP '000 GBP '000 GBP '000 GBP '000
-------------------------------- ----- --------- --------------- ------------- ---------- ----------
Balance at 1 April 2011 20,860 70,663 (515) (53,957) 37,051
Recognition in respect of
share-based payments 1s - - - 54 54
Retained losses for the period - - - (4,317) (4,317)
Balance at 30 September 2011 20,860 70,663 (515) (58,220) 32,788
-------------------------------- ----- --------- --------------- ------------- ---------- ----------
for the six months ended 30 September 2010 (unaudited)
Share
premium Shares Retained
account Distribut-able held earnings Total
GBP reserves in treasury GBP equity
Note '000 GBP '000 GBP '000 '000 GBP '000
-------------------------------- ----- --------- --------------- ------------- ---------- ----------
Balance at 1 April 2010 71,275 70,663 (515) (51,742) 89,681
Capital distribution 17 (50,109) - - - (50,109)
Recognition in respect of
share-based payments 1s - - - 54 54
Retained losses for the period - - - (1,816) (1,816)
Balance at 30 September 2010 21,166 70,663 (515) (53,504) 37,810
-------------------------------- ----- --------- --------------- ------------- ---------- ----------
for the year ended 31 March 2011 (audited)
Share
premium Shares Retained
account Distribut-able held earnings Total
GBP reserves in treasury GBP equity
Note '000 GBP '000 GBP '000 '000 GBP '000
------------------------------ ----- --------- --------------- ------------- ---------- ----------
Balance at 1 April 2010 71,275 70,663 (515) (51,742) 89,681
Capital distribution 17 (50,109) - - - (50,109)
Capital distribution costs 17 (306) - - - (306)
Recognition in respect of
share-based payments 1s - - - 108 108
Retained losses for the year - - - (2,323) (2,323)
Balance at 31 March 2011 20,860 70,663 (515) (53,957) 37,051
------------------------------ ----- --------- --------------- ------------- ---------- ----------
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 September 2011 (unaudited)
Shares Assets Non-
Share held classified con-
premium Distribu-table Transla-tion in Retained as held trolling Total
account reserves reserve treasury earnings for sale interest equity
GBP GBP GBP GBP GBP GBP '000 GBP GBP
Note '000 '000 '000 '000 '000 '000 '000
---------------------- ----- -------- --------------- ------------- --------- --------- ----------- --------- --------
Balance at 1 April
2011 20,860 70,663 58 (515) (65,148) 462 2,499 28,879
Recognition in
respect of
share-based
payments 1s - - - - 54 - - 54
Other reserve
movements - - 34 - (47) - - (13)
Retained losses
for the period - - - - (3,536) - (470) (4,006)
Shares issued to
non-controlling
interest 19 - - - - - - 215 215
Amounts in equity
relating to assets
previously
classified
as held for sale - - - - 462 (462) - -
Acquisition/disposal
of subsidiaries 19 - - - - - - (498) (498)
Balance at 30 September
2011 20,860 70,663 92 (515) (68,215) - 1,746 24,631
----------------------------- -------- --------------- ------------- --------- --------- ----------- --------- --------
for the six months ended 30 September 2010 (unaudited)
Shares Assets Non-
held classified con-
Share Distribu-table Transla-tion in Retained as held trolling
premium reserves reserve treasury earnings for sale interest Total
account GBP GBP GBP GBP GBP '000 GBP equity
Note GBP '000 '000 '000 '000 '000 '000 GBP '000
---------------- ----- --------- --------------- ------------- --------- --------- ----------- --------- ---------
Balance at 1
April
2010 71,275 70,663 39 (515) (60,812) - 3,668 84,318
Capital
distribution 17 (50,109) - - - - - - (50,109)
Recognition in
respect of
share-based
payments 1s - - - - 54 - - 54
Other reserve
movements - - (110) - (134) - 33 (211)
Dividends - - - - - - (46) (46)
Retained losses
for the period - - - - (2,427) - (1,551) (3,978)
Balance at 30
September
2010 21,166 70,663 (71) (515) (63,319) - 2,104 30,028
----------------------- --------- --------------- ------------- --------- --------- ----------- --------- ---------
for the year ended 31 March 2011 (audited)
Shares Assets Non-
held classified con-
Share Distribu-table Transla-tion in Retained as held trolling
premium reserves reserve treasury earnings for sale interest Total
account GBP GBP GBP GBP GBP '000 GBP equity
Note GBP '000 '000 '000 '000 '000 '000 GBP '000
---------------- ----- --------- --------------- ------------- --------- --------- ----------- --------- ---------
Balance at 1
April
2010 71,275 70,663 39 (515) (60,812) - 3,668 84,318
Capital
distribution 17 (50,109) - - - - - - (50,109)
Capital
distribution
costs 17 (306) - - - - - - (306)
Recognition in
respect of
share-based
payments 1s - - - - 108 - - 108
Other reserve
movements - - 19 - (134) - 33 (82)
Dividends - - - - - - (137) (137)
Retained losses
for the year - - - - (3,848) - (1,065) (4,913)
Amounts in
equity
relating to
assets
classified as
held
for sale - - - - (462) 462 - -
Balance at 31 March
2011 20,860 70,663 58 (515) (65,148) 462 2,499 28,879
----------------------- --------- --------------- ------------- --------- --------- ----------- --------- ---------
Condensed Company Statement of Cash Flows
for the six months ended 30 September 2011
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2011 (unaudited) 2010 (unaudited) 2011 (audited)
Note GBP '000 GBP '000 GBP '000
======================================== ===== ================== ================== ================
Net cash flow from operating activities (438) (401) (570)
======================================== ===== ================== ================== ================
Investing activities
Acquisition of subsidiary undertakings 7 - (500) (997)
Sale of investment 7 1,723 1,761 1,761
Sale of investment at fair value
through profit and loss 12 - - 171
Net cash flow used in investing
activities 1,723 1,261 935
======================================== ===== ================== ================== ================
Financing activities
Capital distribution 17 - (50,109) (50,109)
Capital distribution costs 17 - - (306)
Net cash flow used in financing
activities - (50,109) (50,415)
======================================== ===== ================== ================== ================
Net increase/(decrease) in cash
and cash equivalents 1,285 (49,249) (50,050)
======================================== ===== ================== ================== ================
Cash and cash equivalents at beginning
of period/year 5,718 55,768 55,768
======================================== ===== ================== ================== ================
Cash and cash equivalents at end
of period/year 7,003 6,519 5,718
======================================== ===== ================== ================== ================
Cash flow from operating activities
Loss before taxation (4,317) (1,816) (2,323)
Fair value loss on financial assets 4,032 853 1,196
(Profit)/loss on disposal of investment (72) 353 438
Recognition of share based payment 54 54 108
(Increase)/decrease in amounts
receivable (47) 74 90
(Decrease)/increase in amounts
payable (88) 81 (79)
Net cash flow from operating activities (438) (401) (570)
======================================== ===== ================== ================== ================
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 September 2011
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2011 (unaudited) 2010 (unaudited) 2011 (audited)
Note GBP '000 GBP '000 GBP '000
======================================== ===== ================== ================== ================
Net cash flow from operating activities (5,446) (6,763) (2,834)
======================================== ===== ================== ================== ================
Investing activities
Acquisition of subsidiary undertakings 8 534 1,388 1,203
Sale of investment 12 377 1,989 2,127
Acquisition of intangible assets 6 (188) (132) (755)
Disposal of non current assets - 69 -
Purchases of fixtures, fittings
and equipment (177) (264) (383)
Disposal of subsidiary 11 1,320 - -
Net cash flow used in investing
activities 1,866 3,050 2,192
======================================== ===== ================== ================== ================
Financing activities
Capital distribution 17 - (50,109) (50,109)
Capital distribution costs 17 - - (306)
Third party borrowings 1,332 (47) (30)
Amounts received from/(paid to)
non-controlling interests 61 (241) (332)
Net cash flow used in financing
activities 1,393 (50,397) (50,777)
======================================== ===== ================== ================== ================
Net decrease in cash and cash
equivalents (2,187) (54,110) (51,419)
======================================== ===== ================== ================== ================
Cash and cash equivalents at beginning
of period/year 17,497 68,888 68,888
======================================== ===== ================== ================== ================
Effect of foreign exchange rate
changes 42 (110) 28
======================================== ===== ================== ================== ================
Cash and cash equivalents at end
of period/year 15,352 14,668 17,497
======================================== ===== ================== ================== ================
Cash flow from operating activities
Loss before taxation (4,066) (3,697) (3,960)
Fair value (gain)/loss on financial
assets at fair
value through profit or loss 12 (3,491) 853 853
Recognition of share based payment 54 54 108
Loss on disposal of investment - 347 432
Impairment of goodwill 5 5,763 - -
Impairment of intangible assets 6 240 75 75
Amortisation of intangible assets 6 540 907 1,884
Increase in amounts receivable (4,149) (995) (110)
Decrease in amounts payable (440) (3,798) (1,897)
Decrease/(increase) in inventories 782 (648) (558)
Depreciation of fixtures, fittings
and equipment 133 161 256
Profit on disposal of a foreign
operation (610) - -
Other (202) (22) 83
Net cash flow from operating activities (5,446) (6,763) (2,834)
======================================== ===== ================== ================== ================
Notes to the Condensed Interim Financial Statements
(Unaudited)
for the six months ended 30 September 2011
1. Summary of significant accounting policies
Reporting entity
Ingenious Media Active Capital Limited (the Company) is a
closed-end investment company with limited liability formed under
The Companies (Guernsey) Law 2008, and its shares are admitted to
trading on AIM. The Company was incorporated on 17 February 2006
and dealings on AIM commenced on 11 April 2006. The Company's
registered office is Isabelle Chambers, Route Isabelle, St Peter
Port, Guernsey. The Group is defined as the Company and its
subsidiaries.
Basis of preparation
The condensed set of financial statements of the Company and
Group have been prepared in accordance with IFRSs, which comprise
standards and interpretations approved by the International
Accounting Standards Board (the IASB), and International Accounting
Standards and Standing Interpretations Committee interpretations
approved by the International Accounting Standards Committee (IASC)
that remain in effect, together with applicable legal and
regulatory requirements of Guernsey Law and the Listing Rules of
the UK Listing Authority. The condensed set of financial statements
included in this Half-Yearly Report and Accounts has been prepared
in accordance with International Accounting Standard 34, "Interim
Financial Reporting".
The financial statements have been prepared on the historical
cost basis, as modified by the measurement at fair value of
investments and financial instruments.
There have been no material changes in accounting policies
during the period.
Going concern
The financial statements have been prepared on the going concern
basis. IMAC currently holds adequate cash balances to meet the
payment of funds committed to its investee companies as they fall
due. Following the capital distribution of GBP50.1 million to
Shareholders in May 2010, the Manager anticipated that the Company
would have sufficient cash reserves to fund future operating costs
of the Company over the next three years. These costs are expected
to be funded from a combination of the Company's post-distribution
cash balance, as well as cash retained from ongoing realisations,
if required. In the unlikely scenario that insufficient
realisations are made over this period, the Company will have
sufficient cash to meet its operating costs. The Directors are
satisfied under The Companies (Guernsey) Law 2008 as to the
solvency of the Company for the purposes of any future
distributions of capital.
Any current funding commitments that the Company has to the
investee companies, which have yet to be drawn down, are at the
discretion of the Company and the Manager. If the Company and
Manager were to approve a draw down of any outstanding commitments,
the commitments to the investee companies would be funded from a
combination of the post--distribution cash balance of the Company,
as well as from additional cash retained from ongoing realisations,
if required.
Shareholders should note that the implementation of the return
of GBP50.1 million of capital also attracted inherent risks to the
Company, such as the Company not being able to realise, or
realising less than expected, for the investee companies. However,
in such a case, with respect to its current funding commitments,
the Company retains the flexibility of choosing in which investee
companies it will continue to invest, with a view to maximising
Shareholder value. Furthermore, in such a case where the Company is
unable to pay fees owing to the Manager due to having insufficient
cash, the Manager has agreed to defer such payments until such time
as the Company has sufficient cash following the realisation of
investee companies. The Board is therefore of the opinion that the
going concern basis should be adopted in the preparation of the
financial statements.
Ethical Standard 3 (Revised), "Long association with the audit
engagement", issued by the Auditing Practices Board, requires
mandatory rotation of the audit engagement partner after 5 years
unless the Audit Committee deem that more flexibility is necessary
in the timing of rotation to safeguard the quality of the audit and
the audit firm agrees. In such cases, the audit engagement partner
may continue to act for an additional period of up to 2 years. In
view of the Group's current circumstances, the Audit Committee has
requested the current audit partner to continue to act. This
position will be reviewed again going forward.
Use of estimates
The preparation of the Group's financial statements requires
management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, and contingencies at the
date of the Group's financial statements, and revenue and expenses
during the reporting period. Actual results could differ from those
estimated. Significant estimates in the Group's financial
statements include the amounts recorded for the fair value of the
investments and recoverable value of goodwill and other intangible
assets. By their nature, these estimates and assumptions are
subject to measurement uncertainty and the effect on the Group's
financial statements of changes in estimates in future periods
could be significant. In the current economic conditions the number
of transactions and market prices are depressed. In these
circumstances the fair value of the Company's investments and
recoverable value of goodwill and other intangible assets cannot be
estimated as easily as when there are greater levels of market
activity.
The current market conditions are such that some of the Group's
investments remain loss making and may require further cash
injection in the future. In each case, the Manager has implemented
measures to reduce operating costs and stimulate revenue growth for
these investments in order to limit future funding requirements and
increase investment value with a view to realisation in an orderly
fashion over an extended period. As explained in note 1d, the
valuations undertaken by the Company are based upon a mixture of
bases using revenue, contribution, net assets, cash and earnings
multiples in light of the measures noted above.
Financial instruments
Financial assets
Financial assets are divided into the following categories:
-- loans and receivables, including cash and cash equivalents;
-- fair value through profit or loss.
Financial assets are assigned to the different categories on
initial recognition depending on the characteristics of the
instrument and its purpose. A financial instrument's category is
relevant for the way it is measured and whether resulting income
and expenses are recognised in the Condensed (Company and
Consolidated) Statement of Comprehensive Income or charged directly
against equity. All income and expenses in respect of financial
assets held by the Company and Group in the period under review are
recognised in the Condensed (Company and Consolidated) Statement of
Comprehensive Income. Generally the Company and Group recognise all
financial assets using trade date accounting. An assessment of
whether the value of a financial asset is impaired is made at least
at each reporting date. All income relating to financial assets is
recognised in the Condensed (Company and Consolidated) Statement of
Comprehensive Income under the heading "revenue" and interest
payable is recognised under the heading "finance costs".
The Company and Group's loans and receivables comprise trade and
other receivables and cash and cash equivalents in the Condensed
(Company and Consolidated) Statement of Financial Position.
Cash and cash equivalents include cash in hand and deposits held
on call with banks.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market.
The Company and Group's trade and other receivables are
initially recognised at fair value and subsequently measured at
amortised cost, using the effective interest method. Discounting is
omitted where its effect is immaterial. Individual receivables are
considered for impairment when they are overdue or when there is
objective evidence that the debtor will default.
Financial assets at fair value through profit or loss include
financial assets that are classified as held for trading. The
Company and Group's remaining financial assets fall into this
category and include its investment in investee companies. Fair
values of securities listed in active markets are determined by the
current bid prices. Where independent prices are not available,
fair values have been determined with reference to financial
information available at the time of the original investment
updated to reflect all relevant changes to that information at the
reporting date. This may include, among other factors, changes in
the business outlook affecting a particular investment, performance
of the underlying business against original projections and
valuations of similar quoted companies.
Financial liabilities
Financial liabilities are divided into the following
categories:
-- other financial liabilities;
-- fair value through profit or loss.
Other financial liabilities include the Company and Group's
trade and other payables and are initially recognised at fair value
and subsequently measured at amortised cost, using the effective
interest method.
Financial liabilities at fair value through profit or loss are
carried on the Condensed (Company and Consolidated) Statement of
Financial Position at fair value determined by current market
prices.
Fair value measurement hierarchy
IFRS 7, "Financial Instruments: Disclosures", requires certain
disclosures which require a classification of financial assets and
liabilities measured at fair value using a fair value hierarchy
that reflects the significance of the inputs used in making the
fair value measurement. The fair value hierarchy has the following
levels:
-- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- level 2 - inputs other than quoted prices included within
level 1 that are observable for the asset or liability either
directly (i.e. as prices) or indirectly (i.e. derived from
prices);
-- level 3 - inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
The level in the fair value hierarchy of the financial asset or
liability is determined on the basis of the lowest level input that
is significant to the fair value measured. Financial assets and
liabilities are classified in their entirety into only one of the
three levels.
Company
-------------------------------------------
Six months Six months Year ended
ended ended 31 March
30 September 30 September 2011
2011 2010
GBP '000 GBP '000 GBP '000
========= ============== ============== ===========
Level 1 - 256 -
Level 2 - - -
Level 3 25,755 31,284 31,438
========= ============== ============== ===========
25,755 31,540 31,438
========= ============== ============== ===========
Consolidated
-------------------------------------------
Six months Six months Year ended
ended ended 31 March
30 September 30 September 2011
2011 2010
GBP '000 GBP '000 GBP '000
========= ============== ============== ===========
Level 1 - 256 -
Level 2 - - -
Level 3 6,920 3,806 3,806
========= ============== ============== ===========
6,920 4,062 3,806
========= ============== ============== ===========
Adoption of new and revised standards
At the date of approval of the financial statements, the
following Standards and Interpretations, which have not been
applied in the financial statements, were in issue but not yet
effective:
-- IFRS 9 "Financial Instruments - Classification and
Measurement", effective for periods beginning on or after 1 January
2013;
-- IFRS 10 "Consolidated Financial Statements", effective for
periods beginning on or after 1 January 2013;
-- IFRS 11 "Joint Arrangements", effective for periods beginning on or after 1 January 2013;
-- IFRS 12 "Disclosure of Interests in Other Entities",
effective for periods beginning on or after 1 January 2013;
-- IFRS 13 "Fair Value Measurement", effective for periods
beginning on or after 1 January 2013.
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods could have a significant
impact on the financial statements of the Group or Company. The
Directors are reviewing this impact on an ongoing basis.
Principal accounting policies
a. Basis of consolidation
The Condensed Consolidated Interim Financial Statements
incorporate the financial statements of the Company and the Group
made up to 30 September 2011. 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.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. Non-controlling interests consist of the amount of those
interests at the date of the original business combination and the
minority's share of changes in equity since the date of the
combination.
The results of subsidiaries acquired during the period are
included in the Condensed Consolidated Statement of Comprehensive
Income from the effective date of acquisition.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
All intra-group transactions, balances, revenue and expenses are
eliminated on consolidation.
b. Business combinations
The acquisition of subsidiaries is accounted for using the
purchase method. The cost of the acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. The
acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3,
"Business Combinations (Amended)", are recognised at their fair
value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceeds the cost of
the business combination, the excess is recognised immediately in
profit or loss. Goodwill is reviewed for impairments annually.
The non-controlling interests in the acquiree are initially
measured at the minority's proportion of the net fair value of the
assets, liabilities and contingent liabilities at the time of
acquisition.
c. Functional currency
Items included in the financial statements of the Group and the
Company are measured using the currency of the primary economic
environment in which the entity operates ('the functional
currency'). The condensed consolidated financial statements are
presented in GBP (GBP), which is the Company's functional and
presentational currency.
Transactions in currencies other than sterling are translated at
the foreign exchange rate ruling on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated into sterling at the
exchange rate ruling at that date. Foreign exchange differences
arising on translation are recognised in the Condensed (Company and
Consolidated) Statement of Comprehensive Income. Non-monetary
assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are
translated into sterling at foreign exchange rates ruling at the
dates the fair value was determined.
On consolidation, the assets and liabilities of the Group's
overseas operations are translated at exchange rates prevailing at
the balance sheet date. Income and expenses are translated at the
average exchange rates for the period unless exchange rates
fluctuate significantly. Where the average exchange rates fluctuate
significantly, material income and expenses must be translated at
the exchange rate prevailing on the date of the transaction.
Exchange differences arising, if any, are classified as equity and
transferred to the Group's translation reserve. Such translation
differences are recognised as income or expenses in the period in
which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the rate prevailing at the balance
sheet date.
d. Financial assets at fair value through profit or loss
Investments, including equity and loan investments, including
subsidiaries, are designated as fair value through profit or loss
in accordance with International Accounting Standard 39 (IAS 39)
"Financial Instruments: Recognition and Measurement", as the
Company is an investment company whose business is investing in
financial assets with a view to profiting from their total return
in the form of interest and changes in fair value. Investments are
initially recognised at cost. The investments are subsequently
re-measured at fair value, as determined by the Directors.
Unrealised gains or losses arising from the revaluation of
investments are taken directly to the Condensed (Company and
Consolidated) Statement of Comprehensive Income.
Fair value is determined as follows:
Unquoted securities are valued based on the realisation value
which is estimated by the Directors with prudence and good faith.
The Directors will take into account the guidelines and principles
for valuation of investee companies set out by the International
Private Equity and Venture Capital association, with particular
consideration of the following factors:
-- Fair value is the amount for which an asset could be
exchanged between knowledgeable, willing parties in an arm's length
transaction.
-- In estimating fair value for an investment, the Company will
apply a methodology that is appropriate in light of the nature,
facts and circumstances of the investment and its materiality in
the context of the total investment portfolio and will use
reasonable assumptions and estimations.
-- An appropriate methodology incorporates available information
about all factors that are likely to materially affect the fair
value of the investment. The valuation methodologies are applied
consistently from period to period, except where a change would
result in a better estimate of fair value. Any changes in valuation
methodologies will be clearly disclosed in the financial
statements.
The most widely used methodologies are listed below. In
assessing which methodology is appropriate, the Directors are
predisposed towards those methodologies that draw upon market-based
measures of risk and return.
-- Cost of recent investment
-- Earnings multiple
-- Net assets
-- Available market prices
Gains or losses arising from changes in the fair value of the
'financial assets at fair value through profit or loss' category
are presented in the Condensed (Company and Consolidated) Statement
of Comprehensive Income in the period in which they arise.
The Group has determined that the valuations are most sensitive
to changes in the following key assumptions:
-- Annual budgets and cash flow projections for each individual
investment. These are based on actual budgets and cash flows and
projections discussed with and approved by management for a period
of one year to five years depending on the investment;
-- Comparable earnings multiples. A number of investments are
valued using comparable listed and other industry multiples which
range from 5 to 6 times earnings depending on the investment.
As a result of the above basis of valuation, there is
significant judgement associated with the valuation of
investments.
e. Arrangement fees
Under the terms of the investment agreements between the Company
and its investee companies, the investee companies are required to
pay to the Company an arrangement fee in consideration for its
services in arranging financing for the investee company. In
accordance with IAS 39, this arrangement fee is deducted from the
cost of the investment. A corresponding increase in the fair value
of the investment is then recorded so that the investment is valued
at the gross amount paid.
f. Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of
discounts, VAT and other sales-related taxes. Where appropriate,
revenue is recorded in the Condensed (Company and Consolidated)
Statement of Comprehensive Income on the basis that there is a
legally binding contract in place and there is virtual certainty of
fulfilment of any conditionality attached to the contract.
Interest income is included on an accruals basis using the
effective interest method.
Dividend income from investments is recognised when the Group's
right to receive payment has been established.
g. Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged through the Condensed (Company and Consolidated)
Statement of Comprehensive Income except where they relate to
capital expenditure or the raising and maintenance of capital.
h. Other intangible assets
Acquired trademarks, licenses and customer relationships are
initially recognised at fair value. Trademarks, licenses and
customer relationships have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated
using the straight-line method to allocate the cost of trademarks,
licenses and customer relationships over their estimated useful
lives (being a period of up to 10 years).
i. Fixtures, fittings and equipment
Fixtures, fittings and equipment are stated at cost less
accumulated depreciation and any recognised impairment losses.
Depreciation is charged so as to write off the cost or valuation
of assets, over their estimated useful lives (being between two and
five years) using the straight-line method.
j. Investee company interests in joint ventures
Investee company interests in jointly controlled entities,
whereby the venturers have a contractual arrangement that
establishes joint control over the economic activities of the
entity, are recognised using the equity method of accounting. The
investment is initially recognised at cost under 'investments in
associates', and adjusted thereafter for the post-acquisition
change in the investee company's share of net assets of the joint
venture. The investee company's share of the profit or loss of the
joint venture is included under 'other operating revenue and
expenses'.
This accounting policy differs from that applied by the Company
in accounting for its interests in associates, which are designated
as financial assets at fair value through profit or loss.
k. Investee company interests in associates
Investee company interests in associates are accounted for using
the equity method of accounting. Under the equity method,
investments in the associates are carried in the Condensed
Consolidated Statement of Financial Position at cost plus post
acquisition changes in the consolidated entity's share of net
assets of the associates.
When the consolidated entity's share of losses in an associate
equals or exceeds its interest in the associate, including any
unsecured long-term receivables and loans, the consolidated entity
does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The reporting dates of the associates and the consolidated
entity are identical and the associates' accounting policies
conform to those used by the consolidated entity for like
transactions and events in similar circumstances.
l. Inventories
Inventories comprise of work-in-progress which is the cost
incurred in relation to a show or customer campaign which has not
taken place at the balance sheet date and is stated at the lower of
cost and net realisable value. Cost includes materials, direct
labour and any other direct costs.
m. Trade and other receivables
Trade and other receivables are initially recognised at fair
value. A provision for impairment of trade receivables is
established when there is objective evidence the Group will not be
able to collect all amounts due according to the original terms of
the receivables.
n. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, on-demand
deposits and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
o. Trade and other payables
Trade and other payables are initially recognised at fair value
and subsequently, where necessary, re-measured at amortised cost
using the effective interest method.
p. Deferred consideration
A number of investee company acquisitions have been made on
deferred payment terms. These deferred payments are generally
contingent on the future revenue and/or profits achieved by the
investee company. Amounts of deferred consideration payable after
one year, are discounted using discount rates that reflect the
current market assessment of the time value of money and, where
appropriate, the risks specific to the investee company. This
contingent deferred consideration is reassessed annually, and the
difference between the present value and the total amount payable
at a future date gives rise to a finance charge which is charged to
the Condensed Consolidated Statement of Comprehensive Income and
credited to the liability over the period in which the
consideration is deferred.
q. Financial instruments
Financial assets and financial liabilities are recognised in the
Condensed (Company and Consolidated) Statement of Financial
Position when the Group becomes a party to the contractual
provisions of the instrument.
r. Equity instruments
Equity instruments issued by the Group are recorded at the
proceeds received, net of direct issue costs.
s. Share options
The Group and the Company accounts for the fair value of share
options at the grant date over the vesting period in the Condensed
(Company and Consolidated) Statement of Comprehensive Income, with
a corresponding increase to equity. The fair value has been
calculated based on the Black Scholes Model using the following
inputs:
-- Share price 97.50 pence
-- Exercise price 100.00 pence
-- Expected volatility 11.55%
-- Expected life 10 years
-- Risk free rate 4.413%
-- Expected dividends NIL
2. Operating segments
The information in this note has been prepared using the
definition of an operating segment in IFRS 8: "Operating Segments".
The Group determines and presents the information that is provided
internally to the Directors to enable them to assess performance
and allocate resources.
The chief operating decision-maker has been identified as the
Board, which reviews the Company's internal reporting in order to
assess performance and allocate resources. The Board has determined
the operating segments based on these reports.
As an investment company, the Group's primary focus is on the
performance of its investment portfolio. Whilst there are a number
of individual investments included in this portfolio, performance
is reviewed for the portfolio as a whole on the basis of its fair
value.
The Directors believe that the Company and the Group are engaged
in a single segment of business of holding investments in media and
entertainment companies, and therefore the Directors only recognise
a single class of asset. The information reviewed by the Board
includes summarised financial information for each investment in
the portfolio, however, this is not sufficiently detailed to
provide any segmental analysis and hence only a single segment has
been identified.
Segment revenue Segment profit/(loss)
------------------------------------------------- -------------------------------------------------
Six months Six months Six months Six months
Segment ended 30 ended 30 Year ended 31 ended 30 ended 30 Year ended 31
revenues September 2011 September 2010 March 2011 September 2011 September 2010 March 2011
and results GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
================ =============== =============== =============== =============== =============== ===============
Investments
portfolio 27,716 21,526 51,190 11,720 6,680 10,275
=============== =============== =============== =============== =============== ===============
Total for
continuing
operations 27,716 21,526 51,190 11,720 6,680 10,275
Share of
results from
associates (227) - 1,392
Group
administration
costs and
directors'
salaries (9,215) (10,058) (18,443)
Finance costs (318) (319) (637)
Consolidation
adjustments (6,026) - 3,453
================ =============== =============== =============== =============== =============== ===============
Loss before tax (4,066) (3,697) (3,960)
================ =============== =============== =============== =============== =============== ===============
Six months ended 30 Six months ended 30
September 2011 September 2010 Year ended 31 March 2011
Segment assets GBP '000 GBP '000 GBP '000
============================= ============================= ============================= =========================
Investments portfolio 67,548 68,391 66,936
Assets classified as held
for sale - - 2,103
============================= ============================= ============================= =========================
Total segment and
consolidated assets 67,548 68,391 69,039
============================= ============================= ============================= =========================
Six months Six months
ended 30 ended 30
September September Year ended 31
2011 2010 March 2011
Segment liabilities GBP '000 GBP '000 GBP '000
================================================================ ============== ============== ==============
Investments portfolio 42,917 38,363 39,519
Liabilities directly associated with assets classified as held
for sale - - 641
================================================================ ============== ============== ==============
Total segment and consolidated liabilities 42,917 38,363 40,160
================================================================ ============== ============== ==============
Revenue from external customers Non current assets
---------------------------------------------- ----------------------------------------------
Six months Six months Six months Six months
ended 30 ended 30 ended 30 ended 30
September September Year ended 31 September September Year ended 31
Geographical 2011 2010 March 2011 2011 2010 March 2011
information GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
================ ============== ============== ============== ============== ============== ==============
United Kingdom 12,042 9,707 18,279 22,990 27,517 26,484
================ ============== ============== ============== ============== ============== ==============
Europe
(excluding UK) 6,784 6,458 11,858 20 - 29
================ ============== ============== ============== ============== ============== ==============
Other 8,890 5,361 21,053 68 - 11
================ ============== ============== ============== ============== ============== ==============
27,716 21,526 51,190 23,078 27,517 26,524
================ ============== ============== ============== ============== ============== ==============
Major clients
The Group is not reliant on one major customer as no one
customer accounts for more than 10 per cent. of the Group's
revenue.
3. Income tax expense
The Company has been granted exemption from income tax in
Guernsey under the Income Tax (Exempt Bodies) (Bailiwick of
Guernsey) Ordinance 1989, and is liable to pay an annual fee
(currently GBP600) under the provisions of the Ordinance. As such
it will not be liable to income tax in Guernsey other than on
Guernsey source income (excluding deposit interest on funds
deposited with a Guernsey bank). No withholding tax is applicable
to distributions to Shareholders by the Company.
The subsidiary companies are resident in the UK and liable to UK
Corporation Tax. Group relief on operating losses may be available
between those United Kingdom resident investee companies in which
the Company holds not less than 75 per cent. of the ordinary share
capital.
4. Loss per share
The calculation of basic and diluted return per share is based
on the return on ordinary activities and on 143,168,463 Ordinary
Shares (six months ended 30 September 2010: 143,168,463, year ended
31 March 2011: 143,168,463), being the weighted average number of
shares for the purpose of the earnings per share calculation.
5. Goodwill
Consolidated
-------------------------------------
Six months Year
ended Six months ended
30 Sep 2011 ended 31 March
30 Sep 2010 2011
GBP '000 GBP '000 GBP '000
====================================== ============ ============ =========
Cost
Balance at the beginning of the
period/year 37,601 36,441 36,441
Recognised on acquisition of
subsidiaries 1,342 929 1,268
Adjustment to brought forward
cost - (17) (108)
Balance at the end of the period/year 38,943 37,353 37,601
Impairment
Balance at the beginning of the
period/year (22,511) (22,511) (22,511)
Charge for the period/year (5,763) - -
Balance at the end of the period/year (28,274) (22,511) (22,511)
Carrying amount at the end of
the period/year 10,669 14,842 15,090
====================================== ============ ============ =========
Included within goodwill are other intangible assets which were
not separately identified at acquisition. The Company will review
the treatment of these assets over the next 12 months and make any
appropriate adjustments to the categorisation of these assets.
The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired.
The Group has invested in a broad range of companies within the
media sector. The Directors view each investment as an individual
cash generating unit as this represents the lowest level within the
Group at which the goodwill is monitored for internal management
purposes. Goodwill has been allocated for impairment testing
purposes to four individual cash-generating units.
The carrying amount of goodwill is as follows:
Year
Six months ended ended
30 September Six months ended 31 March
2011 30 September 2010 2011
GBP '000 GBP '000 GBP '000
------------ ---------------- ------------------ ---------
Investments 10,669 14,842 15,090
------------ ---------------- ------------------ ---------
During the period ended 30 September 2011, the Group has
determined that there has been an impairment on a number of its
cash-generating units containing goodwill or intangible assets with
indefinite useful lives amounting to GBP5,763k (six months ended 30
September 2010: GBPNil, year ended 31 March 2011: GBPNil).
The recoverable amounts (i.e. the higher of value in use and
fair value less costs to sell) of those units and group of units
are determined using either the value in use or the fair value less
cost to sell methodologies as the Directors determine as
appropriate.
Year
Six months ended ended
30 September Six months ended 31 March
2011 30 September 2010 2011
GBP '000 GBP '000 GBP '000
------------------------------ ---------------- ------------------ ---------
Fair value less costs to sell 10,669 14,842 15,090
------------------------------ ---------------- ------------------ ---------
The Group has determined that the recoverable amount
calculations are most sensitive to changes in the following key
assumptions:
a. Annual budgets and cash flow projections for each individual
investment. These are based on actual budgets and cash flows and
projections discussed with and approved by the Manager for a period
of one year to five years depending on the investment;
b. Comparable earnings multiples. A number of investments are
valued using comparable listed and other industry multiples which
range from 5 to 6 times earnings depending on the investment.
The Directors have applied the accounting policy outlined in
note 1d to determine the recoverable amount of cash-generating
units where the fair value less cost to sell methodology
applies.
6. Other intangible assets
Consolidated
----------------------------------------------
Six months ended Six months Year
30 Sep 2011 ended ended
30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
============================================== ================ ============ ==============
Cost or valuation
Balance at the beginning of the period/year 13,687 12,932 12,932
Additions in period/year 188 378 513
Recognised on acquisition of a subsidiary 18 - 242
Derecognised due to early license termination (2,956) - -
============================================== ================ ============ ==============
Balance at the end of the period/year 10,937 13,310 13,687
Amortisation
Balance at the beginning of the period/year (2,633) (673) (673)
Reclassification - - (76)
Charge for the period/year (540) (907) (1,884)
Derecognised due to early license termination 1,702 - -
============================================== ================ ============ ==============
Balance at the end of the period/year (1,471) (1,580) (2,633)
Impairment
Balance at the beginning of the period/year (3,672) (3,597) (3,597)
Charge for the period/year (240) (75) (75)
============================================== ================ ============ ==============
Balance at the end of the period/year (3,912) (3,672) (3,672)
Carrying amount at the end of the period/year 5,554 8,058 7,382
============================================== ================ ============ ==============
On 9 May 2011, DRG ended its existing trade mark license
agreement with Channel 4 International, to continue using its name,
waiving future payments associated with this agreement of GBP1.3
million. The trade mark license agreement to use the Channel 4
International name originated when DRG acquired the international
TV distribution business of Channel 4 International in November
2007.
Acquired trademarks, licenses and customer relationships are
initially recognised at fair value. Trademarks and customer
relationships have a finite useful life and are carried at cost
less accumulated amortisation. Show formats and some licenses have
indefinite lives. Amortisation is calculated using the straight
line method to allocate the cost of trademarks, licenses and
customer relationships over their estimated useful lives (being a
period of up to 10 years).
The carrying amount of intangible assets with indefinite useful
lives is as follows:
Six months Year
Six months ended ended ended
30 Sep 2011 30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
------------ ----------------- -------------- ----------------
Investments 4,373 5,532 5,686
------------ ----------------- -------------- ----------------
The recoverable amounts (i.e. the higher of value in use and
fair value less costs to sell) of those units and group of units
are determined using either the value in use or the fair value less
cost to sell methodologies as the Directors determine as
appropriate.
Six months ended Year
Six months ended 30 Sep 2010 ended
30 Sep 2011 31 March 2011
GBP '000 GBP '000 GBP '000
------------------------------ ---------------- ---------------- --------------
Fair value less costs to sell 4,373 5,532 5,686
------------------------------ ---------------- ---------------- --------------
7. Investment in subsidiaries
Company
----------------------------------------
Six months Year
ended Six months ended
30 Sep 2011 ended 31 March
30 Sep 2010 2011
GBP '000 GBP '000 GBP '000
===================================== ============= ============= ==========
Opening fair value at the beginning
of the period/year 31,438 32,898 32,898
Purchases at cost - 500 997
Disposal proceeds (1,723) (1,761) (1,761)
Profit/(loss) on sale of investment 72 - (353)
Fair value adjustment (4,032) (353) (343)
===================================== ============= ============= ==========
Closing fair value at the end
of the period/year 25,755 31,284 31,438
===================================== ============= ============= ==========
An investee company is classified as a subsidiary where the
Company can achieve control either:
-- by obtaining more than 50 per cent. of the equity of the investee company; or
-- where there is sufficient power to govern the financial and
operating policies of the investee company so as to obtain the
economic benefits from its activities.
Ingenious Ventures L.P. continues to hold its investment in
Cream Holdings Limited.
In April 2011, the Company disposed of its holding in Outside
Line Limited.
In June 2011, Enigmas2 Limited applied to be struck off from the
register of companies at Companies House in the UK.
In August 2011, Nouveau Jour SAS and SponsorClick France SAS,
French subsidiaries of brandRapport Group Limited, were placed into
voluntary liquidation.
In October 2011, the Company announced that it has disposed of
its investment in Two Way Media Holdings Limited.
Undrawn commitments
All outstanding funding commitments are at the discretion of the
Company and the Manager.
Paid Paid Paid
as at as at as at
Name of % of Country Full 30 Sep 30 Sep 31 March
subsidiary Class class of Principal commitment 2011 2010 2011
undertaking of share held incorpo-ration activity GBP'000 GBP'000 GBP'000 GBP'000
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Whizz Kid
Entertainment Television
Limited Ordinary 47.1% UK production 4,250 2,750 2,750 2,750
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Digital
Rights Group Television
Limited Ordinary 78.3% UK distribution 11,270 8,274 8,274 8,274
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Two Way
Media Interactive
Holdings television
Limited Ordinary 84.3% UK company 4,935 4,655 4,655 4,655
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Enigmas2
Limited
(formerly
In2Games Video games
Limited) Ordinary 43.8% UK business 4,560 4,560 4,560 4,560
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Brand Events Consumer
Holdings events
Limited Ordinary 69.5% UK business 9,080 9,080 8,583 9,080
=============== ============ ======= =============== ============= ============ ========= ========= ==========
brandRapport Marketing
Group Limited Preference 79.1% UK services 12,867 12,867 12,867 12,867
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Review Centre Internet/new
Limited Ordinary 71.5% UK media 7,034 7,034 7,034 7,034
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Ingenious
Ventures Investment
L.P. N/A 90.0% UK vehicle 1,035 685 4,826 685
=============== ============ ======= =============== ============= ============ ========= ========= ==========
Total 55,031 49,905 53,549 49,905
============================ ======= =============== ============= ============ ========= ========= ==========
8. Acquisition of subsidiaries
During the period the Group acquired a controlling interest in
Brand Events Benelux B.V. and Taste Festivals Limited which
resulted in goodwill arising. The fair value of assets acquired and
liabilities assumed were as follows:
Year
Six months ended Six months ended ended
30 Sep 2011 30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
=================================================== ================= ================= ===============
Intangibles 18 - 242
Fixtures and fittings 13 20 62
Cash and cash equivalents 1,902 2,005 2,005
Accounts receivable 605 560 987
Trade payables (4,385) (2,141) (3,131)
Non-controlling interest 31 (118) 161
Inventory 1,842 - 144
Net assets acquired 26 326 470
Goodwill on consolidation 1,342 1,084 1,268
=================================================== ================= ================= ===============
Total consideration 1,368 1,410 1,738
Total consideration satisfied by:
Cash 1,368 617 802
Cash paid in prior years - - 300
Consideration shares - 110 110
Deferred consideration - 683 526
1,368 1,410 1,738
=================================================== ================= ================= ===============
Net cash (inflow)/outflow arising on acquisition:
Cash consideration 1,368 617 802
Cash and cash equivalents acquired (1,902) (2,005) (2,005)
=================================================== ================= ================= ===============
(534) (1,388) (1,203)
=================================================== ================= ================= ===============
The goodwill arising on the acquisition is attributable to the
anticipated profitability of the Group's products and services.
Included within the consolidated retained loss for the period is
a profit before tax of GBP0.4 million relating to acquired
subsidiaries (year ended 31 March 2011: profit of GBP0.6 million;
six months ended 30 September 2010: profit of GBP0.1 million). Due
to the nature of the businesses acquired, financial performance is
not comparable pre to post investment. Therefore, for all business
combinations that were effected during the period, it is
inappropriate to disclose the revenue and profit and loss of the
combined entities for the period as though the acquisition date was
the start of the financial period.
9. Investment in associates
Six months ended Six months ended Year
30 Sep 2011 30 Sep 2010 ended 31 March 2011
GBP '000 GBP '000 GBP '000
========================================== ================= ================= =====================
Aggregate amounts relating to associates
Total assets 7,438 9,473 12,614
Total liabilities (9,674) (9,871) (11,898)
Revenues 1,832 9,702 15,999
Loss (4,344) (2,126) (1,557)
========================================== ================= ================= =====================
A list of the significant investments in associates, including
the name, class of share, proportion of ownership interest and
country of incorporation is given below.
% of class Country of
Name of associate Class of share held incorporation
-------------------------------- --------------- ----------- ---------------
Sub Zero Limited Ordinary 50.0% UK
Brand Events Management Ireland Ordinary 50.0% Ireland
Limited
Brand Events Festivals Limited Ordinary 50.0% Ireland
Brand Events Italy Ordinary 50.0% Italy
Brand Events Live Limited Ordinary 49.9% UK
Golfmania Limited Ordinary 49.9% UK
Dance Floor Limited Ordinary 49.9% UK
DRG Media Assets Limited Ordinary 49.9% UK
Taste Xmas Live Limited Ordinary 49.9% UK
-------------------------------- --------------- ----------- ---------------
Brand Events Holdings Limited is required to fund its share of
losses in its associates listed above. DRG is not required to fund
the losses of its associate, DRG Media Assets Limited and Whizz Kid
Entertainment Limited is not required to fund the losses in Dance
Floor Limited.
During the period the Group acquired a controlling interest in
Brand Events Benelux B.V. and Taste Festivals Limited. These
companies are no longer associates in the Group, and are now fully
consolidated.
10. Discontinued operations
Discontinued operations in the current period results relate to
Outside Line Limited and Enigmas2 Limited.
Six months ended Six months Year
30 Sep 2011 ended ended
30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
====================================================== ================ ============ ==============
Revenue 58 - 3,666
Expenses (54) - (3,287)
Gain on derecognition of a subsidiary 320 - -
---------------- ------------ --------------
Profit before tax 324 - 379
Attributable tax expense - - (90)
---------------- ------------ --------------
Profit for the period/year on discontinued operations 324 - 289
------------------------------------------------------ ---------------- ------------ --------------
11. Derecognition of subsidiaries
The Group no longer has a controlling interest in Outside Line
Limited (Outside Line) as IMAC sold its shareholding on 6 April
2011.
The fair value of assets and liabilities no longer controlled by
the Group are as follows:
Six months ended Six months Year
30 Sep 2011 ended ended
30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
========================== ================ ============ ==============
Fixtures and fittings 129 - -
Cash and cash equivalents 516 - -
Accounts receivable 1,691 - -
Trade payables (1,867) - -
Net assets deconsolidated 469 - -
========================== ================ ============ ==============
Outside Line was disposed of for GBP1,320,000. The cash
contained as part of the net assets of Outside Line on the day of
disposal was GBP516,000. This cash was not shown as part of cash
and cash equivalents as at 31 March 2011, as it was contained
within assets classified as held for sale.
12. Financial assets at fair value through profit or loss
Company
----------------------------------------------
Six months ended Six months Year
30 Sep 2011 ended ended
30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
=============================== ================ ============ ==============
Opening fair value - 1,109 1,109
Disposal proceeds - - (171)
Fair value adjustment - (853) (853)
Loss on disposal of investment - - (85)
Closing fair value - 256 -
=============================== ================ ============ ==============
Consolidated
--------------------------------------------------
Six months ended Six months ended Year
30 Sep 2011 30 Sep 2010 ended
31 March 2011
GBP '000 GBP '000 GBP '000
=============================== ================ ================ ==============
Opening fair value 3,806 7,251 7,251
Disposal proceeds (377) (1,989) (2,160)
Fair value adjustment 3,491 (853) (853)
Loss on disposal of investment - (347) (432)
------------------------------- ---------------- ---------------- --------------
Closing fair value 6,920 4,062 3,806
=============================== ================ ================ ==============
The disposal proceeds of GBP377,000 relates to the disposal of
Stage Three Music Limited to BMG Rights Management GmbH in July
2010.
Paid Paid Paid
% as at as at as at
of Country Full 30 Sep 30 Sep 31 March
Name of Class class of Principal commit-ment 2011 2010 2011
investment of share held incorporation activity GBP'000 GBP'000 GBP'000 GBP'000
=============== ============ ======= ============== ============== ============ ========= ========= ==========
Incisive Media Business
Limited Ordinary 0.1% UK publishing 17,903 17,903 17,903 17,903
=============== ============ ======= ============== ============== ============ ========= ========= ==========
Trinity
Universal Interactive
Holdings media
Limited Ordinary 0% UK marketing 5,710 5,710 5,710 5,710
=============== ============ ======= ============== ============== ============ ========= ========= ==========
British
Sportbuzz Virgin Internet/new
Limited Preference 45% Islands media 1,604 1,604 1,604 1,604
=============== ============ ======= ============== ============== ============ ========= ========= ==========
Crystal
Entertainment Talent
Limited Ordinary 10% UK relationships 1,311 1,311 1,311 1,311
=============== ============ ======= ============== ============== ============ ========= ========= ==========
Total 26,528 26,528 26,528 26,528
============================ ======= ============== ============== ============ ========= ========= ==========
In April 2009 Trinity Universal Holdings Limited was placed in
Voluntary Creditors Liquidation which is still ongoing.
13. Cash and cash equivalents
Cash and cash equivalents held by the Company and Group amount
to GBP7,003k (year ended 31 March 2011: GBP5,718k, six months ended
30 September 2010: GBP6,519k) and GBP15,352k (year ended 31 March
2011: GBP17,497k, six months ended 30 September 2010: GBP14,668k)
respectively. Cash and cash equivalents comprise cash and
short-term bank deposits with an original maturity of three months
or less. The cash equivalents are currently invested in quoted cash
funds. The carrying amount of these assets approximates to their
fair value. Included within the Group's cash and cash equivalents
is a restricted cash amount of GBP2,023k (year ended 31 March 2011:
GBP2,080k, six months ended 30 September 2010: GBP2,101k) in
relation to amounts that Whizz Kid Entertainment Limited is holding
in programme production trust accounts to fund specific programme
production costs and which are owed to Live VCT 1, Live VCT 2,
Entertainment VCT 1 and Entertainment VCT 2.
14. Long term and short term third party loans
Long term
Consolidated
--------------------------------------------------------------------------------------------
Six months ended 30 Six months ended 30 Sep Year ended 31 March
Sep 2011 2010 2011
Redemption
date GBP '000 GBP '000 GBP '000
------------------------ --------------- ----------------------- ------------------------ ------------------------
Brand Events Holdings
Limited 26 April 2012 2,390 2,207 2,296
Review Centre Limited 6 June 2018 630 570 599
------------------------ --------------- ----------------------- ------------------------ ------------------------
3,020 2,777 2,895
---------------------------------------- ----------------------- ------------------------ ------------------------
Long term third party loans represent loan stock instruments
held by other investors in the Group's subsidiaries. Brand Events
Holdings Limited has an ongoing lending facility which is ranked
subordinate with IMAC loan notes. It has been agreed that the 2015
loan notes take priority over the 2012 loan notes. Therefore, there
will be no repayments of any of the loan notes before 2015. Review
Centre Limited's long term third party loan comprises of a loan
provided by one of the existing directors and ranks pari passu with
IMAC loan notes.
Short term
Short term third party loans represent a flexible rate loan (the
current default interest rate is 18.91%) acquired by Brand Events
Holdings Limited, denominated in Australian Dollar. The loan is
secured by a charge over certain properties of the Group, and is
repayable on 29 February 2012.
15. Share capital
Company and Consolidated
------------------------------------------
Six months Six months Year
ended 30 ended 30 Sep ended
Sep 2011 2010 31 March 2011
Authorised share capital No. No. No.
-------------------------------- ----------- ------------- --------------
Ordinary shares of no par value Unlimited Unlimited Unlimited
-------------------------------- ----------- ------------- --------------
Issued and fully paid No. No. No.
-------------------------------- ----------- ------------- --------------
Ordinary shares of no par value 144,402,402 144,402,402 144,402,402
-------------------------------- ----------- ------------- --------------
Share options
On 4 April 2006, 750,000 share options were issued in respect of
ongoing services, granting rights to Neil Blackley to subscribe for
750,000 Ordinary Shares. On 24 January 2008, Mike Luckwell was
awarded 750,000 share options.
The share options have an exercise price equal to the placing
price (GBP1) and vest over five years, (with one fifth of the
options vesting each year) or immediately on the signing of a
contract for the sale of the entire (or substantially entire)
issued share capital or business undertaking of the Company or on
their appointment as a Director of the Company being terminated
without cause by the Company. The share options will expire ten
years from each date of grant unless there is an early expiration
in accordance with the terms of each grant.
16. Shares held in treasury
The Company held 1,233,939 ordinary shares purchased at an
average price of 41.72 pence in 2009.
Company and Consolidated
-----------------------------------------
Six months Six months
ended 30 ended 30 Sep Year ended
Sep 2011 2010 31 March 2011
Shares held in treasury No. No. No.
-------------------------------- ---------- ------------- --------------
Ordinary shares of no par value 1,233,939 1,233,939 1,233,939
-------------------------------- ---------- ------------- --------------
17. Share premium account
Company and Consolidated
------------------------------------------
Six months Six months Year
ended ended ended
30 Sep 2011 30 Sep 2010 31 March 2011
GBP '000 GBP '000 GBP '000
====================================== ============ ============ ==============
Balance at the beginning of
the period/year 20,860 71,275 71,275
Capital distribution - (50,109) (50,109)
Capital distribution costs - - (306)
-------------------------------------- ------------ ------------ --------------
Balance at the end of the period/year 20,860 21,166 20,860
====================================== ============ ============ ==============
Following a strategic review of the Company, the Board proposed
changes to the Company's investing policy, the Investment
Management Agreement, its Articles, and a reduction of capital. The
proposed changes were approved by the Shareholders at an
extraordinary general meeting on 12 May 2010.
The new Articles were adopted in order to extend the duration of
the life of the Company to at least the eighth anniversary
following Admission; and to allow greater freedom for the Company
to distribute both income and capital to Shareholders. The term of
the Investment Management Agreement was extended for a further
three years so that it expires no earlier than 11 April 2014
(rather than 11 April 2011). The Investment Management Agreement
was also changed to permit the Manager (and its subsidiaries and
associated companies) to make investments for itself, or on behalf
of its clients or other funds it may manage that would otherwise be
caught within the current investing policy.
The investing policy was amended to halt any new investments,
other than investments relating to the investee companies and to
remove the investment restriction which prevents more than 15 per
cent. of the Company's net assets being invested in any one
investee company at the time of that investment. Subject to
Guernsey company law and the Company's ongoing working capital
requirements, the revised investing policy permits the Company to
make distributions to Shareholders as and when the appropriate
situations arise following the realisation of its investee
companies.
It was agreed to return cash to Shareholders in an amount of
GBP50.1 million by way of a reduction of the Company's Share
Capital (the Returned Capital). The Returned Capital was
distributed to Shareholders on 28 May 2010.
18. Net asset value per share
Company Consolidated
No. of Shares pence pence
------------------ ------------- ------- ------------
30 September 2011
Ordinary shares
Basic and diluted 143,168,463 22.90 15.98
------------------ ------------- ------- ------------
30 September 2010
Ordinary shares
Basic and diluted 143,168,463 26.41 19.50
------------------ ------------- ------- ------------
31 March 2011
Ordinary shares
Basic and diluted 143,168,463 25.88 18.10
------------------ ------------- ------- ------------
19. Non-controlling interests
Consolidated
==========================================
Six months Six months Year ended
ended 30 Sep ended 30 Sep 31 March
2011 2010 2011
GBP '000 GBP '000 GBP '000
====================================== ============= ============= ============
Balance at the beginning of
the period/year 2,499 3,668 3,668
Post acquisition capital loss - (101) (101)
Prior period adjustment - 134 134
Dividends - (46) (137)
Shares issued to non-controlling
interest 215 - -
Acquisition/disposal of subsidiaries (498) - -
Loss for the period/year (470) (1,551) (1,065)
====================================== ============= ============= ============
Balance at the end of the period/year 1,746 2,104 2,499
====================================== ============= ============= ============
20. Related party transactions
a. The Company has appointed Ingenious Ventures (a trading
division of Ingenious Asset Management Limited) to provide
investment management services. Patrick McKenna is a director of
Ingenious Asset Management Limited which is a subsidiary within the
Ingenious Group, which is controlled by Patrick McKenna. William
Simpson is also a non-executive director of Ingenious Asset
Management International Limited (IAMI) and FP Holdings Limited
which are Guernsey registered companies, within the Ingenious
Group. Ogier, of which William Simpson is a partner, has provided
legal advice in connection with these entities.
The Company has incurred a management fee of GBP179,000 of which
GBP27,915 was still outstanding at the period end.
At the EGM on 12 May 2010, the terms of the Manager's investment
management agreement with the Company were varied, reducing the
Manager's fee to 1.25 per cent. of the Company's net asset value
minus the cash held by the Company, payable monthly in arrears. If
the Company were to be unable to pay fees owing to the Manager due
to having insufficient cash, the Manager has agreed to defer such
payments until such time as the Company has sufficient cash
following the realisation of investee companies.
b. Ingenious Ventures, a trading division of Ingenious Asset
Management Limited, provides administrative support to the Company
which is outside the scope of the Investment Management Agreement.
The recharge is made at cost and has been approved by the Board at
a value of GBP85,500 for the current financial period. Ingenious
Ventures invoices for this quarterly in arrears. Ingenious Asset
Management Limited is a subsidiary within the Ingenious Group which
is controlled by Patrick McKenna.
c. Serena Tremlett is the Managing Director of Morgan Sharpe
Administration Limited which receives fees for providing
secretarial and administrative services to the Company. Morgan
Sharpe has received GBP30,008 for the current financial period in
fees for company secretarial and administration services.
d. William Simpson is a partner of Ogier, which may receive fees
for providing legal advice and other services from time to time to
the Company. In the current financial period, fees of GBP750 have
been incurred with Ogier for legal advice.
e. The Company has delegated discretionary treasury management
responsibilities to IAMI, a company of which William Simpson is a
non-executive director, to manage the uninvested funds of the
Company. As at 30 September 2011 IAMI held GBP6,856,000 (six months
ended 30 September 2010: GBP6,436,000; 31 March 2011: GBP5,591,000)
on behalf of the Company. IAMI is a subsidiary within the Ingenious
Group, which is controlled by Patrick McKenna. The fees for the
services provided by IAMI to the Company are met by Ingenious
Ventures.
f. IAMI has further delegated its treasury management
responsibilities to Ingenious Asset Management Limited which is a
subsidiary within the Ingenious Group, which is controlled by
Patrick McKenna.
g. Entities within the Group appointed Ingenious Corporate
Finance Limited (ICF), a company of which Patrick McKenna is a
director, to provide corporate finance services. ICF is a
wholly-owned subsidiary within the Ingenious Group, which is
controlled by Patrick McKenna.
h. Patrick McKenna is a director and a shareholder of both
Ingenious Entertainment VCT 1 plc (Entertainment VCT 1) and
Ingenious Entertainment VCT 2 plc (Entertainment VCT 2). The
Ingenious Group holds shares in both Entertainment VCT 1 and
Entertainment VCT 2. In August 2010, Entertainment VCT 1 and
Entertainment VCT 2 invested GBP1,000,000 through a combination of
equity and loan notes into CLS Concerts Limited (CLS) in return for
a 33 per cent. share of the equity. Cream Holdings Limited also
owns 33 per cent. of the equity of CLS. Patrick McKenna is a
director of Cream Holdings Limited.
i. In February 2011, Two Way Media Holdings Limited and
Ingenious Games LLP entered into an agreement to co-develop new
computer games. Patrick McKenna is a member of the Executive
Committee of Ingenious Games LLP and was a non-controlling member
of Ingenious Games LLP until he retired on 6 April 2011.
j. Patrick McKenna is a director and a shareholder of Ingenious
Live VCT 1 plc (Live VCT 1), Ingenious Live VCT 2 plc (Live VCT 2),
Entertainment VCT 1 and Entertainment VCT 2. Live VCT 1, Live VCT
2, Entertainment VCT 1 and Entertainment VCT 2 have jointly agreed
with Whizz Kid Entertainment Limited to form a new company, Dance
Floor Limited, to co-produce Let's Dance. In January 2009, Live VCT
1, invested GBP500,000 for a total of 12.475% of the equity in
Dance Floor Limited. Live VCT 2, Entertainment VCT 1 and
Entertainment VCT 2 each invested GBP500,000 for 12.475% of the
equity in Dance Floor Limited. Whizz Kid Entertainment Limited
holds 49.9% of the equity in Dance Floor Limited. Whizz Kid
Entertainment Limited is a subsidiary of IMAC of which Patrick
McKenna is a director. Ingenious Media Limited, a company which is
controlled by Patrick McKenna, is also a shareholder of IMAC.
Ingenious Ventures is also the Manager of IMAC.
Dance Floor Limited recouped GBP87,881 of its investment in
March 2011. At 30 September 2011, a balance of GBP1,754,972 was
held in a deposit account under charge from Dance Floor Limited.
This is repayable on demand from Dance Floor Limited.
During the period/year, the Group carried out a number of
transactions with the above mentioned related parties in the normal
course of business and on an arm's length basis as listed in the
table below.
Expenditure paid/(reclaimed) Amounts due
Six months Six months Six months Six months
ended ended Year ended ended ended Year ended
30 Sep 30 Sep 31 March 30 Sep 30 Sep 31 March
2011 2010 2011 2011 2010 2011
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
--------------------------------------- --- ---------- ---------- ----------- ---------- ---------- -----------
Ingenious Ventures
- Investment management
fee a 184 (116) 256 28 93 33
- Administrative support b 86 86 171 43 43 43
Morgan Sharpe Administration
Limited
* Company secretarial, administra
tion, accounting &
directorship c 30 30 79 6 12 -
Ogier Fund Administration
(Guernsey) Limited
* Directorship d - - 6 - 5 -
Ogier
- Legal advice d 1 13 13 - - -
Ingenious Corporate Finance
Limited
- Corporate finance g - 325 379 - - 50
======================================= === ========== ========== =========== ========== ========== ===========
Transactions between related parties
The arrangements detailed at notes a to b below between related
parties of the Company were agreed in the period from 2001 to 2004
prior to IMAC acquiring its 90 per cent. shareholding in IVLP in
2008. IVLP holds the Company's interest in Cream Holdings Limited
and Stage Three Music Limited which was disposed in July 2010. At
the time that this arrangement was entered into the entities were
not related to the Company. There has been no variation of the
terms of the arrangements since they were originally entered into.
Following the sale of the assets of Stage Three Music Limited to
BMG Rights Management GmbH, Stage Three Music Limited will remain
owned by IVLP until its liquidation is completed. This means the
board of Stage Three Music Limited will remain in place, but under
the control of the liquidator.
a. Patrick McKenna is a director of Cream Holdings Limited and
receives a salary of GBP10,000 per annum and a consultancy fee of
GBP110,000 per annum.
b. Ingenious Media Consulting Limited, a subsidiary within the
Ingenious Group, which is controlled by Patrick McKenna, receives a
fee of GBP120,000 per annum for the provision of finance director
and financial controller support to Cream Holdings Limited.
21. Events after the balance sheet date
a. On 28 October 2011, the Company sold its holding in Two Way
Media Holdings Limited to its management team. At the date of
signing this report, the financial impact of the sale is still to
be determined.
b. The directors of Live VCT 1 and Live VCT 2 have agreed to
sell their interest in CFDT Limited, an associated company of C.I.
(Events) Limited, to C.I. (Events) Limited, a wholly-owned
subsidiary of Cream Holdings Limited. The total consideration has
been agreed at GBP2.78 million, together with a future contingent
payment. As disclosed in note 20, Live VCT 1 and Live VCT 2 are
related parties of IMAC.
For further information:
Patrick McKenna/Patrick Bradley Ingenious 020 7319 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGGMAPUPGGRA
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