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