Fixed asset investments (see note 7) are valued at fair value.
For quoted securities included in current asset non-qualifying
investments, this is bid price. In respect of unquoted investments,
these are fair valued in accordance with the International Private
Equity and Venture Capital Valuation Guidelines. The fair value of
all other financial assets and liabilities is represented by their
carrying value on the Balance Sheet.
Fair Value Hierarchy
2010 2009
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Listed money market instruments (note 10) Level 1 1,717 2,598
Unquoted investments (note 7) Level 3 6,521 6,242
------------------------------------------ -------- -------- --------
8,238 8,840
--------------------------------------------------- -------- --------
The level 3 investments include net fair value gains of GBP279k
in the current year (2009: GBP287k), as disclosed in note 7.
In accordance with Financial Reporting Standard 29 'Financial
Instruments: Disclosures', the above table provides an analysis of
these investments based on the fair value hierarchy described below
which reflects the reliability and significance of the information
used to measure their fair value:
-- Level 1 - investments with quoted prices in active
markets;
-- Level 2 - investments whose fair value is based directly on
observable market prices or is indirectly drawn from observable
market prices; and
-- Level 3 - investments whose fair value is determined using a
valuation technique based on assumptions that are not supported by
observable current market prices or are not based on observable
market data.
The valuation techniques used by the Company are explained in
note 1 on accounting policies.
The Company's investing activities expose it to various types of
risk that are associated with the financial instruments and markets
in which it invests. The most important types of financial risk to
which the Company is exposed are:
-- Market risk;
-- Interest rate risk;
-- Credit risk; and
-- Liquidity risk.
The nature and extent of the financial instruments outstanding
at the Balance Sheet date and the risk management policies employed
by the Company are discussed below:
a) Market Risk
Market risk embodies the potential for both losses and gains and
includes interest rate risk and price risk.
The Company's strategy on the management of investment risk is
driven by the Company's investment objective. Investments in
unquoted companies, by their nature, involve a higher degree of
risk than investments in larger "blue chip" companies.
The risk of loss in value is managed through careful selection
in accordance with a formalised investment decision process, with
each investment proposal evaluated by the Investment Committee as
part of the due diligence stage. The Company's investment policy
can be found in the Business Review. The risk is also managed
through continuous monitoring of the performance of investments and
changes in their risk profile.
b) Interest Rate Risk
Some of the Company's financial assets are interest bearing, all
of which are at floating rates. As a result, the Company has
exposure to interest rate risk due to fluctuations in the
prevailing levels of market interest rate.
When the Company retains cash balances, the majority of cash is
held within interest bearing money market open ended investment
companies (OEICs). This is the Non-Qualifying Investments amount on
the Balance Sheet being GBP1,717k (2009: GBP2,598k). The benchmark
rate which determines the interest payments received on interest
bearing cash balances and debt investments in unquoted companies is
the bank base rate which was 0.5% as at 31 December 2010 (31
December 2009: 0.5%).
The following table illustrates the sensitivity of the impact on
ordinary activities for the year before taxation and total equity
to a change in interest rates of 50 basis points, with effect from
the beginning of the year. These changes are considered to be
reasonably possible based on observation of current market
conditions. The calculations are based on the Company's
Non-qualifying investments held at each balance sheet date. All
other variables are held constant.
31 December 2010 31 December 2009
GBP '000 GBP '000
+/- 50 basis points +/- 50 basis points
Impact on profit/(loss) on ordinary
activities for the year
before taxation and total equity 9 14
------------------------------------ ------------------- -------------------
c) Credit Risk
Credit risk is the risk that counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Company.
Whilst the Company is exposed to credit risk due to its
GBP4,484k (2009: GBP4,168k) unsecured loan note instruments, this
risk is mitigated by the Company requiring that minimum royalty
arrangements are in place prior to the investment as set out in the
Company's investment policy. In addition, and in accordance with
the Company's monitoring procedure, the Manager closely monitors
progress (including financial expenditure) against the Investee
Companies' agreed business plans.
The GBP4,484k (2009: GBP4,168k) unsecured loan notes are the
contractually agreed 70% of initial investments.
d) Liquidity Risk
The Company's financial instruments include equity and debt
investments in unquoted companies, which are not traded in an
organised public market and which generally may be illiquid. As a
result, the Company may not be able to liquidate quickly some of
its investment in these instruments at an amount close to fair
value.
The Company maintains sufficient reserves of cash and readily
realisable marketable securities to meet its liquidity requirements
at all times. No numerical disclosures have been provided in
respect of liquidity risk as this is not considered to be
material.
16. Contingencies, Guarantees and Financial Commitments
There is currently interest income accruing on the unsecured
loan note instruments at a rate of 4.5% (2009: 1.5%, amended to
4.5% in April 2010), being 4% over the bank base rate which was
0.5% as at 31 December 2010 (2009: 0.5%), totalling GBP137k (2009:
GBP47k). The repayment of this interest is not deemed recoverable
based on current profits being derived by the Investee Companies,
which currently can not be determined with any certainty, therefore
the Directors have not recognised it in the financial
statements.
17. Related Party Transactions
a) Ingenious Ventures Limited was the investment manager until
28 February 2008, when the investment management agreement was
novated to Ingenious Asset Management Limited, and Ingenious
Ventures became a trading division of Ingenious Asset Management
Limited. Patrick McKenna is a director of Ingenious Asset
Management Limited and was a director of Ingenious Ventures Limited
until 1 June 2009, which are subsidiaries within the Ingenious
Media Holdings plc group of companies (the Ingenious Group), which
is controlled by Patrick McKenna. Ingenious Ventures (the Manager),
as per the management agreement, receives a management fee of 0.5%
of the net asset value payable quarterly in advance. This amounted
to GBP172k as at 31 December 2010 (2009: GBP178k). The Manager also
charges an administration fee of GBP19k (2009:GBP18k) per annum and
irrecoverable VAT.
b) The funds invested in OEICs are managed by the Asset
Management division of Ingenious Asset Management Limited, a
company of which Patrick McKenna is a director. Ingenious Asset
Management Limited is a subsidiary of the Ingenious Group, which is
controlled by Patrick McKenna. There is no fee associated with this
transaction.
c) Patrick McKenna is a director and a shareholder of Ingenious
Live VCT 1 plc. In January 2010, the Company made a further
investment of GBP74,000 into an existing company, Into the Groove
Limited, to co-promote 80's Rewind bringing its total investment to
GBP346,348 for 13.97% of the equity. Ingenious Live VCT 1 plc also
invested GBP74,000k bringing its total investment to GBP346,348 for
13.97% of the equity of Into the Groove Limited.
d) Patrick McKenna is a director and a shareholder of Ingenious
Live VCT 1 plc. In January 2010, an existing company, IR
Productions Limited, which co-promotes a music festival at
Powderham Castle, repaid GBP74,000 of unsecured loan notes to the
Company. This reduced the Company's total investment to GBP328,350
while retaining 24.95% of the equity. IR Productions Limited also
repaid GBP74,000 of unsecured loan notes to Ingenious Live VCT 1
plc reducing its total investment to GBP328,350 while retaining
24.95% of the equity.
During the period the Company has entered into transactions with
the above-mentioned related parties in the normal course of
business and on an arm's length basis:
2010 2010 2009 2009
Expenditure Amounts Expenditure Amounts
paid due paid due
Entity Note GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------ ------------- --------- -------------- ---------
Ingenious Asset Management Limited
Investment
management fee a 172 - 178 -
Administration
fee a 19 - 18 -
Irrecoverable
VAT a 1 2 8 3
----------------- ------ ------------- --------- -------------- ---------
Transactions Between Related Parties
Ingenious 2 (LSE:ILV2)
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부터 5월(5) 2024 으로 6월(6) 2024
Ingenious 2 (LSE:ILV2)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
