IBIS Media VCT 1 plc Annual Report & Financial Statements for the year ended 31 January 2016

Incorporated in England and Wales with registration number 5660269 Contents

Financial Summary 1 Strategic Report Chairman’s Statement 2 Investment Adviser’s Review 4 Objectives and Key Policies 13 Reports from the Directors The Board, Investment Committee & Investment Adviser 15 Directors’ Report 16 Statement of Corporate Governance 18 Statement of Directors’ Responsibilities 21 Directors’ Remuneration Report 22 Report of the Independent Auditor 25 Financial Statements Income Statement 27 Balance Sheet 28 Statement of Changes in Equity 29 Cash Flow Statement 30 Notes to the Financial Statements 31 Information for Shareholders Notice of Annual General Meeting 40 Form of Proxy 43 Corporate Information 45 IBIS Media VCT 1 plc 1

Financial Summary

Year ended 31 January 2016 2015 Net assets £3,836,419 £5,593,882 Net asset value per share 35.30p 51.47p Investment income £89,593 £104,854

Return on ordinary activities before tax - Revenue £(90,201) £4,551 - Capital £(1,667,262) £(617,771) - Total £(1,757,463) £(613,220)

Return per share - Revenue (0.83)p 0.04p - Capital (15.34)p (5.73)p - Total (16.17)p (5.69)p

Dividend per share declared in respect of the year - Revenue Nil Nil - Capital Nil Nil - Total Nil Nil

Share price at end of year 21.0p 21.5p 2 IBIS Media VCT 1 plc

Strategic Report Chairman’s Statement

The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the Company for shareholders’ collective benefit. This report has been prepared by the Directors in accordance with the requirements of Section 414 of the Companies Act 2006.

Company Overview but are held at nil value until there is and the net asset value total return per The improved trading at Steel River more visibility on each company’s share decreased from 60.47p to Media, the holding company for prospects. 44.30p, a decrease of 16.17p per share Contagious, and Freshwater UK or 26.7%. reported at IBIS’ half-year continued in Financial Performance The net cash inflow during the year was the second half of 2015. However, £1,582 due to operating activities. despite an encouraging first six months The Board, in consideration of the Company’s performance and taking Over the same period, the FTSE All- of 2015, Get Me Media’s financial Share Media Index increased by 4.58%. position deteriorated rapidly in October account of the comparatively long-term nature of the Company’s investments, A graph comparing the Company’s and, despite discussions with various share price total return, the Company’s strategic investors and well-regarded pays particular attention to the net asset value total return per share net asset value total return per share individuals from the media industry, the and the total return from a notional company entered a creditors’ voluntary performance against the FTSE All- Share Media Index (which IBIS Private investment of 100p in the FTSE All- liquidation which concluded in January Share Media Index over the period from 2016. Regrettably, there are no Equity Partners LLP (the “Investment Adviser”) considers to be the most 5 April 2006 to 31 January 2016 is distributions available to creditors or presented on page 24. shareholders, including IBIS. As a appropriate broad equity market index result of the insolvency, IBIS has written for comparative purposes) and the total The total expense ratio, calculated as its investment off, resulting in a expense ratio. the year’s expenses (as disclosed in £1,161,831 decrease in the Company’s The net asset value total return per the profit and loss account) divided by net asset value over the 12 month share comprises the net asset value the average net asset value across the reporting period attributable to Get Me plus cumulative dividends paid per year, was 6.78% (2015: 3.43%). The Media. Further details of Get Me Media share. Net asset value is calculated at current year’s expenses include a short and IBIS’ investment in it are provided least quarterly with investments valued term loan of £75,000 and £86,893 of in the Investment Adviser’s Review. in accordance with the International interest which were written off when Get Private Equity and Venture Capital Me Media entered administration. If There is more encouraging news to these exceptional costs are excluded report on Contagious and Freshwater Valuation Guidelines. As at 31 January 2016, the Company’s net asset value from the calculation, the total expense UK. Both companies reported another ratio for the current year is 3.62%. full year of profitable and improving total return per share was 44.30p. trading results. Contagious has During the year under review, the Under the terms of the Investment received in-bound acquisition interest Company’s net assets decreased by Adviser agreement, the running costs from multiple parties and Freshwater £1,757,463. This decrease comprises of the Company (excluding the has increased its dividend payments to an unrealised capital loss of £500,155 Investment Adviser’s performance shareholders, with IBIS receiving an due to a decrease in the fair value of related incentive fee, irrecoverable VAT, interim dividend of £11,036 in May Ginx TV, a realised capital loss of trail commission and costs of any 2015, a final dividend increased by £1,074,938 due to the write off of the significant corporate activity) are 10% to £24,281 in January 2016 and a Company’s investment in Get Me restricted to a maximum of 3.5% of the further interim dividend increased by Media, a realised capital loss of average value of the Company’s net 50% to £16,555 announced since the £92,169 comprising investment adviser assets. Any excess will be paid by the Company’s year-end. Ginx TV fees allocated to capital and a revenue Investment Adviser. completed an equity fundraising in loss of £90,201 (which includes January 2016 and is in discussions with £86,893 of written off accrued loan Dividends a number of strategic investors to fund interest due from Get me Media). a rebranded channel dedicated to Therefore, the net asset value per share No dividend was paid for the year eSports (competitive video gaming). decreased from 51.47p to 35.30p, a ended 31 January 2015 and the Board Masher Technologies and Riva Digital decrease of 16.17p per share or 31.4%, proposes that the Company pays no Media remain within the IBIS portfolio dividend for the year ending 31 January IBIS Media VCT 1 plc 3

2016. The Board believes that at this Digital Media remain within the IBIS stage of the Company’s development portfolio but are both held at nil value the payment of future dividends should following write downs in prior years. be more directly linked to the proceeds Both companies will be held at nil value of realisations from the remaining until there is more visibility on each portfolio companies. This is likely to company’s prospects. lead to a future flow of dividends that is more irregular both with regards to timing and to size. Outlook We are pleased to report another year of profitable and improving trading at Investment Performance Contagious and Freshwater. It is No new or follow-on investments in IBIS encouraging to see in-bound portfolio companies were made during acquisition interest in Contagious, the year and no investments were although it is still too early to determine directly realised. The carrying value of the outcome of various discussions. the Company’s venture capital Freshwater is now a business with a investments decreased by £1,243,466, strong balance sheet and improving taking the fair value of the portfolio to outlook, with the prospect of increasing £3,938,872 as at 31 January 2016. dividends to shareholders. Ginx TV is in Despite profitable and improving discussions with a number of major trading results reported by Contagious strategic investors, a positive outcome and Freshwater, we held the valuation of which could materially improve the of our investments in both companies future prospects of the company. unchanged over the 12 month These three companies now represent reporting period. In order to support 100% of the Company’s current Ginx TV’s fundraising, we agreed to portfolio net asset value between them. convert our £637,500 loan note, The Board is grateful for the support of £191,250 redemption premium and the Company’s shareholders and £256,627 in accrued loan interest into would encourage them (or their the company’s ordinary shares, advisers) to contact the company conditional upon a successful equity secretary on 0131 243 7210 with any crowdfunding campaign in January questions they may have about either 2016. We reduced the carrying value of the Company or their shareholdings in our investment in Ginx TV by £500,155 it. The Investment Adviser also to reflect the price of the most recent maintains a website for the Company third party investment in the company. which may be accessed at As a result of Get Me Media entering a www.ibiscap.com. creditors’ voluntary liquidation in January 2016, IBIS has written off £999,938 in equity and long-term loans, £75,000 in short-term loans and £86,893 in accrued loan interest, resulting in a £1,161,831 decrease in Sir Robin Miller the Company’s net asset value over the Chairman 12 month reporting period attributable 31 May 2016 to the Company’s investment in Get Me Media. Masher Technologies and Riva 4 IBIS Media VCT 1 plc

Strategic Report Investment Adviser’s Review

Overview Freshwater continued its upward trend position deteriorated rapidly in October > Year-end NAV per share of 35.30p, in improved key trading and financial when new business came to an abrupt compared to 51.47p at the end of indicators, with £3.49m in revenue and halt and some of the larger client 2014/15, reflecting negative £0.75m in EBITDA, up 4% and 20% renewals failed to materialise. By adjustments to the carrying value respectively at the company’s 31 November, Get Me Media had missed of two investee companies and August 2015 year-end. Freshwater a number of VAT and PAYE payments ongoing costs increased its final dividend payment to agreed with HMRC and it became shareholders by 10% and continued inevitable that HMRC would petition to > Fair value of Contagious trading improvement at the company’s wind the business up without unchanged despite improved half-year to 29 February 2016 means immediate payment. The company’s trading and recent acquisition that Freshwater also recently declared board accelerated discussions with interest a 50% increase in its interim dividend. various strategic investors and well- > Fair value of Freshwater Freshwater is now a business with a regarded individuals from the media unchanged despite continued strong balance sheet and improving industry, but no offers were forthcoming trading improvement and outlook. and the company’s shareholders were increasing dividend payments to IBIS has reduced the carrying value of unwilling to continue to support the shareholders its investment in Ginx TV to reflect the business. Following advice from an insolvency practitioner, the directors > Investment in Get Me Media price of the most recent third party sought to commence a process of written off due to the company investment in the company and written putting the company into a creditors’ entering creditors’ voluntary off its investment in Get Me Media due voluntary liquidation in December and liquidation in January 2016 to the company entering a creditors’ voluntary liquidation in January 2016. this was confirmed at meetings of the > Reduction in the carrying value of shareholders and creditors that took Ginx TV to reflect the price of the Over the course of 2015, Ginx TV place in January 2016. After deducting most recent third party investment launched a number of smaller the insolvency practitioner’s costs, European channel deals in spite of a > The boards of Freshwater, there are no distributions available to slowing linear TV market for new Contagious and Ginx TV are creditors or shareholders, including channels and grew its UK advertising focused on achieving exits as IBIS. As a result of the insolvency, IBIS revenue by 100% from its 24/7 free-to- soon as practicable has written off £999,938 in equity and air channel on Virgin Media. The long-term loans, £75,000 in short-term Despite profitable and improving company commenced a new loans and £86,893 in accrued loan trading results reported by Steel River fundraising and secured £600,000 in interest, resulting in a £1,161,831 Media, the holding company for commitments from existing decrease in the Company’s net asset Contagious, and Freshwater, IBIS has shareholders followed by £569,000 via value over the 12 month reporting held the valuation of its investments in an over-subscribed equity period attributable to the Company’s both companies unchanged over the crowdfunding campaign on investment in Get Me Media. Further 12 month reporting period under Crowdcube.com. In its efforts to details of Get Me Media and IBIS’ review. support the company’s fundraising, investment in it are provided in the Contagious’ core UK and US territories IBIS agreed to convert its £637,500 Portfolio Review. loan note, £191,250 redemption continued to perform well, with FY2015 Masher Technologies and Riva Digital revenue of £3.34m and Earnings before premium and £256,627 in accrued loan interest into the company’s ordinary Media remain within the IBIS portfolio Interest Taxation, Depreciation and but are both held at nil value following Amortisation (EBITDA) of £0.21m, up shares, conditional upon a successful equity crowdfunding campaign in write downs in prior years. Both 8% and 128% respectively year-on-year. companies will be held at nil value until Contagious expects to continue its January 2016. IBIS’ valuation at the year ended 31 January 2016 has there is more visibility on each positive momentum in FY2016 at the company’s prospects. group level and trade well-ahead of last decreased by £500,155 over the 12 year in terms of revenue and month reporting period to reflect the In the 12 months to 31 January 2016, profitability. The company received in- price of the most recent third party IBIS made downward adjustments in bound acquisition interest in the investment. the carrying value of its investments in second half of 2015, resulting in the As reported at IBIS’ half-year, there Ginx TV and Get Me Media. The table receipt of a letter of intent in Q1 2016. were a number of positive below summarises the changes in fair At the time of writing, these discussions developments at Get Me Media over value as compared to the previous remain on-going and the company has the course of the first six months of year, including and excluding the subsequently received a separate 2015. However, the company’s financial impact of new investment by IBIS. approach from a new interested party. IBIS Media VCT 1 plc 5

Change in Fair Change in Fair Value between New investment Value between 31 Jan 2015 and in the period 31 Jan 2015 and Percentage 31 Jan 2016 (including 31 Jan 2016 Change (including new capitalised (excluding new (excluding new investment) interest) investment)* investment) Steel River Media (Contagious) £0 £0 £0 0% Ginx TV* -£243,528 -£256,627 -£500,155 -30% Get Me Media -£999,938 £0 -£999,938 -100% Masher £0 £0 £0 0% Freshwater £0 £0 £0 0% Riva Digital Media £0 £0 £0 0% Total -£1,243,466 -£256,627 -£1,500,093 -24%

*Capitalised redemption premium of £191,250 provided as part of a long term loan agreement with Ginx TV has been included in net gains and losses on investments.

As the above table illustrates, we have seen an overall decrease in the value of the IBIS investment portfolio, which on a like for like basis has decreased by approximately 24% over the 12 month period. 6 IBIS Media VCT 1 plc

Strategic Report Investment Adviser’s Review (continued)

The Company has a portfolio of McCann Worldgroup. activities before taxation of £0.06m. investee companies with a strong Contagious’ offering includes a The company ended FY2015 with digital focus spanning Marketing quarterly intelligence journal, a digital turnover of £3.34m and Earnings Services, Business Information and insights and trends platform and before Interest, Taxation, Depreciation Content/IP media sub-sectors, as consultancy service, covering topics and Amortisation (EBITDA) of £0.21m illustrated in the above chart. such as: creative leadership and (unaudited). excellence, programmatic creative Contagious’ core UK and US territories Portfolio Review content and media, mobile, social, performed well during the company’s emerging cultures, behaviour and FY2015 financial year. The group The IBIS Media portfolio comprises technologies. Separately, Contagious traded significantly ahead of FY2014 investments in Steel River Media, the has an events division that delivers and also up on budget in terms of holding company for Contagious, Ginx curated industry events that look at sales and profitability. Revenue grew TV, Freshwater, Masher Technologies emerging themes and movements. by £0.25m (8%) and EBITDA was up and Riva Digital Media (both held at nil £0.21m (98%) over the prior year. The value) and Get Me Media (written off). The overall proposition of the business is to identify ideas, insight and company reported strong performance The following is a review of the current innovation behind the world’s most of I/O (online subscriptions) with new portfolio. revolutionary marketing strategies to business increasing by 66% year-on- make brands braver and to be year in part due to a successful contagious. migration of its Magazine (print) Steel River Media (being the holding business online, whilst Insider company of Contagious) (consultancy) increased by 8%. Date of initial investment: Investment Thesis In 2014, Contagious launched in Asia 12 January 2010 Digital media has had a major impact (Singapore) and via a joint venture in Investment to date: on the way that brands can South America (Brazil). The Singapore £850,000 ordinary shares communicate to their end customers. business hit its sales forecast for the As the market has changed it has year, although impacted by the Valuation as at 31 January 2015: become increasingly important for economic recession in Brazil, the £2,092,746 brand owners to be aware of new South American joint venture Investment in period: marketing techniques as they emerge continued to trade behind budget and £0 as well as understanding the remains loss making. Nevertheless, Contagious expects to continue its Valuation as at 31 January 2016: associated technologies. Contagious positive momentum in FY2016 at the £2,092,746 seeks to address this market by providing an authoritative intelligence group level and trade well-ahead of Change in valuation: source for this information. last year in terms of revenue and year-on-year £0, 0% profitability. At the time of the investment by IBIS, Contagious was a profitable company In the second half of 2015, Contagious Investment Overview with a management team that had received in-bound acquisition interest successfully established Contagious’ from a number of well-known media Contagious, which was launched in position in the market. The company companies and also a global 2004, is a respected global intelligence benefits from an attractive business consultancy brand. In Q1 2016, the resource and advisory service model which is largely based on company progressed discussions with reporting on innovative marketing annual subscriptions for its various one party to the point of negotiating a techniques, consumer culture and the business intelligence services. letter of intent. At the time of writing, impact of emerging technologies on these discussions remain on-going brands. Contagious’ clients include and the company has also received a some of the world’s leading advertisers Recent Updates separate approach from a new such as Google, Heineken, Mondelez, interested party. Notwithstanding Nike, Kraft and LVMH as well as a Contagious’ most recent audited financial statements for the year ended Contagious’ continued trading range of advertising agencies momentum, improving outlook and including FCB, Havas, JWT and 31 December 2014 reported £3.09m in turnover and a loss on ordinary acquisition interest, IBIS’ valuation at IBIS Media VCT 1 plc 7

the 31 January 2016 year-end is growing number of video gamers; Research Board (BARB). Ginx has also unchanged over the 12 month traditionally a difficult audience to seen its viewership ratings improve by reporting period. reach. 50% in France over the period, where Ginx TV has an attractive scalable its 24/7 localised channels are available in 13 million TV households. Ginx TV platform from which Ginx TV channels can be delivered to cable, satellite and In the first half of the 2015, Ginx TV Date of initial investment: TV broadcasters all over the world. commenced a fundraising of up to 24 August 2010 Ginx TV is the first 24/7 channel £1.25m. The company secured Investment to date: dedicated to the video games sector commitments for approximately £1,241,627 ordinary shares and loan and is expected to benefit from the size £600,000 from existing shareholders notes and growth of the market. The and launched an equity crowdfunding company’s principal revenue stream is campaign on Crowdcube.com, Valuation as at 31 January 2015: from the sale of Ginx TV programming exceeding its fundraising target by £1,679,883 to local distributors in multiple raising a total of £569,000 by the time Investment in period: international territories. of the campaign closed in January £256,627 (Accrued loan interest IBIS is backing an experienced team: 2016. In its efforts to support the capitalised) the chairman of Ginx TV is Peter company’s fundraising, IBIS agreed to Redemption premium capitalised: Einstein, who was formerly president of convert its £637,500 loan note, £191,250 MTV Networks Europe and Showtime £191,250 redemption premium and Arabia and the CEO is Michiel Bakker, £256,627 in accrued loan interest into Valuation as at 31 January 2016: the company’s ordinary shares, £1,436,355 who was previously executive vice president and managing director of conditional upon a successful equity Change in valuation: MTV Networks UK and Nordic. crowdfunding campaign. year-on-year -£243,528, -14.5% At the time of writing, Ginx TV is in discussions with a number of major Recent Updates strategic investors to fund a rebranded Investment Overview Ginx TV’s most recent audited financial channel offering dedicated to eSports Ginx TV produces a 24/7 video games statements for the financial year ended (competitive video gaming). TV channel as well as individual review 31 December 2014 reported £1.25m in Nevertheless, IBIS’ valuation at the 31 and insight programmes on the latest turnover and a loss on ordinary January 2016 year-end has decreased video games. Ginx programming is activities before taxation of £0.80m. by £243,528 over the 12 month available on TV and online and the TV Sales marginally decreased in FY2015 reporting period to reflect the price of shows are targeted at international to £1.24m, although the company the most recent third party investment. audiences in English and localised reported a significantly reduced versions. Ginx TV is now aired in over EBITDA loss of £0.25m (unaudited). 50 territories and in more than 10 languages. During the course of FY2015, Ginx TV launched a number of smaller European channel deals and continued Investment Thesis its efforts to convert free-to-air channel contracts inherited from The Poker The global video games industry is Channel acquisition in 2013 to paid-for worth over $65 billion a year; is 2x channels in spite of a slowing linear TV larger than music (at $32 billion) and market for new channels. Year-on-year forecast to be $91 billion by 20151. UK advertising revenue grew by 100% Video gaming is growing faster than from its 24/7 free-to-air channel on other entertainment sectors. Ginx Virgin Media, with independent ratings provides video games publishers with growth of 59% reported over the same an effective means of marketing to a period by the Broadcasters’ Audience

1 GIA Video Games: A global Strategic Business Report 2001-2015 8 IBIS Media VCT 1 plc

Strategic Report Investment Adviser’s Review (continued)

Freshwater reported turnover of £4.20m, revenue will be paid in May 2016. Date of initial investment: of £3.49m and a profit before tax of Freshwater is now a business with a 18 July 2007 £0.65m. Freshwater delivered another strong balance sheet, well-established excellent set of results, building on a brand, diverse offering and strong Investment to date: successful prior year and positioning £864,499 ordinary shares position in key sectors such as itself as one of the UK’s leading healthcare, transport and infrastructure. Valuation as at 31 January 2015: independent communications Notwithstanding Freshwater’s £409,771 consultancies. continued trading momentum and Investment in period: The group once again saw all its key improving outlook, IBIS’ valuation at the £0 trading and financial indicators moving 31 January 2016 year-end is in the right direction. Revenue grew unchanged over the 12 month Valuation as at 31 January 2016: 4%, following a 7% increase in the prior reporting period. £409,771 year, as the company continued to Change in valuation: focus on markets with the greatest year-on-year £0, 0% potential, especially London, and Get Me Media sectors such as healthcare and Date of initial investment: infrastructure. This growth yielded a 22 January 2007 Investment Overview 22% increase in operating profit to Investment to date: Freshwater UK is a former AIM-listed £0.67m and a 20% increase in EBITDA £806,442 ordinary shares and public relations led marketing group to £0.75m, with full year savings from unsecured loan notes with teams operating in the UK and the closure of small, unprofitable Ireland across five specialisms. The offices in Belfast and Edinburgh Valuation as at 31 January 2015: company has four support divisions helping to reduce running costs. £999,938 offering: marketing, graphic design and Earnings per share also continued to Investment in period: media buying, conferences, training increase, rising 11% to 2.45p, the £0 and coaching, and interactive and highest level since 2007/08. online media. Valuation as at 31 January 2016: These healthy earnings translated into £0 a 33% increase in net cash flow from operating activities, providing for an Change in valuation: Investment Thesis increased level of dividend payments year-on-year -£999,938, -100% The aim of Freshwater has been to and the continued strengthening of the build a network of regional PR balance sheet. The 2013/14 final Investment Overview agencies largely through acquisition dividend of 1p paid in January 2015 and to integrate the businesses under was the first dividend payment for five Get Me Media, which trades as one brand. The company has years. This was followed by a payment Getmemedia.com, is an online completed 13 acquisitions since 2004 of a 0.5p interim dividend for 2014/15 directory of marketing and media and has built up expertise in a number in May 2015. In light of the further spend ideas. The company helps of specialty areas. Freshwater has an profitable growth in the second half of marketers and their agencies find abundance of selling opportunities due the year, Freshwater declared a 1.1p relevant and up-to-date marketing to its diverse roster of clients across final dividend for 2014/15, which was opportunities for their brands. The the UK and presence in a wide range paid in January 2016, representing a company serves two needs: 1) for of economic sectors. 10% increase in the final dividend. media owners, it gives them a shop Continued year-on-year trading window to promote their inventory of improvement at the company’s half- media opportunities to advertisers and Recent Developments year to 29 February 2016 means that their agencies, from whom the media Freshwater’s most recent audited Freshwater recently declared a 0.75p owners hope to attract a share of financial statements for the company’s interim dividend, representing a 50% marketing spend; and 2) for advertisers financial year ended 31 August 2015 increase in the interim dividend, which and their agencies, it gives them an easily navigable and searchable IBIS Media VCT 1 plc 9

database of alternative media and immediate payment. The company’s investment in Get Me Media. ideas for their marketing campaigns. board accelerated discussions with various strategic investors and well- regarded individuals from the media Masher Investment Thesis industry, but no offers were Date of initial investment: The Get Me Media business model forthcoming and the company’s 14 July 2008 shareholders were unwilling to has been to disrupt the traditional Investment to date: continue to support the business. market for media spend by allowing £564,333 ordinary shares, preferred Following advice from an insolvency greater transparency and providing ordinary shares and loan notes media owners and advertisers the practitioner, the directors sought to opportunity to transact directly. The commence a process of putting the Valuation as at 31 January 2015: business was set up by Pete Davis, company into a creditors’ voluntary £0 who had nine years of marketing liquidation in December and this was Investment in period: experience at Nestlé UK prior to confirmed at meetings of the £0 launching Get Me Media. The shareholders and creditors that took Valuation as at 31 January 2016: investment thesis was to back a place in January 2016. £0 management team in the development An ongoing issue through the course of a new digital platform which would of the company’s development was Change in valuation: allow market participants to trade more that it failed to develop beyond its year-on-year £0, 0% efficiently and with better knowledge of reliance on its founder to generate new the available marketing opportunities. business, whilst also struggling to Investment Overview consistently renew existing client business. The Investment Adviser Masher Technologies produces an Recent Developments worked hard to address this issue and online video editing and messaging Get Me Media’s most recent draft, over the years it was instrumental in tool designed to be used in unaudited accounts for the year ended working with the founder to appoint a conjunction with online social 31 December 2014 reported £0.52m in number of experienced and high- networking communities; it is a B2C turnover and a pre-tax loss of £0.07m, profile chairmen and various senior widget and application with simple and a reduction in turnover but trading at a media industry executives to the intuitive drag and drop functionality. significantly reduced loss over FY2013. business. Unfortunately, none of these Masher is a spin-off from BBC As reported at IBIS’ half-year to 31 July appointments ultimately succeeded in Worldwide. Through a content 2015, there were a number of positive reversing the fortunes of the company. licensing agreement with the BBC, it developments at Get Me Media over offers its users access to a catalogue After nine years of support, IBIS did the course of the first six months of of video and audio content. not feel it was in the best interests of 2015. After several years of losses, Get its shareholders to commit further Me Media managed to reduce its funding to Get Me Media or bid to operating costs to the point whereby it Investment Thesis purchase the company’s assets via the traded EBITDA profitably and the liquidation without a new management Online social media has been one of company subsequently commenced team and visibility of new financing. the fastest growing sectors of media discussions with a major strategic After deducting the insolvency within the last few years. Masher investor in September 2015. practitioner’s costs, there are no provides an application for online However, the company’s financial distributions available to creditors or social media that seeks to enhance position deteriorated rapidly in October shareholders, including IBIS. As a video messaging and communication. when new business came to an abrupt result of the insolvency, IBIS has The ability to mix user generated halt and some of the larger client written off £999,938 in equity and long- content (UGC) and high quality video renewals failed to materialise. By term loans, £75,000 in short-term loans content from BBC Worldwide’s digital November, Get Me Media had missed and £86,581 in accrued loan interest, archive provides an exciting and a number of VAT and PAYE payments resulting in a £1,161,518 decrease in differentiated product for users. agreed with HMRC and it became the Company’s net asset value over Revenues to date have been inevitable that HMRC would petition to the 12 month reporting period generated by providing Masher as a wind the business up without attributable to the Company’s white label application to brands and 10 IBIS Media VCT 1 plc

Strategic Report Investment Adviser’s Review (continued)

media owners seeking to use online Riva Digital Media Investment Thesis social media as part of their marketing Date of initial investment: The original investment thesis was campaigns. As Masher’s audience 03 May 2007 based on the management’s ability to builds, the intention is to generate Investment to date: secure high quality content, such as advertising income from the online exclusive celebrity video downloads, traffic using the application as well as £345,015 ordinary shares and £4,500 unsecured loan note which would then be used to populate by charging for premium content and an online store for consumers. The services to consumers. Valuation as at 31 January 2015: business model suffered due to the £0 lack of premium content and a Recent Developments Investment in period: resulting lower level of users of Epacs. £0 The current plan from the management Masher Technologies’ most recent team is to re-position Epacs as a PC Valuation as at 31 January 2016: statutory accounts the company’s version of mobile applications (“Mobile £0 financial year ended 30 June 2015 Apps”) on phones such as Apple’s reported £1,049 in turnover and a loss Change in valuation: iPhone. The marketplace for Mobile on ordinary activities before taxation of year-on-year £0, 0% Apps has grown enormously over the £55,688. Masher continues to attract last few years and Riva Digital Media is approximately 50,000 visitors per seeking to benefit from this demand month and signs up in excess of 2,000 Investment Overview spilling over into the PC environment new users per week to its website with Riva Digital Media’s core activity is the where current Mobile Apps are not no paid-for marketing. More than design, production and distribution of designed to function. 10,000 videos are created each month Epacs. Each Epac is a bundled and, as a result, Masher continues to collection of premium content which is generate revenue from display digitally wrapped in a unique branded Recent Developments advertising that is sufficient to cover skin and is downloadable to a During the Company’s year ended 31 the cost of hosting the website. customer’s personal computer. The January 2012, IBIS wrote down the fair Masher’s chairman is exploring components of an Epac can include value of its investment in Riva Digital alternative revenue streams and the video clips, MP3 files, ring tones, Media to zero. Riva Digital Media will company launched a pay-per-video- digital wall paper and customised be held at nil value until there is more download feature in December 2015 information. visibility on the company’s prospects. which it aims to promote more widely during the course of 2016. Since launch, Riva Digital Media has struggled to establish Epacs as a At the Company’s 31 January 2015 widely used consumer application for year-end, IBIS wrote down the fair value the consumption of mixed digital of its investment in Masher to zero. media. The company’s business Masher will be held at nil value until model, which required significant web there is more visibility on the company’s traffic to generate advertising income prospects. as well as charging for premium content, has not worked as originally envisaged. In response the management cut costs significantly while the business model was redeveloped. IBIS Media VCT 1 plc 11

Investment Portfolio as at 31 January 2016

2016 2015 % of net % of net Cost Valuation assets Cost Valuation assets £ £ by value £ £ by value Venture capital investments Steel River Media Limited 850,000 2,092,746 54.55 850,000 2,092,746 37.41 Ginx TV Limited 1,241,627 1,436,355 37.44 985,000 1,679,883 30.03 Masher Technologies Limited 564,333 0 0 564,333 0 0 Freshwater UK plc 864,499 409,771 10.68 864,499 409,771 7.32 Get Me Media Limited 806,442 0 0 806,442 999,938 17.88 Riva Digital Media Limited 349,515 0 0 349,515 0 0

Total venture capital investments 4,676,416 3,938,872 102.67 4,419,789 5,182,338 92.64

Total fixed asset investments 4,676,416 3,938,872 102.67 4,419,789 5,182,338 92.64

Net current assets (102,453) (2.67) 411,544 7.36

Net assets 3,836,419 100.00 5,593,882 100.00 12 IBIS Media VCT 1 plc

Strategic Report Investment Adviser’s Review (continued) Venture Capital Investments as at 31 January 2016

Steel River Media Limited Freshwater UK plc Masher Technologies Limited Steel River Media Limited is the holding Freshwater is a regional public relations Masher is an online application for the company for Contagious, a publisher of led marketing group with teams creation of personal videos including business information on new marketing operating in the UK and Ireland. BBC content. strategies and associated The Company’s investment has been The Company’s investment has been technologies. valued on the basis of discounted cash valued on the basis of original cost as The Company’s investment has been flow and valuations from transactions adjusted by an impairment provision. valued on the basis of discounted cash involving comparable companies. flow and valuations from transactions involving comparable companies.

VCT Investment VCT Investment VCT Investment Cost £850,000 Cost £864,499 Cost £564,333 Valuation £2,092,746 Valuation £409,771 Valuation £Nil Equity holding 24.5% Equity holding 10.9% Equity holding 33.3% Income accrued to VCT Income accrued to VCT Income accrued to VCT in y/e 31 Jan ‘16 £25,760 in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £Nil Income paid to VCT Income paid to VCT Income paid to VCT in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £12,441 in y/e 31 Jan ‘16 £Nil

Ginx TV Limited Get Me Media Limited Riva Digital Media Limited Ginx TV Limited produces a 24/7 TV Get Me Media is a search engine for Riva is a digital media agency. channel focused on the video games brands and their agencies to find The Company’s investment has been market as well as producing individual marketing, media and sponsorship valued on the basis of original cost as TV programmes for international solutions. adjusted by an impairment provision. distribution. The Company’s investment was written The Company’s investment has been off as a result of the company entering valued on the basis of third party equity a creditors’ voluntary liquidation in investment in the company and the January 2016. debt element held at its repayment value.

VCT Investment VCT Investment VCT Investment Cost £1,241,627 Cost £806,442 Cost £349,515 Valuation £1,436,355 Valuation £Nil Valuation £Nil Equity holding 20.3% Equity holding 38.8% Equity holding 9% Income accrued to VCT Income accrued to VCT Income accrued to VCT in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £Nil Income paid to VCT Income paid to VCT Income paid to VCT in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £Nil in y/e 31 Jan ‘16 £Nil Accrued interest converted to equity in y/e 31 Jan ‘16 £256,627 Redemption premium converted to equity in y/e 31 Jan ‘16 £191,250 IBIS Media VCT 1 plc 13

Strategic Report Objectives and Key Policies

The Board is responsible to Investment policy unless the management team has a shareholders for the proper The objective of the Company is to strong profile in the media sector and a management of the Company and for make investments in unquoted track record of value creation for determining the Company’s investment companies within the media sector that shareholders. policy. Investment and divestment have the potential to grow and to The Directors and the Investment proposals are originated, negotiated achieve capital appreciation on a Committee look for the following and recommended to the Investment subsequent exit. characteristics when considering Committee by IBIS Private Equity potential investments: Partners LLP. Company secretarial and Whilst the Company’s Directors accountancy services are provided to (“Directors”) and the Company’s > A sustainable business model the Company by The City Partnership investment committee (“Investment > A high quality management team (UK) Limited. Committee”) are primarily targeting investments in privately owned > A competitive advantage within In reviewing the work of the Investment companies, suitable opportunities to their target markets Committee and the Investment Adviser, acquire VCT qualifying investments in > The scope for organic revenue the Board looks to be satisfied that: smaller AIM and ISDX-quoted stocks growth > The Company’s investment policy will also be considered where there is > Profitability or reasonable is being followed potential to achieve the level of return expectation of achieving targeted by the Company’s board of > Each investment or divestment profitability within a foreseeable Directors (“Board”). It is also the decision is subjected to rigorous timeframe. due diligence intention of the Directors to build a balanced portfolio with interests in a > Risk is spread by investing across mixture of cyclical and non-cyclically Business and principal activities a sufficiently diverse range of exposed media companies operating businesses within the media sector both in mature and high growth areas The Company was launched in and by maintaining a balance of the market. IBIS is, however, unlikely February 2006 to invest in private between equity and loan stock to invest in all media sub-sectors as equity type transactions at the smaller exposure factors such as growth prospects, the end of the UK media industry. > The portfolio will meet the HMRC competitive environment and The Directors do not foresee any major VCT conditions valuations may mean that the changes in the activity undertaken by prospective investment performance of the Company in the foreseeable future. In consideration of the Company’s certain of those sub-sectors would be financial performance, the Board, unlikely to provide satisfactory rates of taking account of the comparatively return. VCT status long term nature of the Company’s investments, pays particular attention IBIS Private Equity Partners LLP is the The Company was granted provisional to net asset value total return per Company’s investment adviser approval as a venture capital trust by share, ongoing charges ratio and (“Investment Adviser”). HM Revenue & Customs under section 274 of the Income Tax Act 2007. The performance against the FTSE All- IBIS invests principally in smaller Directors have managed the affairs of Share Media Index (which is unquoted companies, although AIM the Company in compliance with this considered to be the most and ISDX-quoted companies are also section throughout the year under appropriate broad equity market index considered. The focus is on providing review and intend to continue to do so. for comparative purposes). development capital, second stage A summary of the Company’s key fundraisings, pre-IPO fundraisings and financial measures is given on page 1. acquisition capital to investee companies. Investments in business start-ups will generally be avoided 14 IBIS Media VCT 1 plc

Strategic Report Objectives and Key Policies (continued)

Risk management Further information about the Other disclosures The Board has adopted a risk Company’s internal controls is given The Company had no employees management programme whereby it in the Statement of Corporate during the year other than Directors. continually identifies the principal Governance on pages 18 to 20. The The Company has 5 Directors, 1 of risks faced by the Company and Board have identified no uncertainties whom is female. The Company, being reviews both the nature and affecting the Company. an investment company with no effectiveness of the internal controls Further information on the employees, has no policies in relation adopted to protect the Company Company’s exposure risk is given in to environmental matters, social, from such risks as far as is possible. note 20 of the financial statements. community and human rights issues. The Board believes that the principal risks to which the Company is Statement of long-term viability By Order of the Board exposed are: As required by the AIC Code of Economic risk – events such as a Corporate Governance, the Directors downturn in the media sector or a have assessed the prospects of the tightening of credit facilities may Company over the three years to adversely affect the Company’s January 2019, taking into account the investee companies and make Company’s current position and The City Partnership successful divestments less likely. principal risks, and have concluded (UK) Limited Investment risk – the adoption of that there is a reasonable expectation inappropriate investment policies, that the Company will be able to Company Secretary sourcing too few investment continue in operation and meet 31 May 2016 opportunities of the required liabilities as they fall due over that standard, and taking investment period. The Directors consider that for decisions without having undertaken the purpose of this exercise it is not sufficiently robust due diligence. practical or meaningful to look forward Financial risk – poor financial controls over a period of more than three years. which may lead to the In making their assessment the misappropriation of assets or Directors have taken into account the inappropriate financial decisions and principal risks and their mitigation breaches of regulations through identified in the strategic report on deficient financial reporting. page 14, the nature of the Company’s Regulatory risk – failure to comply business, including the potential of its with any of the regulations to which venture capital portfolio to generate the Company is subject which future income and capital proceeds, include the provisions of the and the ability of the Directors to Companies Act 2006, the UKLA minimise the level of cash outflows listing rules, applicable Accounting should this be necessary. Standards and HMRC VCT regulations. IBIS Media VCT 1 plc 15

Reports from the Directors The Board, Investment Committee & Investment Adviser

The Board Lucy Macdonald Charles McIntyre Sir Robin Miller independent non-executive Director non-independent non-executive independent non-executive Chairman Lucy joined Allianz Global Investors in Director Robin Miller is a non-executive director October 2001. She heads the Global Charles McIntyre began his career with of The Racing Post and Time Out Equity Fund Management team, which Apax Partners, which today is one of Group, chairman of IBIS Media VCT 1 is responsible for global mandates Europe’s largest private equity plc, Edge Performance VCT plc, Crash from clients around the world with investors. In 1999, together with other Media Group and Butler Tanner & currently over $8bn of assets under senior managers, Charles spun off the Dennis, and a trustee of the Golf management. She was instrumental in investment banking arm of Apax Foundation and Riders for Health. launching the Global High Alpha Partners to form Altium Capital which Robin was formerly chief executive product five years ago, now was developed into a pan-European (1985-98 and 2001-03) and chairman representing over $6bn of global equity investment bank. At Altium Capital, he (1998-2001) of Emap plc, a leading assets, which she now manages. Retail headed up the European media international media group in consumer funds following this strategy include the investment banking team and and trade publishing, commercial radio DIT-Interglobal retail fund (S&P AA originated deal flow in the small to mid- and music TV channels and events. rated since December 2007) and the sized sector of the market. AGIF Allianz RCM Global Equity Fund In 2003, Robin became senior media (also S&P AA rated). Prior to Allianz advisor to HgCapital, and was involved Global Investors, Lucy spent 16 years, The Investment Committee in the successful disposal of Boosey & latterly as a director and senior portfolio There are five members of the Hawkes and Clarion Events Limited. He manager, at Baring Asset Management Investment Committee comprising all has also been non-executive director of managing High Alpha UK and global the Company’s Directors. Channel Four Television (1999-2006), funds. Lucy graduated from Bristol Investment decisions are taken by the and was chairman of their New University in 1984, and is an Associate Investment Committee. A minimum of Business Board, was non-executive of the Society of Investment two Directors must be in attendance at chairman of the HMV Group (2004- Professionals (ASIP). She was made each meeting of the Investment 2005), senior non-executive director at managing director of Allianz Global Committee and each investment must Mecom Group plc (2005-2009), Investors in December 2007 and sits be approved by at least two Directors chairman of Entertainment Rights plc on the London Executive Committee. (2008-2009) and Setanta Sports in with no member of the Investment 2009. Committee voting against. David David Forster Forster and Charles McIntyre have no vote on the Investment Committee but Peter English non-independent non-executive can participate in its discussions. Director independent non-executive Director Between 1986 and 2003, David Forster Peter English co-founded VCF LLP, worked as an equity analyst covering The Investment Adviser which now trades as Foresight Group, the media sector for firms including IBIS Private Equity Partners LLP acts as in 1985. Foresight Group has managed Kleinwort Benson, Merrill Lynch and the Investment Adviser to IBIS. IBIS or advised Fleming Ventures Limited latterly Citigroup. Between 1996 and Private Equity Partners LLP is an and a number of venture capital trusts 2003, whilst he was at Citigroup, he authorised representative of IBIS including Foresight VCT plc, TriVest became a managing director taking Capital Limited, a company regulated VCT plc, Foresight 2 VCT plc, Foresight over responsibility for the global equity by the Financial Conduct Authority. 3 VCT plc (formerly Advent VCT plc) media research product in 2001. In and Foresight 4 VCT plc (formerly 2003 he left and established IBIS Advent VCT 2 plc). Capital in conjunction with Charles McIntyre. 16 IBIS Media VCT 1 plc

Reports from the Directors Directors’ Report

Directors performance related incentive fee, Share capital The Directors of the Company during irrecoverable VAT, trail commission and The Company was incorporated on the year under review were Sir Robin costs of any significant corporate 21 December 2005 with the name Miller, Peter English, Lucy Macdonald, activity) with any excess being borne IBIS Media VCT 1 plc. by the Investment Adviser. David Forster and Charles McIntyre. As at 31 January 2016 a total of Brief biographical details of the In the opinion of the Directors, the 10,869,135 ordinary shares of 1p Directors are given on page 15. continuous appointment of the each of the Company were in issue. Investment Adviser is in the interests of In accordance with corporate the shareholders as a whole. The rights and obligations attaching to governance best practice all Directors the Company’s ordinary shares are set will retire at the annual general meeting out in the Company’s Articles of in 2016 and, being eligible, offer Performance related Association, copies of which can be themselves for re-election. incentive fee obtained from Companies House. The The Investment Adviser and each holders of ordinary shares are entitled to receive dividends when declared, to Investment Adviser agreement member of the Investment Committee (other than Messrs. Forster and receive the Company’s report and IBIS Private Equity Partners LLP is the McIntyre who will benefit through their accounts, to attend and speak at Investment Adviser to the Company interest in IBIS Private Equity Partners general meetings, to appoint proxies and provides a range of services to the LLP) will each be entitled to share in a and to exercise voting rights. There are Company under an investment adviser performance related incentive fee no restrictions on the voting rights agreement dated 7 February 2006. equal to 20% of the increase in the attaching to the Company’s shares or the transfer of securities in the This appointment shall continue until Performance Value per ordinary share Company. terminated by the expiry of not less over an initial period of three years than twelve months’ notice in writing and thereafter each successive period The Company will consider requests to given by either party to the other at any of six months. No fee will be payable buy back shares but is mindful that time after the third anniversary of the unless two tests are met. First, a investment in the Company was last date (30 June 2006) on which performance hurdle must be achieved promoted as comparatively long-term ordinary shares issued pursuant to the that requires the Performance Value with venture capital portfolios typically prospectus published in February 2006 per ordinary share to exceed 150 taking from five to seven years to were admitted to the Official List and to pence and that cumulative cash mature. trading on the London Stock distributions are not less than 60 Exchange. This appointment may also pence per ordinary share. Second, be terminated in circumstances of the Performance Value per ordinary Substantial shareholdings material breach by either party. share must be higher than the highest As at the date of this report the previously recorded Performance IBIS Private Equity Partners LLP Company was aware of the undernoted Value per ordinary share. receives an annual advisory fee. The individual shareholdings exceeding 3% fee is payable quarterly in advance, Each member of the Investment of the issued share capital: such quarterly fee (exclusive of VAT) Committee (other than Messrs. > M Alen-Buckley, 6.26% (680,656 being equal to one-quarter of 2.25% of Forster and McIntyre who will benefit shares) through their interest in IBIS Private the net asset value of the Company as > C Davies, 4.63% (502,971 shares) at the commencement of the quarter Equity Partners LLP) will be entitled to but excluding any amount taken into a 3% share of the performance > D Forster 5.90% (641,634 shares) consideration in the calculation of that related incentive fee, save that the > C McIntyre 4.01% (435,975 net asset value which is intended to be Chairman of the Board will be entitled shares) distributed to shareholders within that to a share of 3.5%. The Investment > A Beckingham 3.64% (395,916 quarter. Adviser will be entitled to the remaining 90.5% of the performance shares) Total annual running costs have been related incentive fee. > R Hooper, 3.55% (385,640 shares) capped at 3.5% of average net assets (excluding the Investment Adviser’s > S Knight, 3.06% (332,489 shares) IBIS Media VCT 1 plc 17

Disclosure of information to Auditor Global greenhouse gas emissions the auditor A resolution to re-appoint Scott- All of the Company’s activities are The Directors who held office at the Moncrieff as auditor to the Company outsourced to third parties. The date of the approval of this Directors’ will be proposed at the forthcoming Company therefore has no direct Report confirm that, so far as they are annual general meeting. A separate greenhouse gas emissions to report aware: there is no relevant audit resolution will be proposed at the from its operations. information of which the Company’s meeting authorising the Directors to auditor is unaware and the Directors fix the remuneration of the auditor. have taken all the steps they ought to have taken to make themselves aware of any relevant audit information and to By Order of the Board establish that the auditor is aware of that information. The City Partnership (UK) Limited Company Secretary 31 May 2016 18 IBIS Media VCT 1 plc

Reports from the Directors Statement of Corporate Governance

The Directors of IBIS Media VCT 1 plc who has served for more than nine Board performance confirm that the Company has taken years will be subject to annual re- The Board carried out a performance appropriate action to enable it to election annually, therefore resolutions evaluation of the Board, committees and comply with the Principles of the UK to re-elect Sir Robin Miller, Peter individual Directors during the year. Due Corporate Governance Code (the English, Lucy Macdonald, David to the size of the Company, the fact that “Code”) issued by the Financial Forster and Charles McIntyre are the majority of the Directors are Reporting Council in September 2014. included in the Notice of Annual independent non-executive Directors As a venture capital trust, most of the General Meeting. and the costs involved, external Company’s day-to-day responsibilities Directors are provided with key facilitators are not used in the evaluation are delegated to third parties and the information on the Company’s activities of the Board. The Directors concluded Directors are all non-executive. Thus, including regulatory and statutory that the balance of skills and Directors is not all the provisions of the Code are requirements and internal controls by appropriate and all Directors contribute directly applicable to the Company. the Company’s Investment Adviser, fully to discussion in an open, Apart from the matters referred to in the IBIS Private Equity Partners LLP and by constructive and objective way. The size following paragraphs, the requirements the company secretary, The City and composition of the Board and its of the Code were complied with Partnership (UK) Limited. The Board committees are considered adequate for throughout the year ended 31 January has direct access to corporate the effective governance of the 2016. governance advice and compliance Company. The biographies of the In view of its non-executive nature the services through the company Directors shown on page 15 Board considers that it is not secretary, which is responsible for demonstrate the wide range of appropriate for the Directors to be ensuring that board procedures are investment, commercial and professional appointed for a specific term as followed and compliance requirements experience that they contribute. recommended by the Code. Full details are met. of duties and obligations are provided All Directors may take independent Board committees at the time of appointment and are professional advice in furtherance of supplemented by further details as their duties as necessary. Any newly There are three Board committees: an necessary. In light of the responsibilities appointed Director will be given a investment committee, an audit retained by the Board and its comprehensive introduction to the committee and a nomination and committees and of the responsibilities Company’s business including meeting remuneration committee. These delegated to IBIS Private Equity the Company’s advisers. committees all operate within clearly defined written terms of reference Partners LLP and the company The Board is responsible to secretary, the Company has not which are available on request from shareholders for the proper the company secretary. appointed a chief executive, deputy management of the Company and chairman or a senior independent non- looks to hold meetings on at least executive director. There is no formal four occasions each year. It has Investment committee induction programme for Directors. formally adopted a schedule of This is a fully constituted Board matters which must be brought to it committee established to perform the for decision, thus ensuring that it Board of Directors duties summarised below and to maintains full and effective control report on those matters to the Board: The Company has a Board of five over appropriate strategic, financial, non-executive Directors, three of operational and compliance issues. > In respect of equity investment whom are considered to be The Chairman together with the opportunities: to consider each independent. The remaining two, company secretary establish the such opportunity of which it is David Forster and Charles McIntyre, agenda for each Board meeting and appraised by IBIS Private Equity are also directors of the Investment all necessary papers are distributed Partners LLP; to decide which of Adviser, IBIS Private Equity Partners in advance of the meetings. The the investment opportunities LLP. The Company has no staff. The Board considers all matters not should be accepted by the Board does not believe that length of included within the remits of the Company; to ensure that service will necessarily compromise board committees. investments fall within the the independence or effectiveness of investment policy described in Directors and no limit has been the prospectus; to monitor placed on the overall length of investee companies and the service. The Board consider that such Company’s investments therein. continuity and experience can be of > In respect of fixed interest significant benefit to the Company investments to monitor the and its shareholders. However, in Company’s investment in fixed accordance with corporate interest securities. governance best practice any Director IBIS Media VCT 1 plc 19

> Generally, to monitor the > Recommending to the board knowledge and that they have a clear Company’s performance in and shareholders the ongoing understanding of the business of the respect of the VCT investment appointment of Scott-Moncrieff. Company; that the audit team is criteria and to advise the Board The key areas of risk identified by the appropriately resourced; that the as necessary. audit committee in relation to the auditor provided a clear explanation of > After reviewing the advice of business activities and financial the scope and strategy of the audit and advisers, to determine the statements of the Company are: that the auditor maintained valuation of each investment in independence and objectivity. As part > Compliance with HM Revenue & of the review of auditor effectiveness accordance with the previously Customs to maintain the agreed valuation guidelines. and independence, Scott-Moncrieff has Company’s VCT status; and confirmed that it is independent of the The members of the investment > Valuation of unquoted Company and has complied with committee are all the Company’s investments. auditing accounting standards. Scott- Directors. The chairman of the Moncrieff was appointed as auditor of These issues were discussed with the committee is Sir Robin Miller. the Company on inception of the Investment Adviser and the auditor at Company; in accordance with A quorum shall be two members and the board meeting pre-sign off of the professional guidelines the must include at least two members of financial statements. The committee engagement partner is rotated after at the committee other than David Forster concluded: and Charles McIntyre. Each investment most five years, and the current partner must be approved by at least two Venture Capital Trust status – the has served for 4 years. No tender for Directors with no member of the Investment Adviser confirmed to the the audit of the Company has been committee voting against the proposed audit committee that the conditions for undertaken since inception. maintaining the Company’s status had investment. Neither David Forster nor Following the review as noted above been complied with throughout the Charles McIntyre has a vote on the the audit committee is satisfied with the year. investment committee but both may performance of Scott-Moncrieff and participate in its discussions. Valuation of unquoted investments – recommends the services of Scott- the Investment Adviser and the auditor Moncrieff to the shareholders in view of confirmed to the audit committee that that performance and the firm’s Audit committee the basis of valuation for unquoted experience in auditing Venture Capital The audit committee comprises at least companies was consistent with the Trusts. 3 independent Directors. The members prior year and in accordance with of the committee are Lucy Macdonald published industry guidelines, taking (chairman), Peter English and Robin account of the latest available Nomination and Miller. A quorum is two members. information about investee companies remuneration committee and current market data. The committee comprises at least two Directors. The members of the During the year ended 31 January 2016 The Investment Adviser and auditor committee are Peter English the audit committee discharged its confirmed to the audit committee that (chairman) and Lucy Macdonald. A responsibilities by: they were not aware of any material misstatements. Having reviewed the quorum is two members. > Reviewing the Company’s draft reports received from the Investment The nomination and remuneration annual and half yearly results Adviser and auditor, the audit committee has considered the and the proposed fair value of committee is satisfied that the key recommendations of the Code investments as determined by areas of risk and judgement have been concerning gender diversity and the Investment Adviser; appropriately addressed in the financial welcomes initiatives aimed at > Reviewing the Company’s statements and that the significant increasing diversity generally. The accounting policies; assumptions used in determining the committee believes, however, that all value of assets and liabilities have been > Ongoing review of the internal appointments should be made on properly appraised and are sufficiently controls and assessing the merit rather than positive robust. effectiveness of those controls in discrimination. The policy of the minimising the impact of key The audit committee has managed the committee is that maintaining an risks; relationship with the external auditor appropriate balance around the and assessed the effectiveness of the board table through a diverse mix of > Reviewing and approving the audit process. When assessing the skills, experience, knowledge and external auditor’s terms of effectiveness of the process for the background is of paramount engagement, remuneration and year under review the Committee importance and gender diversity is a independence; and considered the auditor’s technical significant element of this. 20 IBIS Media VCT 1 plc

Reports from the Directors Statement of Corporate Governance (continued)

Any search for new Board candidates is information on which business Company’s members. All written conducted, and appointments made, decisions are made and which is used communication with shareholders is on merit, against objective selection for publication, and that the assets of reviewed by the Board to ensure that criteria having due regard, amongst the Company are safeguarded. They shareholder enquiries are promptly and other things, to the benefits of diversity can by their nature provide only adequately resolved. Shareholders are on the Board, including gender. When reasonable and not absolute encouraged to attend the Company’s recommending new appointments to assurance against material annual general meeting where the the Board the committee draws on its misstatement or loss. The financial Directors and representatives of the members’ extensive business controls operated by the Board include Company’s advisers will be available to experience and range of contacts to the authorisation of investments and answer any questions members may identify suitable candidates; the use of regular reviews of both the financial have. The notice of the 2016 annual formal advertisements and external results and investment performance. general meeting accompanies this consultants is not considered cost- The Board has delegated to third report – separate resolutions are effective given the Company’s size. parties the provision of: investment proposed for each substantive issue. advisory services; VCT status advisory The Board also communicates with services; broking services; day-to-day shareholders through the half-yearly Attendance at Board and committee and annual reports which will include a meetings accounting, company secretarial and administration services; and share chairman’s statement and an During the year ended 31 January 2016 registration services. Each of these investment adviser’s report both of there were: contracts was entered into after full and which are reviewed and approved by the Board to ensure that they present a > 4 full Board meetings proper consideration by the Board of the quality and cost of services offered. fair assessment of the Company’s > 4 investment committee The Board receives and considers position and future prospects. meetings regular reports from the Investment > 2 audit committee meetings Committee which, in turn, receives and Accountability and audit > No meetings of the nomination considers regular reports from the The statement of the Directors’ and remuneration committee Investment Adviser. Ad hoc reports and information are supplied to the Board responsibilities in respect of the The Directors’ attendance at these as required. The Board keeps under financial statements and the meetings is noted below. review the terms of the agreement with independent auditor’s report are the Investment Adviser. presented on pages 21 and 25 respectively of this report. Investment Audit Director Board committee committee Review of internal control Robin Miller 4 4 2 Internal audit The process adopted by the Board for Peter English 4 4 2 identifying, evaluating and managing The Company does not have an Lucy Macdonald 4 4 2 the risks faced by the Company independent internal audit function. Such a function is thought by the David Forster 3 3 n/a includes an annual review of the control systems. The review covers a Board to be unnecessary at this time Charles McIntyre 4 4 n/a consideration of the significant risks in given the size of the Company and the each of five areas: statutory and nature of its business. However, the regulatory compliance, financial audit committee considers annually Internal control reporting, investment strategy, whether an independent internal audit The Board has established an ongoing investment performance and function should be introduced and process for the identification, reputation. Each risk is considered with reports its conclusions to the Board. evaluation and management of the regard to: the likelihood of occurrence, significant risks faced by the Company. the probable impact on the Company, Going concern The Board acknowledges that it is and the controls exercised at source, responsible for the Company’s internal through reporting and at board level. After making enquiries, the Directors control systems and for reviewing their The Board has identified no problems are satisfied that the Company has effectiveness. Internal controls are with the Company’s internal controls. adequate resources to continue to designed to manage the particular operate for the foreseeable future. For needs of the Company and the risks to this reason, the going concern basis which it is exposed. The internal control Relations with shareholders has been adopted in the preparation of systems aim to ensure the The Board welcomes the views of the Company’s financial statements. maintenance of proper accounting shareholders and puts a premium on records, the reliability of the financial effective communication with the IBIS Media VCT 1 plc 21

Reports from the Directors Statement of Directors’ Responsibilities

The Directors are responsible for The Directors are responsible for Directors’ Responsibilities pursuant preparing the Annual Report and the keeping adequate accounting records to DTR4 Financial Statements in accordance that are sufficient to show and explain The Directors confirm to the best of with applicable law and regulations. the company’s transactions and their knowledge: Company law requires the Directors to disclose with reasonable accuracy at any time the financial position of the > The financial statements which prepare financial statements for each have been prepared in financial year. Under that law the company and enable them to ensure that the financial statements comply accordance with UK Generally Directors have prepared the financial Accepted Accounting Practice statements in accordance with United with the Companies Act 2006 and, as regards the Company financial and give a true and fair view of Kingdom Generally Accepted the assets, liabilities, financial Accounting Practice (United Kingdom statements, Article 4 of the IAS Regulation. They are also responsible position and profit of the Accounting Standards and applicable company. law). Under company law the Directors for safeguarding the assets of the must not approve the financial company and hence for taking > The annual report includes a fair statements unless they are satisfied reasonable steps for the prevention review of the development and that they give a true and fair view of the and detection of fraud and other performance of the business state of affairs of the company and of irregularities. and the financial position of the the profit or loss for the company for The Directors are responsible for Company, together with a that period. ensuring, that the Annual Report and description of the principal risks and uncertainties that they face. In preparing these financial statements, accounts, taken as a whole, are fair, the Directors are required to: balanced and understandable and provides the information necessary for select suitable accounting policies and shareholders to assess the Company’s then apply them consistently; performance, business model and On behalf of the Board make judgements and accounting strategy. estimates that are reasonable and prudent; Website Publication > state whether they have been prepared in accordance with The Directors are responsible for applicable UK accounting ensuring the annual report and the standards, subject to any financial statements are made available material departures disclosed on a website. Financial statements are published on the Company’s website in and explained in the financial Sir Robin Miller accordance with legislation in the statements; Director United Kingdom governing the > prepare the financial statements preparation and dissemination of 31 May 2016 on the going concern basis financial statements, which may vary unless it is inappropriate to from legislation in other jurisdictions. presume that the company will The maintenance and integrity of the continue in business; and company’s website is the responsibility > prepare a Strategic Report, a of the Directors. The Directors’ Directors’ Report and Directors’ responsibility also extends to the Remuneration Report which ongoing integrity of the financial comply with the requirements of statements contained therein. the Companies Act 2006. 22 IBIS Media VCT 1 plc

Reports from the Directors Directors’ Remuneration Report

This report has been prepared by the Directors’ remuneration policy Performance Value per ordinary share Directors in accordance with The The committee considers that must be higher than the highest Large and Medium-sized Companies Directors’ fees should reflect the time previously recorded Performance Value and Groups (Accounts and Reports) commitment required and the high per ordinary share when an incentive (Amendment) Regulations 2013 (the level of responsibility borne by fee was paid. “Regulations”). An Ordinary resolution Directors, and should be broadly Each member of the Investment for the approval of the Directors’ comparable to the fees paid by similar Committee is entitled to a 3% share of annual report on remuneration will be companies while ensuring that the fees the incentive fee, save that the put to members at the forthcoming payable are appropriate to retain Chairman of the Board is entitled to a Annual General Meeting. individuals of sufficient calibre to lead share of 3.5%. The Investment Adviser The Company’s auditor, Scott- the Company in achieving its short and is entitled to the remaining 90.5% of the Moncrieff, is required to give their long term strategy. The Company’s fee. The performance fee policy is opinion on certain information included Articles of Association do not place an unchanged since the inception of the in this report. The disclosures which overall limit on Directors’ remuneration. Company and no incentive fee has have been audited are indicated as None of the Directors is eligible for been paid to any of the Directors as a such. The auditor’s opinion on these pension benefits, share options, result of the policy. and other matters is set out in their bonuses or other benefits in respect of The Directors’ remuneration policy was report on pages 25 and 26. their services as non-executive approved at the AGM of the Company Directors of the Company. The Board held on 2 July 2014 and this policy will has not received any views from the Annual statement from the continue as described above for the Company’s shareholders in respect of year ending 31 January 2017 and Chairman of the Nomination and the levels of Directors’ remuneration. Remuneration Committee subsequent years. In accordance with As members of the Investment the Regulations, an ordinary resolution The members of the Nomination and Committee, each Director (other than to approve the Directors’ remuneration Remuneration Committee, a fully David Forster and Charles McIntyre) is policy will be put to shareholders at constituted board committee, are entitled to share in a performance- least once every three years. Peter English (Chairman) and Lucy related incentive fee from the Macdonald. The committee’s remit Company. David Forster and Charles regarding remuneration is included in McIntyre will benefit through their Directors’ annual report on the Statement of Corporate interest in the Investment Adviser remuneration Governance which is set out on pages which is also entitled to share in the Terms of appointment 18 to 20. No other person provided incentive fee. material advice or services to the None of the Directors has a service committee in relation to remuneration. The aggregate performance fee contract with the Company. On being payable by the Company is calculated appointed all Directors received a letter The committee did not meet in the as being equal to 20% of the increase from the Company setting out the year ended 31 January 2016. At a in the Performance Value per ordinary terms of their appointment, details of meeting of the Board held in the year share over an initial period of three the fees payable and their specific ended 31 January 2015 the Directors years and thereafter each successive duties and responsibilities. A Director’s resolved to reduce their fees with period of six months. No fee will be appointment may be terminated by the effect from 1 September 2014. As payable unless two tests are met. Director or by the Company on the from 1 September 2014 the Directors First, a performance hurdle must be expiry of six months’ notice in writing will be paid for their attendance at given by the Director or the Company meetings and for any duties achieved that requires the Performance Value per ordinary share to exceed 150 as the case may be. No arrangements undertaken, rather than a set annual have been entered into between the fee. pence and that cumulative cash distributions are not less than 60 pence Company and the Directors to entitle per ordinary share. Second, the any of the Directors to compensation IBIS Media VCT 1 plc 23

for loss of office. The letters of annual general meeting after their David Forster and Charles McIntyre, appointment are available for appointment and at least every three being non-independent Directors, will, inspection on request from the years thereafter. In accordance with as required by Listing Rule 15.2.13A, company secretary. corporate governance best practice Sir also retire and, being eligible, offer The Company’s Articles of Association Robin Miller, Peter English and Lucy themselves for re-election. Brief provide that the Directors shall retire Macdonald will retire at the annual biographical details of these Directors and be subject to re-election at the first general meeting in 2016 and, being are given on page 15. eligible, offer themselves for re-election. Directors’ fees for the year (audited) The fees payable to individual Directors in respect of the year ended 31 January 2016 are shown in the table below. Sir Robin Miller’s and Peter English’s fees are paid to RMC Limited and VCF Partners, respectively in consideration for their services. Total fee Total fee Fees paid for paid for (reduced from year ended year ended 1 September 31 January 31 January Director 2014) 2016 2015 Sir Robin Miller £1,000 per meeting 4,000 4,667 Peter English £750 per meeting 2,250 3,500 David Forster £750 per meeting -* -* Lucy Macdonald £750 per meeting 2,250 3,500 Charles McIntyre £750 per meeting -* -* Peter Williams Retired - 3,500 Simon Jamieson Retired - 3,500

*Both David Forster and Charles McIntyre, who are partners in the Investment Adviser, waived their entitlement to Directors’ fees in both periods. No fees were payable in respect of the incentive fee to any of the Directors. No taxable benefits were paid to the Directors, no pension related benefits were paid to the Directors and no money or other assets were received or receivable to Directors for either the current or prior year. There were no fees payable to past Directors or payments made for loss of office.

Relative importance of spend on pay The table below shows the total remuneration paid to the Directors and shareholder distributions in the year to 31 January 2016 and the prior year: Percentage increase/ 2016 2015 (decrease) ££% Dividend Nil Nil Nil Total Directors fees 8,500 18,667 (54.47)

Directors’ shareholdings (audited) The beneficial interests of the Directors in the shares of the Company, at the beginning and the end of the year were as follows: As at 31 January 2016 As at 31 January 2015 % of shares % of shares Director Shares held in issue Shares held in issue Sir Robin Miller 75,993 0.70 75,993 0.70 Peter English 174,817 1.61 174,817 1.61 David Forster 948,641 8.73 948,641 8.73 Lucy Macdonald 138,541 1.27 138,541 1.27 Charles McIntyre 476,791 4.39 476,791 4.39 Peter Williams n/a n/a 80,070 0.74 Simon Jamieson n/a n/a 113,524 1.04 There have been no changes in the holdings of any of the Directors between 31 January 2016 and the date of this report. The Company has no policy for Directors concerning their ownership of shares in the Company. 24 IBIS Media VCT 1 plc

Reports from the Directors Directors’ Remuneration Report (continued)

Company performance The Board is responsible for the Company’s investment strategy and performance, although the management of the Company’s investment portfolio is delegated to the Manager through the management agreement. The graph below compares the Company’s share price total return and the Company’s net asset value per share total return with the total return from a notional investment of 100p in the FTSE All-Share Media Index over the same period. This index is considered to be the most appropriate broad equity market index for comparative purposes.

Return to ordinary shareholders in IBIS Media VCT 1 plc Period from 5 April 2006 to 31 January 2016 240

220

200

180

160

140

120 100 Index 80

60 NAV total return per share

40 Share price total return 20 05 Apr 06 31 Jan 07 31 Jan 08 31 Jan 09 31 Jan 10 31 Jan 11 31 Jan 12 31 Jan 13 31 Jan 14 31 Jan 15 31 Jan 16

At the last AGM held on 1 July 2015, 100% of shareholders voted for the resolutions approving the Directors’ Remuneration Report and the Directors’ Remuneration Policy, although no proxy votes were received. An ordinary resolution for the approval of the Directors’ Remuneration Report on will be put to shareholders at the forthcoming AGM.

By Order of the Board

The City Partnership (UK) Limited Company Secretary 31 May 2016 IBIS Media VCT 1 plc 25

Report of the Independent Auditor to the Shareholders of IBIS Media VCT 1 plc

We have audited the financial Scope of the audit of the financial the level of error that would change the statements of IBIS Media VCT 1 plc for statements opinion of the reader of the financial the year ended 31 January 2016, which A description of the scope of an audit of statements. comprise the Income Statement, the financial statements is provided at the When establishing our overall audit Balance Sheet, Statement of Changes Financial Reporting Council’s website at strategy, we determined the level of in the Equity, the Cash Flow statement www.frc.org.uk/apb/scope/private.cfm. uncorrected misstatement that would and the related notes. The financial Opinion on financial statements be material for the financial statements reporting framework that has been as a whole to be £63,500 (2015: applied in their preparation is applicable In our opinion the financial statements: £56,000) which is 1% of net assets (net law and United Kingdom Accounting > give a true and fair view of the state assets being a key performance Standards (United Kingdom Generally of the Company’s affairs as at 31 indicator for investors in the Company). Accepted Accounting Practice), January 2016 and of its return for including FRS102 ‘The Financial Materiality for revenue transactions was the year then ended; Reporting Standard applicable to the determined to be £5,500 (2015: UK and Republic of Ireland’. > have been properly prepared in £6,000), as we believe readers of the accordance with United Kingdom financial statements will be more This report is made solely to the Generally Accepting Accounting sensitive to variances in the revenue Company’s members as a body, in Practice including FRS102 ‘The account. accordance with Chapter 3 of Part 16 of Financial Reporting Standard the Companies Act 2006. Our audit We agreed with the Audit Committee applicable to the UK and Republic work has been undertaken so that we that we would report to them individual of Ireland’; and might state to the Company’s members and extrapolated errors in excess of a those matters we are required to state > have been prepared in accordance threshold of £500 (2015: £1,200), as to them in an auditor’s report and for with the Companies Act 2006. well as differences below that threshold no other purpose. To the fullest extent that we believe warranted reporting on permitted by law, we do not accept or qualitative grounds. assume responsibility to anyone other Our assessment of risks of material than the Company and the Company’s misstatement An overview of the scope of our members as a body, for our audit work, We identified the following risks that we audit for this report, or for the opinions we believe have the greatest impact on the have formed. audit strategy: The way in which we scoped our audit in order to address the assessed risks > valuation of the Company’s unlisted of material misstatement was as investments; Respective responsibilities of follows: directors and auditor > revenue recognised, specifically in > for the valuation of the Company’s relation to investment income; and As explained more fully in the unlisted investments, we agreed all Statement of Directors’ Responsibilities > management override; and holdings to investee companies’ on page 21, the Directors are > going concern. annual returns submitted at responsible for the preparation of the Companies House; we examined financial statements and for being the latest available audited financial satisfied that they give a true and fair Our application of materiality statements of investee entities; and view. Our responsibility is to audit the we assessed the valuation method We apply the concept of materiality in financial statements in accordance with used to ensure it was reasonable planning and performing our audit, and applicable law and International and in accordance with the in evaluating the effect of Standards on Auditing (UK and International Private Equity and misstatements on our audit and on the Ireland). Those standards require us to Venture Capital Valuation guidelines financial statements. For the purposes comply with the Auditing Practices (revised December 2012). Board’s Ethical Standards for Auditors. of determining whether the financial statements are free from material misstatement we define materiality as 26 IBIS Media VCT 1 plc

Report of the Independent Auditor (continued)

> for revenue recognition, specifically issued by the Financial Conduct > the financial statements and the in relation to investment income, we Authority (information about internal part of the Directors’ Remuneration recalculated the expected interest control and risk management Report to be audited are not in from loan notes held by the systems in relation to financial agreement with the accounting Company and compared this to the reporting processes and share records and returns; or actual interest recognised. capital structure) is consistent with > certain disclosures of Directors’ Differences were investigated to the financial statements. remuneration specified by law are ensure there was no indication of not made; or omitted income. In addition, we reviewed the latest available Matters on which we are required > we have not received all the audited financial statements of the to report by exception information and explanations we investee company to assess if We have nothing to report in respect of require for our audit. dividends were expected. the following: > for management override, we Under the International Standards on Under the Listing Rules we are required reviewed the accounting records for Auditing (UK and Ireland), we are to review: any significant transactions that required to report to you if, in our > the Directors’ statement on in were outside the normal course of opinion, information in the annual relation to going concern, and long business. report is: term viability, set out on page 14; > for going concern, we reviewed > materially inconsistent with the and cashflow forecasts, along with other information in the audited financial > the part of the Corporate supporting documentation, and statements; or Governance Statement relating to obtained written confirmations > apparently materially incorrect the Company’s compliance with the where appropriate. based on, or materially inconsistent nine provisions of the Corporate The Audit Committee’s consideration of with, our knowledge of the Governance Code specified for our these risks is set out on page 19. Company acquired in the course of review; and performing our audit; or > certain elements of the report to the Opinion on other matters > is otherwise misleading. shareholders by the Board on prescribed by the Companies Act In particular, we are required to Directors’ remuneration. 2006 consider whether we have identified In our opinion: any inconsistencies between our knowledge acquired during the audit > the part of the Directors’ and the Directors’ statement that they Gareth Magee Remuneration Report to be audited consider the annual report is fair, (Senior Statutory Auditor) has been properly prepared in balanced and understandable and For and on behalf of Scott-Moncrieff, accordance with the Companies whether the annual report appropriately Statutory Auditor Act 2006; and discloses those matters that we Exchange Place 3 > the information given in the communicated to the Audit Committee Semple St Strategic Report and Directors’ which we consider should have been Edinburgh Report for the financial year for disclosed. EH3 8BL which the financial statements are Under the Companies Act 2006 we are 31 May 2016 prepared is consistent with the required to report to you if, in our financial statements. opinion: > the information given in the > adequate accounting records have Corporate Governance Statement in not been kept and returns adequate compliance with rules 7.2.5 and for our audit have not been 7.2.6 in the Disclosure and received from branches not visited Transparency rules sourcebook by us; or IBIS Media VCT 1 plc 27

Financial Statements Income Statement for the year ended 31 January 2016

Year ended 31 January 2016 Year ended 31 January 2015 Note Revenue Capital Total Revenue Capital Total ££££££ Realised/unrealised movements on investments 6 - (1,500,093) (1,500,093) - (516,784) (516,784)

Income 7 89,593 - 89,593 104,854 - 104,854

Investment adviser’s fees 8 (30,723) (92,169) (122,892) (33,663) (100,987) (134,650)

Other expenses 9 (149,071) (75,000) (224,071) (66,640) - (66,640)

Return on ordinary activities before tax (90,201) (1,667,262) (1,757,463) 4,551 (617,771) (613,220)

Tax on ordinary activities 10 ------

Return attributable to equity shareholders (90,201) (1,667,262) (1,757,463) 4,551 (617,771) (613,220)

Transfer to reserves (90,201) (1,667,262) (1,757,463) 4,551 (617,771) (613,220)

Basic and diluted (loss)/earnings per ordinary share 11 (0.83)p (15.34)p (16.17)p 0.04p (5.73)p (5.69)p

The total column of this Income Statement is the Statement of Total Comprehensive Income of the Company, prepared in accordance with Financial Reporting Standards 102 (“FRS 102”). The supplementary revenue and capital return columns are prepared in accordance with the Statement of Recommended Practice, “Financial Statements of Investment Trust Companies and Venture Capital Trusts” (“SORP”) revised in November 2014. A separate Statement of Comprehensive Income has not been prepared as all comprehensive income is included in the Income Statement. All the items above derive from continuing operations of the Company. The accompanying notes on pages 31 to 39 are an integral part of the financial statements. 28 IBIS Media VCT 1 plc

Financial Statements Balance Sheet as at 31 January 2016

2016 2015 Note £ £ Fixed assets

Investments 12 3,938,872 5,182,338

Current assets

Debtors 14 54,208 416,265 Liquidity funds and cash at bank 44,336 42,754 98,544 459,019

Creditors: amounts falling due within one year 15 (200,997) (47,475) Net current assets (102,453) 411,544 Net assets 3,836,419 5,593,882

Capital and reserves

Called up share capital 16 108,691 108,691

Share premium account 17 4,495,853 4,495,853

Special reserve 17 4,474,481 4,474,481

Capital reserves 17 (4,797,008) (3,129,746)

Revenue reserves 17 (445,598) (355,397)

Total equity shareholders’ funds 3,836,419 5,593,882

Net asset value per share 18 35.30p 51.47p

The accompanying notes on pages 31 to 39 are an integral part of the financial statements. The financial statements were authorised for issue by the Directors on 31 May 2016 and signed on their behalf by:

Sir Robin Miller Director

Registered in England and Wales, No. 5660269 IBIS Media VCT 1 plc 29

Financial Statements Statement of Changes in Equity for the year ended 31 January 2016

Share Share Special Capital Revenue Total capital premium reserve reserve reserve reserves For the year ended 31 January 2016 ££££££ Opening balance as at 1 February 2015 108,691 4,495,853 4,474,481 (3,129,746) (355,397) 5,593,882 (Loss)/profit for the year - - - (1,667,262) (90,201) (1,757,463) Closing balance as at 31 January 2016 108,691 4,495,853 4,474,481 (4,797,008) (445,598) (3,836,419)

Share Share Special Capital Revenue Total capital premium reserve reserve reserve reserves For the year ended 31 January 2015 ££££££ Opening balance as at 1 February 2014 105,310 4,306,020 4,474,481 (2,511,975) (359,948) 6,013,888 Net proceeds of share issue 3,606 201,168 - - - 204,774 Repurchase of shares (225) (11,335) - - (11,560) (Loss)/profit for the year - - - (617,771) 4,551 (613,220) Closing balance as at 31 January 2015 108,691 4,495,853 4,474,481 (3,129,746) (355,397) 5,593,882

Distributable reserves comprise the special reserve, the revenue reserve and the capital reserve. At 31 January 2016, the amount of reserves deemed distributable is £nil (31 January 2015: £989,338). The accompanying notes on pages 31 to 39 are an integral part of the financial statements. 30 IBIS Media VCT 1 plc

Financial Statements Cash Flow Statement for the year ended 31 January 2016

2016 2015 ££ Cash flows from operating activities (Loss) for the year (1,757,463) (613,220) Adjustments for: Add back net loss on investments 1,500,093 516,784 Decrease/(Increase) in debtors 362,057 (62,810) Debtors movement attributable to loan interest converted to interest (256,627)- Increase in creditors (excluding financing balances) 153,522 1,367 Net cash generated/(used) in operating activities 1,582 (157,879)

Cash flows from financing activities New share issue - 206,875 Cash (released) for allotment - (75,000) Costs relating to issue of shares - (2,159) Share buyback - (11,502) Net cash generated from financing activities - 118,214

Net increase/(decrease) in cash and cash equivalents 1,582 (39,665)

Cash and cash equivalents at the beginning of the year 42,754 82,419

Cash and cash equivalents at the end of the year 44,336 42,754

The accompanying notes on pages 31 to 39 are an integral part of the financial statements. IBIS Media VCT 1 plc 31

Financial Statements Notes to the Financial Statements

1. Company Information The company is a Public Limited Company incorporated in England and Wales. The registered address is 22 Soho Square, London. W1D 4NS. The principal activity is investing in private equity type transactions.

2. Basis of preparation These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 – ‘The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (‘FRS 102’), and with the Companies Act 2006 and in accordance with the SORP issued by the Association of Investment Companies (“AIC”) in November 2014. The financial statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in the accounting policies below. This is the first year in which the financial statements have been prepared under FRS 102 and in accordance with the SORP issued by the Association of Investment Companies (“AIC”) in November 2014. There are no significant changes to the Company’s accounting policies as a result of the adoption of FRS 102 or the SORP.

3. Going concern The Board of Directors is satisfied that the Company has adequate availability of funding in order to continue as a going concern. Therefore, the Company continues to adopt the going concern basis in preparing these financial statements.

4. Significant judgements and estimates The preparation of financial statements in conformity with generally accepted accounting practice requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are those used to determine the fair value of investments at fair value through profit or loss, as disclosed in note 12 to the financial statements. The fair value of investments at fair value through profit or loss is determined by using valuation techniques explained in note 5.

5. Accounting policies A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out below. a) Investments The Company did not hold any listed investments at any time during the period under review. Investments in unlisted companies are valued at fair value by the Directors with reference to the International Private Equity and Venture Capital Association guidelines which include the following: > Investments which have been made within the last twelve months are valued at cost except where the company’s performance against plan is significantly below the expectations on which the investment was made, in which case provision against cost is made as appropriate. > Where a company is in the early stage of development, it will normally continue to be held at cost on the basis described above. > Where a company is well established after one year from the date of investment the shares may be valued by applying a suitable price-earnings ratio to that company’s historical post tax earnings. The ratio used is based on a comparable listed company or sector but discounted to reflect lack of marketability. Alternative methods of valuation will include cost, provision against cost, discounted cash flow or net asset value where such factors apply that make one of these methods more appropriate. Alternatively, where a value is indicated by a material arm’s-length transaction by a third party in the shares of a company, the valuation will normally be based on this. Gains and losses arising from changes in fair value being included in the Statement of Comprehensive Income as gains or losses on investments. 32 IBIS Media VCT 1 plc

Financial Statements Notes to the Financial Statements (continued)

b) Income Dividends receivable on listed equity shares are brought into account on the ex-dividend date. Dividends receivable on unlisted equity shares are brought into account when the Company’s right to receive payment is established and there is no reasonable doubt that payment will be received. Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course. Returns from Redemption premiums are included in revenue using the effective interest rate method unless the resultant return is not in line with commercial expectations, in which case, any returns will be included in the capital column within net gains or losses on investments.

c) Expenses All expenses (inclusive of VAT where appropriate) are accounted for on an accruals basis. Expenses are charged wholly to revenue, with the exception of expenses incidental to the acquisition or disposal of an investment, which are included within the cost of the investment or deducted from the disposal proceeds as appropriate, and with the exception that 75% of the fees payable to IBIS Private Equity Partners LLP are charged against capital.

d) Debtors Short term debtors are measured at transaction price, less any impairment.

e) Creditors Short term trade creditors are measured at the transaction price.

f) Taxation Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date. Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated. Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. The tax expense/(income) is presented either in the Statement of comprehensive income or Statement of Changes in Equity depending on the transaction that resulted in the tax expense/(income). Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.

6. Movement on investments 2016 2015 ££ Changes in fair value of unquoted investments (1,500,093) (516,784) (1,500,093) (516,784) IBIS Media VCT 1 plc 33

7. Income 2016 2015 ££ Interest receivable - from liquidity funds - 43 - from bank deposits 16 19 - from loan stock 39,514 65,721 - from short term loans 14,745 16,997 Equity dividends 35,318 22,074 89,593 104,854

8. Investment adviser’s fees 2016 2015 ££ IBIS Private Equity Partners LLP 122,892 134,650 122,892 134,650

IBIS Private Equity Partners LLP has been appointed as the Company’s investment adviser. This appointment shall continue until terminated by the expiry of not less than twelve months’ notice in writing given by either party to the other at any time after the third anniversary of the last date on which ordinary shares issued pursuant to the prospectus published in February 2006 were admitted to the Official List and to trading on the London Stock Exchange. This appointment may also be terminated in circumstances of material breach by either party. The Investment Adviser receives an annual advisory fee. The fee is payable quarterly in advance, such quarterly fee (exclusive of VAT) being equal to one-quarter of 2.25% of the net asset value of the Company as at the commencement of the quarter but excluding any amount taken into consideration in the calculation of that net asset value which is intended to be distributed to shareholders within that quarter. The Investment Adviser and each member of the Investment Committee (other than Messrs. Forster and McIntyre who will benefit through their shareholdings in IBIS Private Equity Partners LLP, the Investment Adviser) will each be entitled to share in a performance related incentive fee equal to 20% of the increase in the Performance Value per ordinary share since the close of the Company’s first public offer (“launch”) as now measured by reference to each successive period of six months. No fee will be payable unless two tests are met. First, a performance hurdle must be achieved that requires the Performance Value per ordinary share to exceed 150 pence and that cumulative cash distributions are not less than 60 pence per ordinary share. Second, the Performance Value per ordinary share must be higher than the highest previously recorded Performance Value per ordinary share. These tests are calculated by reference to each of the average number of ordinary shares in issue since launch. Each member of the Investment Committee will be entitled to a 3% share of the performance related incentive fee, save that the Chairman of the Board will be entitled to a share of 3.5%. The Investment Adviser will be entitled to the remaining 90.5% of the performance related incentive fee. Total annual running costs have been capped at 3.5% of average net assets (excluding the investment adviser’s performance related incentive fee, irrecoverable VAT and costs of any significant corporate activity) with any excess being borne by the Investment Adviser. 34 IBIS Media VCT 1 plc

Financial Statements Notes to the Financial Statements (continued)

9. Other expenses 2016 2015 ££ Directors’ remuneration 8,500 18,667 Company secretarial fees 13,200 15,125 Auditor’s fees – audit services 11,500 10,600 Printing & stationery 7,416 8,586 Loan stock interest written off 86,893 - Short term loan written off 75,000 - Other costs 13,401 5,388 Irrecoverable VAT 8,161 8,274 224,071 66,640

The Company has no employees other than the Directors. Details of Directors’ remuneration are provided in the audited section of the Directors’ remuneration report on pages 22 to 24.

10. Tax on ordinary activities a) Analysis of tax charge 2016 2015 ££ Revenue charge - - Credited to capital return - - Current and total tax charge (note (b)) - -

b) Factors affecting tax charge for the year Total return on ordinary activities before tax (1,757,463) (613,220) Add: unrealised losses 1,500,093 516,784 Less: non-taxable realised gains - - Add: transaction costs and investment management expense charged to capital 167,169 100,987 Revenue return on ordinary activities before taxation (90,201) 4,551

Corporation tax at 20% (2014: 21.00%) (18,040) 910 Non-taxable UK dividends (7,064) (4,415) Non-allowable expenditure - - Taxation on revenue return - -

Taxation on allowable expenditure charged to capital return (33,434) (20,197) Unrelieved expenses 33,434 20,197 Tax charge for year (note (a)) - -

Tax relief relating to investment management fees is allocated between revenue and capital where such relief can be utilised. No asset or liability has been recognised for deferred tax in relation to capital gains or losses on revaluing investments as the Company is exempt from corporation tax in relation to capital gains or losses as a result of qualifying as a venture capital trust. There is no potential liability to deferred tax (2015: nil). There is no unrecognised deferred tax asset (2015: nil). The deferred tax asset relates to prior year unutilised expenses. IBIS Media VCT 1 plc 35

11. Earnings per share 2016 2015 Revenue Capital Total Revenue Capital Total (Loss)/earnings per ordinary share (0.83)p (15.34)p (16.17)p 0.04p (5.73)p (5.69)p

Basic revenue earnings per share is based on the net revenue earnings from ordinary activities after taxation of £(90,201) (2015: £4,551) and on 10,869,135 (2015: 10,775,258) ordinary shares, being the weighted average number of shares in issue during the year. Basic capital earnings per share is based on the net capital loss after taxation of £(1,667,262) (2015: £(617,771)) and on 10,869,135 (2015: 10,775,258) ordinary shares, being the weighted average number of shares in issue during the year.

12. Investments Movements in investments during the year are summarised as follows: Total £ Book cost at 31 January 2015 5,369,789 Accrued interest converted to equity 256,627 Disposal – Revaluation of prior year losses on liquidation** (950,000) Book cost at 31 January 2016 4,676,416 Unrealised losses at 31 January 2015 (187,451) Movement in unrealised gains/losses in the year* (1,500,093) Disposal – Realisation of prior year losses on liquidation** 950,000 Net unrealised losses at 31 January 2016 (737,544) Valuation at 31 January 2016 3,938,872 Valuation at 31 January 2015 5,182,338 * Includes £191,250 relating to redemption premium converted to equity during the year as part of the fixed term loan agreement with Ginx TV. More details relating to the investment in Ginx TV are included in the investment adviser review of pages 4 to 12. ** Futurelex Limited entered the process of liquidation in December 2014 and was dissolved in March 2016. The Company received no funds as a result of liquidation. As at 31 January 2016, the Company had no intention to dispose of any of its holdings. The Company is required to report the category of fair value measurements used in determining the value of its investments, to be disclosed by the source of inputs, using a three-level hierarchy:

Quoted market prices in active markets – “Level 1” Inputs to Level 1 fair values are quoted prices in active markets for identical assets. An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company has no investments classified in this category.

Valued using models with significant observable market parameters – “Level 2” Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. The Company has no investments classified in this category.

Valued using models with significant unobservable market parameters – “Level 3” Inputs to Level 3 fair values are unobservable inputs for the asset. Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models). As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset. The Company’s unquoted equities and loan stock are classified within this category. As explained in Note 5, unquoted investments are valued in accordance with the International Private Equity and Venture Capital Association guidelines. All the Company’s investments are classified with the “Level 3” category. 36 IBIS Media VCT 1 plc

Financial Statements Notes to the Financial Statements (continued)

13. Significant interests As at the balance sheet date and from the dates of making the investments the Company has held 10% or more in the undernoted investments: Percentage Investment equity holding Get Me Media 38.8% Masher 33.3% Steel River Media (Contagious) 24.5% Ginx TV 20.3% Freshwater 10.9%

14. Debtors 2016 2015 ££ Amounts falling due within one year: Accrued interest and other accrued income 25,760 315,022 Prepayments 21,125 21,037 HMRC 5,206 5,206 Get Me Media - 75,000 Investment adviser 2,117 - 54,208 416,265

15. Creditors: amounts falling due within one year 2016 2015 ££ Sundry creditors and accruals 200,997 47,475 200,997 47,475

16. Called up share capital 2016 2015 ££ Authorised: 30,000,000 Ordinary Shares of 1p each 300,000 300,000 Allotted, called-up and fully paid: 10,869,135 Ordinary Shares of 1p each (2015: 10,869,135) 108,691 108,691

The rights and obligations attaching to the Company’s ordinary shares are detailed in the Directors’ report.

17. Reserves Called-up share capital represents the nominal value of shares that have been issued. Share premium account includes any premiums received on issue of share capital less any transaction costs associated with the issuing of shares and any amounts transferred to the special reserve. Special reserve includes any amounts transferred from the share premium account on 23 January 2006. The special reserve can be used for payment of dividends and to fund buy backs of the Company’s shares. Capital reserves include all current and prior period realised and unrealised movements in the fair value of investments and all costs which are considered capital in nature. Revenue reserves include all current and prior period retained profits and losses. IBIS Media VCT 1 plc 37

18. Net asset value per share The net asset value per ordinary share at the year end was as follows: 2016 2015 Net asset values attributable Net asset values attributable Net assets Net assets Net assets per share Net assets per share Ordinary shares (basic) £3,836,419 35.30p £5,5593,882 51,47p

Net asset value per share is based on net assets at the period end and on 10,869,135 (2015: 10,869,135) ordinary shares, being the number of shares in issue at the year end.

19. Financial instruments The Company’s financial instruments comprise: - Equity and fixed-interest investments - Cash balances and liquid resources Investments are made in a combination of equity and loans in unquoted companies. Surplus funds are held on bank deposit. It is not the Company’s policy to trade in financial instruments or derivatives. Fixed asset investments are valued at fair value. Unquoted investments are valued by the Directors in accordance with current industry guidelines. Where no reliable fair value can be estimated, unquoted investments are carried at cost subject to provision for impairment where necessary. The fair value of all other financial assets and liabilities is represented by their carrying value in the balance sheet. The Company held the following categories of financial instruments, all of which are included in the balance sheet at fair value, at 31 January 2016: 2016 2016 2015 2015 (Book cost) (Fair value) (Book cost) (Fair value) ££££ Assets at fair value through profit and loss Investment portfolio 4,676,416 3,938,872 5,369,789 5,182,338 Cash at bank 44,336 44,336 42,754 42,754

Loans and receivables Accrued income 25,760 25,760 315,022 315,022 Short term loans --75,000 75,000 Trade and other receivables 28,448 28,448 26,243 26,243 Trade and other payables (200,997) (200,997) (47,475) (47,475) 4,573,963 3,836,419 5,781,333 5,593,882

Unquoted investments account for 100% of the investment portfolio (2015: 100%) by value. The investment portfolio has a 100% concentration of risk towards small UK based, sterling denominated companies and represents 102.67% (2015: 92.64%) of net assets at the year end. The main risks arising from the Company’s financial instruments are credit risk, market price risk, interest rate risk and liquidity risk. All assets and liabilities are denominated in sterling, hence there is very little exposure to currency risk. 38 IBIS Media VCT 1 plc

Financial Statements Notes to the Financial Statements (continued)

20. Financial risk management Credit risk Credit risk is managed by settling all transactions on the basis of delivery against payment.

Market price risk The Board manages the market risk inherent in the Company’s portfolio by maintaining an appropriate spread of market risk and by ensuring full and timely access to relevant information from the Investment Committee. The Investment Committee reviews the investment performance and financial results, as well as compliance with the Company’s investment objectives. The Board seeks to ensure that an appropriate proportion of the Company’s portfolio is invested in cash and readily realisable securities which are sufficient to meet any funding commitments which may arise. The Company does not use derivative instruments to hedge against market risk. The equity and fixed interest stocks of the Company’s unquoted investee companies are very seldom traded and, as such, their prices are more uncertain than those of more frequently traded stocks. It is estimated that a 10% fall in the carrying value of the Company’s unquoted investments would reduce profit before tax for the year and the Company’s net asset value per share by £393,887 and 4p respectively.

Interest rate risk Some of the Company’s financial assets are interest bearing, some of which are at fixed rates and some at variable. As a result, the Company is exposed to interest rate risk due to fluctuations in prevailing levels of market interest rates. The Board seeks to mitigate this risk through regular monitoring of the Company’s interest bearing investments. The Company does not use derivative instruments to hedge against interest rate risk. The risk from future fluctuations in interest rate movements should be mitigated by the Company’s intention to complete its investment strategy and to hold a majority of its investments in instruments which are not exposed to market interest rate changes. As at 31 January 2016 the company held only one fixed rate loan with a value of £235,000 and fixed interest rate of 0%.

Liquidity risk The investments in equity and fixed interest stocks of unquoted companies that the Company holds are not traded and thus are not readily realisable. At times the Company may be unable to realise its investments at their carrying values because of an absence of willing buyers. The Company’s ability to sell investments may also be constrained by the requirements set down for VCTs. To counter such liquidity risk, sufficient cash and money market funds are held to meet running costs and other commitments.

Management of capital The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, satisfy the relevant HMRC requirements and provide at least adequate returns for shareholders. As a VCT, the Company must have, and must continue to have, within three years of raising its capital at least 70% by value of its investments in VCT qualifying holdings which are a relatively high risk asset class of small UK companies. In satisfying this requirement, the Company’s capital management scope is restricted. Subject to this restriction, the Company may adjust dividends, return capital to shareholders, issue new shares or sell assets to maintain the level of liquidity to remain a going concern.

21. Post balance sheet events There were no significant post balance sheet events. IBIS Media VCT 1 plc 39

22. Transactions with the Investment Adviser During the year ended 31 January 2016 the Company incurred costs of £122,892 (2015: £134,650) (exclusive of VAT) payable to IBIS Private Equity Partners LLP, the Investment Adviser: > £125,009 (2015: £134,650) as an investment advisory fee; > £2,117 (2015: £nil) as a sum recoverable from the Investment Adviser in respect of the cap on the Company’s annual running expenses; and > As at 31 January 2016 the Company owed the Investment Adviser £138,570 (2015: £13,560) (exclusive of VAT) in respect of the Investment Adviser fees. As at 31 January 2016 the Investment Adviser owed the Company £2,117 (2015: £nil) (exclusive of VAT) in respect of the cap on the Company’s annual running expenses. Details of the Investment Adviser’s fee arrangements are given in Note 8.

23. Management of capital The Board of Directors considers the Company’s net assets to be its capital and the Company does not have any externally imposed capital requirements. The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns to shareholders. The requirements of the Venture Capital Trust Regulations and the fact that the Company has a policy of not having any borrowings, mean that there is limited scope to manage the Company’s capital structure. However, to the extent to which it is possible, the Company can maintain or adjust its capital structure by adjusting the amount of dividends paid to shareholders, purchasing its own shares or issuing new shares. There has been no change from the previous year in the objectives, policies or processes for managing capital. 40 IBIS Media VCT 1 plc

Information for Shareholders Notice of Annual General Meeting

Notice is hereby given that the tenth annual general meeting of IBIS Media VCT 1 plc will be held at 5.00pm on 20 July 2016 at 22 Soho Square, London W1D 4NS for the purpose of considering and, if thought fit, passing the following Resolutions (of which, Resolutions 1 to 10 will be proposed as Ordinary Resolutions and Resolutions 11 and 12 will be proposed as Special Resolutions):

Ordinary Business 1. To receive the Directors’ and the Independent Auditor’s Reports and the Company’s financial statements for the year ended 31 January 2016. 2. To approve the Directors’ Remuneration Report for the year ended 31 January 2016. 3. To re-elect Lucy Macdonald as a Director of the Company. 4. To re-elect Sir Robin Miller as a Director of the Company. 5. To re-elect Peter English as a Director of the Company. 6. To re-elect David Forster as a Director of the Company. 7. To re-elect Charles McIntyre as a Director of the Company. 8. To re-appoint Scott-Moncrieff as auditor of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company. 9. To authorise the Directors to fix the remuneration of the auditor. 10. (i) That the Directors be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the Company to allot relevant securities (as defined in that section) up to an aggregate nominal amount of £21,738 during the period commencing on the passing of this resolution and expiring on the earlier of the date of the annual general meeting of the Company to be held in 2017 and the date which is 15 months after the date on which this resolution is passed (unless the authority is previously revoked, varied or extended by the Company in general meeting) but so that this authority shall allow the Company to make before the expiry of this authority offers or agreements which would or might require relevant securities to be allotted after such expiry; and (ii) That all previous authorities given to the Directors in accordance with section 551 of the Act be and they are hereby revoked, provided that such revocation shall not have retrospective effect.

Special Resolutions 11. The Directors be and are hereby empowered pursuant to Section 570 and 573 of the Act to allot or make offers or agreements to allot equity securities as defined in Section 560 of the Act for cash pursuant to the authority given pursuant to Resolution 10 set out in this notice of Annual General Meeting as if section 561(1) of the Act did not apply to such allotment provided that this power shall expire on the date falling 15 months after the date of the passing of this resolution and provided further that this power shall be limited to the allotment and issue of equity securities in connection with: (i) the allotment of equity securities with an aggregate nominal value of up to but not exceeding 10% of the issued ordinary share capital where the proceeds of the allotment are to be used in whole or in part to purchase the Company’s Ordinary Shares, and (ii) the allotment of equity securities from time to time with an aggregate nominal value of up to but not exceeding 5% of the issued Ordinary Share capital of the Company. 12. That the Company be and is hereby generally and unconditionally authorised within the meaning of Section 693(4) of the Act of ordinary shares of 1p each in the capital of the Company (“Ordinary Shares”) provided that: (i) The maximum aggregate number of Ordinary Shares hereby authorised to be purchased is an amount equal to 14.99% of the issued ordinary share capital of the Company from time to time; (ii) The minimum price which may be paid for an Ordinary Share is 1p per share, the nominal amount thereof; (iii) The maximum price which may be paid for an Ordinary Share is an amount equal to 105% of the average of the middle market prices shown in the quotations for an ordinary share in The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that ordinary share is purchased; (iv) The authority hereby conferred shall (unless previously renewed or revoked) expire on the earlier of the annual general meeting of the Company to be held in 2017 and the date which is 15 months after the date on which this resolution is passed; and IBIS Media VCT 1 plc 41

(v) The Company may make a contract or contracts to purchase its own Ordinary Shares under this authority before the expiry of the authority which will or may be executed wholly or partly after the expiry of the authority, and may make a purchase of its own Ordinary Shares in pursuance of any such contract or contracts as if the authority conferred hereby had not expired.

By order of the Board

The City Partnership (UK) Limited Secretary 31 May 2016

Notes 1. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the meeting and you should have received a proxy form with this notice of meeting. You can appoint a proxy only by using the procedures set out in these notes and the notes to the proxy form. 2. A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of how to appoint the chairman of the meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the chairman) and give your instructions directly to them. 3. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. 4. If you do not give your proxy an indication of how to vote on any resolution, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 5. The notes to the proxy form explain how to direct your proxy to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be: > completed and signed; > sent or delivered to Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL or by fax to 01252 719232; and > received by Share Registrars Limited no later than 5.00pm on 18 July 2016. 6. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). 7. To change your proxy instructions simply submit a new proxy appointment using the method set out above. Note that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions; and amended proxy appointment received after the relevant cut-off time will be discarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy from, please contact Share Registrars Limited. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 8. In order to revoke a proxy instruction you will need to inform the Company using the following method: Send a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surry GU9 7LL. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The revocation notice must be received by Share Registrars Limited no later than 5.00pm on 18 July 2016. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the following text, your proxy appointment will remain valid. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 9. The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those shareholders registered in the register of members of the Company as at 5.00pm on 18 July 2016 or, in the event that the meeting is adjourned, in the register of members 48 hours before the time of any adjourned meeting, shall be entitled to attend or vote (whether on a show of hands or on a poll) at the meeting in respect of the number of shares registered in their name at that time. Changes to entries in the register of members after 5.00pm on 18 July 2016 or, in the event that the meeting is adjourned, in the register of members less than 48 hours before the time of any adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at the meeting. 10. Biographical details of the Directors are given on page 15 of the Annual Report and Financial Statements 11. The issued share capital of the Company at the date of this notice is 10,869,135 ordinary shares. The total number of voting rights in the Company is 10,869,135. 12. The following documents are available for inspection at the registered office of the Company: > The Directors’ letters of appointment > Register of the Directors’ interests in the share capital of the Company. 42 IBIS Media VCT 1 plc IBIS Media VCT 1 plc 43

Form of Proxy IBIS Media VCT 1 plc Annual General Meeting – 20 July 2016

I/We...... (block capitals, please) of ...... being a member of IBIS Media VCT 1 plc, hereby appoint (see note 3)

...... or failing him/her the chairman of the meeting to be my/our proxy and exercise all or any of my/our rights to attend, speak and vote for me/us in respect of my/our voting entitlement on my/our behalf at the annual general meeting of the Company to be held at 5pm on 20 July 2016, notice of which was sent to shareholders with the annual report and financial statements for the year ended 31 January 2016, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolution set out in the notice of meeting: No. Resolution For Against Vote withheld

1 To receive the financial statements for the year ended 31 January 2016.

2 To approve the Directors’ Remuneration Report in respect of the year ended 31 January 2016.

3 To re-elect Lucy MacDonald as a director of the Company.

4 To re-elect Robin Miller as a director of the Company.

5 To re-elect Peter English as a director of the Company.

6 To re-elect Peter Forster as a director of the Company.

7 To re-elect Charles McIntyre as a director of the Company.

8 To re-appoint Scott-Moncrieff as independent auditors.

9 To authorise the Directors to fix the remuneration of the auditor.

10 To authorise the Directors to allot shares pursuant to Section 551 of the Companies Act 2006.

11 To disapply Section 561(1) of the Companies Act 2006 in relation to the allotment of equity securities.

12 To authorise the Company to make market purchases of ordinary shares in accordance with Sectin 693(4) of the Companies Act 2006.

Signed: ...... Date:...... 2016

Attendance indication Shareholders who intend to attend the annual general meeting are requested to place a tick in the box below in order to assist with administrative arrangements. I intend to attend the annual general meeting at 5pm on 20 July 2016 at 22 Soho Square, London W1D 4NS

Signed: ...... Date:...... 2016 44 IBIS Media VCT 1 plc

NOTES RELATING TO FORM OF PROXY 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of his/her rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the chairman of the meeting, insert their full name in the space provided. If you sign and return this proxy with no name inserted in the box, the chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish your proxy to make any comments on your behalf, you will need to appoint someone other than the chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. you may not appoint more than one proxy to exercise rights attached to any one share. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an ‘X’. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. To appoint a proxy using this form, the form must be: > completed and signed; > sent or delivered to Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL or by fax to 01252 719232; and > received by the Company no later than 5pm on 18 July 2016. 7. In the case of a member which is a company, this proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. 8. Any power of attorney or any other authority under which this proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. 9. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). 10. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 11. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of the meeting. 12. The “vote withheld” option is provided to enable a member to abstain from voting on the resolution; however, it should be noted that a “vote withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “for” and “against” the resolution. IBIS Media VCT 1 plc 45

Corporate Information

Directors (all non-executive)

Independent Sir Robin W Miller (Chairman) Lucy H Macdonald Peter D English

Not independent David C K Forster Charles A McIntyre

All of the registered office and principal place of business of IBIS Media VCT 1 plc 22 Soho Square London W1D 4NS VCT web site: www.ibismediavct.com

Investment Adviser Registrars IBIS Private Equity Partners LLP Share Registrars Limited 22 Soho Square Suite E, First Floor London 9 Lion and Lamb Yard W1D 4NS Farnham Surrey GU9 7LL Secretary The City Partnership (UK) Limited Thistle House Bankers 21 Thistle Street Barclays Bank plc Edinburgh 1st Floor EH2 1DF 99 Hatton Garden Telephone: 0131 243 7210 London EC1N 8DN

Auditor Scott-Moncrieff IBIS Media VCT 1 plc Chartered Accountants (incorporated in England and Wales Exchange Place 3 registration number: 5660269) Semple Street Edinburgh EH3 8BL Reporting Calendar for year ending 31 January 2017 Results announced: Interim – August 2016 Annual – May 2017

Annual general meeting: June 2017 IBIS Media VCT 1 plc 22 Soho Square London W1D 4NS