PPG.L Regulatory News (PPG)

19 August 2011

IPSO VENTURES PLC

FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2011

IPSO Ventures plc (AIM: IPS) ("IPSO", the "Company" or the "Group"), the technology commercialisation business, is pleased to announce its audited results for the year ended 30 April 2011.

Highlights:

A difficult year for IPSO, but positive developments with portfolio companies:

·; Therakind sold its interest in one of its products for a significant upfront fee and future royalties on product sales. This product has now received a positive opinion regarding approval from the European Medicines Agency

·; IPSol Energy raised over £400,000 from investors and has been recommended for accreditation by UKAS to become the UK's first solar photovoltaic certification centre

·; Cambridge Meditech signed an agreement with Lantor to develop its technology

·; Polyfect has secured collaborations with major international manufacturers

·; Increased revenues from £83,000 to £155,000

·; Further reductions in overhead costs

·; Net assets per share: 4.91 pence (adjusted for the share issue in July 2011)

Craig Rochford, Chairman of IPSO, said: "This has been our most challenging year so far. However, through the actions we have taken during the year under review, the subsequent fundraising and the undoubted progress we have made in our portfolio, we believe that we are well placed to deliver better shareholder value from our activities."

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Company description:

IPSO Ventures has created a portfolio of companies based on a range of technologies. Its objective is to nurture these investments to provide value to its shareholders.CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW

This has been our most difficult year so far. In our statement at the time of the interim results in January 2011, we indicated that expected to realise value from at least one of our assets in the financial year under review. Despite the efforts of IPSO's management, this proved not to be possible in the timescales required and we were forced to resort to a deeply discounted and very dilutive equity issue which we completed in July 2011. This funding provided working capital to support the operating costs of the business.

The Board has realised that in the current market our investments, despite making good progress as detailed below, have taken longer to mature to the stage where cash value can be realised for the benefit of IPSO shareholders. We have not made any new investments during the year due to a lack of sufficient funds.

Investments

Healthcare

Our venture with Imperial Innovations plc, Medermica, has created an innovative pH measuring device that works with ultra small volumes of liquid and is cheap, accurate, rapid and disposable. We have sought to license this technology to a larger entity which would be able to best utilise the technology in their products. To date this has not been possible, but we continue to seek an appropriate partner for this technology.

Cambridge Meditech has successfully signed an agreement with Lantor (UK) Ltd which is expected to lead to a licence for the technology in due course. Lantor is currently developing a number of products using the Cambridge Meditech technology.

Our paediatric therapeutic business, Therakind, has been informed by the European Medicines Agency that its first product, BuccolamTM, has received a positive opinion which the Board anticipate should lead to full approval of the drug very shortly. Therakind sold the majority of its interest in BuccolamTM in May 2011for cash, but retains a royalty.

We secured a small investment after the year end in Biocroí, a spin-out from Trinity College Dublin. This was as a result of our assistance in creating the business. Biocroí's nano well-plate technology offers a route to miniaturization for high content screening assays.

Process and Software

Axilica has developed a novel software product, FalconML, which accelerates the specification and design of electronic systems. Axilica has continued to work actively with a number of major industrial partners within both the Enosys (FP7) European partnership and the iFest programme. It is actively developing further customer endorsements to maximise value.

WildKnowledge has had a difficult year in its principal market, education, and we do not expect it to make significant progress in the near future.

Energy and Environment

IPSol Energy, which provides testing and other services to the solar photovoltaic market, raised over £400,000 during the year. Most of the proceeds were used to set up a testing and certification laboratory in Nottingham which was recommended for accreditation by UKAS in July 2011 and will be able to test and certify solar modules according to international standards.

New Materials

Polyfect Solutions' technology for the highly efficient dispersal of property-enhancing materials within polymers has now been proven in a range of different applications. It is now working with customers to overcome processing problems and create new products. The next phase of Polyfect's development will see customer collaborations being built towards licensing the technology into different sectors.

Financial and operational review

Changes in fair value of investments

We recorded an increase of £151,000 and £201,203 in the fair value of our investments in Polyfect Solutions and IPSol Energy respectively, in accordance with our accounting policies. We have carried out a careful review of all of our portfolio companies and decided to recognise a reduction in the fair values of Axilica, Medermica, IPSO Capital and Wildknowledge totalling £1,200,560. This reflects a prudent view of their likely short to medium term realisation prospects. Of these reductions, £916,000 is eliminated on consolidation. Therefore our net change in fair values in the Group's consolidated figures is an increase of £68,000 to £1.697 million (30 April 2010 - £1.629 million).

Revenues

Our revenues continued to increase to £155,000 (2010: £83,000).

Investment activities

No new investments were made during the year.

Operating costs

Administrative expenses show a decrease this year to £764,000 compared with £1,185,000 in 2010. Of this £764,000 some £509,000 was incurred in the first half of the financial year and £255,000 incurred in the second half of the year. This is a direct result of significant efforts to reduce the cost structure of the business. Further reductions in costs have been made since the year end. The full benefits of these reductions will be seen in the new financial year.

Cash

At the year end IPSO had cash totalling £20,000. Since the year end the Company has raised £155,000 (net of expenses) to provide additional working capital for IPSO,

Net assets

Net assets at 30 April 2011 were 4.91 pence per share, after taking into account the share issue in July 2011.

Events since the year end

Since the year end there have been developments within IPSO's portfolio. Therakind has received a positive opinion on its first product, BuccolamTM, from the European Medicines Agency. IPSol Energy has secured approval for its laboratory from UKAS. In addition, IPSO has received a minority shareholding at the time of the formation of Biocroí.

In addition, IPSO completed an equity fundraising of £195,000 (before expenses) with new and existing investors as announced by the Company in July 2011

In August 2011 Simon Hunt and Michael Baines stepped down from the Board as Chairman and Non-Executive Director respectively. We would like to thank them for the efforts in the development of IPSO.Going concern and auditor's report

The new funding described above will allow us to manage and develop the portfolio into the third quarter of 2012. We will need further funding from the sale of portfolio assets, or a further fundraising, to allow us to progress beyond then and to make further new investments. We are confident that this can be achieved.

Outlook and strategy

Through the actions we have taken during the year under review, the subsequent fundraising and the undoubted progress we have made in our portfolio, we believe that we are better placed to deliver improved shareholder value from our activities.

We are grateful for the support of our colleagues and our collaborators and we look forward to further progress in the current year.

We will endeavour to realise some of the portfolio assets and in addition we will selectively consider acquisitions which we believe can provide value to shareholders.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 April 2011

All results derive from continuing operations.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 April 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 April 2011

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 April 2011

NOTES TO THE FINANCIAL INFORMATION

1. Basis of preparation

Whilst the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group expects to publish full financial statements that comply with IFRSs in August 2011.

The financial information set out in the announcement does not constitute the Group's statutory accounts as defined in s435 of the Companies Act 2006 for the years ended 30 April 2011 or 2010. The financial information for the year ended 30 April 2010 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors reported on those accounts: their report included an emphasis of matter in respect of the material uncertainty over going concern, but was not qualified. Their report did not contain a statement under s498(2) or (3) Companies Act 2006. The audit of the statutory accounts for the year ended 30 April 2011 is complete. The report of the auditors on the 30 April 2011 financial statements is without qualification or emphasis. These accounts will be delivered to the Registrar of Companies following the Company's annual general meeting.

2. Significant accounting policies

Basis of accounting

The financial statements have been prepared in accordance with IFRS as adopted by the European Union.

The financial statements have been prepared on the historical cost basis, except for certain financial instruments. The principal accounting policies adopted are set out below.

Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. The Group had cash and cash equivalents of £19,968 as at 30 April 2011 and incurred a loss of £423,679 for the twelve months then ended. Since the year-end the Group raised £195,000 (before expenses) by issuing 19,500,000 new ordinary shares in IPSO. The Directors are confident that these funds will provide IPSO with sufficient working capital for the next 12 months, based on a detailed cash flow forecast ('the forecast'). The forecast does not assume any revenues from existing investments nor additional fundraisings, but it does assume that operating costs will be reduced to a minimum. Steps have already been taken to implement further cost savings.

Having reviewed the forecast and made enquiries into the underlying assumptions, the Directors have a reasonable expectation that the Group will be able to meet its liabilities as they fall due for the foreseeable future. Therefore, the Directors consider it appropriate to prepare the Group's financial statements on the going concern basis.

2. Significant accounting policies (continued)

Foreign currency

Transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled solely by the Company (its subsidiaries) made up to 30 April each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination (see below) and the non-controlled share of changes in equity since the date of the combination.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

Subsidiaries include all entities, including investee companies, controlled by the Company.

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

Any goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

Any interest of minority shareholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

2. Significant accounting policies (continued)

Investments in associates and jointly-controlled entities

An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A jointly-controlled entity is one over which the Group, together with one or more unrelated entities, is in a position to control the financial and operating policies of the entity.

The Group's equity investments are held with a view to realisation of capital gains and for this reason the Directors have designated such investments in associates and jointly-controlled entities to be measured at fair value through profit or loss in accordance with IAS 39 'Financial Investments: Recognition and Measurement'.

Other investments

Investments over which the Group does not exercise control or significant influence are recognised at fair value.

Operating loss

Operating loss is stated before investment income and finance costs.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

Revenue from consultancy, corporate finance and other services are recognised in terms of the individual contracts. In most cases, this would be an agreed fee over a fixed period of time.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Leasing

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

2. Significant accounting policies (continued)

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred

tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not

recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment

Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the straight-line method, on the following bases:

Computer equipment three yearsFixtures and equipment five years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Intangible assets

(i) Internally generated intangible assets - research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally generated intangible asset arising from the Group's development activities is recognised only if all of the following conditions are met:

·; an asset is created that can be identified (such as software and new processes);

·; it is probable that the asset created will generate future economic benefits; and

·; the development cost of the asset can be measured reliably.

2. Significant accounting policies (continued)

Internally generated intangible assets are amortised on a straight-line basis over their useful lives. Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

(ii) Acquired intangible assets

Intangible assets that are acquired as a result of a business combination and that can be separately measured at fair value on a reliable basis are separately recognised on acquisition at their fair value. Amortisation is charged on a straight-line basis to the statement of comprehensive income over their expected useful lives and is included within 'Other administrative expenses'.

Patents and trademarks

Patents and trademarks are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Financial assets are classified into the following specified categories: financial assets 'at fair value through profit or loss' (at 'FVTPL'), 'available-for-sale' ('AFS') financial assets and 'loans and receivables'.

2. Significant accounting policies (continued)

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at FVTPL

Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

·; it has been acquired principally for the purpose of selling in the near future; or

·; it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

·; it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

·; such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

·; the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the Group is provided internally on that basis; or

·; it forms part of a contract containing one or more embedded derivatives and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.

The fair value of unlisted investments is established using valuation techniques. The valuation methodology used most commonly by the Group is the 'price for recent investment' contained in the 'International private equity and venture capital valuation guidelines' endorsed by the British & European Venture Capital Associations. The following considerations are used when calculating the fair value of unlisted investments:

·; where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value; and

·; where there has been any recent investment by third parties, the price of that investment will provide a basis of the valuation.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

2. Significant accounting policies (continued)

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For shares classified as available-for-sale ('AFS'), a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. For all other financial assets, including redeemable notes classified as AFS and finance lease receivables, objective evidence of impairment could include:

·; significant financial difficulty of the issuer or counterparty; or

·; default or delinquency in interest or principal payments; or

·; it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised directly in equity.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

2. Significant accounting policies (continued)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are classified as 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Share-based payments

The Group has applied the requirements of IFRS 2 'Share-based Payments'.

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non market based vesting conditions.

Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

3. Critical accounting judgements and key sources of estimation uncertainty

Critical judgements in applying the Group's accounting policies

In the application of the Group's accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(i) Share-based compensation

In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its option pricing model as set out in note 26 of the Group's financial statements.

(ii) Valuation for unquoted equity investments

As described above, investments in associates are held at fair value with changes in such fair value recorded in the statement of comprehensive income. This represents a critical accounting policy of the Group. The Group relies on judgements in order to determine the appropriate valuation methodology of unquoted equity investments. These judgements include making assessments of the future earnings potential of associated companies and marketability discounts.

(iii) Impairment

The Group tests intangible assets annually for impairment by comparing carrying values to recoverable amounts. Recoverable amounts are calculated as the present value of future cash flows expected to be derived from each intangible asset. The future cash flows are estimated by relying on certain assumptions and judgements.

4. Revenue

The principal sources of revenue for the Group are as follows:

5. Business segments

In accordance with IFRS 8, the Group is required to define its operating segments based on the internal reports presented to its chief operating decision maker in order to allocate resources and assess performance. The chief operating decision maker is the Chief Executive. The reportable segments are Consultancy & Portfolio Management, Healthcare and Energy & Environment.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Administrative costs incurred in the Portfolio Management segment are not allocated to the various reportable segments; each segment incurs its own administrative costs.

No geographical information is provided because the Group only operates in the United Kingdom.

Information about major customers

In 2011, revenue from our largest client amounted to £24,843 (16% of revenues). This revenue was reported in the Consultancy & Portfolio Management segment.

Segment revenue and results

The following is an analysis of the Group's revenue and results by reportable segment for the year ended 30 April 2011:

1 During the year IPSol Energy Limited, an associate of the Group, issued 69,933 new shares in IPSol Energy to external investors. As a result, the Group's interest in IPSol Energy was diluted from 82% to 32% and a deemed disposal gain of £458,336 was recognised.5. Business segments (continued)

The following is an analysis of the Group's revenue and results by reportable segment for the year ended 30 April 2010:

Segment assets

No assets are allocated to reportable segments; all segments own and manage their own assets. No information is provided for segment liabilities as this measure is not provided to the chief operating decision maker.

6. Loss per share

The basic and diluted loss per ordinary share is based on losses attributable to ordinary shareholders for the year of £409,182 (2010: £994,814). The basic loss per share is based on the weighted average number of ordinary shares of 15,505,144 in issue during the year (2010: 12,727,566).

Given that the Group incurred a loss in the current year and the preceding year, no adjustment is required to the weighted average number of shares in order to calculate diluted earnings per share. Therefore, basic and diluted earnings per share are the same.

7. Investments

The Group held the following equity investments in unquoted companies:

All of the investments, held at fair value through profit and loss, were designated as such upon initial recognition.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

·; Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets or for identical assets and liabilities;

·; Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

·; Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

7. Investments (continued)

Fair value measurements recognised in the statement of financial position:

There were no transfers between Level 1 and Level 2 during the year.

8. Events after the year-end

In July 2011 the Group raised £195,000 (before expenses) through the issue of 19,500,000 new ordinary shares at a price of 1p per share. Since the subscription price was lower than the nominal value of the Group's ordinary shares (i.e. 5 pence) at the time, the Group sub-divided each issued existing ordinary share into one new share (i.e. an ordinary share of 0.1 pence) and one deferred share of 4.9 pence each. Unissued ordinary shares were divided into 50 new shares each.

The deferred shares have no income or voting rights and have no value. The deferred shares are not be transferable and are held by the secretary of the Group as trustee for the holders.

A copy of the circular with further details about the transaction is available on the Group's website, www.ipsoventures.com.

9. Availability of statutory accounts

The Group expects to publish its full statutory accounts in August 2011. Following publication, copies of the full statutory accounts will be available from the registered office at Elizabeth House, 39 York Road, London SE1 7NQ and will also be available from the website at www.ipsoventures.com.

9. Annual General Meeting

The Annual General Meeting will be held at the registered offices of IPSO Ventures at Elizabeth House, 39 York Road, London SE1 7NQ on 9 September 2011 at 12 noon.