PPG.L Regulatory News (PPG)



28 December 2012 

IPSO VENTURES PLC

FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2012

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 2012.

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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's Review

This has again been a difficult year and, despite considerable effort, none of the opportunities I alluded to in my letter with the interim statement in January have come to fruition. Since the year end we have therefore taken some tough decisions with the portfolio investments.

Portfolio review

Axilica

Axilica provides a unique behavioural synthesis tool in the ESL (electronic system level) design automation market. The advanced section of the ESL market has been dominated by small technology vendors and start-ups offering synthesis tools focused on translating programming languages (C, C++) into hardware (FPGA, ASIC).

During the year to 30 April 2012 Axilica continued to work on the funded European research projects as it has done previously. It has endeavoured to secure further funded research but this has not proved possible and since the year end the decision has been taken, by the board of Axilica, to reduce activity to a minimum in the company.

It is unclear whether the residual technology has any value. IPSO's shareholding is 45%.

Biocroí

Biocroí has designed and developed a range of unique advanced microplates and a novel cell culture medium. Biocroi's microplates use a gel-based buffering system surrounding the wells which leads to better control of the microplate environment improving the quality, accuracy and uniformity of results. Biocroí has launched its products and signed distribution agreements for its cell culture product. Revenues are being generated from sales of the cell culture product and discussions are on-going for the licence of the microplate technology. IPSO's shareholding is 6%.

Cambridge Meditech

Cambridge Meditech's novel patented wound infection technology gives a visual indication of infection. Wound infection can be detected without unnecessary disruption to a dressing and appropriate intervention can be made immediately. It is anticipated that the products will have multiple applications in various settings.

At the 30 April 2012 the company's development partner, Lantor, had an option to licence the technology. In August 2012 Lantor's option expired. Early discussions are taking place with the new owner of Lantor with a view to granting them a licence or selling the technology. Cambridge Meditech is 100% owned by IPSO.

IPSol Energy

IPSol Energy is a service business providing testing, certification and other services to the solar photovoltaic ("PV") industry.

The downturn in the PV market in the UK as a result of the Government's changes in the feed in tariffs has been considerable and the business of IPSol Energy has come under severe pressure. In August 2012 the company raised a further £150,000 of working capital. The company has a reasonable order book but, due to customer delays, product has been slow to arrive for testing which has affected cash flow. However additional orders have been received in the last two months and the outlook is a little more positive. IPSO's shareholding is 23%.

Medermica

Medermica has so far been unsuccessful in licencing its ph measurement technology to third parties. It has recently taken its patents into the PCT national/regional phase in Europe and US. Further significant business development is prevented through a lack of funding. Medermica is 75% owned by IPSO.

Polyfect Solutions

Polyfect's novel process enables cost savings and quality improvements to a range of plastics through the highly efficient incorporation of functional fillers (which give polymers certain characteristics and properties).

Polyfect is continuing its development work with a major international brewer and has undertaken a feasibility study with a consumer product multinational. Discussions with other interested parties are also taking place with a view to exploiting Polyfect's technology particularly in the nanotechnology area. Additionally Polyfect has secured Technology Strategy Board funding for a project on improved food packaging.

During the year to 30 April 2012 and since that date Polyfect has raised some £80,000 from external investors which has diluted the shareholding owned by IPSO. These monies have been raised at a discount to the original valuation of the business and the value of IPSO's shareholding has been reduced to £135,000. IPSO's current shareholding is 22%.

Therakind

Therakind is a paediatric healthcare company. It takes known adult drugs and creates a version for children which can be protected by EU legislation. The revenue model is to generate royalties on product sales.

Therakind's first product, Buccolam, which is licenced to Viropharma Inc, has been launched in the UK and other European countries. Royalties are now been received by Therakind from this product. Therakind's second product which is being developed with a partner is awaiting registration for the UK.

A third product has started development and others are being reviewed. IPSO's shareholding is 35%.

Wildknowledge

Wildknowledge creates mobile applications that engage audiences with their heritage (i.e. the environment, wildlife, archaeology and history). Its offering includes data gathering applications; location based content and engaging games.

Wildknowledge has reduced its reliance on the education market and built revenues through three streams (white labelling existing technology, delivery of native applications/subscriptions and creation of standalone content) in the wider heritage market and new markets. However Wildknowledge is a small business and with limited funding is struggling to compete with bigger companies. IPSO's shareholding is 9%.

Portfolio analysis by sector

* This sector includes investments which are accounted for as subsidiaries in the Group accounts. The adjustment row eliminates the carrying value of these subsidiaries in order to arrive at the consolidated investment value for the Group's remaining equity investments, as shown in the statement of financial position.

The valuation policy of the Group is set out in the notes to the financial statements.

Financial review

Revenues

Our revenues reduced slightly to £122,000 (2011: £155,000) reflecting a reduction in non portfolio related income in this year compared with last year.

Changes in fair value of investments

The value of our investments was reduced by £189,000 which was a reduction in the value of our Polyfect holding partly offset by the inclusion of our holding in Biocroi.

Investment activities

No new investments were made during the year.

Operating costs

Administrative expenses show another significant decrease this year to £400,000 compared with £764,000 in 2011. This is a direct result of significant efforts to reduce the cost structure of the business. Some £105,000 of the 2012 operating costs was paid in shares in IPSO.

Cash

At the year end IPSO had cash totalling £25,000 (2011: £20,000).

Events after the reporting period

In August IPSol Energy Limited raised a further round of funding from external investors diluting IPSO's shareholding to 23%. In September Axilica made the decision to reduce its activities to a minimum and the Directors of IPSO believe that has reduced the value of this investment to zero.

In early October IPSO Management sold its wholly owned subsidiary, IPSO Capital for £25,000 in cash. On 10 October trading in the Company's shares on AIM was suspended due to the uncertain financial position of the Company and its inability to publish these accounts by 31 October 2012. Since that date the Board has agreed a conditional fundraising of £360,000 and a disposal of its operating subsidiary IPSO Management, both of which are subject to the approval of shareholders at the General Meeting of the Company scheduled for 14 January 2013 and the approval of the Court. Assuming the fundraising is approved by both the Company's shareholders and the Court then the creditors of the Company and its subsidiaries will be paid in full and a further sum will be paid into IPSO Management as working capital.

The Directors are of the view that the events since the year end set out above have reduced the portfolio values from the value as at 30th April 2012. However these are almost all minority holdings in private companies where there is no ready market in the shares and as such it is very difficult to give an accurate current valuation. In a forced sale or liquidation the Directors believe that the value realized would be very little. To maximize value in the portfolio a longer time is needed. In the Directors' opinion the most valuable investment in the portfolio is the holding in Therakind.

Going concern

The new funding and reorganisation described in the events after the reporting period section above, if approved by shareholders at the General Meeting, should give both IPSO Ventures plc and IPSO Management, after disposal, sufficient funding for at least 12 months in each case.

Outlook and strategy

Assuming that the new fundraising and reorganization are approved by shareholders at the General Meeting, then I believe the outlook for the Company is positive although my colleagues will not be involved in the Company following the General Meeting and my involvement is likely to cease shortly thereafter. Assuming that IPSO Management has a modest amount of working capital available to it then there is a reasonable opportunity for the realization of the portfolio to create value for shareholders.

Consolidated Statement of Continuing Income

For the year ended 30 April 2012

All results derive from continuing operations.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 April 2012

Consolidated Statement of Financial Position

As at 30 April 2012

Consolidated Cash Flow Statement

For the year ended 30 April 2012

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 December 2012.

 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 2012 or 2011. The financial information for the year ended 30 April 2011 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 2012 is complete. The report of the auditors on the 30 April 2012 financial statements included an emphasis of matter in respect of the material uncertainty over going concern, but was not qualified. 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 £24,740 as at 30 April 2012 and incurred a loss before tax of £466,356 for the twelve months then ended. The Directors are confident that £360,000 of further funding can be raised from a group of new investors and the Company's operating subsidiary can be disposed of. This would provide 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. The further funding and the disposal are however subject to the approval of shareholders in and the approval of the Court.

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.

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 reporting period end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting period end 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 non-controlling shareholders in the acquiree is initially measured at the non-controlled party's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

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'.

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 reporting period end.

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 statement of financial position 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 reporting period end 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.

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 reporting period end, 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 statement of financial position 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') and 'loans and receivables'. 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;

·; 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 initially measured at fair value and subsequently 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.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each reporting period end. 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 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.

Impairment of financial assets continued 

If, in a subsequent period, the amount of the impairment loss decreases and the decreasecan 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.

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.

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 thereporting period end, 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 reporting period end, 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.

(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 comprehensiveincome. 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 Board of the Company. The reportable segments for revenue and cost purposes are Consultancy & Portfolio Management; Healthcare; and Energy & Environmental. The principal assets of the Group being its investment portfolio are reported by investment sector in the Chairman's review, being Healthcare, New Materials, Process & Software 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 2012, revenue from our largest client amounted to £43,510 (36% 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 2012:

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

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.

In 2011, there were administrative expenses arising in the Energy and Environmental sector in 2011 from a subsidiary undertaking. In 2012, the Company has maintained a 27% share in the entity but it is no longer a subsidiary and is therefore not included in this analysis.

6. Loss for the year

Loss for the year has been arrived at after charging:

The analysis of auditors' remuneration is as follows:

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).

Fair value measurements recognised in the statement of financial position:

There were no transfers between Level 1 and Level 2 during the year. There was no movement in Level 3 during the year.

8. Events after the reporting period

In August IPSol Energy Limited raised a further round of funding from external investors diluting IPSO's shareholding to 23%. In September Axilica made the decision to reduce its activities to a minimum and the Directors of IPSO believe that has reduced the value of this investment to zero.

In early October IPSO Management sold its wholly owned subsidiary, IPSO Capital for £25,000 in cash. On 10 October trading in the Company's shares on AIM was suspended due to the uncertain financial position of the Company and its inability to publish these accounts by 31 October 2012. Since that date the Board has agreed a fundraising of £360,000 and a disposal of its operating subsidiary IPSO Management, both of which are both subject to the approval of shareholders at the General Meeting of the Company scheduled for 14 January 2013 and the approval of the Court. Assuming the fundraising is approved then the creditors of the Company and its subsidiaries will be paid and a further sum will be paid into IPSO Management as working capital.

9. Availability of statutory accounts

The Group expects to publish its full statutory accounts today, 28 December 2012. Following publication, copies of the full statutory accounts will be available from the registered office at Suite 3 1st Floor, 1 Duchess Street, London W1W 6AN and will also be available from the website at www.ipsoventures.com

10. Annual General Meeting

The Annual General Meeting will be held at the offices of DMH Stallard LLP, 6 New Street Square, New Fetter Lane, London EC4A 3BF on 21 January 2013 at 10.30am.