29 Jan 2010 07:00
INTERIM MANAGEMENT REPORT 2009
Ipso Ventures plc (AIM: IPS) ("IPSO", the "Company" or the "Group"), the demand led technology commercialisation business, is pleased to announce its unaudited interim results for the six months to 31 October 2009.
Key points:
| ·; | Value added to the investment portfolio | |
| | - | Created the UK’s first commercial photovoltaic testing business, our first investment in the renewables sector, and generated immediate customer revenue |
| | - | First license revenues for Axilica with the prospect of non-dilutive funding from a major European project initiative in Q1 2010 |
| | - | Medermica’s novel pH sensor device developed on plan and now ready for licensing |
| | - | Polyfect’s technology has attracted the interest of international manufacturers with the imminent prospect of a product commercialisation relationship |
| | Despite the economic climate all our investments are progressing well. | |
| ·; | Financing | |
| | - | Business costs structure successfully adjusted by management team |
| | - | First batch of investments approaching cash generative exits |
| | - | Seeking further equity funding to provide additional working capital as well as to make further investments prior to securing the first exit |
| ·; | Value added to the business model | |
| | - | Industrial partner relationships developed and strengthened to promote our market pull investment strategy, as opposed to the more usual technology push, approach |
| | - | Discussions with major corporates for new partnerships to exploit their ideas and technology |
| | - | Establishment of new complementary revenue sources in human capital and university advisory work. These revenue sources have begun generating cash and reducing overheads |
Simon Hunt, Chairman of IPSO, said: "2010 is a big year for IPSO: We now have a well developed commercialisation process and have the realistic prospect of becoming a self-sustainable business. This will be an unusual achievement in new technology investment.
We believe that a successful exit from one of our investment businesses will be achieved during 2010, which would validate our value creation strategy."
Further information, please contact:
| IPSO Ventures plc Simon Hunt, Executive Chairman Nick Rodgers, Chief Executive Officer | Tel: 020 7921 2990 simon@ipsoventures.com nick@ipsoventures.com www.ipsoventures.com |
| Ambrian Partners Limited Samantha Harrison | Tel: 020 7634 4712 samantha.harrison@ambrian.com |
| Old Park Lane Capital plc Michael Parnes | Tel: 020 7493 8188 mp@oldplc.com |
| Rawlings Financial PR Limited Catriona Valentine | Tel: 01653 618 016 catriona@rawlingsfinancial.co.uk www.rawlingsfinancial.co.uk |
Company description:
IPSO creates commercial value from technology and its business model is entirely demand driven. It works closely with its industrial collaborators to identify the demand for new, innovative technologies and then, through its strong relationships with research institutions, sources technologies which could meet those needs. Much of this technology requires considerable further work by IPSO before it can be sold to industry as a developed product. IPSO creates businesses and provides expertise, strategic direction, human and seed capital, as well as corporate finance advice.
For industrial collaborators, IPSO provides a mechanism to identify and develop technologies which could be of significant value to their businesses, and removes the risk to them of acquiring raw, unproven and undeveloped technology.
For research institutions, IPSO provides greater certainty that their technology will find commercial success.
INTERIM MANAGEMENT REPORT
Overview
Over the last six months we have added more value to our portfolio both by creating another new entity and by developing the existing businesses further towards exit. Our accounting policies on valuation do not give us scope to adequately reflect this growth in the statement of financial position at the moment, but we hope it will do in the near future.
We now have a well developed commercialisation process and, as previously indicated, are currently seeking equity funding for the Company to provide additional working capital and investment funds.
The Company is generating revenue from a number of sources, which are complementary to our core activities and helps us defray our overhead cost. We expect these revenues to increase over the remainder of the financial year and, in time, to represent a steady and meaningful contribution to the business.
Whilst we did not generate capital through an exit during 2009 due to it taking longer than expected to bring the relevant portfolio business to maturity, the directors believe that an exit will be achieved during 2010.
Financial review
Overview
Net loss for the six months was £575,000 after interest on bank deposits of £8,000. The net loss included £68,000 of costs relating to research undertaken by our subsidiary, Medermica Limited.
Revenue
Revenue was increased significantly during the period through complementary revenue generating initiatives, involving university development programmes, headhunting and corporate finance activities. We expect revenue to continue growing throughout the remainder of this financial year.
Investment activities
The Company made further investments totalling £202,000 in the period. These were spread across our core sectors of activity - Energy & Environmental, Healthcare and Process & Software. Of this, £177,000 was invested in two companies which are shown as subsidiaries on consolidation and, therefore, are excluded from the investments total shown in the condensed consolidated statement of financial position.
Financing
As indicated in the Company' Annual Report 2009, our intention has been to seek additional funding for the business which will allow us to create a financially self-sustaining entity over the medium term.
Our first batch of investments is now approaching exits which will generate cash for IPSO. We are currently seeking equity funding to provide further working capital as well as to make further investments prior to securing the first exit. We have also taken action to reduce the overhead costs so as to give us a realistic time period to achieve that exit.
Cash and short term investments at 29 January 2010 totalled £277,000. The directors believe that, based upon the current cash burn rate and in the absence of a successful exit, this will provide sufficient working capital for the Group's requirements for approximately six months of operation.
Operating costs
Operating costs during the period were broadly maintained at £550,000 (2008: £500,000). The recent cost reductions will reduce the operating costs in the second half of this financial year. The Group continues to control its costs, reducing them where possible.
Cash
At 31 October 2009, cash and shortߛterm investments totalled £555,000.
Portfolio analysis by sector
Our portfolio companies are making pleasing progress. We have provided a variety of support for all the businesses including financial administration, business development advice, recruiting management and staff, hands on management support and funding. Each business is already creating products.
| As at 31 October 2009 | As at 30 April 2009 | |||||||
| Fair value | Number | Fair value | Number | |||||
| Sector | £ | % | No | % | £ | % | No | % |
| Energy & environmental | 42,368 | 2 | 1 | 14 | - | - | - | - |
| Healthcare | 1,337,962 | 62 | 3 | 44 | 1,202,962 | 61 | 3 | 50 |
| New materials | 254,190 | 12 | 1 | 14 | 254,190 | 13 | 1 | 17 |
| Process & software | 531,309 | 24 | 2 | 28 | 506,309 | 26 | 2 | 33 |
| 2,165,829 | 100 | 7 | 100 | 1,963,461 | 100 | 6 | 100 | |
Energy & environmental
IPSol Energy Limited, our latest investment, was created to provide business and technical solutions to the solar photovoltaic ("PV") market with an initial focus on testing services. It is the UK's first commercial PV module testing business and provides manufacturers and installers of solar PV modules with third party validation of their products. We have recruited an experienced CEO and the first customer has already tested products through the company. First revenue was achieved within a month of the business being established.
Healthcare
Cambridge Meditech Limited has had discussions with a US based supplier of wound and skin care products, which could lead to a commercial licence in due course.
Medermica Limited received a final investment of £135,000 bringing our total investment in Medermica to £811,000. An agreement was signed in October 2009 to develop the pH measurement technology that had been patented in May 2009 by Medermica. This is expected to lead to licence discussions with commercial partners for the technology in the next 12 months.
Therakind Limited, our paediatric healthcare business, reported that its first product had secured regulatory approval for its paediatric investigational plan and commenced clinical trials, which will lead to marketing approval in due course. The first product is currently available to UK clinicians. A second product is progressing and additional products have been identified for future work.
New materials
Polyfect Solutions Limited is engaged in discussions with international manufacturers who are potential customers for its technology. We expect the first relationship with regard to one particular application will be formalised through an agreement in the near future.
Process & software
Axilica Limited has continued further refinement of its behavioural synthesis tool software and secured its first licence agreement with a significant defence business in September 2009. The East Midlands Early Growth Fund and IPSO have each invested £25,000 during the period. The business now has the prospect of securing non-dilutive funding through participation in a European funded software project.
WildKnowledge (the trading name for WildKey Limited) is making steady progress towards profitability and has developed its platform further.
Demand relationships
We made considerable effort to strengthen and develop further our relationships with major industrial and commercial companies at senior levels. These interactions allow IPSO to identify demand for new products and solutions and to build businesses developing technologies which meet that demand. Our objective is to develop those entities to a stage where the technologies are proven and can be sold, licensed or otherwise exited to release value for shareholders. For our industrial and commercial collaborators, we provide a mechanism to identify and develop technologies which could have a significant value to both parties.
Outlook and risks
The principal risk faced by IPSO relates to our ability to sell the businesses we have created. For that reason, we take the greatest care to identify demand for our products and have a structured development plan before any entity is established. However, any delays in exits will reduce the cash available for working capital and investment.
The Company now has a well developed commercialisation process to allow IPSO to become a self-sustaining business. Following our assessment of the timing of a business exit in 2010 we have taken action to reduce our overhead costs to give us a realistic time to achieve that exit.
Our demand relationships are generating a strong pipeline of opportunities for potential new businesses and analysis of the performance of each of our investments indicates that, despite the economic climate, all are performing well.
Related party transaction
On 19 October 2009, IPSO announced that its subsidiary company, Medermica, had signed an agreement to develop its pH measuring device technology with Dr Peter Knox, a non-executive director of IPSO, and DSPI Limited, a company controlled by Dr Knox (together "the Developers"). Under the agreement, the Developers will provide to Medermica, at their own cost and risk, the expertise, equipment and materials to develop the consumable and electronic components of the pH measuring device and to create a number of robust prototype devices which are capable of being demonstrated to potential licensing partners.
The Developers will, as compensation, receive a royalty based upon a percentage of the revenue Medermica receives from the pH measuring device during the first ten years following successful commercialisation. The royalty will be 30% of the first £1 million of revenue; 7.5% of all revenues between £1 million and £5 million; and 2.5% of all revenues over £5 million until expiry of the royalty term.
Post balance sheet events
On 6 November 2009, IPSO announced the granting of options over 970,590 shares in IPSO in recognition of Simon Haworth becoming a full-time employee of IPSO and his commitment to establishing a head hunting and human capital revenue stream within the Company.
Long term strategy
The Board's long term strategy is to create a self-sustaining business, with the capacity to pay dividends and create capital growth for shareholders.
Simon Hunt
Executive Chairman
29 January 2010
Nick Rodgers
Chief Executive
29 January 2010
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 October 2009
| Note | Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited year ended 30 April 2009 £ | |
| Revenue | 35,168 | 3,486 | 27,374 | |
| Change in fair value of investments | - | - | 262,663 | |
| Administrative expenses | (550,129) | (501,149) | (942,149) | |
| Research and development expenses | (67,500) | (139,000) | (206,500) | |
| Operating loss | (582,461) | (636,663) | (858,612) | |
| Finance income - interest receivable | 7,606 | 60,080 | 85,516 | |
| Loss before tax | (574,855) | (576,583) | (773,096) | |
| Tax | 246 | 536 | 5,405 | |
| Loss and total comprehensive income for the period attributable to equity holders of the parent | (574,609) | (576,047) | (767,691) | |
| Loss per share | ||||
| Basic and diluted | 4 | (4.5)p | (4.6)p | (6.1)p |
All results derive from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 October 2009
Attributable to equity holders of the Group
| | Share capital £ | Own shares £ | Share premium £ | Share option reserve £ | Other reserve £ | Retained losses £ | Total £ | Minority interest £ | Total equity £ |
| At 1 May 2008 (audited) | 627,882 | (40,000) | 4,979,046 | 47,886 | (175,292) | (2,104,674) | 3,334,848 | - | 3,334,848 |
| Consolidated loss for the period | - | - | - | - | - | (576,047) | (576,047) | - | (576,047) |
| Employee share option charge | - | - | - | 7,370 | - | - | 7,370 | - | 7,370 |
| At 31 October 2008 (unaudited) | 627,882 | (40,000) | 4,979,046 | 55,256 | (175,292) | (2,680,721) | 2,766,171 | - | 2,766,171 |
| Issue of share capital | 8,461 | - | 101,539 | - | - | - | 110,000 | - | 110,000 |
| Own shares held by Employee Benefit Trust | - | (60,000) | - | - | - | - | (60,000) | - | (60,000) |
| Consolidated loss for the period | - | - | - | - | - | (191,644) | (191,644) | - | (191,644) |
| Dilution of investment in subsidiary | - | - | - | - | - | - | - | 332 | 332 |
| Employee share option charge | - | - | - | 17,689 | - | - | 17,689 | - | 17,689 |
| At 30 April 2009 (audited) | 636,343 | (100,000) | 5,080,585 | 72,945 | (175,292) | (2,872,365) | 2,642,216 | 332 | 2,642,548 |
| Consolidated loss for the period | - | - | - | - | - | (574,609) | (574,609) | - | (574,609) |
| Employee share option charge | - | - | - | 17,082 | - | - | 17,082 | - | 17,082 |
| At 31 October 2009 (unaudited) | 636,343 | (100,000) | 5,080,585 | 90,027 | (175,292) | (3,446,974) | 2,084,689 | 332 | 2,085,021 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 October 2009
| Note | Unaudited 31 October 2009 £ | Unaudited 31 October 2008 £ | Audited 30 April 2009 £ | |
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 105,374 | - | 88,481 | |
| Property, plant and equipment | 5 | 7,825 | 6,103 | 9,410 |
| Investments | 6 | 1,478,124 | 1,215,514 | 1,453,124 |
| Deferred tax assets | - | 452 | - | |
| Total non-current assets | 1,591,323 | 1,222,069 | 1,551,015 | |
| Current assets | ||||
| Other receivables | 7 | 111,848 | 97,555 | 78,567 |
| Cash and cash equivalents | 8 | 554,903 | 1,512,769 | 1,172,530 |
| Total current assets | 666,751 | 1,610,324 | 1,251,097 | |
| Total assets | 2,258,074 | 2,832,393 | 2,802,112 | |
| EQUITY AND LIABILITIES | ||||
| Share capital | 636,343 | 627,882 | 636,343 | |
| Share premium | 5,080,585 | 4,979,046 | 5,080,585 | |
| Own shares | (100,000) | (40,000) | (100,000) | |
| Share option reserves | 90,027 | 55,256 | 72,945 | |
| Other reserve | (175,292) | (175,292) | (175,292) | |
| Retained losses | (3,446,974) | (2,680,721) | (2,872,365) | |
| Equity attributable to equity holders of the parent | 2,084,689 | 2,766,171 | 2,642,216 | |
| Minority interest | 332 | - | 332 | |
| Total equity | 2,085,021 | 2,766,171 | 2,642,548 | |
| Current liabilities | ||||
| Trade and other payables | 9 | 172,648 | 66,222 | 158,913 |
| Non-current liabilities | ||||
| Deferred tax liabilities | 405 | - | 651 | |
| Total liabilities | 173,053 | 66,222 | 159,564 | |
| Total equity and liabilities | 2,258,074 | 2,832,393 | 2,802,112 |
The financial statements were approved by the Board of Directors and authorised for issue on 29 January 2010. They were signed on its behalf by
Simon Hunt
Director
29 January 2010
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 31 October 2009
| Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited year ended 30 April 2009 £ | ||
| Operating activities | ||||
| Loss for the period | (574,609) | (576,047) | (767,691) | |
| Adjusted for: | ||||
| Fair value movements in investments | - | - | (262,663) | |
| Depreciation of property, plant and equipment | 2,715 | 3,018 | 6,575 | |
| Amortisation of intangible assets | 4,107 | - | - | |
| Income tax credit | (246) | (536) | - | |
| Share-based payment expense | 17,082 | 7,370 | 25,059 | |
| Operating cash flows before movements in working capital | (550,951) | (566,195) | (998,720) | |
| (Increase)/decrease in receivables | (33,281) | 40,430 | 59,417 | |
| Increase/(decrease) in payables | 13,735 | (104,118) | (10,860) | |
| Net cash used in operating activities | (570,497) | (629,883) | (950,163) | |
| Investing activities | ||||
| Purchases of intangible assets | (21,000) | - | - | |
| Purchases of property, plant and equipment | (1,130) | - | (6,864) | |
| Acquisition of subsidiary net of cash acquired | - | - | (38,481) | |
| Payments to acquire investments | (25,000) | (534,488) | (509,434) | |
| Net cash used in investing activities | (47,130) | (534,488) | (554,779) | |
| Financing activities | ||||
| Proceeds on issue of shares | - | - | 332 | |
| Cost of share issue | - | - | - | |
| Net cash from financing activities | - | - | 332 | |
| Net decrease in cash and cash equivalents | (617,627) | (1,164,371) | (1,504,610) | |
| Cash and cash equivalents at beginning of period | 1,172,530 | 2,677,140 | 2,677,140 | |
| Cash and cash equivalents at end of period | 554,903 | 1,512,769 | 1,172,530 |
NOTES TO THE CONSOLIDATED SET OF FINANCIAL STATEMENTS
for the six months ended 31 October 2009
1. General information
The financial information for the six months ended 31 October 2009 is unaudited and has been prepared in accordance with the accounting policies set out in the Group's Annual Report for the year ended 30 April 2009. The financial information for the six months ended 31 October 2008 is also unaudited and the results have not been reviewed by the Group's auditors. The financial information relating to the year ended 30 April 2009 has been extracted from the full report for that year. The report of the auditors on the 2009 accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) Companies Act 2006. The statutory accounts for the year ended 30 April 2009 were approved at the Group's Annual General Meeting on 10 September 2009 and have been delivered to the Registrar of Companies.
2. Accounting policies
The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the EU. The condensed set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the EU.
Basis of preparation
The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual financial statements.
IFRS 8 - Operating Segments
The Group's reportable segments as reported under IAS 14 have remained unchanged following the adoption of this standard. There has been no effect on the reported results or previous financial position of the Group.
IAS 1 (revised 2007) - Presentation of Financial Statements
The revised standard has introduced a number of terminology changes (including revised titles for the condensed financial statements) and has resulted in a number of changes in presentation and disclosure. There has been no effect on the reported results or previous financial position of the Group.
3. Operating segments
The Group is currently divided in two segments, (i) the creation of demand-driven commercial value from intellectual property and (ii) the activities of investee companies controlled by the Group and accounted for as subsidiary companies. The results of these segments, all operations of which are based in the UK, were as follows:
| Business creation and investment activities | Consolidated portfolio companies | Consolidated | |
| 6 months to 31 October 2009 (unaudited) | £ | £ | £ |
| Income statement | |||
| Other operating revenue | 35,168 | - | 35,168 |
| Change in fair value of investments | - | - | - |
| Administrative expenses | (478,675) | (71,454) | (550,129) |
| Research and development expenses | - | (67,500) | (67,500) |
| Operating loss | (443,507) | (138,954) | (582,461) |
| Finance income - interest receivable | 7,606 | - | 7,606 |
| Loss before tax | (435,901) | (138,954) | (574,855) |
| Tax | 246 | - | 246 |
| Loss for the period and total comprehensive income for the period | (435,655) | (138,954) | (574,609) |
| Business creation and investment activities | Consolidated portfolio companies | Consolidated | |
| 6 months to 31 October 2008 (unaudited) | £ | £ | £ |
| Income statement | |||
| Other operating revenue | 3,486 | - | 3,486 |
| Administrative expenses | (472,121) | (29,028) | (501,149) |
| Research and development expenses | - | (139,000) | (139,000) |
| Operating loss | (468,635) | (168,028) | (636,663) |
| Finance income - interest receivable | 60,010 | 70 | 60,080 |
| Loss before taxation | (408,625) | (167,958) | (576,583) |
| Tax | 536 | - | 536 |
| Loss for the period and total comprehensive income for the period | (408,089) | (167,958) | (576,047) |
| Business creation and investment activities | Consolidated portfolio companies | Consolidated | |
| Year to 30 April 2009 (audited) | £ | £ | £ |
| Income statement | |||
| Other operating revenue | 27,374 | - | 27,374 |
| Change in fair value of investments | 262,663 | - | 262,663 |
| Administrative expenses | (879,769) | (62,380) | (942,149) |
| Research and development expenses | - | (206,500) | (206,500) |
| Operating loss | (589,732) | (268,880) | (858,612) |
| Finance income - interest receivable | 85,409 | 107 | 85,516 |
| Loss before taxation | (504,323) | (268,773) | (773,096) |
| Tax | (567) | 5,972 | 5,405 |
| Loss for the year and total comprehensive income for the year | (504,890) | (262,801) | (767,691) |
4. Loss per share
The basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares of 12,726,855 outstanding during the six months ended 31 October 2009 (31 October 2008: 12,557,624).
There were no dividends for the six months ended 31 October 2009 or the six months ended 31 October 2008.
There were no potentially dilutive share options over ordinary shares in the Group outstanding at the period end and therefore the dilutive earnings per share are equal to the basic earnings per share.
5. Property, plant and equipment
| Fixtures and fittings | Computer equipment | Total | |
| £ | £ | £ | |
| Cost | |||
| At 1 May 2009 | 4,855 | 20,695 | 25,550 |
| Additions | - | 1,130 | 1,130 |
| At 31 October 2009 | 4,855 | 21,825 | 26,680 |
| Accumulated depreciation and impairment | |||
| At 1 May 2009 | (753) | (15,387) | (16,140) |
| Charge for the period | (485) | (2,230) | (2,715) |
| At 31 October 2009 | (1,238) | (17,617) | (18,855) |
| Net book value | |||
| At 31 October 2009 | 3,617 | 4,208 | 7,825 |
| At 31 October 2008 | 992 | 5,111 | 6,103 |
| At 30 April 2009 | 4,102 | 5,308 | 9,410 |
6. Investments
The Group held the following investments in unquoted companies:
| Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited Year ended 30 April 2009 £ | |
| Available-for-sale investments (fair value) | |||
| At the beginning of the period | 1,453,124 | 681,027 | 681,027 |
| Investments during the period | 25,000 | 534,487 | 534,258 |
| Change in fair value in the period | - | - | 262,663 |
| Reclassifications in the period | - | - | (24,824) |
| At the end of the period | 1,478,124 | 1,215,514 | 1,453,124 |
All of the available-for-sale investments, held at fair value through profit and loss, were designated as such upon initial recognition.
7. Other receivables
| Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited Year ended 30 April 2009 £ | |
| Amounts due from investee companies | 5,000 | 3,908 | 13,186 |
| Corporation tax receivable | 12,324 | 8,400 | 12,324 |
| Other receivables | 65,969 | 69,667 | 27,206 |
| Prepayments and accrued income | 28,555 | 15,580 | 25,851 |
| 111,848 | 97,555 | 78,567 |
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
8. Cash and cash equivalents
| Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited Year ended 30 April 2009 £ | |
| Cash and cash equivalents | 47,081 | 312,768 | 270,243 |
| Short-term deposits | 507,822 | 1,200,000 | 902,287 |
| 554,903 | 1,512,769 | 1,172,530 |
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
9. Trade and other payables
| Unaudited six months ended 31 October 2009 £ | Unaudited six months ended 31 October 2008 £ | Audited Year ended 30 April 2009 £ | |
| Trade creditors | 112,626 | 10,213 | 105,327 |
| Other creditors | 295 | 3,476 | 200 |
| Accruals and deferred income | 59,727 | 52,533 | 53,386 |
| 172,648 | 66,222 | 158,913 |
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors consider that the carrying amount of trade payables approximates to their fair value.
Responsibility statement
The Directors confirm to the best of their knowledge that:
| (a) | the financial information in the condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the EU; and |
| (b) | the interim management report includes a fair review of the information required by the FSA's Disclosure and Transparency Rules (4.2.7 R and 4.2.8 R). |
By order of the Board
| Simon Hunt Chairman 29 January 2010 | Nick Rodgers Chief Executive |