Final Results

25th Jul 2008 07:00



PRELIMINARY RESULTS 2008

Ipso Ventures plc (AIM: IPS) ("IPSO" or the "Company"), the creator of commercial value from technology, is pleased to announce its unaudited preliminary results for the year ended 30 April 2008.

Highlights

 

* First Loughborough spin-out, Axilica Limited, incorporated in September 2007

 

* Value enhancing "assets" added to all existing investments 

 

* Significant progress achieved in framework agreement with Loughborough University

 

* Additional seed investment in three existing spin-out companies

 

* Initial investments entering growth phase and achieving first revenues

 

* Second Loughborough spin-out, Polyfect Solutions Limited, incorporated since the year end

Simon Hunt, Chairman of IPSO, said: "We are pleased to report material progress in the year to April 2008. Our relationship with Loughborough University continues to flourish with our first spin-out investment, Axilica Limited, in September 2007 and, more recently, our second spin-out, Polyfect Solutions Limited. We have also continued to develop our technology access outside Loughborough. We have already taken prudent steps to optimise our cost base and, in revenue terms, we are working towards achieving our first exit during this financial year."

Further information, please contact:

IPSO Ventures plc: Tel: 020 7395 1500 

Simon Hunt, Chairman [email protected]

Nick Rodgers, Chief Executive  [email protected]

www.ipsoventures.com

Ambrian Partners Limited Tel: 020 7776 6421

Tim Goodman [email protected]

Rawlings Financial PR Limited Tel: 01653 618 016

Catriona Valentine [email protected]

www.rawlingsfinancial.co.uk

  

CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW

Summary of review

* First Loughborough spin-out, Axilica Limited, incorporated in September 2007

 

* Value enhancing "assets" added to all existing investments

 

* Significant progress achieved in framework agreement with Loughborough University

 

* Additional seed investment in three existing spin-out companies

 

* Initial investment entering growth phase and achieving first revenues

 

* Second Loughborough spin-out, Polyfect Solutions Limited, incorporated since the year end

Highlights

IPSO Ventures plc ('IPSO') is pleased to report material progress in the year to 30 April 2008. During the period we invested £775,000 in new and existing spin-outs, as well as adding valuable "assets" to these fledgling businesses. The nature of these "assets" varies from case to case but usually includes improvement in human capital, ensuring that products are developed on time and within budget, assisting with the negotiation of commercial contracts with third parties and enabling the generation of first revenues. 

Our relationship with Loughborough University continues to flourish. We invested in our first Loughborough spin-out, Axilica Limited, in September 2007, within six months of the commencement of the agreement, and we recently created our second spin-out, Polyfect Solutions Limited. IPSO has the full support of Shirley Pearce, Vice Chancellor of Loughborough, to exploit technology opportunities in key research areas such as IT, materials, chemistry and environmental and energy technologies.

Outside Loughborough, we continued to develop our technology access, gaining knowledge of IP sources across the UK and Western Europe. We also invested further funds in our existing spin outs, Medermica Limited (formerly Intelligent Wound Care Limited), Therakind Limited and WildKey Limited.

Investments

Axilica Limited, our first spin out from Loughborough, is developing a software tool for the electronic design automation market. Using UML, it brings software design techniques to hardware design thereby speeding up the process and reducing the cost. Since formation, we have recruited a VP of business development and a non executive director with considerable senior management experience at Cadence Systems Inc, one of the world's leading EDA companies.

The software tool is currently in beta testing with potential customers.

Medermica Limited, from Imperial College, is developing devices to enable clinicians to make informed assessments of the health of tissues. A prototype device has been developed and is now being tested prior to deployment in research settings.

We have added sector specific business development skills to the team to identify and engage with commercial partners.

Therakind Limited, which specialises in creating children's medicines, was a spin-out from the School of Pharmacy, University of London. Therakind is now taking forward a number of products with its partners and has started to generate revenue using its considerable scientific knowledge base and relationships.

We have helped the COO to secure the first revenues for this business and to negotiate with potential product development partners. A regulatory affairs advisor has been recruited and further medical and pharmacokinetic expertise added.

WildKey Limited, from Oxford Brookes University, is now developing its market leading e-learning products for SmartPhone applications as well as for the educational PDA market and is steadily increasing its revenues. The company has already established itself as a leading provider in the sector. 

Outlook 

In an environment where there is a perception that capital markets have little appetite for the provision of additional funding, IPSO is able to continue progress by applying existing in-house funds to develop its portfolio companies and prospective spin-outs. We are seeking to create additional spin-outs from Loughborough, as well as combining exciting technologies from the wider market, and are able to do so without undue reliance on capital markets. We have taken prudent steps to optimise our cost base and, in revenue terms, we are working towards achieving our first exit during this financial year.

Meanwhile, the value of our informal relationships has become increasingly apparent during the year. We continue to invest time and energy in assessing the technology portfolios of other universities and research institutions across a wide geographical base. Also, and with equal emphasis, we are developing our connections with industry in order to address the demand for specific technologies. These connections are proving exceptionally valuable to the universities and corporates involved and, consequently, to IPSO.

Financial and operational review

Investment activities

During the year the Group invested a total of £775,000: 

In July 2007, we invested a further £270,000 in Medermica Limited, which is eliminated on consolidation, and a further and final investment of £270,000 is scheduled in the current financial year.

In June 2007, we made a further planned investment of £300,000 in Therakind Limited.

In September 2007, we increased our investment in WildKey to £61,000 and, just after the year end, we added a further £30,000 to take the total invested to £91,000. These additional investments have provided necessary working capital allowing WildKey to develop its products further.

In September 2007, we invested £165,000 in Axilica Limited and we plan to invest a second tranche of funding in this current financial year.

Investments in potential projects amounted to £24,000.

Operating costs

Operating costs reflected a full complement of staff to service our industry and academic relationships and to control and develop the business. Our core team of staff is highly focused and we complement this with outside resources where required. Operating costs also included £274,000 of research and development expenses for Medermica Limited, which is currently a wholly-owned subsidiary.

Exceptional administrative expenses

Earlier this year, we identified a potential acquisition which would have strengthened the Group. We secured the appropriate funding for the acquisition; however the vendors decided to discontinue the transaction at a late stage. We have therefore expensed legal and other costs totalling £109,408.

Cash

At the year end the Group had cash and short term investments totalling £2,677,000 (2007: £4,247,641).

Simon Hunt - Executive Chairman

Nick Rodgers - Chief Executive

 

CONSOLIDATED INCOME STATEMENT (UNAUDITED)

For the year ended 30 April 2008

		2008	2007
	Note	£	£
Continuing operations
Revenue		-	-
Cost of sales		-	-
Gross profit		-	-
Other operating income		3,225	-
Administrative expenses		(1,112,128)	(647,242)
- exceptional aborted acquisition costs	4	(109,408)	-
- other administrative expenses		(1,002,720)	(647,242)
Research and development expenses		(274,000)	(270,000)
Operating loss		(1,382,903)	(917,242)
Investment revenues from cash and cash equivalents		200,358	49,080
Loss before tax		(1,182,545)	(868,162)
Taxation		8,806	(490)
Loss for the year attributable to equity holders of the parent		(1,173,739)	(868,652)
Loss per share
Basic and diluted	5	(9)p	(18)p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

For the year ended 30 April 2008

				Share
	Share	Own	Share	option	Other	Retained
	capital	shares	premium	reserve	reserve	losses	Total
	£	£	£	£	£	£	£
At 30 April 2006	1,177	-	-	-	-	(62,283)	(61,106)
Issue of share capital	625,647	-	4,941,281	-	(176,469)	-	5,390,459
Transfer of shares on reverse
acquisition	(1,177)	-	-	-	1,177	-	-
Consolidated loss for the year	-	-	-	-	-	(868,652)	(868,652)
Employee share option charge	-	-	-	13,676	-	-	13,676
At 30 April 2007	625,647		4,941,281	13,676	(175,292)	(930,935)	4,474,377
Issue of share capital	2,235	-	37,765	-	-	-	40,000
Own shares held by Employee Benefit Trust	-	(40,000)	-	-	-	-	(40,000)
Consolidated loss for the year	-	-	-	-	-	(1,173,739)	(1,173,739)
Employee share option charge	-	-	-	34,210	-	-	34,210
At 30 April 2008	627,882	(40,000)	4,979,046	47,886	(175,292)	(2,104,674)	3,334,848

  CONSOLIDATED BALANCE SHEET (UNAUDITED) 

At 30 April 2008

		2008	2007
	Note	£	£
Non current assets
Property, plant and equipment		9,121	12,146
Investments	6	681,027	175,582
		690,148	187,728
Current assets
Trade and other receivables		137,984	158,256
Cash and cash equivalents		2,677,140	4,247,641
		2,815,124	4,405,897
Total assets		3,505,272	4,593,625
Current liabilities
Trade and other payables		(170,340)	(118,758)
Net current assets		2,644,784	4,287,139
Non current liabilities
Deferred tax liabilities		(84)	(490)
Total liabilities		(170,424)	(119,248)
Net assets		3,334,848	4,474,377
Equity
Share capital		627,882	625,647
Share premium		4,979,046	4,941,281
Own shares		(40,000)	-
Share option reserves		47,886	13,676
Other reserve		(175,292)	(175,292)
Retained losses		(2,104,674)	(930,935)
Equity attributable to equity holders of the parent		3,334,848	4,474,377

  CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

For the year ended 30 April 2008

		2008	2007
		£	£
Net cash from operating activities		(1,262,670)	(1,001,446)
Investing activities
Interest received		200,358	49,080
Purchases of property, plant and equipment		(2,744)	(15,942)
Payments to acquire investments		(505,445)	(175,582)
Net cash used in investing activities		(307,831)	(142,444)
Financing activities
Proceeds on issue of shares		-	6,135,995
Cost of share issue		-	(745,538)
Net cash from financing activities		-	5,390,457
Net (decrease)/increase in cash and cash equivalents		(1,570,501)	4,246,567
Cash and cash equivalents at beginning of year		4,247,641	1,074
Cash and cash equivalents at end of year		2,677,140	4,247,641

  NOTES TO THE ACCOUNTS

 

1. Basis of preparation

Whilst the financial information included in this preliminary 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 Company expects to publish full financial statements that comply with IFRSs in July 2008.

The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 30 April 2008 or 2007. The financial information for the year ended 30 April 2007 is derived from the statutory accounts of the Group for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s. 237(2) or (3) Companies Act 1985. The audit of the statutory accounts for the year ended 30 April 2008 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

 

2. Significant accounting policies

The announcement is prepared on the basis of the accounting policies as stated in the previous year's financial statements of the Group.

The principal accounting policies adopted are set out below:

Basis of accounting

The financial statements have been prepared in accordance with IFRS. The financial statements have also been prepared in accordance with IFRS adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.

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

 

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.

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.

The 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.

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. 

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.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Rentals payable under operating leases are charge 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 income statement 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.

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 Income statement, 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  3 years

Fixtures and equipment  5 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.

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 research and 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.

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'. 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;

- 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.

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 asset, 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.

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 Payment'. 

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 in this model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

 

3. Business segments 

	Core business	Medermica Limited	Consolidated
	2008	2008	2008
	£	£	£
Income statement
Other operating income	3,225	-	3,225
Administrative expenses	(1,072,930)	(39,198)	(1,112,128)
- exceptional aborted acquisition costs	(109,408)	-	(109,408)
- other administrative expenses	(963,522)	(39,198)	(1,002,720)
Research and development expenses	-	(274,000)	(274,000)
Operating loss	(1,069,705)	(313,198)	(1,382,903)
Finance income - interest receivable	200,264	94	200,358
Loss before taxation	(869,441)	(313,104)	(1,182,545)
Tax	406	8,400	8,806
Loss attributable to equity holders	(869,035)	(304,704)	(1,173,739)
Balance sheet
Assets	3,487,818	17,454	3,505,272
Liabilities	(105,216)	(65,208)	(170,424)
Net assets	3,382,602	(47,754)	3,334,848
Other segment items
Capital expenditure	2,744	-	2,744
Depreciation	5,769	-	5,769
	Core business	Medermica Limited	Consolidated
	2007	2007	2007
	£	£	£
Income statement
Administrative expenses	(633,192)	(14,050)	(647,242)
Research and development expenses	-	(270,000)	(270,000)
Operating loss	(633,192)	(284,050)	(917,242)
Finance income - interest receivable	49,080	-	49,080
Loss before taxation	(584,112)	(284,050)	(868,162)
Tax	(490)	-	(490)
Loss attributable to equity holders	(584,602)	(284,050)	(868,652)
Balance sheet
Assets	4,593,625	-	4,593,625
Liabilities	(106,198)	(13,050)	(119,248)
Net assets	4,487,427	(13,050)	4,474,377
Other segment items
Capital expenditure	15,942	-	15,942
Depreciation	3,796	-	3,796

4. Exceptional administrative expense

The exceptional administrative expense relates to legal and professional fees that were incurred as part of an aborted acquisition.

 

5. Loss per share

The basic and diluted loss per ordinary share is based on losses attributable to ordinary shareholders for the year of £1,173,739 (2007: £868,652). The basic loss per share is based on the weighted average number of ordinary shares of 12,512,932 in issue during the year (2007: 4,906,679).

 

6. Investments - available for sale investments (fair value)

Unquoted companies	2008	2007
	£	£
Therakind Limited	429,962	129,962
WildKey Limited	61,407	45,620
Axilica Limited	164,835	-
Other investments	24,823	-
	681,027	175,582

 

7. Post balance sheet events

The Group created a new spin-out, Polyfect Solutions Limited, from Loughborough University in July 2008. Polyfect Solutions is commercialising a new process which enables a significant reduction in the cost of functional fillers in polymers and plastics

 

8. Availability of statutory accounts

Copies of the full statutory accounts will be available from the registered office at 53 Chandos Place, Covent Garden, London WC2N 4HS from Monday 18 August 2008 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 offices of Memery Crystal, 44 Southampton Buildings, London WC2A 1AP on 10 September 2008 at 12 noon.

ENDFR RIMFTMMITBFP

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