8PG.L Regulatory News (8PG)

14 August 2012

Legendary Investments Plc

("Legendary" or the "Company")

RESULTS FOR THE YEAR ENDED 31 MARCH 2012

Legendary investments are pleased to announce its results for the year ended 31 March 2012. The year under review has been one of building on the foundations laid last year. Progress was made with investee companies, several new investments were made and the balance sheet was strengthened. Post the balance sheet date, an investee company generated a return of more than 150 per cent and more investments were made.

In April 2011, an intellectual property licence and service agreement for the supply of elite pongamia scions and grafts to Bosques Energeticos EBE S.A. de C.V. ("Bosques") was entered into. Following this agreement, and in light of the progress made by Bosques, an investment was made in Bosques thereby obtaining a 15.4% stake. In late 2011, Bosques shipped and rooted elite pongamia scions in Mexico. This allowed the creation of the first elite Pongamia mother garden in Mexico. This is believed to be the first reported instance of elite pongamia scions successfully transported from India and rooted in Mexico for commercial use. Accordingly, Legendary increased its stake in Bosques to 30.8%. Bosques' strategy has now been further developed to cultivate large areas of bio diesel producing plantations. A number of parties have shown interest in Bosques and suitable partners to cultivate large plantations are being sought.

In May 2011, Legendary negotiated a 42.5% stake in Undrawn Reality Limited ("UR") (previously Raw Games Limited), a company specialising in the development of computer games on several platforms. Legendary assisted UR in developing a business plan with milestones. In July 2011, the first such milestone was hit and the principals of UR earned back 2.0% of the equity of UR. Legendary then assisted UR in UR's discussions with international games publishers. Progress continued during the course of 2011.

While earlier this year, Legendary reported that UR was progressing, it subsequently became evident that advances with game development and associated discussions had slowed dramatically. From talks with UR, it became clear that the timeframe to develop the game had extended considerably. Post the balance sheet date, Legendary concluded that it would not receive a return on UR in the foreseeable future and wrote its investment down to zero. While disappointing, the investment in UR was nominal (£2,000), and writing the investment to zero made available more time for Legendary to focus on more promising investments.

In May 2011, Legendary invested EUR30,000 in Terra Energy Limited ("Terra"), an oil and gas company. Post the balance sheet date, in June 2012, Terra listed as Fastnet Oil & Gas Plc ("Fastnet") on AIM and the Enterprise Securities Market of the Irish Stock Exchange, following a reverse takeover of Sterling Green Group plc. Legendary continues to hold its stake in Fastnet. Based on the closing price on 10 August 2012 the value of this stake was in excess of 250% on the original investment. The investment demonstrated both the potential of Legendary's strategy of looking for asymmetric returns and Legendary's ability to source and take positions in companies that have a near to medium term catalyst to increase value.

In July 2011, Legendary invested £50,000 in MedGold Resources Limited ("Medgold"). MedGold focuses on the discovery and development of gold and precious metal deposits. Medgold continues to make progress and is expected to seek admission to a public market later in 2012.

In December 2011, Legendary raised £615,000 (before expenses), by way of a placing of 615,000,000 ordinary shares thus significantly strengthening Legendary's balance sheet and providing Legendary with resources to make further investments. Over the following months, further investments were assessed and post the balance sheet date several investments were made.

During the year under review, Legendary changed some of its advisers: Marriott Harrison were appointed as the Company's legal advisers, Grant Thornton were appointed as the Company's nominated adviser and Simple Investments Limited were appointed as the Company's broker.

Post the balance sheet date, in July 2012, Legendary invested £50,000 in a pre-IPO funding round for Sula Iron and Gold plc ("Sula"). Sula holds a 153sq km licence in Sierra Leone, which is considered highly prospective for gold and iron ore. The resource is of particular interest as Sula's territory runs contiguous to the licence containing African Minerals' 12.8 billion tonne Tonkolili mine. Sula is expected to be admitted to a public market before the end of 2012. Legendary's investment is by way of a convertible loan, and if admission to a public market is achieved, Legendary will receive a half-warrant for every share held.

In July 2012 Legendary invested £50,000 in Regency Mines plc ("Regency"). Regency is a mineral exploration and development company focusing on nickel and cobalt in Papua New Guinea (alongside JV partner Direct Nickel) and gold, flake graphite and base metals in Australia. Regency has the potential, for example, with equity leverage to Direct Nickel's potentially revolutionary laterite nickel processing technology, to generate asymmetric returns.

Also in July 2012, Legendary invested £100,000 in cash into Kyrgyzstan based Manas Minerals LLC ("Manas Minerals"). Manas Minerals owns the Padsha Ata Licence to mine for coal in the Chatkal Ridge in the Asksy region of Jalal-Abad, Kyrgyzstan. Soviet surveys suggest that the region contains 182 million tonnes of coal reserves of which 116 million are in the P1 and P2 categories according to the Russian standard for resource reporting. A programme of works is being carried out on this which includes confirmation of the Soviet surveys by an internationally recognised firm of consultants, profiling, trenching, drilling and the improvement of site access. This programme is expected to be completed later this year. The results of qualitative studies conducted to date indicate the coal to be of high calorific value, with energy values in excess of 25 MJ/kg and low ash and sulphur content. Manas Minerals intends to seek further licences in the region, certain of which have already been identified, and combine them into a single entity. Jalal-Abad is strategically located within 200 km of the Chinese border.

Legendary's investment is by way of a convertible loan note which when converted is expected to result in Legendary having a 1.0% stake in Manas Minerals. In addition, Legendary has an option with an exercise price of £50,000 which upon exercise would result in Legendary having an additional 0.5% stake in Manas Minerals. Value crystallisation is expected through Manas Minerals being admitted to trading on a public market.

As with Fastnet, Medgold, Sula and Regency, the Directors believe that the Company's investment in Manas Minerals has the potential for generating asymmetric returns.

During the year under review, Legendary made neither a gain nor a loss on investments (2011: net loss of £10,000). Administrative costs were £189,000 (2011: £170,000). The £189,000 included the non-cash expense of £19,000 in respect of share based payment charge (2011: £62,000). This left the cash costs of £170,000 (2011: £108,000) which included £31,000 of costs associated with the £615,000 of equity raised. The remaining £139,000 increased over last year's £108,000 for several reasons. Total fees paid to our auditors were higher than in the previous year at £36,000 (2011: £18,000) due to various items of one off work. These fees are expected to return to lower levels going forward. Other professional fees were higher at £70,000 (2011: £52,000). Again there were one off items related to changing advisers and updating articles. Additional printing costs associated with updating articles were also incurred. Travel & entertaining increased to £13,000 (2011: £8,000).

With the policy of directors remuneration being success based aligned with shareholder returns, the cash element of director remuneration was only £300 (2011: £7,300). The non-cash share option charge of £19,000 (2011: £62,000) related to the options granted to the Directors in May 2011 and January 2012.

Overall operating loss was £189,000 (2011: £92,000). Last year benefitted from the exceptional cancellation of a loan of £88,000. There were nil finance charges (2011: £21,000).

Overall, Legendary made a net loss of £189,000 (2011: £113,000).

Legendary ended the period with £143,000 of investments and £534,000 cash in bank.

Post the balance sheet date, and as at the date of these accounts Legendary had, conservatively valued at historic cost price, and in the case of Fastnet and Regency, at the market price, investments of £373,000.

OUTLOOK

In the last year, Legendary has built upon the foundations laid in the prior period. It has executed on its investment strategy, with its first investment exhibiting a multiple return. It has strengthened its balance sheet and negotiated and made investments with similar potential. Costs have been kept to a minimum with directors' remuneration linked directly to the performance of the Company.

The Board looks confidently to building on the current momentum.

Extracts of the audited results appear below and a full version will be available on the Company's website www.legendaryinvestments.co.uk

A separate statement of recognised gains and losses has not been prepared as the Company has no recognised gains or losses in the current or prior period other than the loss noted above.

All activities derive from continuing operations.

Notes:

A loan of £88,379 which was interest free and had no repayment terms was cancelled during the prior year.

Other than the director's fees of £300 (2011: £7,300) accrued in the year there were no staff costs paid during the year (2011: £Nil). With respect to directors' share based payments, see note 15.

4 INTEREST PAYABLE AND SIMILAR CHARGES

There was no non-cash finance charge for the year ended 31 March 2012 (2011: £21,000).

As at 31 March 2012 the Company had losses of approximately £6m (2011: £5.8m) available to carry forward against future income. No deferred tax asset is recognised in respect of these losses due to the uncertainty as to the utilisation of the losses in the foreseeable future.

Future tax charges will be dependent on the split of profits for tax purposes as between revenue and capital items, and the utilisation of losses incurred to date.

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purposes of calculating the diluted loss per share are identical to those used for basic loss per ordinary share. This is because the exercise of share options and other benefits would have the effect of reducing loss per share and is therefore not dilutive under the terms of FRS 22 Earnings Per Share.

Trade creditors represent the company's financial liabilities measured at amortised cost. Due to their short term nature, carrying value approximates to fair value.

The loan represents the funding of £30,000 that was raised in August 2011 by way of a loan facility. The facility bears no interest and has no fixed date for repayment. The loan is not expected to be paid in the foreseeable future and therefore has been classified as due in more than one year as the directors believe this most appropriately reflects the period over which the loan will be repaid. As part of the terms of the loan, Legendary granted 260,000,000 warrants over new ordinary shares at an exercise price of 0.1p per share. At that time, the Company's share price was 0.075p.

On 29 December 2011, the company placed 615,000,000 ordinary shares of nominal value 0.10p per share at par. The aggregate consideration received was £615,000. Transaction costs amounting to £30,750 were deducted from the consideration and charged to the profit and loss account.

Transaction costs amounting to £nil (2011: £49,000) in regard to issue of shares were deducted from equity and charged against the share premium account.

15 SHARE BASED PAYMENT

The Company has unapproved and approved share option schemes in which the directors participate.

Under the Company's approved share option plan, the Company grants options and shares to certain directors and employees of the Company. If the options remain unexercised for a period after 10 years from the date of grant, the options lapse. The options are exercisable immediately on grant.

Details of Directors' outstanding share options as at the year ended are shown below.

Movements in ordinary share options outstanding

All options were exercisable at the end of the year.

15 SHARE BASED PAYMENT (continued)

Fair value

The fair value of the options is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on implied volatilities as determined by simple average of a sample of listed companies base in similar sectors. The risk free rate for the period within the contractual life of the option is based on the UK gilt yield curve at the time of the grant.

The share based payment charged for the year was £19,000 (2011: £62,000).

Other than the employee share options set out above, warrants have been granted with exercise prices and dates shown in the table below.

The fair value of warrants granted in the year was £Nil (2011: £75,400).

15 SHARE BASED PAYMENT (continued)

Fair value

The fair value of the warrants is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

Other Information

The market price of the Company's ordinary shares ranged from a high of 0.335p to a low of 0.0875p during the year.

21 FINANCIAL INSTRUMENTS

Interest rate risk

The Company had no floating rate financial liabilities at 31 March 2012 and 31 March 2011.

Borrowing facilities

At the year end the Company had no overdraft facility (2011: £Nil).

Capital Management

The Company is financed primarily with equity capital, which is then utilised to meeting operating expenses and make investments. Investments are financed primarily from equity capital, though debt may be utilised where it is felt that it is prudent to do so.

21 FINANCIAL INSTRUMENTS (continued)

Currency risk

The Company makes investments in both UK and foreign companies. In addition, the companies in which the Company invests may or may not have exposure to foreign currency exposure. In this regard the Company has foreign currency exposure. Currency exposure is one the factors considered when making investments, and as such it is implicitly managed at the point of investment.

Liquidity risk

The Company makes investments in unlisted and listed entities. Consequently the Company is exposed to the liquidity risk to the extent that it may not be able to find buyers for its unlisted investments and liquidity in its listed investments may be low. Therefore there can be no certainty that the Company would be able to exit its investments.

Market risk

The Company monitors its investments on a regular basis, and takes action when it deems appropriate.

22 POST BALANCE SHEET EVENTS

Post the balance sheet date, in July 2012, Legendary invested £50,000 in a pre-IPO funding round for Sula Iron and Gold plc ("Sula"). Sula is expected to be admitted to a public market, before the end of 2012. Legendary's investment is by way of a convertible loan, and if admission to a public market is achieved, the Legendary will receive a half-warrant for every share held.

In July 2012, Legendary invested £50,000 in Regency Mines plc ("Regency"). Regency is a mineral exploration and development company focusing on nickel and cobalt in Papua New Guinea (alongside JV partner Direct Nickel) and gold, flake graphite and base metals in Australia.

Also in July 2012, Legendary invested £100,000 in cash into Kyrgyzstan based Manas Minerals LLC ("Manas Minerals"). Manas Minerals owns the Padsha Ata Licence to mine for coal in the Chatkal Ridge in the Asksy region of Jalal-Abad, Kyrgyzstan.

Legendary's investment is by way of a convertible loan note which when converted is expected to result in Legendary having a 1.0% stake in Manas Minerals. In addition, Legendary has an option with an exercise price of £50,000 which upon exercise would result in Legendary having an additional 0.5% stake in Manas Minerals or equivalent thereof in any successor entity. Value crystallisation is expected through Manas Minerals being admitted to trading on a public market.