Craven House Capital Regulatory News (CRV)

2 August 2011

AIM Investments Plc

(the "Company")

Final Results for the Year to 31 May 2011

Chairman's Statement

It is a pleasure to be reporting the full-year results for AIM Investments plc ('the Company') for the twelve months to 31 May 2011. Whilst the Company continued to report a loss, 2011 was a very important year of transition for us. Over the course of the year, we have taken a number of significant actions, which I am confident will lead to an increase in shareholder value.

Key milestones (some of which have occurred following the end of the reporting period) included:

·; The formation of a strategic partnership with Desmond Holdings Ltd ("Desmond Holdings") (a Hong Kong based investment company) - which is now the Company's major shareholder.

·; Provision of loan facilities by Desmond Holdings, which secured working capital for the Company as well as capital to invest in companies within our target markets.

·; Lifting of the suspension in the trading of shares in the Company, after changes to the Investing Policy of the Company were approved by shareholders in the 2010 Annual General Meeting

·; Three separate investments made during the period in companies in China and South America. A further investment made after the year-end in a Mongolia-focused investment vehicle.

·; The appointment of a new Nominated Advisor and Broker; Daniel Stewart and Company.

·; A successful private placing, which raised over £700,000.

·; The re-structuring of the Board.

Since the year end, the Board has reviewed the Company's strategy and the exciting investment opportunities that the directors believe exist in emerging and frontier markets. As a consequence, the Board is now proposing to appoint Desmond Holdings as the Company's investment manager and to amend the Company's Investing Policy to focus on emerging and frontier markets. Conditional upon the approval of shareholders of this change at the Annual General Meeting to be held on 23 August 2011, we believe that the Company is now well positioned to make further investments in our target markets which we are confident will begin to generate profitable returns for our shareholders.

Review of the Financial Results

Proactive investment activity on behalf of the Company was limited over the course of the financial year. Operational activity was focused on the actions described above and, principally, the securing of investment capital and working capital to ensure the Company remained a going concern. We are pleased to report that not only were substantial funds secured, but also that the Company was able to execute three investments in Shenzen Cadro (Catic Group) Hydraulic Equipment Co. Limited, Planteman SA and Minera Mapsa SA on 27 October 2010, 2 November 2010 and 5 November 2010 respectively. These represent a combined investment of $800,000 - funded from the loan facility provided by Desmond Holdings.

The Board anticipates that all investments, made using loans that convert to equity on admission to Market, will yield significant returns on loan capital invested in the form of equity, although this cannot be guaranteed. If these companies do not eventually succeed in being admitted to a public market, the Company will receive back investment monies plus interest.

The Company has successfully kept its operating costs and overheads, including director's remuneration, low over the course of the period. It will continue to operate from a very low cost base until the Company is generating profits. It is the intention moving forward for incoming and future directors and officers to be remunerated in the main with a combination of shares and performance-related share options.

Working Capital

Desmond Holdings provided a Loan Facility to the Company of up to £500,000 on 28 October 2010 (increased to £700,000 on 1 November 2010) to be used to make qualifying investments under the Company's Investing Policy. The fee for providing this loan was settled by the issue of 58,480,300 shares equivalent to 29.99% of the Company on 10 December 2010.

In addition, the Company is supported by a working capital facility, provided by Desmond Holdings, which funds the underlying operating expenses of the Company. As at 31 May 2011, the total provided under this loan was approximately £87,000.

Subsequent to the end of the reporting period, a private placement for shares in the Company was successfully closed. £721,578 was raised at 1.25p per share, a significant premium to the market price of the shares. A total of 57,726,266 new ordinary shares were issued increasing the total issued share capital to 252,725,666 ordinary shares. This represents 22.84% of the enlarged ordinary share capital of the Company.

The success of the placing at a premium to market price represents a very encouraging endorsement by the new shareholders of the actions we have taken over the course of the year, and the strength of the underlying strategy of the Company.

A historic loan provided to the Company by Maji Capital Ltd, a company connected to a former director, was converted into new ordinary shares in the Company on 8 July 2010. Maji Capital has subsequently sold all of its shares in the Company and has no involvement in the ongoing operations of AIM Investments. The former major shareholder, PDT Holdings Ltd, another company connected to the same former director, also disposed of its entire shareholding in April 2011. 

Subsequent activities

In addition to the successful placing of shares described above, other important activities which occurred following the end of the reporting period included the appointment of a new Nominated Advisor and Broker to the Company; Daniel Stewart and Company.

A reorganisation of the Board also took place, details of which are outlined below.

In June 2011, the Company subscribed for 42,500 common shares of CAD$3.51 per share in Mongolia Growth Group Ltd, a real estate and financial services investment fund focusing its operations in the emerging economy of Mongolia, which is listed on the Canadian National Stock Exchange (YAK:CNSX). The cost of this investment was CAD$149,175 (£95,131) in aggregate and represented a holding of 0.1% of the total issued shares capital of that company.

Going Concern

Further to the successful private placing and the ongoing working capital facility provided by Desmond Holdings, the Board is pleased to report that the Company can continue to trade as a going concern.

Appointment and resignation of directors

Mark Pajak, a director of Desmond Holdings, joined the board of the Company in December 2010, replacing John Frankland as non-executive director. Mr Pajak took up the position of Acting Chairman of the Company after the end of the reporting period, following the departure of Sir Bernard Zissman in June 2011.

Balbir Bindra, a partner and Head of Asia Banking & Finance at international law firm, Gide Loyrette Nouel, in Hong Kong, joined the Board as a non-executive director following the end of the reporting period. He has extensive experience in international finance law and has represented corporates, banks, securities houses, hedge funds, private equity groups and other financial institutions with interests in Asia, Europe, the Middle East, Africa and South America.

Andrew Fletcher, the Company's Finance Director, will be stepping down from the Board following the publication of the annual report and accounts.

We would like to thank John, Andy and Sir Bernard for their hard work on behalf of the Company.

Outlook

We are delighted with the progress that has been made over the course of the year and in particular with the support we have received from our new and existing shareholders, following the recent placement.

The funds we have raised and the solid operational platform we have been able to establish mean that a concerted focus can now be made delivering shareholder value. The Directors have reviewed the investing strategy of the Company and believe that, based on their own contacts and those of Desmond Holdings, shareholders would be better served by re-focusing the Company's Investing Policy on emerging and frontier markets, and on the energy, agricultural, infrastructure, engineering, logistics, manufacturing, transportation and natural resources sectors within those geographic regions. Subject to shareholders approving the new Investing Policy at the Annual General Meeting to be held on 24 August 2011, the directors have a wide range of prospective investment targets currently under review and look forward to announcing progress in relation to these in the coming months.

For further information please contact:

www.aiminvestmentsplc.com

Copies of the Company's Annual Report and Accounts for the year ended 31 May 2011 are being posted to shareholders today, together with the notice of the Company's forthcoming Annual General Meeting.

The Annual Report and Accounts may be viewed in its entirety on, or downloaded from, the Company's website www.aiminvestmentsplc.com.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MAY 2011

STATEMENT OF FINANCIAL POSITION

AS AT 31 MAY 2011

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MAY 2011

Share capital represents the aggregate nominal value of shares issued to date.

Share premium represents the aggregate amount by which subscription price exceeds nominal value of shares issued to date net of the costs of shares issued and any permissible utilisation of share premium account.

Retained earnings represent accumulated net retained losses to date.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MAY 2011

The Company has adopted the policy of determining that cash and cash equivalents shall comprise cash in hand and demand deposits, together with short-term liquid investments that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes in value. At the end of the reporting period cash and cash equivalents consisted of cash at bank.

NOTES TO THE ACCOUNTS

1. Basis of preparation

AIM Investments plc is a company incorporated in the United Kingdom under the Companies Act. The address of the registered office is given on the company information page. The Company is listed on the AIM Market of the London Stock Exchange (code: AIM).

The financial statements have been prepared under the historical cost convention, except to the extent varied below for fair value adjustments required by accounting standards, and in accordance with applicable International Financial Reporting Standards (IFRS) as adopted for use by the European Union. The principal accounting policies are set out below.

These financial statements are presented in pounds sterling, rounded to the nearest £'000. Pounds sterling is the currency of the primary economic environment in which the company operates.

The accounting policies adopted by the Company are consistent with those of the previous financial year except as follows:

The Company has adopted new and amended IFRS and IFRIC interpretations as of 1 June 2010 and applied retrospectively where required.

As at the date of approval of these financial statements some standards and interpretations were in issue but not yet effective. The directors expect that the adoption of these standards and interpretations in future accounting periods will not have a material impact on the Company's results.

2. Critical accounting estimates and judgments

Preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

In particular, significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are in the following areas:

Valuation of unquoted investments

The Company has made a number of investments in the form of pre-IPO loans to companies operating in emerging markets. The investee companies are generally at a key stage in their development and operating in an environment of uncertainty in capital markets. Should planned IPO transactions prove successful the value of the Company's investment is likely to increase, although there can be no guarantee that this will be the case. Should planned IPO transactions prove unsuccessful there is a material risk that the Company's investments may be impaired. The carrying amounts of investments are therefore highly sensitive to the assumption that the strategies of the investee companies will be successfully executed.

In estimating the fair value for an investment, the Company applies a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio using reasonable data, market inputs, assumptions and estimates. Any changes in the above data, market inputs, assumptions and estimates will affect the fair value of an investment which may lead to a recognition of impairment loss in the statements of comprehensive income if an indication of impairment exists.

3. Going concern

At the balance sheet date, the Company had drawn down non-interest bearing loans of £587,000 from Desmond Holdings to enable it to make qualifying investments under its Investing Policy and to provide working capital for the Company. Although amounts drawn down are repayable within 12 months of the balance sheet date Desmond Holdings has agreed that it will not seek repayment of outstanding balances in respect of both facilities unless the Company is in a position to make the repayment. 

In addition, on 28 June 2011, the Company announced that it had raised £721,578 from the subscription at 1.25p per share of 57,726,266 new ordinary shares of 0.1p and issue of 57,726,266 fully transferable warrants. These funds will be used to further execute the Company's investing policy. The directors therefore consider it appropriate to prepare the financial statements on the basis that the Company is a going concern.

4. Investments at fair value through profit or loss

On 27 October 2010, the Company announced that it had entered into a US$100,000 convertible loan agreement with Shenzen Cadro (Catic Group) Hydraulic Equipment Co. Limited ("Cadro"), a Chinese hydraulics company, in order to partially fund the cost of Cadro's proposed IPO. The loan is convertible, at the Company's discretion, into Cadro equity at a 50% discount to the issue price. The directors estimate that the equity entitlement on eventual conversion, should that take place, would represent approximately 1% of Cadro's total issued share capital.

On 2 November 2010, the Company announced that it had entered into a convertible loan agreement of up to US$700,000 with Planteman S.A. ('Planteman'), a Uruguayan agricultural company, in order to fund all expenses connected with its proposed IPO. The loan is convertible, at the Company's discretion, into equity in Planteman (or its new holding company) at a 50% discount to the issue price. The Company made an initial advance under the facility of $600,000. The directors estimate that the equity entitlement on eventual conversion, should that take place, will represent approximately 1% of Planteman's total issued share capital prior to a planned substantial capital raise concurrent with a public listing.

On 8 November 2010, the Company announced that it had entered into a convertible loan agreement of up to US$300,000 with Minera Mapsa SA ("Minera Mapsa"), a Peruvian mining company, in order to fund certain expenses of Minera Mapsa's proposed listing on a UK or US stockmarket. The loan is convertible, at the Company's discretion, into Minera Mapsa equity at a 50% discount to the issue price for the listing. The Company made an initial advance under the facility of $100,000. The directors estimate that the equity entitlement on eventual conversion, should that take place, will represent approximately 0.4% of Minera Mapsa's total issued share capital.

As the directors are not aware of any adverse elements that would materially affect the value of the above loans, they consider the original cost is an appropriate valuation as at 31 May 2011.

5. Trade and other payables

Other loans of £587,000 comprise advances made by Desmond Holdings, a Hong Kong investment company. The loans were provided to enable the Company to make qualifying investments under its Investing Policy and to provide working capital for the Company.

The terms of the loans are as follows:

a) Investment facility

Non-interest bearing loan facility of up to £700,000. The Company may only make drawdowns in order to enter into investment agreements companies introduced by Desmond Holdings should they comply with the Company's Investing Policy to provide funds to assist good quality and high growth companies achieve a listing for their shares on an appropriate stock market.

The Company paid Desmond Holdings a fee of £120,000 for providing the facility, such fee being satisfied by the issue on 13 December 2010 of 58,480,300 ordinary shares in the Company for a total consideration of £120,000. In the event that the admission of the Company's shares is cancelled after monies have been drawn down against the facility the outstanding balance will be repaid through the transfer of the benefit of those investments to Desmond Holdings. Amounts drawn down under the facility are otherwise repayable within 12 months of the date of drawdown.

b) Working capital loans

Interest-bearing loans to provide financial support to enable the Company to meet its reasonable working capital requirements. The facility will remain in place for at least 12 months from the date of approval of the financial statements. 

Desmond Holdings has agreed that it will not seek repayment of outstanding balances in respect of both facilities unless the Company is in a position to make the repayment. 

6. Related party transactions

During the year, the Company entered into the following transactions with related parties and connected parties:

Loans from Desmond Holdings

Amounts of £587,000 were advanced by Desmond Holdings, shareholder in the Company. Details are set out in note 10.

The Company paid Desmond Holdings a fee of £120,000 for providing the loan facilities described in note 10, such fee being satisfied by the issue of 58,480,300 ordinary shares.

Directors and key management

Amounts payable in the year to directors (who also comprise key management) are set out in the Directors' Remuneration report. At 31 May 2011 the following amounts were payable to directors:

All key management personnel are directors and appropriate disclosure with respect to them is made in note 6 of the financial statements. There are no other contracts of significance in which any director has or had during the year a material interest.

7. Events after the reporting period

On 28 June 2011 the Company announced that it had raised £721,578 from the subscription at 1.25p per share of 57,726,266 new ordinary shares of 0.1p and issue of 57,726,266 fully transferable warrants. The warrants are exercisable at 1.5p per share at any time before 30 June 2014. These funds will be used to further execute the Company's Investing Policy.

Also on 28 June 2011, a number of board changes were made to prepare the Company for a growing involvement in emerging and frontier markets. Non-Executive Chairman, Sir Bernard Zissman, resigned from the Board with effect from 28 June 2011 and Mark Pajak was appointed to the role of Acting Chairman. Balbir Bindra joined the board as a non-executive director and it was announced that Andrew Fletcher would be stepping down as Finance Director following completion of the Company's 2011 annual report.

On 29 June 2011, the Company announced that it had subscribed for 42,500 common shares of CAD$3.51 per share in Mongolia Growth Group Ltd, a real estate and financial services investment fund focusing its operations in the emerging economy of Mongolia, which is listed on the Canadian National Stock Exchange (YAK:CNSX). The cost of this investment was CAD$149,175 (£95,131) in aggregate and represented a holding of 0.1% of the total issued shares capital of that company.

8. The financial information contained in this announcement does not constitute full statutory accounts. The figures are extracted from the financial statements for the year ended 31 May 2011, which have been agreed with the company's auditors and have been sent to shareholders and will be available on the Group's website at www.aiminvestmentsplc.com. The auditors have reported on those accounts and their reports were unmodified.