TIDMAIM
RNS Number : 5123L
AIM Investments PLC
02 August 2011
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
GBP700,000.
-- 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 GBP500,000 on 28 October 2010 (increased to GBP700,000 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 GBP87,000.
Subsequent to the end of the reporting period, a private
placement for shares in the Company was successfully closed.
GBP721,578 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 (GBP95,131) 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:
Alexandra Eavis, Mark
AIM Investments Plc Pajak 020 7002 1027
Daniel Stewart & Company
(Nominated Adviser and Antony Legge, James
Broker) Thomas 020 7776 6550
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
12 months ended
31 May
Continuing operations
Gross portfolio return - -
Administrative expense (206) (93)
--------- -------
Operating loss (206) (93)
Finance expense (122) -
--------- -------
Loss for the year (328) (93)
Other comprehensive income - -
--------- -------
Total comprehensive loss
for the year (328) (93)
========= =======
Loss per share (pence)
Basic and diluted (0.202) (0.10)
========= =======
STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2011
12 months ended
31 May
2010
2011 GBP'000
GBP'000 (Restated)
Assets
Non-current assets
Investments at fair value
through
profit or loss 486 -
--------- ------------
Current assets
Trade and other receivables 42 34
Cash and cash equivalents 106 10
--------- ------------
148 44
Total assets 634 44
Equity and Liabilities
Shareholders' equity
Share capital 7,915 7,836
Share premium 383 237
Retained earnings (8,496) (8,168)
(198) (95)
Current liabilities
Trade and other payables 832 139
--------- ------------
Total equity and liabilities 634 44
========= ============
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2011
Share Share Other Retained Total
Capital Premium Reserves Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 June 2009
as previously stated 7,798 22 (7,060) (1,015) (255)
Prior period adjustment
(Note 1) - - 7,060 (7,060) -
-------- -------- --------- --------- --------
Balance at 1 June 2009
as restated 7,798 22 - (8,075) (255)
Loss for the year - - - (93) (93)
-------- -------- --------- --------- --------
Total comprehensive
income
for the year attributable
to
equity shareholders - - - (93) (93)
Issue of shares 38 215 - - 253
-------- -------- --------- --------- --------
Balance at 31 May 2010 7,836 237 - (8,168) (95)
======== ======== ========= ========= ========
Balance at 1 June 2010 7,836 237 - (8,168) (95)
Loss for the period - - - (328) (328)
-------- -------- --------- --------- --------
Total comprehensive
income
For the year attributable
to
equity shareholders - - - (328) (328)
Issue of shares 79 146 - - 225
-------- -------- --------- --------- --------
Balance at 31 May 2011 7,915 383 - (8,496) (198)
======== ======== ========= ========= ========
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
12 months ended
31 May
2011 2010
GBP'000 GBP'000
Loss arising from operating activities (206) (93)
Adjustments for:
Change in investments on foreign exchange
translation 14 -
(Increase)/Decrease in trade and other receivables (8) (34)
(Decrease)/Increase in trade and other payables 288 (43)
(Decrease)/Increase in amounts owed to related
undertakings - (154)
-------- --------
Net cash generated/(used) in operating activities 88 (324)
Cash from financing activities
Share issues - 253
-------- --------
Net cash from financing activities - 253
Cash from investing activities
Other loans 508 79
Investments acquired (500) -
-------- --------
Net cash from investing activities 8 79
-------- --------
Net increase in cash and cash equivalents 96 8
Cash and cash equivalents at the beginning
of period 10 2
-------- --------
Cash and cash equivalents at the end of
the period 106 10
======== ========
Cash and cash equivalents consist of:
Cash and cash equivalents included in current
assets 106 10
-------- --------
106 10
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 GBP'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 GBP587,000 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 GBP721,578 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
GBP'000
Balance as at 1 June 2010 -
Additions 500
Effect of foreign exchange (14)
---------------------------- --------
Balance as at 31 May 2011 486
---------------------------- --------
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
2011 2010
GBP'000 GBP'000
Trade payables 123 48
Other taxation and social security 106 6
Other loans 587 79
Accruals and deferred income 16 6
-------- --------
832 139
======== ========
Other loans of GBP587,000 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 GBP700,000. 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 GBP120,000 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 GBP120,000. 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 GBP587,000 were advanced by Desmond Holdings,
shareholder in the Company. Details are set out in note 10.
The Company paid Desmond Holdings a fee of GBP120,000 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:
Sir Bernard Zissman GBP5,000
Alexandra Eavis GBP1,500
John Frankland GBP5,000
Andrew Fletcher GBP23,050
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
GBP721,578 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 (GBP95,131) 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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