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Friday 14 March, 2003


Annual Report and Accounts

14 March 2003


To:   Company Announcements

From: The AIM Trust plc

Date: 14 March 2003

Unaudited Results for the year ended 31 January 2003

The Chairman, Jon Pither said:

'Introduction I I am sure I do not need to remind shareholders that we are
currently in a severe bear market. We have now experienced three full years of
equity values being in decline and there does not appear to be a great deal of
confidence around. Since the spring of the year 2000 when stock markets peaked
there has been a downward trend, initially caused by the bursting of the
technology bubble, then concerns over general economic conditions and latterly
from global terrorism. We are now experiencing a build up towards further
conflict in the Middle East and growing concerns over whether Western economies
will go into recession. Investors have reacted by reducing their equity
investments and as the valuations of larger companies have fallen the small
companies have followed with the additional problems associated with their lack
of liquidity.

This background has had a profound impact on the entrepreneurial enterprises,
traded on AiM. Many of these companies which are in the early stages of their
business plans have not only found their trading environment much harsher but
have also found it hard if not impossible to raise further capital as investors
have tended to shun this end of the market. Some promising companies have either
failed or suffered large declines in their valuations. Research has estimated
that some 80% of AiM companies trade below their issue prices and potentially a
third of AiM companies may need to raise further capital this year and many of
these will find it difficult. Business plans that seemed so sensible two or
three years ago are in danger of being delayed for want of investment funds.

Performance I This has been a very difficult environment in which to run a
portfolio of small companies. Over the year, the FTSE AIM Index fell by 33.1%,
the third consecutive year of large falls with 40.1% and 35.2% in the previous
two years.

I am disappointed to report that your Company's net asset value per share fell
by 57.1% during the period to 72.2 pence from 168.3 pence. At the gross asset
level, the fall from £107.8 million to £69.1 million represents a fall of 35.9%,
closer to the performance of the market as a whole demonstrating the impact of
gearing again in falling markets. The portfolio performed very much in line with
the market, however once costs such as interest charges and running costs are
taken into account, the portfolio did underperform.

Earnings and Dividends I The companies in which The AIM Trust is invested are
largely in their development phase and as a result, they do not ordinarily pay
significant dividends. Given the interest charges on our debt facilities and the
low level of dividend income, the Group made a loss per share of 0.03 pence,
compared to 1.41 pence in the previous year. As was the case last year, no
dividend will be paid this year.

Gearing Position I I explained last year that the Company had two debt
facilities totalling £40 million from The Royal Bank of Scotland and JPMorgan
Chase. After the falls in the market after September 11th 2001, the covenants
were re-negotiated with the banks to enable the Company to operate within their
constraints. The continuing falls in the market over the past 12 months has
necessitated your fund managers to apply cash realised from the portfolio as a
cash offset to maintain the asset cover ratios required by the gearing
covenants. As a result of this, cash and fixed interest holdings amounted to
some £28 million by the year-end.

We announced at the beginning of February that the £10 million loan from
JPMorgan Chase was transferred to The Royal Bank of Scotland with effect from
the year-end. The Company's total borrowings are now from the one bank and
although there has been no change to the ongoing interest costs, other terms in
respect of financial covenants and liquidity offset arrangements improved.

Share Price I A combination of falling asset values and a discount widening from
12.4% to 31.6% resulted in a two thirds fall in the share price over the year.
This is a disappointing outcome for shareholders and I hope that over the next
year we can succeed in narrowing the discount through further marketing of the
shares and hopefully a recovery in asset values.

Prospects I Last year, I discussed how the Company's portfolio comprised a
number of Venture Capital style companies. This remains the case at present,
however we have suffered from many of the problems of Venture Capital this year
without the advantages that public listing normally offers.

Venture Capital investments generally have regard to business risk and market
liquidity. Venture Capitalists benefit from having enhanced access, both in
terms of due diligence and ongoing trading information and open dialogue with

Over the past year, investors in small company markets have had to live with
both the business risks and lack of liquidity characterised by venture capital
companies. Corporates and advisers are now required to be cautious in explaining
trading issues with investors with the result that some of the formal statements
have been taken as a shock and the markets have reacted very negatively.

The economic environment in the UK is clearly much less attractive than it was
two years ago and there is certainly caution about investing money. That said,
when individual companies are looked at in isolation, their valuations do look
very attractive. We therefore think that the market as a whole will mark time
for the next few months but individual, special situations will have the chance
to outperform as valuations are released through corporate activity or change in

For further information please contact:

Bill Brown
Robert Mitchell                         Michael Campbell
Investment Managers                     Company Secretary
ISIS Asset Management plc               ISIS Asset Management plc
0207 506 1100                           0131 465 1000

The Summarised Consolidated Statement of Total Return and Balance Sheet follow:

Unaudited Consolidated Statement of Total Return

                                             Year ended 31 January 2003

                                                                      PDS '000           PDS '000         PDS '000
                                                                      Revenue            Capital          Total

Gains on investments                                                  -                  (35,603)         (35,603)
Realised exchange differences                                         -                  6                6

Income                                                                1,457              -                1,457
Investment management fee                                             (302)              (907)            (1,209)
Other expenses                                                        (432)              -                (432)
                                                                      ------             ------           ------
Return on ordinary activities before finance costs and                723                (36,504)         (35,781)

Interest payable                                                      (732)              (2,197)          (2,929)
                                                                      ------             ------           ------

Return on ordinary activities before tax                              (9)                (38,701)         (38,710)
                                                                      ------             ------           ------

Tax on ordinary activities                                            (4)                -                (4)
                                                                      ------             ------           ------

Return attributable to equity shareholders                            (13)               (38,701)         (38,714)
                                                                      ------             ------           ------

Transfer to reserves                                                  (13)               (38,701)         (38,714)
                                                                      ===                ===              ===

Return per share:                                                     (0.03)p            (96.13)p         (96.16)p

Unaudited Consolidated Statement of Total Return
Year ended 31 January 2002 (Audited)
                                                                      PDS '000           PDS '000         PDS '000
                                                                      Revenue            Capital          Total

Gains on investments                                                  -                  (92,754)         (92,754)
Realised exchange differences                                         -                  -                -

Income                                                                1,274              -                1,274
Investment management fee                                             (504)              (1,513)          (2,017)
Other expenses                                                        (492)              -                (492)
                                                                      ------             ------           ------
Return on ordinary activities before finance costs and                278                (94,267)         (93,989)

Interest payable                                                      (722)              (2,166)          (2,888)

                                                                      ------             ------           ------
Return on ordinary activities before tax                              (444)              (96,433)         (96,877)

Tax on ordinary activities                                            (124)              121              (3)
                                                                      ------             ------           ------

Return attributable to equity shareholders                            (568)              (96,312)         (96,880)

Dividends in respect of equity shares                                 -                  -                -
                                                                      ------             ------           ------

Transfer from reserves                                                (568)              (96,312)         (96,880)
                                                                      ===                ===              ===

Return per ordinary share:                                            (1.41)p            (239.22)p        (240.63)p

Unaudited Group Balance Sheet
                                                                As at                    As at
                                                                31/01/03                 31/01/02
                                                                PDS '000                 PDS '000

Fixed Assets
     Listed                                                     7,653                    18,118
     Quoted on AiM                                              30,815                   72,219
     Quoted on other markets                                    1,155                    673
     Unquoted                                                   1,318                    5,165
     UK government securities                                   14,209                   7,074
                                                                ----------               ----------
                                                                55,150                   103,249

Current assets

Investments held by dealing subsidiary                          4                        26
Debtors                                                         233                      147
Cash at bank and on deposit                                     13,956                   4,678
                                                                ------                   ------
                                                                14,193                   4,851

Creditors: amounts falling due within one year                  (280)                    (323)
                                                                ------                   ------

Net current assets                                              13,913                   4,528
                                                                ------                   ------
Total assets less current liabilities                           69,063                   107,777
                                                                ------                   ------

Creditors: amounts falling due after more than one              (40,000)                 (40,000)
                                                                ------                   ------
Net Assets                                                      29,063                   67,777
                                                                =====                    =====
Capital and reserves
Called-up share capital                                         10,066                   10,066
Special reserve                                                 27,808                   27,808
Other reserves -
     Capital reserve - realised                                 48,092                   46,557
     Capital reserve - unrealised                               (57,600)                 (17,364)
     Capital redemption reserve                                 872                      872
Revenue reserve                                                 (175)                    (162)
                                                                ------                   ------
Equity shareholders' funds                                      29,063                   67,777
                                                                =====                    =====

Net asset value per share                                       72.2p                    168.3p

Unaudited Consolidated Cash Flow Statement

                                                                                                   Year ended 31 January
                                                                                                 2003               2002
                                                                                                £'000              £'000

Net cash outflow from operating activities                                                      (318)            (1,099)

Servicing of finance                                                                          (2,931)            (2,892)

Taxation                                                                                           25                  -

Capital expenditure and financial investment                                                   12,496              8,443

Equity dividends paid                                                                               -              (403)

Net cash inflow before financing                                                                9,272              4,049

Increase in cash                                                                                9,272              4,049

Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the year                                                         9,272              4,049
Net debt at 1 February                                                                       (35,322)           (39,371)
Currency gains                                                                                      6                  -

Net debt at 31 January                                                                       (26,044)           (35,322)

                                                                                           Year to               Year to
                                                                                        31 January            31 January
                                                                                              2003                  2002

Reconciliation of operating profit to net cash flow from operating activities
Net return before finance costs and taxation                                                   723                   278
Tax on investment income                                                                       (4)                   (3)
Changes in working capital and other non-cash items                                        (1,037)               (1,374)
Net cash flow from operating activities                                                      (318)               (1,099)


        1.     Return per Ordinary Share is based on 40,261,451 (2002: same)
        Ordinary Shares in issue.

        2.     The Group results consolidate those of Target Dealing Company
        Limited, a wholly owned subsidiary which deals in securities.

        3.     These are not full statutory accounts in terms of Section 240 of
        the Companies Act 1985. The full audited accounts for the period to 31
        January 2002, which were unqualified, have been lodged with the
        Registrar of Companies. The accounts for the year ended 31 January 2003
        are unaudited, however, we expect the auditors to issue an unqualified
        opinion. A full annual report is expected to be sent to shareholders in
        April 2003, and will be available for inspection at 100 Wood Street,
        London EC2V 7AN, the registered office of the Company.

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                             

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