TIDMMEQ
26 June 2009
Microcap plc
("Microcap" or the "Company")
Final results for the year ended 31 December 2008
CHAIRMAN'S STATEMENT
I am pleased to report on the results of the Company for the year ended 31
December 2008.
The Company's operating loss was reduced to GBP65,630 (2007: GBP90,363). The loss
before tax increased to GBP144,366 compared to a loss last year of GBP86,432 after
a permanent diminution in value of the Company's investments, amounting to GBP
40,000 (2007: GBP1,482) and after a premium paid of GBP40,000 on conversion of GBP
20,000 nominal convertible unsecured loan notes.
The Company made announcements on 12 May and 1 June 2009 relating to a
potential equity investment in the Company. Negotiations relating to the
investment are now at an advanced stage and the Directors are hopeful that
these negotiations will be concluded shortly. Any such transaction will be
subject to the approval of shareholders at a general meeting and, if
negotiations can be concluded, the Company will send a document to shareholders
explaining and seeking approval for the transaction and containing a notice of
general meeting.
Your Directors continue to investigate ways of increasing shareholder value.
Nicolas Greenstone
Chairman
26 June 2009
FURTHER ENQUIRIES
Microcap plc
Nicolas Greenstone 020 7247 9691
Rakesh Patel 020 8371 3071
John East & Partners Limited, a subsidiary of Merchant Securities Plc
Bidhi Bhoma 020 7628 2200
INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008
Year ended 31 Year ended 31
December December
Note 2008 2007
GBP GBP
Administrative expenses (65,630) (90,363)
Operating loss (65,630) (90,363)
Impairment of investments (40,000) -
Interest receivable and similar income 2 1,264 3,931
Interest payable and similar charges 3 (40,000) -
Loss on ordinary activities before (144,366) (86,432)
taxation
Tax on loss on ordinary activities 4 - -
Loss for the year (144,366) (86,432)
Loss per share (pence)
- Basic 5 (0.13p) (0.08p)
- Diluted (0.13p) (0.08p)
The income statement has been prepared on the basis that all operations are
continuing operations.
STATEMENT OF RECOGNISED INCOME AND EXPENDITURE FOR THE YEAR ENDED 31 DECEMBER 2008
Year ended 31 Year ended 31
December December
2008 2007
GBP GBP
Net loss on available for sale investments (27,731) (1,482)
Net loss recognised directly in equity (27,731) (1,482)
Loss for the period (144,366) (86,432)
Total recognised income and expense for the (172,097) (87,914)
financial period
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2008
Share Share Retained Total
Capital Premium earnings
GBP GBP GBP GBP
At 1 January 2007 1,709,545 3,006,830 (4,511,401) 204,974
Issue of ordinary shares 20,000 - - 20,000
Loss for the year - - (86,432) (86,432)
Net loss on available for sale - - (1,482) (1,482)
investments
As at 31 December 2007 1,729,545 3,006,830 (4,599,315) 137,060
Issue of ordinary shares 60,000 - - 60,000
Loss for the year - - (144,366) (144,366)
Net loss on investments - - (27,731) (27,731)
transferred to equity
Transfer from share premium - (40,000) 40,000 -
account
As at 31 December 2008 1,789,545 2,966,830 (4,731,412) 24,963
BALANCE SHEET AS AT 31 DECEMBER 2008
Notes As at As at
31 December 31 December
2008 2007
GBP GBP
ASSETS
Non-current assets
Investments - available for sale 6 2,069 69,800
Current assets
Trade and other receivables 13,132 10,497
Cash and cash equivalents 8 19,534 85,338
32,666 95,835
LIABILITIES
Current liabilities
Trade and other payables 7 (9,772) (28,575)
Net Current Assets 22,894 67,260
NET ASSETS 24,963 137,060
SHAREHOLDERS' EQUITY
Called up share capital 1,789,545 1,729,545
Share premium account 2,966,830 3,006,830
Retained earnings (4,731,412) (4,599,315)
TOTAL EQUITY 24,963 137,060
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008
Notes Year ended 31 Year ended 31
December December
2008 2007
GBP'000 GBP'000
Cash flows from operating activities
Cash expended from operations (87,068) (94,634)
Net cash from operating activities (87,068) (94,634)
Cash flows from investing activities
Interest received 1,264 3,931
Interest paid - -
Net cash from investing activities 1,264 3,931
Cash flows from financing activities
Proceeds of share issue 20,000 -
Net cash from financing activities 20,000 -
(Decrease)/Increase in cash and cash (65,804) (90,703)
equivalents
Reconciliation of net cash flow to
movement in net funds
(Decrease)/Increase in cash and cash 8 (65,804) (90,703)
equivalents
Change in net funds (65,804) (90,703)
Net funds at start of period 85,338 176,041
Net funds at end of period 8 19,534 85,338
NOTES TO THE PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
1. BASIS OF PREPARATION
These financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by European Union ("adopted IFRSs"), and are
in accordance with IFRS as issued by the IASB.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2007 and 2008, but is
derived from those accounts. Statutory accounts for 2007 have been delivered to
the Registrar of Companies and those for 2008 will be delivered following the
Company's Annual General Meeting. The Auditors have reported on those accounts;
their reports were unqualified and did not contain statements under the
Companies Act 1985, sections 237(2) or (3).
2. INTEREST RECEIVABLE AND SIMILAR INCOME
2008 2007
GBP GBP
Bank Interest 1,264 3,931
3. INTEREST PAYABLE AND SIMILAR CHARGES
2008 2007
GBP GBP
Premium on redemption of loan notes 40,000 -
Pursuant to the loan stock instrument issued on 17 December 2007, the Company
issued loan notes amounting to GBP20,000, on 12 March 2008. These loan notes were
redeemed on 19 March 2008 giving rise to a premium on redemption of GBP40,000.
4. TAXATION
2008 2007
GBP'000 GBP'000
Current tax charge - -
Factors affecting the tax charge for the period
Loss on ordinary activities before taxation (144,366) (86,432)
Loss on ordinary activities before taxation (40,422) (25,930)
multiplied by standard rate of corporation tax
of 30.0% (2007 - 30.0%)
Effects of:
Non deductible expenses - -
Other tax adjustments 40,422 25,930
Current tax charge - -
As at 31 December 2008 a potential deferred tax asset of GBP433,062 (2007: GBP
414,686) existed due to unrelieved management expenses and interest of GBP
1,546,650 (2007: GBP1,481,020) at a rate of 28 per cent (2007: 28 per cent). No
deferred tax asset has been recognised due to the uncertainty over the
availability of future trading profits to offset against these losses..
5. LOSS PER SHARE
The calculation of the basic loss per share is based on the loss on ordinary
activities after taxation of GBP144,366 (2007: GBP86,432) and on the weighted
average number of shares of 113,773,879 (2007: 108,820,452) ordinary shares in
issue during the year.
There was no dilutive effect from the share options outstanding during the
year.
6. INVESTMENTS - AVAILABLE FOR SALE
Listed Unlisted 2008 2007
investment investment
GBP GBP GBP GBP
Fair value
At 1 January 29,800 40,000 69,800 71,282
Net loss transferred to equity (27,731) - (27,731) (1,482)
Impairment - (40,000) (40,000) -
At 31 December 2,069 - 2,069 69,800
7. TRADE AND OTHER PAYABLES
2008 2007
GBP GBP
Trade payables 2,679 17,486
Taxation and social security 666 -
Directors current account - 5,089
Accruals and deferred income 6,427 6,000
9,772 28,575
8. ANALYSIS OF NET FUNDS
1 January 2008 Cash flow Other non-cash 31 December
changes 2008
GBP GBP GBP GBP
Cash at bank and in 85,338 (65,804) - 19,534
hand
Net funds 85,338 (65,804) - 19,534
9. DIVIDEND
The Directors do not recommend the payment of a dividend.
10. RELATED PARTY TRANSACTIONS
Adler Shine LLP, a firm in which R Patel is a Member, invoiced the company GBP
5,000 (2007: GBP4,167) in respect of Directors remuneration for six months.
The above transaction was on a commercial arm's length basis.
11. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report and Accounts have been posted to shareholders, are
available from the Company's registered office Thames House, Portsmouth Road,
Esher, Surrey KT10 9AD and are available from the Company's website
www.microcapequities.plc.uk.
END
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