Rurelec Regulatory News (RUR)

22nd July 2008

AIM:RUR

Rurelec PLC

Tel. 020 7793 5610

Peter Earl, Managing Director

Daniel Stewart & Company

Tel: 020 7776 6578

Paul Shackleton/ Stewart Dick

Parkgreen Communications

Tel: 020 7933 8870

Sue Scott/Ana Ribeiro

RURELEC PLC

PROFIT AND LOSS ACCOUNT (unaudited)

FOR THE PERIOD ENDED 17 JULY 2008

Period 

Year 

ended

ended

17 July

31 Dec.

2008

2007

Notes

£

£

Revenue

1,250,000 

- 

Cost of sales

(673,000)

- 

─────── 

─────── 

Gross profit

577,000 

- 

Administrative expenses

(496,808)

(891,970)

─────── 

─────── 

Operating profit / (loss)

80,192 

(891,970)

Investment income

2

1,818,646 

1,737,721 

Finance income

2

38,994 

61,203 

Finance expense

3

(111,604)

(1,961)

─────── 

─────── 

Profit before taxation

1,826,228 

904,993 

Tax expense

4

(233,072)

(217,215)

─────── 

─────── 

Profit for the period / year

11

1,593,156 

687,778 

═══════ 

═══════ 

The profit and loss account has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses other than those passing through the profit and loss account.

RURELEC PLC

BALANCE SHEET (unaudited)

AS AT 17 JULY 2008

2008

31 December 2007

Notes

£

£

£

£

Non-current assets

Investments

6

17,437,929 

3,776,692 

Trade and other receivables

7

27,760,814 

22,142,924 

─────── 

─────── 

45,198,743 

25,919,616 

Current assets

Trade and other receivables

8

1,498,193 

36,704 

Cash and cash equivalents

3,924,907 

1,517,824 

─────── 

─────── 

5,423,100 

1,554,528 

Creditors: amounts falling due within one year

9

(14,818,603)

(1,289,060)

─────── 

─────── 

Net current (liabilities) / assets

(9,395,503)

265,468 

─────── 

─────── 

Total assets less current liabilities

35,803,240 

26,185,084 

═══════ 

═══════ 

Capital and reserves

Share capital

10

1,715,776 

1,465,776 

Share premium account

11

31,757,739 

23,982,739 

Retained earnings

11

2,329,725 

736,569 

─────── 

─────── 

Shareholders' funds

12

35,803,240 

26,185,084 

═══════ 

═══════ 

Approved by the Board and authorised for issue on 17 July 2008 and signed by:

E R Shaw

F G Fisher III

Director

Director

RURELEC PLC

CASH FLOW STATEMENT (unaudited)

FOR THE PERIOD ENDED 17 JULY 2008

Period 

Year 

ended

ended

17 July

31 Dec.

2008

2007

Notes

£

£

£

£

Cash flows from operating activities

Cash used in operations

13

(1,137,317)

(846,014)

Interest received

38,851

61,203

Interest paid

(111,461)

(1,961)

Tax paid

(5,740)

- 

─────── 

─────── 

Net cash used in operations

(1,215,667)

(786,772)

Cash flows from investing activities

Dividend received (net of tax)

1,591,314

1,520,506

(Loans to) / repayment by subsidiaries and joint venture company

(2,462,482)

368,256

Purchase of balance of 50% of PEL

6

(13,661,237)

- 

─────── 

─────── 

Net cash (used in) / generated from investing activities

(14,532,405)

1,888,762

─────── 

─────── 

Net cash (outflow) / inflow before financing activities

(15,748,072)

1,101,990

Cash flows from financing activities

Issue of shares (net of costs)

8,025,000

2,779,675 

Loan drawdowns / (repayments)

2,616,459

(817,293)

Vendor loan / deferred consideration

6

7,513,696

- 

Equity dividend paid

- 

(1,612,997)

─────── 

─────── 

Net cash generated from financing activities

18,155,155

349,385

─────── 

─────── 

Increase in cash in the period

2,407,083

1,451,375

Cash and cash equivalents at start of period / year

1,517,824

66,449

─────── 

─────── 

Cash and cash equivalents at end of period / year

3,924,907

1,517,824

═══════ 

═══════ 

RURELEC PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 17 JULY 2008

1

Basis of preparation

1.1

These unaudited Interim Accounts have been prepared for the purposes of Section 838 of the Companies Act 2006.

1.2

These unaudited Interim Accounts do not constitute Statutory Accounts within the meaning of Section 447 of the Companies Act 2006. Statutory Accounts for the year ended 31 December 2007 have been filed with the Registrar of Companies. The auditors have made a report on those Statutory Accounts under Section 235 of the Companies Act 1985. The auditors' reports were unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985.

1.3

The accounting policies which have been applied are consistent with the accounting policies set out in the Rurelec PLC consolidated financial statements for the year ended 31 December 2007.

2

Investment and finance income

2008

2007

£

£

Income from shares in group undertakings

1,818,646 

1,737,721 

Bank interest

38,994 

61,203 

─────── 

─────── 

1,857,640 

1,798,924 

═══════ 

═══════ 

3

Finance expense

2008

2007

£

£

On loans wholly repayable within five years

111,461 

- 

Other interest

143 

1,961 

─────── 

─────── 

111,604 

1,961 

═══════ 

═══════ 

4

Tax expense

2008

2007

£

£

U.K. corporation tax

5,740

- 

Bolivian withholding tax on dividend received

227,332

217,215 

─────── 

─────── 

233,072 

217,215 

═══════ 

═══════ 

5

Dividends

2008

2007

£

£

Final dividend for the year ended 31 December 2006 paid in June 2007

- 

1,612,997 

═══════ 

═══════ 

6

Investments

2008

2007

£

£

Investments in subsidiary companies

17,437,929 

292,112 

Investments in joint venture company

- 

3,484,580 

─────── 

─────── 

17,437,929 

3,776,692 

═══════ 

═══════ 

The Company holds the following investments:

i) 100% of the issued share capital of Energia para Sistemas Aislados S.A., a company registered in Bolivia under registration number 107752. 

ii) 100% of the issued share capital of Bolivia Integrated Energy Limited (BIE), a company registered in the British Virgin Islands under registration number 510247. BIE owns, through an intermediary holding company, 50.00125% of the issued share capital of Empresa Electrica Guaracachi S.A., a company registered in Bolivia.

iii) 100% of the issued share capital of Patagonia Energy Limited (PEL), a company registered in the British Virgin Islands under registration number 620522. PEL, together with a wholly owned intermediary company, owns 100% of the issued share capital of Energia del Sur S.A., a company registered in Argentina. At 31 December 2007, the company owned 50% of PEL. The remaining 50% was acquired by the company on 25 June 2008 at a cost of $25m of which $12m was paid on completion, with a further payment of $3m due three months after completion and the final $10m due one year after completion.

7

Trade and other receivables (non-current)

2008

2007

£

£

Amounts owed by subsidiary companies

27,760,814 

21,696,696 

Amounts owed by joint venture company

- 

446,228 

─────── 

─────── 

27,760,814 

22,142,924 

═══════ 

═══════ 

The amounts owed by subsidiary companies are unsecured and receivable on demand but are not expected to be fully received within the next twelve months.

8

Trade and other receivables (current)

2008

2007

£

£

Trade receivables

1,468,750 

- 

Other receivables

4,235 

7,531 

Prepayments

25,208 

29,173 

─────── 

─────── 

1,498,193 

36,704 

═══════ 

═══════ 

9

Creditors: amounts falling due within one year

2008

2007

£

£

Trade payables

128,878 

117,468 

Taxes and social security costs

226,531 

9,116 

Borrowings

14,411,193 

1,112,145 

Accruals and deferred income

52,001 

50,331 

─────── 

─────── 

14,818,603 

1,289,060 

═══════ 

═══════ 

Borrowings comprise short term loans repayable within 12 months. Included within borrowings is an amount of £10,669,103 payable in respect of the company's acquisition of the remaining 50% of Patagonia Energy Limited (PEL), of which £7,513,696 relates to deferred consideration (see note 6) and £3,155,407 relates to loans to PEL acquired from the vendor.

10

Share capital

2008

2007

£

£

Authorised

120,000,000 Ordinary shares of 2p each

2,400,000 

2,400,000 

═══════ 

═══════ 

Allotted, called up and fully paid

85,788,775 Ordinary shares of 2p each

1,715,776 

1,465,776 

═══════ 

═══════ 

The company issued 12,500,000 ordinary 2p shares at 65p per share on 25 June 2008. The excess over the par value has been credited to the share premium account.

11

Statement of movements on reserves

Share premium account

Retainedearnings

£

£

Balance at 1 January 2008

23,982,739 

736,569 

Profit for the period

- 

1,593,156 

Premium on shares issued during the period

7,775,000 

- 

─────── 

─────── 

Balance at 17 July 2008

31,757,739 

2,329,725 

═══════ 

═══════ 

12

Reconciliation of movements in shareholders' funds

2008

2007

£

£

Profit for the period / year

1,593,156 

687,778 

Equity dividend paid

- 

(1,612,997)

─────── 

─────── 

1,593,156 

(925,219)

Proceeds from issue of shares

8,025,000 

2,779,675 

─────── 

─────── 

Net addition to shareholders' funds

9,618,156 

1,854,456 

Opening shareholders' funds

26,185,084 

24,330,628 

─────── 

─────── 

Closing shareholders' funds

35,803,240 

26,185,084 

═══════ 

═══════ 

13

Net cash flow from operating activities

2008

2007

£

£

Result for the period / year before tax

1,826,228

904,993

Net finance costs

72,610

(59,242)

Adjustments for:

- Dividend received (net of tax)

(1,591,314)

(1,520,506)

- Tax withheld on dividend

(227,332)

(217,215)

Movement in working capital:

- Change in trade and other receivables

(1,461,489)

34,155

- Change in trade and other payables

243,980

11,801

─────── 

─────── 

Cash used in operations

(1,137,317)

(846,014)

═══════ 

═══════