EQI EQ Grp

RNS Number:9544Z
EQ Group PLC
21 June 2004


eq group plc ("eq" or the "Company")

High Court approves cancellation of share premium account

eq group plc, the marketing services group, today announces that it has obtained
approval from the High Court to cancel its share premium account, details of
which were set out in a letter to shareholders on 2 April 2004. The order from
the High Court has been registered by the Registrar of Companies and the
cancellation of the share premium account thus takes effect today.

Background

As reported in the 2003 Accounts, the balance sheet of the Company as at 31
December 2003 stood in deficit in the sum of #5.512 million. The share premium
account of the Company as reported in the 2003 accounts was in credit in the sum
of #7.335 million. Whilst the Company had a deficit on its profit and loss
account the payment of dividends was not possible and it was proposed to cancel
the share premium account of the Company and transfer it to the profit and loss
account.

Despite 2003 being a very positive year for the Company, the balance sheet of
the Company was burdened by the losses, sustained principally through the
Company's treatment of its investment in its wholly owned subsidiary TVI
Acquisition Inc (later renamed eq Management Services Inc), of Delaware, USA.
The board wished to address the impact of this investment on the balance sheet
of the Company in order to bring forward the date upon which it would be able to
pay dividends.

Share premium account

Share premium arises on the issue by the Company of shares at a premium to their
nominal value. Any such premium is credited to the share premium account.

The share premium account is treated by statute as an undistributable capital
reserve except to the extent that its reduction or cancellation is first
approved by shareholders by special resolution and subsequently confirmed by
order of the High Court on the application to the court by the Company. A
cancellation of the share premium account which has been both approved by the
shareholders and confirmed by the High Court takes effect when the High Court's
order is registered by the Registrar of Companies.

Further information
In addition and as set out in the letter to shareholders of 2 April 2004, the
Company has made a further investment in eq Management Services Inc to enable it
to repay an outstanding bank loan. That investment has been written down in the
balance sheet of the Company, increasing the loss on the profit and loss account
of the Company. Also, a number of the Company's profitable subsidiaries have
paid a dividend payable to the Company. Taking as a starting point the deficit
on the profit and loss account of the Company as shown in its balance sheet as
at 31 December 2003, and making adjustments for these transactions and the
Cancellation, the profit and loss account of the Company contains a credit of
approximately #1.84 million before any entries for the trading period commencing
1 January 2004 are recorded.


Contacts

Bob Bond, Chief Executive - 01422 301917
Keeley Clarke, Group PR - 07967 816525



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

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