FOR IMMEDIATE RELEASE 28 SEPTEMBER 2007
PNC Telecom PLC (the "Company")
Results for the year ended 31 March 2007
CHAIRMAN'S STATEMENT
The year to 31st March 2007 has been spent in renegotiating a number of leases
and taking legal actions against previous directors. As it can be seen in the
previous announcements, we have obtained judgements against G Thomas and N
Etherington for �281,750 and further �108,000 against N Etherington.
We are now waiting a tribunal hearing from HMRC for our VAT reclaim for both
Vat repayment and loss of income.
Our investment in SIM 4 Travel is currently valued at �625,000 at the mid price
as at 13 September 2007.
Your board are looking at a number of other businesses in the mobile and retail
fields and will keep shareholders informed of any developments.
L.E.V. Knifton
Chairman
*****
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2007
The Directors present their annual report and the audited financial statements
for the year ended 31 March 2007.
Principal Activities
The principal activity of the company is the export and import of mobile phones
and other electrical equipment.
Business Review and Future Developments
A review of the business and future developments is contained in the Chairman's
Statement.
Key Performance Indicators
The Company has only traded for the first few months in the year resulting in a
loss �664,000. We will continue to keep operating costs down going forward.
Key Risks and Uncertainties
The key risk and uncertainty that is currently facing the Company is the
possibility that the VAT refund may not be received.
Dividend
The Directors resolved that no dividend will be paid for the year ended 31
March 2007.
Directors and their interests
The Directors of the Company, all of whom served throughout the year except
where stated below were:-
J.W. Case
L.E.V. Knifton
Directors' Interests
The interests of the Directors and persons connected with them in the issued
share capital of the Company as notified to the Company were as follows:
Directors 31 March 2007 31 March 2006
Ordinary Shares Ordinary Shares
0.1p each 0.1p each
J.W.Case 13,850,000 12,710,000
L.E.V. Knifton - -
Substantial Interests
The company has been notified of the following persons (other than those
referred to in the paragraph above) who hold interests ( as defined in Part VI
of the Act) in 3 per cent or more of the issued ordinary share capital of the
Company at 17 September 2007.
Number of Percentage of
0.1p Shares Ordinary Share
Capital
JIM Nominees Limited 109,046,679 42.25%
ABC (Nominees) Limited 23,976,737 9.29%
Brewin Nominees (Channel Islands) 13,000,000 5.04%
Limited
TD Waterhouse Nominees (Europe) Limited 12,397,704 4.80%
Artillery Nominees Limited 8,471,008 3.28%
Save as disclosed above, the Directors are not aware of any other interests
that represent or will represent 3 per cent or more of the issued ordinary
share capital of the Company.
Policy of Payment of Creditors
It was the Company's normal practice to agree payments terms with all its
suppliers. Payment was made when it has been confirmed that the goods or
services had been provided in accordance with the agreed contractual terms and
conditions. Creditor days, represented by the aggregate amount of trade
creditors at the year end compared with the aggregate amount invoiced by
suppliers in the year, in 2007 were 18 days (2006 - 73 days)
Auditors
In accordance with Section 385 of the Companies Act 1985, a resolution
proposing that Jeffreys Henry LLP be re-appointed as auditors will be put to
the Annual General Meeting.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and United Kingdom Generally
Accepted Accounting Practice. Company law requires the Directors to prepare
financial statements for each year which give a true and fair view of the state
of affairs of the Company and of the profit or loss for that period. In
preparing those financial statements, the Directors are required to:
- select suitable accounting policies and apply them consistently;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable United Kingdom accounting standards have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Directors' report and other
information included in the Annual Report is prepared in accordance with
company law in the United Kingdom.
Statement of disclosure to auditors
a. So far as the directors are aware, there is no relevant audit information
of which the company auditors are unaware, and
b. They have taken all the steps that they ought to have taken as directors in
order to make themselves aware of any relevant audit information and to
establish that the company's auditors are aware of that information.
Corporate Governance
The Company is not required to comply with the code of Best Practice as set out
in Section 1 of the Combined Code appended to the Listing Rules of the
Financial Services Authority as it is listed on AIM. All relevant discussions
being taken by the full board.
L.E.V. Knifton
Company Director
PNC TELECOM PLC
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2007
Notes 31 March 31 March
2007 2006
�'000 �'000
Turnover 2 959 25,840
Cost of Sales (855) (24,871)
_______ ________
Gross Profit 104 969
Operating expenses (415) (533)
_______ ________
Operating Profit/ (Loss) (311) 436
Profit/ (Loss) on ordinary (311) 436
activities before interest and tax
Interest receivable and similar 4 9 8
income
Interest payable 5 (362) (297)
_______ ________
Profit/ (Loss) on ordinary (664) 147
activities before tax
Tax on loss on ordinary activities 6 - -
_______ ________
Retained Profit/ (Loss) for the (664) 147
year
Pence Pence
Loss per share 7 0.37 0.14
Diluted loss per share 7 0.37 0.02
There are no other recognised gains or losses in the year.
There are no acquisitions or discontinued operations in the year.
PNC TELECOM PLC
RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 MARCH 2007
2007 2006
�'000 �'000
Profit/(Loss) for the financial year (664) 147
Conversion of loan notes 45 100
Issue of shares - 5
Opening shareholders' funds 410 158
_______ _______
Closing shareholders' funds (209) 410
PNC TELECOM PLC
BALANCE SHEET
AS AT 31 MARCH 2007
Note 2007 2006
�'000 �'000
Fixed Assets
Tangibles 8 10 150
Investments 9 100 100
__________ __________
110 250
Current Assets
Stock 10 3 14
Debtors: due within one year 11 1,289 1,806
Cash at bank 1 1,721
__________ __________
1,293 3,541
Creditors: Amounts falling due within one year 12 (1,137) (2,784)
__________ __________
Net Current Assets 156 757
Total Assets Less Current Liabilities 266 1,007
Creditors: Amounts falling due greater than 13 (475) (597)
one year
__________ __________
Net Assets (209) 410
Capital and Reserves
Called up share capital 15 2,554 2,509
Share premium account 16 48,033 48,033
Profit and loss account 16 (50,796) (50,132)
__________ __________
Equity Shareholders' Funds (209) 410
PNC TELECOM PLC
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2007
Note 2007 2006
�'000 �'000
Net cash inflow/ (outflow) from operating 19 (1,358) 1,300
activities
Returns on investment and servicing of finance 20 (353) (286)
Capital Expenditure 20 115 (154)
Financing 20 (125) 602
_______ _______
Increase / (Decrease) in cash 21 (1,721) 1,462
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2007
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements are prepared in accordance with applicable accounting
standards under the historical cost convention and in accordance with
applicable accounting standards.
Going Concern
HMRC have withheld repayment of VAT and this has necessitated in the
curtailment of the company's trade of the import and export of mobile phones.
The Company has taken legal advice and is taking action against HMRC for the
repayment of the VAT and loss of income. Ongoing overhead costs in the year
have been kept to a minimum and been financed by loans from the directors.
The directors have undertaken to provide funds for working capital purposes in
the next twelve months and in addition are pursing payment from the previous
directors following the receipt of judgment against them as noted on Note
number 17.
Accordingly, the directors believe that it is appropriate to prepare the
financial statements on the going concern basis. The financial statements do
not include any adjustments that would be required if this basis was not
appropriate.
Turnover
Turnover represents the amount invoiced for services and product provided
(excluding value added tax).
Deferred Taxation
Deferred tax was recognised, without discounting, in respect of all timing
differences between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date, except
as otherwise required by FRS19.
Pensions
The Company operated a defined contribution scheme for some senior staff
members. The pension costs for that scheme represented contributions payable by
the Company in the year.
Fixed Asset Investment
Fixed asset investments are stated at cost less provision for diminution in
value.
Tangible fixed assets and depreciation
Depreciation is provided to write off the cost less estimated residual value of
tangible fixed assets over the estimated useful economic life subject to the
following periods:
Motor Vehicles - 25% Reducing Balance
Office Equipment - 15% Reducing Balance
Stocks
Stock is valued at the lower of cost and net realisable value.
2(a). TURNOVER
The Directors consider it prejudicial to disclose the geographical analysis of
turnover.
2(b). PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
2007 2006
�'000 �'000
Depreciation 20 48
Auditors' remuneration
- audit fees 16 10
- other fees - -
Loss on disposal of motor vehicles 5 -
Recovery from claims against former 31 115
directors
3. EMPLOYEES
Directors' remuneration 2007 2006
�'000 �'000
Salaries and fees 10 100
Pension contributions 9 15
19 115
2007 2006
�'000 �'000
Staff costs, including Directors
Wages and salaries 41 115
Social Security costs 5 14
Other pension costs 9 15
55 144
Please see Note 22 for fees paid to directors.
4. INTEREST RECEIVABLE AND SIMILAR INCOME
2007 2006
�'000 �'000
Bank Interest receivable 9 8
5. INTEREST PAYABLE
2007 2006
�'000 �'000
Other interest payable 350 294
Hire Purchase Interest payable 12 3
362 297
6. TAXATION
2007 2006
�'000 �'000
Current tax:
UK Corporation tax on profits of the period - -
Adjustments in respect of prior periods - -
Current tax reconciliation 2007 2006
�'000 �'000
Profit/(Loss) on ordinary activities before (664) 147
tax
Theoretical tax at UK corporation tax rate (199) 44
30% (2006:30%)
Effects of:
Non deductible expenses - -
Depreciation 8 48
Capital allowances (19) (60)
Tax losses carry forward 210
Tax losses utilised - (32)
Other tax adjustment - -
Actual current tax charge for period - -
The company has trading losses of �699,302 and excess management expenses of �
3,045,508 (2006 - �3,137,000) available for carry forward which are subject to
agreement with the Inland Revenue.
7. EARNINGS PER SHARE
The weighted average number of shares used 2007 2006
was:
�'000 �'000
Basic 181,016 105,865
Diluted 181,016 593,262
In the diluted EPS calculation, share options with an exercise price of less
than the average share price for the year have not been treated as dilutive
where to do so would decrease the net loss per share.
2007 2007 2006 2006
�'000 pence per �'000 pence per
share share
Basic EPS
Profit/ (Loss) for the year (664) (0.37)p 147 0.14p
Diluted EPS
Profit/ (Loss) for the year (664) (0.37)p 147 0.02p
and loss per share
8. TANGIBLE FIXED ASSETS
Fixtures,
Fittings
and Motor Vehicles Total
equipment
�000 �000 �000
Cost
At beginning 16 183 199
of year
Disposal - (183) (183)
At end of 16 - 16
year
Depreciation
At beginning 2 47 49
of year
Charge for 4 17 21
year
Disposal - (64) (64)
At end of 6 - 6
year
Net book
value
At 31 March 10 - 10
2007
At 31 March 14 136 150
2006
9. INVESTMENTS
Listed
Investments
�
Cost
At beginning of year 100
Additions -
At end of year 100
The company owns 50million ordinary shares in Sim4Travel Holdings Limited, a
company quoted on
Plus Markets, the value of the investment at the date of the annual report was
�625,000.
10. STOCK
2007 2006
�'000 �'000
Finished Goods 3 14
11. DEBTORS
2007 2006
�'000 �'000
Due within one year
Trade debtors 5 1
Other debtors 1,284 1,805
1,289 1,806
In other debtors, there is an amount of �1.2 million which relates to VAT
recoverable. HMRC are withholding payments due to the Company along with
other mobile phone dealers. The Company has taken legal advice and are
preparing a case against HMRC for both repayment and loss of income. The
VAT is considered to be fully recoverable on the basis that even if there
was evasion of VAT elsewhere within the chain of transactions the
Directors had no knowledge nor should have had such knowledge.
12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2007 2006
�'000 �'000
Bank Overdraft 1
Net obligations under finance - 48
leases
Trade creditors 14 93
Other creditors 735 2,391
Other taxes and social 4 20
security costs
Accruals and deferred income 383 232
1,137 2,784
13. CREDITORS: AMOUNTS FALLING DUE OVER YEAR
2007 2006
�'000 �'000
Net obligations under finance - 77
leases
Convertible loan (a) 425 425
Convertible loan (b) 50 95
475 597
The convertible loans `a' and `b', are convertible into ordinary shares at
0.1p per share, exercisable by 16 February 2012 and 28 April 2012
respectively. In addition the loan gives the right to subscribe for
ordinary shares at a price of 0.1p each.
On the 19 May 2006, �5,000 of Loan Notes were converted into Ordinary
Shares
On the 28 November, a further �40,000 of Loan Notes were converted into
Ordinary Shares.
14. FINANCIAL INSTRUMENTS
The Company's financial instruments comprised borrowings, cash and various
items such as trade debtors and creditors that arose directly from operations.
The main purpose of these instruments was to raise finance for operations. The
Company had not entered into derivative transactions nor did it trade in
financial instruments as a matter of policy.
Short-term debtors and creditors are excluded from the disclosures which
follow.
Financial Assets
The only financial asset is cash at bank. At 31 March 2007 the Company had cash
at bank of �526 (2006-�1,721,000).
15. SHARE CAPITAL
2007 2006 2007 2006
No. 000 No. 000 �'000 �'000
Authorised:
Ordinary shares of 0.1p each 1,543,873 1,543,873 1,544 1,544
Deferred Ordinary shares of 4.9p 48,084 48,084 2,356 2,356
each
3,900 3,900
Allotted, called up and fully paid:
Ordinary shares of 0.1p each 208,084 163,084 208 163
Deferred Ordinary shares of 4.9p 48,084 48,084 2,346 2,346
each
2,554 2,509
On 19 May 2006, 5,000,000 ordinary shares were issued at 0.1p per share on
conversion of loan notes.
On 28 November 2006, a further 40,000,000 ordinary shares of 0.1p per
share on conversion of loan notes.
On the 27 May 2007, a further 50,000,000 ordinary shares were issued on
conversion of loan notes.
The deferred shares do not confer any voting rights.
16. RESERVES
Share premium Profit and
account Loss account
�'000 �'000
At 1 April 2006 48,033 (50,132)
Retained profit for period - (664)
________ ________
At 31 March 2007 48,033 (50,796)
________ ________
17. CONTINGENCIES
On the 6 August 2007, in successful litigation in High Court in London the
Company has obtained judgements against two former Directors of the Company, Mr
Jeremy Thomas - in respect of his breach of fiduciary duty and Mr Nigel
Etherington, jointly and severally for �281,750 plus interest since August
2004, and separately against Mr Etherington for a further sum of �108,000
including interest to date.
As against Mr Thomas, the Company was also awarded a contribution towards costs
of which there is a payment of �20,000 due by August 2007.
Further costs are also recoverable from Mr Thomas (estimated to be �30,000) and
Mr Etherington (estimated to be �140,000).
The Directors of PNC have been made aware that Vanguard Plc is being placed
into administration. This has the effect of potentially creating a liability to
PNC for a number of leases on certain properties that were indemnified by
Vanguard Plc. PNC has taken steps to mitigate these losses by attempting to
assign these leases. The directors have been advised that there may be several
claims that they may make against some of the professionals who handled the
original administration of PNC Plc which ended in January 2004.
18. CONTROL
PNC Telecom Plc is listed on the AIM. At the date of the Annual report in the
directors' opinion there is no controlling party.
19. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING
ACTIVITIES
2007 2006
�'000 �'000
Operating (loss)/profit (311) 436
Working capital movements
(Increase)/Decrease in Stock 11 (14)
(Increase)/Decrease in Debtors 517 (1,761)
Increase/(Decrease) in Creditors (1,600) 2,590
Depreciation 20 49
Loss on disposal of fixed assets 5 -
________ ________
Net cash inflow/ (outflow) from operating (1,358) 1,300
activities
________ ________
20. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
2007 2006
�'000 �'000
Capital Expenditure
Disposal of tangible fixed assets 115 (54)
Payments to acquire investments - (100)
Net cash outflow from capital expenditure 115 (154)
_____ ____
Returns on investments and servicing of finance
Interest paid (362) (294)
Interest received 9 8
_____ ____
Net cash (outflow)/ inflow for returns on (353) (286)
investments and servicing of finance
_____ ____
Financing
Hire Purchase Repayments (125) (23)
Conversion of loans (45) 620
Proceeds from issue of shares 45 5
________ ________
Net cash inflow from financing (125) 602
________ ________
21. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2007 2006
�'000 �'000
Increase /(Decrease) in cash in the year (1,721) 1,462
Issue of convertible loans - (520)
______ ______
Change in net debt from cash flows (see note (1,721) 942
19)
Net funds at 1 April 2006 1,201 259
______ ______
Net funds at 31 March 2007 (520) 1,201
______ ______
22. RELATED PARTY TRANSACTIONS
During the year, the company paid consultancy fees of �4,950 to Fort Knox
Property Services, a business owned by a director, Mr Leo Knifton.
�115,000 (2006-�115,000) of the convertible loan notes were due to Mr Leo
Knifton.
During the year, the company paid rent of �2,916 (2006-�31,162) and commissions
of �28,890 (2006-�205,847) to Mr Joe Case, a director of the company.
�63,000 (2006-�163,000) of the convertible loan notes were due to Mr Joe
Case.
The announcement of the results for the year ended 31 March 2007 is an excerpt
from the forthcoming 2007 Annual Report and Accounts and does not constitute
the statutory accounts for 2007 for the purposes of section 240(3) of the
Companies Act 1985. The 2007 figures are extracted from the audited accounts
for that year which have not yet been filed with Companies House. These audited
accounts have been audited with an unqualified audit opinion although readers
should note that an emphasis of matter was raised, by the Auditors, as follows:
Emphasis of matter - going concern
In forming our opinion, which is not qualified, we have considered the adequacy
of the disclosure made in the accounting policies on page 12 of the financial
statements concerning the company's ability to continue as a going concern. The
Company incurred a net loss of �664,000 for the year ended 31 March 2007 and,
at that date, the company's net current liabilities were �209,000. These
conditions indicate the existence of a material uncertainty which may cast
significant doubt about the company's ability to continue as a going concern.
The financial statements do not include the adjustments that would result if
the company was unable to continue as a going concern.
The duly authorised Board Committee has approved this announcement.
Copies of the Report and Accounts for the year ended 31 March 2007 will be sent
to shareholders and will be available from the Company at Finsgate, 5-7
Cranwood Street, London, EC1V 9EE and on the Company website:
www.telecom-plc.co.uk.
PNC Telecom Plc
Leo Knifton 0207 251 3762
Beaumont Cornish Limited 0207 628 3396
Roland Cornish
END
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