28th Sep 2007 08:00
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. KniftonChairman¢â‚¬¦¢â‚¬¦¢â‚¬¦¢â‚¬¦¢â‚¬¦ 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. CaseL.E.V. KniftonDirectors' 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 InterestsThe company has been notified of the following persons (other than thosereferred to in the paragraph above) who hold interests ( as defined in Part VIof the Act) in 3 per cent or more of the issued ordinary share capital of theCompany 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. KniftonCompany DirectorPNC TELECOM PLCPROFIT AND LOSS ACCOUNTFOR 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) 436activities before interest and tax Interest receivable and similar 4 9 8income Interest payable 5 (362) (297) _______ ________ Profit/ (Loss) on ordinary (664) 147activities before tax Tax on loss on ordinary activities 6 - - _______ ________ Retained Profit/ (Loss) for the (664) 147year 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 PLCRECONCILIATION OF MOVEMENTS INSHAREHOLDERS' FUNDSFOR 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 PLCBALANCE SHEETAS 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 PLCCASH FLOW STATEMENTFOR 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 PLCNOTES TO THE FINANCIAL STATEMENTSFOR 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 115directors 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) 4430% (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 2006was: ‚£'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 0.02pand 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 1411. 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 - 48leases Trade creditors 14 93 Other creditors 735 2,391 Other taxes and social 4 20security 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 - 77leases 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) 1,300activities ________ ________
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) 94219) 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 sentto shareholders and will be available from the Company at Finsgate, 5-7Cranwood 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
PNC TELECOM PLCRelated Shares:
Tricor