30th Sep 2008 13:20
For immediate release 30 September 2008 PNC TELECOM PLC ("PNC" or the "Company") Audited Results for the year ended 31 March 2008
The Board of PNC announces that it has today posted the Report and Accounts forthe year ended 31 March 2008 to shareholders. A copy of the Report and Accountswill be available from the Company's website, being www.telecom-plc.co.uk. Setout below is the full text of the Report and Accounts.Enquiries:PNC Telecom PLC: Tel: 0207 251 3762 Leo Knifton, Chairman Nominated Adviser: Tel: 0207 628 3396 Beaumont Cornish Limited Michael Cornish Chairman's Statement for the year ended 31 March 2008
Chairman's statement
The Group made a loss of ‚£52,000 in the year ended 31 March 2008 (2007: loss ‚£ 664,000).
Your Directors are now focused on the VAT reclaim from HMRC which is entering its final stages.
Since the year end we have been dealing in electronic gaming consoles with the majority of turnover being accounted for by sales of Nintendo Wii games consoles.
In February the Company acquired the entire issued share capital of Specs andLenses Limited ("Specs and Lenses"), a newly incorporated company establishedto develop an internet and retail consumer offering of optical glasses bycombining a town centre presence with outlet shopping mall locations, "out oftown" superstores and "in town" satellite stores and offering through itswebsite, www.specsandlenses.co.uk. Specs and Lenses opened its Factory outletstore in Freeport Braintree and is now looking to open two more to complementthis.
Our investment in SIM 4 Travel is currently valued at ‚£175,000, at the mid price, as at 26 September 2008.
Your Directors are actively looking for other businesses to add to the group to bring in further income.
We will keep you informed of any further developments
L.E.V. KniftonChairman30 September 2008 Report of the Directors for the year ended 31 March 2008
The Directors present their annual report and the audited financial statements for the year ended 31 March 2008.
Principal Activities
The principal activity of the company is the export and import of mobile phones and other electrical equipment and the sale of specs and lenses.
Business Review and Future Developments
A review of the business and future developments is contained in the Chairman's Statement.
Key Performance Indicators
The directors consider the key performance indicators of the company to be its loss for the period of ‚£52,000.
Key Risks and Uncertainties
The key risks and uncertainties that 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 2008.
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 2008 31 March 2007 Ordinary Shares Ordinary Shares 0.1p each 0.1p each J.W.Case 13,850,000 13,850,000 L.E.V. Knifton - - PNC TELECOM PLC Report of the Directors (continued¢â‚¬¦) for the year ended 31 March 2008 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 2008. Number of Percentage of 0.1p Shares Ordinary Share Capital JIM Nominees Limited 245,596,679 37.6% Bade Finance Limited 185,000,000 28.3% Pershing Nominees Limited 73,364,237 11.2% DSL Client Nominees Limited 19,500,000 3.0%
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 2008 were 37 days (2007 - 18 days)
Corporate Governance
The Company is not required to comply with the code of Best Practice as set outin Section 1 of the Combined Code appended to the Listing Rules of theFinancial Services Authority as it is listed on AIM. All relevant discussionsbeing taken by the full board.
Publication of Accounts on Company Website
Financial statements are published on the company's website. The maintenanceand integrity of the website is the responsibility of the directors. Thedirectors' responsibility also extends to the financial statements containedtherein.Indemnity of Officers
The Group may purchase and maintain, for any director or officer, insurance against any liability and the Group does maintain appropriate insurance cover against legal action brought against its directors and officers.
PNC TELECOM PLC Report of the Directors (continued¢â‚¬¦) for the year ended 31 March 2008
Statement of Directors' Responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the directors have elected to prepare thefinancial statements in accordance with International Financial ReportingStandards (IFRSs) as adopted for use in the European Union. The financialstatements are required by law to give a true and fair view of the state ofaffairs of the company and the Group and of the profit or loss of the Group forthat Year. In preparing these financial statements, the directors are requiredto:- select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
- to follow IFRS as adopted by the European Union
The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thecompany and the Group and to enable them to ensure that the financialstatements comply with the Companies Act 1985, and as regards the groupfinancial statements, article 4 of the IAS regulations. They are alsoresponsible for safeguarding the assets of the company and the Group and hencefor taking reasonable steps for the prevention and detection of fraud and otherirregularities.
Statement as to Disclosure of Information to Auditors
So far as the directors are aware, there is no relevant audit information (asdefined by Section 234ZA of the Companies Act 1985) of which the Group'sauditors are unaware, and each director has taken all the steps that he oughtto have taken as a director in order to make himself aware of any relevantaudit information and to establish that the Group's auditors are aware of thatinformation.Auditors
The auditors, Jeffreys Henry LLP, will be proposed for re-appointment in accordance with Section 385 of the Companies Act 1985 in the Annual General Meeting.
ON BEHALF OF THE BOARD:L.E.V. KniftonCompany Director30 September 2008 Report of the Independent Auditors to the Shareholders of PNC TELECOM PLC We have audited the group and parent company financial statements ("thefinancial statements") of PNC Telecom Plc which include the consolidated incomestatement, the consolidated and parent company balance sheets, the consolidatedand parent company cashflow statements, consolidated statement of changes inequity for the year ended 31 March 2008 and the related notes. These financialstatements have been prepared under the accounting policies set out therein.This report is made solely to the Company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our audit work has been undertakenfor no purpose other than to draw to the attention of the Company's membersthose matters which we are required to include in an auditor's report addressedto them. To the fullest extent permitted by law, we do not accept or assumeresponsibility to any party other than the Company and Company's members as abody, for our audit work, for this report, or for the opinions we have formed.
Respective Responsibilities of Directors and Auditors
As described in the Statement of Directors' responsibilities, the group'sdirectors are responsible for preparing the financial statements in accordancewith applicable law and International Financial Reporting Standards (IFRSs) asadopted for use in the European Union.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985 and as regard group financial statements, Article 4 of the ISA Regulation.We also report to you if, in our opinion, the Directors' report is notconsistent with the financial statements. The information given in theDirectors' report includes that specific information mentioned in theChairman's statement that is cross referred from the Review of the Businesssections of the directors' report.
In addition, we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.
We read the other information contained in the Annual Report and considerwhether it is consistent with the audited financial statements. The otherinformation comprises only the Directors' Report, the Chairman's Statement. Weconsider the implications for our report if we become aware of any apparentmisstatements or material inconsistencies with the financial statements. Ourresponsibilities do not extend to any other information.
Basis of Audit Opinion
We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgements made by the Directors in the preparationof the financial statements, and of whether the accounting policies areappropriate to the Company's circumstances, consistently applied and adequatelydisclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Report of the Independent Auditors to the Shareholders of PNC TELECOM PLC(continued)
Emphasis of matter - going concern
In forming our opinion, which is not qualified, we have considered the adequacyof the disclosure made in the accounting policies on page 22 of the financialstatements concerning the company's ability to continue as a going concern. TheCompany incurred a net loss of ‚£52,000 for the year ended 31 March 2008 and, atthat date, the company's net current assets included a VAT balance recoverableof ‚£1,302,000. These conditions indicate the existence of a materialuncertainty which may cast significant doubt about the company's ability tocontinue as a going concern. The financial statements do not include theadjustments that would result if the company was unable to continue as a goingconcern.OpinionIn our opinion:- the Group financial statements give a true and fair view, in accordance withInternational Financial Reporting Standards (IFRS's) as adopted for use in theEuropean Union, of the state of affairs of the Group as at 31 March 2008 and ofits loss and cash flows of the Group for the year then ended;
- the parent company financial statements give a true and fair view, in accordance with IFRS's as adopted by the European Union as applied in accordance with provisions of the Companies Act 1985, of the state of the parent company's affairs as at 31 March 2008;
- the financial statements have been properly prepared in accordance with theCompanies Act 1985 and, as regard the group financial statements, article 4 ofthe IAS regulation; and
- the information given in the Report of the Directors is consistent with the financial statements.
30 September 2008Jeffreys Henry LLP Finsgate
Chartered Accountants 5-7 Cranwood Street
Registered Auditors London EC1V 9EE
PNC TELECOM PLC Consolidated Income Statement For the year ended 31 March 2008 Notes 31 March 31 March 2008 2007 ‚£'000 ‚£'000 Revenue 2 179 959 Cost of Sales (144) (855) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Gross Profit 35 104 Operating expenses (346) (415) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Operating Loss (311) (311)
Other operating income 314
- ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Profit/ (Loss) on ordinary 3
(311)
activities before interest and tax Interest receivable and similar 4 96
9income Interest payable 4 (151) (362) _______ ________ Loss on ordinary activities before (52) (664)tax
Tax on loss on ordinary activities 6 - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Retained Loss for the year 17 (52) (664) Pence Pence Loss per share 7 0.02 0.37
There are no other recognised gains or losses in the year.
There is no difference between basic and diluted loss per share.
All the loss for the year is attributable to the Equity holders of the company.PNC TELECOM PLC Statement of Changes in Equity for the year ended 31 March 2008 Share Capital Share Merger Retained Ordinary Deferred Premium Relief Earnings Total shares Reserve of Ordinary Shares of 0.1p 4.9p each each ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 As at 1 April 208 2,346 48,033 - (50,796) (209) 2007 Shares issued 445 - - - - 445 Loss after tax - - - - (52) (52) for the year Arising on - - - 324 - 324 acquisition of - - (20) - - (20) Subsidiary Share issue costs As at 31 March 653 2,346 48,013 324 (50,848) 488 2008 Share Capital Share Merger Retained Ordinary Deferred Premium Relief Earnings Total shares Reserve of Ordinary Shares of 0.1p 4.9p each each ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 As at 1 April 163 2,346 48,033 - (50,132) 410 2006 Shares issued 45 - - - - 45 Loss after tax - - - - (664) (664) for the year Arising on - - - - - - acquisition of Subsidiary As at 31 March 208 2,346 48,033 - (50,796) (209) 2007
Share capital is the amount subscribed for shares at nominal value.
Retained profit represents the cumulative deficit of the Company attributable to equity shareholders.
Share premium represents the excess of the amount subscribed for share capitalover the nominal value of those shares net of share issue expenses. Share issueexpenses in the year comprise a proportion of the costs incurred in respect ofthe initial public offering and issue of new shares on the London StockExchange's Alternative Investment Market.PNC TELECOM PLC Consolidated Balance Sheet As at 31 March 2008 Note 2008 2007 ‚£'000 ‚£'000 ASSETS Non-Current Assets
Property, plant and equipment 8 74
10 Goodwill 9 429 - Investments 10 100 100 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 603 110 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Current Assets Inventories 11 18 3 Trade and other receivables 12 1,326 1,289 Cash and cash equivalent 13 191 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,535 1,293 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL ASSETS ‚£2,138 ‚£1,403 EQUITY AND LIABILITIES Share capital 16 2,999 2,554 Share premium accounts 17 48,013 48,033 Merger reserve 17 324 - Retained earnings 17 (50,848) (50,796) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL EQUITY 488 (209) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ NON CURRENT LIABILITIES
Interest bearing loans and borrowings 15 385
475 Non interest bearing - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 385 475 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ CURRENT LIABILITIES Trade and other payables 14 1,265 1,137 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,265 1,137 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL EQUITY AND LIABILITIES ‚£2,138 ‚£1,403 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
The financial statements were approved and authorised for issue by the Board on 30 September 2008 and signed on its behalf by:
L.E.V. KniftonDirector PNC TELECOM PLC Balance Sheet As at 31 March 2008 Note 2008 2007 ‚£'000 ‚£'000 ASSETS Non-Current Assets
Property, plant and equipment 8 9
10 Investments 10 609 100 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 618 110 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Current Assets Inventories 11 3 3 Trade and other receivables 12 1,424 1,289 Cash and cash equivalent 13 91 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,518 1,293 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL ASSETS ‚£2,136 ‚£1,403 EQUITY AND LIABILITIES Share capital 16 2,999 2,554 Share premium accounts 17 48,013 48,033 Merger reserve 17 324 - Retained earnings 17 (50,842) (50,796) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL EQUITY 494 (209) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ NON CURRENT LIABILITIES
Interest bearing loans and borrowings 15 385
475 Non interest bearing - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 385 475 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ CURRENT LIABILITIES Trade and other payables 14 1,257 1,137 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,257 1,137 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ TOTAL EQUITY AND LIABILITIES ‚£2,136 ‚£1,403 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
The financial statements were approved and authorised for issue by the Board on 30 September 2008 and signed on its behalf by:
L.E.V. KniftonDirector PNC TELECOM PLC Consolidated Cash Flow Statement for the year ended 31 March 2008 2008 2007 Notes ‚£'000 ‚£'000
Cash flows from operating activities Cash generated from operations 1 254 (1,358) Finance costs (151) (362) Corporation tax paid - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from operating activities 103 (1,720) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash flows from investing activities
Acquisition of tangibles (65) - Disposable of tangibles - 115 Acquisition of subsidiaries 2 - - Interest received 2 9 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from investing activities (63) 124 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash flows from financing activities
Hire purchase repayments - (125) Issue of new shares 190 45 Conversion of loans - (45) Repayment of loans (40) - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from financing activities 150 (125) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Increase/(decrease) in cash and cash 190 (1,721) equivalents Cash and cash equivalents at beginning 1 1,721 of year ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash and cash equivalents at end of year 191
- ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Represented by: Cash at bank 191 1 Bank overdraft - (1) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 191 - ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ PNC TELECOM PLC Company Cash Flow Statement for the year ended 31 March 2008 2008 2007 Notes ‚£'000 ‚£'000
Cash flows from operating activities Cash generated from operations 1 89 (1,358) Finance costs (151) (362) Corporation tax paid - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from operating activities (62) (1,720) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash flows from investing activities
Acquisition of tangibles - - Disposable of tangibles - 115 Acquisition of subsidiaries 2 - - Interest received 2 9 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from investing activities 2 124 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash flows from financing activities
Hire purchase repayments - (125) Issue of new shares 190 45 Conversion of loans - (45) Repayment of loans (40) - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net cash from financing activities 150 (125) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Increase/(decrease) in cash and cash 90 (1,721) equivalents Cash and cash equivalents at beginning 1 1,721 of year ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash and cash equivalents at end of year 91
- ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Represented by: Cash at bank 91 1 Bank overdraft - (1) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 91 - ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ PNC TELECOM PLC Notes to the Group Cash Flow Statement for the year ended 31 March 2008
1 RECONCILIATION OF OPERATING PROFIT TO CASH GENERATED FROM OPERATIONS
Group 2008 2007 ‚£000 ‚£000 Operating loss for the year (311) (311) Adjustments for:
Depreciation of property, plant and equipment 1 20
Other operating income 314 -
Loss on disposal of tangible assets - 5
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Operating cash flows before movements in working 4 (286) capital (Increase)/Decrease in inventories (15) 11 (Increase)/Decrease in receivables (37) 517 (Decrease)/Increase in payables 302 (1,600) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash generated from operations 254 (1,358)
¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢Company 2008 2007 ‚£000 ‚£000 Operating loss for the year (305) (311) Adjustments for:
Depreciation of property, plant and equipment 1 20
Other operating income 314 -
Loss on disposal of tangible assets - 5
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Operating cash flows before movements in working 10 (286) capital (Increase)/Decrease in inventories - 11 (Increase)/Decrease in receivables (41) 517 (Decrease)/Increase in payables 120 (1,600) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Cash generated from operations 89 (1,358)
¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢2 ACQUISITION OF SUBSIDIARY During the year the Group and Company acquired the shares and net assets ofSpecs and Lenses Limited, its wholly owned subsidiary, for a totalconsideration of ‚£508,750 settled by issue of new shares. The fair value of thenet assets acquired were: 2008 ‚£000 Website 54
Fixtures, fittings and equipment 11
Goodwill 60 Inventory 15 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
Fair value of net assets acquired 140
¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ PNC TELECOM PLC Notes to the Financial Statements for the Year Ended 31 March 2008 GENERAL INFORMATION
PNC Telecom Plc is a company incorporated in the United Kingdom under the Companies Act 1985 and quoted on the Alternative Investment Market of the London Stock Exchange. The address of the registered office is disclosed on page 1 of the financial statements. The principal activity of the Group is described in the Directors Report.
1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards and IFRIC interpretations issued by theInternational Accounting Standards Board (IASB) as adopted by the EuropeanUnion and with those parts of the Companies Act 1985 applicable to companiesreporting under IFRS. The financial statements have been prepared under thehistorical cost convention. The principal accounting policies adopted are setout below.The company's financial statements were previously prepared in accordance withUnited Kingdom Generally Accepted Accounting Principles (GAAP) until 31 March2007. UK GAAP differs in some areas from IFRS. In preparing the Companyfinancial statements, management has considered certain accounting, valuationand consolidation methods applied in the UK GAAP ¯¬nancial statements to complywith IFRS. The comparative ¯¬gures in respect of 2007 were restated to re¯¬â€šectthese adjustments, except as described in the accounting policies. The effectof the change in accounting standards did not result in any reconcilingdifferences, accordingly no separate note has been provided in these accounts.
(a) Standards, amendment and interpretations effective in 2008
IFRS 7, `Financial instruments: Disclosures', and the complementary amendmentto IAS 1, `Presentation of financial statements - Capital disclosures',introduces new disclosures relating to financial instruments and does not haveany impact on the classification and valuation of the Group's financialinstruments, or the disclosures relating to taxation, trade and other payables.IFRIC 8, `Scope of IFRS 2', requires consideration of transactions involvingthe issuance of equity instruments, where the identifiable considerationreceived is less than the fair value of the equity instruments issued in orderto establish whether or not they fall within the scope of IFRS 2. This standarddoes not have any impact on the Group's financial statements.IFRIC 10, `Interim financial reporting and impairment', prohibits theimpairment losses recognized in an interim Year on goodwill and investments inequity instruments and in financial assets carried at cost to be reversed at asubsequent balance sheet date. This standard does not have any impact on theGroup's financial statements.
(b) Standards, amendment and interpretations effective in 2008
IFRS 1 (Amendment), FirstTime Adoption of International Financial Reporting Standards;
IAS 21 (Amendment), Net Investment in a Foreign Operation;
IAS 39 (Amendment), Cash Flow Hedge Accounting of Forecast Intercompany transactions;
IAS 39 (Amendment), The Fair Value Option; and
IAS 39 and IFRS 4 (Amendment), Financial Guarantee Contracts;
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the Year Ended 31 March 2008
1. ACCOUNTING POLICIES (Continued)
Basis of preparation (continued)
(c)
Standards, amendments and interpretations effective in 2006 but not relevant
The following standards, amendments and interpretations are mandatory for accounting years beginning on or after 1 April 2006 but are not relevant to the Group's operations:
IFRS 6 (Amendment), Exploration for and Evaluation of Mineral Resources;
IFRS 6, Exploration for and Evaluation of Mineral Resources;
IFRIC 4, Determining whether an Arrangement contains a Lease;
IFRIC 5, Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds; and
IFRIC 6, Liabilities arising from Participating in a Specific Market waste Electrical and Electronic Equipment;
(d) Standards, amendments and interpretations effective in 2007 but not relevant
The following standards, amendments and interpretations to published standardsare mandatory for accounting years beginning on or after 1 April 2007 but theyare not relevant to the Group's operations:
IFRS 4, `Insurance contracts';
IFRIC 7, `Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies';
IFRIC 9, `Re-assessment of embedded derivatives', and
IFRIC 11, `IFRS 2 - Group and treasury share transactions'
(e) Interpretations to existing standards that are not yet effective and have not been adopted early by the Group.
The following interpretations to existing standards have been published and aremandatory for the Group's accounting years beginning on or after 1 April 2008or later years but the Group has not adopted them:IFRS 8, `Operating segments `(effective from 1 January 2009). IFRS 8 replacesIAS 14 and aligns segment reporting with the requirements of the US standardSFAS 131, `Disclosures about segments of an enterprise and relatedinformation'. The new standard requires a `management approach', under whichsegment information is presented on the same basis as that used for internalreporting purposes. The Group will apply IFRS 8 from 1 April 2009. The expectedimpact is still being assessed in detail by management, but it appears likelythat the number of reportable segments, as well as the manner in which thesegments are reported, will change in a manner that is consistent with theinternal reporting provided to the chief operating decision-maker. As goodwillis allocated to Groups of cash-generating units based on segment level, thechange will also require management to reallocate goodwill to the newlyidentified operating segments. Management does not anticipate that this willresult in any material impairment to the goodwill balance. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the Year Ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
Basis of preparation (continued)
(f) Interpretations to existing standards that are not yet effective and not relevant for the Group's operations
The following interpretations to existing standards have been published and aremandatory for the Group's accounting Years beginning on or after 1 April 2008or later years but are not relevant for the Group's operations:IAS 1 Revised - Presentation of Financial Statements (effective from 1 January2009). Key changes include, the requirement to aggregate information in thefinancial statements on the basis of shared characteristics, the introductionof a Statement of Comprehensive Income & changes in titles of some of thefinancial statements.IAS 23 (Amendment), `Borrowing costs' (effective from 1 January 2009). Itrequires an entity to capitalise borrowing costs directly attributable to theacquisition, construction or production of a qualifying asset (one that takes asubstantial Year of time to get ready for use or sale) as part of the cost ofthat asset. The option of immediately expensing those borrowing costs will beremoved. IAS 23 (Amended) is not relevant to the Group as there are noqualifying assets.IFRIC 12, `Service concession arrangements' (effective from 1 January 2008).IFRIC 12 applies to contractual arrangements whereby a private sector operatorparticipates in the development, financing, operation and maintenance ofinfrastructure for public sector services. IFRIC 12 is not relevant to theGroup's operations because the Group does not provide for public sectorservices.IFRIC 13, `Customer loyalty programmes' (effective from 1 July 2008). IFRIC 13clarifies that where goods or services are sold together with a customerloyalty incentive (for example, loyalty points or free products), thearrangement is a multiple-element arrangement and the consideration receivablefrom the customer is allocated between the components of the arrangement inusing fair values. IFRIC 13 is not relevant to the Group's operations becausethe Group does not operate any loyalty programmes.IFRIC 14, `IAS 19 - The limit on a defined benefit asset, minimum fundingrequirements and their interaction' (effective from 1 January 2008). IFRIC 14provides guidance on assessing the limit in IAS 19 on the amount of the surplusthat can be recognised as an asset. It also explains how the pension asset orliability may be affected by a statutory or contractual minimum-fundingrequirement. IFRIC 14 is not relevant to the Group, as it does not have pensionscheme in place. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the Year Ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
ConsolidationSubsidiaries
Subsidiaries are all entities over which PNC Telecom Plc has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to PNC Telecom Plc. They are de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition ofsubsidiaries by the Group. The cost of an acquisition is measured as the fairvalue of the assets given, equity instruments issued and liabilities incurredor assumed at the date of exchange, plus costs directly attributable to theacquisition. Identifiable assets acquired and liabilities and contingentliabilities assumed in a business combination are measured initially at theirfair values at the acquisition date, irrespective of the extent of any minorityinterest. The excess of the cost of acquisition over the fair value of theGroup's share of the identifiable net assets acquired is recorded as goodwill.If the cost of acquisition is less than the fair value of the net assets of thesubsidiary acquired, the difference is recognised directly in the incomestatement.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted the Group.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fairvalue of the Group's share of the net identifiable assets of the acquiredsubsidiary or associate at the date of acquisition. Goodwill on acquisitions ofsubsidiaries is included in `intangible assets'. Goodwill on acquisitions ofassociates is included in `investments in associates' and is tested forimpairment as part of the overall balance. Separately recognised goodwill istested annually for impairment and carried at cost less accumulated impairmentlosses. Impairment losses on goodwill are not reversed. Gains and losses on thedisposal of an entity include the carrying amount of goodwill relating to theentity sold.Goodwill is allocated to cash-generating units for the purpose of impairmenttesting. The allocation is made to those cash-generating units or Groups ofcash-generating units that are expected to benefit from the businesscombination in which the goodwill arose. The Group allocates goodwill to eachbusiness segment in each country in which it operates.
(b) Website
Website development costs are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over the estimated useful economic life of 3 years.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the Year Ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are notsubject to amortisation and are tested annually for impairment. Assets that aresubject to amortisation are reviewed for impairment whenever events or changesin circumstances indicate that the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which the asset's carryingamount exceeds its recoverable amount. The recoverable amount is the higher ofan asset's fair value less costs to sell and value in use. For the purposes ofassessing impairment, assets are grouped at the lowest levels for which thereare separately identifiable cash flows (cash-generating units). Non-financialassets other than goodwill that suffered impairment are reviewed for possiblereversal of the impairment at each reporting date.
Property, plant and equipment
Tangible non-current assets are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as aseparate asset, as appropriate, only when it is probable that future economicbenefits associated with the item will flow to the Group and the cost of theitem can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are charged to the incomestatement during the financial Year in which they are incurred. Depreciation isprovided at the following annual rates in order to write off each asset overits estimated useful life.Fixtures, fittings and - 15% reducing balance equipment The asset's residual values and useful economic lives are reviewed, andadjusted if appropriate, at each balance sheet date. An asset's carrying amountis written down immediately to its recoverable amount if the asset's carryingamount is greater than its estimated recoverable value.Gains and losses on disposals are determined by comparing the proceeds with thecarrying amount and are recognised within other (losses) or gains in the incomestatement. When revalued assets are sold, the amounts included in otherreserves are transferred to retained earnings.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.
Functional currency translation
i) Functional and presentation currency
The financial statements are presented in Pounds Sterling (‚£), which is both the Group's presentation and functional currency.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
Taxation
The tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on the taxable profit for the year.Taxable profit differed from net profit as reported in the income statementbecause it excludes items of income or expense that are taxable or deductiblein other years and it further excludes items that are never taxable ordeductible. The entity's liability for current tax is calculated using taxrates that have been enacted or substantively enacted by the balance sheetdate.
Deferred tax
Deferred income tax is provided in full, using the liability method, ontemporary differences arising between the tax bases of assets and liabilitiesand their carrying amounts in the financial statements. However, the deferredincome tax is not accounted for if it arises from initial recognition of anasset or liability in a transaction other than a business combination that atthe time of the transaction affects neither accounting nor taxable profit orloss. Deferred income tax is determined using tax rates (and laws) that havebeen enacted or substantially enacted by the balance sheet date and areexpected to apply when the related deferred income tax asset is realised or thedeferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Operating leases
Rental leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost isdetermined using the first-in, first-out (FIFO) method. The cost of finishedgoods and work in progress comprises raw materials and other direct costs. Itexcludes borrowing costs. Net realisable value is the estimated selling pricein the ordinary course of business, less applicable variable selling expenses. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
Trade receivables
Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less provisionfor impairment. A provision for impairment is established when there isobjective evidence that the Group will not be able to collect all amounts dueaccording to the original terms of the receivables. Significant financialdifficulties of the debtor, probability that the debtor will enter bankruptcyor financial reorganisation and default or delinquency in payments isconsidered indicators that the trade receivable is impaired.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costsincurred. Borrowings are subsequently stated at amortised cost; any differencebetween the proceeds (net of transaction costs) and the redemption value isrecognised in the income statement over the year of the borrowings using theeffective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Financial InstrumentsNon-derivative financial instruments comprise investments in equity and debtsecurities, trade and other receivables, cash and cash equivalents, loans andborrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transactions costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below.
A financial instrument is recognised when the Group becomes a party to thecontractual provisions of the instrument. Financial assets are derecognised ifthe Group's contractual rights to the cash flows from the financial assetsexpire or if the Group transfers the financial assets to another party withoutretaining control or substantially all risks and rewards of the asset. Regularway purchases and sales of financial assets are accounted for at trade date,i.e. the date that the Group commits itself to purchase or sell the asset.Financial liabilities are derecognised if the Group's obligations specified inthe contract expire or are discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities such as cash andcash equivalents, receivables and payables of the Group at the balance sheetdate approximated their fair values, due to relatively short term nature ofthese financial instruments.The Company provides financial guarantees to licensed banks for creditfacilities extended to a subsidiary company. The fair value of such financialguarantees is not expected to be significantly different as the probability ofthe subsidiary company defaulting on the credit lines is remote. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
1. ACCOUNTING POLICIES (CONTINUED)
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Critical accounting estimates and judgements
The preparation of consolidated financial statements requires the Group to makeestimates and assumptions that affect the application of policies and reportedamounts. Estimates and judgements are continually evaluated and are based onhistorical experience and other factors including expectations of future eventsthat are believed to be reasonable under the circumstances. Actual results maydiffer from these estimates. The estimates and assumptions which have asignificant risk of causing a material adjustment to the carrying amount ofassets and liabilities are discussed below:
(a) Impairment of goodwill
The Group is required to test, at least annually, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a suitable discount rate in order to calculate the present value of these cash flows. Actual outcomes could vary.
(b) VAT
The VAT debtor is reviewed for impairment if events or changes in circumstancesindicate that the carrying amount may not be recoverable. When a review forimpairment is conducted, the recoverable amount is determined based on currentcase law.Going concernHMRC have withheld repayment of VAT and this has necessitated the curtailmentof the company's trade of the import and export of mobile phones. The Companyhas taken legal advice and is taking action against HMRC for the repayment ofthe VAT and loss of income. Ongoing overhead costs in the year have been keptto 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.
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.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008 2 TURNOVERThe Directors consider it prejudicial to disclose the geographical analysis ofturnover.3 EMPLOYEES AND DIRECTORSDirectors' remuneration 2008 2007 ‚£'000 ‚£'000 Salaries and fees - 10 Pension contributions - 9 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ - 19 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ 2008 2007 ‚£'000 ‚£'000
Staff costs, including Directors
Wages and salaries 36 41 Social Security costs 3 5 Other pension costs 3 9 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 42 55 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
Please see Note 20 for fees paid to directors.
4 NET FINANCE COSTS 2008 2007 ‚£000 ‚£000Finance income:
Deposit account interest 2 9
Finance costs:
Hire purchase interest - 12Other interest 151 350 151 362Net finance costs 149 353 PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
5 OPERATING LOSS FOR THE YEAR
The operating loss for the year is stated after charging / (crediting):
2008 2007 ‚£'000 ‚£'000 Depreciation 1 20 Auditors' remuneration - audit fees 10 16 - other fees 1 -
Loss on disposal of motor vehicles - 5 Recovery from claims against former directors (314) 31
¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
The analysis of administrative expenses in the consolidated income statement bynature of expense: 2008 2007 ‚£'000 ‚£'000 Employment costs 42 36 Directors fees - 19 Rent and Rates 6 5 Travelling and entertaining 5 17 Legal and Professional Fees 170 202 Other expenses 123 136 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 346 415 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
Other operating income represents receipts recovered from claims against former directors.
6 INCOME TAX EXPENSE
The tax charge on the profit for the year was as follows:
2008 2007 ‚£000 ‚£000 Current tax: Corporation tax - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ - - Deferred tax - - ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Total - - ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
6 INCOME TAX EXPENSE (CONTINUED)
Loss before tax (52) (664) ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ 2008 2007 ‚£000 ‚£000 Profit on ordinary activities before taxation (16)
(199)
multiplied by standard rate of UK corporation tax of 30% (2007 - 30%) Effects of: Non deductible expenses - - Depreciation add back - 8 Capital allowance - (19) Tax losses carry forward 16 210 Other tax adjustments - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ - - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Current tax charge - - ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢The company has trading losses of ‚£748,000 and excess management expenses of ‚£3,045,508 (2007 - ‚£3,045,508) available for carry forward which are subject toagreement with the Inland Revenue.
7 EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on earnings after taxand the weighted average number of ordinary shares in issue during the year.For diluted earnings per share, the weighted average number of ordinary sharesin issue is adjusted to assume conversion of all dilutive potential ordinaryshares.
Details of the adjusted earnings per share are set out below:
The weighted average number of shares used was: 2008 2007 ‚£'000 ‚£'000 Basic 287,442 181,016 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Diluted 287,442 181,016 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ 2008 2008 2007 2007 ‚£'000 pence per ‚£'000 pence per share share Basic EPS Profit/ (Loss) for the year (52) (0.02)p (664) (0.37)p Diluted EPS Profit/ (Loss) for the year and loss (52) (0.02)p (664) (0.37)pper share PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
8 PROPERTY, PLANT AND EQUIPMENT
Group Website Fixtures, Total Fittings and equipment ‚£000 ‚£000 ‚£000 Cost At beginning of year - 16 16 Acquisitions 54 11 65 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At end of year 54 27 81 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Depreciation At beginning of year - 6 6 Charge for year - 1 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At end of year - 7 7 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net book value At 31 March 2008 54 20 74 At 31 March 2007 - 10 10 Company Website Fixtures, Total Fittings and equipment ‚£000 ‚£000 ‚£000 Cost
At beginning and end of year - 16 16
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Depreciation At beginning of year - 6 6 Charge for year - 1 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At end of year - 7 7 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Net book value At 31 March 2008 - 9 9 At 31 March 2007 - 10 10
The website costs are internally generated.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008 9. Intangible Assets Cost Amortisation Net Book Value Goodwill ‚£'000 ‚£'000 ‚£'000 At 1 April 2007 - - - Acquisition of Specs and Lenses 429 - 429 Limited ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At 31 March 2008 429 - 429 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ The group assesses at each reporting date whether there is an indication thatan asset may be impaired, by considering the net present value of discountedcash flows forecasts. If an indication exists an impairment review is carriedout. At the period end, there was no indication of impairment of the value ofgoodwill or of developments costs.The directors have also concluded that no amortization of goodwill isnecessary, because its value has been actively maintained since it wasacquired.10. FIXED ASSET INVESTMENTS Group Company ‚£000 ‚£000 COST At 1 April 2007 100 100 Additions - 509
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
At 31 March 2008 100 609
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
CARRYING AMOUNT At 31 March 2008 100 609
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
At 31 March 2007 100 100
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
(a) The company owns 50 million ordinary shares in Sim4Travel Holdings Limited,a company quoted on Plus Market; and having a cost of ‚£100,000 the value of theinvestment at the date of the annual report was ‚£175,000 (2007: ‚£625,000).(b) The company acquired the entire issued share capital of Specs and LensesLimited on 5 March 2008 for ‚£508,750 by the issue of 185,000,000 shares at0.275p per share; the company is unquoted but the directors consider that norevaluation is required.
Included within these consolidated financial statements is the loss from the subsidiary since the date of acquisition:
2008 ‚£'000SubsidiarySpecs and Lenses Limited (6)Below are the combined revenues and profit of the enlarged Group from 1 April2007 to 31 March 2008: 2008 ‚£'000Revenue 179Loss for the period (52) PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008 11 INVENTORIESGROUP 2008 2007 ‚£'000 ‚£'000 Group Finished Goods 18 3 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ COMPANY Financial goods 3 3 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
The directors consider that the carrying amount of inventories is at fair value.
12 TRADE AND OTHER RECEIVABLES
GROUP 2008 2007 ‚£'000 ‚£'000 Due within one year Trade receivables 21 5 Other receivables 1,305 1,284 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,326 1,289 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
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.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
COMPANY 2008 2007 ‚£'000 ‚£'000 Due within one year Trade receivables 19 5 Other receivables 1,405 1,284 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,424 1,289 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
13 CASH AND CASH EQUIVALENTS
Group 2008 2007 ‚£'000 ‚£'000
Bank current account and cash 120 - Bank deposit account 71 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 191 1 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢Company 2008 2007 ‚£'000 ‚£'000 Bank current account and cash 90 - Bank deposit account 1 1 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 91 1 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢14 TRADE AND OTHER PAYABLESGROUP 2008 2007 ‚£'000 ‚£'000 Current: Financial liabilities - - 1 borrowings Interest bearing loans and borrowings Trade payables 45 14 Other payables 686 735
Social security and other taxes 15 4 Accruals and deferred income 519 383 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 1,265 1,137 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ COMPANY 2008 2007 ‚£'000 ‚£'000 Current: Financial liabilities - - 1 borrowings Interest bearing loans and borrowings Trade payables 38 14 Other payables 685 735
Social security and other taxes 15
4 Accruals and deferred income 519 383
¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬
1,257 1,137 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing expenses.
The directors consider that the carrying amount of trade and other payables approximates their fair value.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008 15. FINANCIAL LIABILITIES GROUP AND COMPANY 2008 2007 ‚£'000 ‚£'000 Convertible loan (a) 385 425 Convertible loan (b) - 50 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 385 475 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ The convertible loans `a' and `b', are convertible into ordinary shares at 0.1pper share exercisable by 16 February 2012 and 28 April 2012 respectively. Inaddition the loan gives the right to subscribe for ordinary shares at a priceof 0.1p each. See note 16 for repayments during the year.The Company's financial instruments comprised borrowings, cash and variousitems such as trade debtors and creditors that arose directly from operations.The main purpose of these instruments was to raise finance for operations. TheCompany had not entered into derivative transactions nor did it trade infinancial 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 and in hand. At 31 March 2008 the Company had cash at bank of ‚£191,000 (2007: ‚£1,000).
16. CALLED UP SHARE CAPITAL 2008 2007 2008 2007 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 each 48,084 48,084 2,356 2,356 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 3,900 3,900
¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
Allotted, called up and fully paid: Ordinary shares of 0.1p each 653,084 208,084 653
208
Deferred Ordinary shares of 4.9p each 48,084 48,084 2,346 2,346 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 2,999 2,554 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
On 27 May 2007, a further 50,000,000 ordinary shares were issued on conversion of loan notes.
On 4 March 2008, 185,000,000 ordinary shares of 0.1p per share were issued tothe vendors or Specs and Lenses Limited. On 5 March 2008, 210,000,000 ordinaryshares of 0.1p per share were placed with shareholders. On the same day, ‚£40,000 of convertible loan (a) notes were repaid.
The deferred shares do not confer any voting rights.
PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008 17.RESERVESGROUP Retained Share Other earnings premium reserves Totals ‚£000 ‚£000 ‚£000 ‚£000At 1 April 2007 (50,796) 48,033 - (2,763)Loss for the year (52) - - (52)Arising on acquisition ofSubsidiary - - 324 324Share issue costs - (20) - (20)At 31 March 2008 (50,848) 48,013 324 (2,511)COMPANY Retained Share Other earnings premium reserves Totals ‚£000 ‚£000 ‚£000 ‚£000At 1 April 2007 (50,796) 48,033 - (2,763)Loss for the year (46) - - (46)Arising on acquisition ofsubsidiary - - 324 324Share issue costs - (20) - (20)At 31 March 2008 (50,842) 48,013 324 (2,505)
18RISK AND SENSITIVITY ANALYSIS
The Group's activities expose it to a variety of financial risks: interest raterisk, liquidity risk, capital risk and credit risk. The Group's activities alsoexpose it to non-financial risks: market risk. The Group's overall riskmanagement programme focuses on unpredictability and seeks to minimise thepotential adverse effects on the Group's financial performance. The Board, on aregular basis, reviews key risks and, where appropriate, actions are taken tomitigate the key risks identified.
Interest rate risk
The Group does not have formal policies on interest rate risk. However, the Group's exposure in this area (as at the balance sheet date) was minimal.
Liquidity risk
The Group prepares periodic working capital forecasts for the foreseeable future, allowing an assessment of the cash requirements of the company, to manage liquidity risk. The directors have considered the risk posed by liquidity and are satisfied that there is sufficient growth and equity in the company.
Capital riskThe Group's objectives when managing capital are to safeguard the ability tocontinue as a going concern in order to provide returns for shareholders andbenefits to other stakeholders and to maintain an optimal capital structure toreduce the cost of capital. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
18 RISK AND SENSITIVITY ANALYSIS (continued)
Market risk
The market may not grow as rapidly as anticipated. The Group may lose customersto its competitors. The Group's major competitors may have significantlygreater financial resources than those available to the company. There is nocertainty that the company will be able to achieve its projected levels ofsales or profitability.
Credit risk
The Group's principal financial assets are bank balances and cash, trade andother receivables. The credit risk on liquid funds is limited because thecounter parties are banks with high credit ratings assigned by internationalcredit-rating agencies. The Group's credit risk is primarily attributable toits trade. The amounts presented in the balance sheet are net of allowance fordoubtful receivables. An allowance for impairment is made where there is anidentified loss event which, based on previous experiences, is evidence of areduction in the recoverability of the cash flows. The Group has no significantconcentration of credit risk, with exposure spread over a large number ofcounter parties and customers.
19LOSS FOR THE PARENT COMPANY
As permitted by section 203 of the Companies Act 1985, the income statements of the parent company is not presented as part of the financial statements.
2008 2007 ‚£000 ‚£000 Loss for the year 46 664 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢
20 RELATED PARTY TRANSACTIONS
During the year, the company paid consultancy fees of ‚£Nil (2007: ‚£4,950) to Fort Knox Property Services, a business owned by a director, Mr Leo Knifton.
‚£65,000 (2007-‚£115,000) of the convertible loan notes were due to Mr Leo Knifton.
During the year, the company paid rent of ‚£14,913 (2007: ‚£2,916) and commissions of ‚£39,500 (2007: ‚£28,890) to Mr Joe Case, a director of the company.
‚£63,000 (2007-‚£63,000) of the convertible loan notes were due to Mr Joe Case. PNC TELECOM PLC Notes to the Financial Statements (Continued) for the year ended 31 March 2008
21CONTINGENT LIABILITIES AND GUARANTEES
The Directors of PNC have been made aware that Vanguard Plc is being placedinto administration. This has the effect of potentially creating a liability toPNC for a number of leases on certain properties that were indemnified byVanguard Plc. PNC has taken steps to mitigate these losses by attempting toassign these leases. The directors have been advised that there may be severalclaims that they may make against some of the professionals who handled theoriginal administration of PNC Plc which ended in January 2004.
22 CAPITAL COMMITMENTS
There was no capital expenditure contracted for at each of the balance sheet dates but not yet incurred.
23 EXPLANATION OF TRANSITION TO IFRS
There have been no adjustments or restatements to the reported financial position, financial performance and cash flows of the Company resulting from the transition to IFRS from UK GAAP with effect from 1 April 2007.
24 ULTIMATE CONTROLLING PARTY
PNC Telecom Plc is listed on the AIM. At the date of the Annual report in the directors' opinion there is no controlling party
vendorRelated Shares:
Tricor