Final Results
September 29 2006 - 12:40PM
UK Regulatory
FOR IMMEDIATE RELEASE 29 September 2006
PNC TELECOM PLC
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2006
CHAIRMAN'S STATEMENT
The year to 31st March 2006 has seen the company revive its income by trading
in the import and export of mobile phones. Unfortunately as you may have seen
from recent television and press coverage the VAT department of HMRC are
withholding payments (including those due to PNC) along with other innocent
mobile phone dealers. PNC has taken legal advice and are preparing a case
against HMRC for both repayment and loss of income. It is our intention to
recommence trade when we receive repayment.
The directors have not received any remuneration since April and further your
board have been scrutinising every aspect of the business to ensure overheads
are kept to a minimum.
There have been a number of leases that your board have had to re-negotiate due
to Vanguard PLC going into administration. Vanguard bought KJC mobile phones
from PNC`s administrator in 2003. Your board have been advised that the
assignment of some of these leases was incorrect and are now taking legal
advice to recover the costs incurred from the professionals who handled the
administration.
Your board are attending a mediation hearing on 12th October with the previous
Directors in an attempt to reach a settlement in the ongoing legal action
against them.
Our investment in SIM 4 Travel is currently valued at �1,750,000 at the bid
price as at 28 September 2006.
Your board are looking at a number of other businesses in the mobile field and
will keep shareholders informed of any developments.
L.E.V. Knifton
Chairman
29 September 2006
PNC TELECOM PLC
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2006
Notes 31 March 31 March
2006 2005
�'000 �'000
Turnover 2 25,840 -
Cost of Sales (24,871)
_______ ________
Gross Profit 969 -
Operating expenses (533) (465)
_______ ________
Operating Profit/ (Loss) 436 (465)
Profit/ (Loss) on ordinary 436 (465)
activities before interest and tax
Interest receivable and similar 4 8 7
income
Interest payable 5 (297)
_______ ________
Profit/ (Loss) on ordinary 147 (458)
activities before tax
Tax on loss on ordinary activities 6 - -
_______ ________
Retained Profit/ (Loss) for the 12 147 (458)
year
Pence Pence
Loss per share 7 0.14 (0.95)
Diluted loss per share 7 0.02 (0.95)
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 2006
2006 2005
�'000 �'000
Profit/(Loss) for the financial year 147 (458)
Conversion of loan notes 100 -
Issue of shares 5 -
Opening shareholders' funds 158 616
_______ _______
Closing shareholders' funds 410 158
PNC TELECOM PLC
BALANCE SHEET
AS AT 31 MARCH 2006
Note 2006 2005
�'000 �'000
Fixed Assets
Tangibles 8 150 -
Investments 9 100
__________ __________
250 -
Current Assets
Stock 10 14 -
Debtors: due within one year 11 1,806 45
Cash at bank 1,721 259
__________ __________
3,541 304
Creditors: Amounts falling due within one year 12 (2,784) (146)
__________ __________
Net Current Assets 757 158
Total Assets Less Current Liabilities 1,007 158
Creditors: Amounts falling due greater than 13 (597) -
one year
__________ __________
Net Assets 410 158
Capital and Reserves
Called up share capital 15 2,509 2,404
Share premium account 16 48,033 48,033
Profit and loss account 16 (50,132) (50,279)
__________ __________
Equity Shareholders' Funds 410 158
The financial statements were approved by the Board on 29 September 2006 and
signed on its behalf by:
L.E.V. Knifton
Director
PNC TELECOM PLC
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
Note 2006 2005
�'000 �'000
Net cash inflow/ (outflow) from operating 19 1,300 (492)
activities
Returns on investment and servicing of finance 20 (286) 7
Capital Expenditure 20 (154) -
Financing 20 602 -
_______ _______
Increase / (Decrease) in cash 21 1,462 (485)
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2006
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.
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.
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
2(a). TURNOVER
The Directors consider it prejudicial to disclose the geographical analysis of
turnover.
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
2(b). PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
2006 2005
�'000 �'000
Depreciation 48 -
Auditors' remuneration
- audit fees 10 7
- other fees - 7
Recovery from claims against former 115 -
directors
3. EMPLOYEES
Directors' remuneration 2006 2005
�'000 �'000
Salaries and fees 100 -
Pension contributions 15 -
115 -
2006 2005
�'000 �'000
Staff costs, including Directors
Wages and salaries 115 -
Social Security costs 14 -
Other pension costs 15 -
144 -
Please see Note 22 for fees paid to directors.
4. INTEREST RECEIVABLE AND SIMILAR INCOME
2006 2005
�'000 �'000
Bank Interest receivable 8 7
5. INTEREST PAYABLE
2006 2005
�'000 �'000
Other interest payable 294 -
Hire Purchase Interest payable 3 -
297 -
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
6. TAXATION
2006 2005
�'000 �'000
Current tax:
UK Corporation tax on profits of the period - -
Adjustments in respect of prior periods - -
Current tax reconciliation 2006 2005
�\'000 �'000
Profit/(Loss) on ordinary activities before 147 (458)
tax
Theoretical tax at UK corporation tax rate 44 (137)
30% (2004:30%)
Effects of:
Depreciation 48 -
Capital allowances (60) -
Tax losses (32) 137
Actual current tax charge for period - -
The company has excess management expenses of �3,137,000 (2005 - �3,244,00)
available for carry forward which are subject to agreement with the Inland
Revenue.
7. EARNINGS PER SHARE
The weighted average number of shares used 2006 2005
was:
�'000 �'000
Basic 105,865 48,084
Diluted 593,262 48,084
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.
2006 2006 2005 2005
�'000 pence per �'000 pence per
share share
Basic EPS
Prfofit/ (Loss) for the 147 0.14p (458) (0.95)
year
Diluted EPS
Profit/ (Loss) for the year 147 0.02p (458) (0.95)
and loss per share
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
8. TANGIBLE FIXED ASSETS
Fixtures,
Fittings
and Motor Vehicles Total
equipment
�000 �000 �000
Cost
At beginning - - -
of year
Additions 16 183 199
At end of 16 183 199
year
Depreciation
At beginning - - -
of year
Charge for 2 47 49
year
At end of 2 47 49
year
Net book
value
At 31 March 14 136 150
2006
At 31 March - - -
2005
9. INVESTMENTS
Listed
Investments
�
Cost
At beginning of year -
Additions 100
At end of year 100
The company owns 50million ordinary shares in Sim4Travel
Holdings Limited, a company quoted on
OFEX, the value of the investment at the date of the annual
report was �1,750,000.
10. STOCK
2006 2005
�'000 �'000
Finished Goods 14 -
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
11. DEBTORS
2006 2005
�'000 �'000
Due within one year
Trade debtors 1 -
Other debtors 1,805 45
1,806 45
In other debtors, there is an amount of �1.8 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
2006 2005
�'000 �'000
Net obligations under finance 48 -
leases
Trade creditors 93 16
Other creditors 2,391 7
Other taxes and social 20 -
security costs
Accruals and deferred income 232 123
2,784 146
13. CREDITORS: AMOUNTS FALLING DUE OVER YEAR
2006 2005
�'000 �'000
Net obligations under finance 77 -
leases
Convertible loan (a) 425 -
Convertible loan (b) 95 -
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.
Net Obligations under hire purchase contracts
Repayable within one year 55 -
Repayable within one and five 88 -
years
143 -
Finance charges and interest allocated to future (18) -
accounting
periods 125 -
Included in liabilities within (48) -
one year
77 -
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
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 2006 the Company had cash
at bank of �1,721,000 (2005-�259,000). This attracts interest at rates that
vary with the bank rates and all accounts are held in sterling.
15. SHARE CAPITAL
2006 2005 2006 2005
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 153,084 48,084 153 48
Deferred Ordinary shares of 4.9p 48,084 48,084 2,356 2,356
each
2,509 2,404
The deferred shares have a no value.
During the year end the company issued convertible loan notes totalling �
620,000 which had been underwritten by the directors. �100,000 of these
were converted to 100,00,000 ordinary shares of 0.1p each by the year end.
On 8 February 2006 5,000,000 shares were issued at 0.1p per share.
On 19 May 2006, 5,000,000 ordinary shares were issued at 0.1p per share.
16. RESERVES
Share premium Profit and
account Loss account
�'000 �'000
At 1 April 2005 48,033 (50,279)
Retained profit for period - 147
________ ________
At 31 March 2006 48,033 (50,132)
________ ________
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
17. CONTINGENCIES
Since gaining control of the board on 24 August 2004, the Directors have found
that the Company's funds have reduced by over �900,000 since 15 January 2004
(when the Company came out of its administration) to having approximately �
100,000. The majority of these payments have been drawn by the previous
directors and include alleged compensation payments for loss of office. The
current board have secured a repayment of �160,000 and is pursing claims of
approximately �500,000 against past directors.
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
2006 2005
�'000 �'000
Operating profit/(loss) 436 (465)
Working capital movements
(Increase) in Stock (14) -
(Increase) in Debtors (1,761) (45)
Increase in Creditors 2,590 18
Depreciation 49 -
________ ________
Net cash inflow/ (outflow) from operating 1,300 (492)
activities
________ ________
20. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
21.
2006 2005
�'000 �'000
Capital Expenditure
Payments to acquire tangible fixed assets (54) -
Payments to acquire investments (100) -
Net cash outflow from capital expenditure (154) -
_____ ____
Returns on investments and servicing of finance
Interest paid (294) -
Interest received 8 7
_____ ____
Net cash (outflow)/ inflow for returns on (286) 7
investments and servicing of finance
_____ ____
PNC TELECOM PLC
NOTES TO THE FINANCIAL STATEMENTS
Continued
FOR THE YEAR ENDED 31 MARCH 2006
20. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
(continued)
2006 2005
�'000 �'000
Financing
Hire Purchase Repayments (23) -
Proceeds from issue of convertible loans 620 -
Proceeds from issue of shares 5 -
________ ________
Net cash inflow from financing 602 -
________ ________
21. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2006 2005
�'000 �'000
Increase /(Decrease) in cash in the year 1,462 (485)
Issue of convertible loans (520) -
______ ______
Change in net debt from cash flows (see note 942 (485)
19)
Net funds at 1 April 2005 259 744
______ ______
Net funds at 31 March 2006 1,201 259
______ ______
22. RELATED PARTY TRANSACTIONS
During the year, the company paid consultancy fees of �124,500 to Fort Knox
Property Services, a business owned by a director, Mr Leo Knifton.
During the year, the company made the following payments to Mr Joe Case, a
director of the company:
Lease compensation payment �12,613
Sales commission �193,684
Rent �31,162
Mr Leo Knifton advanced convertible loan notes of �115,000 during the
period and this was the balance outstanding at the year end.
Mr Joe Case advanced convertible loan notes of �163,000 during the period
and this was the balance outstanding at the year end.
The Report and Accounts have been posted to Shareholders and are available,
free of charge, for a period of at least one month, from Finsgate, 5-7 Cranwood
Street, London EC1V 9EE
___________________________________________________________________________
END
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