PINNACLE TELECOM GROUP PLC  
REPORT AND FINANCIAL STATEMENTS 30 SEPTEMBER 2010 
COMPANY NUMBER: 05259846  
 
 
Pinnacle Telecom Group plc is a value added, solutions 
based provider of integrated telecommunications services 
including IP and cloud solutions. It focuses on the SME 
market across the UK, where it provides a wide range of 
communications solutions including telecommunication 
calls, access and consultancy, IT support, mobile 
solutions both voice and data and hosted broadband voice services.  
Pinnacle's strategy is to be a SME focused, value added, solutions 
based provider of converged communications services, driven by 
leveraging organic opportunities as well as through targeted 
acquisitions. 
 
Contents  
 
01 Highlights  
02 Chairman’s Statement  
03 Chief Executive’s Review  
08 Corporate Governance  
10 Report of the Board to the Members on Directors’ Remuneration  
13 Directors’ Report  
18 Statement of Directors’ Responsibilities  
19 Independent Auditors report to the Members of Pinnacle Telecom Group plc  
20 Consolidated Income Statement  
21 Consolidated Statement of Comprehensive Income  
22 Consolidated Balance Sheet  
23 Consolidated Statement of Changes in Equity 
24 Consolidated Cash Flow Statement  
25 Notes to the Consolidated Financial Statements  
51 Independent Auditors report to the Members of Pinnacle Telecom Group plc (Parent Company)   
53 Balance Sheet (Parent Company)  
54 Notes to the Financial Statements (Parent Company)  
60 Notice of Annual General Meeting for Pinnacle Telecom Group plc 
IBC Directors, Secretary and Advisers   
 
 
 
  
 
107% 
Increase 
 
111% 
Increase 
 
  Positive 
EBITDA 
  
Maiden 
Operating 
Profit 
 
19% 
Increase 
In Gross Profit 
In Turnover 
In Cash 
HIGHLIGHTS 
 
Financial benchmarks 
 
• Turnover more than doubled, up 107% to £6,608,533, ahead of expectations, 
compared to £3,192,222 last year. 
 
• Gross profit more than doubled, up 111% to £2,089,457, compared to £991,169 last 
year. 
 
• Positive EBITDA (1) of £149,378 for the year compared to an EBITDA loss of 
£499,429 last year. 
 
• Maiden operating profit (2) for the full year of £78,647 compared to a loss of 
£582,816 last year. 
 
• The loss retained for the full year (3) after all costs, reduced by £626,324, down 70% 
to £270,739 compared to £897,063 in the previous year. 
 
Acquisitions 
 
• All share acquisition of Solwise Telephony Limited and its wholly owned subsidiary 
Sipswitch Limited completed on 13 January 2010 for an initial consideration of 
£180,957 in shares plus the assumption of debt of £23,958 also satisfied in shares.  
 
Balance sheet highlights 
 
• Cash at the year end amounted to £697,189 compared to the previous year of 
£586,222, a 19% increase  
 
• A placing on 22 September 2010 by way of an issue of 128,571,429 new Ordinary 
Shares at 0.35p per share, raised £450,000. The placing was at a premium of 
approximately 18.64% over the closing mid-market price of 0.295p on 21 September 
2010. 
 
• Group net assets increased to £1,319,743 (2009: £921,645) 
 
Reduction in group subsidiary operating companies 
 
• During the year, the group completed a reduction in the number of operating group 
subsidiary entities, which had expanded following a series of acquisitions over the 
years, and there are now only three main operating units. We expect to see some 
modest reductions in administration costs in the future as a result of the 
consolidation.  
 
BBC high-profile contracts 
 
• Delivering certain high-profile voice and data requirements of the BBC has been a 
significant success this year. We expect to be able to service high-profile contracts 
of this nature again in 2011. 
 
Notes: 
1. EBITDA is defined as Earnings before interest, taxation, depreciation, amortisation of intangibles, 
exceptional acquisition costs, share of results of associates and the embedded fair value adjustment in 
the convertible loan. 
2. Operating profit is measured before amortisation of intangibles, exceptional acquisition costs, share of 
results of associates and the embedded fair value adjustment in the convertible loan. 
3. Loss for the year is measured after all costs, including the costs of discontinued operations relating to 
previous years. 
Pinnacle Telecom Group plc
Page 1   
 
 
 
  
 
“Pinnacle 
has 
continued to 
win new 
contracts 
and seek 
new areas for 
organic 
growth.”
 
CHAIRMAN’S STATEMENT 
 
 
 
 
“It has been a tough year for the UK economy, but it has 
been a rewarding and successful year for Pinnacle.” 
 
 
 
 
 
Bill Allan, Chairman 
 
This has been my first year as your Chairman.  It has been a tough year for the UK economy, but it has 
been a rewarding and successful year for Pinnacle.  Over the year your company has continued to 
improve its financial and operational performance from organic growth and a successful acquisition 
strategy. 
 
The acquisition of Solwise Telephony Limited and its subsidiary Sipswitch Limited, in January 2010, 
have been successfully integrated.  Back office systems and processes have been simplified, with 
billing rationalised into a single platform.  The legal organisational structures from the various entities 
acquired or merged into Pinnacle over the years have also been rationalised, simplifying accounting 
and administration.  For a small company, these were two major accomplishments this year that 
absorbed a considerable amount of management time and focus.  Nevertheless, they provide a more 
robust and efficient operating platform for future growth and expansion. 
 
In addition to the above, Pinnacle has continued to win new contracts and seek new areas for organic 
growth.  Your company’s success in providing bespoke solutions to its customers is an area we seek to 
leverage this year.  The short-term contracts with the BBC mentioned at the half-year resulted in further 
business including supporting the telecommunications for Pope Benedict XVI’s visit to the U.K.  These 
were high profile events that demonstrated confidence in Pinnacle’s systems and people.  
 
The successful share placing in September 2010 has improved your company’s financial standing and 
working capital needs for organic growth.  As a Board we are also conscious that value enhancing 
opportunities for growth by acquisition involve considerable resource and time commitments. However, 
we will continue to be prudent as we seek new growth to enhance your company’s capability as a 
provider of IP and bespoke services and solutions into the UK SME market.. 
 
Finally, my thanks to Alan Bonner and all his staff for their enthusiasm and hard work this year.  Further 
detail and comment on the results for the full year are contained in the Chief Executive’s Review.  I look 
forward to the year ahead. 
 
Bill Allan 
CHAIRMAN 
21 February 2011 
Pinnacle Telecom Group plc
Page 2   
 
 
 
  
CHIEF EXECUTIVE’S REVIEW 
 
“2010 has been a very successful year.” 
“We have delivered record results for the Group which has 
included a year of triple-digit growth in both turnover and 
gross profit.” 
 
Alan Bonner, Chief Executive Officer 
 
Introduction 
2010 has been a very successful year, as we have returned a maiden operating profit of £78,647 compared 
to a 2009 operating loss of £582,816. This result is measured before amortisation of intangibles, exceptional 
acquisition costs, share of results of associates and the embedded fair value adjustment in the convertible 
loan. After these adjustments, which are mainly non-cash based and a requirement of International 
Financial Reporting Standards (IFRS), the Group returned an operating loss of £236,572 (2009: loss 
£890,856). We continue to view IFRS adjustments as technical, and they have little bearing on cash. 
Accordingly, we believe that the best measure of operating profit or loss should be before striking these 
costs. 
 
Adjusted EBITDA (Earnings before interest, taxation, depreciation, amortisation of intangibles, exceptional 
acquisition costs, share of results of associates and the embedded fair value adjustment in the convertible 
loan) is an important performance measurement, and we regard EBITDA as a key performance indicator in 
terms of our operating result. Although there is no requirement to disclose EBITDA, we believe that, 
because of its importance, it should be part of our disclosure. 
 
IFRS accounting requires us to carefully consider the carrying value of our intangible assets and forces 
amortisation of these assets. Acquisitions also require us to consider whether the goodwill that we have 
acquired (basically the difference between the net assets of the business acquired and the price paid) 
should be recognised and allocated in our financial statements as other intangible assets, such as a 
customer base, billing system and so on which would not necessarily be recognised in the financial 
statements of the acquired business. For the first time, we are required to expense the costs of acquisitions, 
and £18,216 has been expensed in the year and shown as an exceptional item in the income statement. 
Overall, the loss carried forward for the year was £261,239 compared to a loss of £897,063 in 2009. 
These are record results for the Group which has included a year of triple-digit growth in both turnover and 
gross profit. 2010 has also been a year of consolidation. For the second year running, turnover more than 
doubled, up 107% to £6,608,533. We have managed and enhanced our cash resources whilst remaining 
free of bank debt.   
 
 
 
 
 
“For the 
second year 
running, 
turnover 
more than 
doubled, up 
107%.”
Pinnacle Telecom Group plc
Page 3   
 
 
 
  
CHIEF EXECUTIVE’S REVIEW (CONTINUED) 
With a view to streamlining our operations, we have taken time to considerably reduce the number of operating subsidiaries and 
have successfully closed some of our office locations, which has enabled us to centralise a number of our core functions into new 
larger offices on the outskirts of Northampton. 
 
As we continue to move our business away from traditional telephony onto next generation IP telephony, the acquisition of 
Solwise Telephony Limited and its subsidiary Sipswitch Limited in January 2010 was of major importance to the group. Sipswitch 
has developed its own proprietary next generation VoIP system, which we have continued to develop in-house. Our balance sheet 
shows that the carrying value of our investment in this technology to 30 September 2010 amounted to £195,834. The Sipswitch 
acquisition was timely as it was fundamental to Pinnacle being awarded, and successfully delivering, voice and data services to a 
significant number of the UK’s biggest high-profile events, which included voice and data networks for the BBC’s coverage of the 
UK General Election and the BBC’s coverage of the Pope’s first ever State visit. We expect to be able to win high-profile events of 
this nature again in 2011.  As we focus our sales efforts on the roll out of cloud based IP solutions, we also look forward in 2011 to 
further deployments by leveraging the intellectual property that is embedded in our award winning VoIP platform. 
On 22 September 2010, I was pleased to welcome Dr Tom Black as a shareholder; as a result of an issue of new ordinary shares. 
The Company raised £450,000 through the issue of 128,571,429 new Ordinary Shares at 0.35p per share. Tom, the former CEO 
of Detica plc, a major provider of security, intelligence and analysis solutions and current Executive Chairman of AIM listed Digital 
Barriers plc, subscribed personally for 57,142,857 shares in the placing, representing 3.06% of the enlarged share capital of the 
Company. The Board and the senior management team also subscribed for new shares in the placing. The placing price 
represented a premium of approximately 18.64% over the mid-market closing price of 0.295p on 21 September 2010.  
The consolidation within our market is moving at a rapid pace and we aim to search out earning-enhancing bolt-on acquisitions, 
with a focus on delivering cloud based IP solutions. I believe our actions this year will provide us with a solid foundation on which 
we can build. 
Results 
Compared against our 2009 results, our 2010 performance shows a significant turnaround. 
• Turnover 
 
For the second year running, turnover more than doubled over the year, an increase of 107% from £3,192,222 in 2009 
to £6,608,533 in 2010. Approximately 81% (2009: 88%) of turnover is recurring income.  
• EBITDA (Earnings before interest, taxation, depreciation, amortisation of intangibles, exceptional acquisition 
costs, share of results of associates and the embedded fair value adjustment in the convertible loan) 
 
We regard EBITDA, as defined, as a key performance indicator and a figure that the Board considers on a regular basis. 
For 2010, we achieved positive annual EBITDA for the first time of £158,878 which compares very favourably with the 
2009 figure which stood at negative £499,429. Importantly, EBITDA has remained positive throughout the year, 
representing a significant turnaround and a milestone in the history of the group. 
• Gross Profit 
 
The overall gross profit for the full year was £2,089,457 (2009: £991,169) representing a gross profit to sales percentage 
of 31.6% (2009: 31.0%), a pleasing increase. Delivering a complex IP based solution, where we can add significant 
value to the customer, can deliver gross margins in excess of 50%. This complex area is now the focus of our business, 
as we see significant expansion opportunities, not just in the SME market but  also in multi-sited smaller corporates, 
where significant cost savings are achievable compared to traditional telecom deployments. 
 
Pinnacle Telecom Group plc
Page 4   
 
 
 
  
CHIEF EXECUTIVE’S REVIEW (CONTINUED) 
• Operating Profit (before amortisation of intangibles, exceptional acquisition costs, share of results of 
associates and the embedded fair value adjustment in the convertible loan) 
 
We have achieved a maiden operating profit, as defined, of £78,647 in the full year compared to an operating loss of 
£582,816 in 2009. This has been achieved through the results from acquisitions and from organic growth coupled with 
tight control of the operating costs of the business. 
• Loss for the year 
 
The overall loss for the year, after all costs, reduced by £635,824, down 71% to £261,239 compared to £897,063 in the 
previous year, a significant reduction. 
• Debt  
 
The group has no debt other than a loan note which is carried at fair value on the balance sheet of £133,467. 
 
• Cash 
 
At the year end the group had £697,189 (2009: £586,222) of cash available to fund working capital as the business 
continues to grow. The year-end figure has been helped by the share issue noted above and the micro management of 
cash during the year, and particularly at the year end. The cash balances remain a key performance indicator of the 
Board. 
 
• Administration Expenses 
 
Our administration expenses remain carefully controlled. Acquisitions, however, tend to mask the trend. For 2010 the 
administration expenses were £2,010,810 (2009: £1,573,985).  
• Balance Sheet 
 
At 30 September 2010, the group had net assets of £1,329,243 (2009: £921,645). Included in this figure are intangible 
assets, being the written down value of customer bases and maintenance contracts acquired, of £859,217 (2009: 
£864,123). Also included, as a result of the acquisition of Sipswitch Limited, are capitalised development costs of 
£195,834, being the costs less depreciation to 30 September 2010 of developing the VoIP platform now at the heart of 
the group’s strategy. This is being depreciated over a period of 5 years. 
The group keeps tight control over receivables and at the year end they represented 25 days of turnover (2009: 56 
days). Considering the current economic climate, we are very satisfied with this result. 65% of our customers pay by 
direct debit which helps the profile. 
Strategy 
The Group has continued its successful strategy to seek out well-priced and timely acquisitions, deliver organic growth and 
develop a wide range of next generation communications services, where the emphasis is on IP based cloud technologies. We 
will deliver to our customers, solutions that improve productivity, lower costs and save money, particularly for businesses that 
have more than one location. 
 
Future Developments 
We are undertaking a number of initiatives in 2011: 
 
• We continue the migration of all group customers onto a single billing system, which we expect to complete before the 
end of the first half of 2011. 
Pinnacle Telecom Group plc
Page 5   
 
 
 
  
CHIEF EXECUTIVE’S REVIEW (CONTINUED) 
• We plan to build an online customer-ordering portal that will allow customers to order and provision new services over 
the Internet. 
 
• We aim to roll out a remote on-line backup service for businesses, which will provide customers with an online system 
for backing up, storing and restoring computer files. 
 
• We expect to complete a major overhaul of our websites by the end of the 2011 half-year. 
 
Acquisitions 
On 13 January 2010, the Company acquired the entire issued share capital of Solwise Telephony Limited, and its wholly owned 
subsidiary Sipswitch Limited. The initial consideration was £204,915, satisfied by the issue of 35,950,000 ordinary shares in 
Pinnacle Telecom Group plc at a price of 0.57 pence per share.  
 
The total consideration was apportioned to initial consideration, loan shares and contingent consideration as follows: 
 
• 31,746,843 of ordinary shares were issued as initial consideration. 
• A further 4,203,157 ordinary shares were issued in connection with loans owed by Solwise to certain vendors, 
amounting to £23,958 in aggregate. The loans were assigned from Solwise to the Company and were capitalised 
through the issue to the lenders of ordinary shares in the capital of the Company. 
 
The acquisition agreement allows for contingent consideration with earn out provisions to be awarded, based on earnings before 
interest and taxation (“EBIT”) for the years ending 30 September 2010 and 30 September 2011. For the year ending 2010, 
additional consideration of £15,000 will be payable in ordinary shares for every £10,000 of EBIT above £40,000. For the year 
ending 2011, additional consideration of £15,000 will be payable in ordinary shares for every £10,000 of EBIT above £60,000. In 
accordance with IFRS3, we have accrued additional consideration of £80,000 in the financial statements, when calculating the 
intangible asset on acquisition. The total contingent consideration cannot exceed £295,085 in total over the two year end periods. 
 
At 30
 
September 2010, a provisional EBIT calculation was performed for Solwise which showed that potentially up to £30,000 of 
new ordinary shares may be issued to the vendors, represented by a price per share equal to the middle market closing price for 
an ordinary share in the Company on the day of the announcement of the preliminary results for the year ended 30
 
September 
2010. The final EBIT calculation for the year is subject to approval. 
Organic Growth 
Once again, we have successfully delivered organic growth during the year; one notable contract was 30 million voice call minutes 
per annum for Grass Roots plc, a marketing, research and HR services business, operating in 16 countries and employing over 
1,000 people. Won against much larger competitors, this deal demonstrates our capability to handle larger and more complex 
contracts. 
Contract Wins 
We were delighted to win contracts to deliver voice and data connectivity for many of the UK’s largest high-profile, short term 
events, which further demonstrates the group's ability in this specialist area, and shows good continuation of Pinnacle's skill to 
offer bespoke capability and build new sources of revenue growth.  
Pinnacle Telecom Group plc
Page  6  
 
 
 
  
CHIEF EXECUTIVE’S REVIEW (CONTINUED) 
 
Some of the successfully completed high-profile events are listed below: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operations 
During the year, the group completed a reduction in the number of operating companies, which had expanded following a series of 
acquisitions over the years. There are now three main operating units. We expect to see some modest reductions in 
administration costs in the future as a result of the group structure consolidation 
 
We also managed to successfully close our office locations in Edinburgh, Hinckley, and central Northampton, which has allowed 
us to centralise a number of our core functions into new larger offices on the outskirts of Northampton. 
 
We have successfully migrated customers’ analogue fixed-lines and ISDN channels onto a new BT WLR3 service. Our systems 
connect to the BT WLR3 gateway, which gives us access to a wide range of products from BT Openreach, including resilience 
solutions and temporary lines. 
As a result of the acquisition of Solwise, we acquired a data centre in Brighton, which has allowed us to better utilise our 
connectivity between our data centre in Glasgow and our network located in Telehouse North in London. Our network now has 
resilience in Glasgow, London and Brighton. 
Summary 
We have made excellent progress this year, diligently managing our cash resources, strengthening our balance sheet and 
remaining free of bank debt. We assiduously centralised our operations into Northampton and successfully delivered voice and 
data networks for some of the UK’s largest high-profile events, including the UK General Election for the BBC. We have delivered 
triple-digit growth in turnover and gross margin, produced our maiden operating profit, and delivered positive EBITDA. 
Notwithstanding the difficulties of the economic climate, we aim to search out earning-enhancing bolt-on acquisitions, with a focus 
on delivering cloud based IP solutions, and we look forward to moving the business forward during 2011. 
Alan J Bonner 
CHIEF EXECUTIVE OFFICER 
21 February 2011 
Alton Towers - Pink Concert Chelsea Flower Show Millennium Stadium - Various 
BBC Question Time – Various Donington Download Festival Milton Keynes Bowl - Various 
BBC UK General Election Edinburgh Festival - Various Notting Hill Carnival 
BBC Home Broadcast - Chris Evans Evolution Festival, Gateshead Religious Broadcasts - Various 
BBC Radio1 Big Weekend Finsbury Park - concert Reading Festival 
BBC Radio1 Chris Moyles OB Glastonbury Festival Stadium of Light Concerts 
BBC Lib-Dem Party Conference Gloucester Cricket Ground Shambala Festival 
BBC TUC Conference Hampden Park –Various concerts Start Project, London 
BBC Great North Run Harvest at Jimmy’s Festival Swansea Proms in the park 
BBC Radio 1Xtra Live Holland Park Opera T4 Festival 
BBC & others Pope’s State Visit Hyde Park Festival Theatre Royal, Drury Lane 
Ben and Jerry's Festival  Latitude Festival T-in-the-Park Festival 
Birmingham Symphony Orchestra Leeds Festival V Festival Hylands Park 
Bournemouth Air Show London Eye New Year Fireworks V Festival Weston Park 
Pinnacle Telecom Group plc
Page 7   
 
 
 
  
CORPORATE GOVERNANCE 
 
As the company is listed on AIM it is not required to comply with the provisions of the UK Corporate Governance Code, which is 
mandatory for companies with a primary listing on the main market of the London Stock Exchange. This code, among other 
things, sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and 
relations with shareholders.  
 
Although the company is not required to comply with the provisions of the Code, the board is committed to ensuring that proper 
standards of corporate governance operate and has established governance procedures and policies that are considered 
appropriate to the nature and size of the Group.  
 
Your board considers that at this stage in the Group’s development, the expense of full compliance with the UK Corporate 
Governance Code is not appropriate. 
 
Directors and the board 
The board directs the Group's activities in an effective manner through regular monthly board meetings and monitors performance 
through timely and relevant reporting procedures. Where it deems it necessary the board requests reports on specific areas 
outwith the normal reporting regime. All directors have access to advice from the company secretary and independent 
professionals at the company’s expense. Training is available for new and other directors as necessary. 
 
The board at present comprises one executive and two non-executive directors. The size of the board is considered to be 
appropriate to the current size and character of the Group. The non-executive directors are independent of management and any 
business or other relationships which could interfere with the exercise of their independent judgment. The roles of chairman and 
chief executive are separate appointments and it is board policy that this will continue. 
 
The board has established two committees, the audit committee and the remuneration committee. Membership of both the audit 
committee and the remuneration committee is exclusively non-executive. A nominations committee will be established should it be 
required. Bill Allan is chairman of the remuneration committee and John Anderson of the audit committee. 
 
A separate report on directors’ remuneration is set out on pages 10 to 12, this is to be approved by the shareholders at the annual 
general meeting. 
 
Under the company’s articles of association, the nearest number to one third of the board shall retire each year by rotation. 
 
Accountability and audit 
The board considers that the annual report presents a balanced and understandable assessment of the Group’s performance and 
prospects. The audit committee has written terms of reference setting out its authority and duties and has meetings, at which the 
executive director also has the right to attend, at least two times a year with the external auditors. The audit committee reviews the 
independence and objectivity of the external auditors. The committee reviews the nature and amount of the non-audit work 
undertaken by the auditors to satisfy itself that there is no effect on their independence. The committee is satisfied that Grant 
Thornton UK LLP are independent. 
 
Risk management 
The board has established a risk register which is formally reviewed during each calendar year. 
 
 
 
Pinnacle Telecom Group plc
Page 8   
 
 
 
  
CORPORATE GOVERNANCE (CONTINUED) 
 
Attendance at Board and Committee Meetings 
The following table summarises the number of board and committee meetings held during the year and the attendance record of 
individual directors: 
 
  Board Audit Remuneration 
   Attended Eligible 
to attend 
Attended Eligible 
to attend 
Attended Eligible to 
attend 
W Allan   6 6 1 1 1 1 
J C Anderson   11 11 1 1 1 1 
A Bonner   11 11 - - - - 
G J Duncan   5 5 - - - - 
 
Going concern 
On the basis of a review of cash balances, banking facilities and the ability to call on certain shareholders to subscribe to 
additional loan notes, together with a review of forecasts and sensitised cash flows, the Directors have a reasonable expectation 
that the Group has adequate resources to continue in operational existence for at least the next 12 months from the date of 
signing the financial statements. The Directors recognise that the Group must maintain monthly profitability for the business to 
cover its cost base and remain within its finance facilities. 
 
Internal financial control 
The Group has established policies covering the key areas of internal financial control and the appropriate procedures, controls, 
authority levels and reporting requirements which must be applied throughout the Group. The key procedures that have been 
established in respect of internal financial control are as follows: 
 
• Financial reporting: there is in place a comprehensive system of financial reporting based on the annual budget which 
the board approves. The results for the Group as a whole and each business segment are reported monthly, along with 
an analysis of key variances. Year-end forecasts are updated on a regular basis. 
 
• Investment appraisal: applications for capital expenditure are made in a prescribed format which places emphasis on 
the commercial and strategic as well as the financial justification. All significant projects require specific board approval. 
 
No system can provide absolute assurance against material misstatement or loss but the Group's systems are designed to 
provide reasonable assurance as to the reliability of financial information, ensuring proper control over income and expenditure, 
assets and liabilities. 
 
Relations with shareholders 
The company values the views of its shareholders and recognises their interest in the Group’s strategy and performance, board 
membership and quality of management. 
 
The annual general meeting is used to communicate with all shareholder and investor groups, and they are encouraged to 
participate. The chairmen of the audit and remuneration committees are available to answer questions. Separate resolutions are 
proposed on each issue so that they can be given proper consideration and there are resolutions to receive the annual report and 
accounts and the report on directors’ remuneration. The company counts all proxy votes and will indicate the level of proxies 
lodged on each resolution, after it has been dealt with by a show of hands. The company uses its website, 
www.pinnacletelecomgroup.co.uk, as a means of providing information to shareholders and other related parties. The company’s 
annual report and accounts, interim reports and other relevant announcements are maintained on the website.  
 
 
Pinnacle Telecom Group plc
Page 9   
 
 
 
  
REPORT OF THE BOARD TO THE MEMBERS ON DIRECTORS’ REMUNERATION 
 
The remuneration committee has given consideration to the UK Corporate Governance Code issued by the Financial Reporting 
Council in framing its remuneration policy. As the company is listed on AIM, it is not required to comply with the provisions of 
Section 412 of the Companies Act 2006. The following disclosures are voluntary as is resolution 2 to approve this report at the 
annual general meeting. 
 
Remuneration committee 
The remuneration committee determines, on behalf of the board, the Group’s policy for executive remuneration and the individual 
remuneration packages for the executive director. In setting the Group’s remuneration policy, the remuneration committee 
considers a number of factors, including the following: 
 
• salaries and benefits available to executive directors of comparable companies; 
• the need to attract and retain executives of an appropriate calibre; and 
• the continued commitment of executives to the Group’s success through appropriate incentive schemes. 
 
The committee meets at least once a year. 
 
Remuneration of executive director 
The remuneration package of the only executive director comprises the following elements: 
 
• Base salary 
 
The remuneration committee sets the base salary to reflect responsibilities and the skill, knowledge and experience of 
the individual. The executive director does not receive a director’s fee. 
 
• Bonus scheme 
 
The executive director is eligible to receive a bonus on top of his basic salary dependent on individual and Group 
performance at the discretion of the remuneration committee. Performance conditions are set to ensure they are 
relevant and stretching. 
 
• Car allowance 
 
The executive director is entitled to a car allowance. 
 
• Pensions 
 
There are no pension provisions for the executive director. 
 
• Share options 
 
The executive director is entitled to participate in share option schemes. 
 
• Other benefits 
 
The executive director receives private medical insurance.  
 
The executive director is engaged under a service contract which requires a notice period of 12 months. 
 
Remuneration of non-executive directors 
The fees paid to the non-executive directors are determined by the board. They are not entitled to receive any bonus or other 
benefits. Non-executive directors’ letters of appointment are on a 3 month rolling basis. 
 
Pinnacle Telecom Group plc
Page 10   
 
 
 
  
REPORT OF THE BOARD TO THE MEMBERS ON DIRECTORS’ REMUNERATION (CONTINUED) 
 
Directors’ remuneration 
Details of individual directors’ emoluments for the year (excluding employers national insurance contributions) are as follows: 
 
 Salary and 
fees paid or 
receivable 
Bonus paid or 
receivable 
Pension 
contributions 
Other   
benefits 
2010    
total 
2009    
total 
 £ £ £ £ £ £ 
Non- Executive       
W Allan (1) 18,000 - - - 18,000 - 
J C Anderson 10,000 - - - 10,000 10,000 
G J Duncan (2) 22,032 - -- 435 22,467 35,869 
Executive       
A Bonner 85,800 49,200 - 8,169 143,169 126,927 
       
Totals 135,832 49,200 - 8,604 193,636 172,796 
 
Notes: 
1) William Allan was appointed to the board as non-executive chairman on 29 March 2010 
2) Graham J Duncan ceased to be a director on 29 March 2010 
 
Darron Giddens, a Director of the Company’s subsidiaries received salary and fees of £66,667 during the year (2009: £28,888). 
Included in “Other benefits”, above, are the costs of share options issued in accordance with IFRS 2 Share Based Payments to 
the Directors as follows: 
 
      
2010 2009 
       
   £    £ 
Name of Director 
             
G J Duncan (1) 
      
435 869 
A J Bonner 
      
7,512 5,368 
  
            
    
Total 
            
7,947 6,237 
Note: 
1) Graham J Duncan ceased to be a director on 29 March 2010 
 
Directors’ interests in shares 
The interests of the Directors in the ordinary shares of the Company at 30 September 2010 together with their 
interests at 1 October 2009 were as follows: 
 
     
2010 2009 
      
   £    £ 
Name of Director            
W Allan 
     
5,714,286 - 
A J Bonner 
     
187,076,972 172,791,257 
J C Anderson 
     
1,428,571 - 
  
          
    
Pinnacle Telecom Group plc
Page 11   
 
 
 
  
REPORT OF THE BOARD TO THE MEMBERS ON DIRECTORS’ REMUNERATION (CONTINUED) 
 
Directors’ interests in loan notes  
The interests of the Directors in the loan notes of the Company, referred to in note 16, at 30 September 2010 together with their 
interests at 1 October 2009 were as follows: 
 
     
2010 2009 
      
   £    £ 
Name of Director 
           
A J Bonner 
     
25,000 25,000 
J C Anderson 
     
5,000 5,000 
 
Directors’ interests in share options 
The interests of the current Directors in options over the ordinary shares of the Company at 30 September 2010 together with their 
interests at 1 October 2009 (or date of appointment if later) were as follows: 
 
 
1 October 
2009 
Granted Lapsed 30 September 
2010 
Exercise Price Date when 
Exercisable 
Expiry date 
 
A J Bonner 
 
54,545,455 
 
- 
 
- 
 
54,545,455 
 
0.1375p 
 
01-Jul-10 
 
01-Jul-18 
A J Bonner 15,000,000   - - 15,000,000 0.3000p 09-Jul-11 09-Jul-19 
 
Two Directors of the Company’s subsidiaries have been granted options over the shares of the Company as follows: 
       
 
1 October 
2009 
Granted Lapsed 30 September 
2010 
Exercise Price Date when 
Exercisable 
Expiry date 
 
D Giddens 
 
8,333,333 
 
- 
 
- 
 
8,333,333 
 
0.3000p 
 
09-Jul-11 
 
09-Jul-19 
B McMillan 2,000,000 - - 2,000,000 0.3000p 09-Jul-11 09-Jul-19 
           
 
All options granted are dependent on increasing shareholder value above 25% of the mid-market share price at the time the 
options were granted. When these options were issued, the Remuneration Committee regarded absolute shareholder return as a 
valid performance criteria relating to all options granted, based on the fact that the Group was not trading profitably and its share 
price had fallen materially. The Remuneration Committee do, however, regard adjusted EBITDA as the key performance 
measurement and future options, if any, will take due regard of this measurement. 
 
Out of the total options granted to Directors, 56,545,455 options over the Ordinary Shares in the Company have been granted 
under the terms of the Company’s approved EMI share option scheme and options over 23,333,333 Ordinary Shares in the 
Company have been granted under the terms of the Company’s unapproved share option scheme.  
 
No other Directors have been granted share options in the shares of the Company or other group companies. The mid-market 
price of the Company’s shares at the end of the financial period was 0.425p and the range of prices during the period was 
between 0.25p and 0.62p. 
 
By order of the Board 
 
 
Bill Allan 
Chairman, Remuneration Committee 
21 February 2011 
 
Pinnacle Telecom Group plc
Page 12   
 
 
 
  
DIRECTORS’ REPORT 
for the year ended 30 September 2010 
 
COMPANY NUMBER: 05259846 
 
The Directors present their report on the affairs of the Group, together with the financial statements and auditors’ report for the 
year ended 30 September 2010. 
 
Principal activity 
The principal activity of the Group is the provision of telecommunications and IT solutions to businesses within the United 
Kingdom. 
 
Business review 
The business review contained within the Chairman’s Statement on page 2 and the Chief Executive’s review on pages 3 to 7, 
together with the key performance indicators and principal risks and uncertainties disclosed below have been provided by the 
directors in accordance with the Companies Act 2006. 
 
The Company has disclosed the main trends and factors likely to affect the future development, performance and position of the 
business.  
 
Key performance indicator review  
The major key performance indicators that the Directors monitor are turnover, EBITDA, gross margin, total group overheads, cash 
and capital expenditure. 
 
• Turnover has more than doubled over the last two years with growth of 107% over the year compared to a growth of 
113% in the previous year. 
• The adjusted EBITDA margin has shown a substantial improvement as a result of both acquisition and organic growth. 
The adjusted EBITDA was £149,378 for the year compared to negative EBITDA of £499,429 last year. 
• Gross margin increased from £991,169 to £2,089,457, largely caused by acquisitions during the year and the previous 
year. 
• Total group overheads for this year of £2,010,810 compares to £1,573,985 in the previous year. The trend is masked by 
the increased overheads from acquisitions. 
• Cash at the year end amounted to £697,189 compared to the previous year of £586,222. The increase was assisted by 
an issue, on 22 September 2010, of 128,571,429 new Ordinary Shares at 0.35p per share which raised £450,000. The 
increase was also helped by the micro management of cash during the year, and particularly at the year end. 
• Capital expenditure remains modest. The group will continue to invest in its proprietary VoIP platform, the costs of which 
are capitalised.  
 
Principal risks and uncertainties 
Section 417(3) of the Companies Act 2006 provides that the business review must contain a description of the principal risks and 
uncertainties. The board has established a formal process to identify risks and uncertainties through the production and 
maintenance of a risk register. There are a number of principal risks and uncertainties which have been identified as a result of 
this process which could have a material impact on the Group’s future performance. At all times, the Board seeks to mitigate these 
risks and uncertainties. These are not all the risks which the board has identified but those principal risks and uncertainties that 
the Directors currently consider to be the most material. In addition to these risks Note 22 contains details of financial risks. 
 
• Working capital  
 
Risk: The group’s cash resources are finite and its borrowing facilities are limited. Although the group has achieved 
monthly profitability (before the amortisation of intangibles), there is no guarantee that it will remain in profit. The 
directors recognise that the group must remain profitable for the business to cover its cost base and remain within its 
finance resources.  
 
Mitigation: The Board seeks to mitigate this risk by carefully managing the costs and cash resources of the group. Cash 
is micro managed on a day to day basis by the senior management team. 
Pinnacle Telecom Group plc
Page 13   
 
 
 
  
DIRECTORS’ REPORT (CONTINUED) 
 
• People  
 
Risk: As in many businesses, the ability to hire and retain good people is fundamental to the success of the business. 
Given the current economic climate, such individuals may be less willing to move to a small business than might 
otherwise be the case in times of prosperity. This includes quality sales personnel.  
 
Mitigation: The Board uses its contacts and significant experience in the recruitment and selection of employees. 
Acquisitions also bring people and talent which we can utilise. 
 
• Reputational damage  
 
Risk: The Group provides an essential service to an extensive client base many of whom rely on the provision of that 
service in order to run their businesses. Any diminution in the level of service could have serious consequences for 
customer acquisition and retention.  
 
Mitigation: Our high level of recurring revenue and our low level of customer attrition are evidence of our ability to 
provide the level of service required and maintain our reputation in the market. 
 
• Key suppliers 
 
Risk: The Group is dependent on certain key suppliers for the continued operation of its business. The most significant 
of which are those for electricity, bandwidth, servers and the delivery of calls and access from licensed operators, 
particularly BT.  
 
Mitigation: In all cases these supplies are obtained from reputable organisations chosen after a thorough selection 
process. In the case of BT, we rely on the regulatory framework provided by the regulator, OFCOM. The Group actively 
seeks to maintain good relationships with its chosen suppliers. The Group also seeks to maintain either several sources 
of supply or alternative sources of supply. 
 
• Bad debts  
 
Risk: The customer base is mainly made up of SME customers, who are one of the groups feeling the effects of the 
economic downturn. Although we have not yet experienced any material lift in bad debt, that does not mean to say that 
there will not be an increase in 2011 as companies continue to realign their cost base. We are particularly exposed to a 
dealer or reseller running into difficulties as suppliers would require to be paid irrespective of the status of the dealer or 
reseller.  
 
Mitigation: A majority of customers are signed on direct debit which allows us very quickly to know when a customer 
defaults, and so take appropriate action. Those that are not on direct debit are also carefully monitored and the Group 
takes appropriate action to recover older debt including engaging with a debt collection agency to recover delinquent 
debt. 
 
• Competition 
 
Risk: We pride ourselves in being competitive coupled with having the ability to deliver a solutions based service that 
enhances the customer’s business. Although the economic outlook appears to have strengthened since 2009, a 
deteriorating climate might cause buying decisions to move more in the direction of a price based sale compared to a 
value based sale. Although we have not experienced this, we may do so in the future. 
 
Mitigation: We deliver a complete communications solution to the customer which, in many cases, is cheaper than 
legacy products. Our disconnect rate is modest. Due to the nature of VoIP technology, competition exists from the 
traditional telecom reseller market as well as from IT services businesses. However, the Group considers this as an 
opportunity as well as a competitive threat, as most of these businesses do not have their own proprietary IP platform. 
Pinnacle Telecom Group plc
Page 14   
 
 
 
  
DIRECTORS’ REPORT (CONTINUED) 
 
• Technology  
 
Risk: As we move towards an IP solution for our customers’ needs, there is an increasing technology risk, particularly 
with the reliability and speed of broadband, which is of fundamental importance to the customer solution. The 
development of IP is moving very quickly, and certain technologies which exist today may well be obsolete quicker than 
expected in the future. This would have a negative impact on the group who would be exposed to higher costs, not 
necessarily recoverable from the client.  
 
Mitigation: The VoIP platform developed by Sipswitch gives the Group ownership of a proprietary solution. Solwise is 
able to undertake technology development to its own account and does not rely on third parties for its VoIP solution.   
  
• Financing 
 
Risk: The group relies on credit from suppliers on reasonable commercial terms. The main creditors tend to be 
significant companies. The group does not, at this time, rely on the banking market and is therefore somewhat shielded 
from the difficulties associated with overdraft and other loan facilities. From time to time, the group has taken out leasing 
for plant and vehicles and will continue to do so when required. The group owns no property. 
 
Mitigation: The group continues to carefully monitor its cash resources, and its forward plans are regularly updated. 
Should the Board believe that additional capital is required, it would move quickly to achieve this. 
 
The above is not an exhaustive list, and it should not be taken as such, but it does cover the principal areas of risk and 
uncertainties which the Board continues to focus on. 
 
Results and dividends 
The Group’s loss on ordinary activities after taxation was £270,739 (2009: £897,063). The audited financial statements of the 
Group are set out on pages 20 to 50. The Directors do not propose a dividend for the year ended 30 September 2010 (2009: £Nil). 
 
Directors and their interests 
The present membership of the Board is as follows:  
 
William Allan, Non-Executive Chairman 
Alan J Bonner, Chief Executive Officer 
John C Anderson, Non-Executive Director 
 
Graham J Duncan was a director until 29 March 2010. In accordance with the Company’s articles of association, John C 
Anderson will offer himself for re-election at the forthcoming Annual General Meeting. Details of Directors’ interests in the 
Company’s shares during the year, including changes to the make up of the Board during the year, are set out in the report of the 
Board to the members on Directors’ remuneration on pages 10 to 12. 
 
Acquisitions 
During the year the Company acquired the entire issued share capital of Solwise Telephony Limited and its wholly owned 
subsidiary Sipswitch Limited, which provides internet and telecommunication services to business customers. Sipswitch has 
developed its own software platform for the provision of VoIP (broadband voice) services. Further details are contained in Note 3.1 
to the consolidated financial statements. 
 
Pinnacle Telecom Group plc
Page 15   
 
 
 
  
DIRECTORS’ REPORT (CONTINUED) 
 
Substantial shareholdings 
At 18 February 2011 the following interests in three per cent or more of the issued ordinary share capital had been notified to the 
Company: 
 Number of ordinary shares Percentage held 
D Giddens 190,273,709 10.19 
A J Bonner 187,076,972 10.02 
P Goodland 178,273,709 9.55 
S Dronfield 84,136,855 4.51 
S Patel (1) 74,556,571 3.99 
J Alexander (2) 62,356,571 3.34 
T Black 57,142,857 3.06 
      1  Includes the interests of his wife, N Patel 2. Includes the interests of his wife, R Alexander 
 
Share capital 
The share capital during the year and the number of ordinary shares reserved for issue are shown in Note 17 to the consolidated 
financial statements. 
 
Employee involvement 
All companies within the Group use an Intranet system as a source of information on the Group and developments within the 
Group, including updates on the Group’s strategy and details of new products and services provided by the Group. Information 
about all products and services is also available on the websites of the operating companies. 
 
Employment of disabled persons 
Full and fair consideration is given to applications for employment made by disabled persons having regard to their particular 
aptitudes and abilities. Appropriate training is arranged for disabled persons, including retraining for alternative work of employees 
who become disabled, to promote their career development within the organisation. 
 
Supplier payment policy and practice 
The Company and its subsidiaries agree the terms of payment when negotiating the terms and conditions for their transactions 
with their suppliers. Payment is made in compliance with those terms, subject to the terms and conditions of the relevant 
transaction having been met by the supplier. Trade creditor days of the Group at 30 September 2010, calculated in accordance 
with the requirements of the Companies Act 2006, were 53 days (2009: 56 days). Trade creditor days of the Parent Company at 
30 September 2010, were 81 days (2009: 40 days).  This represents the ratio, expressed in days, between amounts invoiced to 
the Company and its subsidiaries in the year by their suppliers and the amounts due, at the year-end, to trade creditors falling due 
for payment within one year. 
 
Financial risk management and objectives 
Details of financial risk management and objectives are contained in Note 22 to the consolidated financial statements. 
 
Financial instruments 
The Group’s financial instruments comprise cash and liquid resources and finance leases together with various items such as 
trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to 
provide finance for the Group’s operations. The main risk to the Group is interest rate risk arising from floating rate interest rates.  
 
The Group’s borrowings at 30 September 2010 comprise finance leases totalling £49,653 (2009: £43,447). The interest rates on 
the finance leases are fixed for the term of the lease at between 7.5% and 12%.  
 
On 30 September 2009, Pinnacle created £250,000 unsecured convertible loan notes in units of £5,000. On 30 September 2009, 
notes for a nominal value of £125,000 were issued at par. The loan notes are not transferrable and may be redeemed (in whole or 
in part) by Pinnacle, at its sole discretion, at any time. The loan notes will become repayable on demand in the event of a specified 
default by Pinnacle. Interest accrues on the loan notes at 10% per annum, from 30 September 2009 to the earlier of the date of 
redemption and the date of conversion. The interest accrues on a day to day basis and is payable monthly in arrears.  
 
Pinnacle Telecom Group plc
Page 16   
 
 
 
  
DIRECTORS’ REPORT (CONTINUED) 
 
 
The directors consider the fair value of the loan notes to be £133,467 taking into consideration the present value of the principal 
sum of £125,000 plus the cost of the potential discount, should the loan notes be converted into shares, less the present value of 
interest payable in arrears as governed by IAS32. Additional information on financial instruments is included in Note 16 
 
Research and Development 
As part of the acquisition of Solwise Telephony Limited and its wholly owned subsidiary Sipswitch Limited, the group acquired a 
number of proprietary software applications. The Group is committed to the continued research and development of advanced 
technical applications that enhance the services and solutions available to customers, where they demonstrate potential to 
generate future profitable revenue streams. 
 
Political and charitable donations 
The Group did not make any charitable or political donations in either the current or the previous year. 
 
Environmental policy 
The Group acknowledges the importance of environmental matters and where possible uses environmentally-friendly policies in 
all its offices such as recycling and energy-efficient practices.  
 
Awareness of relevant audit information 
So far as each of the directors, at the time the report is approved, is aware: 
 
• there is no relevant audit information of which the auditors are unaware, and 
• the directors have taken all the steps they ought to have taken to make themselves aware of any relevant audit 
information and to establish that the auditors are aware of that information. 
 
Website disclaimer 
The maintenance and integrity of the Pinnacle Telecom Group plc website is the responsibility of the directors. The work carried 
out by the auditor does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any 
changes that may have occurred to the financial statements since they were initially presented on the website. 
 
Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from 
legislation in the other jurisdictions. 
 
Annual General Meeting 
Notice of the Annual General Meeting is set out on pages 60 to 62. Information relating to certain of the resolutions is given or 
referred to in the notes forming part of the notice. 
 
Auditors 
Grant Thornton UK LLP offers themselves for reappointment as auditors in accordance with section 489 of the Companies Act 
2006 and a resolution will be proposed at the forthcoming Annual General Meeting. 
 
By order of the Board 
 
 
 
WJM Secretaries Limited 
Company Secretary 
21 February 2011 
 
 
Pinnacle Telecom Group plc
Page 17   
 
 
 
  
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 
 
The directors are responsible for preparing the Annual Report of the Group and the Parent Company Financial Statements in 
accordance with applicable law and regulations. 
 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
prepared the Group Financial Statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by 
the European Union and the Parent Company Financial Statements in accordance with applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The Group and Parent Company Financial 
Statements are required by law to give a true and fair view of the state of affairs of the Company and the Group and of the profit or 
loss of the Group for that period. In preparing those financial statements, the Directors are required to: 
 
• select suitable accounting policies and then apply them consistently; 
• make judgements and estimates that are reasonable and prudent; 
• for group financial statements, state whether applicable IFRSs have been followed subject to any material departures 
disclosed and explained in the financial statements; 
• for Parent Company financial statements, state whether applicable UK 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 Group will 
continue in business. 
 
The directors are responsible for keeping adequate accounting records which disclose, with reasonable accuracy at any time, the 
financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. 
They are also responsible for the Group’s system of internal financial control, for safeguarding the assets of the Group and hence 
for taking reasonable steps for the prevention and detection of fraud and other irregularities. 
 
 
 
 
Pinnacle Telecom Group plc
Page 18   
 
 
 
  
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PINNACLE TELECOM GROUP PLC 
 
We have audited the group financial statements of Pinnacle Telecom Group plc for the year ended 30 September 2010 which 
comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, 
consolidated statement of changes in equity, consolidated cash flow statement and the related notes.  The financial reporting 
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as 
adopted by the European Union. 
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed. 
Respective responsibilities of directors and auditor 
As explained more fully in the Directors’ Responsibilities Statement set out on page 18, the directors are responsible for the 
preparation of the group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to 
audit and express an opinion on the group financial statements in accordance with applicable law and International Standards on 
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for 
Auditors. 
Scope of the audit of the financial statements 
A description of the scope of an audit of financial statements is provided on the APB's website at 
www.frc.org.uk/apb/scope/private.cfm. 
Opinion on financial statements 
In our opinion the group financial statements: 
• give a true and fair view of the state of the group's affairs as at 30 September 2010 and of its loss for the  year then ended;  
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and 
• have been prepared in accordance with the requirements of the Companies Act 2006. 
 
Opinion on other matter prescribed by the Companies Act 2006 
In our opinion the information given in the Directors' Report for the financial year for which the group financial statements are 
prepared is consistent with the group financial statements. 
Matters on which we are required to report by exception 
We have nothing to report in respect of the following:  
Under the Companies Act 2006 we are required to report to you if, in our opinion: 
• certain disclosures of directors’ remuneration specified by law are not made; or 
• we have not received all the information and explanations we require for our audit. 
 
Other matter 
We have reported separately on the parent company financial statements of Pinnacle Telecom Group plc for the year ended 30 
September 2010.  
Andrew Howie (Senior Statutory Auditor) 
for and on behalf of Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
1/4 Atholl Crescent,  
Edinburgh  
EH3 8LQ           
 
21 February  2011 
Pinnacle Telecom Group plc
Page 19   
 
 
 
  
CONSOLIDATED INCOME STATEMENT 
for the year ended 30 September 2010 
  Year ended  Year ended  
  2010  2009  
 Note £  £  
        
Revenue 4 6,608,533  
   
3,192,222   
       
Cost of sales  (4,519,076)  (2,201,053)  
Gross profit  2,089,457  
   
991,169   
 
 
     
Administrative expenses  (2,010,810)  (1,573,985)  
       
Operating profit/(loss) before amortisation of intangibles and        
exceptional costs.  78,647  (582,816)  
Share of (loss)/profit from associate 10 (1,830)  
   
4,405   
Exceptional costs relating to acquisition 3 (18,216)  -  
Embedded fair value adjustment in convertible loan 16 (8,467)  -  
Amortisation of intangibles  (296,206)  (312,445)  
       
Operating loss 5 (246,072)  (890,856)  
Interest receivable  3  
   
618   
Interest payable  (22,495)  (4,927)  
       
Finance costs 6 (22,492)  (4,309)  
       
Loss before tax  (268,564)  (895,165)  
       
Taxation 18 18,904  462   
       
Loss for the period from continuing operations  (249,660)  (894,703)  
 
 
     
Discontinued operations       
Loss for the period from discontinued operations  (21,079)  (2,360)  
 
Loss for the year  (270,739)  (897,063)  
       
Loss per share       
- basic and fully diluted - continuing 8 (0.01)p  (0.07)p  
- basic and fully diluted - discontinued 8 0.00p  0.00p   
- basic and fully diluted - total 8 (0.01)p  (0.07)p  
 
 
      
Pinnacle Telecom Group plc
Page 20   
 
 
 
  
CONSOLIDATED INCOME STATEMENT (CONTINUED) 
for the year ended 30 September 2010 
 
 
  Year ended  Year ended  
Earnings before Interest, Taxation, Depreciation  2010  2009  
and Amortisation (EBITDA) 
  £  £  
Operating loss  (246,072)  (890,856)  
Add back amortisation  296,206  312,445   
Add back depreciation  99,244  78,982   
       
EBITDA for the year  149,378  (499,429)  
 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
for the year ended 30 September 2010 
     
  Year ended  Year ended 
  2010  2009 
  £  £ 
Loss for the year from total operations  (270,739)  (897,063) 
Total comprehensive negative income for the year  (270,739)  (897,063)  
Attributable to equity holders of the parent  (270,739)  (897,063)  
Pinnacle Telecom Group plc
Page 21   
 
 
 
  
CONSOLIDATED BALANCE SHEET 
as at 30 September 2010 
  2010  2009 
 Note £  £ 
Assets       
Intangible assets 9               859,217            864,123  
Investments in Associated Companies 10               167,875             169,705  
Research and Development Asset 11 195,834   - 
Property, plant and equipment 11               136,244    134,332  
Total non-current assets  1,359,170  
   
1,168,160  
      
Current assets      
Inventories 13 73,190              25,745  
Trade and other receivables 14 1,220,871            929,848  
Cash and cash equivalents 15 697,189            586,222  
Total current assets  1,991,250  
   
1,541,815  
Total assets  3,350,420  
   
2,709,975  
      
Liabilities      
Short term borrowings  (27,115)  (3,480) 
Trade and other payables  (968,006)  (882,854) 
Other taxes and social security costs  (176,814)  (93,996) 
Accruals and other payables  (649,614)  (644,242) 
      
Total current liabilities 16 (1,821,549)  (1,624,572) 
      
Non-current liabilities      
Long term borrowings 16 (209,128)  (163,758) 
      
Total liabilities  (2,030,677)  (1,788,330) 
Net assets  1,319,743  
   
921,645  
      
Equity      
Share capital             5,481,009          5,316,488  
Share premium account             3,560,331         3,238,902  
Merger reserve                283,357   114,392 
Other reserve  25,026  11,104  
Fair value adjustment  (1,064,130)  (1,064,130) 
Profit and loss reserve  (6,965,850)  (6,695,111) 
Total equity 17 1,319,743  
   
921,645  
 
These financial statements were approved by the Board of Directors on 21 February 2011. Signed on behalf of the 
Board of Directors by:  
 
A J Bonner  
Chief Executive Officer  
 
The accompanying accounting policies and notes form an integral part of these financial statements.  
COMPANY NUMBER: 05259846 
Pinnacle Telecom Group plc
Page 22   
 
 
 
  
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
for the year ended 30 September 2010 
 Share Share Merger Other Fair Retained  
 capital premium reserve reserve value earnings Total 
        
At 1 October 2008 
4,807,680 3,207,593 - 2,852 (1,064,130) (5,798,048) 1,155,947 
Loss and total comprehensive 
loss for the period - - - - - (897,063) (897,063) 
        
Transactions with owners        
Share Issue 508,808  - - - - - 508,808 
Premium on Share Issue - - 152,642 - - - 152,642 
Share based payments - - - 8,252 - - 8,252 
Expenses recovered on prior year 
disposal * 
- 31,309 - - - - 31,309 
Expenses incurred on acquisition - - (38,250) - - - (38,250) 
Total Transactions with owners 508,808 31,309 114,392 8,252 - - 662,761 
 
Total movements 508,808 31,309 114,392 8,252 - (897,063) (234,302) 
        
Equity at 30 September 2009 
5,316,488 3,238,902 114,392 11,104 (1,064,130) (6,695,111) 921,645 
        
At 1 October 2009 
5,316,488 3,238,902 114,392 11,104 (1,064,130) (6,695,111) 921,645 
Loss and total comprehensive 
loss for the period and expense 
for the period 
- - - - - (270,739) (270,739) 
        
Transactions with owners        
Share Issue 164,521  - - - - - 164,521  
Share based payments - - - 13,922  - - 13,922  
Premium on Share Issue - 321,429  168,965  - - - 490,394  
Total Transactions with owners 164,521 321,429 168,965 13,922 - - 668,837 
 
Total movements 164,521 321,429 168,965 13,922 - (270,739) 398,098 
        
Equity at 30 September 2010 5,481,009 3,560,331 283,357 25,026 (1,064,130) (6,965,850) 1,319,743 
 
Note 
* Relates to VAT recovered on expenses on prior year disposal group 
 
 
The accompanying accounting policies and notes form an integral part of these financial statements.  
Pinnacle Telecom Group plc
Page 23   
 
 
 
  
CONSOLIDATED CASH FLOW STATEMENT 
for the year ended 30 September 2010  
  2010  2009 
  £  £ 
Cash flows from operating activities       
Loss before taxation  (289,643)  (897,525) 
     
Adjustments for:      
Depreciation  99,244  78,982  
Amortisation  296,206                312,445  
Share of profit/(loss) from associate   1,830  (4,405) 
Share option charge  13,922  8,252 
Fair value adjustment for convertible loan  8,467  - 
Interest expense  22,492  4,309 
Receipt of corporation tax  -  - 
(Increase)/decrease in trade and other receivables  (216,973)  (156,874) 
(Increase)/decrease in inventories  (42,445)  (11,393) 
(Decrease)/Increase in trade payables, accruals and other 
creditors  
(68,556)  541,607 
      
Net cash flow from operating activities  (175,456)  (124,602) 
      
Cash flows from investing activities      
Acquisition of subsidiaries, net of cash acquired  (20,525)  86,389 
Purchase of property, plant and equipment  (93,377)  (18,432) 
Interest received  3  618 
     
Net cash used in investing activities  (113,899)  68,575 
      
Cash flows from financing activities      
Issue of shares  450,000  - 
Receipt from convertible loans  -  125,000 
Payments of finance lease liabilities  (23,703)                (19,889)  
Interest paid  (22,495)               (4,927)   
      
Net cash from financing activities  403,802  100,184  
      
Net increase in cash  114,447  44,157  
Cash and cash equivalents at beginning of period  582,742  538,585  
      
Cash and cash equivalents at end of period  697,189  582,742  
      
Cash and cash equivalents comprise:      
Cash and cash equivalents    697,189  586,222  
Bank overdrafts   -  (3,480) 
      
  697,189  582,742  
 
 
Pinnacle Telecom Group plc
Page 24   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
1. General information  
Pinnacle Telecom Group plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of 
the registered office is given on the inside back cover of this report. The nature of the Group’s operations and its principal activities 
are set out in the Chief Executive’s Review and Directors’ report. The financial statements are presented in pounds sterling 
because that is the currency of the primary economic environment in which each of the Group’s subsidiaries operates. 
 
1.1. Basis of preparation 
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and 
IFRIC interpretations endorsed by the European Union (EU) and with those parts of the Companies Act 2006 applicable to 
companies reporting under IFRS.  
 
The financial statements have been prepared under the historical cost convention. The measurement bases and principal 
accounting policies of the Group are set out below. The principal accounting policies of the Group have remained unchanged from 
the previous year. 
 
On the basis of a review of cash balances, banking facilities and the ability to call on certain shareholders to subscribe to 
additional loan notes, together with a review of forecasts and sensitised cash flows, the Directors have a reasonable expectation 
that the Group has adequate resources to continue in operational existence for at least the next 12 months from the date of 
signing the financial statements. The Directors recognise that the Group must maintain monthly profitability for the business to 
cover its cost base and remain within its finance facilities. 
 
The accounting policies that have been applied in the opening balance sheet have also been applied throughout all periods 
presented in these financial statements.  
 
1.2. New standards and interpretations of existing standards that are not yet effective and have not been adopted early 
by the Group 
The International Accounting Standards Board and the International Financial Reporting Interpretations Committee have issued 
the following standards and interpretations with an effective date after the date of these financial statements:  
 
·       IFRS 9 Financial Instruments (effective 1 January 2013)  
·       IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)  
·       Prepayments of a Minimum Funding Requirement - Amendments to IFRIC 14 (effective 1 January 2011)  
·       Improvements to IFRS issued May 2010 (Note: some changes are effective 1 July 2010, though not yet EU-adopted; others  
         effective 1 January 2011)  
 
These standards are not yet effective and have not been adopted early by the Group, neither are they expected to have any 
material impact on the Group’s consolidated financial statements: 
 
The financial statements for the year ended 30 September 2010 were approved by the Board of Directors on 21 February 2011.  
 
2. Principal Accounting Policies 
 
a) Basis of consolidation 
The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 
September 2010. Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as 
to obtain benefits from its activities. The Group obtains and exercises control through voting rights. 
 
Unrealised gains on transactions between the Group and its subsidiaries are eliminated. Unrealised losses are also eliminated 
unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements 
of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. 
 
Pinnacle Telecom Group plc
Page 25   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
a) Basis of consolidation (continued) 
Acquisitions of subsidiaries are dealt with by the purchase method. The purchase method involves the recognition at fair value of 
all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether 
or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and 
liabilities of the subsidiary are included in the consolidated balance sheet at their fair values, which are also used as the bases for 
subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating out identifiable 
intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group’s share of the identifiable net 
assets of the acquired subsidiary at the date of acquisition. 
 
Associates are those entities over which the Group has significant influence but which are neither subsidiaries nor interests in joint 
ventures.  Investments in associates are recognised initially at cost and subsequently accounted for using the equity method.  
Acquired investments in associates are also subject to purchase method accounting.  However, any goodwill or fair value 
adjustment attributable to the share in the associate is included in the amount recognised as investment in associates. 
 
All subsequent changes to the share of interest in the equity of the associate are recognised in the Group's carrying amount of the 
investment.  Changes resulting from the profit or loss generated by the associate are reported in "share of profits of associates" in 
the consolidated income statement and therefore affect net results of the group.   
 
These changes include subsequent depreciation, amortisation or impairment of the fair value adjustments of assets and liabilities.   
 
Items that have been recognised directly in the associate's equity are recognised in the consolidated equity of the Group.  
However, when the Group's share of losses in an associate equals or exceeds its interest in the associate, including any 
unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on 
behalf of the associate.  If the associate subsequently reports profits, the investor resumes recognising its share of those profits 
only after its share of the profits equals the share of losses not recognised. 
 
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the 
associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset 
transferred. Amounts reported in the financial statements of associates have been adjusted where necessary to ensure 
consistency with the accounting policies adopted by the Group. 
 
b) Goodwill 
Goodwill representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets 
acquired is capitalised and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. 
Refer to Principal Accounting Policy (j) for a description of impairment testing procedures. 
 
c) Revenue and 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. 
 
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits 
will flow from the transaction and specific criteria have been met for each of the group’s activities as described below. The amount 
of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The group 
bases its estimates on prior experience, taking into consideration the type of customer and the type of transaction. 
 
The group recognises three segments for monitoring and reporting purposes: 
 
• Mobile services 
• IT 
• Other telecommunications services 
 
 
 
Pinnacle Telecom Group plc
Page 26   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
Mobile services 
Mobile network services (voice and data) principally consist of service and usage charges. Service charges are recognised evenly 
over the period to which the service relates. Usage charges are recognised in the period when the service is received by the 
customer. 
 
Where period discounts are offered, the discount is spread evenly over the contract. Commissions receivable from mobile network 
operators for new connections or the resigning of an existing contract are recognised in line with the fulfilment of the associated 
obligation. Separate provision is made for any anticipated liabilities. 
 
IT 
Revenue attributable to the maintenance and support of systems is invoiced in accordance with the contract and recognised on a 
straight-line basis over the support period. Deferred income arises where services are invoiced in advance of performance. The 
amount is released to the income statement in subsequent periods with reference to the stage of completion of the transaction at 
the balance sheet date. 
 
Other telecommunications services 
Fixed line network services (voice and data) principally consist of service and usage charges. Service charges are recognised 
evenly over the period to which the service relates. Usage charges are recognised in the period when the service is received by 
the customer. Where period discounts are offered, the discount is spread evenly over the contract.  
 
The group sells and installs telephony systems. Revenue from the sale and installation of hardware and associated licences is 
recognised in the income statement when the significant risks and rewards of ownership have passed to the buyer, usually on 
installation. External costs associated with the installation are recorded as work-in-progress until the revenue has been 
recognised. Revenue in respect of licences is only recognised where there are no ongoing obligations. Where ongoing obligations 
exist revenue is deferred as appropriate. The system may be sold as part of a package including network services and 
maintenance. Customer discounts, such as free maintenance or free line rental for a period of the contract, are apportioned 
between the system sale and the associated service based on sales value. 
 
The group provides maintenance services for telephony systems. Revenue is recognised evenly over the contract period. Fees 
charged to customers for the provision of maintenance and support services is recognised on a straight line basis over the period 
of the related agreement. 
 
Revenue from the sale and installation of hardware is recognised in the income statement when the significant risks and rewards 
of ownership have passed to the buyer, usually on installation. Costs associated with this revenue are recognised in the same 
month. 
 
 
d) Foreign currencies 
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and 
liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. All other exchange 
differences are dealt with through the income statement. 
 
 
e) Property, plant and equipment 
Property, plant and equipment, which include motor vehicles, are stated at cost, net of depreciation and any provision for 
impairment. The depreciation policy is contained in Principal Accounting Policy (h). 
 
Pinnacle Telecom Group plc
Page 27   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
f) Disposal of assets 
The gain or loss arising on the disposal of an asset is determined as the difference between the disposal proceeds and the 
carrying amount of the asset and is recognised in the income statement. The gain or loss arising from the sale or revaluation of 
held for sale assets is included in “Loss for the year from discontinued operations” in the income statement. Any revaluation 
surplus remaining in equity on disposal of the asset is transferred to the profit and loss reserve. 
 
g) Discontinued operations 
A discontinued operation is a cash generating unit, or a group of cash generating units, that either has been disposed of, or is 
classified as held for sale, and: 
 
• represents a separate major line of business or geographical area of operations; 
• is part of a single coordinated plan to dispose of a separate major line of business or geographical area of  operations; 
or 
• is a subsidiary acquired exclusively with a view to resale. 
 
The disclosures for discontinued operations in the current and prior year relate to all operations that have been discontinued by 
the balance sheet date for the latest period presented. 
 
h) Depreciation 
Depreciation is calculated on a straight line basis so as to write off the cost of an asset, less its estimated residual value, over the 
useful economic life of that asset as follows: 
 
Plant and equipment – over three years     IT equipment – over three years 
Fixtures and fittings and leasehold improvements – over three years  Motor vehicles – over three years 
Software development – over five years 
 
Material residual value estimates are updated as required, but at least annually, whether or not the asset is revalued. 
 
i) Intangible fixed assets 
Intangible assets mainly comprise the fair value of customer bases and other identifiable assets acquired which are not included 
on the balance sheets of the acquired companies. A fair value calculation is carried out based on evaluating the net recurring 
income stream from each type of intangible asset. Intangibles are initially recognised at fair value, and subsequently carried at fair 
value, less accumulated amortisation and impairment. The following items were identified as part of the acquisitions of entities by 
the Group. 
 
-  Maintenance contracts to be amortised over 5 years  
- Customer lists to be amortised over a period of 5 years         
- Custom Voice over internet systems to be valued and amortised over a maximum of 5 years. 
j) Impairment testing of goodwill, other intangible assets and property, plant and equipment 
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash 
flows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash 
generating unit level. 
 
Goodwill is allocated to those cash generating units that are expected to benefit from synergies of the related business 
combination and represent the lowest level within the Group at which management monitors the related cash flows.  
 
Goodwill and other intangible assets with an indefinite useful life, and those intangible assets not yet available for use, are tested 
for impairment at least annually. All individual assets are tested for impairment whenever events or changes in circumstances 
indicate that the carrying amount may not be recoverable. 
 
 
Pinnacle Telecom Group plc
Page 28   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
j) Impairment testing of goodwill, other intangible assets and property, plant and equipment (continued) 
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The 
recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal 
discounted cash flow evaluation. Impairment losses are credited to the carrying amount of the relevant asset. With the exception 
of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer 
exist. 
 
k) Leased assets 
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially 
all the risks and rewards related to the ownership of the leased asset. The related asset is recognised at the time of inception of 
the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments plus incidental 
payments, if any, to be borne by the lessee. A corresponding amount is recognised as a finance leasing liability. 
 
The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to 
the income statement over the period of the lease. 
 
All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a 
straight line basis over the lease term. Lease incentives are spread over the term of the lease. 
 
l) Inventories and work in progress 
Inventories are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving 
items and the cost is calculated using the FIFO basis. Work in progress relates to costs incurred on part completed work. 
 
m) Taxation 
Current tax is the tax currently payable based on taxable results for the year. 
 
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on 
the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on 
the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business 
combination or affects tax or accounting profit.  
 
In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition 
as deferred tax assets. Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the 
extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable 
income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective 
period of realisation, provided they are enacted or substantively enacted at the balance sheet date. 
 
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where 
they relate to items that are charged or credited directly to equity, in which case the related deferred tax is also charged or 
credited directly to equity. 
 
n) Financial assets 
Financial assets are divided into the following categories: loans and receivables. Financial assets are assigned to the different 
categories by management on initial recognition, depending on the purpose for which the investments were acquired. The 
designation of financial assets is re-evaluated at every reporting date at which a choice of classification or accounting treatment is 
available. 
 
All financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument.  
 
All financial assets are initially recognised at fair value, plus transaction costs. 
 
 
Pinnacle Telecom Group plc
Page 29   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
n) Financial assets (continued) 
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred and 
substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least 
at each balance sheet date. 
 
Interest and other cash flows resulting from holding financial assets are recognised in the income statement when receivable, 
regardless of how the related carrying amount of financial assets is measured. 
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active 
market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the 
receivables. Loans and receivables are subsequently measured at amortised cost using the effective interest rate method, less 
provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the income 
statement. 
 
Provision against trade receivables is made when objective evidence is received that the Group will not be able to collect all 
amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is determined as the 
difference between the asset’s carrying amount and the present value of estimated future cash flows. 
 
o) Cash and cash equivalents 
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments 
that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. 
 
p) Financial liabilities 
Financial liabilities are obligations to pay cash or other financial instruments and are recognised when the Group becomes a party 
to the contractual provisions of the instrument. All interest related charges are recognised as an expense in ‘finance cost’ in the 
income statement. Loan notes are raised for support of long-term funding of the Group’s operations. They are recognised initially 
at fair value, net of direct issue costs. Financial liabilities are subsequently measured at amortised cost using the effective interest 
rate method. 
 
Finance charges, including premiums payable on settlement or redemption, and direct issue costs are charged to the income 
statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the 
extent that they are not settled in the period in which they arise. 
 
Dividend distributions payable to equity shareholders are included in ‘other short-term financial liabilities’ when the dividends are 
approved in general meeting prior to the balance sheet date. 
 
q) Equity 
Equity comprises the following: 
 
• ‘Share capital’ represents the nominal value of equity shares. 
• ‘Share premium’ represents the excess over nominal value of the fair value of consideration received for equity shares, 
net of expenses of the share issue. 
• ‘Merger reserve’ represents the excess over nominal value of the fair value of consideration received for equity shares, 
net of expenses of the share issue, in connection with acquisitions. 
• ‘Other reserve’ represents equity-settled share-based employee remuneration until such share options are exercised. 
• ‘Fair Value Adjustment’ represents the difference between the market value at the date of issue of shares to satisfy 
acquisitions and the value agreed with the vendors relating to these acquisitions. 
• ‘Profit and loss reserve’ represents retained profits and accumulated losses. 
 
 
 
 
Pinnacle Telecom Group plc
Page 30   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
r) Employee benefits 
Share-Based Payment – Equity settled 
 
All material share-based payment arrangements are recognised in the financial statements. All goods and services received in 
exchange for the grant of any share-based remuneration are measured at their fair values. Fair values of employee services are 
indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and 
excludes the impact of non-market vesting conditions (for example, profitability and sales growth targets). 
 
All share-based remuneration is ultimately recognised as an expense in the income statement with a corresponding credit to ‘other 
reserve’. If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based 
on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any 
indication that the number of share options expected to vest differs from previous estimates.  
 
Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised 
in prior periods if share options ultimately exercised are different to that estimated on vesting. 
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital. 
 
s) Critical accounting judgements and key sources of estimation uncertainty 
 
Critical judgements in applying the Group’s accounting policies 
The Group has made one acquisition during the year, being Solwise Telephony Limited and its wholly owned subsidiary Sipswitch 
Limited. The allocation of fair values to the tangible assets and the identification and valuation of intangible assets affects the 
goodwill and the assignment of that to the cash generating unit, recognised in respect of the acquisition. Estimates and 
judgements around the allocation of fair values are continually evaluated and are based on historical experience and other factors, 
including expectations of future events that are believed to be reasonable under the circumstances. 
 
Key sources of estimation uncertainty 
The key assumptions concerning the future and other sources of estimation uncertainty at the balance sheet date that have a 
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are 
discussed below. 
 
Intangible assets 
Determining whether intangible assets are impaired requires the judgement of whether there is an impairment indicator. 
Management are satisfied there is no impairment indicator and the loss reported by the Group for the year is not an impairment 
indicator. Although overall loss making the gross profit for the Group is positive. The loss is due to group operating costs, 
restructuring costs and not a result of the performance of the intangible assets.  
 
The key judgement for the carrying value of intangible assets is the cash flows associated with the intangible assets. Each of the 
intangible assets held by the Group continues to generate positive cash flows and therefore management are satisfied there is no 
impairment indicator. 
 
Impairment of goodwill 
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill 
has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the 
cash generating unit and a suitable discount rate in order to calculate the present value. 
 
Share-based payments 
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date 
at which they were granted. Judgement is required in determining the most appropriate valuation model for a grant of equity 
instruments depending on the terms and conditions of the grant. Management are also required to use certain assumptions in 
determining the most appropriate inputs to the valuation model including expected life of the option, volatility, risk free rate and 
dividend yield. The assumptions and models used are fully disclosed in note 7. 
 
Pinnacle Telecom Group plc
Page 31   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
Contingent consideration 
Under IFRS 3: Business combinations, contingent consideration is included in the cost of a business combination to the extent 
that it is deemed probable and can be measured reliably. This requires management to assess the probability and to estimate the 
financial impact of events on which consideration is contingent. 
 
3. Acquisitions 
 
3.1. Acquisition of Solwise Telephony Limited 
On 13 January 2010, the Company acquired the entire issued share capital of Solwise Telephony Limited, and its wholly owned 
subsidiary Sipswitch Limited. The total consideration was £204,915, satisfied by the issue of 35,950,000 ordinary shares in 
Pinnacle Telecom Group plc at a price of 0.57 pence per share. The total consideration was apportioned as 31,746,843 of 
ordinary shares, issued as initial consideration, amounting to £180,957 plus a further 4,203,157 ordinary shares ("loan shares") 
issued in connection with loans owed by Solwise to certain vendors, amounting to £23,958 in aggregate.  
 
The acquisition agreement allows for additional contingent consideration to be awarded, with earn out provisions based on 
earnings before interest and taxation (“EBIT”) for the years ending 30 September 2010 and 30 September 2011. For the year 
ending 2010, additional consideration of £15,000 will be payable in ordinary shares for every £10,000 of EBIT above £40,000. For 
the year ending 2011, additional consideration of £15,000 will be payable in ordinary shares for every £10,000 of EBIT above 
£60,000. The total contingent consideration cannot exceed £295,085 in total over the two year end periods. For the purpose of 
calculating the intangible asset under IFRS3, contingent consideration of £80,000 has been assumed over the two year end 
periods. 
 
Prior to the acquisition, Solwise Telephony Limited was an existing customer of Pinnacle Telecom plc for the supply of wholesale 
telecommunications services. For the period 1 October 2009 to 12 January 2010, Solwise Telephony Limited purchased services 
to the value of £33,930 on normal commercial terms and on an arms length basis. On the date of acquisition, Solwise Telephony 
Limited owed Pinnacle Telecom plc £61,563 in unpaid invoices. All transactions were carried out under normal market conditions 
and subsequently paid after 13 January 2010. 
 
The loan shares above, amounting to £23,958, were issued in full settlement of a number of commercial loans made to Solwise 
Telephony Limited by certain minority shareholders prior to acquisition. The commercial loans were issued for cash and under 
normal commercial terms. The loans were settled at par value and included any interest accrued at the acquisition date. 
 
With the exception of intangible assets no adjustments have been made to the book values of the assets and liabilities at 
acquisition. The book value of intangible assets in Solwise Telephony Limited and Sipswitch Limited at acquisition was nil. The 
consolidated accounts of both companies can be analysed as follows: 
 
  Book Cost 
£ 
Fair Value 
£ 
Assets     
Software development costs  154,973 154,973 
Property, plant and equipment  18,732 18,732 
  173,705 173,705 
    
Current assets    
Inventories  5,000 5,000 
Trade and other receivables  74,049 74,049 
Cash and cash equivalents  (20,525) (20,525) 
Total current assets  58,524 58,524 
Total assets  232,229 232,229 
Pinnacle Telecom Group plc
Page 32   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
3.1. Acquisition of Solwise Telephony Limited (continued) 
  Book Cost 
£ 
Fair Value 
£ 
Current Liabilities    
Trade and other payables  160,962 160,962 
Other taxes and social security costs  34,782 34,782 
Other creditors and accruals  42,102 42,102 
 
 237,846 237,846 
Total non-current liabilities . 24,726 24,726 
  262,572 262,572 
    
Net Liabilities  (30,343) (30,343) 
    
    
- initial consideration   180,957 
- contingent consideration   80,000 
Fair value of cost of acquisition   260,957 
    
Intangible Asset   291,300 
 
 
Turnover and operating profit of the company acquired for the post acquisition period was £1,008,372 and £60,754, respectively. 
Pre-acquisition turnover and operating losses for the period 1 October 2009 to 12 January 2011 were £170,214 and £53,807 
respectively and are not included in the Group consolidated financial statements.  
 
Exceptional costs incurred in relation to the acquisition were £18,216 and in accordance with IFRS3 have been expensed in the 
income statement for the Group. 
 
4. Segment Reporting 
The chief operating decision-maker has been identified as the Chief Executive Officer (“CEO”) of the Company. The CEO reviews 
the Group’s internal reporting in order to assess performance and to allocate resources. The Company has determined its 
operating segments based on these reports. 
 
The Group currently has three reportable segments: 
 
• Mobile services – this segment provides a range of mobile services and solutions to micro and SME companies. 
• IT – this segment provides a wide range of IT focused solutions to both SME and middle market companies, including 
Voice over IP (‘VoIP’) implementations. 
• Other – this sector covers a range of telecommunications services including calls and line rental. 
 
Information regarding the operation of the reportable segments is included below. The CEO assesses the performance of the 
operating segments based on revenue and a measure of Earnings before Interest, Depreciation and Amortisation (EBITDA) 
before any allocation of Group overheads or charges for share based payments. Segment EBITDA is used to measure 
performance as the CEO believes that such information is the most relevant in evaluating the results of the segment.  
 
The Group’s EBITDA for the year has been calculated after deducting Group overheads from the EBITDA of the three segments 
as reported internally. The Group overheads include the cost of the Board, the costs of maintaining a listing on AIM, legal and 
professional fees, and the costs of shareholder communications including the costs of retaining a Nominated Advisor and a 
Broker. 
Pinnacle Telecom Group plc
Page 33   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
4. Segment Reporting (continued) 
The segment information is prepared using accounting policies consistent with those of the Group as a whole. 
The assets and liabilities of the Group are also reviewed by the chief operating decision-maker on a segment basis and have been 
disclosed.  
 
All segments are continuing operations. No customer accounts for more than 10% of external revenues. Inter-segment 
transactions are accounted for using an arms-length commercial basis. 
 
 
4.1 Analysis of revenue  2010  2009  
  £  £  
By business sector      
Mobile services  663,551   332,249   
IT  742,070   571,270   
Other telecommunications services  5,202,912   2,288,703   
      
Continuing operations  6,608,533  3,192,222   
 
Total revenue  6,608,533  3,192,222   
      
By destination      
United Kingdom  6,608,533  3,192,222   
 
Total revenue  6,608,533  3,192,222   
 
  2010  2009  
  £  £  
By origin      
Continuing operations      
Pinnacle Telecom plc              1,327,003   1,177,169   
Accent Telecom UK Limited               3,504,104          1,154,067   
Solwise Telephony Limited (13 January to 30 September)              1,008,372   -  
Colloquium Limited                 315,486             396,253   
Sports Club Telecom Limited                 265,528             274,026   
Explore IT Limited                 114,246             104,684   
Other group companies                   73,794   86,023   
  6,608,533  
   
3,192,222   
Total revenue  6,608,533  
   
3,192,222   
      
By recurring nature      
Recurring - continuing operations              5,343,492        2,811,137   
Non-Recurring - continuing operations              1,265,041             381,085   
  6,608,533  
   
3,192,222   
Total revenue  6,608,533  
   
3,192,222   
 
 
Pinnacle Telecom Group plc
Page 34   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
4.2 Analysis of net loss after tax 
  2010  2009 
4.2.1 By business sector  £  £ 
Mobile services     
Profit/(loss) from operations before amortisation  46,083  (17,842) 
      
IT     
Loss from operations before amortisation  (55,379)  (151,978) 
Amortisation  (54,789)  (47,289) 
      
Loss from operations after amortisation  (110,168)  (199,267) 
     
Other telecommunications services     
Profit/(loss) from operations before amortisation  372,788   (56,020) 
Amortisation  (241,417)  (265,156) 
     
Profit/(loss) from operations after amortisation  131,371  (321,176) 
     
Head office  (316,946)  (356,418) 
     
Continuing operations  (249,660)  (894,703) 
IT - discontinued operations  (21,079)  (2,360) 
     
Total losses  (270,739)  (897,063) 
 
 
4.2.2 By destination  
2010 
£ 
  
2009 
£ 
 
United Kingdom  (270,739)  (897,063) 
     
  2010  2009 
  £  £ 
4.2.3 By origin     
Pinnacle Telecom plc  163,897   12,555  
Accent Telecom UK Limited   155,529   (25,654) 
Colloquium Limited  (54,219)  (116,443) 
Sports Club Telecom Limited  14,983   (8,662) 
Solwise Telephony Limited (13 January to 30 September)  60,754  - 
Explore IT Limited  (3,363)  (49,602) 
Head Office and other group companies  (291,035)  (394,452) 
      
Profit/(loss) from continuing operations before exceptional 
items  46,546  (582,258) 
Amortisation  (296,206)  (312,445) 
Eclectic Group Limited and I G Software Limited - 
discontinued operations  (21,079)  (2,360) 
     
Total losses  (270,739)  (897,063) 
     
Pinnacle Telecom Group plc
Page 35   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
4.2.4 By recurring nature 
  
2010 
£  
2009 
£ 
     
Recurring - continuing operations  94,146  (573,096) 
Non-Recurring - continuing operations  (47,600)  (9,162) 
Loss from continuing operations before exceptional items  46,546  (582,258) 
 
Amortisation  (296,206)  (312,445) 
Non-Recurring - discontinued operations  (21,079)  (2,360) 
      
Total losses  (270,739)  (897,063) 
 
4.3 Analysis of assets and liabilities  
 
 Mobile IT 
Other 
telecommunications 
services 
Discontinued 
operations Total 
Assets      
Intangible assets - 205,544 653,673 -         859,217  
Investments in Associated Companies - 167,875 - -         167,875  
Property, plant and equipment 324 282,967 48,787 - 332,078 
 
Total non-current assets 324 656,386 702,460 - 1,359,170 
 
 Mobile IT 
Other 
telecommunications 
services 
Discontinued 
operations 
Total 
 
Current assets      
Inventories                   -   7,353             65,837                   -             73,190  
Trade and other receivables          78,557  33,067 1,108,039          1,208       1,220,871  
Cash and cash equivalents          11,263  8,610           674,506           2,810          697,189  
 
Total current assets 89,820 49,030 1,848,382 4,018 1,991,250 
 
Total assets 90,144 705,416 2,550,842 4,018 3,350,420 
 
Liabilities      
Short term borrowings                  -                       -   (27,115)   - (27,115) 
Trade and other payables (29,943) (36,180) (883,797) (18,086) (968,006) 
Other taxes and social security costs (2,925) (14,608) (159,091) (190) (176,814) 
Accruals and other payables (36,532) (14,773) (598,055) (254) (649,614) 
 
Total current liabilities (69,400) (65,561) (1,668,058) (18,530) (1,821,549) 
 
Total non-current liabilities - - (209,128) - (209,128) 
 
Total liabilities (69,400) (65,561) (1,877,186) (18,530) (2,030,677) 
 
Net assets 20,744 639,855 673,656 (14,512) 1,319,743 
 
 
 
Pinnacle Telecom Group plc
Page 36   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
5. Operating loss 
2010 2009 
 
£  £  
Loss from operations is stated after charging:  
    
Depreciation of owned fixed assets  99,244 78,415 
Other operating lease rentals:    
– buildings  57,837 48,391 
– office equipment  - 1,413 
Auditors’ remuneration: - audit of parent company 
                                      - audit of subsidiary companies 
7,000 
23,000 
7,000 
22,000 
 
6. Finance income and finance costs  
Finance cost includes all interest-related income and expenses. The following amounts have been included in the income 
statement line for the reporting periods presented: 
 
2010 2009 
 
£  £  
Interest income resulting from short-term bank deposits 3 618 
Finance income 3 618 
Interest expense resulting from:   
- Convertible loan 
- finance leases 
- other commercial loans 
- bank overdrafts 
- overdue taxation 
12,500 
4,997 
774 
1,700 
2,524 
- 
2,854 
192 
86 
1,795 
   
Finance costs 22,495 4,927 
 
7. Employee costs 
 
7.1 Directors and employees   
The average number of staff employed by the Group during the financial year amounted to: 
 
  
 
2010 2009 
 
Number of management staff 
 
6 
 
5 
Number of operational staff 18  18  
 
Total 
 
24 
 
23 
 
Employee numbers are stated including Directors. 
 
7.2 Employee remuneration  
  
 2010 
£ 
2009 
£ 
   
Wages and salaries 665,004 755,844 
Share option costs 13,922 8,252 
Social security costs 66,719 89,190 
 
Total 
 
745,645 
 
853,286 
 
Pinnacle Telecom Group plc
Page 37   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
7.3. Share-based remuneration  
The Company has an HMRC approved EMI share option scheme as part of the remuneration of senior management. There is also 
an unapproved share option scheme in place which is used where the individuals do not fall under the rules of the approved scheme. 
The maximum term of current arrangements under the EMI scheme ends on 1 July 2018.  
 
The unapproved scheme has no set term. In both schemes, upon vesting, each option allows the holder to purchase one ordinary 
share at the pre-agreed option price. All share-based employee remuneration will be settled in equity. The Group has no legal or 
other obligation to repurchase or settle the options. The performance criteria attached to the outstanding options is based on total 
shareholder return. The holder can only exercise the option if the share price exceeds 25% of the share price at the time the option 
was granted. 
  2010   2009 
  
 
  
weighted average 
exercise price   
weighted average 
exercise price 
  Number  £  Number £ 
                
Outstanding at 1 October 65,212,122  0.00167  65,212,122 0.00167 
Granted  39,666,666  0.003  39,666,666 0.003 
Lapsed  -    - - 
        
                
Outstanding at 30 September 104,878,788  0.00167  104,878,788 0.00167 
   
  
     
 
At 30 September 2010, Pinnacle Telecom Group plc has granted the following outstanding share options:  
 
   2010   2009  
   
Weighted 
average 
exercise price 
weighted 
average  
remaining 
contractual life   
weighted 
average 
exercise price 
weighted 
average  
remaining 
contractual life 
  Number £ Months  Number £ Months 
                  
Earliest exercise date        
2005  666,667 0.03 50  666,667 0.03 62 
2010  64,545,455 0.001375 93  64,545,455 0.001375 105 
2011  39,666,666 0.003 105  39,666,666 0.003 117 
         
                  
 
In total £13,922 of employee remuneration expense has been included in the consolidated income statement for 2010 (2009: 
£8,252). The fair value of options granted was calculated using the Black Scholes option pricing model incorporating the following key 
assumptions:  
 
 
 
 
 
 
 
Pinnacle Telecom Group plc
Page 38   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
7.3. Share-based remuneration (continued) 
 
 
  
 
|______________2010 ___________|  
  
 
|______________2009 ___________|  
  
Number of options 
 
 39,666,666 64,545,455 666,667 
 
39,666,666 64,545,455 666,667 
Volatility 
 
 75% 75% 50% 
 
75% 75% 50% 
Spot Price 
 
 0.003 0.001375 0.03 
 
0.003 0.001375 0.03 
Interest rate 
 
 4.50% 4.50% 4.52% 
 
4.50% 4.50% 4.52% 
Dividend yield 
 
 0% 0% 0% 
 
0% 0% 0% 
Vesting period (years) 
 
 2 3 1 
 
2 3 1 
 
Option value weighted  
average exercise price   
 
 £0.0185 £0.00869 £0.0147 
 
£0.0185 £0.00869 £0.0147 
  
 
        
 
      
7.4 Directors 
Details of individual Directors’ emoluments for the year (including employers national insurance contributions shown below) are as 
follows: 
 Fees and salaries Bonus Employers NI 
contributions 
 
Other 
Benefits 
Totals 
(incl. Employers NI) 
 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 
 £ £ £ £ £ £ £ £ £ £ 
Non- Executive          
W Allan 18,000   -  - - 2,304 - - - 20,304   - 
J C Anderson 10,000 10,000 - - 1,280 1,280 - - 11,280 11,280 
G J Duncan (1) 22,032 35,000 - - 2,820 4,480 435 869 25,287 40,349 
Executive           
A Bonner 
85,800 85,800 49,200 35,156 17,280 15,482 8,169 5,971 160,449 142,409 
 
          
                       
Totals 135,832 130,800 49,200 35,156 23,684 21,242 8,604 6,840 217,320 194,038 
 
In addition to his remuneration as Chairman, Graham J Duncan received consulting fees under the terms of a contract for services of 
£50,000 (2009: £56,667). D Giddens, a director of a subsidiary company received fees during the year of £66,667 (2009: £28,888). 
Benefits include the costs of share options issued in accordance with IFRS 2 Share Based Payments to the Directors of the 
Company as follows: 
 
        
2010 2009 
         
£ £ 
Name of Director 
                  
G J Duncan (1) 
        
435 869 
A J Bonner 
        
7,512 5,368 
 
        
  
  
                
    
Total 
                
7,947 6,237 
 
1) Graham J Duncan ceased to be a director on 29 March 2010 
Pinnacle Telecom Group plc
Page 39   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
8. Total and continuing loss per share 
 
 2010  
£ 
2009  
£ 
   
Loss attributable to ordinary shareholders – continuing operations  249,660 894,703 
Loss attributable to ordinary shareholders – discontinued operations  21,079 2,360 
   
Loss attributable to ordinary shareholders  270,739 897,063 
 
 
Number  Number  
    
Weighted average number of ordinary shares in issue  1,732,688,226 1,363,702,413 
Loss per share (pence) – continuing operations  0.01 0.07 
Loss per share (pence) – discontinued operations  0 0 
Loss per share (pence) – total  0.01 0.07 
 
Both the basic and diluted earnings per share have been calculated using the net loss after taxation attributable to the 
shareholders of Pinnacle Telecom Group plc as the numerator.   
 
The weighted average number of outstanding shares used for basic earnings per share amounted to 1,732,688,226 shares (2009: 
1,363,702,413) following the issue of 35,950,000 shares as part of the acquisition of Solwise Telephony Limited on 13 January 
2010 and the issue of 128,571,429 shares as part of the private placing on 22 September 2010.  Due to the losses incurred by the 
Group the share options are anti-dilutive.  
9. Intangible assets 
 
                            
2010 
 
2009 
Fair value at cost  Date of acquisition  £ £ 
Explore IT Limited - Maintenance Contracts    04 September 2006  100,000 100,000 
Pinnacle Telecom plc - billing system    
08 June 2007 
 150,000 150,000 
Pinnacle Telecom plc - customer base    
08 June 2007 
 443,163 443,163 
Sports Club Telecom Limited - customer base    25 June 2007  123,946 123,946 
Colloquium Limited - customer base    04 June 2008  136,444 136,444 
Accent Telecom UK Limited - customer base    
11 June 2009 
 459,000 459,000 
Solwise Telephony Limited - customer base    
13 January 2010 
 291,300 - 
         
1,703,853 
 
1,412,553 
 
Amortisation to date: 
         
Explore IT Limited - Maintenance Contracts      80,000  60,000 
Pinnacle Telecom plc - billing system      150,000  150,000 
Pinnacle Telecom plc - customer base      295,443  206,810 
Sports Club Telecom Limited - customer base      80,564  55,775 
Colloquium Limited - customer base      61,400  34,111 
Accent Telecom UK Limited - customer base      133,534  41,734 
Solwise Telephony Limited - customer base      43,695  - 
          
        844,636 548,430 
                    
Carrying amount at 30 September       859,217 864,123 
                    
Pinnacle Telecom Group plc
Page 40   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
9. Intangible assets (continued) 
       2010 
£ 
2009 
£ 
         
Net intangible assets at 1 October       864,123 717,568 
Intangible asset additions      291,300 459,000 
Amortisation in period        (296,206) (312,445) 
 
Net intangible assets at 30 September 
       
859,217 
 
864,123 
 
Intangible assets are non-physical assets which have been obtained as part of an acquisition and which have an identifiable future 
economic benefit to the Group at the point of acquisition. The Group's policy is for the:    
-  Maintenance contracts to be amortised over 5 years  
- Customer lists to be amortised over a period of 5 years         
- Custom Voice over internet systems to be valued and amortised over a maximum of 5 years. 
For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash 
flows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash 
generating unit level. Customer lists are assessed for impairment by measuring the actual post-acquisition cash flows of individual 
customers purchased from the date of acquisition and projecting these cash flows forward over time. The calculation at 30 
September 2010 showed that each of the acquired customer lists will continue to generate positive cash flows in excess of their 
net carrying value at year-end. In addition, the projected revenues from the custom voice over internet systems are forecast to 
generate cash flows greater than their carrying value at year-end. On this basis the directors conclude that no further .impairment 
of intangible assets is required at 30 September 2010. 
10. Group Investments 
 
10.1 Principal subsidiary undertakings 
         
 
The Group's principal subsidiary undertakings are as follows: 
                Holding  Country of incorporation  
Class of 
share capital   Nature  of business 
Subsidiary undertakings         
Glen Communications Limited          100% Scotland   Ordinary   Telecommunications 
Pinnacle Telecom plc                 100% Scotland   Ordinary/Preference   Telecommunications 
Pinnacle Mobile Limited                 100% England and Wales  Ordinary   Telecommunications 
Sports Club Telecom Limited            100% Scotland   Ordinary   Telecommunications 
Colloquium Limited                 100% Scotland   Ordinary   Telecommunications 
Accent Telecom UK Limited              100% England and Wales  Ordinary/Preference   Telecommunications 
Explore IT Limited                 100% England and Wales  Ordinary   IT Services 
Solwise Telephony Limited               100% England and Wales  Ordinary/Preference   Telecommunications 
Sipswitch Limited                              100% England and Wales  Ordinary/Preference   Voice over Internet 
Pinnacle Group Limited                 100% Scotland   Ordinary   Holding company 
 
10.2 Associate company 
As part of the acquisition of Accent Telecom UK Limited in 2009, the Group acquired a 40% investment in the ordinary share capital 
of Stripe21 Limited, a company registered in England and Wales. The investment in the associate company is carried using the fair 
value of the identifiable assets at 30 September 2010 and is adjusted for the Group share of revenues and expenses in the year. 
Stripe21 Limited has an accounting reference date of 30 June. 
 
Pinnacle Telecom Group plc
Page 41   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
10.2 Associate company (continued) 2010 
£ 
2009 
£ 
   
Fair value of investment in associated company – Stripe21 Limited 169,705 165,300 
Share of (loss)/profit from associate  (1,830) 4,405 
   
Investment in associated company at 30 September 167,875 169,705 
 
11. Property, plant and equipment 
IT  
Equipment  
Fixtures and 
fittings and 
leasehold 
improvements  
Plant, 
machinery 
and motor 
vehicles 
  
 
 
Software  
 
 
 
Total 
  £  £  
 
£ 
  
£  £ 
Cost of assets           
At 1 October 2009  578,904  135,351  42,020  -  756,275 
           
Additions  29,945  1,957  29,909  61,475  123,286 
Additions by acquisition   50,403  191  -  154,973  205,567 
Disposals  (15,872)  -  (17,890)  -  (33,762) 
             
At 30 September 2010  643,380  137,499  54,039  216,448  1,051,366 
 
 
Cost of assets 
    
 
     
At 1 October 2008  476,990  117,336  27,020  -  621,346 
           
Additions  417  18,015  15,000  -  33,432 
Additions by acquisition   101,497  -  -  -  101,497 
              
  
   
At 30 September 2009  
578,904  135,351  42,020  -  756,275 
  
         
  
IT  
Equipment  
Fixtures and 
fittings and 
leasehold 
improvements  
Plant, 
machinery 
and motor 
vehicles 
 
 
 
 
Software  
 
 
 
Total 
  £  £  
 
£ 
  
£  £ 
Depreciation  
         
At 1 October 2009  489,650  103,238  29,055  -  621,943 
           
Additions by acquisition  
31,863  -  -  -  31,863 
Charge for the year  
59,553  12,260  6,817  20,614  99,244 
Disposals  
(15,872)  -  (17,890)  -  (33,762) 
  
         
At 30 September 2010  
565,194  115,498  17,982  20,614  719,288 
           
Pinnacle Telecom Group plc
Page 42   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
11. Property, plant and equipment (continued) 
  
IT  
Equipment  
Fixtures and 
fittings and 
leasehold 
improvements  
Plant, 
machinery 
and motor 
vehicles 
 
 
 
 
Software 
 
 
 
 
Total 
  
£  £  £  £  £ 
Depreciation  
         
At 1 October 2008 
 
379,405  84,252  23,677  -  487,334 
           
Additions by acquisition  
55,626  -  -  -  55,626 
Charge for the year  
54,619  18,986  5,378  -  78,983 
  
         
At 30 September 2009  
489,650  103,238  29,055  -  621,943 
  
         
Net Book value at 30 September 2010 
78,186  22,001  36,057  195,834  332,078 
           
Net Book value at 30 September 2009 89,254  32,113  12,965  -  134,332 
 
12. Leases  
12.1. Finance leases  
Pinnacle Telecom Group plc has finance leases which relate to assets used within the Group. The net carrying amount of the 
assets held under the leases is £51,674 (2009: £39,361). The assets are included under IT Equipment and Motor Vehicles.  
 
Future minimum lease payments as at 30 September 2010:  
Within 1 year  1 to 5 years  More than 5 years  Total  
£  £  £  £  
Finance lease payments due 27,115 22,538 - 49,653 
 
12.2. Operating leases  
   
The Group’s minimum operating lease payments all relate to land and buildings as follows:  
Within 1 year  1 to 5 years  More than 5 years  Total  
Land and buildings                                                                            £  £  £  £  
As at 30 September 2010  43,135 56,238 - 99,373 
As at 30 September 2009  34,200  44,400 –  78,600 
 
Lease payments recognised as an expense during the year amounted to £57,837 (2009: £45,901). No sublease income is expected as 
all assets held under lease agreements are used exclusively by the Group. The terms left on the non-cancellable leases can be 
summarised as follows:   
Rented since  
Non-cancellable 
term left  
Property  
 
101 Abercorn Street, Paisley 1995 6 months 
10a Cheyne Walk, Northampton 2006 4 months 
Brooke House, Northampton 2010 33 months 
 
Pinnacle Telecom Group plc
Page 43   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
12.2. Operating leases (continued) 
 
Operating leases do not contain any contingent rent clauses. None of the operating lease agreements contain renewal of 
purchase options or escalation clauses or any restrictions regarding dividends, further leasing or additional debt. The property at 
10a Cheyne Walk was vacated in August 2010 prior to the year end. 
 
13. Inventories  
2010  2009  
£  £  
 
Consumables 
Work in Progress  
53,631 
19,559 
15,506 
10,239 
Inventories  73,190 25,745 
 
 
14. Trade and other receivables  
  
 2010 
 £  
2009 
£ 
Trade receivables  495,375 560,780  
Prepayments and accrued income  725,496 369,068 
 
1,220,871 929,848  
 
Trade debtors at the balance sheet date comprise amounts receivable from the provision of IT and telecommunications services. 
The average credit period taken on the provision of these services is 25 days (2009: 56 days). Trade receivables are stated net of 
an impairment for estimated irrecoverable amounts of £71,181 (2009: £169,566). This impairment has been determined by 
reference to known issues. Write offs are made when the irrecoverable amount becomes certain. The carrying value of trade and 
other receivables approximates to their fair value. 
At 30 September 2010 trade receivables amounting to £233,120 (2009: £308,295) were past due but not impaired.  
The age of trade receivables not impaired is as follows:  
 2010 2009 
 £ £ 
Not past due (less than 30 days)  262,255 252,485  
30 – 59 days  92,764 123,217  
60 – 89 days  102,238 54,383  
90 – 119 days  16,420 44,481  
120 days +  21,698 86,214  
 
495,375 560,780  
 
Credit risk  
The Group’s main risk relates to trade receivables which are stated net of the provisions above. No collateral is held as security 
against these debtors and the carrying value represents the fair value. The Group does not identify specific concentrations of 
credit risk with regards to trade and other receivables, as the amounts recognised represent a large number of receivables from 
various customers, including some government and public authorities. 
 
Pinnacle Telecom Group plc
Page 44   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
15. Cash and cash equivalents 
 
 2010 2009 
 £ £ 
   
Cash at bank and in hand 697,189 586,222 
 
Cash balances are held with a small number of counter parties. The figure at 30 September 2010 has been helped by the micro-
management of cash during the year, and particularly at the year end. The year end cash balance also includes £450,000 
representing the proceeds of the private placing on 22 September 2010. The majority of bank accounts are held with HSBC plc.  
16.1. Trade and other payables  
 
 2010 2009 
 £ £ 
   
Bank overdrafts  - - 
Bank loans  - - 
Finance lease liability  49,653 43,447 
 
 
 
49,653 
 
43,447 
   
Less non-current portion of finance leases (22,538) (38,758) 
   
Short-term borrowings   27,115 3,480  
   
Trade payables  968,006 882,854 
Accruals and other payables  619,614 644,242  
Contingent consideration – Solwise Telephony – short term element 30,000 - 
Other taxes and social security costs 176,814 93,996  
   
Trade and other payables  1,821,549 1,624,572 
   
Note 12.1 contains further information on the finance lease liability.  
The fair values of the trade and other payables has not been disclosed as due to their short duration, management considers the 
carrying amounts recognised in the balance sheet to be a reasonable approximation of their fair value.  
16.2. Long-term borrowings  
 
On 30 September 2009, Pinnacle created £250,000 unsecured convertible loan notes in units of £5,000. On 30 September 2009, 
notes for a nominal value of £125,000 were issued at par. The loan notes are not transferable and may be redeemed (in whole or 
in part) by Pinnacle, at its sole discretion, at any time. The loan notes will become repayable on demand in the event of a specified 
default by Pinnacle. 
 
The loan notes are convertible into ordinary shares by Pinnacle at any time after 30 September 2011, or by the holders of the loan 
notes at any time following the period of thirty days after 30 September 2011. The conversion price is at a discount of 15% to the 
mid-market price per ordinary share as at close of business on the date five days after service of the relevant conversion notice, 
subject to a minimum of nominal value. The ordinary shares to be issued will rank pari passu in all respects with the ordinary 
shares in issue. A provision for the embedded derivative created by the potential discount, should the loan notes be converted into 
shares, has been made in the accounts. Certain shareholders have agreed to subscribe to additional loan notes to the value of 
£125,000 if the Group requires additional funding in the next twelve months.  
 
 
Pinnacle Telecom Group plc
Page 45   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
16.2. Long-term borrowings (continued) 
 
The directors consider the fair value of the loan notes to be £133,467 at 30 September 2010 taking into consideration the issue 
price of £125,000 at 30 September 2009 plus a provision for the potential discount, should the loan notes be converted into shares 
at some future date. Interest accrues on the loan notes at 10% per annum, from 30 September 2009 to the earlier of the date of 
redemption and the date of conversion. The interest accrues on a day to day basis and is payable monthly in arrears. 
 
 2010 
£ 
 
2009 
£ 
Fair value of convertible loan notes  133,467 125,000 
Contingent consideration – Solwise Telephony Limited – long term element 50,000 - 
Finance leasing liability – long-term element  22,538 23,141 
Effective repayment to acquire investment – long term element 3,123 15,617 
Long-term financial liabilities  209,128 163,758  
 
17. Share capital and reserves  
 
17.1. Share capital  
The share capital of Pinnacle Telecom Group plc consists of ordinary shares with a par value of £0.001 and deferred shares with 
a par value of £0.009. All ordinary shares are equally eligible to receive dividends and the repayment of capital, and represent one 
vote at the shareholders’ meeting of Pinnacle Telecom Group plc. The deferred shares carry no voting rights and are not eligible 
to receive dividends or repayment of capital.  
2010                  2009 
£                        £ 
Shares issued and fully paid  
– beginning of year  5,316,488 4,807,680  
– issued during year  164,521 508,808  
Shares issued and fully paid  5,481,009 5,316,488  
Shares authorised but not issued at 30 September 3,518,991 683,512  
Total equity shares authorised at 30 September  9,000,000 6,000,000  
 
The authorised and issued share capital can be summarised as follows:  2010  2009  
       £     £  
Total equity shares authorised  
  
2,386,420,000 Ordinary shares of £0.001 each 2,386,420 2,386,420  
3,000,000,000 Ordinary shares of £0.001 each authorised 31 March 2010 3,000,000 - 
401,508,895 Deferred shares of £0.009 each  3,613,580 3,613,580  
 
9,000,000 6,000,000  
Shares issued and fully paid  
  
1,702,907,630 Ordinary shares of £0.001 each  - 1,702,908  
1,867,429,630 Ordinary shares of £0.001 each  1,867,429 - 
401,508,895 Deferred shares of £0.009 each  3,613,580 3,613,580  
 
5,481,009 5,316,488 
Pinnacle Telecom Group plc
Page 46   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
17.2. Share premium  
  
        2010          2009  
              £                £  
Balance brought forward 3,238,902 3,207,593 
Share premium on private placing for shares 321,429 - 
Expenses recovered on group disposal * -      31,309 
   
Balance carried forward 3,560,331 3,238,902 
 
Note:  
* Relates to VAT recovered on expenses on prior year disposal group 
 
17.3 Profit and loss reserve 
        2010          2009  
              £                £  
   
Profit and loss account at 1 October 2009 (6,695,111) (5,798,048) 
Loss for the year (270,739)  (  897,063)  
   
Profit and loss account at 30 September 2010 (6,965,850) (6,695,111) 
 
17.4. Merger reserve 
The Group has taken advantage of the merger relief provisions in relation to the acquisition of Solwise Telephony Limited. The 
Merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares, net of 
expenses of the share issue, in connection with acquisitions. 
 
18. Income tax expenses 
The tax rebate represents: 2010  2009  
 £  £  
UK corporation tax on profits of the period  
_ _ 
Total current tax  
     _      _  
Adjustment for prior year taxation  (18,904) (462) 
 
Tax rebate  (18,904) (462) 
 
The relationship between expected tax expense based on the effective tax rate of Pinnacle Telecom Group plc at 28%  
(2009: 28%) and the tax expense actually recognised in the income statement can be reconciled as follows:  
 
 2010  2009  
 £  £  
   
Result for the year before tax  (268,564) (897,525) 
Tax rate  28% 28% 
   
Expected tax expenses  (75,198) (251,307) 
Pinnacle Telecom Group plc
Page 47   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
18. Income tax expenses (continued) 
 2010 
£ 
2009 
£ 
 
Adjustment for: 
  
Non-deductible expenses 587 3,629 
Small companies relief  18,804 14 
Depreciation in excess of capital allowances  (12,556) 9,404 
Excess management charges 58,578 - 
Utilisation of tax losses  (23,151) (37,982) 
Tax losses carried forward   153,643 329,553 
Adjustments on consolidation – pre-acquisition losses etc  (128,800) (53,773) 
Prior year adjustments  (10,811) – 
   
Actual tax rebate net (18,904) (462) 
 
The Group has unrecognised deferred tax assets in respect of tax losses carried forward totalling £1,043,441 (2009: £1,184,789). 
The Group has not yet provided deferred tax liabilities in respect of intangible assets totalling £240,581 (2009: £241,954).  
19. Related party transactions  
As part of the acquisition of Accent Telecom UK Limited, the Group acquired a 40% share of the equity of an associated company, 
Stripe21 Limited. During the year, Accent Telecom UK Limited purchased services totalling £239,673 (2009: £101,100) from 
Stripe21 Limited, recorded as cost of sales in the consolidated income statement. 
 
In addition to his remuneration, ex-Chairman Graham J Duncan received consulting fees under the terms of a contract for services 
of £50,000 (2009: £56,667). John Anderson and Alan Bonner both received interest payments of £500 and £2,500 (2009: Nil) 
respectively during the year in accordance with the terms of their unsecured convertible loan notes (see note 16.2). There are no 
other related party transactions recorded during the year to 30 September 2010 or to 30 September 2009 
20. Contingent liabilities  
There were no contingent liabilities at 30 September 2010 or 30 September 2009.  
21. Capital commitments  
There were no capital commitments at 30 September 2010 or 30 September 2009.  
 
22. Risk management  
The Group finances its activities through equity, loan notes and bank funds. No speculative treasury transactions are undertaken 
and during the last two years no derivative contracts were entered into. Financial assets and liabilities include those assets and 
liabilities of a financial nature, namely cash, investments and borrowings. The Group is exposed to a variety of financial risks 
arising from its operating activities, which are monitored by the Directors.  
 
22.1. Cash and liquidity risk  
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash 
assets safely and profitably.  The Group policy throughout the year has been to ensure continuity of funding by a combination of 
loan note funding and available bank facilities.  
22.2. Interest rate risk  
The interest rate on the Group’s cash at bank is determined by reference to the bank rate. The Group has an agreed bank 
overdraft facility with HSBC of £80,000 which remained unused at the year end. (2009: £Nil). 
 
 
Pinnacle Telecom Group plc
Page 48   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
22.3. Capital risk management  
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the 
returns to shareholders through the organisation of cash, debt and equity balances. The capital structure of the Group consists of 
cash and cash equivalents, debt and equity attributable to equity holders of the parent, comprising issued share capital, reserves 
and retained earnings as disclosed in the statement of changes in equity on page 23.  
22.4. Credit risk  
The Group’s policy is to monitor trade and other receivables and avoid significant concentrations of credit risk. The principal credit 
risk arises from trade receivables. Aged receivables reports are reviewed monthly and any balances greater than 60 days are 
reported to the CEO. The credit control function follows a policy of sending reminder letters that start once an invoice is over 30 
days overdue. These culminate in a legal letter with the threat of legal action. In a limited number of cases, legal action has been 
pursued.  
An aged analysis of receivables is shown in Note 14 to the financial statements.  
22.5. Risk Management Analysis  
The information below provides an analysis of the financial assets and liabilities within the scope of IAS 39 Financial Instruments: 
Recognition and Measurement, required by IFRS 7 Financial Instruments: Disclosure. An analysis of the principal balance sheet 
sums, relevant to an analysis of risk management, is as follows:   
  Loans and 
receivables 
 Non-financial 
assets 
 Balance Sheet 
Total  
  £  £  £ 
2010       
Trade and other receivables  1,220,871  -  1,220,871 
Other current assets  -  73,190  73,190 
Cash and cash equivalents  697,189  -  697,189 
       
  1,918,060  73,190  1,991,250 
       
  Loans and 
receivables 
 Non-financial 
assets 
 Balance Sheet 
Total  
  £  £  £ 
2009       
Trade and other receivables  929,848  -  929,848 
Other current assets  -  25,745  25,745 
Cash and cash equivalents  586,222  -  586,222 
       
  1,516,070  25,745  1,541,815 
 
  
Other financial 
liabilities at  
amortised cost 
 
 
Other liabilities 
not within 
scope of  
IAS 39 
 
 
Balance Sheet  
Total 
  £  £  £ 
2010       
Trade and other payables  1,764,434  80,000  1,844,434 
Finance lease liability - current  27,115  -  27,115 
Long-term borrowings - non-current  -  136,590  136,590 
Finance lease liability - non-current  22,538  -  22,538 
       
  1,814,087  216,590  2,030,677 
Pinnacle Telecom Group plc
Page 49   
 
 
 
  
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
22.5. Risk Management Analysis (continued) 
       
  Other financial 
liabilities at  
amortised cost 
 Other liabilities 
not within 
scope of  
IAS 39 
  
Balance Sheet  
Total 
  £  £  £ 
2009       
Trade and other payables  1,591,771  -  1,591,771 
Long-term borrowings - current position  -  12,494  12,494 
Finance lease liability – current  20,306  -  20,306 
Long-term borrowings - non-current  125,000  15,618  140,618 
Finance lease liability - non-current  23,141  -  23,141 
       
  1,760,218  28,112  1,788,330 
 
 
 
 
 
0 to 60 
days 
 
61 days to  
6 months 
6 months to 
12 months 
12 months to 
2 Years 
2 Years to  
5 Years 
Total 
 
2010 
      
Trade payables 794,188 173,818 - - - 968,006 
Long-term borrowings - - - 207,090 - 207,090 
Finance lease liabilities 6,661 13,321 19,982 6,852 2,837 49,653 
       
 800,849 187,139 19,982 213,942 2,837 1,224,749 
       
 
     
 
 
 
 
0 to 60 
days 
61 days to  
6 months 
6 months to 
12 months 
12 months to 
2 Years 
2 Years to  
5 Years 
Total 
 
2009 
      
Trade payables 372,240 143,856 106,369 - - 622,465 
Long-term borrowings - - - - 125,000 125,000 
Finance lease liabilities 5,467 10,933 16,400 32,800 5,958 71,558 
       
 377,707 154,789 122,769 32,800 130,958 819,023 
 
 
23. Ultimate controlling party 
There is no ultimate controlling party. 
Pinnacle Telecom Group plc
Page 50   
 
 
 
  
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PINNACLE TELECOM GROUP PLC 
 
We have audited the parent company financial statements of Pinnacle Telecom Group plc for the year ended 30 September 2010 
which comprise the parent company balance sheet, and the related notes. The financial reporting framework that has been 
applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted 
Accounting Practice). 
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed. 
Respective responsibilities of directors and auditor 
 
As explained more fully in the Directors’ Responsibilities Statement on page 18, the directors are responsible for the preparation 
of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit 
and express an opinion on the parent company financial statements in accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical 
Standards for Auditors. 
Scope of the audit of the financial statements 
 
A description of the scope of an audit of financial statements is provided on the APB's website at 
www.frc.org.uk/apb/scope/private.cfm. 
Opinion on financial statements 
 
In our opinion the parent company financial statements: 
• give a true and fair view of the state of the company's affairs as at 30 September 2010 and of its loss for the year then 
ended;  
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and 
• have been prepared in accordance with the requirements of the Companies Act 2006. 
 
Opinion on other matter prescribed by the Companies Act 2006 
 
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is 
consistent with the parent company financial statements. 
Matters on which we are required to report by exception 
 
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our 
opinion: 
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been 
received from branches not visited by us; or 
• the parent company financial statements are not in agreement with the accounting records and returns; or 
• certain disclosures of directors’ remuneration specified by law are not made; or 
• we have not received all the information and explanations we require for our audit. 
Pinnacle Telecom Group plc
Page 51   
 
 
 
  
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PINNACLE TELECOM GROUP PLC (CONTINUED) 
 
Other matter 
 
We have reported separately on the group financial statements of Pinnacle Telecom Group plc for the year ended 30 September 
2010.  
 
Andrew Howie (Senior Statutory Auditor) 
for and on behalf of Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
1/4 Atholl Crescent 
Edinburgh 
EH3 8LQ  
21 February 2011 
 
Pinnacle Telecom Group plc
Page 52   
 
 
 
  
BALANCE SHEET (PARENT COMPANY) 
as at 30 September 2010 
      
  2010  2009  
 Note £  £  
Fixed Assets        
Tangible assets 4 -  139  
Fixed asset investments 5 2,496,792  2,235,835  
          
Total non-current assets  2,496,792  2,235,974  
          
Current assets       
Debtors 6 742,296  726,126  
Cash and cash equivalents  365,225  135,927  
          
Total current assets  1,107,521  862,053  
          
Creditors: amounts falling due within one year 7 (1,035,940)  (987,252)  
          
Net current assets / (liabilities)  71,581  (125,199)  
          
Total assets less current liabilities  2,568,373  2,110,775  
          
Creditors: amounts falling due after one year 8 (175,000)  (125,000)  
          
  2,393,373  1,985,775  
          
Capital and reserves       
Called up share capital 10 5,481,009  5,316,488  
Share premium account 11 3,560,331  3,238,902  
Merger reserve  283,357  114,392  
Profit and loss account 11 (6,931,324)  (6,684,007)  
          
Shareholders' funds 12 2,393,373  1,985,775  
           
 
Approved by the Board and authorised for issue on 21 February 2011.  
 
 
A J Bonner  
Director  
 
The accompanying accounting policies and notes form part of these financial statements.  
 
COMPANY NUMBER: 05259846 
 
 
Pinnacle Telecom Group plc
Page 53   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) 
1. Accounting policies  
 
1.1. Accounting convention  
The financial statements are prepared under the historical cost convention.  
1.2. Profit and loss account and cash flow statement  
The Parent Company has taken advantage of section 480 of the Companies Act 2006 and has not included its own profit and loss 
account and cash flow statement in the financial statements. The Parent Company’s loss for the year was £247,317.  
(2009: £888,811).  
1.3. Compliance with accounting standards  
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).  
1.4. Tangible fixed assets and depreciation  
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less 
estimated residual value of each asset over its expected useful life, as follows:  
Computer equipment – straight line over 3 years.  
1.5. Investments  
Fixed asset investments are stated at cost less provision for diminution in value.  
1.6. Pensions  
The Company does not currently offer a pension scheme for the benefit of its employees. 
1.7. Deferred taxation  
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for 
taxation and accounting purposes. The deferred tax balance has not been discounted.  
2. Auditor remuneration  
Fees payable to the Company’s auditor for the audit of the Parent Company’s annual accounts was £7,000 (2009: £7,000). 
3. Taxation  2010  
£  
2009  
£  
 
Factors affecting the tax charge for the year  
  
Loss on ordinary activities before taxation  (247,317) (888,811) 
multiplied by standard rate of UK corporation tax of 28% (2009: 28%) (69,249) (248,867) 
 
Effects of:  
  
Depreciation in excess of capital allowances  (85) (154) 
Tax losses carried forward 29,136 249,021 
Group relief surrendered  40,198 – 
   
 69,249 248,867 
   
 
Current tax charge 
 
- 
 
– 
   
 
Pinnacle Telecom Group plc
Page 54   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
4. Tangible fixed assets  
 £ 
 
Cost 
At 1 October 2009 and at 30 September 2010 
 
6,165 
Depreciation  
At 1 October 2009  
Charge for the year 
6,026  
139 
At 30 September 2010  6,165  
Net book value  
At 30 September 2010  -  
 
At 30 September 2009  139 
 
 
5. Fixed asset investments  
Shares in subsidiary  
undertakings  
£  
Cost  
At 1 October 2009  
Additions – Solwise Telephony Limited – initial consideration 
                -  Solwise Telephony Limited – contingent consideration 
6,112,642 
180,957 
80,000 
At 30 September 2010  6,373,599 
Provisions for diminution in value 
At 1 October 2009  
Charge for the year  
 
3,876,807 
- 
At 30 September 2010 3,876,807  
Net book value  
At 30 September 2010  2,496,792 
 
 
Company 
Country of registration  
or incorporation 
Shares held 
Class % 
 
Subsidiary undertakings    
Glen Communications Limited Scotland Ordinary 100 
Explore IT Limited England and Wales Ordinary 100 
Pinnacle Technology Consulting Limited (1) Scotland Ordinary 100 
I G Software Limited England and Wales Ordinary 100 
Pinnacle Telecom plc Scotland Ordinary/Preference 100 
Pinnacle Mobile Limited England and Wales Ordinary 100 
Sports Club Telecom Limited Scotland Ordinary 100 
Straiton Group Management Limited (2) Scotland Ordinary 100 
Pinnacle Group Limited Scotland Ordinary 100 
 
 
 
Pinnacle Telecom Group plc
Page 55   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
5. Subsidiary undertakings (continued) 
Colloquium Limited Scotland Ordinary/Preference 100 
Glen Group Limited (3) Scotland Ordinary 100 
ICT Investments Limited Scotland Ordinary 100 
Pinnacle ICT Limited England and Wales Ordinary 100 
Pinnacle Data Limited England and Wales Ordinary 100 
Straiton Resourcing Limited Scotland Ordinary 100 
Straiton Learning Services Limited Scotland Ordinary 100 
Accent Telecom UK Limited England and Wales Ordinary 100 
Sipswitch Limited England and Wales Ordinary 100 
Solwise Telephony Limited England and Wales Ordinary 100 
 
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as 
follows:  
Capital and  
reserves  
Profit/(loss)  
for the year  
2010 2010 
Company                                                                      Principal activity  £  £  
 
Glen Communications Limited  Telecommunications  (1,705,376) 34,866 
Explore IT Limited * IT services  (242,394) (3,363) 
Pinnacle Technology Consulting Limited (1)  IT consultancy  804,289 - 
I G Software Limited  IT consultancy  278,685 (21,069) 
Pinnacle Telecom plc  Telecommunications  171,119 163,897 
Pinnacle Mobile Limited * Telecommunications  (73,401) 12,274 
Solwise Telephony Limited Telecommunications 84,216 114,559 
Sports Club Telecom Limited * Telecommunications  33,185 14,983 
Accent Telecom UK Limited Telecommunications 343,010 155,529 
Sipswitch Limited Voice over Internet (27,325) (27,519) 
Colloquium Limited * ISP and telecommunications  (230,637) (54,219) 
Straiton Group Management Limited (2)  Holding company  (176,203) - 
Pinnacle Group Limited  Holding company  460,000 - 
Glen Group Limited (3) Dormant  2 - 
ICT Investments Limited  Dormant  24,522 - 
Pinnacle ICT Limited  Dormant  2 - 
Pinnacle Data Limited  Dormant  2 - 
Straiton Resourcing Limited  Dormant  2 - 
Straiton Learning Services Limited  Dormant  2 - 
 
1   Formerly Eclectic Group Limited 
2.  Formerly Eclectic Holdings Limited 
3.  Formerly Pinnacle Telecom Group Limited 
   
Note: 
* On 30 September 2010, in order to simplify the administration of the group and reduce overheads, the assets and liabilities of the 
companies marked with an asterisk (*) above were hived-up into Glen Communications Limited at par value. 
 
Associate company 
As part of the acquisition of Accent Telecom UK Limited in 2009, the Group acquired a 40% investment in the ordinary share capital of 
Stripe21 Limited, a company registered in England and Wales. The investment in the associate company is carried using the fair value of 
the identifiable assets at 30 September 2010 and is adjusted for the Group share of revenues and expenses in the year. Stripe21 Limited 
has an accounting reference date of 30 June. 
 
Pinnacle Telecom Group plc
Page 56   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
6. Debtors  
2010 2009  
  £  £  
Amounts owed by subsidiary undertakings  730,075 708,927 
Other debtors  - -  
Prepayments and accrued income  12,221 17,199  
  
742,296 
 
726,126  
 
7. Creditors: amounts falling due within one year  2010  
£  
2009  
£  
Bank loans and overdrafts  - - 
Trade creditors  47,210 107,276  
Corporation tax  - 3,266  
Other taxes and social security costs  62,334 33,499 
Other creditors  40,813 -  
Contingent consideration – Solwise Telephony Limited  - short term element 30,000 - 
Accruals and deferred income  855,583 843,211  
 
 1,035,940 987,252 
 
 
8. Creditors: amounts falling due after more than one year  
2010  2009  
£  £  
Convertible loan notes 
Contingent consideration – Solwise Telephony Limited – long term element 
125,000 
50,000 
125,000 
- 
Analysis of loans  
  
Wholly repayable within five years  175,000  125,000 
 
 
On 30 September 2009, Pinnacle created £250,000 unsecured convertible loan notes in units of £5,000. On 30 September 2009, notes 
for a nominal value of £125,000 were issued at par. The loan notes are not transferrable and may be redeemed (in whole or in part) by 
Pinnacle, at its sole discretion, at any time. The loan notes will become repayable on demand in the event of a specified default by 
Pinnacle. 
The loan notes are convertible into ordinary shares by Pinnacle at any time after 30 September 2011, or by the holders of the loan notes 
at any time following the period of thirty days after 30 September 2011. The conversion price is at a discount of 15% to the mid-market 
price per ordinary share as at close of business on the date five days after service of the relevant conversion notice, subject to a 
minimum of nominal value. The ordinary shares to be issued will rank pari passu in all respects with the ordinary shares in issue.  
Certain shareholders have agreed to subscribe to additional loan notes to the value of £125,000 if the group requires additional funding within 
the next 12 months. 
Interest accrues on the loan notes at 10% per annum, from 30 September 2009 to the earlier of the date of redemption and the 
date of conversion. The interest accrues on a day to day basis and is payable monthly in arrears. 
 
9. Pension and other post-retirement benefit commitments 
 
No contributions to company pension schemes were made during the year (2009: Nil). 
 
Pinnacle Telecom Group plc
Page 57   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
10. Share capital    
 2010  
£ 
2009 
£  
   
Authorised 
2,386,420,000 Ordinary shares of £0.001 each 
3,000,000,000 Ordinary shares of £0.001 each authorised 31 March 2010 
 
2,386,420 
3,000,000 
 
2,386,420 
- 
401,508,895 Deferred shares of £0.009 each 3,613,580  3,613,580  
   
 9,000,000 6,000,000 
 
 
Allotted, called up and fully paid 
1,702,907,630 Ordinary shares of £0.001 each  
164,521,428 Ordinary shares of £0.001 each issued during the year 
 
 
1,702,908 
164,521 
 
 
1,702,908 
-  
401,508,895 Deferred shares of £0.009 each  3,613,580  3,613,580  
  
5,481,009 
 
5,316,488 
 
11. Statement of movements on reserves  
  
 Share premium 
account  
Profit and loss 
account  
 £  £  
Balance at 1 October 2009  3,238,902  (6,684,007) 
Share Premium on placing 22 September 2010 
Loss for the year  
321,429 
- 
- 
(247,317) 
 
Balance at 30 September 2010  
 
3,560,331 
 
(6,931,324) 
 
12. Reconciliation of movements in shareholders’ funds  
 
 
2010 
£ 
2009 
£ 
 
Opening shareholders’ funds at 1 October 
 
1,985,775 
 
2,220,077  
 
Loss for the financial year 
Issue of shares on placing 
Issue of shares on acquisition 
Share Premium  – premium on shares issued in placing 
                           – expenses recovered from prior year disposal of discontinued operations 
Merger reserve  – premium on shares issued on acquisition  
                           – expenses on share issue 
 
(247,317) 
128,571 
35,950 
321,429 
- 
168,965 
- 
 
(888,811) 
- 
 508,808 
- 
31,309 
152,642 
(38,250) 
 
Net increase/(depletion) in shareholders’ funds 
 
407,598 
 
(234,302) 
Closing shareholders’ funds at 30 September  2,393,373 1,985,775 
 
The Company has taken advantage of the merger relief provisions in relation to the acquisition of Solwise Telephony Limited. The 
Merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses 
of the share issue, in connection with acquisitions. 
Pinnacle Telecom Group plc
Page 58   
 
 
 
  
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
13. Directors emoluments  
 
2010  2009  
 £  £  
Emoluments for qualifying services  193,636 172,796 
 
193,636 172,796 
 
Emoluments disclosed above include the following amounts paid to the highest paid Director:    
 
 
2010 
£ 
2009 
£ 
   
Emoluments for qualifying services  143,169 126,927 
Company pension contributions to money purchase schemes  -  - 
 
 
14. Employees  
  
 
Number of employees  
  
The average monthly number of employees (including Directors) during the year was:    
 2010 2009  
 Number  Number  
Management  5  3  
Administration  
 
-  -  
 
5 3 
15. Related party transactions  
As part of the acquisition of Accent Telecom UK Limited, the Group acquired a 40% share of the equity of an associated company, 
Stripe21 Limited. During the year, Accent Telecom UK Limited purchased services totalling £239,673 (2009: £101,100) from 
Stripe21 Limited, recorded as cost of sales in the consolidated income statement. 
 
In addition to his remuneration, ex-Chairman Graham J Duncan received consulting fees under the terms of a contract for services 
of £50,000 (2009: £56,667). John Anderson and Alan Bonner both received interest payments of £500 and £2,500 (2009: Nil) 
respectively during the year in accordance with the terms of their unsecured convertible loan notes (see note 16.2).  
 
There are no other related party transactions recorded during the year to 30 September 2010 or to 30 September 2009.  
 
 
 
 
 
2010  
£ 
 
2009  
£ 
 
Employment costs 
  
Wages and Salaries 239,693 223,305 
Social security Costs 
Other pension costs 
27,594 
-  
22,213 
-  
   
 267,287 245,518 
   
Pinnacle Telecom Group plc
Page 59   
 
 
 
  
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TELECOM GROUP plc 
Registered in England and Wales with registered number 5259846 
 
NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at the offices of 
Wright, Johnston & Mackenzie LLP, 18 Charlotte Square, Edinburgh, EH2 4DF, on 28 March 2011 at 10.30 a.m. for 
the purpose of considering and, if thought fit, passing the following resolutions, of which resolutions 1-5 will be 
proposed as Ordinary Resolutions and resolution 6 will be proposed as a Special Resolution: 
 
ROUTINE BUSINESS 
Ordinary Resolutions 
 
1. To receive the report of the directors and the financial statements for the year ended 30 September 2010 together  
      with the report of the auditors thereon. 
2. To approve the report of the board to the members on directors' remuneration for the year ended 30 September 2010. 
3. To re-elect Mr John C Anderson, a director who retires by virtue of rotation and, being eligible, offers himself for re-election. 
4. To re-appoint Grant Thornton UK LLP as the auditors. 
5. To authorise the directors to agree the remuneration of the auditors. 
 
SPECIAL BUSINESS 
 
Special Resolution 
 
6. That: 
 
(a) That, in accordance with section 551 of the Companies Act 2006 (the "2006 Act"), the Directors be generally and 
unconditionally authorised to allot shares or grant rights to subscribe for or to convert any security into shares in the Company 
(“Rights”) in the Company up to an aggregate nominal amount of the unissued share capital of the Company provided that this 
authority shall, unless renewed, varied or revoked by the Company, expire on the date of the Annual General Meeting of the 
Company to be held in 2012 or 15 months after the date of the passing of this resolution (whichever is the earlier) save that the 
Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted or Rights to be 
granted and the Directors may allot shares or grant Rights in pursuance of such offer or agreement notwithstanding that the 
authority conferred by this resolution has expired. 
 
This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 80 of the 
Companies Act 1985 or section 551 of the 2006 Act. 
 
(b) the directors of the Company be and are hereby empowered pursuant to section 570 of the 2006 Act to allot equity securities 
(within the meaning of section 560 of the 2006 Act) of the Company for cash pursuant to the general authority conferred on the 
Directors by paragraph (a) of this resolution as if section 561(1) of the 2006 Act did not apply to such allotment, provided that this 
power shall: 
 
(i) be limited to the allotment of equity securities up to an aggregate nominal amount of the unissued share capital of the 
Company; and 
 
(ii) expire on the date of the Annual General Meeting of the Company to be held in 2012 or 15 months after the date of the passing 
of this resolution (whichever is the earlier) (unless renewed, varied or revoked by the Company prior to or on that date) save that 
the Company may, before such expiry make an offer or agreement which would or might require equity securities to be allotted 
after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that 
the power conferred by this resolution has expired. 
 
Registered Office         By order of the Board 
5 Fleet Place         WJM Secretaries Limited 
London          Company Secretary 
EC4M 7RD 
Dated: 21 February 2011 
Pinnacle Telecom Group plc
Page 60   
 
 
 
  
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TELECOM GROUP (CONTINUED) 
Registered in England and Wales with registered number 5259846 
 
Notes: 
 
1. A member is entitled to appoint another person as his proxy to attend and speak and vote on his behalf at the meeting. A 
shareholder may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the 
rights attached to a different share or shares held by that shareholder. The proxy need not be a member of the Company. A proxy 
form which may be used to make such appointment and give proxy instructions accompanies this notice. If you do not have a 
proxy form and believe that you should have one, or if you require additional forms, please contact Computershare Investor 
Services plc on 0870 707 1017. 
 
 
2. To be valid a form of proxy, together with a power of attorney or other authority, if any, under which it is executed or a notarially 
certified copy thereof, must be deposited at the offices of Computershare Investor Services plc, The Pavilions, Bridgwater Road, 
Bristol BS99 6ZY not less than 48 hours before the time for holding the meeting or adjourned meeting. 
 
 
3. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the 
exclusion of the votes of any other joint holders. For these purposes, seniority shall be determined by the order in which the 
names stand in the register of members in respect of the joint holding. 
 
 
4. In the case of a corporation, the form of proxy must be executed under its common seal or signed on its behalf by a duly 
authorised attorney or duly authorised officer of the corporation. 
 
 
5. The Company, pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those 
shareholders registered in the register of members of the Company as at the close of business on 26 March 2011 shall be entitled 
to attend and vote, whether in person or by proxy, at the Annual General Meeting, in respect of the number of Ordinary Shares 
registered in their name at that time. Changes to entries in the register of members after the close of business on  
26 March 2011 shall be disregarded in determining the rights of any person to attend or vote at the Annual General Meeting. If the 
Annual General Meeting is adjourned, entitlements to attend and vote will be determined by reference to the register of members 
of the Company as at the close of business two days before the time of the adjourned meeting. 
 
 
6. Completion and return of the form of proxy will not preclude members from attending or voting in person at the meeting if they 
so wish. 
 
 
7. As at 18 February 2011 (being the last business day prior to the publication of this notice) the Company’s issued voting share 
capital consists of 1,867,429,059 Ordinary Shares, carrying one vote each. Therefore, the total voting rights in the Company as at 
18 February 2011 are 1,867,429,059. 
 
 
 
 
 
 
 
 
 
 
 
Pinnacle Telecom Group plc
Page 61   
 
 
 
  
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TELECOM GROUP plc (CONTINUED) 
Registered in England and Wales with registered number 5259846 
 
EXPLANATORY NOTES TO THE RESOLUTIONS 
ROUTINE BUSINESS 
 
The following notes explain the items of routine business. 
 
Resolution 1 (Receipt of reports and accounts) 
 
The directors must lay the annual accounts and the respective reports of the directors and auditors before shareholders at an 
Annual General Meeting. 
 
Resolution 2 (To approve the directors' remuneration report)  
 
Shareholders are asked to approve the directors' remuneration report which may be found in the annual report on pages 10 to 12. 
This resolution is an advisory one and no entitlement to remuneration is conditional on the resolution being passed. 
 
Resolution 3 (Re-election of director) 
 
Under the Articles of Association of the Company, one director must resign by rotation each year. John C Anderson has put 
himself up for resignation and is therefore standing for re-election. You are therefore asked to re-elect Mr Anderson as a director 
of the Company. 
 
Resolution 4 (Appointment of auditors) 
 
At each general meeting at which accounts are laid before the members, the Company is required to appoint auditors to serve 
until the next such meeting. Grant Thornton UK LLP have indicated their wish to continue as the Company’s auditors. 
 
Resolution 5 (Agreement of auditors’ remuneration) 
 
The directors are seeking authority to agree the remuneration of Grant Thornton UK LLP as the Company’s auditors. 
 
SPECIAL BUSINESS 
 
In addition to the routine business of the Company, there will be the following items of special business at the Annual General 
Meeting. 
 
Resolution 6 (Authority to issue Ordinary Shares and waiver of Pre-emption Rights) 
 
By resolution 6(a), you are asked to give the directors authority to allot share capital up to the maximum authorised share capital. 
This authority shall remain in force until the 2012 AGM or for 15 months (whichever is earlier). 
 
By resolution 6(b), you are asked to give the directors authority to disapply the statutory pre-emption rights in favour of existing 
shareholders in respect of share allotments in the Company. This authority shall remain in force until the 2012 AGM or for 15 
months (whichever is earlier). 
  
Pinnacle Telecom Group plc
Page 62   
 
 
 
  
NOTES 
 
 
 
 
 
Pinnacle Telecom Group plc  
 
 
 
  
NOTES 
 
 
 
 
 
Pinnacle Telecom Group plc  
 
 
 
  
DIRECTORS, SECRETARY AND ADVISERS 
 
 
Directors     William Allan, Non-Executive Chairman 
      Alan J Bonner, Chief Executive Officer 
      John C Anderson, Non-Executive Director 
 
Secretary    WJM Secretaries Limited 
      302 St Vincent Street 
      Glasgow, G2 5RZ  
 
Company number                                            05259846 
 
Registered office    5 Fleet Place 
      London 
      EC4M 7RD 
 
Nominated adviser and broker  Zeus Capital Limited 
      3 Ralli Court 
      West Riverside 
      Manchester 
      M3 5FT 
 
Solicitors    Charles Russell LLP 
      5 Fleet Place 
      London 
      EC4M 7RD 
 
      Wright, Johnston & Mackenzie LLP 
      302 St Vincent Street 
      Glasgow 
      G2 5RZ 
 
Registered auditors   Grant Thornton UK LLP  
      1-4 Atholl Crescent 
      Edinburgh 
      EH3 8LQ 
 
Bankers     HSBC Bank plc 
      Commercial Centre 
      St Clair House 
      Bedford Road 
      Northampton 
      NN4 7AA        
    
      Bank of Scotland 
      47 High Street 
      Dalkeith 
      Midlothian 
      EH22 1JA 
 
Registrars                          Computershare Investor Services plc 
      The Pavilions  
      Bridgwater Road 
      Bristol 
      BS99 6ZZ