PINNACLE TECHNOLOGY 
GROUP PLC 
 
 
REPORT AND ACCOUNTS 2012    
PINNACLE TECHNOLOGY GROUP PLC (formerly Pinnacle Telecom Group Plc) 
REPORT AND FINANCIAL STATEMENTS 30 September 2012 
COMPANY NUMBER: 05259846  
 
 
Pinnacle Technology Group plc focuses on the business market across the UK. 
Driven by leveraging organic opportunities as well as through targeted 
acquisitions, we provide a wide range of converged managed solutions including 
IT Services, IT Security Solutions, Cloud and Data Connectivity, 
Telecommunications Services and Mobility Solutions to business and enterprise 
customers. 
Pinnacle's growth strategy is predicated on cross-selling the elements of our 
converged managed services offering. The objective is to cross-sell the Group’s 
services into our existing customer base, which strengthens our customer's 
reliance on the company, increases our profit per customer and dramatically 
decreases the likelihood of our customer’s switching to a competitor.  
 
Contents  
 
01 Highlights  
02 Chairman’s Statement  
03 Chief Executive’s Review  
10 Corporate Governance  
12 Report of the Board to the Members on Directors’ Remuneration  
15 Directors’ Report  
21 Statement of Directors’ Responsibilities  
22 Independent Auditors report to the Members of Pinnacle Technology Group plc  
23 Consolidated Income Statement  
24 Consolidated Statement of Financial Position   
25 Consolidated Statement of Changes in Equity 
25 Consolidated Statement of Comprehensive Income  
26 Consolidated Statement of Cash Flows 
27 Notes to the Consolidated Financial Statements  
59 Independent Auditors report to the Members of Pinnacle Technology Group plc (Parent Company)   
60 Balance Sheet (Parent Company)  
61 Notes to the Financial Statements (Parent Company)  
67 Notice of Annual General Meeting for Pinnacle Technology Group plc 
IBC Directors, Secretary and Advisers     
 
49% 
Increase 
 
79% of 
Turnover 
 
£2.95m  
  
    
61% 
Increase  
In Gross Profit 
 
75% 
Increase 
Is recurring 
In Turnover 
 
In Total Assets 
Cash raised  
post year-end  
HIGHLIGHTS 
 
Financial 
 
 49% increase in turnover to £12,710,446 (2011: £8,522,079). 
o 79% of turnover now relates to recurring and contracted revenues. 
 
 61% increase in Gross Profit to £3,960,322 (2011: £2,464,529). 
o Gross Profit increased to 31.1% (2011: 28.9%). 
 
 £515,437 of adjusted EBITDA (1). 
 
 75% increase in total assets to £6,920,652 (2011: £3,958,300). 
 
 Placing of £365,000 completed during the year (2011: Nil). 
 
 Invested £766,846 of cash (2) in one-off costs associated with acquisitions. 
 
 Post year-end, successful Placings of £2.95m. 
 
 
 
Operational 
 
 Fifth consecutive year of growth. 
 
 Acquired RMS Managed IT Security Limited (“RMS”) and Online Computer 
Developments Limited (“OCD”). 
 
 Completion of first two phases of strategic growth plan, building a strong portfolio of IT 
managed services. 
 
 Focus now on cross-sales of the Group’s services into existing extensive customer base. 
 
 
Name Change 
 
Name changed to Pinnacle Technology Group plc. 
 
BBC high-profile contracts 
 
We continue to supply the BBC with voice and data services for high-profile and prestigious 
events, which included the Queens 60
th
 Diamond Jubilee Celebrations and the BBC International 
coverage of the Olympic Games in 2012. 
 
Strategy 
 
We have completed phases one and two of our strategic growth plan and have entered phase 
three of our four-phase plan for growth. The phase three objective is to cross-sell all of the group’s 
services into our existing customer base, this strengthens our customer's reliance on Pinnacle, 
increases our profit per customer and dramatically decreases the likelihood of our customer’s 
switching to a competitor. Our strategy is predicated on cross-selling the elements of our 
converged managed services offering, which is already delivering positive results. 
 
Notes: 
 
1. Adjusted EBITDA is defined as Earnings before interest, taxation, depreciation, amortisation and impairment of 
intangibles, exceptional acquisition costs, share of results of associates, the embedded fair value adjustment in 
the convertible loan and £230,883 profit related to acquisitions (£140,883 from the bargain purchase of OCD, 
plus £90,000 of profit from contingent consideration of OCD). 
 
2. One-off costs associated with acquisitions in the year amounted to £766,846, which was made up of £564,292 
of cash relating to severance and redundancy costs and £202,554 of cash relating to purchase consideration.     
CHAIRMAN’S STATEMENT 
 
 
 
“Another very strong year of integration” 
 
 
Bill Allan, Chairman 
 
It gives me great pleasure to be able to report on another strong year for Pinnacle. For the fifth consecutive year as a public 
company Pinnacle has delivered growth whilst successfully integrating its acquired businesses into the Group. These 
achievements demonstrate the strength and resilience of the Company’s staff and core business. 
 
The outlook for Pinnacle is positive. I am delighted that post year-end we successfully raised £2.95m before expenses, ensuring 
that the Company has a strong balance sheet, with the financial and operational flexibility to deliver its stated strategy. I am 
confident that Pinnacle is more strongly positioned today, with greater opportunities for increased growth and shareholder value. 
  
A great deal has been achieved since I joined the Board as Chairman in March 2010. The last three years have been a period of 
growth in a challenging market. Pinnacle has been bold in building a business from core strength and acquisitions to compete 
more effectively in a changing telecommunications market, where business customers require a more sophisticated portfolio of 
services. Pinnacle now has the building blocks to compete and win. New skills are being added from staff recruitment, and 
previously independent companies are cooperating to build new services and cross-sell into new markets.   
This is also a time for change, to add new strength and expertise to the Board. In this respect I am delighted to announce that Dr 
James Dodd will replace me as Chairman following the Annual General Meeting on March 26th, and Dr Tom Black will replace 
John Anderson as a Non-Executive Director. These are strong appointments, which reflect well on our company’s ability to attract 
skilled and experienced practitioners to the Board. 
Dr James Dodd has over 30 years experience in the public and private equity markets, focusing on telecommunications and 
related technology industries. A member of the Securities Institute and the Institute of Physics, James is currently a member of 
Oriel Securities' Advisory Board, and serves on the Board of Apollo Submarine Cable System Limited, the joint venture between 
Vodafone Group plc and Alcatel-Lucent SA.  
Dr Tom Black is co-founder and Executive Chairman of Digital Barriers plc, an AIM-listed business focussed on the surveillance 
sector. Prior to setting-up Digital Barriers in 2009, Tom spent over 20 years with Detica Group plc. He joined the business in 1984 
and was appointed Chief Executive in 1995. Tom led the £12m management buyout of Detica in 1997 and the Group's flotation on 
the London Stock Exchange in April 2002. He then oversaw the acquisition of Detica by BAE Systems in 2008 for £538m. 
These are two exciting appointments for Pinnacle and John and I wish them well in the years ahead. Being part of Pinnacle has 
been very rewarding. The telecommunications and technology markets are very demanding and require particular strength, 
perseverance and persistence from the Board and management to succeed. Alan Bonner and his team have achieved remarkable 
results over the past three years. The Company is now stronger today in its staff and services to continue to prosper. I look 
forward to Pinnacle’s continued success.  
 
 
Bill Allan 
CHAIRMAN 
20 February 2013    
CHIEF EXECUTIVE OFFICER’S REVIEW 
 
“2012 has been another solid performance.” 
“We are performing very well” 
 
 
Alan Bonner, Chief Executive Officer 
 
Introduction 
 
I am pleased to report that the Group has made significant progress in the last twelve months; once again, we have delivered a 
consistently strong performance and ongoing success in repositioning the business away from commoditised telecommunications 
markets towards the higher growth and higher margin IT managed services market. 
Despite the challenges of post-acquisition integration and difficult macro-economic market conditions, we are pleased to report 
material financial progress has been achieved in the year, delivering adjusted EBITDA including profit from acquisitions of 
£515,437, record sales of £12.7m, which is a 49% increase over last year, and a 61% increase in gross profit to £4m. 
Whilst the key focus of 2012 has been on consolidating our last four acquisitions, as with prior years, we have enjoyed a 
substantial increase in revenues over the year, which have been boosted as a result of driving organic growth from the acquired 
businesses. During the year we welcomed RMS Managed IT Security Limited and Online Computer Developments Limited into 
the Group and I am pleased to report that both businesses have now been fully integrated into Pinnacle's operations. 
It should be noted that our continuing success is as a result of a great deal of hard work, our team have done exceptionally well 
this year and I am extremely proud of the commitment and determination shown by all staff members.  
Strategy 
Background 
Prior to Pinnacle’s involvement on the AIM Market in June 2007, we had a four-phase plan:  
1) Join AIM through IPO or other means (we chose Glen Group plc); 
2) Acquire the companies, vendor agreements, intellectual property and talent, to build our own Managed Services 
Platform for growth, focusing on the high growth areas of IT security, IT Services, Cloud and Data solutions, Mobility and 
Telecommunications Connectivity. 
3) Aggregate our customers’ services onto Pinnacle’s platform (those services which we offer our customers, but are 
purchased by our customers from our competitors). This would be delivered as a result of cross-selling the enlarged 
Group’s services to our existing customer base. 
4) As a result of aggregating all our customers’ services onto Pinnacle’s Managed Services Platform, deliver new 
technology-based solutions that drive business transformation, agility, speed to market, and cost reduction for our 
customers.     
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
 
We have now entered phase three of our four-phase plan for growth. The phase three objective is to cross-sell the group’s 
services into our existing customer base, strengthening our customers’ reliance on Pinnacle, increasing our profit per customer 
and the ‘stickiness’ of our services. Our strategy is predicated on cross-selling the elements of our converged managed services 
offering, which is already delivering positive results. 
Name Change 
On 29
th
 March 2012, shareholders agreed to the Company's change of name from Pinnacle Telecom Group plc, to Pinnacle 
Technology Group plc. The change of name was effective from the 4
th
 April 2012. We also intend to change the FTSE sector from 
Fixed Line Communications to Software and Computer Services, which the Board believe better reflects the Group’s strategy. 
Growth 
Background 
Pinnacle had a single service offering (fixed line telephony) when we joined AIM in 2007. In 2008, we acquired Scotland’s oldest 
Internet Service Provider (“ISP”), which gave us Internet and core data network skills, and a public telecom operator’s license. In 
2009, we acquired a mobile and inbound calls business. In 2010, we acquired a Voice over IP (VoIP) platform and another ISP (in 
Brighton). In 2011, we acquired two IT support businesses, an IP CCTV business and an IT Security business.  
By October 2011, we had invested £2.4m (£0.7m cash - £1.7m shares) amassed 2,800 business customers and posted £8.5m of 
annual revenues and £2.6m of gross profit. By the beginning of October 2012, we had completed phase-two of our growth plan 
and developed our Managed Services Platform. We had also grown the acquired revenues by 51%, delivering combined revenues 
of £12.7m and grown the acquired gross profit by 48% to £4m, in the year to 30 September 2012. 
Market Segments 
IT Services 
Revenue grew 69% to £1,456,063 (2011: £863,464) representing 11% of group revenues at FY 30 Sept 2012 (2011: 10%). 
This area of the businesses provides expert advice and assistance to business customers in planning and designing computer 
solutions that integrate computer hardware, software, data and communication technologies. The emergence of new virtualised 
technologies, such as cloud computing, increases the requirement for internal IT support to be outsourced to third-party 
specialists, such as Pinnacle, and we are seeing good recurring revenue growth helping our customers to embrace new 
technologies, as well as being on hand to maintain, repair or replace internally managed hardware as part of the solution. 
 
The industry is rapidly moving towards providing managed services, which includes a combination of hardware provision, software 
development, installation and overseeing customers ‘technology hardware estate’. Whilst this segment is labour intensive, it 
recognises the service-orientated nature of the sector and the relatively high level of education and training that is required. 
IT Security Solutions 
Revenue grew 65,000% to £3,729,640 (2011: £5,712) representing 29% of group revenues at FY 30 Sept 2012 (2011: 0.07%).  
IT security was almost non-existent in our portfolio prior to 2012, however, through the acquisition of RMS Managed ICT Security 
Limited in October 2011, Pinnacle acquired one of the most respected and knowledgeable UK based organisations in this field. 
Combined with our experience in IT Services, voice and data networks, we specialise in providing testing, hardware, consultancy 
and application support to some of the most prestigious organisations in the UK.     
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
 
Over the past 6 years, business customers have witnessed an unprecedented number of IT intrusions or attempts to transfer data, 
national secrets, source code, databases, email archives, document stores, legal contracts, design schematics, and much more 
into the wrong hands. Unsolicited IT hacking is a risk to every company in every conceivable industry, with significant size or 
valuable intellectual property and trade secrets at risk. The great majority of the victims rarely discover the intrusion or its impact 
until it is too late. 
 
Cloud Services and Data Connectivity 
Revenue grew 25% to £2,930,336 (2011: £2,342,115) representing 23% of group revenues at FY 30 Sept 2012 (2011: 27%). 
In recent years, in order to maximise security and work efficiencies, the IT industry has driven change within the business 
community, encouraging customers to move their internally housed IT equipment and applications, out of the office and into a 
specialised virtual environment. As a host provider of cloud solutions, Pinnacle hosts and manages a variety of business software 
applications on servers that sit in the cloud, so that our customers, who use them as resources, can access them easily, paying 
for what they use, when they use it. This drives down the requirement for large capital expenditure projects and allows enterprises 
to concentrate their expenditure on key business activities. To facilitate fast access to these cloud services from customer sites, 
Pinnacle provides a full range of secure data connectivity solutions for business customers.  
 
As a fully licensed network provider, Pinnacle owns and manages its own core UK network infrastructure. By connecting 
customers to our core network using local tail connections from BT, TalkTalk or Virgin Media, we provide business customers with 
a private, managed and fully secure data network in order to run Internet, IP CCTV, video and voice applications. In recent years, 
this has expanded into other niche areas and we have also developed core skills in providing short-term voice, cloud and data 
solutions to event and media broadcasters, such as the BBC and CNN. 
 
 
Mobility Solutions 
Revenue reduced 5% to £538,702 (2011: £565,460) representing 4% of group revenues at FY 30 Sept 2012 (2011: 7%).  
Mobile phones, smartphones, tablets and mobile data devices are an integral part of how organisations now run their business. 
Many companies now have more mobile devices than PCs, all accessing valuable corporate resources. The ease with which a 
mobile device can be lost or stolen, and the inconsistent security policies that are applied to mobile devices means that there is 
significant demand to lock down and secure mobile devices and the applications running on them. Pinnacle provides a full range 
of mobile and mobile solutions from the main business mobile networks and hardware manufacturers.  
 
The rise in popularity of personal smartphone devices in the workplace is changing the way companies manage mobile devices in 
the office environment. The increased use of Non-IT managed, or supported mobile devices accessing corporate resources is 
known as a bring-your-own-device (BYOD) culture. Allowing personal devices to access corporate data in this way introduces new 
problems to the business. Pinnacle work with our business customers to ensure that all devices attached to the corporate network 
are identified, registered and managed, so that IT managers can securely control network and data access. 
 
The reduction in revenues in the year reflects the reduced commissions on offer from the major UK mobile networks, who have 
moved away from a fixed commission model to a commission based on share of spend. We expect mobile revenues to increase in 
future years as we look to cross-sell additional services in to our existing customer base.  
     
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
 
Telecommunications 
Revenue reduced 15% to £4,055,705 (2011: £4,745,328) representing 32% of group revenues at FY 30 Sept 2012 (2011: 56%).  
No other industry touches as many technology-related business sectors as telecommunications, which, by definition, 
encompasses not only the traditional areas of telephone services, but also advanced technology-based services including 
wireless communications, the Internet, fibre-optics and satellites. Whilst there is little sign that revenues in the telecommunications 
sector will disappear altogether, our focus here has been two-fold. Firstly, on IP cloud based telephony, particularly Session 
Initiation Protocol (“SIP”) as clients begin to migrate to SIP from ISDN30 and secondly, on Voice over IP (“VoIP”).  
Fixed-line telecommunications are vital to most of our customers. Mobile phones, though extremely convenient, are still quite 
unreliable in terms of service and are therefore not a complete alternative for many customers. VoIP, though inexpensive when 
compared to fixed-line telephony, has not yet gained full confidence from the customer. Nonetheless, customers will continue to 
adopt new telephony technologies at a steady rate over time, in the same way that they adopted new Internet services like online 
banking and shopping via e-commerce websites over a relatively short time period.  
The reduction in revenues this year is a reflection of the industry move towards an overall reduction in call tariffs to end users, 
mainly in the cost of calls from landlines to mobiles, which we welcome. These regulatory changes reduce the wholesale price that 
the major mobile providers charge us for using their networks. In turn, these savings are passed on to our customers in the form of 
lower call tariffs. Given the general move towards lowering margins, the reduction in revenues also reflects the impact of the 
decision in 2011 by the Group, to withdraw our own wholesale product from sale to other telecommunications resellers. 
For Pinnacle, telecommunications is a cash cow, however, over the next ten years, we do see most companies moving from 
traditional voice to VoIP solutions.  
Future Growth 
Cross-selling 
As mentioned above, our strategy is predicated on cross-selling the elements of our converged managed services offering. Put 
simply, this means selling more services to our existing customers. Currently, on average, our customers buy 1.4 services from 
Pinnacle; our short-term aim is to increase that average to 3. In percentage terms, our target is to achieve 60% of our customers 
buying more than one service from Pinnacle; achieving this goal will have a significant positive impact on our business. Currently, as 
a result of strategically acquiring single service companies, only 23% of our customers are buying more than one service from us. 
This represents a huge growth opportunity for the Company. 
Recruitment 
 
We have segmented our customers by geographic region and employee size (Enterprise, Corporate, SMB and 5 Vertical Sectors). 
We now supply services to around 3,000 customers across 14 geographic regions in the UK. We currently have 15 sales people 
across the business, however, to achieve our target of supplying 3 Pinnacle services per customer, and to help us better account 
manage our customers across the regions, we need to recruit additional Enterprise and Corporate facing account managers. For 
SMB and Vertical Sector clients, we need to recruit additional internal based account managers. We hope to have completed the 
recruitment by the summer of 2013.     
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
 
Acquisitions 
On the 5
th
 October 2011 we completed the acquisition of Online Computer Developments Limited (“OCD”). OCD, an IT Support 
Company based in Glasgow, brought us an additional team of technical staff with a wide range of desktop, server and 
virtualisation experience. All our research shows that these are the areas where customers will increase spend over the next five 
years. Equally important, OCD gave us a stronger foothold in the IT services market as we look to expand this offering across the 
UK in 2013.  
On the 9
th
 October 2011, we completed the acquisition of RMS Managed ICT Security Limited (“RMS”). RMS, a specialist IT 
Security Company based in Stoke-on-Trent, had at the time of acquisition, been voted McAfee Partner of the Year and boasts a 
customer base of some of the most prestigious and well-respected organisations in the UK. These larger enterprise and corporate 
customers trust and rely on RMS to deliver and manage their IT security solutions and lock down their networks from attack and 
vulnerability. RMS has a very different customer profile to the rest of the group companies and we see this as an opportunity to 
develop high-end cross-selling opportunities of the enlarged customer portfolio into this sector. 
 
Whilst a large percentage of the RMS revenues come from recurring IT security software solutions, our value-add in this growing 
market is professional services. We differentiate in this area through our expertise from pre-sale design, through to regular 
health-checks, audits, stress testing, ongoing training and service management. We invest a lot of business resources to ensure 
that our engineers are fully accredited and trained in all current and developing technologies, and our relationship with our Vendor 
partners is key in this respect. 
 
Since our involvement on AIM in 2007, we have invested a total of £2.4m over nine acquisitions (£0.7m cash & £1.7m shares), 
acquiring £8.4m of revenue and £2.7m of gross profit. This was phase-two, of our four-phase plan as described above. All 
acquisitions were strategic in nature, component parts as we built our Managed Service Platform. As phase-two is now complete, 
we can financially demonstrate the value of these acquisitions, having organically grown the acquired revenues by 51%, from 
£8.4m to £12.7m. In line with revenue growth, the acquired gross profit has increased by 48%, from £2.6m to £4m.  
Exceptional costs relating to acquisitions 
In this financial year, £766,846 of cash was invested in one-off acquisition costs (made up of £564,292 of cash relating to 
severance and redundancy costs and £202,554 of cash relating to purchase consideration). It should be emphasised that these 
are one-off costs that will not occur again.  
 
It is also worth noting that acquisitions 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 
accounts of the acquired business. Also, IFRS accounting requires us to carefully consider the carrying value of our intangible assets 
and forces amortisation of these assets. We view these adjustments as technical, and they have no bearing on cash.  
 
 
Accordingly, we believe that the best measure of operating profit 
or loss should be adjusted EBITDA plus the profit from the 
acquisition of OCD. IFRS operating profit or loss forces charges 
in the year for Amortisation of Intangible Assets (£464,960), 
Depreciation (£153,049), Impairment of intangible assets 
(£410,290), Exceptional costs relating to acquisitions 
(£564,292), Share based payments (£13,921) and embedded 
fair value in convertible loans (£11,229). 
 
 Adjusted EBITDA  
 £284,554 
Add Back  
Profit relating to bargain purchase of OCD £140,883 
Profit from contingent consideration of OCD £90,000 
  
EBITDA plus profit from acquisition of OCD £515,437 
 
     
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
Supply Agreement with Atos  
On 14
th
 November 2011, we announced that the Group had entered into a supply agreement with Atos, a leading international IT 
services company and Worldwide IT Partner for the Olympic and Paralympic Games. Pinnacle supply Atos with short-term 
communications and data services. Atos is a leading international IT services company generating annual revenues of EUR 8.7 
billion, employing 78,500 people in more than 42 countries around the world. Atos was also the Worldwide IT Partner for the Olympic 
and Paralympic Games and lead IT consultant for the London Olympic Games, working with the London Organising Committee of 
the Olympic and Paralympic Games. 
Global Interconnect Agreement 
Also in November 2011, we announced that the Group entered into an agreement with CMC Networks (“CMC”) for an interconnect 
into CMC’s Global Fibre Network. The interconnect strengthens the Group’s capability in the provision of IP and cloud-based 
solutions for the broadcasting industry, Pinnacle entered into an agreement that allows Pinnacle to interconnect into CMC’s Global 
Fibre Network. 
CMC, established in 1999 in South Africa, are recognised as a global leader in providing connectivity in hard to reach and “no go” 
zones. By combining the CMC interconnect with Pinnacle's data network, Pinnacle are now able to offer its customers a direct fibre 
interconnect to most capital cities across the world, but also including Vsat, SANet, MENet, AFNet and GLNet. 
These interconnects can be set up for short or long durations – from a single day’s event, or longer term events including long term 
connections. Pinnacle and CMC interconnect from Telehouse in London and will be able to offer services and connections (including 
broadcast streams) to businesses and broadcasters on a world-wide basis. 
High-Profile Contracts 
This year, once again, saw us deliver connectivity solutions to numerous media events across the UK, supporting multimedia 
broadcasts to countries all over the world. 
Queen's Jubilee Celebrations and the Olympic and Paralympic Games 
For the Queen's Diamond Jubilee celebrations, Pinnacle successfully supplied secure data network services for BBC news, BBC 
International and BBC Events, CNN and Globecast. These organisations in turn supplied broadcasters from France, Germany and 
Australia using Pinnacle's services. Over 120 data circuits were installed at Buckingham Palace, Canada Gate, Green Park, 
Tower Bridge, Victoria Embankment, The Mall, Battersea Park, Tate Modern, Wellington Barracks, Knightsbridge Barracks, 
Billingsgate, Whitehall, The Palace of Westminster, St Paul's, Convoys Wharf and Trafalgar Square. 
2012 will also be remembered as the year London hosted the Olympic and Paralympic Games, and it was with great excitement that 
the Group announced that it had entered into a supply agreement with the BBC to provide data, connectivity and voice services to 
BBC International and its world media partners, enabling worldwide broadcast coverage of the 2012 Olympic and Paralympic 
Games. 
The London 2012 Olympic Games delivered the biggest national television event since current measuring systems began, with 
51.9m (90% of the UK population) watching at least 15 minutes of coverage. 24.2m (42% of the UK population) also watched at 
least 15 minutes of coverage on the BBC Red Button. 
Under the terms of this agreement, the BBC offered international broadcasters from around the world the ability to broadcast from 
the Stratford Broadcast Tower; a 22-storey building situated at the edge of the Olympic Park with commanding views overlooking the 
Olympic Stadium, the Aquatics Centre and the Orbit Tower. Pinnacle supplied BBC International with the resilient fibre connections;      
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED) 
Olympic and Paralympic Games (continued) 
 
microwave back-up links, analogue and ISDN connectivity. Pinnacle also supplied IP telephone switchboards, telephone handsets 
and data connections to Stratford Broadcast Tower's offices, studios and production crews for the world's media. In addition to TV 
broadcasts, the BBC delivered its most successful online event ever, attracting a record-breaking 55m global browsers to BBC 
Sport online (cumulative reach) throughout the course of the Games, and marking London 2012 as the first truly digital Games. 
This mirrored the BBC’s record Olympic TV reach, across both linear TV channels and Red Button, with over 51.9m viewers in the 
UK - the largest TV audience reach for a major event for at least 10 years.  
Through our agreement with Atos, our interconnect agreements with CMC, both signed during this year, and other international data 
carriers, Pinnacle enabled the BBC and its international broadcast partners at the London Olympics Stratford Broadcast Tower, to 
have direct point-to-point fibre connections to most capital cities around the world. Pinnacle delivered the transmission of Olympic 
and Paralympic Games broadcast images and sound, direct to the broadcaster's own country for editing and re-transmission around 
the world. 
We expect to continue to win future contracts of this nature and we are delighted to have fostered such a strong relationship with 
the BBC. 
Board Changes 
As reported in the Chairman’s Statement, both Bill Allan and John Anderson have decided to retire from the Board and will not be 
seeking re-election at the forthcoming AGM. I have had the pleasure of working with John since he joined the Board in 2008, he 
has served us well and his support and counsel will be missed. Bill took the Chair in March 2010 and the last three years working 
alongside Bill have been inspirational, I wish them both well and would like to take this opportunity to thank them for their support 
and all that they have given the Company. 
I would also like to take this opportunity to welcome Dr James Dodd to the Board as Non-Executive Chairman and also Dr Tom 
Black, as Non-Executive Director. I am excited about the prospect of working alongside James and Tom and look forward to the 
future with great optimism. 
Summary 
”As we continue to invest to reposition the business for the future, the Group has made good progress and performance in the 
current economic climate. Our commitment to investment in people will continue and we are well positioned to deliver value to 
shareholders through the achievement of our stated strategy. After carefully considering Pinnacle’s growth and strategic 
objectives, we believe that a share consolidation could prove beneficial to the company and its shareholders, as a result, we will 
be seeking approval for a 1-for-100 share consolidation at the forthcoming AGM on 26 March 2013. 
“There are good reasons to be optimistic; the business has invested £766,846 of cash this year in one-off acquisition costs, 
produced record sales of £12.7m and adjusted EBITDA including profit from acquisitions of £515,437, despite one of the most 
challenging trading environments. We’ve also grown our acquired revenues by 51% and grown our acquired gross profit by 48%. 
We enter the new financial year in a strong position, having secured £2.95m of cash following new share issues post year-end. 
Our financial strength will enable us to continue to invest and reposition the business, and despite the current economic 
conditions, we intend to make further investment in our sales teams to take advantage of the opportunities we have to increase 
our market share. Whilst the results of our cross-selling strategy may take some time to deliver, we are confident that the actions 
we have taken to date and the strategy we are pursuing will ensure the Group continues to prosper.” 
 
Alan J Bonner 
CHIEF EXECUTIVE OFFICER 
20 February 2013    
CORPORATE GOVERNANCE 
As the company is listed on the AIM market of the London Stock Exchange, 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 general board meetings and monitors performance through 
timely and relevant reporting procedures. Where it deems 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 
Group’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 12 to 14, 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 once 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. 
 
Going concern
Following the Placings of new shares on 10
th
 December 2012 and 6
th
 February 2013, raising a total of £2.95m before expenses 
and on the basis of a review of forecasts and sensitised cash flows, the Directors are confident 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 the importance of maintaining a policy of careful cash management and ensuring that any investment in 
future growth, delivers a profitable return for shareholders. 
     
CORPORATE GOVERNANCE (CONTINUED) 
 
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.pinn.uk.com, 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.  
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   11 11 1 1 1 1 
J C Anderson   11 11 1 1 1 1 
A Bonner   11 11 - - - - 
     
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. 
     
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 
2012          
total 
2011          
total 
 £ £ £ £ £ £ 
Non- Executive       
W Allan 35,000 - - - 35,000 31,904 
J C Anderson 10,000 - - - 10,000 10,000 
Executive       
A Bonner 85,800 4,100 - 9,272 99,172 105,695 
       
Totals 130,800 4,100 - 9,272 144,172 147,599 
 
Notes: Included in “Other benefits” in the table of Directors’ remuneration above, are the costs of share options issued in 
accordance with IFRS 2 Share Based Payments to the Directors as follows: 
 
 
      
2012 2011 
       
   £    £ 
Name of Director 
              
A J Bonner 
      
7,512 7,512 
  
            
    
Total 
            
7,512 7,512 
 
 
Directors’ interests in shares 
 
The interests of the Directors’ in the ordinary shares of the Company at 30 September 2012 together with their 
interests at 1 October 2011 were as follows: 
 
     
2012 2011 
      
   £    £ 
Name of Director             
W Allan 
     
5,714,286 5,714,286 
A J Bonner 
     
221,389,150 189,076,972 
J C Anderson 
     
1,428,571 1,428,571 
  
          
    
 
Directors’ interests in loan notes  
The interests of the Directors in the loan notes of the Company, referred to in note 17, at 30 September 2012 together with their 
interests at 1 October 2011 were as follows: 
 
     
2012 2011 
      
   £    £ 
Name of Director 
            
A J Bonner 
     
- 25,000 
J C Anderson 
     
- - 
 
     
REPORT OF THE BOARD TO THE MEMBERS ON DIRECTORS’ REMUNERATION (CONTINUED) 
 
Directors’ interests in share options 
 
The interests of the current Directors in options over the ordinary shares of the Company at 30 September 2012 together with their 
interests at 1 October 2011 (or date of appointment if later) were as follows: 
 
 
1 October 
2011 
 
Granted Lapsed 30 September 
2012 
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 
2011 
Granted Lapsed 30 September 
2012 
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. 
 
Of the total options granted to Directors, 71,545,455 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 8,333,333 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 0.34p and the range of prices during the period was between 
0.40p and 0.30p. 
 
 
By order of the Board 
 
 
 
Bill Allan 
Chairman, Remuneration Committee 
20 February 2013 
     
DIRECTORS’ REPORT  
for the year ended 30 September 2012 
 
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 2012. 
 
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 9, 
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 profit, total Group overheads, cash 
and capital expenditure. 
 
 Turnover increased by £4.2m over the year, 49% up on 2011 figures. 
 
 Adjusted EBITDA shows that the business generated £285k from trading operations during the year, prior to exceptional 
costs of acquisition, mostly headcount reductions, of £466k. 
 
 Gross profit increased by 61% over 2011 figures, a net increase of £1.5m in the year to £4m. Gross profit percent 
increased to 31.1% of revenue, up from 28.9% reported in 2011. 
 
 Administration costs increased by £1.4m in the year, up 60% on the 2011 figure, in line with the increase in gross profit 
and also reflecting the new combined group management and staff infrastructure to grow the business in 2013. 
 
 Cash resources of £452k available from 2011, were invested in the two new business acquisitions made during the 
year, in addition to a net £15k of banking facilities, out of £154k made available to the group from HSBC and HBoS. 
 
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 material. In addition to these risks, Note 24 
contains details of financial risks.     
DIRECTORS’ REPORT (CONTINUED) 
 
 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 the importance of maintaining a policy of careful cash management and ensuring that any 
investment in future growth, delivers a profitable return for shareholders.  
 
Mitigation: The board seeks to mitigate this risk by carefully managing the costs and cash resources of the Group. This 
is governed using an internal purchase order requisition system and pre-defined authorised signatory limits. Cash is 
micro managed on a day to day basis by the senior management team with movements reconciled and reported daily. 
 
 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. The board and senior management regularly review 
employee salaries and benefits in line with those offered for commensurate roles in the market to aid retention. 
 
 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. Solutions that are high profile or with 
critical deadlines are handled by senior management as part of a project delivery team, headed by a Director. 
 
 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 2012 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.     
DIRECTORS’ REPORT (CONTINUED) 
 
 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 has marginally strengthened since 2011, 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. 
To mitigate downward pressure on price, the Group sets out to buy services at the highest point in the value chain and 
will source supply direct from wholesale network providers, where it cannot own the infrastructure from end to end. 
 
 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 £799,253 (2011: £190,293). The audited financial statements of the 
Group are set out on pages 23 to 26. The Directors do not propose a dividend for the year ended 30 September 2012 (2011: £Nil). 
 
Directors and their interests 
The present membership of the Board is as follows:  
 
William Allan, Non-Executive Chairman     (notified retirement from Board on 26
th
 March 2013) 
John C Anderson, Non-Executive Director  (notified retirement from Board on 26
th
 March 2013) 
Alan J Bonner, Chief Executive Officer  
 
Dr James Dodd, Non-Executive Chairman  (to be appointed 26
th
 March 2013)  
Dr Tom Black, Non-Executive Director   (to be appointed 26
th
 March 2013)  
 
In accordance with the Company’s articles of association, Alan Bonner 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 12 to 14. 
     
DIRECTORS’ REPORT (CONTINUED) 
 
Acquisitions 
During the year the Company acquired Online Computer Developments Limited, an IT Managed Services provider focused on 
West Scotland, and IT Security experts RMS Managed ICT Security Limited.
 
Substantial shareholdings 
At 20 February 2013 the following substantial shareholding interests had been notified to the Company: 
 
 Number of ordinary shares Percentage held 
Octopus Investments 329,715,000 10.32% 
ISIS Equity Partners 250,000,000 7.83% 
A J Bonner 224,722,483 7.03% 
D Giddens 190,273,709 5.96% 
Huntingtower Capital 184,046,491 5.76% 
P Goodland 178,273,709 5.58% 
Herald Investments 166,666,667 5.22% 
Hargreave Hale 100,500,000 3.13% 
Dr T Black 88,209,524 2.76% 
 
Share capital 
The share capital during the year and the number of ordinary shares reserved for issue are shown in Note 18 to the consolidated 
financial statements. 
 
Post balance sheet events 
 
On 10
th
 December 2012, the Group announced that it had issued 100,000,000 of new ordinary shares of 0.1p each to raise  
£300,000 before expenses, by way of a placing. The funds were raised from both existing and new investors with the net 
proceeds of the Placing used primarily for working capital purposes.  
On 8 January 2013, the Company announced that William Allan (Non Executive Chairman) and John Anderson (Non Executive 
Director) will retire as Directors of the Company following the conclusion of the Company's Annual General Meeting ("AGM"), to 
be held on 26 March 2013. The Company announced that they will be replaced by Dr James Dodd (Non Executive Chairman) and 
Dr Tom Black (Non Executive Director) at the AGM. 
 
On 6
th
 February 2013, the Group announced that it had issued 883,333,333 of new ordinary shares of 0.1p each to raise  
£2.65 million before expenses, by way of a placing that was oversubscribed. The funds were raised from both existing and new 
investors.  
 
The net proceeds of the Placing will be used primarily for working capital purposes, to bring forward the implementation of the 
Company's growth strategy through the hiring of additional sales expertise to capitalise on the cross selling of the enlarged 
product suite into an already extensive base of around 3,000 customers. This strategy is designed to mitigate customer risk, 
strengthen customer relationships and ensure continuing high quality and visibility of earnings. 
 
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. 
 
     
DIRECTORS’ REPORT (CONTINUED) 
 
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 2012, calculated in accordance 
with the requirements of the Companies Act 2006, were 55 days (2011: 47 days). Trade creditor days of the Parent Company at 
30 September 2012, were 55 days (2011: 36 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 24 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 2012 comprise finance leases totalling £36,408 (2011: £23,857). The interest rates on 
the finance leases are fixed for the term of the lease at between 8.5% 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. On 20
th
 October 2011, in accordance with the terms, £105,000 of loan 
notes were converted into ordinary shares of Pinnacle at a price of 0.315p each, representing a discount of 15% to the closing 
price on the day prior to conversion. 
 
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 become repayable on demand in the event of a specified default by Pinnacle. 
 
On 6 October 2011, Pinnacle created a further £500,000 unsecured convertible loan notes in units of £2,000. 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.  
  
All loan notes are convertible into ordinary shares by Pinnacle at any time after the second anniversary following issue, or 
alternatively by the holders of the loan notes at any time following the period of thirty days after the second anniversary of the loan 
notes. The interest accrues on a day to day basis and is payable monthly in arrears.  
 
The directors consider the value of the loan notes to be £126,229 taking into consideration the principal sum of £115,000 and the 
fair value of the early prepayment option, should the loan be converted into shares, less the present value of the interest payable 
in arrears as governed by IAS32. Additional information on financial instruments is included in Note 17. 
 
Research and Development 
As part of the acquisitions of Sipswitch Limited in 2010 and MacLellan IT Limited in 2011, 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.      
DIRECTORS’ REPORT (CONTINUED) 
 
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 Technology 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 67 to 70. 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 
20 February 2013      
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 United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting Standards and applicable laws). Under company law the directors must not 
approve the financial statements unless they are satisfied that they 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 accounting 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 that are sufficient to show and explain the company’s 
transactions and 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 safeguarding the assets 
of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 
 
 
 
     
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PINNACLE TECHNOLOGY GROUP PLC 
 
We have audited the group financial statements of Pinnacle Technology Group plc for the year ended 30 September 2012 which 
comprise the consolidated income statement, consolidated statement of financial position, consolidated statement of changes in 
equity, consolidated statement of cash flows, consolidated statement of comprehensive income 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 21, 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 2012 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 Technology Group plc for the year ended  
30 September 2012.  
 
Andrew Howie 
Senior Statutory Auditor 
for and on behalf of Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
95 Bothwell Street 
Glasgow 
G2 7JZ 
 
20 February 2013     
CONSOLIDATED INCOME STATEMENT 
for the year ended 30 September 2012 
  Year ended  Year ended  
  2012  2011  
 Note £  £  
        
Revenue 4 12,710,446  8,522,079  
      
Cost of sales  (8,750,124)  (6,057,550)  
 
Gross profit  3,960,322  2,464,529  
      
Operating expenses  (5,058,014)  (2,562,834)  
 
 
    
Operating loss  (1,097,692)  (98,305)  
      
Adjusted EBITDA   284,554  
 
208,211  
 
Profit relating to bargain purchase of OCD 3 140,883  -  
Profit relating to contingent consideration 3 90,000  80,000  
EBITDA before exceptional costs and restructure costs  515,437  288,211  
      
Amortisation of Intangible Assets 9 (464,960)  (239,195)  
Depreciation 11 (153,049)  (108,990)  
Exceptional costs relating to acquisitions 3 (564,292)  (23,031)  
Impairment of intangible assets 9 (410,290)  -   
Share based payments 7 (13,921)  (13,922)  
Embedded fair value in convertible loan 17 (11,229)  (10,062)  
Share of profit from associate 10 4,612   8,684   
        
Operating Loss 
 
(1,097,692) 
 
(98,305) 
 
 
 
 
   
Interest receivable  3,257  349  
Interest payable  (21,123)  (19,360)  
 
 
    
Net Finance expense 6 (17,866)  (19,011)  
 
 
    
Loss before tax  (1,115,558)  (117,316)  
 
 
    
Taxation 19 218,264  (997)  
 
 
    
Loss for the period from continuing operations  (897,294)  (118,313)  
 
 
    
Discontinued operations      
Loss for the period from discontinued operations 20 -  (71,980)  
 
 
     
Loss for the year attributable to the equity holders of the 
parent  
(897,294) 
  
(190,293) 
  
      
Loss per share      
- basic and fully diluted – continuing 8 (0.04)p  (0.01)p  
- basic and fully diluted – discontinued 8 0.00p  0.00p  
- basic and fully diluted – total 8 (0.04)p  (0.01)p  
 
 
 
 
     
 
The notes on pages 27 to 57 are an integral part of these consolidated financial statements.     
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
as at 30 September 2012 
  2012  2011 
 Note £  £ 
Non-current assets       
Intangible assets 9 2,907,886  1,267,813 
Investments in Associated Companies 10 181,171     176,559  
Development Asset 11 279,818  279,818  
Property, plant and equipment 11 217,136  107,715   
107,715  Deferred tax asset 12 508,100  - 
 
Total non-current assets  4,094,111  1,831,905 
     
Current assets     
Inventories 14 363,167  97,661 
Trade and other receivables 15 2,334,145  1,576,303 
Cash and cash equivalents 16 129,229  452,431 
 
Total current assets  2,826,541  2,126,395 
 
Total assets  6,920,652  3,958,300 
     
Liabilities     
Short term borrowings  (261,781)  (9,976) 
Trade and other payables  (2,178,867)  (1,092,069) 
Other taxes and social security costs  (685,449)  (170,162) 
Accruals and other payables  (1,574,251)   (844,071) 
     
Total current liabilities 17 (4,700,348)  (2,116,278) 
     
Non-current liabilities     
Long term borrowings 17 (211,702)  (28,882) 
Deferred tax liability 12 (621,335)  - 
     
Total liabilities  (5,533,385)  (2,145,160) 
 
Net assets  1,387,267  1,813,140 
     
Equity     
Share capital 18 5,825,055    5,667,056  
Share premium account  4,343,553  4,044,052  
Merger reserve  283,357  283,357  
Other reserve  52,869  38,948 
Fair value adjustment  (1,064,130)  (1,064,130) 
Retained earnings  (8,053,437)  (7,156,143) 
 
Total equity  1,387,267  1,813,140 
 
These financial statements were approved and authorised for issue by the Board of Directors on 20 February 2013. 
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      
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
for the year ended 30 September 2012 
 Share Share Merger Other Fair Retained  
 capital premium Reserve reserve Value (1) earnings Total 
        
At 1 October 2010 
5,481,009 3,560,331 283,357 25,026 (1,064,130) (6,965,850) 1,319,743 
Loss and total comprehensive 
loss for the period and expense 
for the period 
- - - - - (190,293) (190,293) 
        
Transactions with owners        
Share Issue 186,047  - - - - - 186,047  
Share based payments - - - 13,922  - - 13,922  
Premium on Share Issue - 483,721 - - - - 483,721  
Total Transactions with owners 186,047 483,721 - 13,922 - - 683,690 
 
Total movements 186,047 483,721 - 13,922 - (190,293) 493,397 
        
Equity at 30 September 2011 5,667,056 4,044,052 283,357 38,948 (1,064,130) (7,156,143)
) 
1,813,140 
 
At 1 October 2011 
5,667,056 4,044,052 283,357 38,948 (1,064,130) (7,156,143) 1,813,140 
Loss and total comprehensive 
loss for the period and expense 
for the period 
- - - - - (897,294) (897,294) 
        
Transactions with owners        
Share Issue 157,999  - - - - - 157,999  
Share based payments - - - 13,921  - - 13,921  
Premium on Share Issue - 312,001 - - - - 312,001  
Expenses on Share Issue - (12,500) - - - - (12,500) 
Total Transactions with owners 157,999 299,501 - 13,921 - - 471,421 
 
Total movements 157,999 299,501 - 13,921 - (897,294) (425,873) 
        
Equity at 30 September 2012 5,825,055 4,343,553 283,357 52,869 (1,064,130) (8,053,437) 1,387,267 
 
(1) Represents the difference between the fair value of the customer base measured using IFRS2 and the actual consideration paid for the assets of the business. 
 
The accompanying accounting policies and notes form an integral part of these financial statements.  
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
for the year ended 30 September 2012  
  Year ended  Year ended 
  2012  2011 
  £  £ 
Loss for the year from total operations  (897,294)  (190,293) 
Total comprehensive negative income for the year  (897,294)  (190,293) 
Attributable to equity holders of the parent  (897,294)  (190,293)     
CONSOLIDATED STATEMENT OF CASH FLOWS 
for the year ended 30 September 2012  
  2012  2011 
  £  £ 
Cash flows from operating activities       
Loss before taxation  (1,115,558)  (117,316) 
Adjustments for:     
Depreciation  153,049  108,990 
Amortisation  464,960  239,195 
Impairment of intangible assets  410,290  - 
Share of (profit)/loss from associate   (4,612)  (8,684) 
Share option charge  13,921  13,922 
Fair value adjustment for convertible loan  11,229  10,062 
Bargain purchase of subsidiary  (140,883)  - 
Contingent consideration in relation to acquisitions  (90,000)  - 
Interest expense  17,867  19,011 
Movements on deferred tax  (225,403)  - 
(Payment)/Receipt of corporation tax  (16,956)  (997) 
Increase in trade and other receivables  (13,652)  (318,467) 
Increase in inventories  (33,250)  (24,471) 
Increase/(decrease) in trade payables, accruals and other 
creditors  
294,021  104,507 
     
Net cash flow from operating activities  (274,977)  25,752 
     
Cash flows from discontinued activities     
Loss of discontinued activities before taxation  -  (71,980) 
Cash flows from investing activities     
Acquisition of business assets, net of cash acquired  (356,943)  (45,000) 
Capitalisation of software development costs  (72,000)  (68,000) 
Purchase of property, plant and equipment  (60,871)  (30,274) 
Interest received  3,257  349 
     
Net cash used in investing activities  (486,557)  (142,925) 
     
Cash flows from financing activities     
Issue of shares  365,000  - 
Repayment of convertible loans and bank loans  (15,290)  (5,000) 
Expenses paid in connection with share issue  (12,500)  - 
Payment of finance lease liabilities  (22,612)  (31,245) 
Interest paid  (21,123)  (19,360) 
     
Net cash from financing activities  293,475  (55,605) 
     
Net (decrease)/increase in cash  (468,059)  (244,758) 
Cash at bank and in hand at beginning of period  452,431  697,189 
     
Cash at bank and in hand at end of period  (15,628)  452,431 
Comprising: 
Cash at bank and in hand  129,229  452,431 
Bank overdrafts   (144,857)  - 
 
  (15,628)  452,431     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
 
1. General information  
Pinnacle Technology 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, except for fair value of certain financial 
investments. 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 
At the date of authorisation of these financial statements, the following new standards, amendments and interpretations to existing 
standards have been published that are mandatory for forthcoming financial periods, but which the Group has not adopted early. 
These are not expected to have a material impact on the Group's consolidated financial statements: 
 IFRS 9 Financial Instruments (effective 1 January 2015) 
 IFRS 10 Consolidated Financial Statements (effective 1 January 2013) 
 IFRS 11 Joint Arrangements (effective 1 January 2013) 
 IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013) 
 IFRS 13 Fair Value Measurement (effective 1 January 2013) 
 IAS 19 (revised June 2011) Employee Benefits (effective 1 January 2013) 
 IAS 27 (revised) Separate Financial Statements (effective 1 January 2013) 
 IAS 28 (revised) Investments in Associates and Joint Venture (effective January 2013) 
 Amendments to IFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities (effective 1 January 2013) 
 Amendments to IAS 32 – Offsetting Financial Assets and Financial Liabilities (effective 1 January 2014) 
 Amendments to IFRS 9 and IFRS  7 – Mandatory Effective Date & Transition Disclosures (effective 1 January 2015) 
 Annual Improvements 2009-2011 Cycle (effective 1 January 2013) 
The financial statements for the year ended 30 September 2012 were approved by the Board of Directors on 20 February 2013.     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
 
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 2012. 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. 
 
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. 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
c) Revenue and revenue recognition (continued) 
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 five segments for monitoring and reporting purposes: 
 
 IT Services 
 IT Security Solutions 
 Cloud Services and Data Connectivity 
 Telecommunication Services 
 Mobile Services 
 
IT Services 
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. 
 
IT Security Solutions 
Revenue attributable to the maintenance and support of IT Security software and hardware solutions is invoiced in accordance 
with the contract and recognised on a straight-line basis over the support period. 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 or software licence renewal date. Deferred income arises where services are 
invoiced in advance of performance. Accrued Income arises where service installation has been completed but not invoiced at the 
balance sheet date. 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. 
 
Cloud Services and Data Connectivity 
Installation and Set-Up Revenues are invoiced in advance but are not recognised as Revenue in the income statement until the 
service goes live. Thereafter, Cloud Services and Data Connectivity Revenues principally consist of contracted monthly or 
quarterly rentals in advance in accordance with the contracts and are 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. 
 
For cloud and data connectivity solutions for short-term events, Revenues are primarily invoiced in arrears after the service goes 
live in accordance with the contract. Accrued Income arises where service installation has been completed but not invoiced at the 
balance sheet date.  
 
Telecommunications services 
Fixed line network services for voice 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. 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
c) Revenue and revenue recognition (continued) 
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 are 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. 
 
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. 
 
Revenue from the sale of mobile hardware is recognised in the income statement when the significant risks and rewards of 
ownership have passed to the buyer. 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 (i). 
 
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 retained earnings 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) Exceptional items 
 
Items that are material and non-operating or non-recurring in nature are presented as exceptional items in the income statement, 
within the relevant account heading. Items that may give rise to classification as exceptional items include, but are not limited to, 
significant Group restructuring and rationalisation programmes, asset impairments, profits or losses on the disposal of businesses, 
negative goodwill, transaction fees and re-measurement of contingent consideration.      
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
i) 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 –three years  
IT equipment –three years 
Fixtures, fittings and leasehold improvements –three years 
Motor vehicles –three years 
Software development –five years 
 
Material residual value estimates are updated as required, but at least annually, whether or not the asset is revalued. 
 
j) Intangible 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 amortised over 5 to 10 years  
- Customer lists to be amortised over 5 to 10 years   
- Custom Voice over internet systems to be valued and amortised over a maximum of 10 years. 
 
The allocation of fair values to the tangible assets and the identification and valuation of intangible assets affects the calculation of 
goodwill recognised in respect of an acquisition and as such represents a key source of estimation uncertainty. Refer to Principal 
Accounting Policy u) below. 
 
k) 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 (CGU) level. Goodwill is allocated to those CGU’s 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.  
 
Impairment reviews are carried out using multi-year cash flow projections from the approved budgets of the Group. These are 
discounted using a 20% weighted average cost of capital, reflecting the time value of money and the nature and risks of the CGU. 
Where the CGU contains a customer base, then this asset is discounted further using an annual customer retention ratio to reflect 
the assumed diminution of revenues from a customer base over time. The customer retention ratio used is measured separately 
by CGU and is calculated as the lower of the actual customer base retention ratio experienced and 80% per annum.  
Following a sustained period of improved customer retention and cash flows generated from customer acquisitions, the Directors 
revised the term over which cash flow projections are measured in 2010. Customer bases acquired after 1 October 2008 have 
cash flows measured over a maximum of 10 years, as opposed to the previous policy of a maximum of 5 years. The term and 
customer retention ratio is attributed separately to each asset and is assessed by the Board at the time of acquisition. 
 
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. 
 
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. 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
l) 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. 
 
m) 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. The cost is calculated using the FIFO basis. Work in progress relates to costs incurred on part completed work. 
 
n) 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. 
 
o) 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. 
 
De-recognition 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.  
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
o) Financial assets (continued) 
Any change in their value through impairment or reversal of impairment is recognised in the income statement. A 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. 
  
p) Cash and cash equivalents 
Cash at bank and in hand 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. 
 
q) 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. The financial liability arising 
on the loan notes is carried at amortised cost. The embedded derivative, which represents an embedded prepayment option, is 
carried at fair value. 
 
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. 
 
r) 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. 
 ‘Retained earnings reserve’ represents retained profits and accumulated losses. 
 
s) 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.     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
t) Pension 
The Group makes payments to defined contribution retirement benefit plans that are charged as an expense as they fall due. 
Payments are made on the basis of a percentage of qualifying salary for certain employees to personal pension schemes. The 
total charge to the income statement for the period was £9,456 (2011: Nil). There were no overdue contributions payable at the 
balance sheet date (2011: £nil). 
 
u) Critical accounting judgements and key sources of estimation uncertainty 
 
Critical judgements in applying the Group’s accounting policies 
The Group has made two business asset acquisitions during the year from Online Computer Developments Limited and RMS 
Managed ICT Security 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 
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. Customer bases are valued at acquisition by measuring the future 
discounted cash flows over a five year or ten year period from the date of acquisition, depending on class an date of acquisition 
and assumes diminution for retention at 80% per annum, using a 20% weighted average cost of capital. IT systems and software 
development are valued at cost.  
 
Determining whether intangible assets are impaired requires the judgement of whether there is an impairment indicator. 
Management consider losses in acquired subsidiaries to be an impairment indicator and perform regular tests to measure the 
future cash flows to ensure that the loss is due to 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 and the 
weighted average cost of capital. Each of the intangible assets held by the Group is measured regularly to ensure that they 
generate discounted positive cash flows. Where there is indication of impairment, the intangible asset is impaired by a charge to 
the income statement. Further details on the impairment tests are shown in note k) above. 
 
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 future cash flows expected to arise from the cash 
generating unit, including management's estimates of long-term operating margins and long-term growth rates and selection of 
suitable discount rate in order to calculate the present value.  
 
Details of the assumptions used and the sensitivities of the key assumptions in the impairment calculations are disclosed in note 
9. In determining the key assumptions, management have taken into account the current economic climate, the resulting impact 
on expected growth and discount rates, and the impact that this has on impairment calculations. 
 
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. 
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
3. Acquisitions   
 
3.1. Acquisition of Online Computer Developments Limited 
On 6
th
 October 2011, Pinnacle Technology Group acquired the entire share capital of Online Computer Developments Limited 
(“OCD”) for a total consideration of up to £110,000.  
 
Online Computer Developments Limited, based in Glasgow, focus on the design, implementation and ongoing maintenance of IT 
solutions to business customers based in Scotland. The acquisition formed a key part of Pinnacle's strategy to build out its IT 
capability - enabling faster delivery of its cloud services proposition. The acquired customer base complements that of Pinnacle 
and further strengthens its presence in the Scottish SME market and allows for strong cross-selling opportunities across the 
combined businesses. 
 
The consideration was satisfied through a combination of cash, convertible loan note and contingent consideration shares at 
0.57p. At completion, Pinnacle paid initial consideration of £2,000 in cash and issued a two-year convertible loan note to the value 
of £18,000. In addition, contingent consideration, calculated in accordance with specific growth performance earn-out provisions 
for the year ending 30th September 2012, allowed the vendors to earn additional consideration of £90,000 of Pinnacle Technology 
Group plc ordinary shares.  
 
In accordance with IFRS3 (revised) Section 39-40, for the purpose of calculating the intangible asset, contingent consideration of 
£90,000 was assumed on acquisition, relating to the financial performance of the subsidiary in the year to 30 September 2012. On 
acquisition, this was deemed to be a reasonable and probable achievement target for the year. The contingent consideration of 
£90,000 was payable provided only that the combined IT Services revenues for the acquired companies in the year to 30 
September 2012, exceeded their prior year revenues by more than £500,000. No pro-rata performance criteria was agreed. Upon 
reviewing the actual results for the year, the performance criteria for payment of the contingent consideration was not met, and 
consequently this amount has been recorded in the consolidated income statement for Group for the year to 30 September 2012.  
 
 
 
 
 Book Cost 
£ 
Fair Value 
£ 
Non-current assets 
Non-current Assets 
   
Intangible Asset  - 626,506 
Property, plant and equipment  11,611 11,611 
Deferred tax asset  - 35,978 
  11,611 674,095 
Current assets    
Trade and other receivables  47,520 47,520 
Cash at bank and in hand  450 450 
    
Total current assets  47,970 47,970 
    
Total assets  59,581 722,065 
    
Non-current liabilities - Deferred tax liability  (144,096) 
    
Current liabilities    
Trade and other payables  (38,146) (38,146) 
Other taxes and social security costs  (55,160) (55,160) 
Other creditors and accruals  (233,780) (233,780) 
 
Total current liabilities 
   
Total liabilities . (327,086) (471,182) 
Net (Liabilities) / Assets 
 
 
Net Assets 
 (267,505) 250,883 
    
    
- initial consideration   (20,000) 
- contingent consideration   (90,000) 
Fair value of cost of acquisition   (110,000) 
    
Gain on bargain purchase   140,883     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
3.1. Acquisition of Online Computer Developments Limited (continued) 
 
In assessing the fair value of Trade and other receivables as part of the acquisition, the Group considered the contractual values 
of Trade Debtors of £59,496 and the bad debt provision of £11,976. The Group concluded the fair value to be equivalent to the 
book value on acquisition. 
 
Included in the fair value calculations above is an intangible asset, representing the future cash flows of the acquired customer 
base in the hands of the Group, calculated in accordance with the provisions of IFRS3. The increase in fair value of assets 
acquired over book value resulted in a gain on acquisition of £140,883, which has been offset against operating expenses in the 
Income Statement for the year to 30 September 2012. 
 
Since the acquisition, equivalent to almost the full financial year, Online Computer Developments Limited, contributed £808,110 of 
revenue and £43,332 of EBITDA towards the performance in the year to 30 September 2012. Costs incurred during the year 
associated with the acquisition included legal fees of £10,735 and exceptional costs in relation to redundancy and severance 
payments of £166,791. Due to the acquisition taking place on 6
th
 October 2011, results for the entire year would be insignificantly 
different to those stated. 
 
 
3.2. Acquisition of RMS Managed ICT Security Limited 
 
On 10
th
 October 2011, Pinnacle Technology Group plc was pleased to announce the acquisition of the entire share capital of RMS 
Managed ICT Security Limited (“RMS”), a leading provider of IT security software and consultancy solutions to mid-market, 
enterprise and public sector business customers. 
The acquisition of RMS provides IT security expertise, a key part of Pinnacle's strategy to build out its of its cloud services 
proposition. The Staffordshire business further strengthened Pinnacle’s reach across the UK and delivered an additional 1,700 
additional business customers to the group. The resulting customer base delivers strong cross-selling opportunities to the Group, 
across the combined businesses. The acquisition of RMS was completed for a total consideration, including brokers fees, of 
£468,301. RMS was formed in November 2010, following the successful management buyout and subsequent separation of the IT 
Security element of Redstone Managed Solutions Plc. At completion, initial consideration of £25,000 was satisfied in cash and in 
addition, further deferred cash payments of £343,301 were agreed, between 31
st
 October 2011 and 25
th
 December 2014.  
 
At completion, the group also created a two-year interest bearing convertible loan notes for the value of £100,000 of ordinary 
shares of Pinnacle Technology Group plc. Included in the fair value calculations below is an intangible asset, representing the 
future cash flows of the acquired customer base, calculated in accordance with the provisions of IFRS3.  
Since the acquisition, results from RMS Managed ICT Security Limited, which spanned the majority of the financial year, 
contributed £3,574,547 of revenue and generated £64,531 of adjusted EBITDA. Exceptional costs incurred during the year 
associated with the acquisition were £356,766 in respect of redundancy and severance payments. 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
3.2. Acquisition of RMS Managed ICT Security Limited (continued)  
 
 
 
Non Current Liabilities – Deferred Tax liability - (386,950) 
    
Current liabilities  
Trade and other payables 
  
(1,116,395) 
 
(1,116,395) 
Deferred Income and accruals  (1,683,271) (1,156,407) 
    
Total non-current liabilities . (2,799,666) (2,659,752) 
    
Net (Liabilities) / Assets 
 
 
Net Assets 
 (1,740,955) 261,876 
    
    
- initial consideration   (182,554) 
- deferred consideration   (285,747) 
Fair value of cost of acquisition   (468,301) 
    
Goodwill           Note 9             (206,425) 
 
 
In assessing the fair value of Trade and other receivables as part of the acquisition, the Group considered the contractual values 
of Trade Debtors of £790,599 and the bad debt provision of £110,215. The Group concluded the fair value of these debts to be 
equivalent to the book value on acquisition. 
 
 
3.3 Restructure costs 
 
Restructure and legal costs for the year totalled £564,292 of which £177,526 related to Online Computer Developments Limited, 
£356,766 related to RMS Managed ICT Security Limited and £30,00 related to the acquisition of MacLellan IT Limited. 
 
 
 
  Book Cost £ Fair Value £ 
    
Non-current assets    
Intangible Asset  - 1,682,392 
Deferred Tax Asset  - 180,525 
Property, plant and equipment  85,874 85,874 
    
Total non-current assets 
 
 
 85,874 1,948,791 
    
Current assets    
Inventories  232,256 232,256 
Trade and other receivables  740,581 740,581 
    
Total current assets  972,837 972,837 
    
Total assets  1,058,711 2,921,628 
    
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
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. Following further diversification of the 
group offering during 2012, the Company has revised its operating segments based on these reports. The Directors present below 
the results for 2012 and revised 2011 comparisons, based on the new reportable operating segments. 
 
The Group currently has five reportable segments: 
 
 IT Services    – this segment provides IT support, consultancy, installation and hardware  
       solutions to SME companies. 
 
 IT Security Solutions   – this segment provides a range of IT applications and consultancy services in  
       order to secure data and assets for corporate and enterprise companies. 
 
 Cloud Services and Data Connectivity  – this segment provides leased lines, data connectivity, wireless solutions, data  
       centre and hosting services, VoIP and other cloud based applications to  
       business customers. 
 
 Telecommunication Services  – this sector covers a range of telecommunications services including calls, line  
       rental and telephone system maintenance. 
 
 Mobility Solutions    – this segment provides a range of mobile services and solutions to SME  
       companies. 
 
 
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. Segments are measured below on this basis. 
 
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. 
 
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. 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
4. Segment Reporting (continued) 
 
 
4.1 Analysis of revenue  2012  2011 
  £  £ 
By business sector     
IT Services  1,456,063  863,464 
IT Security Solutions  3,729,640  5,712 
Cloud Services and Data Connectivity  2,930,336  2,342,115 
Telecommunication Services  4,055,705  4,745,328 
Mobility Solutions  538,702  565,460 
     
Continuing operations  12,710,446  8,522,079 
 
Total revenue  12,710,446  8,522,079 
     
 
By destination     
United Kingdom  12,710,446  8.522,079 
 
Total revenue  12,710,446  8,522,079 
 
 
By origin  2012  2011 
  £  £ 
Continuing operations     
Pinnacle Telecom plc  1,056,378  1,538,436 
Accent Telecom UK Limited   4,234,176     4,890,938 
Solwise Telephony Limited  1,678,634  1,294,080 
Pinnacle Cloud Solutions Limited   1,217,211  798,625 
RMS Managed ICT Security Limited  3,574,547  - 
Other group companies  949,500  - 
 
Total revenue  12,710,446  8,522,079 
     
 
By recurring nature     
Recurring and Renewable - continuing operations  10,031,303  7,142,835 
Non-Recurring - continuing operations  2,679,143  1,379,244 
 
Total revenue  12,710,446  8,522,079     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
4.2 Analysis of net loss after tax  
  2012  2011 
4.2.1 By business sector  £  £ 
IT Services     
Profit from operations before amortisation  (196,691)  59,541 
Amortisation  (102,522)  (34,038) 
 
(Loss) / Profit from operations after amortisation  (299,213)  25,503 
     
IT Security Solutions     
Loss from operations before amortisation  (423,976)  2,000 
Amortisation  (160,966)  - 
 
Loss from operations after amortisation  (584,942)  2,000 
     
Cloud Services and Data Connectivity     
Profit / (Loss) from operations before amortisation  131,004  (35,848) 
Amortisation  (93,281)  (80,656) 
 
Profit / (Loss) from operations after amortisation  37,723  (116,504) 
     
Telecommunication Services     
Profit from operations before amortisation  489,847  450,846 
Amortisation  (108,191)  (124,492) 
 
Profit from operations after amortisation  381,656  326,354 
     
Mobility Services     
Profit from operations before amortisation  31,189  38,242 
     
Head office  (463,707)  (393,908) 
Continuing operations  (897,294)  (118,313) 
IT - discontinued operations  -  (71,980) 
     
Total losses  (897,294)  (190,293) 
 
 
 
4.2.2 By destination  
2012 
£ 
  
2011 
£ 
 
United Kingdom  (897,294)  (190,293)     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
4.2.3 By origin 
 
     
  2012  2011 
  £  £ 
Pinnacle Telecom plc  (170,419)  127,755 
Accent Telecom UK Limited   446,969  469,557 
Solwise Telephony Limited  33,348  (84,143) 
Pinnacle Cloud Solutions Limited   (139,136)  4,462 
Online Computer Developments Limited  (43,026)  - 
RMS Managed ICT Security Limited  (292,236)  - 
Head Office and other group companies  (267,834)  (396,749) 
 
Profit from continuing operations before exceptional items  (432,334)  120,882 
     
Amortisation  (464,960)  (239,195) 
Eclectic Group Limited and I G Software Limited - 
discontinued operations  -  (71,980) 
     
Total losses  (897,294)  (190,293) 
 
     
 
 
4.2.4 By recurring nature 
  
2012 
£  
2011 
£ 
     
Recurring - continuing operations  (423,062)  82,949 
Non-Recurring - continuing operations  (9,272)  37,933 
 
Profit from continuing operations before amortisation and 
discontinued  (432,334)  120,882 
 
Amortisation  (464,960)  (239,195) 
Non-Recurring - discontinued operations  -  (71,980) 
     
Total losses  (897,294)  (190,293) 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
5. Operating loss 2012 2011 
 
£  £  
 
Loss from operations is stated after charging:  
    
Depreciation of owned assets  (153,049) (108,990) 
Other operating lease rentals:    
– buildings  (133,246) (52,440) 
Auditors’ remuneration: - audit of parent company 
                   - audit of subsidiary companies 
 
(10,200) 
(35,600) 
(10,000) 
(24,650) 
  
 
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: 
 
2012 2011 
 
£  £  
Interest income resulting from short-term bank deposits 3,257 349 
 
Finance income 
 
3,257 
 
349 
 
Interest expense resulting from: 
  
- Convertible loan 
- finance leases 
- bank overdrafts 
- other commercial loans 
- overdue taxation 
11,500 
4,892 
3,052 
1,579 
100 
12,000 
6,101 
1,259 
- 
- 
   
Finance costs 21,123 19,360 
 
7. Employee costs 
 
7.1 Directors and employees   
 
At 30 September 2012 the Group employed 65 staff. The average number of staff employed by the Group during the financial 
year amounted to: 
 2012 
 
2011 
 
 
Number of management staff 
 
10 
 
6 
Number of operational staff 55  21  
 
Total 
 
65 
 
27 
  
Employee numbers are stated including Directors.     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
7.2 Employee remuneration  
  
 2012 
£ 
2011 
£ 
   
Wages and salaries 2,197,994 866,661 
Pension Contributions 10,120 - 
Share option costs 13,921 13,922 
Social security costs 226,030 87,527 
 
Total 
 
2,448,065 
 
968,110 
 
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. 
  2012   2011 
  
 
  
weighted average 
exercise price   
Weighted average 
exercise price 
  Number  £  Number £ 
                
Outstanding at 1 October 104,878,788  0.00167  65,212,122 0.00167 
Granted  -  -  39,666,666 0.003 
Lapsed  -  -  - - 
                
Outstanding at 30 September 104,878,788  0.00167  104,878,788 0.00167 
 
 
At 30 September 2012, Pinnacle Technology Group plc has granted the following outstanding share options: 
Date Granted 
Balance 
2011 
Movement 
during the 
year 
Balance 
2012 
Exercise 
Price £ 
Dates Excercisable 
Remaining 
contractual 
life 
       
1 December 2003 666,667 - 666,667 0.03 1 December 2005 - 30 November 2014 26 
1 June 2008 64,545,455 - 64,545,455 0.001375 1 July 2010 - 1 July 2018 69 
9 July 2009 39,666,666 - 39,666,666 0.003 9 July 2011 - 9 July 2019 81 
 
 
      
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
7.3 Share-based remuneration (continued) 
 
In total £13,921 of employee remuneration expense has been included in the consolidated income statement for 2012 (2011: 
£13,922). The fair value of options granted was calculated using the option pricing model, incorporating the following key 
assumptions:  
 
 
  
 
|______________2012 ___________|  
  
 
|______________2011 ___________|  
  
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) 
 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 
 £ £ £ £ £ £ £ £ £ £ 
Non- Executive          
W Allan 35,000 31,904  - 4,830 4,084 - - 39,830 35,988 
J C Anderson 10,000 10,000  - 1,380 1,280 - - 11,380 11,280 
Executive           
A Bonner 85,800 85,800 4,100 11,000 12,406 10,982 9,272 8,895 111,578 116,677 
           
                   
Totals 130,800 127,704 4,100 11,000 18,616 16,346 9,272 8,895 162,788 163,945 
 
D Giddens, a director of a subsidiary company received fees during the year of £66,667 (2011: £66,667). 
Benefits include the costs of share options issued in accordance with IFRS 2 Share Based Payments to the Directors of the Company as 
follows: 
 
        
2012 2011 
         
£ £ 
Name of Director 
                  
  
                
    
A J Bonner 
                
7,512 7,512 
 
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
8. Total and continuing loss per share 
2012  
£ 
2011  
£ 
   
Loss attributable to ordinary shareholders – continuing operations  (897,294) (118,313) 
Loss attributable to ordinary shareholders – discontinued operations  - (71,980) 
   
Loss attributable to ordinary shareholders  (897,294) (190,293) 
 
  
Number  Number  
   
Weighted average number of ordinary shares in issue  2,148,696,417 1,898,436,808 
Loss per share (pence) – continuing operations  0.04 0.01 
Loss per share (pence) – discontinued operations  0.00 0.00 
Loss per share (pence) – total  0.04 0.01 
 
Both the basic and diluted earnings per share have been calculated using the net loss after taxation attributable to the 
shareholders of Pinnacle Technology Group plc as the numerator. The weighted average number of outstanding shares used for 
basic earnings per share amounted to 2,148,696,417 shares (2011: 1,898,436,808). Due to the losses incurred by the Group the 
share options are anti-dilutive.  
9. Intangible assets    
 2012 2011 
Fair value at cost Date of 
acquisition 
£ £ 
Explore IT Limited - Maintenance Contracts 04-Sep-2006 100,000 100,000 
Pinnacle Telecom plc - billing system 08-Jun-2007 150,000 150,000 
Pinnacle Telecom plc - customer base 08-Jun-2007 443,163 443,163 
Sports Club Telecom Limited - customer base 25-Jun-2007 123,946 123,946 
Colloquium Limited - customer base 04-Jun-2008 136,444 136,444 
Accent Telecom UK Limited - customer base 11-Jun-2011 459,000 459,000 
Solwise Telephony Limited - customer base 13-Jan-2011 291,300 291,300 
Multilayer Limited – customer base 01-Jul-2011 45,000 45,000 
MacLellan IT Limited – customer base 10-Aug-2011 602,791 602,791 
Online Computer Developments Limited 06-Oct-2011 626,506 - 
RMS Managed ICT Security Limited – Goodwill 10-Oct-2011 206,425 - 
RMS Managed ICT Security Limited – customer base 10-Oct-2011 1,682,392 - 
  4,866,967 2,351,644 
Amortisation to date:    
Explore IT Limited - Maintenance Contracts  (100,000) (100,000) 
Pinnacle Telecom plc - billing system  (150,000) (150,000) 
Pinnacle Telecom plc - customer base  (443,163) (384,075) 
Sports Club Telecom Limited - customer base  (123,946) (105,354) 
Colloquium Limited - customer base  (115,978) (88,689) 
Accent Telecom UK Limited - customer base  (208,641) (171,088) 
Solwise Telephony Limited - customer base  (97,231) (70,463) 
Multilayer Limited – customer base  (5,622) (1,122) 
MacLellan IT Limited – customer base  (73,320) (13,040) 
Online Computer Developments Limited – customer base  (62,651) - 
RMS Managed ICT Security Limited – customer base  (168,239) - 
    (1,548,791) (1,083,831) 
Impairment to date:    
Online Computer Developments Limited – customer base  (129,388)  
RMS Managed ICT Security Limited – customer base  (280,902) - 
    (410,290) - 
Carrying amount at 30 September   2,907,886 1,267,813 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
9. Intangible assets (continued) 
  
 
      2012 
£ 
2011 
£ 
         
Net intangible assets at 1 October       1,267,813 859,217 
Intangible asset additions      2,515,323 647,791 
Impairment of intangible assets       (410,290) - 
Amortisation in period       (464,960) (239,195) 
       2,907,886 1,267,813 
         
 
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. Prior to 1 October 2011, the Group's policy was for customer lists, IT 
systems and Maintenance contracts to be amortised over a maximum of 5 years from the date of acquisition. Following a review 
of this policy and in light of improved actual customer retention rates experienced since 30 September 2008, the Group has 
amended its policy from 1 October 2010 onwards as follows:  
         Acquired             Acquired 
         Prior to 30 September 2008    01 October 2008 onwards 
- Goodwill – reviewed for impairment annually 
- Maintenance contracts to be amortised over a period   5 years      10 years 
- Customer lists to be amortised over a period of    5 years      10 years   
- Custom IT and billing systems to be amortised over a period of  5 years      10 years   
Intangible assets 
Goodwill 
 
£ 
Maintenance 
contracts  
£ 
IT and billing  
systems 
£ 
Customer  
lists 
£ 
Total 
 
£ 
      
Cost      
At 1 October 2010 - 100,000 280,000 1,323,853 1,703,853 
Additions - - - 647,791 647,791 
At 1 October 2011 - 100,000 280,000 1,971,644 2,351,644 
Additions 206,425   2,308,898 2,515,323 
At 30 September 2012 206,425 100,000 280,000 4,280,542 4,866,967 
      
Accumulated amortisation      
At 1 October 2010 - (80,000) (148,301) (616,335) (844,636) 
Charge for the year - (20,000) (33,145) (186,050) (239,195) 
At 1 October 2011 - (100,000) (181,446) (802,386) (1,083,831) 
Charge for the year - - (11,946) (453,014) (464,960) 
At 30 September 2012 - (100,000) (193,392) (1,255,399) (1,548,791) 
      
Impairment      
At 1 October 2010 and 1 October 2011 - - - - - 
Charge for the year (206,425) - - (203,865) (410,290) 
At 30 September 2012 (206,425) - - (203,865) (410,290) 
      
Carrying amount      
At 30 September 2011 - - 98,554 1,169,258 1,267,813 
At 30 September 2012 - - 86,608 2,821,278 2,907,886 
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
9. Intangible assets (continued) 
 
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 (CGU) level. Goodwill is allocated to those assets 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. The 
term and customer retention ratio is attributed separately to each asset and is assessed by the Board at the time of acquisition. As 
a result, where there is an impairment indicator in accordance with IAS 36, some assets are tested individually for impairment and 
some are tested at cash generating unit level. Each year, management compare the resulting cash flow projections by CGU to the 
carrying value of goodwill. Any material variance in this calculation results in an impairment charge to the income statement. 
Customer bases are assessed annually 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, using a 20% weighted 
average cost of capital and a maximum customer base retention ratio of 80% per annum. The Group compares the projected cash 
flows to the actual cash flows generated from the acquired customer bases in order to identify any impairment of the asset. The 
calculations are sensitive to movements in both the weighted average cost of capital and the customer retention ratio.  
 
During the year to 30 September 2012, forecast retention rates of 80% per annum were used to perform impairment calculations 
for the customer bases of Online Computer Developments Limited and RMS Managed ICT Security Limited. As a result of these 
tests, an impairment provision of £410,290 (2010: nil) is considered necessary to the carrying value of intangible assets. This 
calculation is most sensitive to assumptions made regarding retention rates and cost of capital rates. In preparing the charge, 
management considered a 1% movement in each measure both ways, as it consider this to be the maximum movement likely. A 
1% movement in cost of capital would result in a £43,537 movement in projected cash flows and a 1% movement in customer 
retention per annum would result in a £75,050 movement in projected cash flows. 
10. Group Investments 
 
10.1 Principal subsidiary undertakings 
 
 
 
Holding 
Country of 
Incorporation Shares  Nature of business 
Pinnacle Cloud Solutions Limited 
100% 
Scotland Ordinary  IT Services and Connectivity 
Pinnacle Telecom plc 
100% 
Scotland Ordinary/Preference  Telecommunications 
Online Computer Developments Ltd 
100% 
Scotland Ordinary/Preference  IT Services 
Accent Telecom UK Limited 
100% 
England and Wales Ordinary/Preference  Telecommunications 
RMS Managed ICT Security Ltd 
100% 
England and Wales Ordinary/Preference  IT Security 
Solwise Telephony Limited 
100% 
England and Wales Ordinary/Preference  Cloud Services 
Aware Distribution Limited 
100% 
England and Wales Ordinary/Preference  Retail Distribution 
Sipswitch Limited 
100% 
England and Wales Ordinary/Preference  Voice over Internet 
 
10.2 Associate company 
As part of the acquisition of Accent Telecom UK Limited in 2010, the Group acquired a 40% investment in the ordinary share capital 
of Stripe21 Limited, a company registered in England and Wales. This is being accounted for using the equity method where the 
investment in Stripe21 was initially recognised at cost and has its carrying amount adjusted to recognise the Group’s share of the 
profit or loss of Stripe21, after the date of acquisition. Stripe21 Limited has an accounting reference date of 30 June. 
 
 2012 
£ 
2011 
£ 
   
Fair value of investment in associated company – Stripe21 Limited 176,559 167,875 
Share of profit/(loss) from associate  4,612 8,684 
   
Investment in associated company at 30 September 181,171 176,559     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
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 2011  673,547  142,499  55,039  344,727  1,215,812 
           
Additions  80,405  12,580  -  -  92,985 
Additions by acquisition   165,974  -  -  72,000  237,974 
Disposals  (1,250)  -  -  -  (1,250) 
             
At 30 September 2012  918,676  155,079  55,039  416,727  1,545,521 
 
Cost of assets           
At 1 October 2010  643,380  137,499  54,039  216,448  1,051,366 
           
Additions  25,274  5,000  -  68,000  98,274 
Additions by acquisition   4,893  -  1,000  60,279  66,172 
Disposals           
             
At 30 September 2011  673,547  142,499  55,039  344,727  1,215,812 
           
  
IT  
Equipment  
Fixtures and 
fittings and 
leasehold 
improvements  
Plant, 
machinery 
and motor 
vehicles 
 
 
 
 
Software  
 
 
 
Total 
  £  £   
£ 
  
£ 
 £ 
Depreciation  
         
At 1 October 2011  615,831  118,273  29,265  64,909  828,278 
Additions by acquisition  
68,490  -  -  -  68,490 
Charge for the year  
66,259  3,229  11,561  72,000  153,049 
Disposals  
(1,250)  -  -  -  (1,250) 
           
At 30 September 2012  
749,330  121,502  40,826  136,909  1,048,567 
           
Depreciation 
 
IT  
Equipment  
Fixtures and 
fittings and 
leasehold 
improvements  
Plant, 
machinery 
and motor 
vehicles 
 
 
 
 
Software 
 
 
 
 
Total 
  
£  £  £  £  £ 
  
         
At 1 October 2010 
 
565,194  115,498  17,982  20,614  719,288 
Charge for the year  
50,637  2,776  11,283  44,295  108,991 
  
         
At 30 September 2011  
615,831  118,273  29,265  64,909  828,278 
  
         
Net Book value at 30 September 2012 169,346  33,577  14,213  279,818  496,954 
           
Net Book value at 30 September 2011 
57,715  24,226  25,774  279,818  387,533 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
12. Deferred tax assets and liabilities 
 
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities 
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using 
the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax 
assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary 
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial 
recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a 
transaction which affects neither the tax profit nor the accounting profit. 
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and 
interests in jointly controlled entities, except where the Group is able to control the reversal of the temporary difference and it is 
probable that the temporary difference will not reverse in the foreseeable future.  Deferred tax is calculated at the tax rates (and 
tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the 
income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also 
dealt with in equity. 
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits 
will be available in the future, against which the reversal of temporary differences can be deducted. Recognition, therefore, 
involves judgment regarding the future financial performance of the particular legal entity or tax group in which the deferred tax 
asset has been recognised. Historical differences between forecast and actual taxable profits have not resulted in material 
adjustments to the recognition of deferred tax assets. The movement in the deferred tax account in the period was: 
 Deferred tax on 
acquired Intangibles 
£ 
Deferred tax on tax 
losses 
 
£   
Total 
 
 
£ 
Adjustments in relation to prior periods charged to income 
statement 
291,597  291,597 
Recognised on acquisitions 531,046 (216,503) 314,543 
Charged / (credited) to income statement (201,308) (291,597) (492,905) 
    
Deferred tax (asset) / liability recognised at 30 September 2012 621,335 (508,100) 113,235 
 
13. Leases  
13.1. Finance leases  
Pinnacle Technology 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 £35,137 (2011: £27,953). The assets are included under IT Equipment and Motor Vehicles. The 
amounts held under hire purchase agreements are secured on the assets concerned. Future minimum lease payments as at  
30 September 2012:  
Within 1 year  1 to 5 years  More than 5 years  Total  
£  £  £  £  
Finance lease payments due 19,080 17,328 - 36,408 
 
13.2. 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 2012  115,279 34,031 - 149,310 
As at 30 September 2011  42,756 21,567 - 64,323 
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
13.2. Operating leases (continued) 
 
Lease payments recognised as an expense during the year amounted to £133,246 (2011: £52,440). 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 
Brooke House, Northampton 2011 9 months 
Home Farm, Kelty 2011 3 months 
Queenslie Court, Glasgow 2011 28 months 
 
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.  
 
14. Inventories 
2012  2011  
£  £  
 
Consumables 
Work in Progress  
118,457 
244,710 
70,835 
26,826 
Inventories  363,167 97,661 
 
15. Trade and other receivables  
  
 2012 
 £  
2011 
£ 
Trade receivables  1,565,333 772,978 
Prepayments and accrued income  768,812 803,325 
 2,334,145 1,576,303 
   
Trade receivables 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 42 days (2011: 31 days). Trade receivables are 
stated net of an impairment for estimated irrecoverable amounts of £130,888 (2011: £81,715). 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 2012 trade receivables amounting to £531,281 (2011: £418,419) were past due but not impaired.  
The age of trade receivables not impaired is as follows:  
 2012 2011 
 £ £ 
Not past due (less than 30 days)  939,395 354,559 
30 – 59 days  301,437 164,954 
60 – 89 days  148,755 139,222 
90 – 119 days  98,762 16,379 
120 days +  76,984 97,864 
 1,565,333 772,978 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
15. Trade and other receivables (continued) 
 
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. 
 
16. Cash and cash equivalents 
 2012 2011 
 £ £ 
Cash at bank and in hand 129,229 452,431 
Bank overdraft facilities (144,857) - 
   
Cash and cash equivalents (15,628) 452,431 
 
Cash balances are held with a small number of counter parties. The figure at 30 September 2012 has been helped by the 
micro-management of cash during the year, and particularly at the year end. The majority of bank accounts are held with HSBC 
plc. The facility is secured by Directors guarantee and a fixed and floating debenture over company assets. 
 
On 6
th
 February 2013, the Group announced that it had issued 883,333,333 of new ordinary shares of 0.1p each to raise £2.65 
million before expenses, by way of a placing that was oversubscribed. The funds are being raised from both existing and new 
investors.  
17.1. Trade and other payables  
 
2012 2011 
 £ £ 
   
Bank overdrafts  144,857 - 
Payments in relation to acquisition of RMS Managed ICT Security Ltd 154,319 - 
Bank loans  32,898 - 
Finance lease liability  36,408 23,857 
 
 
 
368,482 
 
23,857 
   
Less non-current portion of finance leases (106,701) (13,882) 
   
Short-term borrowings  261,781 9,975 
   
Trade payables  2,178,867 1,092,069 
Invoice finance 317,075 - 
Commercial loans – short term element 15,290 - 
Accruals and other payables  1,052,631 717,419 
Effective repayment to acquire investment – short term element 82,554 3,123 
Convertible loan notes – short term element - 123,529 
Other taxes and social security costs 685,449 170,163 
   
Trade and other payables  4,700,348 2,116,278 
   
 
Note 13.1 contains further information on the finance lease liability.  
 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
17.1. Trade and other payables (continued) 
 
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.  
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. On 20 October 2011, £105,000 of these original loan notes were converted to equity at 15% discount to the 
mid-price at the time of the conversion. The fair value of this conversion was £123,529. 
 
On 6 October 2011, Pinnacle created further £500,000 unsecured convertible loan notes in units of £2,000. 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. All loan notes are convertible into ordinary shares by 
Pinnacle at any time after the second anniversary following issue, or alternatively by the holders of the loan notes at any time 
following the period of thirty days after the second anniversary of the loan note.  
 
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 has been made in the 
accounts, representing a provision for the Group’s option to repay the loan notes in cash prior to the second anniversary.  
 
On 20 October 2011, the holders of £105,000 of loan notes requested that the loans be converted into shares. The directors 
consider the fair value of these loan notes to be £123,529 at 30 September 2012 taking into consideration the issue price of 
£105,000 at 30 September 2009 plus a provision for the discount when the loan notes be converted into shares. Interest accrued 
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. 
 
Convertible Loan Notes 2012 2011 
  £ £ 
   
i. 30 September 2009 unsecured loan notes (units of £5,000)   
    Maximum issuable value £250,000   
   
   Balance at 1 October 143,529 125,000 
    Fair value adjustment - embedded derivative - 18,529 
    Redeemed in the year for cash (5,000) - 
    Converted to equity in the year (123,529) - 
   Balance at 30 September  15,000 143,529 
   
ii. 6 October 2011 unsecured loan notes (units of £2,000)   
    Maximum issuable value £500,000   
   
   Balance at 1 October - - 
    Issued - Acquisition of RMS Managed ICT Security Limited 100,000 - 
    Fair value adjustment - embedded derivative 11,229 - 
   Balance at 30 September  111,229 - 
   Convertible Loan Note Balance 126,229 143,529 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
 
17.2. Long-term borrowings  
 2012 
£ 
 
2011 
£ 
Convertible loan notes – long term element 126,229 15,000 
Finance leasing liability – long-term element  17,328 13,882 
Commercial loan – long term element 19,264 - 
Effective repayment to acquire investment – long term element 48,881 - 
Long-term financial liabilities  211,702 28,882 
 
18. Share capital and reserves  
 
18.1. Share capital  
 
The share capital of Pinnacle Technology 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 Technology Group plc. The deferred shares carry no voting rights and are not 
eligible to receive dividends or repayment of capital.  
Shares issued and fully paid 2012 
£ 
 
2011 
£ 
– beginning of year  5,667,056 5,481,009 
– issued during year  157,999 186,047 
Shares issued and fully paid  5,825,055 5,667,056 
Shares authorised but not issued at 30 September 3,174,945 3,332,944 
Total equity shares authorised at 30 September  9,000,000 9,000,000 
 
The authorised and issued share capital can be summarised as follows:  
 
2012  2011  
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 2011 3,000,000 3,000,000 
401,508,895 Deferred shares of £0.009 each  3,613,580 3,613,580 
 9,000,000 9,000,000 
 
Allotted, called up and fully paid 
At 30 September 2010 
401,508,895 Deferred shares of £0.009 each 
1,867,429,058 Ordinary shares of £0.001 each  
186,047,091 Ordinary shares of £0.001 each issued during the year 
 
  
 
3,613,580 
1,867,429 
186,047 
 
At 30 September 2011  5,667,056 
157,998,847 Ordinary shares of £0.001 each issued during the year  157,999 
At 30 September 2012  5,825,055     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  
 
 
 
18.3 Retained earnings reserve 
      2012 
£  
       
2011 
£ 
   
Retained earnings reserve at 1 October 2011 (7,156,143) (7,364,436) 
Loss for the year (897,294) (190,293) 
Retained earnings reserve at 30 September 2012 (8,053,437) (7,156,143) 
 
 
18.4. 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. 
 
 
18.5. Fair Vale Adjustment 
Movements in the fair value adjustment reserve are created when there is a difference between the fair value of the customer 
base measured using IFRS2, and the actual consideration paid for the assets of a business. No movements were recorded in the 
year. 
 
 
 
19. Income tax  
The tax rebate represents:  2012  2011  
 £  £  
UK corporation tax on profits of the period  - - 
Total current tax  - (997) 
Adjustment for overprovision in prior periods  16,956 - 
Origination and reversal of timing differences 201,308 - 
Tax rebate 218,264 (997) 
 
 
18.2. Share premium   
        2012      2011  
            £     £  
Balance brought forward 4,044,052 3,560,331 
Share premium on private placing for shares 243,333 483,721 
Share premium on conversion of loan notes 68,668 - 
Less broker fees relating to placing (12,500) - 
Balance carried forward 4,343,553 4,044,052     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
19. Income tax (continued) 
 
The relationship between expected tax expense based on the effective tax rate of Pinnacle Technology Group plc of 25% (2012: 
27%) and the tax expense actually recognised in the income statement can be reconciled as follows:  
 
 2012  2011  
 £  £  
   
Result for the year before tax  (1,115,558) (117,316) 
Tax rate (26% to 31/03/2012 and 24% from 30/09/2012) 25% 27% 
Expected tax expenses  (278,890) (31,675) 
 
Adjustment for: 
  
Non-deductible expenses 204,503 7,136 
Non taxable gain relating to acquisitions (57,721)  
Movement in unprovided deferred tax relating to fixed assets 13,146 (26,474) 
Movement in unprovided deferred tax relating to losses 8,016  
Excess management charges - (30,467) 
Group relief - utilisation of tax losses  - 5,315 
Tax losses carried forward   - 4,290 
Adjustments on consolidation – pre-acquisition losses etc  33,364 72,872 
Prior year adjustments  16,956 - 
Actual tax payable/(rebate) net 218,264 997 
 
The Group has unrecognised deferred tax assets in respect of tax losses carried forward totalling £693,805 (2011: £940,206). 
 
20. Discontinued operations 
There were no losses in the year relating to discontinued operations (2011: £71,980). 
 
21. 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 £279,336 (2011: £263,773) from 
Stripe21 Limited, recorded as cost of sales in the consolidated income statement. In addition, Stripe21 purchased telecom 
services from Accent Telecom UK Limited of £7,474 during the year of which none remained an unpaid trade receivable at year 
end. 
 
In addition to his remuneration and in accordance with the terms of his unsecured convertible loan notes (see note 17.2), CEO 
Alan Bonner received £2,500 in interest payments in 2011. No payments were due in 2012. There are no other related party 
transactions recorded during the year to 30 September 2012 or to 30 September 2011 
22. Contingent liabilities  
There were no contingent liabilities at 30 September 2012 or 30 September 2011.  
23. Capital commitments  
There were no capital commitments at 30 September 2012 or 30 September 2011.  
 
24. 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.  
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
24. Risk management (continued) 
 
24.1. 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.  
24.2. Interest rate risk  
The interest rate on the Group’s cash at bank is determined by reference to the bank rate. The Group has agreed bank overdraft 
and credit card facilities with HSBC of £89,000 and HBoS of £65,000. (2011: £80,000).  
24.3. 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 at bank and in hand, 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 25.  
24.4. 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 15 to the financial statements.  
24.5. 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  
2012  £  £  £ 
Trade and other receivables  2,347,115  -  2,347,115 
Other current assets  -  363,167  363,167 
Cash at bank and in hand  129,229  -  129,229 
  2,476,344  363,167  2,839,511 
       
  Loans and 
receivables 
 Non-financial 
assets 
 Balance Sheet Total  
2011  £  £  £ 
Trade and other receivables  1,576,303  -  1,576,303 
Other current assets  -  97,661  97,661 
Cash at bank and in hand  452,431  -  452,431 
  2,028,734  97,661  2,126,395 
     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
24.5. Risk Management Analysis (continued)  
 Other  
financial  
liabilities at  
amortised cost 
 
Other liabilities 
not within scope 
of  
IAS 39 
 
Balance 
Sheet  
Total 
 £ £ £ 
2012    
Trade and other payables 4,140,121 - 4,140,121 
Deferred tax liability 715,702 - 715,702 
Invoice finance liability – current 317,075 - 317,075 
Finance lease liability – current 19,080 - 19,080 
Commercial loans – current 15,290 - 15,290 
Deferred Consideration – RMS Managed ICT Security Ltd - current 82,554 - 82,554 
Convertible loan notes – non-current 115,000 11,229 126,229 
Finance lease liability – non-current 17,328 - 17,328 
Commercial loans – non-current 17,608 - 17,608 
Deferred Consideration – RMS Managed ICT Security Ltd – non-current 176,765  176,765 
 5,616,523 11,229 5,627,752 
    
 Other financial 
liabilities at  
amortised cost 
Other liabilities 
not within scope 
of  
IAS 39 
 
Balance 
Sheet  
Total 
 £ £ £ 
2011    
Trade and other payables 1,982,773 - 1,982,773 
Finance lease liability - current 9,976 - 9,976 
Convertible loan notes - current 105,000 18,529 123,529 
Convertible loan notes – non-current 15,000 - 15,000 
Finance lease liability - non-current 13,882 - 13,882 
 2,126,631 18,529 2,145,160 
 
 0 to 60 days 61 days to 6 months to 
12 months 
12 months to 2 Years to Total 
6 months 2 Years 5 Years 
2012       
Trade payables 1,921,863 191,641 19,163 46,200 - 2,178,867 
Long-term borrowings - - - 115,000 - 115,000 
Finance lease liabilities 3,180 6,360 9,540 17,328 - 36,408 
       
  1,925,043 198,001 28,703 178,528 - 2,330,275 
       
 0 to 60 days 61 days to 6 months to 
12 months 
12 months to 2 Years to Total 
6 months 2 Years 5 Years 
2011       
Trade payables 628,443 251,403 97,320 36,151 78,752 1,092,069 
Long-term borrowings - - - - 15,000 15,000 
Finance lease liabilities 1,663 3,325 4,988 8,172 5,710 23,858 
       
  630,106 254,728 102,308 44,323 99,462 1,130,927 
* At the year end the Group had no (2011: no) forward contracts. The financial liabilities fall under level 2 of the fair value 
hierarchy. There have been no significant transfers between the various levels of the fair value hierarchy during the year.     
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 
 
25. Post balance sheet events 
 
On 10
th
 December 2012, the Group announced that it had issued 100,000,000 of new ordinary shares of 0.1p each to raise 
£300,000 before expenses, by way of a placing. The funds were raised from both existing and new investors with the net 
proceeds of the Placing used primarily for working capital purposes.  
On 6
th
 February 2013, the Group announced that it had issued 883,333,333 of new ordinary shares of 0.1p each to raise £2.65 
million before expenses, by way of a placing that was oversubscribed. The funds were raised from both existing and new 
investors.  
 
The net proceeds of the Placing will be used primarily for working capital purposes, to bring forward the implementation of the 
Company's growth strategy through the hiring of additional sales expertise to capitalise on the cross selling of the enlarged 
product suite into an already extensive base of around 3,000 customers. This strategy is designed to mitigate customer risk, 
strengthen customer relationships and ensure continuing high quality and visibility of earnings. 
 
26. Ultimate controlling party 
 
There is no ultimate controlling party.     
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PINNACLE TECHNOLOGY GROUP PLC 
 
We have audited the parent company financial statements of Pinnacle Technology Group plc for the year ended 30 September 
2012 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 set out on page 21, 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 2012;  
 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. 
Other matter 
We have reported separately on the group financial statements of Pinnacle Technology Group plc for the year ended  
30 September 2012. 
Andrew Howie 
Senior Statutory Auditor 
for and on behalf of Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
95 Bothwell Street 
Glasgow 
G2 7JZ            20 February 2013     
BALANCE SHEET (PARENT COMPANY) 
as at 30 September 2012 
      
  2012  2011  
 Note £  £  
Fixed Assets        
Intangible assets 3 542,512  602,791  
Tangible assets 4 -  -  
Fixed asset investments 5 1,064,130  2,416,792  
         
Total fixed assets  1,606,642  3,019,583  
         
Current assets      
Debtors 6 2,114,869  926,921  
Cash at bank and in hand  8,648  15,528  
         
Total current assets  2,123,517  942,449  
         
Creditors: amounts falling due within one year 7 (1,115,392)  (1,069,763)  
         
Net current (liabilities) / assets  1,008,125  (127,313)  
         
Total assets less current liabilities  2,614,767  2,892,269  
         
Creditors: amounts falling due after one year 8 (163,370)  (15,000)  
         
  2,451,397  2,877,269  
         
Capital and reserves      
Called up share capital 10 5,825,055  5,667,056  
Share premium account 11 4,343,553  4,044,052  
Merger reserve  283,357  283,357  
Profit and loss account 11 (8,000,568)  (7,117,196)  
         
Shareholders' funds 12 2,451,397  2,877,269  
 
Approved by the Board and authorised for issue on 20 February 2013.  
 
 
A J Bonner  
Director  
 
The accompanying accounting policies and notes form part of these financial statements.  
 
COMPANY NUMBER: 05259846 
     
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 £883,372  
(2011: £185,572).  
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.  
 
1.8 Share based remuneration 
 
The Company issues equity-settled share based payments to certain employees. The fair value of the shares granted is 
recharged to the Company's subsidiaries and is calculated at the grant date, based on an estimate of the shares that will 
ultimately vest, using the Black Scholes model and in accordance with FRS 20. 
2. Auditor remuneration  
Fees payable to the Company’s auditor for the audit of the Parent Company’s annual accounts was £10,200 (2011: £10,000). 
3. Intangible Assets 
 
On 1 August 2011, as part of the acquisition of the business and assets of MacLellan IT Limited, the Group purchased goodwill of 
£602,791 in relation to the customer base, which has been accounted for in accordance with FRS10. This is being amortised to 
the profit and loss account of the parent company over 10 years on a straight line basis.     
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
4. Tangible fixed assets £ 
 
Cost 
At 1 October 2011 and at 30 September 2012 
 
6,165 
Depreciation  
At 1 October 2011  
Charge for the year 
6,165  
- 
At 30 September 2012  - 
Net book value  
At 30 September 2012 and 30 September 2011 -  
Note: On 1 August 2011, the Group acquired tangible assets of £66,976 as part the acquisition of business and assets of MacLellan IT Limited and these were 
transferred to Pinnacle Cloud Solutions Limited at book value and are recorded in the statutory accounts of that company. 
 
 
5. Fixed asset investments  
Shares in subsidiary  
undertakings  
£  
Cost  
At 1 October 2011  6,373,599 
Additions for the year 578,301 
At 30 September 2012  6,951,900 
  
Provisions for diminution in value 
At 1 October 2011 and 30 September  
 
At 1 October 2011 3,956,807 
 Charge for the year 1,930,963 
At 30 September 2012 5,887,770 
Net book value  
At 30 September 2012  1,064,130 
 
 
 
Company 
Country of registration  
or incorporation 
Shares held 
Class % 
Subsidiary undertakings    
Pinnacle Cloud Solutions 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     
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
5. Subsidiary undertakings (continued) 
Company 
Country of registration  
or incorporation 
Shares held 
Class % 
Colloquium Limited Scotland Ordinary/Preference 100 
MacLellan IT Limited (formerly Pinnacle Data Limited) England and Wales Ordinary 100 
Straiton Group Management Limited (2) Scotland Ordinary 100 
Pinnacle Group Limited Scotland Ordinary 100 
Glen Group Limited (3) Scotland Ordinary 100 
ICT Investments Limited Scotland Ordinary 100 
Multilayer Limited (formerly Pinnacle ICT 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 
Online Computer Developments Limited Scotland Ordinary 100 
Aware Distribution Limited England and Wales Ordinary 100 
RMS Managed ICT Security 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: 
 
Capital and  
reserves  
Profit/(loss)  
for the year  
2012 2012 
Company                                Principal activity  £  £  
 
Pinnacle Cloud Solutions Limited  Telecommunications / IT services  (2,361,798) (147,636) 
Pinnacle Technology Consulting Limited (1)  IT consultancy  804,289 - 
I G Software Limited  IT consultancy  170,705 - 
Pinnacle Telecom plc  Telecommunications  (166,810) (292,819) 
Solwise Telephony Limited Telecommunications 14,572 30,097 
Accent Telecom UK Limited Telecommunications 512,357 (28,099) 
Sipswitch Limited Voice over Internet (26,346) - 
Straiton Group Management Limited (2)  Holding company  (177,411) - 
Pinnacle Group Limited  Holding company  460,000 - 
Online Computer Developments Limited IT consultancy (209,364) 60,289 
RMS Managed ICT Security Limited IT Security (1,469,459) (255,368) 
Aware Distribution Limited Retail Distribution (8,353) (9,353) 
Explore IT Limited  Dormant (242,394) - 
Pinnacle Mobile Limited  Dormant (73,401) - 
Sports Club Telecom Limited  Dormant 33,185 - 
Colloquium Limited  Dormant (230,637) - 
Glen Group Limited (3) Dormant  2 - 
ICT Investments Limited  Dormant  24,522 - 
Multilayer Limited (formerly Pinnacle ICT Limited) Dormant  2 - 
MacLellan IT Limited (formerly 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 Technology Group Limited 
       
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
 
5. Subsidiary undertakings (continued) 
 
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 2012 and is adjusted for the Group share of revenues and expenses in the 
year. Stripe21 Limited has an accounting reference date of 30 June. 
 
6. Debtors  
2012 2011  
  £  £  
 
Amounts owed by subsidiary undertakings  
 
2,072,571 
 
913,859 
Prepayments and accrued income  42,298 13,062 
 2,114,869 926,921 
 
7. Creditors: amounts falling due within one year  2012  
£  
2011  
£  
 
Trade creditors  
 
89,563 
 
41,818 
Other taxes and social security costs  124,642 65,752 
Convertible loan notes – short term element - 105,000 
Deferred consideration on acquisition of RMS Managed ICT Security Limited – short term element 84,720 - 
Accruals and deferred income  816,467 857,193 
 1,115,392 1,069,763 
 
 
8. Creditors: amounts falling due after more than one year  
2012  2011  
£  £  
Convertible loan notes – long term element 115,000 15,000 
Deferred consideration on acquisition of RMS Managed ICT Security Limited –long term element 48,370 - 
Analysis of loans  
  
Wholly repayable within five years  163,370 15,000 
 
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. On 20
th
 October 2011, in accordance with the terms, £105,000 of loan 
notes were converted into ordinary shares of Pinnacle at a price of 0.315p each, representing a discount of 15% to the closing price 
on the day prior to conversion. 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 become repayable on demand in the event of a specified default by Pinnacle. 
 
On 6 October 2011, Pinnacle created a further £500,000 unsecured convertible loan notes in units of £2,000. 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.  
 
All loan notes are convertible into ordinary shares by Pinnacle at any time after the second anniversary following issue, or 
alternatively by the holders of the loan notes at any time following the period of thirty days after the second anniversary of the loan 
note.  
 
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.  
     
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
 
9. Pension and other post-retirement benefit commitments 
No contributions to company pension schemes were made during the year (2011: Nil). 
10. Share capital  
2012 
£ 
 
2011 
£  
Authorised 
2,386,420,000 Ordinary shares of £0.001 each 
3,000,000,000 Ordinary shares of £0.001 each authorised 31 March 2011 
 
2,386,420 
3,000,000 
 
2,386,420 
3,000,000 
401,508,895 Deferred shares of £0.009 each 3,613,580  3,613,580  
 9,000,000 9,000,000 
   
  £ 
Allotted, called up and fully paid 
At 30 September 2010 
401,508,895 Deferred shares of £0.009 each 
1,867,429,058 Ordinary shares of £0.001 each  
186,046,091 Ordinary shares of £0.001 each issued during the year 
  
 
3,613,580 
1,867,429 
186,047 
At 30 September 2011  5,667,056 
157,998,847 Ordinary shares of £0.001 each issued during the year  157,999 
At 30 September 2012  5,825,055 
   
11. Statement of movements on reserves Share premium 
account  
Profit and 
loss 
account  
 £  £  
Balance at 1 October 2011  4,044,052 (7,117,196) 
Share Premium – premium on shares issued during the year 299,501 - 
Loss for the year  - (778,799) 
 
Balance at 30 September 2012  
 
4,343,553 
 
(7,895,995) 
 
12. Reconciliation of movements in shareholders’ funds 
 
2012 
£ 
 
2011 
£ 
 
Opening shareholders’ funds at 1 October 
 
2,877,269 
 
2,393,373 
 
Loss for the financial year 
Issue of shares on placing 
Issue of shares on acquisition 
Share Premium  – premium on shares issued during the year 
 
(883,372) 
157,999 
- 
299,501 
 
(185,872) 
- 
186,047 
483,721 
 
Net increase/(depletion) in shareholders’ funds 
 
(425,872) 
 
483,896 
Closing shareholders’ funds at 30 September  2,451,397 2,877,269 
 
 
     
NOTES TO THE FINANCIAL STATEMENTS (PARENT COMPANY) (CONTINUED) 
 
13. 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 £279,336 (2011: £263,773) from 
Stripe21 Limited, recorded as cost of sales in the consolidated income statement. In addition, Stripe21 purchased telecom 
services from Accent Telecom UK Limited of £7,474 during the year of which none remained an unpaid trade receivable at year 
end. 
 
In addition to his remuneration and in accordance with the terms of his unsecured convertible loan notes (see note 17.2), CEO 
Alan Bonner received £2,500 in interest payments in 2011. No payments were due in 2012. There are no other related party 
transactions recorded during the year to 30 September 2012 or to 30 September 2011 
 
     
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TECHNOLOGY GROUP plc 
Registered in England and Wales with registered number 5259846 
 
NOTICE IS HEREBY GIVEN that the Eighth Annual General Meeting of the Company will be held at the offices of Wright, 
Johnston & Mackenzie LLP, 18 Charlotte Square, Edinburgh, EH2 4DF, on 26 March 2013 at 11.30 a.m. for the purpose of 
considering and, if thought fit, passing the following resolutions, of which resolutions 1-6 will be proposed as Ordinary Resolutions 
and resolution 7 will be proposed as a Special Resolutions: 
 
ROUTINE BUSINESS  - Ordinary Resolutions 
 
1. To receive the report of the directors and the financial statements for the year ended 30 September 2012 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 2012. 
3. To re-elect Mr Alan Bonner, 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. 
6. That, the share capital of the Company be reorganised in the following manner: 
(a) every 100 existing Ordinary Shares of £0.001 in the issued share capital of the Company be and are hereby 
consolidated into one Ordinary Share of £0.1 each, such shares having the same rights and being subject to 
the same restrictions (save as to nominal value) as the existing Ordinary Shares of £0.001 each in the capital 
of the Company as set out in the Company's articles of association for the time being;  
(b) every resulting Ordinary Share of £0.1 in the capital of the Company following the consolidation set out at (a) 
above, be and is hereby sub-divided and redesignated into: 
(i) one Ordinary Share of £0.01 each, such shares having the same rights and being subject to the 
same restrictions (save as to nominal value) as the existing Ordinary Shares of £0.001 each in 
the capital of the Company as set out in the Company's articles of association for the time 
being; and 
(ii) one Deferred Share of £0.09 in the capital of the Company; and 
 
(c) every resulting Deferred Share of £0.09 in the capital of the Company following the sub-division set out at (b) 
above, be and are hereby sub-divided and redesignated into ten Deferred Shares of £0.009 each such shares 
having the same rights and being subject to the same restrictions as the existing Deferred Shares of £0.009  
each in the capital of the Company as set out in the Company's articles of association for the time being. 
 
SPECIAL BUSINESS - Special Resolutions 
7. 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 2014 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:     
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TECHNOLOGY GROUP plc (CONTINUED) 
 
(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 2014 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: 20 February 2013 
 
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 24 March 2013 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 24 March 2013 
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 20 February 2013 (being the last business day prior to the publication of this notice) the Company’s issued voting share 
capital consists of 3,194,807,730 Ordinary Shares, carrying one vote each. Therefore, the total voting rights in the Company as at 
20 February 2013 are 3,194,807,730.     
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TECHNOLOGY GROUP plc (CONTINUED) 
 
THIS PAGE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION 
If you are in any doubt as to the action to be taken, please consult your stockbroker, bank manager, solicitor, 
accountant or other professional adviser authorised under the Financial Services and Markets Act 2000 immediately. 
If you have sold or otherwise transferred all your Ordinary Shares in Pinnacle Technology Group plc, please forward this circular 
and enclosed notice of Extraordinary General Meeting at once to your stockbroker or other agent through whom you made the 
sale for transmission to the purchaser or transferee. 
PINNACLE TECHNOLOGY GROUP plc 
(Incorporated in England and Wales under the Companies Act 1985 with registered number 5259846) 
 
EXPLANATORY NOTES TO THE RESOLUTIONS 
Ordinary 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. 
 
Ordinary 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 11 to 13. 
This resolution is an advisory one and no entitlement to remuneration is conditional on the resolution being passed. 
 
Ordinary Resolution 3 (Re-election of director) 
Under the Articles of Association of the Company, one director must resign by rotation each year. Alan Bonner has put himself up 
for resignation and is therefore standing for re-election. You are therefore asked to re-elect Alan Bonner as a director of the 
Company. 
 
Ordinary 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. 
 
Ordinary 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. 
 
Ordinary Resolution No. 6: Proposed Share Capital Reorganisation 
 
Introduction 
Following the recent Placings of 983,333,333 new Ordinary shares of 0.1p each to raise £2.95m before expenses, your Board has been 
reviewing the total number of Ordinary shared admitted to trading on AIM, which at 20
th
 February 2013 was 3,194,807,730.   
 
With over three billion shares in issue, your Board has determined that it is in the best interests of the shareholders as a whole 
to reorganise the share capital of the Company, and refer you to Ordinary Resolution number 6 of the Notice of Annual 
General Meeting. Whereby it is proposed therefore to sub-divide and reclassify each of the Company’s issued ordinary shares 
as follows: 
 
1. Every one hundred ordinary shares of £0.001 are consolidated on a 100:1 basis into one £0.1 ordinary shares 
2. Each £0.1 ordinary shares are subdivided into (a) one £0.01 ordinary shares; and (b) one £0.09 Deferred Shares 
3. The £0.09 Deferred Shares are subdivided into ten £0.009 Deferred Shares     
NOTICE OF ANNUAL GENERAL MEETING FOR PINNACLE TECHNOLOGY GROUP plc (CONTINUED) 
 
 
No share certificates will be issued in respect of deferred shares, or the ordinary shares of £0.1. New share certificates will be issued in 
respect of the resulting ordinary shares of £0.01 each. 
 
 
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. 
 
Special Resolution 7 (Authority to issue Ordinary Shares and waiver of Pre-emption Rights) 
By resolution 7(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 2014 AGM or for 15 months (whichever is earlier). 
By resolution 7(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 2014 AGM or for 15 
months (whichever is earlier). 
Action to be taken by shareholders 
The notice of Annual General Meeting of the Company (“AGM”) to be held at 11.30am on 26 March 2013 at the offices of Wright, 
Johnston & Mackenzie LLP, 18 Charlotte Square, Edinburgh, EH2 4DF, for the purpose of considering and, if thought fit, passing 
the AGM resolutions, of which resolutions 1-6 will be proposed as Ordinary Resolutions and resolution 7 will be proposed as a 
Special Resolutions. 
 
A form of proxy for use at the AGM is enclosed. Whether or not you propose to attend the AGM, you are requested to complete the form in 
accordance with the instructions printed thereon and return it to Computershare Investor Services plc, PO Box 82, The Pavilions, 
Bridgwater Road, Bristol BS99 3FA. 
 
Returning the form of proxy will not prevent you from attending the AGM and voting in person if you so wish. 
 
RECOMMENDATION 
The Board considers the terms of the Share Capital Reorganisation as set out in the Resolutions to be in the best interests of the 
Company and its Shareholders. Accordingly, the Directors unanimously recommend shareholders to vote in favour of the Resolutions as they 
and the Management Team have irrevocably undertaken to do so in respect of their own beneficial shareholdings which total 600,412,758 
ordinary shares representing 18.79 per cent of the current issued share capital of the Company. 
 
Yours faithfully 
 
 
William Allan 
Non-Executive Chairman     
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  
      95 Bothwell Street 
      Glasgow 
      G2 7JZ 
 
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