31 January 2006 The Manager Company Announcements Platform The Australian Stock Exchange Dear Sir, Announcement for Immediate Release Appendix 4C Report The Company encloses its quarterly report of consolidated cash flows for the 3 month period ended 31 December 2005. As reported for the 3 months to September 2005, the Company did not complete the integration of the businesses acquired in July 2005 until the 1st October 2005. The merged businesses are performing in line with our expectations at the time of acquisition and the growth in sales on a month by month basis over the six month period has been as follows: $,000’s (excluding GST) July 764 August 631 September 834 October 1,302 November 1,016 December 1,491 $6,038 Further growth on a monthly basis is anticipated to the levels included in the profit forecast in prospectus for the rights issue by the Company in 2005. There is a time lag in collecting sales revenue in accordance with agreed trading terms and the growth in actual receipts on a month by month basis broadly reflects the growth in sales as follows: $,000’s (excluding GST) July 387 August 362 September 664 October 1,128 November 645 December 745 $3,931 Operating expenses have been higher than anticipated, however cost savings in excess of $450,000 annually have been implemented since the 31 December 2005 and a review has been undertaken of all overhead expenses now that the integration process is completed and present overhead expenses are in line with projected expense levels. The company completed a placement of shares at 4.5 cents raising $2.3M in December 2005 to provide funds for additional working capital and to continue implementing the strategy of extending the existing business operations interstate to establish a fully national business. Yours faithfully, Ian May Managing Director Appendix 4C Quarterly report for entities admitted on the basis of commitments + See chapter 19 for defined terms. Appendix 4C Page 1 Rule 4.7B Appendix 4C Quarterly report for entities admitted on the basis of commitments Introduced 31/3/2000. Name of entity Tele-IP Limited ABN Quarter ended (“current quarter”) 39 010 568 804 31 December 2005 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $A’000 Year to date ( 6 months) $A’000 1.1 Receipts from customers 2518 3931 1.2 Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital (1698) (3006) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 2 4 1.5 Interest and other costs of finance paid (9) (82) 1.6 Income taxes paid 1.7 Other (provide details if material) - Operating Purchases - Rent - GST (Net) - Integration Costs - Other (1739) (87) (68) (62) - (3176) (110) (50) (526) - Net operating cash flows (1143) (3015) Appendix 4C Quarterly report for entities admitted on the basis of commitments + See chapter 19 for defined terms. Appendix 4C Page 2 Current quarter $A’000 Year to date ( 6 months) $A’000 1.8 Net operating cash flows (carried forward) (1143) (3015) Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 0 (2253) 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other Net investing cash flows 0 (2253) 1.14 Total operating and investing cash flows (1143) (5268) Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. – Funds raised via Renounceable Rights Issue 2267 3628 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 0 (237) 1.19 Dividends paid 1.20 Other – Payments re Renounceable Rights Issue 0 (581) Net financing cash flows 2267 2810 Net increase (decrease) in cash held 1124 (2458) 1.21 Cash at beginning of quarter/year to date (91) 3491 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter 1033 1033 Appendix 4C Quarterly report for entities admitted on the basis of commitments + See chapter 19 for defined terms. Appendix 4C Page 3 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A'000 1.24 Aggregate amount of payments to the parties included in item 1.2 54 1.25 Aggregate amount of loans to the parties included in item 1.11 NONE 1.26 Explanation necessary for an understanding of the transactions Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows NIL 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest NIL Financing facilities available Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2). Amount available $A’000 Amount used $A’000 3.1 Loan facilities 500 365 3.2 Credit standby arrangements NONE NONE Appendix 4C Quarterly report for entities admitted on the basis of commitments + See chapter 19 for defined terms. Appendix 4C Page 4 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter $A’000 Previous quarter $A’000 4.1 Cash on hand and at bank 50 41 4.2 Deposits at call 4.3 Bank overdraft (365) (142) 4.4 Other (provide details) Renounceable Rights Issue 1348 10 Total: cash at end of quarter (item 1.23) 1033 (91) Acquisitions and disposals of business entities Acquisitions ( Previous quarter ) (Item 1.9(a)) Disposals (Item 1.10(a)) 5.1 Name of entity PGS COMMUNICATION SYSTEMS P/L, ABLE COMMUNICATIONS & SERVICE P/L 5.2 Place of incorporation or registration MELBOURNE 5.3 Consideration for acquisition or disposal $2,253,000 (BEING PART PAYMENT EQUIVALENT TO 56.25% OF TOTAL CONSIDERATION). 5.4 Total net assets $5,100,000 5.5 Nature of business COMMUNICATIONS Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Law (except to the extent that information is not required because of note 2) or other standards acceptable to ASX. 2 This statement does give a true and fair view of the matters disclosed. 31 January 2006. Appendix 4C Quarterly report for entities admitted on the basis of commitments + See chapter 19 for defined terms. Appendix 4C Page 5 Notes 1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below. • 6.2 - reconciliation of cash flows arising from operating activities to operating profit or loss • 9.2 - itemised disclosure relating to acquisitions • 9.4 - itemised disclosure relating to disposals • 12.1(a) - policy for classification of cash items • 12.3 - disclosure of restrictions on use of cash • 13.1 - comparative information 3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
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