Final Results
(Thomson Reuters ONE) - MILESTONE GROUP PLC ("Milestone" or the "Company) Annual Report and Financial Statements for the year ended 30 September 2009AIM listed Milestone Group PLC, the provider of digital mediasolutions and technology, is pleased to announce its Final Resultsfor the year ended 30 September 2009.Highlights * Financial highlights: Losses reduced by over 50% and balance sheet liabilities by a further 20% * Restructuring: Closure of loss making Oxford Broadcasting and sale of all analogue licences * Key personnel: New appointments of Per Bonato - Business Development Director, Dr Marios Gerogiokas - Director of Wireless Services and Cooper Handley - Creative Director and head of the in house web development team * Company rebranding completed * Post year end deals: Agreement with and Investment into Ve Interactive and JumpStart Wireless * Advisers: Appointment of Hybridan as joint brokers * Post year end trading update: On schedule to exceed sales targets for Q1Deborah White, Executive Director, commented:"During the year we have reduced the financial losses of thebusiness, restructured, hired key personnel, rebranded, successfullyset up a new web design and development team, and just after the yearend, signed two key strategic alliances. It has been an incrediblybusy and transformational year. This is an exciting time for us as wemove towards generating revenues with the three new areas of thebusiness. We look forward to building a positive future for ourshareholders."The full report and financial statements for the year ended 30September 2009 are attached as an annex to this announcement.FOR FURTHER INFORMATIONMilestone Group PLCDeborah White, Executive DirectorTel: 020 7929 7826Arden Partners plcRichard Day / Adrian TrimmingsTel: 020 7398 1632Hybridan LLPClaire Noyce / Stephen AustinTel: 020 7947 4004Chairman's StatementForewordI feel privileged to deliver this statement on behalf of the Boardbut also the management led by Executive Director, Deborah White, whohas brought about significant changes and developments for the goodof Milestone.Shareholders will realise that in a thinly resourced company whichhas disposed of its legacy businesses and is setting out to travelalong new more commercially viable and exciting roads, an enormousburden falls on the Executive Director, particularly when she has notbeen entirely free from past commitments. I am delighted to announcethat Deborah has decided to dedicate 100% of her time to Milestonewith immediate effect. She has resigned from her remaining commitmentwithin the financial services sector to enable her to focus fully onMilestone.Deborah has done shareholders proud in the past 12 months with herpatience, determination and success in repositioning and redefiningthe Company to start to drive shareholder value going forward.Deborah has led the closures, disposals, fundraising and theidentification and development of new opportunities. I very much lookforward to the coming year and seeing the fruits of her work.Milestone backgroundMilestone was admitted to trading on AIM in July 2003. Prior to theadvent of digital television and during the early stages of theadvance in digital media, it enjoyed a number of years as a prominentcompany within the TV production and localised broadcasting industry.The Group had a strategy of developing through organic growth andacquisition. However after inheriting a number of publishing andbroadcasting businesses, the primary focal point became the operationof these entities. The Group became analogue focused and the mediaassets owned were largely traditional.The Board decided that the interests of shareholders would be bestserved by the disposing of these traditional media assets (which wereclearly out of date and not performing) and moving wholeheartedlyinto the digital media / technology space.In order to position Milestone for this strategic evolution it wasclear that both the expenditure and net liability positions had to bereduced and new relationships formed with qualified and institutionalinvestors. Funding change and building a future has been the focusfor the management since the appointment of Deborah White to theBoard.Highlights of the year * Financial highlights: Losses reduced by over 50% and balance sheet liabilities reduced by a further 20% * Restructuring: Closure of loss making Oxford Broadcasting Ltd and the sale of all analogue licences * Key personnel: New appointments of Per Bonato - Business Development Director, Dr Marios Gerogiokas - Director of Wireless Services and Cooper Handley - Creative Director and head of the in-house web development team * Company rebranding completed * Post year end deals: Agreement with and Investment into Ve Interactive and JumpStart Wireless * Advisers: Appointment of Hybridan as joint brokers * Post year end trading update: On schedule to exceed sales targets for Q1Financial summaryThe Group made a loss for the year of £0.39m, a dramatic improvementover 2008 (2008: loss of £0.80m), and has reduced the balance sheetnet liabilities to £0.41m (2008: £0.51m) as the Board has developedits plans to evolve its business positioning and take strategicinvestment stakes in complementary media businesses. These resultsare presented under Adopted International Financial ReportingStandards ("Adopted IFRS").Market overviewAs mentioned in our annual report last year the Board has continuedto focus on developing the Group's exposure to the converging mediaand technology sectors by growing a portfolio of interests insynergistic businesses.Milestone is actively bringing together expert media practices,leading-edge technology and proven business minds to deliverinteractive solutions across web, phone and portable media. We expectthat the management team and Board will continue to grow in line withthe business in the near future.A new look for MilestoneA highlight of the year has been the completion of a new look for thecompany and the development of a new outlook. Milestone has nowemerged as a high quality Web development company. Instead ofdelivering TV programmes for analogue distribution the company hasnow begun to produce websites for a variety of clients.In line with the new media and digital focus, the Company will put aresolution to shareholders at the forthcoming Annual General Meetingto allow website publication of all shareholder information,including the AGM Notice of Meeting and Annual Report and Accounts onthe Company Website at www.milestonegroup.co.uk.Moving ForwardCore service - In-house Web Development TeamIn September 2009, the Board welcomed Cooper Handley as the newCreative Director. Cooper brings over a decade of creative andcommercial web experience to the Group, having pioneered the use ofinteractive software for independent, fan-based music portals and hasdeveloped market-leading digital brands. His arrival reinforces theGroup's new strategic direction of digital media solutions andtechnology.His immediate task is to lead our in-house team in building websites.Milestone has re-launched its own website, www.milestonegroup.co.uk.The team will create immediate revenue for the Group and assist inacquiring the technologies that will give the Group a real edge intoday's market.Web design and development is a rapidly evolving industry in the UKwith a highly fragmented competitive landscape. Milestone offers afull range of Web Design and Development services including, but notlimited to: * Full Web Design * Database Design * Flash Design * CMS Websites * E-Commerce Websites * CopywritingMilestone aims to target primarily the financial services sector,focusing on underserved niche markets such as independent financialadvisors, brokerage businesses and other City professionals. With itsheadquarters conveniently in the heart of the City of London and astrong management team with relevant industry experience, Milestoneis unusually well-positioned to provide bespoke Web Design andDevelopment solutions to the financial services industry.As well as having our core competency of delivering websites, thereare many additional services and products which can be incorporatedinto the web build process. Milestone has already commenced astrategic investment and representative programme to extend itsrange.Milestone has acquired interests in two companies that possesscomplementary technology-enabled service products. We have alsosigned the rights to bring these technologies to our clients andbroader markets as follows: * Mobile Enterprise Application Software (EAS) solutions with our US partner JumpStart Wireless * Online Shopping Cart Abandonment solutions - Ve Capture, brought to market by Ve Interactive LtdJumpStart WirelessThe EAS market in the UK is expected to generate sales ofapproximately £6.8bn in 2009[1]. Milestone has secured distributionrights for JumpStart's mobile EAS solutions in the UK in return for astrategic equity investment of $100,000 in JumpStart WirelessCorporation. JumpStart's innovative technology is a cost-effectivesolution to transform any mobile device into a reporting tool foremployees working remotely from company premises. The technology willbe distributed through a newly created joint venture that is equallyowned by JumpStart and Milestone. Under the agreement, Milestone isentitled to a sales commission of 15% of gross revenues.Ve Interactive LtdOnline Shopping Cart Abandonment solutions are specialised, web-basedsolutions for e-vendors to improve sales conversion from abandonedshopping carts. In 2008, the UK e-commerce market is expected toexceed £68bn[2]. According to Coremetrics, 50.1% of online shoppersabandoned their shopping cart in March 2009[3]. Converting even asmall percentage of those abandoned shopping carts into salesrepresents significant value to e-vendors. Milestone has entered intoa UK distribution agreement with Ve Interactive Ltd., a leadingprovider in the Online Shopping Cart Abandonment solutions market, inreturn for a strategic equity investment of £101,085. Under theagreement, Milestone is entitled to a sales commission of 15% ofgross revenues created by Milestone from Ve Capture.[1] http://www.microsoftpartnercommunity.co.uk/[2] http://www.e-inbusiness.co.uk/news-list/News-Archive/uk-2009/[3] http://www.coremetrics.co.uk/solutions/industry-report.phpRestructuring:Management changesOur Executive Director has been keen to revamp the management andBoard and the new direction is helping to bring about those changes.During the year there have been a number of personnel changes as theGroup positions itself for new launches. In February 2009 the GroupFinance Director, Ian Lodwick and Company Secretary, Tim Eustace,resigned to focus on their respective consultancy businesses. I thankthem both for their guidance and service.As announced in February, it has given me pleasure to welcome GrahamUrquhart as our new Company Secretary and Guy van Zwanenberg as ChiefFinancial Controller. Guy brings to the Company considerableexperience of growing small media businesses as the former FinanceDirector of GamingKing plc (now Sceptre Leisure plc). He is proving avaluable member of the team and it is anticipated that his role willincrease as the Group develops.AdvisersIn November 2008 the Company announced that it would be working withKnowledge MGI as its new strategy consultants. Knowledge MGI are amanagement consultancy specialising in sports, entertainment, mediaand technology. Knowledge MGI is considered by the Board to be wellpositioned to advise Milestone on funding and developmentopportunities. As part of Knowledge MGI's commitment and belief inMilestone, they have accepted 375,000 shares in the Company.I am pleased to report that the Board is continuing to be well servedby all its advisers, who appreciate that Milestone has been in theearly stages in its regeneration, providing support and co-operationwhich Milestone is fortunate to have had during this period. Inrecognition of this we issued 500,000 warrants to Arden Partners Plcin March 2009.Milestone recognised the need for additional marketing in the smallcap arena both to increase investor awareness and assist liquidity inthe stock. We are pleased to have announced the appointment of AIMsmall cap brokers Hybridan as our joint broker with Arden Partners.Hybridan is well placed to assist us with our process. They are aspecialist in the arena focusing both on raising capital and shareprice support with institutional investors; they also reach high networth and other private investors through their weekly contributionto a widely distributed investor circular.Oxford Broadcasting Ltd ("OBL")The Group's wholly owned subsidiary, OBL, provided a terrestriallocal TV channel for Oxford. It became a loss-making entity for thelast two years. Following a thorough review undertaken by the Board,the Company decided to focus resources on the development of newdigital media solutions and technology. As a consequence, the Companydecided to discontinue the broadcasting of its analogue televisionservice in Oxford and in April 2009 the studios in Oxford wereofficially closed.Following the decision to close the studios, the remaining fivebroadcasting licences were disposed of in September 2009, thusterminating the continued trading loss of OBL (operating loss 2009:£8,626; 2008: £75,336).Nexstar Holdings LimitedWith the shifting market place and the effects that this had on thesponsorship market in general, the development of Nexstar was haltedover the last 12 months. With the evolution of an in-housedevelopment team the situation is currently under review and we areclosely watching the sponsorship market's stability which is key toany future progress.Articles of AssociationA resolution was proposed and approved at the Annual General Meeting("AGM") on 28 April 2009 to amend the Company's Articles ofAssociation in order to comply with changes in company law which cameinto effect in October 2009.FundingDuring the year the Company issued 30,407,411 new shares for a totalconsideration of £520,348. Of this consideration, £356,500 wasreceived in cash. The remainder was received from existing and newcontractors in exchange for work or interest, including all of theDirectors. The Company also raised £60,000 in new loans.In the short term, Milestone's strategy focuses on cash generation inorder to strengthen its balance sheet, facilitate its growthambitions and fund additional investments in innovativeweb-technology. The group has identified a target market ofIndependent Financial Advisors (IFAs) and Broker Services. The groupintends to offer a range of bespoke solutions, including innovativetools for client prospecting, supporting investor relations anddigital distribution for up-to-date compliance information.Milestone's medium to long-term strategy capitalises on synergiescreated through bundling its Web Design and Development capabilitieswith specialised technology solutions such as Jumpstart and VeCapture. The company's competitive position is reinforced through itsprivileged access to market-leading technologies.Potential further subscriptionsProtecting the interests of shareholders is a priority and theBoard's strategy is to seek to raise funds on a basis which is fairto all. This strategy has been successfully executed by Deborah Whitewith all subscriptions being placed at higher than market value onall occasions other than debt conversion when the current mid marketprice or higher was used. No discounts were awarded to management fordebt conversion.During the year the Company has raised a series of smallsubscriptions to support working capital requirements. The Board ispleased with the appetite which has been shown for thesesubscriptions and welcomes its new shareholders.It is possible that additional small fundraisings may be required toenable the Group to expand and support the launch of new businesses.Any enquiries should be sent to the Company Secretary at theregistered address or emailed to him atgraham.urquhart(at)milestonegroup.co.uk.OutlookThe Company has a clear strategy of actively growing a portfolio ofcontrolling and non-controlling stakes in digital technology, contentor service companies. At the same time it remains firmly focused ongenerating revenue to help support the business expansion and stemthe need for the raising of capital through the sale of equity whichhas proved necessary over the last 12 months.The company has launched its new media team. With the two agreementswith JumpStart and Ve Interactive, the Board is in a position to takethe Group forward into the new digital media sector. The Group'sExecutive Director, Deborah White, has made excellent progress withKnowledge MGI Ltd in identifying further potential opportunities toadd to the portfolio.In conclusion we have ended another challenging year stronger andbetter placed to take advantage of the changing media landscape witha newly appointed, balanced and energetic team.John SandersonChairman11 November 2009Report of the Directors for the year ended 30 September 2009The directors present their report together with the auditedfinancial statements for the year ended 30 September 2009.Directors in the periodJohn Sanderson, Non-Executive ChairmanDeborah White, Executive DirectorIan Lodwick, Finance Director (appointed 31 March 2008, resigned 23February 2009)Results and dividendsThe consolidated results of the Group for the year are set out onpage 18 of this report and show the loss for the year.The directors do not recommend the payment of a dividend (2008: nil).Principal activities, review of business and future developmentsA review of the year is held within the chairman's statement above.The Group is now offering its shareholders exposure to mediabusinesses specialising in digital communications. Milestone bringstogether expert media practices, leading-edge technology and provenbusiness minds to deliver interactive solutions across web, phone andportable media.Further information on the Group's activities and strategy areincluded in the Chairman's Statement on pages 3 to 8 of this report.Key performance indicators ("KPIs")In the context of its ongoing review of strategy, the Board isfocused on assessing and developing new opportunities. Followingintensive reviews of the Company's new businesses, the Board have setperformance targets for the 3 new sectors of the business. The webteam has a target of £500,000 revenue before 30 September 2010. Thesales team has a target to produce £75,000 of revenue within 18months from the JumpStart project and £50,000 from Ve Interactivesales before the 30 September year end. The Board will review thesetargets on a monthly basis and are pleased that the post year endpipeline business already exceeds expectations.Financial instruments and principal risks and uncertaintiesThe Group had £50,000 of loans outstanding at the year end. TheGroup's modest cash reserves were held in bank current and depositaccounts. A detailed description of how the Group manages risks anduncertainty surrounding financial instruments, working capital,interest rates and liquidity is held in note 18 to the financialstatements.This annual report contains certain forward looking statements withrespect to the principal risks and uncertainties facing the Group.These statements can be identified by the use of forward lookingterminology such as "believe", "expects", "plan", "should", "may" orcomparable terminology indicating expectations or beliefs concerningfuture events. By their very nature, these forward looking statementsinvolve risk and uncertainty because they relate to events and dependon circumstances that may or may not occur in the future. There are anumber of factors that could cause actual results or developments todiffer materially from those expressed or implied by these forwardlooking statements. The forward looking statements reflect theknowledge and information available at the date of preparation ofthis annual report and will not be updated during the year. Nothingin this annual report should be construed as a profit forecast.The directors consider cash flow to be the material financial risk tothe Group in the immediate future. The Board intends that, as newprojects are developed, the material risks will be fully assessed.Policy on the payment of suppliersThe Group recognises the importance of establishing effectiverelationships with its suppliers. In certain cases, payment terms areagreed with suppliers as part of the overall terms of thetransaction. In respect of the Group, year end creditors represent208 days average purchases and expenses (2008: 150). For the Company,year end creditors represent 191 days average purchases and expenses(2008: 139).Post balance sheet eventsPost balance sheets events are set out in note 27 to the financialstatements and explained in more detail in the Chairman's statement.Going concernWhilst the Group has made a loss in the year and had net liabilitiesof £410,637 at the year end, the Board feel it is appropriate toadopt the going concern basis in preparing the annual reports andaccounts. The Board has considered the significant risks anduncertainties surrounding the going concern assumption; these areheld in note 1 to the annual report and accounts.Substantial shareholdingsSo far as the Company is aware and subject to any new notificationsreceived after 5 November 2009, the following persons have anotifiable interest in the ordinary share capital of the Company (3per cent or more of the Company's ordinary shares; please notepercentages are rounded):+-------------------------------------------------------------------+| | Ordinary Shares held at || | 5 November 2009 ||-----------------------------------------+-------------------------|| TRMK Estate Income Ltd (& connected | 14,709,528 (16.66%) || parties) | ||-----------------------------------------+-------------------------|| Deborah Jane White (& connected | 8,351,191 (9.46%) || parties) | ||-----------------------------------------+-------------------------|| Reginald John Brealey (held by WB | 5,750,000 (6.51%) || Nominees Ltd) | ||-----------------------------------------+-------------------------|| CMH Management Ltd | 4,817,290 (5.46%) ||-----------------------------------------+-------------------------|| Magdalene Manikam (held by Alliance | 4,166,667 (4.72%) || Trust Pensions Ltd) | ||-----------------------------------------+-------------------------|| John Godfrey | 4,166,667 (4.72%) ||-----------------------------------------+-------------------------|| Susan Auden | 4,166,667 (4.72%) ||-----------------------------------------+-------------------------|| Compass Securities Ltd | 4,166,667 (4.72%) |+-------------------------------------------------------------------+Communication with shareholdersThe annual report and accounts and the interim statement at each halfyear are the primary vehicles for communication with shareholders.These documents are also distributed to other parties who haveexpressed an interest in the Group's performance. Group results canbe viewed on the Company website (www.milestonegroup.co.uk).Each year shareholders are invited to an annual general meeting("AGM"). The AGM is the main shareholder event of the year andprovides an opportunity for shareholders to question the directors.Shareholders who have any queries relating to their shareholdings orto the affairs of Milestone generally are invited to contact theCompany Secretary at the Company's registered address.During January 2007, new provisions within the Companies Act 2006came into force regarding the ways that a company is permitted tocommunicate with its shareholders. Subject to a resolution beingpassed by shareholders or the inclusion of relevant provisions withinits articles of association, a company can use its website to publishstatutory documents and communications to shareholders, such asAnnual Report and Accounts, as its default method of publication.Milestone Group PLC would like to take advantage of these newregulations; therefore in future we intend to publish all shareholderinformation, including the AGM Notice of Meeting and Annual Reportand Accounts on the Company website at www.milestonegroup.co.uk.Reducing the number of communications sent by post will not onlyresult in cost savings to the company but also reduce the impact thatthe unnecessary printing and distribution of reports has on theenvironment.The Company will put a resolution to shareholders at the forthcomingAnnual General Meeting to allow the website publication of thesedocuments and/or to update its articles of association accordingly.Charitable and political donationsDuring the year the Group made charitable donations of £nil (2008:£nil) and political donations of £nil (2008: £nil).Environmental mattersThe nature of Milestone's business means that it is unlikely to be amajor polluter but the Board is mindful of the potential impact onthe environment of Group activities. The Board recognises itsresponsibility to the environment in areas such as energy management,paper usage, waste reduction and recycling, and communications.Board of directorsThe Board is responsible for formulating, reviewing and approving theGroup's strategies, budgets, major items of capital expenditure andcorporate actions.At the end of the year the Board of the Company comprised oneNon-Executive Chairman, John Sanderson, and one Executive Director,Deborah White. Other directors who held office during the year areset out at the beginning of this report, together with theirappointment and resignation dates. Each director has extensive andrelevant business experience. Brief biographies of the directors areset out below in this report.The Board is currently of the opinion that, given the present size ofthe Group, it is inappropriate to retain separate sub-committees butintends to keep this matter under continuous review.The Board believes that this is an appropriate structure for theCompany at its current stage of development and that there issufficient expertise within the Board to facilitate a sound decisionmaking process and control environment in the short-term. Thedirectors intend to make further appointments to the Board in thenear future.Details of the remuneration of the directors are included in note 5of the financial statements. Future remuneration will be dependent onthe growth of the Company.Directors' profilesJohn Sanderson, Non-Executive ChairmanJohn was originally appointed to Milestone Group plc to support astrategic review of the AIM listed local media specialist with radio,local TV and newspaper interests. John is widely recognised as aleading strategy consultant; advising both listed and private mediabusinesses in their development stages, having begun his career as aleisure and media sector analyst in the City.John's unique and varied knowledge of this industry comes from a verysuccessful career advising through Hydra Associates and through hisvehicle media and business consultancy JFWS Limited. With a pastclient list including the Arts Council, EMI, BSkyB, Channel 4, TimesNewspapers, The Mirror Group and The Economist Group, John has awide-ranging network in the media industry.He is involved in a variety of established and early stage businesseswhose models exploit the opportunities offered by the digital media.They range from music through radio and classified advertising toonline broadcasting.John is currently an advisor to AXM Venture Capital Ltd which managesthe Creative Capital Fund for the London DevelopmentAgency, investing in start-up and early stage creative businesses inLondon. He is also an adviser to Big Issue Invest's Social EnterpriseInvestment Fund which is being raised to invest in a wide range ofenterprises with strong social benefits.Deborah White, Executive DirectorDeborah has significant experience heading financial advisory firmsin the City over the last decade and has been in financial servicesfor over 20 years.From 1999 to 2005 Deborah was jointly responsible for buildingInter-Alliance City Limited. She went on to head Silver Planet LifeInvestment Taxation Solutions, a specialised financial advisory groupdealing with high level investment and tax advice and capital raisingfor SME start-ups.Deborah joined the Group as a Non-Executive Director having raisedfunds for a previous acquisition. She was then appointed ChiefExecutive and has successfully transformed several aspects of thebusiness already: creating a new and refocused strategy,restructuring the operating format and transforming the company'sfinancial position.Deborah is a dynamic team builder and has the core focus ofestablishing an effective, goal orientated team to assist in thesuccessful realization of the company's new vision. The quality ofthe recent recruits is strong evidence of this.Directors' shareholdingsThe directors of the Company and their beneficial interests at theend of the year (including those of their immediate family and anycompany controlled by them) in the share capital of Milestone areshown below:+-------------------------------------------------------------------+| | Ordinary shares of | Ordinary shares of || | 0.1p each held at 30 | 0.1p each held at 30 || | September 2009 | September 2008 ||--------------------+-----------------------+----------------------|| Deborah Jane White | | 7,606,698 || | 8,351,191 | ||--------------------+-----------------------+----------------------|| John Frederick | | - || Waley Sanderson | 540,333 | ||--------------------+-----------------------+----------------------|| Ian David Lodwick | - | - || (appointed 31 | | || March 2008, | | || resigned 23 | | || February 2009) | | |+-------------------------------------------------------------------+No directors' share options were exercised in the year (2008: nil)and there were no options outstanding at the end of the year.Details of any directors' interests in transactions of the Group aregiven in note 23 to these financial statements.Qualifying third party indemnity provision for the benefit of thedirectors was in place during the year and continues to remain inplace.AuditorsAll of the current directors have taken all the steps that they oughtto have taken to make themselves aware of any information needed bythe Group's auditors for the purposes of their audit and to establishthat the auditors are aware of the information. The directors are notaware of any relevant audit information of which the auditors areunaware.Since the year end BDO Stoy Hayward LLP have changed their name toBDO LLP. BDO LLP have expressed their willingness to continue inoffice and a resolution to re-appoint them will be proposed at theAnnual General Meeting.Directors' responsibilitiesThe directors are responsible for keeping proper accounting recordswhich disclose with reasonable accuracy at any time the financialposition of the Group, for safeguarding the assets of the Company,for taking reasonable steps for the prevention and detection of fraudand other irregularities and for the preparation of a directors'report which complies with the requirements of the Companies Act2006.The directors are responsible for preparing the annual report and thefinancial statements in accordance with the Companies Act 2006. Thedirectors are also required to prepare financial statements for theGroup in accordance with International Financial Reporting Standardsas adopted by the European Union ("IFRSs") and the rules of theLondon Stock Exchange for companies trading securities on theAlternative Investment Market. The directors have chosen to preparefinancial statements for the Company in accordance with UK GenerallyAccepted Accounting Practice.Group financial statementsInternational Accounting Standard 1 requires that financialstatements present fairly for each financial year the Group'sfinancial position, financial performance and cash flows. Thisrequires the faithful representation of the effects of transactions,other events and conditions in accordance with the definitions andrecognition criteria for assets, liabilities, income and expenses setout in the International Accounting Standards Board's 'Framework forthe preparation and presentation of financial statements'. Invirtually all circumstances, a fair presentation will be achieved bycompliance with all applicable IFRSs.A fair presentation also requires the directors to: * consistently select and apply appropriate accounting policies; * present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and * provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance.Parent Company financial statementsCompany law requires the directors to prepare financial statementsfor each financial year which give a true and fair view of the stateof affairs of the Company and of the profit or loss of the Companyfor that period. In preparing these financial statements, thedirectors are required to: * select suitable accounting policies and then apply them consistently; * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; * make judgements and estimates that are reasonable and prudent; and * state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.Financial statements are published on the Company's website inaccordance with legislation in the United Kingdom governing thepreparation and dissemination of financial statements, which may varyfrom legislation in other jurisdictions. The maintenance andintegrity of the Company's website is the responsibility of thedirectors. The directors' responsibility also extends to the ongoingintegrity of the financial statements contained therein.By order of the BoardDeborah WhiteExecutive Director11 November 2009Report of the independent auditorsINDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILESTONE GROUP PLCWe have audited the financial statements of Milestone Group plc forthe year ended 30 September 2009 which comprise the consolidatedincome statement, the consolidated balance sheet, the company balancesheet, the consolidated cashflow statement, the consolidatedstatement of change in equity and the related notes. The financialreporting framework that has been applied in the preparation of thegroup financial statements is applicable law and InternationalFinancial Reporting Standards (IFRSs) as adopted by the EuropeanUnion. The financial reporting framework that has been applied inpreparation of the parent company financial statements is applicablelaw and United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice).This report is made solely to the company's members, as a body, inaccordance with sections 495 and 496 of the Companies Act 2006. Ouraudit work has been undertaken so that we might state to thecompany's members those matters we are required to state to them inan auditor's report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyoneother than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.Respective responsibilities of directors and auditorsAs explained more fully in the statement of directors'responsibilities, the directors are responsible for the preparationof the financial statements and for being satisfied that they give atrue and fair view. Our responsibility is to audit the financialstatements in accordance with applicable law and InternationalStandards on Auditing (UK and Ireland). Those standards require us tocomply with the Auditing Practices Board's (APB's) Ethical Standardsfor Auditors.Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts anddisclosures in the financial statements sufficient to give reasonableassurance that the financial statements are free from materialmisstatement, whether caused by fraud or error. This includes anassessment of: whether the accounting policies are appropriate to thegroup's and the parent company's circumstances and have beenconsistently applied and adequately disclosed; the reasonableness ofsignificant accounting estimates made by the directors; and theoverall presentation of the financial statements.Opinion on financial statementsIn our opinion: * the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 2009 and of the group's loss for the year then ended; * the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; * the parent company's financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and * the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.Opinion on other matters prescribed by the Companies Act 2006In our opinion the information given in the directors' report for thefinancial year for which the financial statements are prepared isconsistent with the financial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters wherethe Companies Act 2006 requires us to report to you if, in ouropinion: * 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.Emphasis of matter - Going ConcernIn forming our opinion on the financial statements, which is notqualified, we have considered the adequacy of the disclosures made innote 1 of the financial statements concerning the company's abilityto continue as a going concern. At the balance sheet the group hadnet current liabilities of £410,637. The company is reliant on itscontinuing ability to manage the timing of settlement of liabilitiesassociated with its previous activities. Whilst discussions areongoing with suppliers and appropriate payment profiles unformalisedthere remains a material uncertainty which may cast significant doubtabout the company's ability to continue as a going concern. Thefinancial statements do not include any adjustments that would resultif the company was unable to continue as a going concern.James Brown (senior statutory auditor)For and on behalf of BDO LLP, statutory auditor4th FloorOne Victoria StreetBristolBS1 6AAUnited Kingdom11 November 2009BDO LLP is a limited liability partnership registered in England andWales (with registered number OC305127).Consolidated income statement for the year ended 30 September 2009 Note 2009 2008 £ £Revenue 3 - 18,088Cost of sales - -Gross profit - 18,088Other operating income 4 9,268 3,508Administrative expenses (392,664) (746,851) (383,396) (743,343)Loss from operations 3, 4 (383,396) (725,255)Finance expense 6 - (312)Finance income 20 3,433Loss before taxation (383,376) (722,134)Taxation expense 8 - -Loss from continuing operations (383,376) (722,134)Loss on discontinued operations net of tax 7 (8,626) (75,337)Loss for the year (392,002) (797,471)Attributable to equity shareholders of theparent (392,002) (797,471)Basic and diluted loss per share fromcontinuing operations (pence) 10 (0.56) (1.71)Basic and diluted loss per share fromdiscontinued operations (pence) 10 (0.01) (0.18)Total basic and diluted loss per share 10 (0.57) (1.89)The notes on pages 21 to 41 form part of these financial statementsConsolidated balance sheet at 30 September 2009 Note 2009 2008 £ £Non-current assetsGoodwill 11 - -Property, plant & equipment 12 - -Current assetsTrade and other receivables 13 2,462 71,152Cash and cash equivalents 10,325 18,141 12,787 89,293Current liabilitiesBank overdrafts 15 - (3,260)Trade and other payables 14 (423,424) (596,687) (423,424) (599,947)Net liabilities (410,637) (510,654)Capital and reserves attributable toequity holders of the CompanyShare capital 19 93,098 2,790,795Share premium account 8,479,824 8,023,012Merger reserve 11,119,585 11,119,585Capital Redemption Reserve 2,732,904 -Retained losses (22,836,048) (22,444,046)Total Equity (410,637) (510,654)The financial statements were approved by the Board and authorisedfor issue on 11 November 2009Deborah WhiteExecutive DirectorThe notes on pages 21 to 41 form part of these financial statementsConsolidated cash flow statement for the year ended 30 September 2009Cash flow from operating activities Note 2009 2008 £ £Loss for the year (392,002) (797,471)Adjustments for:Depreciation of tangible assets - 8,834Profit on disposal of property, plant and -equipment (597)Net bank and other interest charges 10 (3,026)Profit on sale of discontinued operations (36,408)net of tax -Issue of share options 4,800Recognition of negative goodwill - (24,212)Net loss before changes in working capital (387,789) (852,283)Decrease/(increase) in trade and other 4,875receivables 68,690(Decrease)/increase in trade and other 341,639payables (89,284)Cash from operations (408,383) (505,769)Interest received 20 3,433Interest paid (30) (407)Net cash flows from operating activities (358,393) (502,743)Investing activitiesAcquisition of subsidiary undertakings,net of cash and overdrafts acquired - 56,314Sale of subsidiary undertakings - (3,539)Purchase of property, plant and equipment 12 - (1,170)Sale proceeds of property, plant andequipment 597 -Net cash flows used in investing activities 597 51,605Financing activitiesIssue of ordinary share capital 356,500 322,816Repayment of loan (10,000) -New loans raised 60,000 37,500Net cash flows from financing activities 406,500 360,316Net decrease in cash (1,296) (90,822)Cash and cash equivalents at beginning ofperiod 11,621 102,443Cash and cash equivalents at end of period 26 10,325 11,621The notes on pages 21 to 41 form part of these financial statementsConsolidated statement of changes in equity for the year ended 30September 2009Cash flow from operating activities Note 2009 2008 £ £Loss for the year (392,002) (797,471)Adjustments for:Depreciation of tangible assets - 8,834Profit on disposal of property, plant and -equipment (597)Net bank and other interest charges 10 (3,026)Profit on sale of discontinued operations (36,408)net of tax -Issue of share options 4,800Recognition of negative goodwill - (24,212)Net loss before changes in working capital (387,789) (852,283)Decrease/(increase) in trade and other 4,875receivables 68,690(Decrease)/increase in trade and other 341,639payables (89,284)Cash from operations (408,383) (505,769)Interest received 20 3,433Interest paid (30) (407)Net cash flows from operating activities (358,393) (502,743)Investing activitiesAcquisition of subsidiary undertakings,net of cash and overdrafts acquired - 56,314Sale of subsidiary undertakings - (3,539)Purchase of property, plant and equipment 12 - (1,170)Sale proceeds of property, plant andequipment 597 -Net cash flows used in investing activities 597 51,605Financing activitiesIssue of ordinary share capital 356,500 322,816Repayment of loan (10,000) -New loans raised 60,000 37,500Net cash flows from financing activities 406,500 360,316Net decrease in cash (1,296) (90,822)Cash and cash equivalents at beginning ofperiod 11,621 102,443Cash and cash equivalents at end of period 26 10,325 11,621The notes on pages 21 to 41 form part of these financial statementsConsolidated statement of changes in equity for the year ended 30September 2009 Share Share Merger Capital Retained Total Capital Premium Reserve Redemption Earnings Equity Reserve £ £ £ £ £ £Balance at 2,760,510 7,692,985 11,119,585 - (21,646,575) (73,495)30 Sept2007Totalrecognisedincome and (797,471)expensefor theyear - - - - (797,471)Shares -issued 30,285 330,027 - - 360,312Balance at (510,654)30 Sept2008 2,790,795 8,023,012 11,119,585 - (22,444,046)Totalrecognisedincome and (392,002)expensefor theyear - - - - (392,002)Shares -issued 30,408 456,812 - - 487,220Share -optionsgranted 4,800 - - - 4,800Repurchaseof -deferredsharecapital (2,732,905) - - 2,732,904 -Balance at30 Sept2009 93,098 8,479,824 11,119,585 2,732,904 (22,836,048) (410,637)Notes to the consolidated accounts for the year ended 30 September2009The principal activity of Milestone Group PLC and its subsidiaries(the Group) is to hold and operate businesses in the media andtechnology sectors.Milestone Group PLC is the Group's ultimate parent company, and it isincorporated and resident in Great Britain. The address of MilestoneGroup PLC's registered office is 1st Floor, 2 Royal Exchange, LondonEC3V 3DG, and this is its principal place of business.Milestone Group PLC's shares are listed on the AIM market of theLondon Stock Exchange.Milestone Group PLC's consolidated financial statements are presentedin Pounds Sterling (£), which is also the functional currency of theparent Company.These consolidated financial statements have been approved for issueby the Board of Directors on 11 November 2009.1 Principal accounting policiesThe principal accounting policies adopted in the preparation of thefinancial statements are set out below. The policies have beenconsistently applied to all the years presented, unless otherwisestated.The Group financial statements have been prepared in accordance withInternational Financial Reporting Standards, International AccountingStandards and Interpretations (collectively IFRSs) issued by theInternational Accounting Standards Board (IASB) as adopted byEuropean Union ("Adopted IFRSs"), and with those parts of theCompanies Act 2006 applicable to companies preparing their financialstatements under Adopted IFRSs.Going concernThe Group's business activities, together with the factors likely toaffect its future development, performance and position are set outin the Chairman's statement. The financial position of the Group, itscash flows, liquidity position and borrowing facilities are describedin the director's report. In addition note 18 to the financialstatements includes the Group's objectives, policies and processesfor managing its capital; its financial risk management objectives;details of its financial instruments and exposures to credit risk andliquidity risk.The future business model is based around generating revenue from twonew areas; website development and commissions from the sale of theJumpStart and Ve products. The Board has prepared forecasts whichreflect agreements that have or are expected to be entered into tosettle existing obligations of the business and the revenues andcosts anticipated from these new revenue streams based on a pipelineof anticipated customers. These projections show the business will beprofitable and cash generative in the future. However, achievingthese forecasts will be dependent upon achieving sales in a newmarket place and obtaining sufficient funding to settle existingobligations which is discussed further below.The Board recognises that a risk arises when expanding into newmarkets and has moved to appoint experienced individuals to themanagement team to significantly improve expertise in these areas.These appointments are detailed more fully in the chairman'sstatement. The Company maintains a low fixed cost base which providesflexibility as the new business streams are developed. The directorsexpect to bill the first sales of website development services inNovember 2009. Sales of the wireless technology solutions areprojected to commence in January 2010.The Board have been able to agree funding subsequent to the balancesheet date in the form of a share issue of £150,450 and loanfinancing of £160,000 repayable in June 2010. The Group has been ableto draw down upon the full £160,000 loan balance subsequent to theyear end. With these funds in place, the Board believe the Group hassufficient working capital to grow the business and repay liabilitiesas they fall due. The Company is however reliant on its continuingability to manage the timing of settlement of liabilities associatedwith its previous activities. Discussions are ongoing with suppliersand appropriate payment profiles remain unformalised.The Directors have concluded that the requirement to manage thetiming of settlement of its liabilities represents a materialuncertainty which may cast significant doubt upon the Group's and theCompany's ability to continue as a going concern. Nevertheless aftermaking enquiries and considering this uncertainty and the measurestaken to mitigate it, the Directors have a reasonable expectationthat the Group and the Company will have adequate resources tocontinue in existence for the foreseeable future. For these reasonsthey continue to adopt the going concern basis in preparing theannual report and accounts. The financial statements do not includeany adjustments that would result if the Group and Company was unableto continue as a going concern.Basis of consolidationThe Group financial statements consolidate those of the Company andof its subsidiary undertakings drawn up to 30 September 2009.Subsidiaries are entities over which the Group has the power tocontrol the financial and operating policies so as to obtain benefitsfrom its activities. The Group obtains and exercises control throughvoting rights.Amounts reported in the financial statements of subsidiaries havebeen adjusted where necessary to ensure consistency with theaccounting policies adopted by the Group.Acquisitions of subsidiaries are dealt with by the acquisitionmethod. The acquisition method involves the recognition at fair valueof all identifiable assets and liabilities, including contingentliabilities of the subsidiary, at the acquisition date, regardless ofwhether or not they were recorded in the financial statements of thesubsidiary prior to acquisition. On initial recognition, the assetsand liabilities of the subsidiary are included in the consolidatedbalance sheet at their fair values, which are also used as the basesfor subsequent measurement in accordance with the Group's accountingpolicies. Goodwill is stated after separating out identifiableintangible assets. Goodwill represents the excess of acquisition costover the fair value of the Group's share of the identifiable netassets of the acquired subsidiary at the date of acquisition.The trading results of subsidiaries acquired or disposed of duringthe year are included in the consolidated income statement from theeffective date of acquisition or up to the effective date ofdisposal, as appropriate.All intra-Group transactions, balances, income and expenditure areeliminated on consolidation.Revenue and attributable profitRevenue represents advertising income from the Group's televisiondivision. Advertising income is recognised on the date of broadcast.Research and developmentExpenditure on research activities is recognised as an expense in theperiod on which it is incurred. An internally generated intangibleasset arising from the Group's development activity is recognisedonly if all the following conditions are met: * an asset is created that can be identified (such as a website); * it is probable that the asset created will generate future economic benefits, and; * the development cost of the asset can be measured reliably.Internally-generated intangible assets are amortised on a straightline basis over their useful lives. Where no internally-generatedintangible asset can be recognised, development expenditure isrecognised as an expense in the period in which it is incurred.Property, plant and equipmentProperty, plant and equipment are stated at cost net of depreciationand any provision for impairment. Depreciation is calculated to writedown the cost less estimated residual value by equal annualinstalments over their expected useful lives. The rates generallyapplicable are:Short leasehold property 10-20% or over the life of the leaseimprovements or licenceProduction and studio equipment 20% on costFixtures, fittings, computer and 10-50% per annum or over the period of the licenceoffice equipment & machineryThe assets' residual values and useful lives are reviewed at eachbalance sheet date and adjusted if appropriate.Intangible assetsGoodwillGoodwill arising on consolidation is recorded as an intangible assetand is the surplus of the cost of acquisition over the Group'sinterest in the fair value of identifiable net assets acquired.Goodwill is not amortised and is reviewed annually for impairment.Any impairment identified as a result of the review is charged in theincome statement.On disposal of a subsidiary the attributable amount of goodwill isincluded in the determination of the profit or loss on disposal.Where the fair value of identifiable assets, liabilities andcontingent liabilities exceed the fair value of consideration paid,the excess is credited in full to the consolidated income statementon the acquisition date.Leased assetsProperty, plant and equipment acquired under finance leases or hirepurchase contracts are capitalised and depreciated in the same manneras other property, plant and equipment, and the interest element ofthe lease is charged to the income statement over the period of thefinance lease. The related obligations, net of future financecharges, are included in liabilities.Rentals payable under operating leases are charged to the incomestatement on a straight line basis over the period of the lease.Impairment of non-current assetsFor the purposes of assessing impairment, assets are grouped intoseparately identifiable cash-generating units. Goodwill is allocatedto those cash-generating units that have arisen from businesscombinations.At each balance sheet date, the Group reviews the carrying amounts ofits non-current assets, to determine whether there is any indicationthat those assets have suffered an impairment loss. If any suchindication exists the recoverable amount of the asset is estimated inorder to determine the extent of the impairment loss (if any).Goodwill is tested for impairment annually. Goodwill impairmentcharges are not reversed.An impairment loss is recognised for the amount by which the asset'sor cash-generating unit's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of fair value and valuein use based on an internal discounted cash flow evaluation.Cash and cash equivalentsCash and cash equivalents comprise cash in hand and demand deposits.Bank overdrafts that are repayable on demand and form an integralpart of the Group's cash management are included as a component ofcash and cash equivalents. Bank overdrafts are shown in currentliabilities on the balance sheet.EquityEquity comprises the following: * Share capital represents the nominal value of issued Ordinary shares and Deferred 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 issued on acquisition of subsidiaries, net of expenses of the share issue. * Capital Redemption reserve represents the excess over consideration paid by the Company to repurchase its own share capital * Retained earnings represents retained profits and losses.Deferred taxationDeferred tax assets and liabilities are recognised where the carryingamount of an asset or liability in the balance sheet differs from itstax base, except for differences arising on: * the initial recognition of goodwill; * the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and * investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.Recognition of deferred tax assets is restricted to those instanceswhere it is probable that taxable profit will be available againstwhich the difference can be utilised.The amount of the asset or liability is d
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