Final Results

PARALLEL MEDIA GROUP PLC RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Chairman's statement This year has been a time of challenges for Parallel Media Group Plc (`PMG') but has also witnessed a turnaround in its fortunes with the successful conclusion of four new Title Sponsorships in its Asian business during the 2006 PGA European Tour international's season. Since year end the company has agreed heads of terms for restructuring of its Asian operations on a basis which the directors believe is beneficial to PMG. In addition PMG is in negotiation to raise funds of at least £2 million which will be used to redeem certain of the Company's issued convertible loan stocks. A circular describing more of these matters will be sent to shareholders shortly and approval of the resolutions necessary to issue shares for these purposes will be sought at an Extraordinary General Meeting. Key assets PMG's business internationally is also set to expand, especially in Europe. PMG sees great potential in the FIFPro XI Awards, and its existing property in Kazakhstan. Another area of activity that PMG has embarked on in 2006, is its involvement in European Golf Resorts Limited. As previously announced, your company is involved in negotiations for one venue in Havr (Croatia). PMG is currently also reviewing its contract with the PGA de las Americas regarding the Tour de las Americas with the aim of making this contract potentially profitable in 2007. It is your board's belief that the aforementioned developments which have been achieved between the year end and today, significantly enhance your Company's long term prospects. Corporate The Company has also decided to restructure the Board to put the Company in the best position for this coming period of growth. I will continue to spend a considerable portion of my time overseas developing the international aspects of the business and will continue for the foreseeable future as chairman. I am delighted to announce that Edward Adams who is chairman of RAM Investment Group plc which is a significant holder of convertible loan stock in the company has agreed to become a Non-Executive Director of the Company and that Leonard Fine has also agreed to become a Non Executive Director again. Both Edward and Leonard have worked closely with me over recent months and I have greatly valued their input so it is a pleasure to welcome them as directors. We will also be looking to further strengthen the board over the forthcoming months The board has decided that it would be appropriate for the business to have a chief operating officer who would run the company on a day-to-day basis, relieving me of these duties and enabling me to apply my skills more fully to event creation and sponsorship arrangement which will be the revenue generators for the company in coming years. We have identified a suitable candidate with considerable experience in this field to take this role and are optimistic of completing an agreement with him in the near future. Outlook The last year has been a very significant period in the development of your company. The current year has started well and I anticipate being able to announce results for the first half of 2006 very shortly and that these will demonstrate the improvement in trading. The changes with regard to our Asian activities should enable this trend to be continued further and the planned improvements to the Group's balance sheet should enable the business to be developed further and profitably. Without doubt this Company would not be in the position it is today without the tremendous support of its staff and shareholders and I thank them for their effort and dedication. David Ciclitira. Chairman 14 August 2006 Financial report Overview to 31 December 2005 In this year the Group shows a retained loss of £1.05 million compared to a prior year loss of £2.57 million. The adjusted loss per share figure for the year was 4.71p, against a prior year adjusted loss per share figure of 10.98p. Turnover Group turnover for the year was £2.58 million compared to turnover of £2.98 million in the prior year. Turnover reduced due to the cessation of the Group's Italian operations and the expiration of a television rights contract, both of these activities had been loss making in 2004. These reductions in turnover were partially offset by the staging of two new Ladies European Tour golf events in Asia and an increase in the commission generated from the Group's associated company Parallel Media Asia (2003) Ltd. Operating Loss After deducting rights fees and other direct costs from the Group's gross revenues a gross profit of £1.0 million was generated in the year. The operating loss equalled £0.31 million which is an improvement of £1.13 million on the £1.44 million recorded in the previous year. A major reason for this improvement is the reduction in the administration costs incurred by the group, especially in terms of staff and professional advisor costs. Exceptional Items During the year the Company disposed of an associated company, Broadcast Innovations Limited, this transaction resulted in a profit on sale of £0.16 million. The Company also disposed of a subsidiary company, Parallel Media Italia SRL ("PMI"), the consideration for this disposal was the transfer to the Company of certain sponsorship rights that PMI held. In calculating the loss on disposal no value was attached to this consideration leading to an accounting loss on disposal of £0.16 million. Net liabilities The net liabilities of the Group at the year end are £5.22 million, this position will be dramatically improved upon conversion of convertible loans owed by the Group and through the fund raising which the Group proposes to undertake. Interest and Taxation The Group paid net interest of £0.36 million arising from convertible loan interest, interest on the facility with Bumiputra Commerce Bank and other loans. There was no corporation tax charge during the year. Loss Per Share Adjusted loss per share in the year was 4.71p compared to 10.98p in the year ended 31 December 2004. The adjusted loss as shown in Note 1 to the accounts is based upon the attributable profit of the continuing operations after adjusting for goodwill and all exceptional items. At the end of this year, the Company made no final dividend recommendation. Parallel Media Group plc Consolidated profit and loss account for the year ended 31 December 2005 Year ended Year ended 31 December 2005 31 December 2004 £'000 £'000 Turnover: Group and share of 2,582 3,702 joint venture Less share of turnover of - (723) joint venture Turnover 2,582 2,979 Cost of Sales (1,593) (1,943) Gross Profit 989 1,036 Administrative Expenses (1,297) (2,474) Operating loss before (308) (1,288) exceptional items Administrative expenses - - (150) exceptional Operating Loss (308) (1,438) Share of operating loss in - (226) joint ventures Share of operating loss in (389) (672) associates Exceptional items - profit on 156 - sale of associated undertaking Exceptional items - loss on (157) 16 disposal of subsidiary Loss on ordinary activities (698) (2,320) before interest and tax Interest receivable - 1 Interest payable (361) (397) Loss on ordinary activities (1,059) (2,716) before tax Tax on loss on ordinary - - activities Loss on ordinary activities (1,059) (2,716) after tax Minority interests 11 144 Loss for the financial year (1,048) (2,572) Loss per share - basic and diluted 1 (4.72p) (11.58p) Parallel Media Group plc Statement of total recognised gains and losses for the year ended 31 December 2005 Year ended Year ended 31 December 31 December 2005 2004 £'000 £'000 Loss for the financial year - Group (659) (1,674) - Joint ventures - (226) - Associated undertakings (389) (672) (1,048) (2,572) Currency translation differences on foreign currency net investments - Group (63) (7) - Joint ventures & associated undertakings (278) 150 Total recognised gains and losses for the year (1,389) (2,429) Parallel Media Group plc Balance sheets at 31 December 2005 Group Company 31 31 31 31 December December December December Note 2005 2004 2005 2004 £'000 £'000 £'000 £'000 Fixed assets Tangible assets 17 62 14 9 Investments 619 883 3,408 3,010 636 945 3,422 3,019 Current assets Debtors - Due within one 1,264 923 2,012 1,449 year - Due after one 805 1,890 802 1,890 year 2,069 2,813 2,814 3,339 Cash 107 47 105 - 2,176 2,860 2,919 3,339 Creditors: amounts falling due within one year (1,906) (2,003) (1,633) (1,447) Net current assets 270 857 1,286 1,892 Total assets less current 906 1,802 4,708 4,911 liabilities Creditors: amounts falling due after one year: (6,130) (5,468) (6,130) (5,468) Provisions for liabilities and charges Associates - (156) - - Net liabilities (5,224) (3,822) (1,422) (557) Capital and reserves Called up share capital 2 1,110 1,110 1,110 1,110 Share premium account - - - - Other reserves 5,591 5,591 5,591 5,591 Profit and loss account (11,802) (10,413) (8,123) (7,258) Shareholders' funds - (5,101) (3,712) (1,422) (557) equity Minority interest - equity (123) (110) - - (5,224) (3,822) (1,422) (557) Parallel Media Group plc Consolidated cash flow statement for the year ended 31 December 2005 31 31 31 31 December December December December 2005 2005 2004 2004 £'000 £'000 £'000 £'000 Net cash outflow from (59) (2,404) operating activities Returns on investments and s ervicing of finance Interest paid (187) (397) Interest received - 1 Net cash outflow from (187) (396) returns on investments and servicing of finance Capital expenditure Payments to acquire tangible (9) (48) fixed assets Net cash outflow from (9) (48) capital expenditure and financial investment Acquisitions and disposals Further investment in - (158) associated undertaking Net (cash)/overdrafts sold (1) (242) with subsidiary Purchase of other - (30) investments (1) (430) Net cash outflow before (256) (3,278) management of liquid resources & financing Financing Bank facility (568) 1,562 Convertible loan 890 678 Loan from director - 514 322 2,754 Increase/(decrease) in cash 66 (524) Parallel Media Group plc Notes forming part of the financial statements for the year ended 31 December 2005 1. Loss per share Year ended Year ended 31 December 31 December 2005 2004 (i) Basic £'000 £'000 Loss for the financial year (1,048) (2,572) Number of shares in issue 22,203,505 22,203,505 Loss per share (4.72p) (11.58p) (ii) Diluted Diluted loss and earnings per share is calculated on the same basis as basic loss and earnings per share because the effect of the potential ordinary shares (share options and convertible loans) reduces the net loss per share and is therefore anti-dilutive. (iii) Adjusted earnings per share The adjusted earnings per share figure shown below is calculated on attributable loss excluding discontinued operations, exceptional items included in administrative expenses, and exceptional items included after operating profit. This calculation has been used as it is deemed to give a more appropriate indication of the earnings of the continuing operations of the Group. Year ended Year ended 31 December 2005 31 December 2004 EPS Earnings EPS Earnings Pence £'000 Pence £'000 Basic loss per share (4.72p) (1,048) (11.58p) (2,572) Administrative expenses - - - 0.67p 150 Exceptional (continuing operations only) Exceptional items (continuing 0.01 1 (0.07p) (16) operations only) Adjusted loss per share (4.71p) (1,047) (10.98p) (2,438) 2. Called up share capital 31 31 December December 2005 2004 £'000 £'000 Authorised 1,799,533,475 ordinary shares of 0.5p each (31 December 8,998 9,997 2004: 199,936,502 ordinary shares of 5p each) 199,831,545 deferred shares of 0.5p each (31 December 999 - 2004: Nil) 9,997 9,997 Issued and fully paid 22,203,505 ordinary shares of 0.5p each (31 December 111 1,110 2004: 22,203,505 ordinary shares of 5p each) 199,831,545 deferred shares of 0.5p each (31 December 999 - 2004: Nil) 1,110 1,110 (i) Ordinary shares and deferred shares A re-organisation of the Company's capital was approved at an extraordinary general meeting of the Company held on 2 August 2005. Every Ordinary Share of 5p in issue was subdivided into one Ordinary Share of 0.5 pence each and nine Deferred Shares of 0.5 pence each. The deferred shares do not entitle their holders to receive any dividend or other distribution, they do not entitle their holders to receive notice of or to attend, speak or vote at any General Meeting of the Company, and they do not entitle their holders on a return of assets on a winding-up of the Company or otherwise only to the repayment of the capital paid up on such Deferred Shares and only after repayment of the capital paid up on each Ordinary Share in the capital of the Company and the payment of a further £100,000 on each such Ordinary Share. The financial information set out above does not constitute the Company's statutory accounts for the year to 31 December 2005 but is derived from those accounts. Copies of the Report and Accounts for the period ended 31 December 2005 are being sent to shareholders. Further copies will be available from the Company's registered office, which is 3-12 Harbour Yard, Chelsea Harbour, London, SW10 OXD.

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