Final Results
MILESTONE GROUP PLC
("Milestone" or the "Company)
Annual Report and Financial Statements for the year ended 30
September 2009
AIM listed Milestone Group PLC, the provider of digital media
solutions and technology, is pleased to announce its Final Results
for 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 Q1
Deborah White, Executive Director, commented:
"During the year we have reduced the financial losses of the
business, restructured, hired key personnel, rebranded, successfully
set up a new web design and development team, and just after the year
end, signed two key strategic alliances. It has been an incredibly
busy and transformational year. This is an exciting time for us as we
move towards generating revenues with the three new areas of the
business. We look forward to building a positive future for our
shareholders."
The full report and financial statements for the year ended 30
September 2009 are attached as an annex to this announcement.
FOR FURTHER INFORMATION
Milestone Group PLC
Deborah White, Executive Director
Tel: 020 7929 7826
Arden Partners plc
Richard Day / Adrian Trimmings
Tel: 020 7398 1632
Hybridan LLP
Claire Noyce / Stephen Austin
Tel: 020 7947 4004
Chairman's Statement
Foreword
I feel privileged to deliver this statement on behalf of the Board
but also the management led by Executive Director, Deborah White, who
has brought about significant changes and developments for the good
of Milestone.
Shareholders will realise that in a thinly resourced company which
has disposed of its legacy businesses and is setting out to travel
along new more commercially viable and exciting roads, an enormous
burden falls on the Executive Director, particularly when she has not
been entirely free from past commitments. I am delighted to announce
that Deborah has decided to dedicate 100% of her time to Milestone
with immediate effect. She has resigned from her remaining commitment
within the financial services sector to enable her to focus fully on
Milestone.
Deborah has done shareholders proud in the past 12 months with her
patience, determination and success in repositioning and redefining
the Company to start to drive shareholder value going forward.
Deborah has led the closures, disposals, fundraising and the
identification and development of new opportunities. I very much look
forward to the coming year and seeing the fruits of her work.
Milestone background
Milestone was admitted to trading on AIM in July 2003. Prior to the
advent of digital television and during the early stages of the
advance in digital media, it enjoyed a number of years as a prominent
company within the TV production and localised broadcasting industry.
The Group had a strategy of developing through organic growth and
acquisition. However after inheriting a number of publishing and
broadcasting businesses, the primary focal point became the operation
of these entities. The Group became analogue focused and the media
assets owned were largely traditional.
The Board decided that the interests of shareholders would be best
served by the disposing of these traditional media assets (which were
clearly out of date and not performing) and moving wholeheartedly
into the digital media / technology space.
In order to position Milestone for this strategic evolution it was
clear that both the expenditure and net liability positions had to be
reduced and new relationships formed with qualified and institutional
investors. Funding change and building a future has been the focus
for the management since the appointment of Deborah White to the
Board.
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 Q1
Financial summary
The Group made a loss for the year of £0.39m, a dramatic improvement
over 2008 (2008: loss of £0.80m), and has reduced the balance sheet
net liabilities to £0.41m (2008: £0.51m) as the Board has developed
its plans to evolve its business positioning and take strategic
investment stakes in complementary media businesses. These results
are presented under Adopted International Financial Reporting
Standards ("Adopted IFRS").
Market overview
As mentioned in our annual report last year the Board has continued
to focus on developing the Group's exposure to the converging media
and technology sectors by growing a portfolio of interests in
synergistic businesses.
Milestone is actively bringing together expert media practices,
leading-edge technology and proven business minds to deliver
interactive solutions across web, phone and portable media. We expect
that the management team and Board will continue to grow in line with
the business in the near future.
A new look for Milestone
A highlight of the year has been the completion of a new look for the
company and the development of a new outlook. Milestone has now
emerged as a high quality Web development company. Instead of
delivering TV programmes for analogue distribution the company has
now begun to produce websites for a variety of clients.
In line with the new media and digital focus, the Company will put a
resolution to shareholders at the forthcoming Annual General Meeting
to allow website publication of all shareholder information,
including the AGM Notice of Meeting and Annual Report and Accounts on
the Company Website at www.milestonegroup.co.uk.
Moving Forward
Core service - In-house Web Development Team
In September 2009, the Board welcomed Cooper Handley as the new
Creative Director. Cooper brings over a decade of creative and
commercial web experience to the Group, having pioneered the use of
interactive software for independent, fan-based music portals and has
developed market-leading digital brands. His arrival reinforces the
Group's new strategic direction of digital media solutions and
technology.
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 in
acquiring the technologies that will give the Group a real edge in
today's market.
Web design and development is a rapidly evolving industry in the UK
with a highly fragmented competitive landscape. Milestone offers a
full range of Web Design and Development services including, but not
limited to:
* Full Web Design
* Database Design
* Flash Design
* CMS Websites
* E-Commerce Websites
* Copywriting
Milestone aims to target primarily the financial services sector,
focusing on underserved niche markets such as independent financial
advisors, brokerage businesses and other City professionals. With its
headquarters conveniently in the heart of the City of London and a
strong management team with relevant industry experience, Milestone
is unusually well-positioned to provide bespoke Web Design and
Development solutions to the financial services industry.
As well as having our core competency of delivering websites, there
are many additional services and products which can be incorporated
into the web build process. Milestone has already commenced a
strategic investment and representative programme to extend its
range.
Milestone has acquired interests in two companies that possess
complementary technology-enabled service products. We have also
signed the rights to bring these technologies to our clients and
broader 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 Ltd
JumpStart Wireless
The EAS market in the UK is expected to generate sales of
approximately £6.8bn in 2009[1]. Milestone has secured distribution
rights for JumpStart's mobile EAS solutions in the UK in return for a
strategic equity investment of $100,000 in JumpStart Wireless
Corporation. JumpStart's innovative technology is a cost-effective
solution to transform any mobile device into a reporting tool for
employees working remotely from company premises. The technology will
be distributed through a newly created joint venture that is equally
owned by JumpStart and Milestone. Under the agreement, Milestone is
entitled to a sales commission of 15% of gross revenues.
Ve Interactive Ltd
Online Shopping Cart Abandonment solutions are specialised, web-based
solutions for e-vendors to improve sales conversion from abandoned
shopping carts. In 2008, the UK e-commerce market is expected to
exceed £68bn[2]. According to Coremetrics, 50.1% of online shoppers
abandoned their shopping cart in March 2009[3]. Converting even a
small percentage of those abandoned shopping carts into sales
represents significant value to e-vendors. Milestone has entered into
a UK distribution agreement with Ve Interactive Ltd., a leading
provider in the Online Shopping Cart Abandonment solutions market, in
return for a strategic equity investment of £101,085. Under the
agreement, Milestone is entitled to a sales commission of 15% of
gross 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.php
Restructuring:
Management changes
Our Executive Director has been keen to revamp the management and
Board and the new direction is helping to bring about those changes.
During the year there have been a number of personnel changes as the
Group positions itself for new launches. In February 2009 the Group
Finance Director, Ian Lodwick and Company Secretary, Tim Eustace,
resigned to focus on their respective consultancy businesses. I thank
them both for their guidance and service.
As announced in February, it has given me pleasure to welcome Graham
Urquhart as our new Company Secretary and Guy van Zwanenberg as Chief
Financial Controller. Guy brings to the Company considerable
experience of growing small media businesses as the former Finance
Director of GamingKing plc (now Sceptre Leisure plc). He is proving a
valuable member of the team and it is anticipated that his role will
increase as the Group develops.
Advisers
In November 2008 the Company announced that it would be working with
Knowledge MGI as its new strategy consultants. Knowledge MGI are a
management consultancy specialising in sports, entertainment, media
and technology. Knowledge MGI is considered by the Board to be well
positioned to advise Milestone on funding and development
opportunities. As part of Knowledge MGI's commitment and belief in
Milestone, they have accepted 375,000 shares in the Company.
I am pleased to report that the Board is continuing to be well served
by all its advisers, who appreciate that Milestone has been in the
early stages in its regeneration, providing support and co-operation
which Milestone is fortunate to have had during this period. In
recognition of this we issued 500,000 warrants to Arden Partners Plc
in March 2009.
Milestone recognised the need for additional marketing in the small
cap arena both to increase investor awareness and assist liquidity in
the stock. We are pleased to have announced the appointment of AIM
small cap brokers Hybridan as our joint broker with Arden Partners.
Hybridan is well placed to assist us with our process. They are a
specialist in the arena focusing both on raising capital and share
price support with institutional investors; they also reach high net
worth and other private investors through their weekly contribution
to a widely distributed investor circular.
Oxford Broadcasting Ltd ("OBL")
The Group's wholly owned subsidiary, OBL, provided a terrestrial
local TV channel for Oxford. It became a loss-making entity for the
last two years. Following a thorough review undertaken by the Board,
the Company decided to focus resources on the development of new
digital media solutions and technology. As a consequence, the Company
decided to discontinue the broadcasting of its analogue television
service in Oxford and in April 2009 the studios in Oxford were
officially closed.
Following the decision to close the studios, the remaining five
broadcasting licences were disposed of in September 2009, thus
terminating the continued trading loss of OBL (operating loss 2009:
£8,626; 2008: £75,336).
Nexstar Holdings Limited
With the shifting market place and the effects that this had on the
sponsorship market in general, the development of Nexstar was halted
over the last 12 months. With the evolution of an in-house
development team the situation is currently under review and we are
closely watching the sponsorship market's stability which is key to
any future progress.
Articles of Association
A resolution was proposed and approved at the Annual General Meeting
("AGM") on 28 April 2009 to amend the Company's Articles of
Association in order to comply with changes in company law which came
into effect in October 2009.
Funding
During the year the Company issued 30,407,411 new shares for a total
consideration of £520,348. Of this consideration, £356,500 was
received in cash. The remainder was received from existing and new
contractors in exchange for work or interest, including all of the
Directors. The Company also raised £60,000 in new loans.
In the short term, Milestone's strategy focuses on cash generation in
order to strengthen its balance sheet, facilitate its growth
ambitions and fund additional investments in innovative
web-technology. The group has identified a target market of
Independent Financial Advisors (IFAs) and Broker Services. The group
intends to offer a range of bespoke solutions, including innovative
tools for client prospecting, supporting investor relations and
digital distribution for up-to-date compliance information.
Milestone's medium to long-term strategy capitalises on synergies
created through bundling its Web Design and Development capabilities
with specialised technology solutions such as Jumpstart and Ve
Capture. The company's competitive position is reinforced through its
privileged access to market-leading technologies.
Potential further subscriptions
Protecting the interests of shareholders is a priority and the
Board's strategy is to seek to raise funds on a basis which is fair
to all. This strategy has been successfully executed by Deborah White
with all subscriptions being placed at higher than market value on
all occasions other than debt conversion when the current mid market
price or higher was used. No discounts were awarded to management for
debt conversion.
During the year the Company has raised a series of small
subscriptions to support working capital requirements. The Board is
pleased with the appetite which has been shown for these
subscriptions and welcomes its new shareholders.
It is possible that additional small fundraisings may be required to
enable the Group to expand and support the launch of new businesses.
Any enquiries should be sent to the Company Secretary at the
registered address or emailed to him at
graham.urquhart@milestonegroup.co.uk.
Outlook
The Company has a clear strategy of actively growing a portfolio of
controlling and non-controlling stakes in digital technology, content
or service companies. At the same time it remains firmly focused on
generating revenue to help support the business expansion and stem
the need for the raising of capital through the sale of equity which
has proved necessary over the last 12 months.
The company has launched its new media team. With the two agreements
with JumpStart and Ve Interactive, the Board is in a position to take
the Group forward into the new digital media sector. The Group's
Executive Director, Deborah White, has made excellent progress with
Knowledge MGI Ltd in identifying further potential opportunities to
add to the portfolio.
In conclusion we have ended another challenging year stronger and
better placed to take advantage of the changing media landscape with
a newly appointed, balanced and energetic team.
John Sanderson
Chairman
11 November 2009
Report of the Directors for the year ended 30 September 2009
The directors present their report together with the audited
financial statements for the year ended 30 September 2009.
Directors in the period
John Sanderson, Non-Executive Chairman
Deborah White, Executive Director
Ian Lodwick, Finance Director (appointed 31 March 2008, resigned 23
February 2009)
Results and dividends
The consolidated results of the Group for the year are set out on
page 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 developments
A review of the year is held within the chairman's statement above.
The Group is now offering its shareholders exposure to media
businesses specialising in digital communications. Milestone brings
together expert media practices, leading-edge technology and proven
business minds to deliver interactive solutions across web, phone and
portable media.
Further information on the Group's activities and strategy are
included 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 is
focused on assessing and developing new opportunities. Following
intensive reviews of the Company's new businesses, the Board have set
performance targets for the 3 new sectors of the business. The web
team has a target of £500,000 revenue before 30 September 2010. The
sales team has a target to produce £75,000 of revenue within 18
months from the JumpStart project and £50,000 from Ve Interactive
sales before the 30 September year end. The Board will review these
targets on a monthly basis and are pleased that the post year end
pipeline business already exceeds expectations.
Financial instruments and principal risks and uncertainties
The Group had £50,000 of loans outstanding at the year end. The
Group's modest cash reserves were held in bank current and deposit
accounts. A detailed description of how the Group manages risks and
uncertainty surrounding financial instruments, working capital,
interest rates and liquidity is held in note 18 to the financial
statements.
This annual report contains certain forward looking statements with
respect to the principal risks and uncertainties facing the Group.
These statements can be identified by the use of forward looking
terminology such as "believe", "expects", "plan", "should", "may" or
comparable terminology indicating expectations or beliefs concerning
future events. By their very nature, these forward looking statements
involve risk and uncertainty because they relate to events and depend
on circumstances that may or may not occur in the future. There are a
number of factors that could cause actual results or developments to
differ materially from those expressed or implied by these forward
looking statements. The forward looking statements reflect the
knowledge and information available at the date of preparation of
this annual report and will not be updated during the year. Nothing
in this annual report should be construed as a profit forecast.
The directors consider cash flow to be the material financial risk to
the Group in the immediate future. The Board intends that, as new
projects are developed, the material risks will be fully assessed.
Policy on the payment of suppliers
The Group recognises the importance of establishing effective
relationships with its suppliers. In certain cases, payment terms are
agreed with suppliers as part of the overall terms of the
transaction. In respect of the Group, year end creditors represent
208 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 events
Post balance sheets events are set out in note 27 to the financial
statements and explained in more detail in the Chairman's statement.
Going concern
Whilst the Group has made a loss in the year and had net liabilities
of £410,637 at the year end, the Board feel it is appropriate to
adopt the going concern basis in preparing the annual reports and
accounts. The Board has considered the significant risks and
uncertainties surrounding the going concern assumption; these are
held in note 1 to the annual report and accounts.
Substantial shareholdings
So far as the Company is aware and subject to any new notifications
received after 5 November 2009, the following persons have a
notifiable interest in the ordinary share capital of the Company (3
per cent or more of the Company's ordinary shares; please note
percentages 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 shareholders
The annual report and accounts and the interim statement at each half
year are the primary vehicles for communication with shareholders.
These documents are also distributed to other parties who have
expressed an interest in the Group's performance. Group results can
be 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 and
provides an opportunity for shareholders to question the directors.
Shareholders who have any queries relating to their shareholdings or
to the affairs of Milestone generally are invited to contact the
Company Secretary at the Company's registered address.
During January 2007, new provisions within the Companies Act 2006
came into force regarding the ways that a company is permitted to
communicate with its shareholders. Subject to a resolution being
passed by shareholders or the inclusion of relevant provisions within
its articles of association, a company can use its website to publish
statutory documents and communications to shareholders, such as
Annual Report and Accounts, as its default method of publication.
Milestone Group PLC would like to take advantage of these new
regulations; therefore in future we intend to publish all shareholder
information, including the AGM Notice of Meeting and Annual Report
and Accounts on the Company website at www.milestonegroup.co.uk.
Reducing the number of communications sent by post will not only
result in cost savings to the company but also reduce the impact that
the unnecessary printing and distribution of reports has on the
environment.
The Company will put a resolution to shareholders at the forthcoming
Annual General Meeting to allow the website publication of these
documents and/or to update its articles of association accordingly.
Charitable and political donations
During the year the Group made charitable donations of £nil (2008:
£nil) and political donations of £nil (2008: £nil).
Environmental matters
The nature of Milestone's business means that it is unlikely to be a
major polluter but the Board is mindful of the potential impact on
the environment of Group activities. The Board recognises its
responsibility to the environment in areas such as energy management,
paper usage, waste reduction and recycling, and communications.
Board of directors
The Board is responsible for formulating, reviewing and approving the
Group's strategies, budgets, major items of capital expenditure and
corporate actions.
At the end of the year the Board of the Company comprised one
Non-Executive Chairman, John Sanderson, and one Executive Director,
Deborah White. Other directors who held office during the year are
set out at the beginning of this report, together with their
appointment and resignation dates. Each director has extensive and
relevant business experience. Brief biographies of the directors are
set out below in this report.
The Board is currently of the opinion that, given the present size of
the Group, it is inappropriate to retain separate sub-committees but
intends to keep this matter under continuous review.
The Board believes that this is an appropriate structure for the
Company at its current stage of development and that there is
sufficient expertise within the Board to facilitate a sound decision
making process and control environment in the short-term. The
directors intend to make further appointments to the Board in the
near future.
Details of the remuneration of the directors are included in note 5
of the financial statements. Future remuneration will be dependent on
the growth of the Company.
Directors' profiles
John Sanderson, Non-Executive Chairman
John was originally appointed to Milestone Group plc to support a
strategic review of the AIM listed local media specialist with radio,
local TV and newspaper interests. John is widely recognised as a
leading strategy consultant; advising both listed and private media
businesses in their development stages, having begun his career as a
leisure and media sector analyst in the City.
John's unique and varied knowledge of this industry comes from a very
successful career advising through Hydra Associates and through his
vehicle media and business consultancy JFWS Limited. With a past
client list including the Arts Council, EMI, BSkyB, Channel 4, Times
Newspapers, The Mirror Group and The Economist Group, John has a
wide-ranging network in the media industry.
He is involved in a variety of established and early stage businesses
whose models exploit the opportunities offered by the digital media.
They range from music through radio and classified advertising to
online broadcasting.
John is currently an advisor to AXM Venture Capital Ltd which manages
the Creative Capital Fund for the London Development
Agency, investing in start-up and early stage creative businesses in
London. He is also an adviser to Big Issue Invest's Social Enterprise
Investment Fund which is being raised to invest in a wide range of
enterprises with strong social benefits.
Deborah White, Executive Director
Deborah has significant experience heading financial advisory firms
in the City over the last decade and has been in financial services
for over 20 years.
From 1999 to 2005 Deborah was jointly responsible for building
Inter-Alliance City Limited. She went on to head Silver Planet Life
Investment Taxation Solutions, a specialised financial advisory group
dealing with high level investment and tax advice and capital raising
for SME start-ups.
Deborah joined the Group as a Non-Executive Director having raised
funds for a previous acquisition. She was then appointed Chief
Executive and has successfully transformed several aspects of the
business already: creating a new and refocused strategy,
restructuring the operating format and transforming the company's
financial position.
Deborah is a dynamic team builder and has the core focus of
establishing an effective, goal orientated team to assist in the
successful realization of the company's new vision. The quality of
the recent recruits is strong evidence of this.
Directors' shareholdings
The directors of the Company and their beneficial interests at the
end of the year (including those of their immediate family and any
company controlled by them) in the share capital of Milestone are
shown 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 are
given in note 23 to these financial statements.
Qualifying third party indemnity provision for the benefit of the
directors was in place during the year and continues to remain in
place.
Auditors
All of the current directors have taken all the steps that they ought
to have taken to make themselves aware of any information needed by
the Group's auditors for the purposes of their audit and to establish
that the auditors are aware of the information. The directors are not
aware of any relevant audit information of which the auditors are
unaware.
Since the year end BDO Stoy Hayward LLP have changed their name to
BDO LLP. BDO LLP have expressed their willingness to continue in
office and a resolution to re-appoint them will be proposed at the
Annual General Meeting.
Directors' responsibilities
The directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Group, for safeguarding the assets of the Company,
for taking reasonable steps for the prevention and detection of fraud
and other irregularities and for the preparation of a directors'
report which complies with the requirements of the Companies Act
2006.
The directors are responsible for preparing the annual report and the
financial statements in accordance with the Companies Act 2006. The
directors are also required to prepare financial statements for the
Group in accordance with International Financial Reporting Standards
as adopted by the European Union ("IFRSs") and the rules of the
London Stock Exchange for companies trading securities on the
Alternative Investment Market. The directors have chosen to prepare
financial statements for the Company in accordance with UK Generally
Accepted Accounting Practice.
Group financial statements
International Accounting Standard 1 requires that financial
statements present fairly for each financial year the Group's
financial position, financial performance and cash flows. This
requires the faithful representation of the effects of transactions,
other events and conditions in accordance with the definitions and
recognition criteria for assets, liabilities, income and expenses set
out in the International Accounting Standards Board's 'Framework for
the preparation and presentation of financial statements'. In
virtually all circumstances, a fair presentation will be achieved by
compliance 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 statements
Company law requires the directors to prepare financial statements
for each financial year which give a true and fair view of the state
of affairs of the Company and of the profit or loss of the Company
for that period. In preparing these financial statements, the
directors 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 in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and
integrity of the Company's website is the responsibility of the
directors. The directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
By order of the Board
Deborah White
Executive Director
11 November 2009
Report of the independent auditors
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MILESTONE GROUP PLC
We have audited the financial statements of Milestone Group plc for
the year ended 30 September 2009 which comprise the consolidated
income statement, the consolidated balance sheet, the company balance
sheet, the consolidated cashflow statement, the consolidated
statement of change in equity and the related notes. The financial
reporting framework that has been applied in the preparation of the
group financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. The financial reporting framework that has been applied in
preparation of the parent company financial statements 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 sections 495 and 496 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 auditors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a
true and fair view. Our responsibility is to audit the 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
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the
group's and the parent company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the directors; and the
overall presentation of the financial statements.
Opinion on financial statements
In 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 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 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.
Emphasis of matter - Going Concern
In forming our opinion on the financial statements, which is not
qualified, we have considered the adequacy of the disclosures made in
note 1 of the financial statements concerning the company's ability
to continue as a going concern. At the balance sheet the group had
net current liabilities of £410,637. The company is reliant on its
continuing ability to manage the timing of settlement of liabilities
associated with its previous activities. Whilst discussions are
ongoing with suppliers and appropriate payment profiles unformalised
there remains a material uncertainty which may cast significant doubt
about the company's ability to continue as a going concern. The
financial statements do not include any adjustments that would result
if the company was unable to continue as a going concern.
James Brown (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
4th Floor
One Victoria Street
Bristol
BS1 6AA
United Kingdom
11 November 2009
BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).
Consolidated income statement for the year ended 30 September 2009
Note 2009 2008
£ £
Revenue 3 - 18,088
Cost of sales - -
Gross profit - 18,088
Other operating income 4 9,268 3,508
Administrative 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 3,433
Loss 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 the
parent (392,002) (797,471)
Basic and diluted loss per share from
continuing operations (pence) 10 (0.56) (1.71)
Basic and diluted loss per share from
discontinued 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 statements
Consolidated balance sheet at 30 September 2009
Note 2009 2008
£ £
Non-current assets
Goodwill 11 - -
Property, plant & equipment 12 - -
Current assets
Trade and other receivables 13 2,462 71,152
Cash and cash equivalents 10,325 18,141
12,787 89,293
Current liabilities
Bank 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 to
equity holders of the Company
Share capital 19 93,098 2,790,795
Share premium account 8,479,824 8,023,012
Merger reserve 11,119,585 11,119,585
Capital 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 authorised
for issue on 11 November 2009
Deborah White
Executive Director
The notes on pages 21 to 41 form part of these financial statements
Consolidated cash flow statement for the year ended 30 September 2009
Cash flow from operating activities Note
2009 2008
£ £
Loss for the year (392,002) (797,471)
Adjustments for:
Depreciation of tangible assets - 8,834
Profit 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 4,800
Recognition of negative goodwill - (24,212)
Net loss before changes in working capital (387,789) (852,283)
Decrease/(increase) in trade and other 4,875
receivables 68,690
(Decrease)/increase in trade and other 341,639
payables (89,284)
Cash from operations (408,383) (505,769)
Interest received 20 3,433
Interest paid (30) (407)
Net cash flows from operating activities (358,393) (502,743)
Investing activities
Acquisition of subsidiary undertakings,
net of cash and overdrafts acquired - 56,314
Sale of subsidiary undertakings - (3,539)
Purchase of property, plant and equipment 12 - (1,170)
Sale proceeds of property, plant and
equipment 597 -
Net cash flows used in investing activities 597 51,605
Financing activities
Issue of ordinary share capital 356,500 322,816
Repayment of loan (10,000) -
New loans raised 60,000 37,500
Net cash flows from financing activities 406,500 360,316
Net decrease in cash (1,296) (90,822)
Cash and cash equivalents at beginning of
period 11,621 102,443
Cash and cash equivalents at end of period 26 10,325 11,621
The notes on pages 21 to 41 form part of these financial statements
Consolidated statement of changes in equity for the year ended 30
September 2009
Cash flow from operating activities Note
2009 2008
£ £
Loss for the year (392,002) (797,471)
Adjustments for:
Depreciation of tangible assets - 8,834
Profit 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 4,800
Recognition of negative goodwill - (24,212)
Net loss before changes in working capital (387,789) (852,283)
Decrease/(increase) in trade and other 4,875
receivables 68,690
(Decrease)/increase in trade and other 341,639
payables (89,284)
Cash from operations (408,383) (505,769)
Interest received 20 3,433
Interest paid (30) (407)
Net cash flows from operating activities (358,393) (502,743)
Investing activities
Acquisition of subsidiary undertakings,
net of cash and overdrafts acquired - 56,314
Sale of subsidiary undertakings - (3,539)
Purchase of property, plant and equipment 12 - (1,170)
Sale proceeds of property, plant and
equipment 597 -
Net cash flows used in investing activities 597 51,605
Financing activities
Issue of ordinary share capital 356,500 322,816
Repayment of loan (10,000) -
New loans raised 60,000 37,500
Net cash flows from financing activities 406,500 360,316
Net decrease in cash (1,296) (90,822)
Cash and cash equivalents at beginning of
period 11,621 102,443
Cash and cash equivalents at end of period 26 10,325 11,621
The notes on pages 21 to 41 form part of these financial statements
Consolidated statement of changes in equity for the year ended 30
September 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 Sept
2007
Total
recognised
income and (797,471)
expense
for the
year - - - - (797,471)
Shares -
issued 30,285 330,027 - - 360,312
Balance at (510,654)
30 Sept
2008 2,790,795 8,023,012 11,119,585 - (22,444,046)
Total
recognised
income and (392,002)
expense
for the
year - - - - (392,002)
Shares -
issued 30,408 456,812 - - 487,220
Share -
options
granted 4,800 - - - 4,800
Repurchase
of -
deferred
share
capital (2,732,905) - - 2,732,904 -
Balance at
30 Sept
2009 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 September
2009
The principal activity of Milestone Group PLC and its subsidiaries
(the Group) is to hold and operate businesses in the media and
technology sectors.
Milestone Group PLC is the Group's ultimate parent company, and it is
incorporated and resident in Great Britain. The address of Milestone
Group PLC's registered office is 1st Floor, 2 Royal Exchange, London
EC3V 3DG, and this is its principal place of business.
Milestone Group PLC's shares are listed on the AIM market of the
London Stock Exchange.
Milestone Group PLC's consolidated financial statements are presented
in Pounds Sterling (£), which is also the functional currency of the
parent Company.
These consolidated financial statements have been approved for issue
by the Board of Directors on 11 November 2009.
1 Principal accounting policies
The principal accounting policies adopted in the preparation of the
financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
The Group financial statements have been prepared in accordance with
International Financial Reporting Standards, International Accounting
Standards and Interpretations (collectively IFRSs) issued by the
International Accounting Standards Board (IASB) as adopted by
European Union ("Adopted IFRSs"), and with those parts of the
Companies Act 2006 applicable to companies preparing their financial
statements under Adopted IFRSs.
Going concern
The Group's business activities, together with the factors likely to
affect its future development, performance and position are set out
in the Chairman's statement. The financial position of the Group, its
cash flows, liquidity position and borrowing facilities are described
in the director's report. In addition note 18 to the financial
statements includes the Group's objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments and exposures to credit risk and
liquidity risk.
The future business model is based around generating revenue from two
new areas; website development and commissions from the sale of the
JumpStart and Ve products. The Board has prepared forecasts which
reflect agreements that have or are expected to be entered into to
settle existing obligations of the business and the revenues and
costs anticipated from these new revenue streams based on a pipeline
of anticipated customers. These projections show the business will be
profitable and cash generative in the future. However, achieving
these forecasts will be dependent upon achieving sales in a new
market place and obtaining sufficient funding to settle existing
obligations which is discussed further below.
The Board recognises that a risk arises when expanding into new
markets and has moved to appoint experienced individuals to the
management team to significantly improve expertise in these areas.
These appointments are detailed more fully in the chairman's
statement. The Company maintains a low fixed cost base which provides
flexibility as the new business streams are developed. The directors
expect to bill the first sales of website development services in
November 2009. Sales of the wireless technology solutions are
projected to commence in January 2010.
The Board have been able to agree funding subsequent to the balance
sheet date in the form of a share issue of £150,450 and loan
financing of £160,000 repayable in June 2010. The Group has been able
to draw down upon the full £160,000 loan balance subsequent to the
year end. With these funds in place, the Board believe the Group has
sufficient working capital to grow the business and repay liabilities
as they fall due. The Company is however reliant on its continuing
ability to manage the timing of settlement of liabilities associated
with its previous activities. Discussions are ongoing with suppliers
and appropriate payment profiles remain unformalised.
The Directors have concluded that the requirement to manage the
timing of settlement of its liabilities represents a material
uncertainty which may cast significant doubt upon the Group's and the
Company's ability to continue as a going concern. Nevertheless after
making enquiries and considering this uncertainty and the measures
taken to mitigate it, the Directors have a reasonable expectation
that the Group and the Company will have adequate resources to
continue in existence for the foreseeable future. For these reasons
they continue to adopt the going concern basis in preparing the
annual report and accounts. The financial statements do not include
any adjustments that would result if the Group and Company was unable
to continue as a going concern.
Basis of consolidation
The Group financial statements consolidate those of the Company and
of its subsidiary undertakings drawn up to 30 September 2009.
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.
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 acquisition
method. The acquisition 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's 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.
The trading results of subsidiaries acquired or disposed of during
the year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
All intra-Group transactions, balances, income and expenditure are
eliminated on consolidation.
Revenue and attributable profit
Revenue represents advertising income from the Group's television
division. Advertising income is recognised on the date of broadcast.
Research and development
Expenditure on research activities is recognised as an expense in the
period on which it is incurred. An internally generated intangible
asset arising from the Group's development activity is recognised
only 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 straight
line basis over their useful lives. Where no internally-generated
intangible asset can be recognised, development expenditure is
recognised as an expense in the period in which it is incurred.
Property, plant and equipment
Property, plant and equipment are stated at cost net of depreciation
and any provision for impairment. Depreciation is calculated to write
down the cost less estimated residual value by equal annual
instalments over their expected useful lives. The rates generally
applicable are:
Short leasehold property 10-20% or over the life of the lease
improvements or licence
Production and studio equipment 20% on cost
Fixtures, fittings, computer and 10-50% per annum or over the period
of the licence
office equipment & machinery
The assets' residual values and useful lives are reviewed at each
balance sheet date and adjusted if appropriate.
Intangible assets
Goodwill
Goodwill arising on consolidation is recorded as an intangible asset
and is the surplus of the cost of acquisition over the Group's
interest 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 the
income statement.
On disposal of a subsidiary the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
Where the fair value of identifiable assets, liabilities and
contingent liabilities exceed the fair value of consideration paid,
the excess is credited in full to the consolidated income statement
on the acquisition date.
Leased assets
Property, plant and equipment acquired under finance leases or hire
purchase contracts are capitalised and depreciated in the same manner
as other property, plant and equipment, and the interest element of
the lease is charged to the income statement over the period of the
finance lease. The related obligations, net of future finance
charges, are included in liabilities.
Rentals payable under operating leases are charged to the income
statement on a straight line basis over the period of the lease.
Impairment of non-current assets
For the purposes of assessing impairment, assets are grouped into
separately identifiable cash-generating units. Goodwill is allocated
to those cash-generating units that have arisen from business
combinations.
At each balance sheet date, the Group reviews the carrying amounts of
its non-current assets, to determine whether there is any indication
that those assets have suffered an impairment loss. If any such
indication exists the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any).
Goodwill is tested for impairment annually. Goodwill impairment
charges are not reversed.
An impairment loss is recognised for the amount by which the asset's
or cash-generating unit's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of fair value and value
in use based on an internal discounted cash flow evaluation.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits.
Bank overdrafts that are repayable on demand and form an integral
part of the Group's cash management are included as a component of
cash and cash equivalents. Bank overdrafts are shown in current
liabilities on the balance sheet.
Equity
Equity 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 taxation
Deferred tax assets and liabilities are recognised where the carrying
amount of an asset or liability in the balance sheet differs from its
tax 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 instances
where it is probable that taxable profit will be available against
which the difference can be utilised.
The amount of the asset or liability is determined using tax rates
that have been enacted or substantively enacted by the balance sheet
date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a
legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
* the same taxable Group company; or
* different Group entities which intend either to settle current
tax assets and liabilities on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax assets or
liabilities are expected to be settled or recovered.
Financial instruments
Financial assets and financial liabilities are initially recognised
in the Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument at their fair value and
thereafter at amortised cost.
Trade receivables
Trade receivables are initially recorded at fair value and then
carried at their amortised cost less any provision for doubtful
debts. Trade receivables due in more than one year are discounted to
their present value.
Impairment provisions are recognised when there is objective evidence
(such as significant financial difficulties on the part of the
counterparty or default or significant delay in payment) that the
Group will be unable to collect all of the amounts due under the
terms receivable, the amount of such a provision being the difference
between the net carrying amount and the present value of the future
expected cash flows associated with the impaired receivable. For
trade receivables, which are reported net, such provisions are
reported in a separate allowance account with the loss being
recognised within administrative expenses in the income statement. On
confirmation that the trade receivable will not be collectable, the
gross carrying value of the asset is written off against the
associated provision.
Trade payables
Trade payables are initially recorded at fair value and then carried
at their amortised cost.
Equity instruments
Equity instruments issued by the Group are recorded as the proceeds
received, net of direct costs.
Share based payments
When share options are awarded, the fair value of the options at the
date of grant is charged to the income statement over the vesting
period. Non-market conditions are taken into account by adjusting the
number of equity instruments expected to vest at each balance sheet
date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually
vest. Market conditions are factored into the fair value of the
options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they
vest, the increase in fair value of the options, measured immediately
before and after the modification, is also charged to the income
statement over the remaining vesting period.
Where equity instruments are granted to persons other than employees,
the full cost of services provided is recognised as a current
liability and as a charge in the income statement. When shares are
issued to settle the obligation the liability is extinguished and the
share issue is reflected in equity as an issue of share capital.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital, and
where appropriate share premium.
Retirement benefits
The Group operated pension schemes for the benefit of two directors
in prior years. The schemes were defined contribution schemes and the
contributions were charged against profits as they accrued. Milestone
made no pension contributions for current directors or staff in the
current year.
Standards issued by the International Accounting Standards Board
(IASB) not effective for the current year and not adopted by the
Group
The following standards and interpretations have been issued by the
IASB. They become effective after the current year and have not been
early adopted by the Group:
International Mandatory To be
Financial effective date adopted by
Reporting (Periods commencing) the Group
Standards during the
years
IFRS 8 This standard 01.01.2009 30.09.2010
Operating Segments requires an
entity to adopt
the 'management
approach' to
reporting on the
financial
performance of
its operating
segments.
Generally, the
information to be
reported would be
what management
uses internally
for evaluating
segment
performance and
deciding how to
allocate
resources to
operating
segments. Such
information may
be different from
what is used to
prepare the
income statement
and balance
sheet. The
standard also
requires
explanations of
the basis on
which the segment
information is
prepared and
reconciliations
to the amounts
recognised in the
income statement
and balance
sheet.
Amendment to IAS 23 The Amendment 01.01.2009 30.09.2010
Borrowing Costs removes the
option of
immediately
recognising as an
expense borrowing
costs that relate
to qualifying
assets (assets
that take a
substantial
period of time to
get ready for use
or sale).
Instead, an
entity will be
required to
capitalise
borrowing costs
whenever the
conditions for
capitalisation
are met. The
provisions of
this Amendment
are applicable to
borrowing costs
relating to
qualifying assets
for which the
commencement date
for
capitalisation is
on or after the
effective date of
the Amendment.
Amendment to IFRS 2 This Amendment 01.01.2009 30.09.2010
Share-based clarifies that
Payment: Vesting vesting
Conditions and conditions are
Cancellations service
conditions and
performance
conditions only.
Other features of
a share-based
payment are not
vesting
conditions. The
purpose of making
the distinction
is so as to be
able to address
the accounting
for non-vesting
conditions, which
were not
previously
covered by IFRS
2. The guidance
in IFRS 2
covering the
accounting for
vesting
conditions is not
affected by the
Amendment. The
Amendment also
specifies that
all
cancellations,
whether by the
entity or by
other parties,
should receive
the same
accounting
treatment. The
Amendment is
likely to have a
particular impact
on entities
operating Save As
You Earn (SAYE)
schemes because
it results in an
immediate
acceleration of
the IFRS 2
expense if an
employee decides
to stop
contributing to
the savings plan,
as well as a
potential
revision to the
fair value of the
awards granted to
factor in the
probability of
employees
withdrawing from
such a plan.
Amendments to IAS 1 The Amendment to 01.01.2009 30.09.2010
Presentation of IAS 1 affects the
Financial presentation of
Statements: A owner changes in
Revised equity and of
Presentation comprehensive
income. An entity
will be required to
present, in a
statement of
changes in equity,
all owner changes
in equity. All
non-owner changes
in equity (i.e.
comprehensive
income) are
required to be
presented in one
statement of
comprehensive
income or in two
statements (a
separate income
statement and a
statement of
comprehensive
income). In
addition, the new
requirements would
require the
presentation of an
opening comparative
balance sheet when
there is a change
in accounting
policy. The
standard does not
change the
recognition,
measurement or
disclosure of
specific
transactions and
other events
required by other
IFRSs.
Amendments to IAS This Amendment 01.01.2009 30.09.2010
32 and IAS 1 results in certain
Puttable Financial types of financial
Instruments and instrument that
Obligations Arising meet the definition
on Liquidation of a liability, but
represent the
residual interest
in the net assets
of the entity,
being classified as
equity. The
Amendment requires
entities to
classify the
following types of
financial
instruments as
equity, provided
they have
particular features
and meet specific
conditions: (a)
Puttable financial
instruments; and,
(b) instruments, or
components of
instruments, that
impose on the
entity an
obligation to
deliver to another
party a pro rata
share of the net
assets of the
entity only on
liquidation
Amendments to IFRS This Amendment 01.01.2009 30.09.2010
1 and IAS 27 allows a first-time
Cost of an adopter that, in
Investment in a its separate
subsidiary, financial
jointly-controlled statements, elects
entity or associate to measure its
investments in
subsidiaries,
jointly controlled
entities or
associates at cost
to initially
recognise these
investments either
at cost determined
in accordance with
IAS 27 or deemed
cost (being either
its fair value at
the date of
transition to IFRSs
or its previous
GAAP carrying
amount at that
date).
The Amendments also
removes the
definition of the
cost method of
accounting for an
investment in a
subsidiary, jointly
controlled entity
or associate. This
has the effect of
removing the
requirement to
deduct
distributions
received that arise
from
pre-acquisition
profits from the
cost of the
investment.
Instead, the
dividend is
recognised as
income and the cost
of investment is
subject to an
impairment test.
Improvements to The improvements in 01.01.2009 30.09.2010
IFRSs (2009) this Amendment
clarify the
requirements of
IFRSs and eliminate
inconsistencies
between Standards.
The most
significant changes
cover the following
issues: The
classification of
assets and
liabilities as held
for sale where a
non-controlling
interest is
retained;
accounting by
companies that
routinely sells
assets previously
held for rental to
others; accounting
for loans given at
a nil or below
market rate of
interest; the
reversal of
impairments against
investments in
associates
accounted for using
the equity method;
the timing of
expense recognition
for costs incurred
on advertising and
other promotional
activity; and,
accounting for
properties in the
course of
construction.
IFRIC 15 This Interpretation 01.01.2009 30.09.2010
Agreements for the clarifies the
Construction of definition of a
Real Estate construction
contract, the
interaction between
IAS 11 and IAS 18
and provides
guidance on how to
account for revenue
when the agreement
for the
construction of
real estate falls
within the scope of
IAS 18. For some
entities, the
Interpretation may
give rise to a
shift from the
recognition of
revenue using the
percentage of
completion method
to the recognition
of revenue at a
single time (e.g.
at completion, upon
or after delivery).
Affected agreements
will be mainly
those accounted for
in accordance with
IAS 11 that do not
meet the definition
of a construction
contract as
interpreted by the
IFRIC and do not
result in a
'continuous
transfer' (i.e.
agreements in which
the entity
transfers to the
buyer control and
the significant
risks and rewards
of ownership of the
work in progress in
its current state
as construction
progresses).
Revised IFRS 3 The basic approach 01.07.2009 30.09.2010
Business of the existing
Combinations IFRS 3 to apply
acquisition
accounting in all
cases and identify
an acquirer is
retained in this
revised version of
the standard. This
includes much of
the current
guidance for the
identification and
recognition of
intangible assets
separately from
goodwill. However,
in some respects
the revised
standard may result
in very significant
changes, including:
The requirement to
write of all
acquisition costs
to profit or loss
instead of
including them in
the cost of
investment; the
requirement to
recognise an
intangible asset
even if it cannot
be reliably
measured; and, an
option to gross up
the balance sheet
for goodwill
attributable to
minority interests
(which are renamed
'non-controlling
interests'). The
revised standard
does not require
the restatement of
previous business
combinations.
Revised IFRS 3 must
be adopted at the
same time as the
Amendment to IAS
27.
Amendments to IAS This Amendment 01.07.2009 30.09.2010
27 Consolidated and relates in
Separate Financial particular to
Statements acquisitions of
subsidiaries
achieved in stages
and disposals of
interests, with
significant
differences in the
accounting
depending on
whether control is
gained or not, or a
transaction simply
results in a change
in the percentage
of the controlling
interest. The
Amendment does not
require the
restatement of
previous
transactions. The
Amendment to IAS 27
must be adopted at
the same time as
IFRS 3 Revised.
Amendment to IAS 39 This Amendment 01.07.2009 30.09.2010
Financial clarifies how the
Instruments: principles that
Recognition and determine whether a
Measurement: hedged risk or
Eligible Hedged portion of cash
Items flows is eligible
for designation
should be applied
in the designation
of a one-sided risk
in a hedged item,
and inflation in a
financial hedged
item.
The impact on the Group's financial statements is not expected to be
material.
There are a number of other standards that have been drafted,
primarily as a result of the IASB improvement programme, that have
yet to be endorsed by the EU. These are not listed here as they have
not yet been endorsed by the EU. The Directors have reviewed these
standards and do not believe that the impact on the Group's financial
statements is, or will be, material.
2 Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial statements requires management to
make estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the date of the financial statements. If in
the future such estimates and assumptions which are based on
management's best judgement at the date of the financial statements,
deviate from the actual circumstances, the original estimates and
assumptions will be modified as appropriate in the year in which the
circumstances change. Where necessary, the comparatives have been
reclassified or extended from the previously reported results to take
into account presentational changes.
Critical judgements in applying the Group's accounting policies
In the process of applying the Group's accounting policies, which are
described in note 1, management has made the following judgements
that have the most significant effect on the amounts recognised in
the financial statements (apart from those involving estimations,
which are dealt with below).
Going concern
Management have considered that the Group remains a going concern.
The going concern assumption is discussed further in Note 1.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key 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.
Recoverability of receivables
During the year, management reconsidered the recoverability of its
receivables that are included in its balance sheet. All trade
receivables outstanding at the year end have been provided for in
full. The provision in place at the year end is £254,524 (2008:
£579,836) against receivables.
3 Segment analysis
The Group's primary format for segment reporting is based on business
segments. All of the Group's current operations are carried out in
the UK. The Group therefore only has one geographical segment.
Loss for Loss for the
Revenue the year Revenue year
2009 2009 2008 2008
£ £ £ £
Analysis by
class of
business:
Head office - (408,011) 18,088 (722,135)
- (408,011) 34,300 (797,471)
Other
segment Capital
information Expenditure Depreciation
2009 2009
Head office - -
Total Total Net Total Total Net
Assets Liabilities Liabilities Assets Liabilities Liabilities
2009 2009 2009 2008 2008 2008
£ £ £ £ £ £
Head office 12,751 (416,161) (403,410) 59,723 (547,040) (487,317)
4 Loss from operations
The loss on ordinary activities before taxation is stated after
charging/ (crediting):
2009 2008
£ £
Auditors' remuneration:
Fees payable to the Company's auditor:
For the audit of the Company's annual accounts 28,000 15,000
For the audit of other Group companies - 10,000
Fees for taxation compliance services 4,000 6,000
Operating lease rentals:
Plant and machinery 4,495 50,352
Other - 29,750
Depreciation, amortisation and impairment:
Property, plant and equipment - 8,834
Staff costs (note 5) 90,401 302,307
Research and development 91,300 94,019
Grant of share options 4,800 -
Other income (rent receivable) 9,268 3,508
5 Directors and staff
Staff costs during the year, including directors, were as follows:
2009 2008
£ £
Wages and salaries 72,076 300,685
Social security costs 18,325 1,622
90,401 302,307
The average number of staff of the Group during the year was as
follows:
2009 2008
no. no.
Sales and distribution 1 1
Directors and administration 2 2
3 3
Remuneration in respect of the directors, who are the key management
personnel of the Group, was as follows:
2009 2008
£ £
John Sanderson 30,132 28,440
Deborah White 34,750 60,000
Andrew Craig - 18,750
Brian Chester - 19,425
Ian Lodwick 153 18,800
65,035 145,415
All directors in the year billed director's remuneration through
their own companies. No director's remuneration was paid directly.
No pension costs were paid to or on behalf of the directors in both
the current and prior year.
6 Finance expenses
2009 2008
£ £
Bank overdraft - 95
Other 20 312
20 407
7 Discontinued Operations
In March 2009 the Board took the decision to close the subsidiary,
Oxford Broadcasting Limited. The company suffered from recurring
losses and did not fit with Milestone's future operating strategy.
The post-tax gain/loss on discontinued operations was determined as
follows:
2009 2008
£ £
Net assets abandoned (excluding cash):
Property, plant and equipment - 513
Trade and other receivables - 29,570
Bank loans and overdrafts - (3,260)
Trade and other payables (7,263) (49,426)
Pre-tax loss on disposal (7,263) (22,603)
The net cash inflow compromises:
Cashflows from operating activities 2,700 (3,260)
Cashflows from investing activities 596 -
Cashflows from financing activities - -
Result of discontinued operations 2009 2008
£ £
Revenue 14,823 16,212
Expense other than finance costs (35,655) (51,296)
Other income 16,113 35,228
Finance costs (30) (95)
Loss from discontinued operations before tax (8,626) (75,337)
Tax expense - -
Loss from discontinued operations after tax (8,626) (75,337)
Basic and diluted earnings/(loss) per share (pence) (0.01) (0.18)
As disclosed in note 10, the effects of share options outstanding at
the year end have not been factored into EPS calculations as this
would be anti-dilutive.
With effect from 15 January 2008 the Company acquired 80% of the
entire share capital of The Flex. This transaction was accounted for
by the acquisition method of accounting in accordance with IFRS 3
(Business Combinations). The Flex was disposed of by the Group
subsequent to the year ended 30 September 2008.
An excess of acquirer's interest in net fair value of acquiree's
identifiable assets, liabilities and contingent liabilities over cost
("excess"("negative goodwill")) of £24,212 was recognised on
acquisition.
The loss after tax of The Flex since acquisition date included in the
group income statement at 30 September 2008 is £60,620. A gain on
disposal of £36,408 was recognised on disposal of The Flex for £100.
These items are disclosed in the income statement as a net figure of
profit/loss on discontinued operations net of tax. The nil result had
no effect on the earnings per share for the year.
It is not practicable to present the results of The Flex for the
period from 30 September 2007 to 15 January 2008 as the directors do
not have access to the books and records of the company.
8 Tax on loss on ordinary activities
2009 2008
£ £
Loss from operations before tax (392,002) (797,471)
Loss from operations at the standard rate of
corporation tax in the UK of 28% (2008:29%) (109,761) (231,267)
Effects of:
Expenses not deductible for tax purposes 43,937 59,666
Capital allowances in excess of depreciation (45,844) 2,562
Unutilised tax losses and other deductions 111,667 169,039
Current tax charge in the period - -
Deferred tax assets of approximately £1.1m (Group) and £1.1m
(Company) have not been recognised in the financial statements as
there is currently insufficient evidence to suggest that any deferred
tax asset would be recoverable. The Group has unutilised tax losses
of approximately £3.9m (Company £3.9m) which would be available to
carry forward against future profits from the same activity, subject
to agreement by HM Revenue & Customs.
9 Dividend
No dividends have been paid or proposed in the year (2008: nil).
10 Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the average number
of shares in issue during the year. The calculation of diluted loss
per share is based on the basic loss per share, adjusted to allow for
the issue of shares and the post tax effect of dividends and
interest, on the assumed conversion of all other dilutive options and
other potential ordinary shares.
There were 500,000 share options outstanding at the year end (2008:
nil) However, the figures for 2009 and 2008 have not been adjusted to
reflect conversion of these share options as the effects would be
anti-dilutive.
2009 2008
Weighted Weighted
Per Per
average share average share
Loss number of amount Loss number of amount
£ shares pence £ shares pence
Basic and
diluted loss
per share
attributable
to
shareholders. (392,002) 68,094,035 (0.57) (797,471) 42,331,041 (1.9)
500,000 warrants allowing shares to be purchased at a discount were
issued to Arden Partners LLP in the year as disclosed in note 20. No
share options, warrants or convertible loans were outstanding at the
previous year end.
11 Goodwill and intangible assets
Goodwill acquired in a business combination is allocated, at
acquisition, to the cash-generating units (CGUs) that are expected to
benefit from that business combination. Before recognition of
impairment losses, the carrying amount of goodwill had been allocated
against the television division.
The recoverable amounts of the CGUs are determined from value in use
calculations.
During the year to 30 September 2006 the Company directors considered
the carrying value of goodwill and wrote the remaining value to nil.
12 Property, plant and equipment
Short leasehold Fixtures and Production
property Fittings and Studio
improvements equipment Equipment Total
£ £ £ £
Cost
At 1 October 2007 65,197 190,366 293,395 548,958
Additions - 1,170 - 1,170
At 30 September
2008 65,197 191,536 293,395 550,128
At 1 October 2008 65,197 191,536 293,395 550,128
Disposals (65,197) (39,336) (293,395) (397,928)
At 30 September
2009 - 152,200 - 152,200
Depreciation
At 1 October 2007 65,197 182,762 293,335 541,294
Provided in year - 8,774 60 8,834
At 30 September
2008 65,197 191,536 293,395 550,128
At 1 October 2008 65,197 191,536 293,395 550,128
Disposed in year (65,197) (39,336) (293,395) (397,928)
At 30 September
2009 - 152,200 - 152,200
Net book value
At 30 September
2009 - - - -
At 30 September
2008 - - - -
13 Trade and other receivables
2009 2008
£ £
Trade receivables - 15,293
Other receivables 2,462 32,748
Prepayments and accrued income - 23,111
2,462 71,152
Trade receivable days in the year were nil (2008: 163 days). No
interest is charged on receivables within the agreed credit terms.
Thereafter, interest may be charged.
An allowance for impairment is made where there is an identified
event which, based on previous experience, is evidence of a reduction
in the recoverability of the outstanding amount. The Group provides,
in full, for any debts it believes have become non recoverable. The
figures shown above are after deducting specific provision for bad
and doubtful debts of £254,524 (2008: £579,836). No amounts included
within trade and other receivables are expected to be recovered in
more than one year (2008: nil).
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable set out above.
The ageing of trade receivables that have not been provided for are:
2009 2008
£ £
Not due yet
0 - 29 days - 5,830
Overdue
30 - 59 days - 9,463
59+ days - -
- 15,293
14 Trade and other payables
2009 2008
£ £
Trade creditors 257,359 431,498
Taxation and social security 20,816 452
Other payables - 673
Accruals and deferred income 95,249 164,064
Loans 50,000 -
423,424 596,687
Included in trade creditors and accruals are amounts of £29,411 and
£10,000 (2008: £69,125 and £3,000) relating to unpaid directors'
remuneration. This has been accrued in accordance with the payments
agreed between the Company and directors
Loan balances are unsecured and repayable within 12 months of the
balance sheet date. No interest is payable on loan balances unless
the Group defaults on repayment, in which case a rate of 1.5% may be
charged.
15 Interest bearing loans and borrowings - due within one year
2009 2008
£ £
Bank overdrafts (unsecured) - 3,260
16 Interest bearing loans and borrowings - due after more than one
year
There are no interest bearing loans or borrowings due after more than
one year.
The interest charge in the income statement for the period was £20
(2008: £312).
17 Deferred tax assets and liabilities
A deferred tax asset of £1.1m, arising principally from losses in the
Group, has not been recognised (2008: £2.2m). These losses can be
offset against future trading profits generated. The directors
believe at this stage that it is prudent not to recognise the
deferred tax asset within the financial statements.
There was no movement in the deferred tax liability in the prior
year.
18 Financial instruments and risk management
Financial risk factors
The Group's financial instruments comprise cash, including short term
deposits, trade and other receivables, short term loan financing and
trade and other payables that arise directly from its operations. The
main risks arising from the group's financial instruments are
liquidity risk, credit risk and interest rate risk. The Board has
reviewed and agreed policies for managing each of these risks and
they are summarised below. The Group has no financial assets other
than trade receivables and cash at bank. The Balance Sheet values for
the financial assets and liabilities are not materially different
from their fair values.
Liquidity risk
The Group seeks to manage financial risk to ensure sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. The Group's policy is to ensure there
are sufficient cash reserves to meet liabilities during such periods.
These are incorporated into rolling twelve month Group cash flow
forecasts, which are reviewed by the Board monthly, and the cash
flows are monitored at Group level by weekly cash reports from each
operating entity. Short term flexibility is provided through the
availability of cash facilities.
Credit risk
The Group's principal financial assets are bank balances, cash and
trade and other receivables. The Group's credit risk is primarily
attributable to its trade receivables. As far as possible the Group
operates to ensure that the payment terms of customers are matched to
the Group's own contractual obligations.
Interest rate risk
The Group finances its operations at present through funds raised on
share placings and loan facilities provided by individuals. The Group
manages its exposure to interest rate fluctuations by mixing the
duration of its deposits and borrowings to reduce the impact of
interest rate fluctuations.
Currency risk
The Group does not operate in overseas markets and is not subject to
exposures on transactions undertaken during the year. The Group's
exposure to exchange rate fluctuations is therefore nil.
Capital risk management
The capital structure of the Group consists of short term loan
financing provided by individual vendors and the shareholders' equity
comprising issued share capital and reserves. The capital structure
of the Group is reviewed on an ongoing basis with reference to the
costs applicable to each element of capital, future requirements of
the group, flexibility of capital to be drawn down and availability
of further capital should it be required.
The Group had current loan liabilities of £50,000 at the year end
(2008: nil).
Interest rate and liquidity risk
The Group's financial liabilities represented trade payables and
short term loan financing at the year end. No interest was payable on
the trade and other payables outstanding. No interest was payable on
loan balances at the year end. The Group's working capital
commitments are reviewed on an ongoing basis with reference to the
dates when liabilities are to be repaid.
19 Share capital
2009 2008
£ £
Authorised
2,267,095,595 (2008: 2,267,095,595) ordinary
shares of 0.1p (2008: 0.1p) each 2,267,096 2,267,096
Nil (2008: 27,605,095) deferred shares of 9.9p
each - 2,732,904
2,267,096 5,000,000
Allotted, called up and fully paid
83,297,740 (2008: 52,890,329) ordinary shares of
0.1p (2008: 0.1p) each 93,098 57,891
Nil (2008: 27,605,095) deferred shares of 9.9p
each - 2,732,905
93,098 2,790,796
On 26 November 2008 the Company issued 9,749,584 ordinary shares of
0.1p each for a combination of cash consideration of £89,000 and
settlement of outstanding trade payables of £27,995.
On 2 December 2008 the Company issued 1,666,667 ordinary shares of
0.1p each for cash consideration of £20,000.
On 22 April 2009 the Company issued 6,957,004 ordinary shares of 0.1p
each for cash consideration of £101,500 and settlement of outstanding
trade payables of £23,726.
On 28 April 2009, it was agreed to buy back the deferred shares. The
deferred shares were not listed, had no rights attached, were
valueless, non transferable and had no effect on the economic
interest of the shareholders. £1 of the small subscription dated 22
April 2009 was used to repurchase these shares. The difference
between this consideration and the nominal value of the deferred
shares was taken to the capital redemption reserves. Subsequently to
the repurchase of the shares they were immediately cancelled and the
authorised share capital of the Company was reduced to 2,267,095,595
shares of 0.1p each.
On 4 June 2009 the Company issued 5,385,911 ordinary shares of 0.1p
each for cash consideration of £52,500 and settlement of trade
payables of £44,446.
On 12 June 2009 the Company issued 3,352,778 ordinary shares of 0.1p
each for cash consideration of £50,000 and settlement of trade
payables of £10,350.
On 8 September 2009 the Company issued 3,295,467 ordinary shares of
0.1p each for cash consideration of £43,500 and settlement of trade
payables of £25,927.
No transaction costs were recorded against the share premium in the
year.
20 Share Options and Warrants
At the 30 September 2009, the Company had the following share options
and warrants in issue.
Date Number of Warrants Shares Warrants Option
warrant shares granted forfeited / outstanding price
granted outstanding during expired / at 30 Sept
at 1 Oct the year waived / 2009
2008 during the
year
Arden 27 - 500,000 - 500,000 1.13p
Partners /03/2009
LLP
Weighted
average 1.13
exercise
price
The vesting requirements of the warrants are that they become valid
12 months from date of issue until the 31 March 2012. No other
conditions exist; the warrants are not dependent on future goods or
services.
The fair value of the share options was estimated at the date of the
grant using the Black-Scholes model, taking into account the terms
and conditions upon which they were granted.
The following table lists the inputs to the model used for the
valuations of share options granted in 2009.
Range of exercise prices of options outstanding at the end of 1.13p
the period
Weighted average share price (pence) 1.5p
Weighted average exercise price (pence) 1.5p
Option life (years) 3
Risk free interest rate (%) 5
Dividend yield 0
Volatility (%) 93
The expected volatility was based on historic volatility and reflects
the assumption that the historical volatility is indicative of future
trends, which many not necessarily be the actual outcome. No other
features of the options were incorporated into the measurement of
fair value, and non-market conditions have not been included in
calculating the fair value. The amount credited to the income
statement for share options was £4,800 (2008: £nil).
21 Capital commitments
There were no capital commitments at 30 September 2009 or 30
September 2008.
22 Share based payment
There were no share options in issue at either 30 September 2009 or
30 September 2008.
23 Transactions with directors and other related parties
Loans from directors
At 30 September 2009 there were no loans due to directors.
As stated in note 14 to the accounts a total of £29,411 and £10,000
(2008: £72,125 and £3,000) is due to the directors as unpaid
remuneration. Directors' emoluments are disclosed in note 5.
Related Party Type of Transaction Balance owing /
relationship Transaction amount owed
2009 2008 2009 2008
£ £ £ £
Companies in which
directors or their
immediate family have a
significant controlling
interest Sales to group 73,476 73,784 2,500 50,857
All outstanding balances at the yearend are unsecured and expect to
be settled by cash consideration.
24 Retirement benefit schemes
No payments were made on behalf of directors to any retirement
benefit schemes in the current or prior year.
25 Operating lease rental commitments
At 30 September 2009 the Group had operating lease rental commitments
as follows:
2009 2008
£ £
Leases expiring within one year:
Land and buildings - 29,750
Office refurbishment and equipment - 50,352
- 80,102
Leases expiring after more than one year but less than
five years:
Land and buildings - -
Office refurbishment and equipment - -
26 Notes supporting the cash flow statement
Cash and cash equivalents for the purposes of the cash flow statement
comprises:
2009 2008
£ £
Bank overdrafts - (3,260)
Cash available on demand 10,325 14,881
-
10,325 11,621
27 Post balance sheet events
(i) JumpStart Wireless ("JSW")
On 8 October 2009, Milestone Group plc announced that it had entered
into an agreement with privately owned JSW; an enterprise wireless
software company founded in 2000, based in Florida, USA.
Under the terms of the Agreement Milestone has obtained the right to
sell patented and patent pending technologies of JumpStart in the
UK. The Board believes that this is a valuable addition to the
Group's newly unveiled suite of technologies/capabilities. In
addition to obtaining the rights to sell JumpStart technologies in
the UK, Milestone also purchased shares in JumpStart.
JumpStart's technology saves clients significant costs in the field
by cutting down on paperwork and seamlessly coordinating wireless
devices and business software applications by leveraging artificial
intelligence technology. JumpStart has a strong track record in the
US, already working with enterprise software partners such as Sage,
Primavera and SAP, reaching 25 million mobile workers through these
networks alone.
JumpStart's clients in the US include such companies as a Fortune 500
service organization Ecolab, Toyota and many companies in
construction and field services, which use JumpStart to connect to
Sage accounting software. It is upon these foundations that Milestone
hope to build a new sales platform in the UK. JumpStart's product is
ideally positioned to thrive in the current economic climate,
significantly reducing the time and costs involved in communicating
with staff on the move.
Milestone will be offering JumpStart technologies in the market
place, contracting sales and using the support and development
services of Jumpstart to implement new programs. There is no doubt
that our current offerings together with this new product suite sets
us apart from our competitors.
Under the terms of the agreement Milestone will receive a dealer
percentage of the gross revenue from all sales that it makes in the
UK. Milestone has an added incentive in that in addition to the cash
reward for the sales it makes; it could also receive an equity award
of JSW Shares, provided that it has reached certain performance
metrics.
Milestone has also purchased Common Stock in JumpStart with a total
subscription value of $100,001 (approximately £60,000).
(ii) Ve Interactive
On 14 October 2009, the Company also entered into a global
agreement to sell the CEM (Customer Experience Management) Solutions
of Ve Interactive Ltd.
'VeCapture' is a patented proprietary ecommerce tool, effective in
securing additional form and shopping cart conversions from aborted
online transactions. In 2008, the UK e-commerce market is expected to
exceed £68bn[4]. According to Coremetrics, 50.1% of online shoppers
abandoned their shopping cart in March 2009[5]. Converting even a
small percentage of those abandoned shopping carts into sales
represents significant value to e-vendors. The VeCapture software
acts like a black box to shopping carts, retaining all information
entered by the customer prior to their abandonment, regardless of
when the customer closed their browser or whether he or she clicked
the submit button. This critical information then offers businesses
the chance to sensitively remarket to those customers, which can mean
the significant difference between profitability and loss. Milestone
purchased 1.3% of Ve Interactive ordinary shares for a total
consideration of £101,111 and has the right to purchase an additional
1.3% by the end of November 2009 for the same amount.
The board are excited by the fit between the two companies. The
company has been actively looking for media savvy companies to
partner with. Ve Interactive with its VeCapture technology offers an
unparalleled market solution that will be hugely synergistic to
Milestone clients.
In addition to taking an equity position in Ve Interactive, Milestone
has secured reseller rights which entitle Milestone to up to 15% of
the gross revenue it generates for Ve Interactive with all software
installations and other costs being paid by Ve Interactive.
[4]
http://www.e-inbusiness.co.uk/news-list/News-Archive/uk-2009/
[5]
http://www.coremetrics.co.uk/solutions/industry-report.php
(iii) Subscriptions and funding
Subsequent to the balance sheet date the Company announced two small
subscriptions to support the short term working capital requirements.
On 30 September 2009 the Company announced a small subscription of
1,860,467 new ordinary shares worth £33,128 (before expenses) to
suppliers in respect of historic trade payable balances. On 12
October 2009 the company announced a small subscription to raise cash
consideration of £150,450 (before expenses) through the issue of
6,686,685 new ordinary shares. These transactions are not reflected
in the financial statements since shares were not issued and admitted
to AIM for trading until after the balance sheet date.
The Company has also been able to secure and draw down upon loan
financing of £160,000. Cash received from this loan and the share
issues above will be used to fund the trade investments entered into
subsequent to the year end and to support short term working capital
requirements.
Company balance sheet at 30 September 2009
Note 2009 2008
£ £
Fixed assets 6
Tangible assets - -
Investments in subsidiaries - -
- -
Current assets
Debtors 7 2,461 41,582
Cash at bank and in hand 10,290 18,141
12,751 59,723
Creditors: amounts falling due within
one year (416,161) (547,040)
Net current assets (403,410) (487,317)
Total net assets (403,410) (487,317)
Capital and reserves
Called up share capital 9 93,098 2,790,795
Share premium account 10 8,479,824 8,023,012
Capital Redemption Reserve 10 2,732,904 -
Profit and loss account 10 (11,709,236) (11,301,124)
Shareholders' funds (403,410) (487,317)
The financial statements were approved by the Board and authorised
for issue on 11 November 2009
Deborah White
Executive Director
The notes on pages 43 to 49 form part of these financial statements.
Notes to the Company accounts for the year ended 30 September 2009
1 Principal accounting policies
These financial statements have been prepared in accordance with the
historical cost convention and applicable accounting standards, and
on a going concern basis. The principal accounting policies have
remained consistent with those adopted in the previous year.
Tangible fixed assets and depreciation
Depreciation is provided at rates calculated to write off the cost or
valuation of fixed assets, less their estimated residual value, over
the expected useful economic lives on the following bases:
Short leasehold property straight line over the life
improvements of the lease
Office and technical equipment 25-33% straight line
Financial instruments
Financial assets are recognised in the balance sheet at the lower of
cost and net realisable value. Provision is made for diminution in
value where appropriate. Income and expenditure arising on financial
instruments is recognised on the accruals basis, and credited or
charged to the income statement in the financial period to which it
relates.
Deferred taxation
Deferred tax is recognised on all timing differences where the
transactions or events that give the company an obligation to pay
more tax in the future, or right to pay less tax in the future, have
occurred by the balance sheet date. Deferred tax assets are
recognised when it is more likely than not that they will be
recovered. Deferred tax is measured using rates of tax that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax balances are not discounted.
Leasing
Rentals payable under operating leases are charged to the income
statement on a straight line basis over the period of the lease.
Pension costs
The Company operated pension schemes for the benefit of two directors
in the prior year. The schemes were defined contribution schemes and
the contributions were charged against profits as they accrued.
Going concern
The Group's business activities, together with the factors likely to
affect its future development, performance and position are set out
in the Chairman's statement. The financial position of the Group, its
cash flows, liquidity position and borrowing facilities are described
in the director's report. In addition note 18 to the financial
statements includes the Group's objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments and exposures to credit risk and
liquidity risk.
The future business model is based around generating revenue from two
new areas; website development and commissions from the sale of the
JumpStart and Ve products. The Board has prepared forecasts which
reflect agreements that have or are expected to be entered into to
settle existing obligations of the business and the revenues and
costs anticipated from these new revenue streams based on a pipeline
of anticipated customers. These projections show the business will be
profitable and cash generative in the future. However, achieving
these forecasts will be dependent upon achieving sales in a new
market place and obtaining sufficient funding to settle existing
obligations which is discussed further below.
The Board recognises that a risk arises when expanding into new
markets and has moved to appoint experienced individuals to the
management team to significantly improve expertise in these areas.
These appointments are detailed more fully in the chairman's
statement. The Company maintains a low fixed cost base which provides
flexibility as the new business streams are developed. The directors
expect to bill the first sales of website development services in
November 2009. Sales of the wireless technology solutions are
projected to commence in January 2010.
The Board have been able to agree funding subsequent to the balance
sheet date in the form of a share issue of £150,450 and loan
financing of £160,000 repayable in June 2010. The Group has been able
to draw down upon the full £160,000 loan balance subsequent to the
year end. With these funds in place, the Board believe the Group has
sufficient working capital to grow the business and repay liabilities
as they fall due. The Company is however reliant on its continuing
ability to manage the timing of settlement of liabilities associated
with its previous activities. Discussions are ongoing with suppliers
and appropriate payment profiles remain unformalised.
The Directors have concluded that the requirement to manage the
timing of settlement of its liabilities represents a material
uncertainty which may cast significant doubt upon the Group's and the
Company's ability to continue as a going concern. Nevertheless after
making enquiries and considering this uncertainty and the measures
taken to mitigate it, the Directors have a reasonable expectation
that the Group and the Company will have adequate resources to
continue in existence for the foreseeable future. For these reasons
they continue to adopt the going concern basis in preparing the
annual report and accounts. The financial statements do not include
any adjustments that would result if the Group and Company was unable
to continue as a going concern.
Convertible debt
The proceeds received on issue of the Company's convertible debt are
allocated into their liability and equity components and presented
separately in the balance sheet. The amount initially attributed to
the debt component equals the discounted cash flows using a market
rate of interest that would be payable on a similar debt instrument
that did not include an option to convert.
The difference between the net proceeds of the convertible debt and
the amount allocated to the debt component is credited direct to
equity and not subsequently remeasured. On conversion, the debt and
equity elements are credited to share capital and share premium as
appropriate. Transaction costs that relate to the issue of the
instrument are allocated to the liability and equity components of
the instrument in proportion to the allocation of proceeds.
Share based payments
When share options are awarded to employees, the fair value of the
options at the date of grant is charged to the income statement over
the vesting period. Non-market conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
balance sheet date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options
that eventually vest. Market conditions are factored into the fair
value of the options granted. As long as all other vesting
conditions are satisfied, a charge is made irrespective of whether
the market vesting conditions are satisfied. The cumulative expense
is not adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they
vest, the increase in fair value of the options, measured immediately
before and after the modification, is also charged to the income
statement over the remaining vesting period. Where equity instruments
are granted to persons other than employees, the income statement is
charged with the fair value of goods and services received.
The share options are exercisable from the grant date. Upon exercise
of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where
appropriate share premium.
Where suppliers outstanding liabilities are settled by equity the
full cost of services provided is recognised as a current liability
and as a charge in the income statement. When shares are issued to
settle the obligation the liability is extinguished and the share
issue is reflected in equity as an issue of share capital.
2 Loss for the financial year
Milestone has taken advantage of section 408 Companies Act 2006 and
has not included its own income statement in these financial
statements. The Company's loss for the year after tax was £408,110
(2008: £783,680).
3 Dividends
No dividends have been paid or proposed in the year (2008: nil).
4 Directors and staff
Staff costs during the year, including directors, were as follows:
2009 2008
£ £
Wages and salaries 65,289 282,685
Social security costs 18,325 -
83,614 282,685
The average number of staff of the Group during the year was as
follows:
2009 2008
no. no.
Directors and administration 2 2
2 2
Remuneration in respect of the directors, who are the key management
personnel of the Group, was as follows:
2009 2008
£ £
John Sanderson 30,132 28,440
Deborah White 34,750 60,000
Andrew Craig - 18,750
Brian Chester - 19,425
Ian Lodwick 153 18,800
65,035 145,415
All directors in the year billed director's remuneration through
their own companies. No director's remuneration was paid directly.
No pension costs were paid to or on behalf of the directors in both
the current and prior year.
5 Property, plant and equipment
Fixtures and Fittings and
equipment Total
£ £
Cost
At 1 October 2008 152,199 152,199
At 30 September 2009 152,199 152,199
Depreciation
At 1 October 2008 152,199 152,199
At 30 September 2009 152,199 152,199
Net book value
At 30 September 2009 - -
At 30 September 2008 - -
6 Fixed asset investments
Shares in subsidiary undertakings
£
Cost
At 1 October 2008 2,645,384
At 30 September 2009 2,645,384
Amounts written off
At 1 October 2008 2,645,384
At 30 September 2009 2,645,384
Net book value
At 30 September 2009 -
At 30 September 2008 -
The principal operating subsidiary companies, which are all wholly
owned, are as follows:
* Oxford Broadcasting Limited
* Milestone Media Limited
* Nexstar Holdings Limited
Oxford Broadcasting Limited is involved in television broadcasting.
Nexstar Holding Limited is developing a sports entertainment venture.
Milestone Media Limited is a holding company.
7 Debtors
2009 2008
£ £
Trade debtors - 5,738
Other debtors 2,461 29,233
Prepayments and accrued income - 6,611
2,461 41,582
8 Creditors: amounts falling due within one year
2009 2008
£ £
Trade creditors 178,776 396,450
Amounts owed to group undertakings - -
Accruals and deferred income 166,383 150,590
Taxation and Social Security 21,002 -
Loans 50,000
416,161 547,040
Included in trade creditors and accruals are amounts of £29,411 and
£10,000 respectively (2008: £69,125 and £3,000) relating to unpaid
directors' remuneration. This has been accrued in accordance with the
payments agreed between the Company and directors.
9 Share capital
2009 2008
£ £
Authorised
2,267,095,595 (2008: 2,267,095,595) ordinary
shares of 0.1p (2008: 0.1p) each 2,267,096 2,267,096
Nil (2008: 27,605,095) deferred shares of 9.9p
each - 2,732,904
2,267,096 5,000,000
Allotted, called up and fully paid
83,297,740 (2008: 52,890,329) ordinary shares of
0.1p (2008: 0.1p) each 93,098 57,891
Nil (2008: 27,605,095) deferred shares of 9.9p
each - 2,732,905
93,098 2,790,796
On 26 November 2008 the Company issued 9,749,584 ordinary shares of
0.1p each for a combination of cash consideration of £89,000 and
settlement of outstanding trade payables of £27,995.
On 2 December 2008 the Company issued 1,666,667 ordinary shares of
0.1p each for cash consideration of £20,000.
On 22 April 2009 the Company issued 6,957,004 ordinary shares of 0.1p
each for cash consideration of £101,500 and settlement of outstanding
trade payables of £23,726.
On 28 April 2009, it was agreed to buy back the deferred shares. The
deferred shares were not listed, had no rights attached, were
valueless, non transferable and had no effect on the economic
interest of the shareholders. £1 of the small subscription dated 22
April 2009 was used to repurchase these shares. The difference
between this consideration and the nominal value of the deferred
shares was taken to the capital redemption reserves. Subsequently to
the repurchase of the shares they were immediately cancelled and the
authorised share capital of the Company was reduced to 2,267,095,595
shares of 0.1p each.
On 4 June 2009 the Company issued 5,385,911 ordinary shares of 0.1p
each for cash consideration of £52,500 and settlement of trade
payables of £44,446.
On 12 June 2009 the Company issued 3,352,778 ordinary shares of 0.1p
each for cash consideration of £50,000 and settlement of trade
payables of £10,350.
On 8 September 2009 the Company issued 3,295,467 ordinary shares of
0.1p each for cash consideration of £43,500 and settlement of trade
payables of £25,927.
No transaction costs of were recorded against the share premium in
the year.
10 Share premium account and reserves
Capital
Share Share Profit and Redemption
Capital premium loss account Reserve Total
£ £ £ £
At 1 October -
2008 2,790,795 8,023,012 (11,301,124) (487,317)
Loss for the -
year - - (408,110) (408,110)
Share -
capital
issued 30,408 456,812 - 487,220
Share -
options
granted 4,800 - - 4,800
Repurchase 2,732,904
of deferred
share
capital (2,732,905) - - (1)
At 30 (403,410)
September
2009 93,098 8,479,824 (11,709,236) 2,732,904
11 Capital commitments
There were no capital commitments at 30 September 2009 or 30
September 2008.
12 Share based payment
There were no share options in issue at either 30 September 2009 or
30 September 2008.
13 Transactions with directors and other related parties
Details of related party transactions for the Company are as
disclosed for the Group in note 23 to the consolidated accounts.
14 Retirement benefit schemes
No payments were made on behalf of directors to any retirement
benefit schemes in the current or prior year.
15 Post balance sheet events
Details of post balance sheet events for the Company are as disclosed
for the Group in note 27 to the consolidated accounts.
---END OF MESSAGE---
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solely responsible for the content of this announcement.
Friday, 17th May 2024
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