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Opening doors to new ideas

VIEWS: 15 PAGES: 42

  • pg 1
									Opening doors to new ideas
Annual Report and Accounts 2007
Bringing buyers and sellers together worldwide, on paper, online, in person


  On Paper
  Our publications are quarterly or bi-annual with controlled
  circulations of 10,000 to 12,000, targeted at the top
  executives in international markets.



                                                                  CIMA001_Cover.indd 1                                                                                                               2/3/07 12:30:25




                                                                                 issue 1 2007 | £5.95 8.00 $8.95




                                                                                                                                                               Tax: can it
                                                                                                                                                               be unravelled?
                                                                                                                                                               AstraZeneca’s Jon Symonds
                                                                                                                                                               on the Varney Report and UK
                                                                                www.the--financedirector.com                                                   corporate taxation

                                                                                                                                                               Will you be SePA reAdy?
                                                                                                                                                               January 2008 operational
                                                                                                                                                               deadline looms

                                                                                                                                                               The feAr fAcTor
                                                                                                                                                               The BBC’s Zarin Patel on embracing
                                                                                                                                                               change and outsourcing




                                                                                         SEPA     |   Supply Chain   |   BPO   |   CPM |   Treasury & Risk Management   |   Pensions & Investments

                                                                            FDE028_cover.indd 1                                                                                                      4/1/07 09:48:54




  Online
  We have created a network of 30 sites that are recognised
  as the most powerful one-stop-shop options on the web
  including the architecture portal DesignBuild-Network.com




  In Person
  Our portfolio boasts more than 50 major international
  events across diverse business sectors including IT /
  telecoms, pharmaceuticals, packaging, construction,
  semiconductor, leadership and management, finance,
  energy, hospitality and transport.
                                                                     SPG Media Group PLC • Annual Report and Accounts 2007




Contents
Directors and Advisers                                                   2
Chairman’s Statement                                                     3
Business Review                                                        4-7
Directors’ Report                                                     8-10
Corporate Governance                                                 11-13
Report by the Board to the Shareholders on Directors’ Remuneration   14-17
Auditors’ Report to the Members                                      18-19
Consolidated Profit and Loss Account                                    20
Consolidated Balance Sheet                                              21
Consolidated Statement of Total Recognised Gains and Losses             22
Reconciliation of Movement in Shareholders’ Funds                       22
Company Balance Sheet                                                   23
Consolidated Cash Flow Statement                                        24
Notes to the Accounts                                                25-38
Five-Year Financial Summary                                             39
Notice of Annual General Meeting                                        40




Financial highlights
Turnover                                    £16.6 million               (2006: £ 18.2 million)

Operating profit
(before exceptional items
and goodwill amortisation)                  £0.7 million                (2006: £1.6 million)

Operating profit                            £0.3 million                (2006: £1.5 million)

Cash generated by operations                £1.0 million                (2006: £2.2 million)

Cash in hand                                £3.0 million                (2006: £2.3 million)




                                                                                                                             1
    SPG Media Group PLC • Annual Report and Accounts 2007




Directors and advisers
Directors                                                                         Advisers
Stephen Davidson, Chairman 1,2,,4                                                Registrars and Transfer Office
Stephen Davidson is Chairman of SPG Media plc, Enteraction TV Ltd and Digital     Capita Registrars
Marketing Group plc. He is also a non-executive director of Inmarsat plc, Betex   The Registry
Group plc, EBT Mobile China plc and Datatec Ltd. Mr Davidson has held various     34 Beckenham Road
positions in Investment Banking, most recently at WestLB Panmure where            Beckenham, Kent, BR3 4TU
he was Global Head of Media and Telecoms, Investment Banking, then Vice
Chairman of Investment Banking.                                                   Stockbroker
                                                                                  Blue Oar Securities PLC
From 1993 to 1998 Mr Davidson was Finance Director, then CEO of Telewest          Colston Tower
Communications plc. He was Chairman of the Cable Communications                   Colston Street
Association from 1996 to 1998.                                                    BS1 4RD

Mr Davidson holds a 1st Class Hons in Mathematics and Statistics from the         Solicitors
University of Aberdeen. Aged 51.                                                  Rosenblatt
                                                                                  9-13 St Andrew Street
Keith Sadler, Chief Executive                                                    London EC4A 3AF
Mr Sadler joined the Board in September 2005 as Group Finance Director and
Company Secretary. He was formerly Group Finance Director and Company             Auditors
Secretary of The Wireless Group plc and two quoted regional newspaper             PricewaterhouseCoopers LLP
publishers, News Communication and Media plc and Bristol United Press plc.        31 Great George Street
Mr Sadler was also Group Treasurer of Mirror Group Newspapers plc. Mr Sadler      Bristol, BS1 5QD
is chartered accountant and holds an honours degree in Economics. Aged 48.
                                                                                  Bankers
Ken Appiah, Group Finance Director and Company Secretary                         Lloyds TSB Bank plc
Mr Appiah joined the board in August 2006 as Group Finance Director and           1st Floor
Company Secretary. He joined the group in September 2005 as Group Financial       25 Gresham Street
Controller. He was formerly Group Financial Controller at The Wireless Group      London, EC2V 7HN
plc, and Group Finance Manager at The Total Record company and Joint
Venture Accountant at Telstar Records plc. Mr Appiah is a Chartered Certified
                                                                                  Head Office and Registered Office
Accountant and holds a degree in Accountancy and Finance. Aged 40.
                                                                                  55(a) North Wharf Road
                                                                                  London W2 1LA
Christopher Haines, Non-executive Director           1,2,

Mr Haines joined the board in October 1996 and was until December 2001
                                                                                  Registered number 1309004
executive chairman. He was previously Chief Executive of the Jockey Club.
Aged 68.

Adrian Howe, Senior Non-Executive Director1,2,,4
Mr Howe joined the Board in May 2007. Mr Howe is Chief Executive of Band-
X Limited, a wholesale provider of outsourced telecommunication services.
Prior to Band-X, Mr Howe had eleven years commercial experience in the
telecommunications industry in a number of different finance management
positions; including Level 3 Communications as European CFO, Telewest
plc and BT plc. Mr Howe qualified as a Chartered Accountant with KPMG in
London, after graduating from Oxford University in PPE. Aged 45.

1
    Member of the Audit Committee
2
    Member of Remuneration Committee
3
    Member of the Nominations Committee
4
    Independent non-executive director




2
                                                            SPG Media Group PLC • Annual Report and Accounts 2007




                             Chairman’s Statement
                             Trading results
                             In a difficult year we have produced results which show the underlying
                             performance of the Group to be sound. The results for the year ended 31 March
                             2007 show turnover of £16.6 million (2006: £18.2 million) and an operating
                             profit, before exceptional items and amortisation, of £0.7 million (2006: £1.6
                             million). The profit before taxation was £0.3 million (2006: £1.3 million).

‘I now believe               As I stated in my interim statement we were reliant on the fourth quarter of
                             the year to deliver significant operating and financial performance. Although
we have a realistic          the fourth quarter was disappointing for revenues we delivered both operating
plan to deliver...           profits and cash flow.
revenue growth.’             Following a review, we made the decision to close our Indian office based in
Stephen Davidson, Chairman   Hyderabad. The Indian operation had produced poor quality data and failed
                             financially to justify continued support. We have entered into an agreement to




£.0
                             sell the shares in SPG Media Pvt Limited to Visage Media Services Pvt Limited
                             for US$100,000. This included the seven websites we had transferred to India
                             to sell advertising. We retain a small successful sales team who sell our
                             International Outsourcing Forum.

                             Net funds


million
                             The Group produced net cash flow from operating activities of £1.0 million
                             (2006: £2.2 million) and made capital expenditure of some £0.3 million (2006:
                             £0.3 million). The Group finished the period with net funds of £3.0 million
                             (2006: £2.3 million). This increase represents the earnings before interest, tax,
                             depreciation and amortisation and indicates healthy cash conversion.
Net funds 2007
(2006: £2.3 million)         Board
                             I am pleased to welcome Adrian Howe to the Board of Directors. Adrian has
                             a wealth of experience in operating with large and medium sized companies.
                             With his financial background Adrian will Chair the Audit Committee. I
                             would like to thank Christopher Haines for his tenure as Chair of the Audit
                             Committee, which he has conducted diligently and effectively. Christopher will
                             remain on the Audit Committee and continue to make a positive contribution to
                             its operation.

                             Employees and customers
                             I would like to thank the staff and management of the Group for their hard
                             work and commitment throughout the year. Also my thanks to all our
                             customers and clients who have placed their marketing needs with us and
                             supported us through this year.

                             Outlook
                             We need to make investments in our products and people to ensure they have
                             an opportunity to deliver growth. I now believe we have a realistic plan to
                             deliver that revenue growth.

                             Stephen Davidson
                             Chairman
                             29 June 2007




                                                                                                                    
    SPG Media Group PLC • Annual Report and Accounts 2007




Business Review
Strategy
Our aim is to grow the Group from its current base by developing the current
portfolio of products, to increase the revenue from each product through
investment in content, people and ideas. The result of this investment will drive
response for our clients ensuring they achieve a return on their investment
with us.

SPG Media Group plc’s activities are focussed in three areas, in print, online
and in person. We aim to offer measurable marketing/advertising solutions
to our customers through these three channels. Historically we have pushed
products into the market place and cut costs to achieve short term results. To
achieve long term growth for the business and increase shareholder value we
need to make investments that will lead to improvements in revenue and over
time improvement in the operating profit of the Group.

The key driver for the business is the demand for advertising and marketing
services from a broad spectrum of industries. We are investing in our products
to ensure we can provide services for our clients even in the cyclical nature of
marketing and advertising. We have increased the budget for content on our
websites, introduced e-newsletters and job boards are to be launched on our
websites from September. Editorial and design form an important part of our
magazines where we now invest in compelling content through the editorial
team writing and commissioning specific articles for the magazines. In our
events division we are introducing more opportunities for our clients to meet
their potential clients through the addition of exhibition stands, meeting chalets
and establishing networking areas.

Principal risks and uncertainties facing the Group would be a
failure to respond to the competitive landscape and establishing marketing and
product initiatives to ensure we remain competitive. Investing in our products
in the future will be imperative if we are to achieve and maintain a profitable
Group. The Group is reliant on its sales force and critical to its success is the
recruitment and retention of skilled sales personnel.

Key performance indicators
The Board use a wide range of financial indicators to assess performance
within the Group. These key performance indicators are reviewed regularly by
the Board and senior management to ensure we comply with our aims.


                                                                         2007           2006
     •   Order intake                                                    (11.1)%        (6.4)%
     •   Product order intake (in aggregate as above)
     •   Sales revenue recognition (conversion of orders into revenue)   110%           109%
     •   Orders per sales person                                         24.5%          11.1%
     •   Cash conversion (operating profit to cash from operations)      3.38           1.42
     •   EBITDA                                                          £1.4 million   £2.7 million



Group Results
Turnover for the Group fell from £18.2 million to £16.6 million. This was a
result of the continued decline in our print division which showed a decline in
revenues of £1.8 million. The majority of this decline, £1.2 million, occurred in
the first half of the year when restructuring had an impact on the performance
of this division. The rate of decline in revenue in the second half has slowed
and has shown signs of stability.




4
                                                                                  SPG Media Group PLC • Annual Report and Accounts 2007




£6.
                                                   The gross profit margin has been maintained at 54% and produced a gross profit
                                                   of £9.0 million compared to £9.8 million for the previous year.

                                                   Distribution costs fell as a result of sourcing cheaper distribution channels and



million
                                                   publishing fewer titles.

                                                   We have identified certain costs as exceptional and disclosed these separately
                                                   on the face of the profit and loss account. They include the redundancy and
Internet revenue 2007                              compensation for loss of office costs of £0.6 million (£0.3 million redundancy
                                                   and £0.3 million compensation for loss of office), the write down of our assets
(2006: £6.1 million)                               in India and a tax liability in India totalling £182,000 and costs associated with
                                                   the potential offer for the company of £44,000. This charge was offset by a
                                                   release of £603,000 from the property provision as a result of the surrender of
                                                   the lease on Edgware Road and the letting of the vacant floor at Goodge Street.

                                                   The Administrative expenses have increased from £7.7 million to £7.9 million.
                                                   This increase is due to a stepped increase in the rent at North Wharf Road, the
                                                   Group’s principal operating office and an increase in the bad debt provision. The



40.1%
                                                   previous year benefited from a release from the bad debt provision. Offsetting
                                                   these increases was a release of £0.4 million (2006: £0.2 million) of credit
                                                   balances on the balance sheet. The Board regularly reviews and assess the
                                                   appropriateness of credit balances in the balance sheet which led to this release
Increase in revenue
                                                   The Group reported an operating profit before amortisation and exceptional
from the Global                                    items of £0.7 million (2006: £1.6 million). Group operating profit after
Semiconductor                                      amortisation and exceptional items is £0.3 million.
forum in 2007
                                                   The net interest charge of £34,000 includes a charge of £114,000 (2006:
compared to 2006                                   £168,000) for the discount applied on the property provision at the time the
                                                   initial provision was calculated. This is a non-cash item and increases the
                                                   property provision by this amount. This should reduce as the provision is
For everyone in building design and construction   reduced over time. £82,000 (2006: £21,000) of interest was generated from the
                                                   Group’s cash balances.




46.0%
www.designbuild-network.com
                                                   As a result of the reduced retained earnings the earnings per share fell to 0.30
                                                   pence from 1.59 pence in 2006.

                                                   The Group was a positive cash generator with £0.7 million added to the balance
                                                   at the previous year-end making a total of £3.0 million of cash balances held at
Increase in revenue                                31 March 2007.
from the Design Build
Network portal in 2007                             Online
                                                   We operate web sites where we offer a listing service to clients with a 600
compared to 2006
                                                   word profile and five image package. These web sites are aimed at businesses
                                                   who are looking to search for the procurement of goods and services for
                                                   their own businesses. Following the sale of our Indian operation we now have
                                                   30 web sites which cover a number of industries. The full list of our current
                                                   websites are as follows:



  •    Aerospace-technology.com                    •   Chemicals-technology.com                •   Hospitalmanagement.com
  •    Medicaldevice-network.com                   •   Pharmaceutical-technology.com           •   Ship-technology.com
  •    Airforce-technology.com                     •   Designbuild-network.com                 •   Hotel-technology.com
  •    Mobilecommunication-technology.com          •   Power-technology.com                    •   Totaloutsourcinghub.com
  •    Airport-technology.com                      •   Drugdevelopment-technology.com          •   Hydrocarbons-technology.com
  •    Naval-technology.com                        •   Railway-technology.com                  •   Water-technology.com
  •    Army-technology.com                         •   The-financedirector.com                 •   Industryappointments.com
  •    Offshore-technology.com                     •   Roadtraffic-technology.com              •   Worldcruise-network.com
  •    The-Chiefexecutive.com                      •   Foodprocessing-technology.com           •   Mining-technology.com
  •    Packaging-gateway.com                       •   Semiconductor-technology.com            •   Worldpharmaceuticals.net




                                                                                                                                          
    SPG Media Group PLC • Annual Report and Accounts 2007




                                                                                             18.4%
Revenues from our internet business increased by 6.8% from £6.1 million to
£6.5 million in the year ended 31 March 2007.

During the last six months we have implemented a number of initiatives
to improve the content on our websites. This includes an increase in the                   Increase in revenue from the
editorial personnel to write and commission articles and features for these
websites. The intention of this is to increase unique user sessions on our
                                                                                            army-technology website in
websites. This investment will initially target our better performing websites.                 2007 compared to 2006
We have also established electronic newsletters which are sent out to our
internet client base and carry paid for advertising. Our initial launch is on
Offshore-technology.com. These newsletters are to be produced monthly with
our plan to increase frequency. From September 2007 we will launch our
interactive job boards for our top twelve websites. This is, again, to increase
unique user sessions and also offer clients opportunities to integrate into the
web site and create community.

Events
Our “in person” side of the business comprises executive Forums and
Conferences. The Forums consist of supplier and buyer delegates attending
meetings at which suppliers have an opportunity to make presentations to
potential clients. An important element for the success of the Forum is the
seminar and conference programme for all delegates. Separate to this is



                                                                                             20.2%
our conference programme where we produce and sell delegate places to
attendees. For both of these areas we also attempt to generate sponsorship
revenues. What we believe differentiates us is our exceptional execution of
both our Forums and Conferences.

We ran 13 forums (2006: 13), 2 business breakfasts (2006: none) and 35                        Increase in revenue from
conferences (2006: 31) through the year. Our aim is to increase the size of                        the European Retail
our Forums with more delegates by making improvements in the proposition                        Banking forum in 2007
by offering further opportunities for suppliers to have exhibition stands
and also the introduction of networking areas. These will generate further
                                                                                                     compared to 2006
sponsorship revenue opportunities. Revenue generated from all the events
held was £6.0 million (2006: £6.2 million). The primary cause for the fall in
revenue was the cancellation of the Digital Infrastructure Technology Forum
which was being sold out of our Indian office. However, due to poor sales this
event had to be cancelled. In addition we were unable to rebook the South
African Event we ran successfully on behalf of the South African Contact
Centre Community.

As with the other areas of the business we have invested in more producers



                                                                                             2.1%
and sales staff as well marketing personnel to improve the performance of this
part of the business.

Print
After a period of change we established the print division under a single                           Increase in revenue
head of sales. We have also improved the quality of the magazines under the
direction of our Editor in Chief. Our aim is to have compelling content within
                                                                                                   from the roadtraffic-
the magazines giving our advertisers and contributors a value added product.                      technology website in
Our UK publications during the year were as follows:                                             2007 compared to 2006

    •   World Pharmaceutical Frontiers            •   FDE                              •    Future Banking
    •   Future Airport                            •   Medical Devices                  •    The Wealth Collection
    •   World Expro                               •   Hotel Management International   •    Hospital Management International
    •   CEO                                       •   Global Semiconductor             •    Leaf Review
    •   Packaging and Converting                  •   CIMA                             •    Review of Modern Surgery
        Intelligence                              •   World Cruise Review              •    Review of Patient Care




6
                                                                                                                                                                                                       SPG Media Group PLC • Annual Report and Accounts 2007




                                                                                                                                                                      The revenue from our print division declined from £5.9 million to £4.1 million. £1.2
                                                                                                                                                                      million of the decline was accounted for in the first half of the year and £0.6 million
                                                                                                                                                                      in the second half. And of this second half decline some £0.3 million was due to the
                                                                                                                                                                      decision to cease publishing certain titles.

      We have been asked                                                                                                                                              Half year on half year the rate of decline slowed dramatically and now we
      to produce, and                                                                                                                                                 have a platform from which we can improve. During the year we were awarded
                                                                                                                                                                      the contract to publish a quarterly magazine for the Chartered Institute of
      procure delegates                                                                                                                                               Management Accountants (“CIMA”). We believe this indicates our ability to
      for, four conferences                                                                                                                                           produce and publish quality magazines. The magazine is part of the continuing
                                                                                                                                                                      professional development for certain members of the institute and therefore
      on behalf of                                                                                                                                                    required reading for those members. In addition we have been asked to
      CIMA [in addition                                                                                                                                               produce, and procure delegates for four conferences on behalf of CIMA.
      to publishing                                                                                                                                                   India
      their quarterly                                                                                                                                                 In the second half of the year a number of inconsistencies in the performance
      magazine].                                                                                                                                                      of the Indian operation appeared. Revenue targets were not being met, bad debt
                                                                                                                                                                      provisioning was increased and the quality of the data being produced in the
                                                                                                                                                                      operation was consistently below standard. The Digital Infrastructure Technology
                                                                                                                                                                      (“DIT”) forum had to be cancelled as no sales had been made on the event. This was
                                         ExCEllEnCE in lEaDERSHiP




                                                                                                                                                                      one of the first events run by the Group. In the wake of this outturn the Board took
                                                                       iSSUE 2 2007
                                                                                                                                                                      the decision to sell the remaining part of the business to Visage Media Services
                                                                      ExCEllEnCE in lEaDERSHiP
                                                                       Strategic Risk Management
                                                                                                                                                                      Pvt Limited a subsidiary of iLabs Management LLC an Indian venture capital fund.
                                                                                                                                                                      We have entered into an agreement with Visage Media Services Pvt Limited to sell
                                                                                                                                                                      the shares to them. We retain a small presence (four sales people and seven data
                                          Strategic Risk Management




                                                                                                                                                                      confirmation team) in India selling our International Outsourcing Forum.
                                                                      Board of responsibility?
                                                                      Why UK company directors need to become more risk-aware


                                                                      Evolving threats, evolving responses
                                                                      HSBC on the need to stay calm in a crisis
                                          iSSUE 2 2007




                                                                      Pension fund trustee challenges
                                                                      Prudential’s Group Finance Director on FRS 17 and pensions risk management




                                                                                                                                                                      Property
CIMA001_Cover.indd 1   2/3/07 12:30:25             CIMA002_Cover.indd 1                                                                            11/6/07 11:29:10




                                                                                                                                                                      We have surrendered our lease at Edgware Road, London. This was the only
                                                                                                                                                                      property not to be sublet. The annual outgoings for this property were £181,000.
                                                                                                                                                                      The Group will make a saving of £74,000 for the remainder of the lease. We
                                                                                                                                                                      have also let a floor at Goodge Street, London for the remainder of the lease,
                                                                                                                                                                      saving the Group some £189,000 per annum. This lease runs until 2014. The
                                                                                                                                                                      settlement of these property issues has allowed the Group to release £603,000
                                                                                                                                                                      from the property provision, which has been disclosed as an exceptional item.




                                                                                                                                                                                                                                                               7
    SPG Media Group PLC • Annual Report and Accounts 2007




Directors’ report
For the year ended 31 March 2007

The directors present their annual reports and accounts for the year ended 31 March 2007.

Principal activity and business review
The principal activity of the Group is to support its customers in achieving their marketing objectives by bringing buyers
and sellers together through print media, on websites and at events. Further information regarding the Group, including
important events and its progress during the year, events since the year end and likely future developments is contained
in the Chairman’s Statement and in the Business Review on pages 4 to 7. The information that fulfils the requirements of
the Business Review (as required by Section 234ZZB of the Companies Act 1985), which is incorporated in this Directors’
Report by reference, can be found on the following pages of this Annual Report:

Information                                         Location                                                             Pages

Development and performance                         Chairman’s statement and Business Review                             3 to 7
during the financial year
Position at the year end including                  Business Review                                                      4 to 7
analysis and key performance indicators
Other performance measures                          Business Review                                                      4 to 7
Principal risks and uncertainties                   Business Review                                                      4 to 7
facing the business
Explanation of amounts included                     Business Review and Notes to the financial statements   4 to 7 and 25 to 38
in the annual accounts


Results and dividends
The Group operating profit before interest and tax for the year was £0.3 million (2006: £1.5 million).

The directors do not recommend a dividend (2006: nil)

The profit of £0.3 million will be transferred to reserves (2006: £1.3 million).


Share capital and substantial interests
Details of the company’s share capital are set out in Note 20. As at 26 June 2007 the company had been notified of the
following persons who had a beneficial interest in 3 per cent or more of the issued ordinary share capital of the company:

                                                                                                                   Percentage
Utilico Investment Trust plc                                                                                             29.67
Invesco plc                                                                                                               9.85
Hargreave Hale Limited                                                                                                    8.08
Herald Investment Trust                                                                                                   5.93
B Newman                                                                                                                  4.88


No other person has notified any interest in the ordinary shares of the company required to be disclosed to the company in
accordance with sections 198 to 208 of the Companies Act 1985.

Directors
The directors who served during the year were as follows:
KK Appiah         (appointed 3 August 2006)
CJ Blake          (resigned 7 July 2006)
SJ Davidson
CJM Haines
SP Nicholson      (resigned 3 October 2006)
KJ Sadler




8
                                                                            SPG Media Group PLC • Annual Report and Accounts 2007




See below for details of directors’ interests in the share capital of the Company.

In accordance with the Articles of Association, Christopher Haines retires by rotation and being eligible offers himself for
re-election. Ken Appiah, having been appointed a director during the year and being eligible, offers himself for re-election.


Directors’ interests
The interests of the directors in the ordinary shares of the Company were as follows:

                       1 March 2007                    1 April 2006
KK Appiah                     4,44                             -
SJ Davidson                  00,000                       300,000
CJM Haines                   47,00                       437,500
KJ Sadler                  1,42,76                     1,383,776

Employee policies
The Group places considerable value on the involvement of its employees and keeps them informed on matters affecting
them as employees and on the factors affecting the performance of the Group. This is achieved through formal and
informal meetings.

It is the Group’s policy to give full and fair consideration to the employment of disabled persons, the continuing
employment of employees becoming disabled, and to the full development of the careers of disabled employees, having
regard to their particular abilities.

Terms of payment
The Company’s policy, which is also applied by the Group, is to settle terms of payment with suppliers when agreeing
terms of each transaction, ensuring that suppliers are made aware of the terms of payment and abide by the terms of
payment. The Company itself has no trade creditors. Normal credit terms are 60 days.

Donations
The Group made no political donations during the year (2006: £nil). The Group has made a charitable donation of £225
(2006: £nil) in the year.

Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the directors to prepare financial statement for each financial year, which give a true and fair view
of the state of affairs of the Company and Group and of the profit or loss of the Group for that period. In preparing those
financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and
    explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will
    continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and Group and enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.

Auditors
A resolution to appoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the Annual General Meeting.

Disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information (that is information needed by the group’s auditors
in connection with preparing their reports) of which the group’s auditors are unaware, and the directors have taken all
steps they ought to have taken in order to make themselves aware of any relevant information and establish that the
group’s auditors are aware of that information.




                                                                                                                                    9
     SPG Media Group PLC • Annual Report and Accounts 2007




Adoption of International Financial Reporting Standards (“IFRS”)
We have planned for the introduction of IFRS, which is mandatory from 1 January 2007. They will apply to the Group’s
interim results for the six months to 30 September 2007 and full year results to 31 March 2008 and thereafter. The areas
which are expected to have the most significant impact on the financial results are explained in the following paragraph.

As required by IFRS 3 purchased goodwill will no longer be amortised over its estimated economic life through the profit
and loss account. Instead an annual impairment review will be carried out.

Other aspects of IFRS reporting relate to presentational matters which we will adopt to ensure we comply with the new
standards.

Annual general meeting
The Annual General Meeting will be held on 1 August 2007 at the Hilton Metropole Hotel, 255 Edgware Road, London at
11.00 am. Details of all resolutions to be put as special business are set out in the enclosed notice to shareholders.


By order of the Board


K K Appiah
Secretary
29 June 2007




10
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




Corporate Governance
The Company is committed to high standards of corporate governance. The paragraphs below and in the Remuneration
Report on pages 14 to 15 describe how the Board has applied the principles set out in the Combined Code (‘the Code’)
issued by the Financial Services Authority in July 2003. The Code is part of the listing rules as issued by the Financial
Services Authority. The Company has substantially complied with the provisions of the Code, except where the Board has
determined that they are inappropriate to the particular circumstances of the Company.

The Board
The Company is headed by the Board, which is made up of two executive directors and three non-executive directors.
Biographical detail on each director is shown on page 2. The Chairman of the Board is Stephen Davidson who has been
Chairman since 18 April 2005. With the appointment of Adrian Howe the Board have identified him as the senior non-
executive director.

The Board met 8 times during the year and there is a formal schedule of matters reserved for the consideration of
the Board. The Board is responsible to the shareholders for the proper management of the Group. The Board sets
and monitors the Group strategy, reviewing trading performance, ensuring adequate funding, examining development
possibilities and formulating policy on key issues.

The Chairman is responsible for the running of the Board and determining strategy in conjunction with the Chief
Executive. The Chief Executive is responsible for the day to day running of the Group’s businesses supported by divisional
managing directors.

The non-executive directors have the opportunity to meet without the executive directors in order to discuss performance
of the Board, its committees and individual directors. A performance review has been carried out.

All directors are required to stand for re-election at least once every three years. The terms and conditions of appointment
of the non-executive directors are available for inspection at our registered office.

The Company Secretary ensures that the Board and its committees are supplied with papers to enable them to consider
matters in good time for meetings and to enable them to discharge their duties. Procedures are in place for the directors,
in the furtherance of their duties, to take independent professional advice, if necessary at the Company’s expense, as
required under the code.

The Board has established a number of committees with mandates to deal with specific aspects of its business. The table
below details the membership and attendance of individual directors at Board and committee meetings held during the
year ended 31 March 2007.

                                       Full board           Remuneration                 Audit                 Nomination
                                                             committee                 committee               committee
Number of meetings in the year             8                      1                         2                       1

KK Appiah                                  5                      -                         12                      -
SJ Davidson                                8                      1                         2                       1
CJM Haines                                 8                      1                         2                       1
KJ Sadler                                  8                      -                         22                      1

1. Ken Appiah has attended all Board meetings since his appointment.
2. By invitation and for part of meetings.


Remuneration committee
The remuneration committee comprises Christopher Haines (chairman) and Stephen Davidson. Under rule B.2.1 the
remuneration committee should comprise two independent non-executive directors. On the resignation of Mr C Blake the
Group did not comply with this rule until a suitable replacement could be found. Adrian Howe joined the committee on 4
May 2007 and on his appointment the Group has complied with the Code. The remuneration committee is responsible for
determining the service contract terms, remuneration and other benefits of the executive directors, details of which are
set out in the Remuneration Report. The terms of reference of the remuneration committee are available for inspection on
request.




                                                                                                                                   11
     SPG Media Group PLC • Annual Report and Accounts 2007




Nomination committee
The nomination committee comprised Stephen Davidson (chairman), Christopher Haines and Keith Sadler. The nomination
committee leads the process for board appointments and makes recommendations to the Board. The committee evaluates
the balance of skills, knowledge and experience on the Board and, in light of that evaluation, prepares a description of
the role and capabilities required for a particular appointment. The terms of reference of the nomination committee are
available for inspection on request.

Audit committee
The audit committee comprises Christopher Haines (chairman) and Stephen Davidson. The committee met twice in the
year with the external auditors in attendance. Under C.3.1 of the Code the audit committee should comprise at least two
independent directors. This was not complied with following the resignation of Mr C Blake until a suitable replacement
could be found. On the appointment of Adrian Howe the Group has complied with the Code. Adrian Howe, on his
appointment, took over as chairman of the audit committee from 4 May 2007.

The committee is responsible for reviewing the Interim Report and the Annual Report and Accounts and it oversees the
controls necessary to ensure the integrity of the financial information reported to shareholders. The audit committee
discusses the nature, scope and findings of the audit with the external auditors, and monitors the independence of the
external auditors. The committee is also responsible for considering the appointment or re-appointment of external
auditors and the audit fee. The terms for the audit committee are available for inspection on request.

The audit committee discharges its responsibilities through receiving reports from management and advisers, working
closely with the auditors, carrying out and reviewing risk assessment and taking counsel where appropriate in areas when
required to make a judgement.

The audit committee has considered the need for a separate internal audit function but due to the size of the Group and
procedures in place to monitor both trading performance and internal controls, it was concluded the costs of a separate
internal audit department would outweigh the benefits.

The audit committee reviews arrangements by which staff may raise possible improprieties in matters relating to financial
reporting. The Group has made staff aware of its whistleblowing policy which is published on the Group’s intranet and
company handbook. Notification can be made anonymously to the Chief Executive Officer, Finance Director or Chairman.

The audit committee is made up of the non-executive directors. The committee was chaired by Christopher Haines
who, under the definition within the Code is not regarded as independent. Christopher brought a great deal of relevant
experience to the audit committee together with his knowledge and understanding of the business. Adrian Howe has been
appointed chairman of the Audit Committee from 4 May 2007. The details of their experience is given within the directors
biographies on page 2.

The auditor’s fees for the year are £63,000 (2006: £60,000).

In order to maintain the independence of the external auditors, the Board has determined that non-audit work will not
be offered to the external auditors unless there are clear efficiencies and value added benefits to the Company. The
Audit Committee annually reviews the remuneration received by the auditors for audit services and non-audit work. The
outcome of this review was that the performance of this work by the auditors was the most cost effective and also that no
conflict existed between such audit and non-audit work.

Internal control and risk management
The Board has overall responsibility for the Group’s system of internal controls and for monitoring its effectiveness.
However, such a system is designed to manage rather than eliminate risk of failure to achieve business objectives and can
only provide reasonable and not absolute assurance against material misstatement or loss.

Under the Code there is a requirement that the directors review the effectiveness of the Group’s system of internal
controls. This extends the existing requirement in respect of internal financial controls to cover all controls including
financial, operational, compliance and risk management.

A formalised process for identifying, evaluating and managing the significant risks faced by the Group has been
operating throughout the period under review. In addition to meeting the Code’s requirement for an annual review of
the effectiveness of the system of internal controls, the Group has established an embedded process for managing
business risks. An integral part of each business’s planning and review process is to identify their risks, the probability of
those risks occurring, the impact if they do occur and the actions being taken to manage those risks. The information is




12
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




continually communicated upwards and enables the senior management to ensure that these risks are being managed on
an effective and timely basis.

The Board has a schedule of matters reserved for the decision of the Board.

The key controls in place have been reviewed by the Board and comprise the following:
• The preparation of comprehensive annual budgets and business plans integrating both financial and operational
  performance objectives and plans, with an assessment of the associated business and financial risks, for each area of
  the business. The overall Group budget and business plan is subject to approval by the Board.
• Weekly revenue reports are produced and reviewed by management.
• Monthly management accounts are prepared for each business unit and reviewed by the Board. This includes
  reporting against key performance indicators and exception reporting.
• An organisational structure with formally defined lines of responsibility. Authorisation limits have been set throughout
  the Group and these are reviewed on a regular basis.

Shareholder relationships
The Company is active in communicating with both its institutional and private shareholders. Effective communication
with institutional shareholders and analysts is established through presentations involving the Chief Executive Officer and
the Finance Director. The Company operates a corporate website at www.spgmedia.com where information is available to
potential investors and shareholders.

The Board will use the Annual General Meeting to communicate with private shareholders and seek their participation.
The Notice of the Annual General Meeting has been circulated more than 20 working days prior to the meeting and is
included in this report on page 40.

Health and safety
It is the policy of the Group to conduct all business activities in a responsible manner free from recognised hazards and
to respect the environment, health and safety of our employees, customers, suppliers, partners, neighbours and the
community at large.

Going concern
After making relevant enquiries the directors have a reasonable expectation that the Group as a whole has adequate
resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing these financial statements.

By order of the Board


K K Appiah
Secretary
29 June 2007




                                                                                                                                   1
        SPG Media Group PLC • Annual Report and Accounts 2007




Report by the Board to the Shareholders on Directors’ Remuneration
Unaudited information

The Remuneration Committee
The remuneration committee consists of Christopher Haines (chairman), Stephen Davidson and Adrian Howe. In the
matters to be decided, members have no personal financial interests, other than as shareholders. Christopher Haines
was awarded notional shares under a long-term incentive plan in 1998 and share options in 1999 and 2000. Under the
Combined Code Christopher Haines would not be independent. Both Stephen Davidson and Adrian Howe are regarded as
independent.

Directors’ remuneration policy
The Board is responsible for setting the Company’s policy on directors’ remuneration and the Remuneration Committee
decides on the remuneration package of each executive director.

The primary objectives of the Company’s policy on executive remuneration are that it should be structured so as to attract
and retain executives of a high calibre with the skills and experience necessary to develop the Company successfully
and, secondly, to reward them in a way which encourages the creation of value for the shareholders. The performance
measurement of the executive directors and the determination of their annual remuneration package is undertaken by the
Remuneration Committee. The Remuneration Committee have used New Bridge Street consultants in the past to advise
on the levels of remuneration and have also used their extensive experience and consulted with others in general as to the
appropriateness of levels of remuneration.

No director is involved in setting his own remuneration.

The main elements of the executive directors remuneration are:
• Basic annual salary -
  The salaries of the executive directors are reviewed annually and reflects the executives’ experience, responsibility and
  market value.
• Long-term incentive arrangements –
  Long-term incentives are achieved by aligning directors’ and shareholders’ interests through shares held under option
  and the annual bonus plan, both of which include performance criteria linked to growth in earnings per share.
• Other benefits –
  Other benefits include pension contributions, medical cover and car allowances.

Non-executive directors’ remuneration
All non-executive directors have letters of appointment and their remuneration is determined by the Board having regard
to the level of fees for similar companies. Non-executive directors cannot participate in any of the Company’s share option
schemes unless they were granted options while holding an executive position. Christopher Haines holds share options,
and notional shares under a Long Term Incentive Plan, which were awarded when he was executive chairman. Non-
executive directors are not entitled to any contribution in respect of pensions.

Performance Chart

         20
                                                   SPG Media Group share price
                                                   FTSE AIM all-share price index relative to SPG share price
         1
Pence




         10


          


          0
               2004                             200                                2006                   2007


The performance chart above illustrates SPG’s total shareholder return compared to the FTSE AIM All Share Index. As
the company moved to the AiM market during 2005, this index has been chosen as the appropriate comparison for the
Company’s performance because it offers a comparison with the performance of companies operating similar sectors of
business.




14
                                                                               SPG Media Group PLC • Annual Report and Accounts 2007




Directors’ service agreements
It is the Group’s policy that directors should not have service agreements with notice periods capable of exceeding twelve
months. The existing service agreements have neither fixed terms nor contractual termination payments but do have
fixed notice periods. Non-executive directors have letters of appointment with the Company. The details of the service
agreements or letters of appointment of those who served during the year are:

                                                                     Contract date                                     Notice period
Executive directors
K K Appiah                                           6 September 2005 amended                                            12 months
K J Sadler                                                   5 September 2005                                            12 months
Non-executive directors
S J Davidson                                                 12 February 2004                                               1 month
C J M Haines                            26 November 2001 amended 16 April 2004                                              1 month
A Howe                                                             4 May 2007                                               1 month


Audited information

Directors’ emoluments
                                                Salary                                         Other
                                              and fees      Bonus           Pension          benefits          Total           Total
                                                                                                                2007            2006
                                                £’000        £’000            £’000             £’000          £’000           £’000
Executive directors
KK Appiah1                                         53           -                 5                 1             9               -
SP Nicholson                                       95          11                 -                 8            114             213
KJ Sadler                                         144           -                14                13            171              86
Non-executive directors
CJ Blake                                            5            -                   -              -                            18
SJ Davidson                                        40            -                   -              -             40              38
CJM Haines                                         25            -                   -              2             27              25
                                                  362          11                19                24            416             380

1. Payment in respect of part of the year.

The other benefits consist of car allowance and health insurance cover. Mr Nicholson received a payment of £237,000 for
compensation for loss of office which included the settlement of Mr Nicholson’s notice period of 12 months and benefit
entitlement for 12 months.

Pension arrangements
The Company makes payment to Keith Sadler and Ken Appiah’s private pension schemes at the rate of 10% per annum.
No other director receives pension contributions.




                                                                                                                                       1
     SPG Media Group PLC • Annual Report and Accounts 2007




Share options

The Company operates four option schemes. The Directors who participate in the schemes and their option awards are
shown in the following table:

                   Note        Option price       Balance at    (Exercised)/     Lapsed in   Balance at                 Exercise
                                                      1 April     granted in         year     31 March                  between
                                                        2005            year                      2006
Executive
KK Appiah              1             10.25            50,000             -              -       50,000    Sept 2008 to Sept 2015
                       1             11.00                 -        50,000              -       50,000     Mar 2009 to Apr 2016
                       1             6.00p                 -     1,000,000              -    1,000,000     Mar 2010 to Mar 2017
                                                      50,000     1,050,000              -    1,100,000

SP Nicholson           1            13.25p         1,000,000             -     (1,000,000)           -
                       1             8.20p         1,250,000     1,250,000               -   1,250,000      Lapsed 3 April 2007
                                                   2,250,000     1,250,000              -    1,250,000

KJ Sadler              1             8.20p         1,250,000             -              -    1,250,000    Sept 2008 to Sept 2015
                       1             6.00p                 -     1,500,000              -    1,500,000     Mar 2010 to Mar 2017
                                                   1,250,000     1,500,000                   2,750,000

Non-executive
CJM Haines             2           33.00p            125,000              -             -      125,000     Jul 2002 to Jul 2009
                       3          116.50p          1,333,335              -             -    1,333,335    Mar 2000 to Mar 2008
                                                   1,458,335                                 1,458,335

1. Issued under the 2003 executive share option scheme
2. Issued under the 1996 executive share option scheme
3. Issued under the 2000 executive share option scheme

No options over ordinary shares were exercised during the year. The market price of the ordinary shares at 31 March 2007
was 5.00 pence and the range during the year was 5.00 pence to 11.25 pence.




16
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




Long-term incentive plan
A long-term incentive plan (the “Plan”) was approved by shareholders in July 1998. On 10 March 2000, with shareholder
approval, two-thirds of the rights under the Plan were substituted into the 2000 Unapproved Share Option Scheme.

Amounts due under the Plan are determined by reference to the average middle market quotation of the ordinary shares
for the ten dealing days following the announcement of the annual results subject to a cap of 30 times the IIMR earnings
per share. Sums due are payable up to 30 days thereafter subject to the requirement for the average growth in IIMR
earnings per share over a three year period to exceed inflation by at least 2.0%. Rights under the Plan expire on 31 May
2008.

The following directors had rights over notional shares, with a notional base price of 100 pence, at 1 April 2006 and 31
March 2007 under the Plan:

	 	                                     1	April	2006	                     Lapsed	in	year	                         31	March	2007
CJM Haines                                 133,333                                      -                               133,333

No amounts are due under the terms of the Plan in respect of the year ended 31 March 2007 (2006: Nil).

Share incentive plan
The Company introduced a share participation plan in December 2004 to enable all UK employees to acquire shares in
the Company. It is an approved government scheme under which employees purchase shares in the Company and these
are matched by the Company purchasing shares on a one for one basis for the employee. At 31 March 2007 employees
had acquired 498,151 shares under the plan and the Company had acquired, on behalf of employees, a further 519,184
matching shares. The directors who participated in the share incentive plan are as follows:

                                                                             1	April	2006	                        31	March	2007
SP Nicholson                                                                      70,130                                  59,416
KJ Sadler                                                                         27,776                                  76,756
K K Appiah                                                                             -                                  54,544

The above holdings are included in the director’s interest in the share capital of the Company on page 9. The above
includes matching shares which must be held for three years.

By order of the Board

CJM Haines
29 June 2007




                                                                                                                                   17
     SPG Media Group PLC • Annual Report and Accounts 2007




Auditors’ Report to the Members
Independent auditors’ report to the members of SPG Media Group Plc
We have audited the group and parent company financial statements (the ‘‘financial statements’’) of SPG Media Group Plc
for the year ended 31 March 2007 which comprise the Group Profit and Loss Account, the Group and Company Balance
Sheets, the Group Cash Flow Statement, the Group Statement of Total Recognised Gains and Losses and the related
notes. These financial statements have been prepared under the accounting policies set out therein.

Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in
the Statement of Directors’ Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for
the company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared
in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the
Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report includes that
specific information presented in the Business Review that is cross referred from the Principal Activities and Business
Review section of the Directors’ Report.

We also report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration
and other transactions is not disclosed.

We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial
statements. This other information comprises only the Directors’ Report, the Chairman’s Statement, the Business Review
and the Corporate Governance Statement. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other
information.

We also, at the request of the directors (because the company applies the Listing Rules of the Financial Services Authority
as if it were a listed company), review whether the Corporate Governance Statement reflects the company’s compliance
with the nine provisions of the Combined Code (2003) specified for our review by the Listing Rules of the Financial Services
Authority, and we report if it does not. We are not required to consider whether the board’s statements on internal control
cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate governance procedures or its
risk and control procedures.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in
the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors
in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s and
company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated
the overall adequacy of the presentation of information in the financial statements.




18
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




Opinion

In our opinion:
• the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting
   Practice, of the state of the group’s and the parent company’s affairs as at 31 March 2007 and of the group’s profit and
   cash flows for the year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent with the financial statements.


PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Bristol
29 June 2007

Notes:
(a) The maintenance and integrity of the SPG Media Group Plc website is the responsibility of the directors; the work
    carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no
    responsibility for any changes that may have occurred to the financial statements since they were initially presented on
    the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
    legislation in other jurisdictions.




                                                                                                                                   19
     SPG Media Group PLC • Annual Report and Accounts 2007




Consolidated Profit and Loss Account
For the year ended 31 March
	    	                                               	          	      2007	                                   2006	
	    	                                               	  Before Exceptional        Total	        Before  Exceptional      Total
	    	                                              exceptional   items and	           	    exceptional  items and	
	    	                                               items and amortisation	           	     items and amortisation	
	    	                                             amortisation     (Note 4)	          	   amortisation     (Note 4)
	    	                                      Notes	        £’000       £’000       £’000	          £’000       £’000      £’000
	    	                                           	              	
Group turnover including
share of joint venture                                       16,97)      -)    16,97)        18,256)           -)    18,256)
Less share of joint venture turnover                              -)      -)         -)           (65)           -)       (65)

Group turnover                                   2           16,97)      -)    16,97)        18,191)           -)    18,191)

Cost of sales                                                (7,67)      -)    (7,67)        (8,349)           -)    (8,349)

Gross profit                                                  9,00)      -)     9,00)         9,842)           -)     9,842)
Distribution costs                                             (80)      -)      (80)          (450)           -)      (450)
Administrative expenses                                      (7,916)   (444)    (8,60)        (7,752)         (94)    (7,846)

Administrative expenses                          3           (7,916)      -)    (7,916)        (7,752)           -)    (7,752)
Amortisation                                     3                -)   (241)      (241)             -)        (248)      (248)
Exceptional items                                4                -)   (20)      (20)             -)         154)       154)
Total administrative expenses                                (7,916)   (444)    (8,60)        (7,752)         (94)    (7,846)

Group operating profit                                         74)    (444)      290)          1,640)         (94)     1,546)

Share of joint venture operating loss                             -)      -)         -)           (44)           -)       (44)
Loss on termination of joint venture             4                -)      -)         -)             -)         (57)       (57)
Profit on disposal of business                   4                -)      -)         -)             -)          51)         51
Net interest payable                             6              (4)      -)       (4)          (152)           -)      (152)

Profit on activities before taxation                           700)    (444)       26          1,444)        (100)     1,344)
Tax on profit on ordinary activities             7              (2)       -)        (2)             -)           -)         -)

Profit on ordinary activities after
taxation and retained profit for
the financial year                                             698)    (444)       24          1,444)        (100)     1,344)

Basic profit per share                           8                               0.0p                                  1.59p
Diluted profit per share                         8                               0.0p                                  1.58p


• All of the above activities are continuing operations with the exception of the joint venture
• There are no material differences between the profits on ordinary activities before taxation and the retained profit as
  stated above and their historical cost equivalents.




20
                                                                         SPG Media Group PLC • Annual Report and Accounts 2007




Consolidated Balance Sheet
As at 31 March 2007
                                                                                                  2007)                   2006)
                                                                        Notes                    £’000)                  £’000)
Fixed assets
Intangible assets                                                            9                   ,918)                 4,159)
Tangible assets                                                             10                     96)                 1,590)
                                                                                                 4,84)                 5,749)

Current assets
Debtors                                                                     12                   4,104)                 4,861)
Cash at bank and in hand                                                                         ,09)                 2,329)
                                                                                                 7,14)                 7,190)

Creditors – amounts falling due within one year
Trade and other creditors                                                   14                  (8,02)                 (8,072)
                                                                                                (8,02)                 (8,072)
Net current liabilities                                                                           (882)                   (882)

Total assets less current liabilities                                                            ,972)                 4,867)

Creditors – amounts falling due after more than one year                    15                       -)                    (39)
Provisions for liabilities and charges                                      16                  (1,17)                 (2,280)
Net assets                                                                                       2,81)                 2,548)

Capital and reserves
Called up share capital                                                     20                  4,29)                  4,293)
Share premium account                                                       21                  7,262)                  7,262)
Capital redemption reserve                                                  21                  7,874)                  7,874)
Other reserves                                                              21                    7)                    733)
Profit and loss account                                                     21                (17,47)                (17,614)
Equity shareholders’ funds                                                                       2,81)                 2,548)

These financial statements were approved by the board of directors on 29 June 2007 and signed on its behalf by:




K J Sadler                                                     K K Appiah
Director                                                       Director




                                                                                                                                 21
     SPG Media Group PLC • Annual Report and Accounts 2007




Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 March 2007
                                                                                      2007)     2006)
                                                                                     £’000)    £’000)
Profit for the financial year
 - Group                                                                              24)    1,388)
 - Joint venture                                                                        -)      (44)
                                                                                      24)    1,344)
Exchange rate adjustment offset in reserves (retranslation of foreign investments)     (4)        8)

Total recognised gains for the year
 - Group                                                                              20)    1,396)
 - Joint venture                                                                        -)      (44)

Total recognised gains for the year                                                   20)     1,352)
Prior year adjustment                                                                   -)    (4,431)

Total gain/(losses) recognised since last annual report                               20)    (3,079)




Reconciliation of Movements in Shareholders’ Funds
For the year ended 31 March 2007
                                                                                      2007)     2006
                                                                                     £’000)    £’000


Profit/(loss) for the financial year                                                  24)     1,344
Share based payments charge                                                            17)         -
Other recognised gains and losses                                                      (4)         8

Net change in shareholders’ funds                                                      267)    1,352
Shareholders’ funds as at start of year                                              2,48)    1,196

Shareholders’ funds as at 31 March                                                   2,81)    2,548




22
                                                                         SPG Media Group PLC • Annual Report and Accounts 2007




Company Balance Sheet
As at 31 March 2007
                                                                                                  2007)                   2006)
                                                                        Notes                    £’000)                  £’000)
Fixed assets
Tangible assets                                                             10                       -)                    47)
Investments in subsidiary undertakings                                      11                   8,768)                10,392)
                                                                                                 8,768)                10,439)

Current assets
Debtors                                                                     12                   6,2)                 6,820)
Cash at bank and in hand                                                                             -)                     2)
                                                                                                 6,2)                 6,822)

Creditors – amounts falling due within one year
Trade and other creditors                                                   14                    (709)                 (1,997)
Bank loans and overdrafts                                                                          (16)                      -)
Net current assets                                                                               ,10)                 4,825)
Total assets less current liabilities                                                          14,278)                 15,264)

Creditors – amounts falling due after more than one year                    15                       -)                    (39)
Provisions for liabilities and charges                                      16                    (120)                   (135)

Net assets                                                                                     14,18)                 15,090)

Capital and reserves
Called up share capital                                                     20                   4,29)                  4,293)
Share premium account                                                       21                   7,262)                  7,262)
Capital redemption reserve                                                  21                   7,874)                  7,874)
Other reserves                                                              21                   1,701)                  1,701)
Profit and loss account                                                     21                  (6,972)                 (6,040)
Equity shareholders’ funds                                                                     14,18)                 15,090)

These financial statements were approved by the board of directors on 29 June 2007 and signed on its behalf by:



K J Sadler                                                     K K Appiah
Director                                                       Director




                                                                                                                                 2
     SPG Media Group PLC • Annual Report and Accounts 2007




Consolidated Cash Flow Statement
For the year ended 31 March 2007
                                                                      2007)    2006)
                                                             Notes   £’000)   £’000)


Net cash inflow from operating activities                       24     981)    2,199)

Returns on investments and servicing of finance
Interest received and similar items                                    82)      21)
Interest element of finance lease payments                             (2)      (5)

Taxation
Overseas corporation tax paid                                           (2)       -)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                            (41)     (291)

Acquisitions and disposals
Net cash inflow from sale of trading assets                            9)     180)
Net cash flow before financing                                        77)    2,104)

Financing
Capital element of finance lease payments                              (4)      (8)
Increase in net cash in the period                                    712)    2,096)

Reconciliation of net cash flow to movement in net funds
Increase in cash in the period                                        712)    2,096)
Cash outflow from lease financing                                      4)        8)
Change in net funds resulting from cash flows                         77)    2,104)
Movement in net funds for the period                                  77)    2,104)

Opening net funds                                                    2,282)    178)
Closing net funds                                              25    ,09)   2,282)




24
                                                                            SPG Media Group PLC • Annual Report and Accounts 2007




Notes to the accounts
1. Statement of accounting policies

The significant accounting policies have been applied consistently throughout the current and prior year, with the
exception of the following changes in preparing the financial statements.

FRS20 Share Based Payments, FRS23 The Effects of Foreign Exchange rates FRS25 Financial Instruments: Disclosure and
Presentation and FRS26 Financial Instruments: Measurement have been adopted during the period. The adoption of these
standards has had no impact on the results for the period.

In accordance with Financial Reporting Standard 18 the Board regularly review the group’s accounting policies to ensure
that they remain most appropriate.

a) Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with applicable
United Kingdom law and accounting standards on a basis consistent with the previous year.

b) Basis of consolidation
The consolidated financial statements include the accounts of the company and all of its subsidiary undertakings drawn
up to 31 March each year. No profit and loss account, statement of total gains and losses or cash flow statement is
presented for the company as permitted by s230 of the Companies Act 1985.

c) Acquisitions and disposals
On the acquisition of a business fair values are attributed to the Group’s share of separable net assets. Where the cost
of acquisition exceeds the fair value attributable to such net assets the difference is treated as purchased goodwill and
is capitalised in the Group balance sheet in the year of acquisition. Acquisitions are accounted for under the acquisition
method.

Cost of acquisition includes deferred consideration to the extent that it is considered probable that it will become due. The
results and cash flows relating to a business are included in the consolidated profit and loss account and the consolidated
cash flow statement from the date of acquisition or the date of disposal as appropriate.

d) Turnover
Turnover comprises amounts derived from services performed or advertisements published by the Group during the
year. Print media revenue is recognised on publication, event revenue in the period in which the event is held and internet
revenues on a straight-line basis over the contractual term (typically twelve months). Turnover derived from barter
transactions is valued on an arms length basis.

e) Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation and any provision for impairment. Depreciation is provided over
five years on a straight-line basis on fixtures, fittings and other equipment. Short Leasehold premises are amortised over
the term of the leases or useful economic life if shorter.

f) Intangible fixed assets and publishing rights
Publishing rights relating to websites and other intangible fixed assets acquired are stated at cost or fair value at the date
of acquisition less any provision for impairment. They are amortised over their useful economic lives. During the year the
useful economic lives was revised from indefinite life to 20 years.

g) Impairment of fixed assets
Impairment reviews are undertaken if events or changes in circumstances indicate that the carrying amount of tangible
and intangible fixed assets may not be recoverable.

h) Goodwill
Goodwill, being the excess of the consideration paid over the fair value attributed to net assets acquired, is capitalised
and amortised through the profit and loss account over its estimated useful economic life, not exceeding 20 years. The
directors regard 20 years as a reasonable estimate of the useful economic life of goodwill. Provision is made for any
impairment.




                                                                                                                                    2
     SPG Media Group PLC • Annual Report and Accounts 2007




Goodwill arising on acquisitions in the year ended 31 March 1997 and earlier periods was written off to the reserves in
accordance with the accounting standard then in force. On disposal or closure of a previously acquired business, the
attributable goodwill previously written off to reserves is included in determining the profit or loss on disposal.

i) Investments in subsidiary undertakings
Investments are stated at cost less provision for any impairment.

j) Leased assets
Assets acquired under finance leases are capitalised as tangible fixed assets and depreciated in accordance with the
Group’s normal accounting policies for tangible fixed assets. The interest element of rental obligations is charged to the
profit and loss account over the period of the lease in proportion to the balance of capital repayments outstanding.

Rentals payable relating to all other leases are charged to the profit and loss account in equal amounts over the term of
the lease.

k) Taxation
Corporation tax payable is provided on taxable profits at the current rate.

Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay
more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax
rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in
periods different from those in which they are included in financial statements. Deferred tax assets are recognised where
their recovery is considered more likely than not. Deferred tax assets and liabilities are not discounted.

l) Foreign currencies
Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the dates of transactions.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the rates
ruling at that date. Any translation differences are dealt with in the profit and loss account.

m) Pensions
The Group’s contributions to pension schemes for its employees, all of which are defined contribution schemes, are
charged in the profit and loss account in the year in which they fall due.

n) Investment in own shares
Shares in the Company held in the Group’s Employee Benefit Trust (“EBT”) have been deducted from shareholders’ funds
and debited against the profit and loss reserve account.

o) Share schemes
The Company applies the requirements of FRS 20 “Share-based Payment” to equity-based employee compensation
schemes in respect of awards granted after 7 November 2002 which remained unvested at 1 January 2005 the dates
specified in FRS 20.

The cost of employees’ services received in exchange for grant of rights under equity-based employee compensation
schemes is measured at the fair value of the equity instruments granted and is expensed over the vesting period.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the equity
instruments granted, excluding the impact of any non-market vesting conditions (eg earnings per share). Non-market
vesting conditions are included in the assumptions about the number of equity instruments that are expected to become
exercisable. At each balance sheet date, the company revises its estimates of the number of equity instruments that
expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income
statement, with a corresponding adjustment to equity. The fair value is measured based on an appropriate valuation model
taking into account the terms and conditions upon which the equity instruments were granted.

p) Provisions
A provision is recognised in the balance sheet when the Group has a legal obligation or constructive obligation as a result
of a past event, it is more likely than not that an outflow of resources will be required to settle that obligation, and a
reliable estimate of the amount can be made. Provisions are discounted.




26
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




2. Segmental reporting analysis

The turnover and operating profit is derived from international business to business communications and originates in the
UK and India. Revenue generated out of India was £0.7 million (2006: £0.9 million).

Geographical analysis of turnover:
                                                                                                     2007                    2006
                                                                                                    £’000                   £’000


UK                                                                                                 ,892                   3,659
USA                                                                                                ,208                   3,640
Europe (other than UK)                                                                             7,774                   9,272
Other                                                                                              1,72                   1,620
                                                                                                  16,97                  18,191


Business analysis:
                             2007              2007               2007              2006                 2006               2006
                            £’000             £’000              £’000             £’000                £’000              £’000
                         Turnover         Operating         Net assets          Turnover            Operating         Net assets
                                              profit                                                    profit

Print                      4,116                6              1,602              5,884                    404              825
Internet                   6,               16                460              6,115                    653              856
Events                     ,948                69                76              6,192                    489              867
                          16,97               290              2,798             18,191                1,546              2,548


The calculation of operating profit before tax has been undertaken by allocating central costs to each division on the basis
of contribution generated. Net assets have been allocated to each business unit on a proportional basis using turnover as
the basis for the calculation. Barter revenue of £0.5 million (2006: £nil) is contained in the above total revenue.




                                                                                                                                   27
     SPG Media Group PLC • Annual Report and Accounts 2007




. Operating profit

Operating profit is stated after charging/(crediting) the following amounts:

                                                                                               2007)                2006)
                                                                                              £’000)               £’000)
Staff costs (including directors)
Wages and salaries                                                                            7,867)              8,924)
Share based payments                                                                             17)                  -)
Social security costs                                                                           988)                951)
Other pension costs                                                                              64)                 26)
                                                                                              8,96)              9,901)

Depreciation, amortisation and impairment
Owned assets                                                                                    848)                908)
Assets held under finance leases                                                                  -)                 13)
Amortisation of goodwill                                                                        100)                107)
Amortisation of web publishing rights                                                           141)                141)
Auditors’ remuneration
Fees payable to the company’s auditor for the audit of the parent company
and consolidated accounts                                                                        8)                 55)
Fees payable to the company’s auditor and its associates for other services:
The audit of the company’s subsidiaries pursuant to legislation                                   )                   5)
Other services pursuant to legislation                                                           12)                   -)
Tax services                                                                                     22)                   -)
Operating lease rentals
Other (land and buildings)                                                                    1,492)              1,174)
Plant and machinery                                                                              74)                112)
Release of credit balances                                                                     (428)               (148)



Information regarding directors’ remuneration, share options, bonuses and pension contributions are set out in the Report
of the Board to the Shareholders on Directors Remuneration on page 14 to 17.

The Board regularly reviews and assesses the appropriateness of credit balances held on the balance sheet. In the year,
this review resulted in the release of £428,000 (2006: £148,000)




28
                                                                            SPG Media Group PLC • Annual Report and Accounts 2007




4. Exceptional items

The following have been identified as exceptional items and disclosed separately on the face of the profit and loss account:

Exceptional items
                                                                                                     2007)                   2006)
                                                                                                    £’000)                  £’000)
Property provisions                                                                                   60)                    523)
Write-off of leasehold improvements associated with onerous leases                                      -)                   (369)
Write down of Indian fixed assets                                                                     (81)                      -)
Tax exposure on India employees                                                                      (101)                      -)
Costs associated with potential offer                                                                 (44)                      -)
Redundancy costs and compensation for loss of office                                                 (80)                      -)
                                                                                                     (20)                   154)

Closure of joint venture                                                                                 -)                   (57)
Profit on disposal of business                                                                           -)                    51)


Due to the surrender, letting and recalculation of the required property provision an exceptional release of £603,000 has
been made. The release mainly comprises £187,000 for the surrender of Edgware Road. The fourth floor of Goodge Street
has been let for the remainder of the term at the current rent. Therefore the remaining provision for this floor of £257,000
has been released.

As the Indian undertaking has been sold post year end we have reviewed the carrying value of the Indian assets on the
balance sheet and provided £81,000 against these assets. The assets relate to software licences. In addition a provision of
£101,000 has been made for personal tax liability of employees in India. A claim is to be pursued against the individuals to
reclaim this tax.

The costs for the potential offer for the Company relate to adviser fees and legal costs.

Leasehold improvements were undertaken to improve the potential letting ability of the non-operational properties and
accordingly the ascertained costs have therefore been written off.

In 2006 the Board decided to discontinue its joint venture with its partner and closed this business down. A one-off charge
has been made of outstanding loans made to the joint venture company. £57,000 has been written off.

The profit on disposal of business relates to deferred consideration on disposal of Debrett’s in 2005 which has been
adjusted to reflect the estimated amount receivable, resulting in a £51,000 credit to the profit and loss account.




. Number of employees

The average monthly number of persons, including executive directors, employed by the Group during the year was as
follows:

                                                                                                    2007                    2006
                                                                                                  Number                  Number
Sales                                                                                                  147                    162
Production, editorial and administrative                                                               174                    202
Total                                                                                                  21                    364




                                                                                                                                    29
     SPG Media Group PLC • Annual Report and Accounts 2007




6. Net interest payable

                                                                                                  2007)              2006)
                                                                                                 £’000)             £’000)
Interest payable
Interest on finance leases                                                                         (2)                (5)
Unwinding of discount on property provisions                                                     (114)              (168)
                                                                                                 (116)              (173)
Interest receivable
Bank interest                                                                                       82)               21)
Total                                                                                              (4)             (152)

The unwinding of the discount on the property provisions calculates a nominal interest charge on the property provision
made. This is not a cash charge and will fall as the provision is either released or utilised.




7. Tax charge

                                                                                                  2007)              2006)
                                                                                                 £’000)             £’000)
UK corporation tax at 30% (2005: 30%)                                                                -)                   -)
Foreign taxation                                                                                    (2)                   -)
Deferred taxation (note 13)                                                                          -)                   -)
                                                                                                    (2)                   -)


The current tax charge is reconciled to the standard corporation tax rate applicable in the UK as follows:

                                                                                                  2007)              2006)
                                                                                                 £’000)             £’000)
Profit/(loss) on ordinary activities before tax                                                   26)             1,344)
Corporation tax at 30% (2005: 30%)                                                                 77)               403)
Effects of:
Prior year adjustment for basis of work-in-progress                                                 -)            (1,329)
Expenses not deductible for tax purposes                                                           14)                57)
Excess of capital allowances over depreciation of eligible assets                                  87)               195)
Reduction in rate due to foreign reliefs                                                            -)               (35)
Utilisation of losses brought forward                                                            (1)                 -)
Losses carried forward                                                                             46)               694)
General bad debt provision                                                                          -)               (71)
Amortisation of goodwill                                                                           70)                73)
Associate losses not utilised                                                                      7)                13)
Foreign tax                                                                                        (2)                 -)
                                                                                                    (2)                   -)


The 2007 budget, announced by the Chancellor of the Exchequer on 21 March 2007, reduced the rate of UK corporation tax
from 30% to 28% with effect from 1 April 2008. There is no impact on the 2007 Financial statements.




0
                                                                            SPG Media Group PLC • Annual Report and Accounts 2007




8. Earnings per share

The earnings per share of 0.30p (2006: 1.59p) and the diluted earnings per share of 0.30p (2006: 1.58p) have been
calculated on the attributable profit to shareholders of £0.3 million (2006: £1.3million).

The weighted average number of shares in issue during the period (excluding those held by the Group’s Employee Benefit
Trust) were:

                                                                                                    2007)                   2006)
                                                                                                 Number)                 Number)
                                                                                                   £’000)                  £’000)



Total number of shares                                                                            8,87)                 85,857)
Shares held in employee benefit trust                                                             (1,214)                 (1,214)

Basic number of shares                                                                            84,64)                 84,643)
Dilutive effect of share options                                                                      74)                    376)

Diluted number of shares                                                                          84,717)                 85,019)




9. Intangible assets

                                                                         Goodwill       Website publishing                  Total)
                                                                                          rights and other
                                                                                    intangible fixed assets
                                                                           £’000)                     £’000                 £’000)
Group
Cost
At 1 April 2006 and 1 March 2007                                         2,06)                  10,9)                 12,84)

Amortisation/permanent diminution
At 1 April 2006                                                             (838)                  (7,848)                 (8,686)
Charge for the year                                                         (100)                    (141)                   (241)

At 1 March 2007                                                           (98)                   (7,989)                (8,927)

Net book value
At 1 March 2007                                                          1,68)                    2,0)                 ,918)

At 31 March 2006                                                           1,468)                   2,691)                 4,159)


Goodwill, being the excess of the consideration paid over the fair value attributed to net assets acquired, relates to the
acquisitions of Net Resources International Limited and Vision in Business Limited.

The carrying value of publishing rights relate to fair value of the websites acquired with Net Resources International
Limited.




                                                                                                                                    1
     SPG Media Group PLC • Annual Report and Accounts 2007




10. Tangible fixed assets

                                                                     Short-term)          Equipment, )              Total)
                                                             leasehold premises)      vehicles fixtures)
                                                                                           and fittings)
                                                                          £’000)                  £’000)            £’000)
Group
Cost
At 1 April 2006                                                            263)                  4,046)             4,309)
Additions                                                                    -)                    341)               341)
Disposals                                                                    -)                   (134)              (134)
Impairment of assets held in India                                           -)                    (81)               (81)
Assets written off                                                           -)                 (1,754)            (1,754)

At 1 March 2007                                                           26)                 2,418)             2,681)

Depreciation

At 1 April 2006                                                             (76)                (2,643)            (2,719)
Charge for the year                                                         (38)                  (810)              (848)
Depreciation written off                                                      -)                    68)                68)
Assets written off                                                            -)                 1,754)             1,754)

At 1 March 2007                                                          (114)                (1,61)            (1,74)

Net book value

At 1 March 2007                                                           149)                   787)               96)

At 31 March 2006                                                           187)                  1,403)            1,590)


The net book value assets held under finance leases and hire purchase contracts included in tangible fixed assets in the
Group was £nil (2006: £47,000). The depreciation charge on these assets in the year was £nil (2006: £13,000).

                                                                                       Motor vehicles)              Total)
                                                                                               £’000)               £’000)
Company
Cost
At 1 April 2006                                                                                     65)                65)
Disposals                                                                                          (65)               (65)

At 31 March 2007                                                                                      -)                   -)

Depreciation

At 1 April 2006                                                                                    (18)               (18)
Disposals                                                                                          (47)               (47)

At 31 March 2007                                                                                      -)                   -)

Net book value
At 31 March 2007                                                                                      -)                   -)

At 31 March 2006                                                                                    47)               47)




2
                                                                                 SPG Media Group PLC • Annual Report and Accounts 2007




11. Fixed asset investments

Shares in Group undertakings
                                                                                                                    Company
                                                                                                           2007                    2006
                                                                                                          £’000                   £’000
Cost
At 1 April and 31 March                                                                                 33,680                  33,680

Provisions for impairment
At 1 April                                                                                              23,288                  23,288
Impairment                                                                                               1,624                       -

At 31 March                                                                                             24,912                  23,288

Net book value
At 31 March                                                                                               8,768                 10,392


The listing below shows the principal subsidiary undertakings as at 31 March 2007.

Company              Country of registration and operation       Principal activity                Percentage of ordinary shares held

SPG Media Limited                                     UK         Business to business marketing solutions                        100%
Cornhill Publications Limited                         UK         Business to business marketing solutions                        100%


12. Debtors
                                                                   Group                                             Company
                                                      2007                       2006                      2007                    2006
                                                     £’000                      £’000                     £’000                   £’000
Trade debtors                                       ,494                       4,179                        -                       -
Amounts owed by Group undertakings                      -                           -                    6,16                   6,705
Other debtors                                          66                         234                       79                     108
Prepayments and accrued income                        44                         448                        -                       7
                                                    4,104                       4,861                    6,2                   6,820


Amounts owed by Group undertakings are repayable on demand and are non-interesting bearing.




1. Deferred taxation

The Group has a unrecognised potential deferred tax asset at the year end comprising:.

Group
                                                                 Provided                                          Unprovided
                                                      2007                       2006                      2007                    2006
                                                     £’000                      £’000                     £’000                   £’000


General bad debt provisions                                  -                        -                     1                      76
Excess capital allowances over depreciation                  -                        -                    211                     110
Losses                                                       -                        -                  1,940                   2,157
Capital losses                                               -                        -                  4,7                   4,583
                                                             -                        -                  6,77                   6,926

The company has an unrecognised potential deferred tax asset at the year end of £4,220 (2006: £4,270).




                                                                                                                                         
     SPG Media Group PLC • Annual Report and Accounts 2007




14. Creditors – amounts falling due within one year

                                                                     Group                                    Company
                                                              2007            2006                   2007                2006
                                                             £’000           £’000                  £’000               £’000
Bank overdraft (secured)                                         -               -                    16                    -
Net obligations under finance leases                             -               8                     -                    8
Trade creditors                                                98             139                     1                    9
Amounts owed to Group undertakings                               -               -                   679                1,126
Other taxes and social security costs                          27             268                    14                  126
Other creditors                                              1,08           1,728                    11                   27
Accruals and deferred income                                 ,792           5,929                     4                  701
                                                             8,02           8,072                   72                1,997

The overdraft is secured against the assets of the company.

Amounts owed to Group undertakings are repayable on demand and are non-interest bearing.




1. Creditors – amounts falling due after more than one year

                                                                     Group                                    Company
                                                              2007            2006                   2007                2006
                                                             £’000           £’000                  £’000               £’000
Net obligations under finance leases                             -             39                       -                 39
                                                                 -             39                       -                 39




16. Provision for liabilities

                                                                                                   £’000)             £’000)
                                                                                                   Group)          Company)
At 1 April 2006                                                                                    2,280)                135)
Utilised in year                                                                                    (64)                (21)
Release in the year                                                                                 (60)                 (1)
Unwinding of discount (see note 6)                                                                   114)                  7)
At 31 March 2007                                                                                   1,17)                120)


Provision has been made for the net present value of future residual leasehold commitments. This provision has been
calculated making assumptions on future rental income, market rents, insurance and rates this has then been discounted
using a discount rate of 5.0% per annum. As these are estimates this provision cannot be known with certainty. During the
year we surrendered the lease for Edgware Road which had been empty for a number of years this allowed us to release
the provision for this property of £206,000. This surrender will also save the Group cash flow of approximately £100,000.
The subletting of the vacant floors at Goodge Street, London allowed a release of £397,000.

The provision will be utilised over the term of the relevant leases and falls within the following periods:

                                                                                                   £’000              £’000
                                                                                                   Group           Company
Less than one year                                                                                   290                  21
Between two and five years                                                                           70                  85
More than five years                                                                                 117                  14
Total                                                                                              1,17                 120




4
                                                                              SPG Media Group PLC • Annual Report and Accounts 2007




17. Financial assets and liabilities

The Group does not have any material exposure to interest rate, liquidity or currency risks. The Group has cash balances,
committed overdraft facilities if required and conducts the majority of its business in sterling. The Group does not use any
swap or hedge instruments. Cash deposits are held on term notice or placed with the money market. Interest is earned by
reference to inter-bank rates.

During the year the company funded its subsidiary, SPG Media Private Limited, on an imprest basis on a monthly cycle.
Since the disposal of SPG Media Private Limited no further funding is required. The remaining employees based in India
are paid directly from the UK.

The Group banking facility operates under a right of set-off agreement for each balance and each currency.

Short-term debtors and creditors have been excluded from the following disclosures.

The fair value of the financial assets is not materially different to the carrying value.

Financial assets: floating rate
                                                                                                        2007                   2006)
                                                                                                       £’000                  £’000)
EUR                                                                                                                             3)
USD                                                                                                       2                     (7)
Indian Rupees                                                                                             11                     92)
Total                                                                                                     98                     88)


Interest on floating-rate bank deposits is based on the inter-bank rate and may be fixed for up to one month. The balance
held on deposit for one month at the year end was £2.8 million (2006: £2.0 million).



18. Obligations under finance leases

Obligations under finance leases net of finance charges allocated to future periods are as follows:

                                                                                                        2007                    2006
                                                                                                       £’000                   £’000
Less than one year                                                                                          -                     8
Between two and five years                                                                                  -                    39
Total                                                                                                       -                    47




19. Operating leases

Non-cancellable operating lease rentals are payable as follows:

                                                                                                        2007                    2006
                                                                                                       £’000                   £’000
Land and buildings
Less than one year                                                                                       61                      57
Between two and five years                                                                                -                     201
More than five years                                                                                  1,211                   1,181
Total                                                                                                 1,272                   1,439

Other
Less than one year                                                                                        40                     56
Between two and five years                                                                                 9                      -
Total                                                                                                     49                     56




                                                                                                                                      
     SPG Media Group PLC • Annual Report and Accounts 2007




20. Share capital
                                                            2007                   2006                 2007               2006
                                                         Number                 Number
                                                           £’000                  £’000                £’000               £’000
Authorised
Ordinary shares of 5p each                              22,74                223,754                11,188             11,188
Redeemable deferred shares of 1p each                   ,621                535,621                 ,6              5,356
At 31 March                                                                                           16,44             16,544

Allotted and fully paid
Ordinary shares of 5p each                                   8,87              85,857                4,29              4,293


There are outstanding options over ordinary shares granted to executives and employees as shown in the following table:
                                                    Number of options
Scheme           Date of     1 April 2006         Granted      Exercised/       31 March   Exercise      Date from        Expiry
                  grant                             during lapsed during            2007      price          which         date
                                                  the year        the year                              exercisable
1996        07/07/1998            15,000                -                 -)      15,000    15.00p     08/07/2001     06/07/2008
1996        06/07/1999           125,000                -                 -)     125,000    33.00p     07/07/2002     05/07/2009
1996        15/12/1999            86,000                -           (21,000)      65,000    76.50p     16/12/2002     14/12/2009
2000        10/03/2000         1,333,335                -                 -)   1,333,335   116.50p     10/03/2000     09/03/2010
1996        07/07/2000           200,000                -          (100,000)     100,000   132.50p     08/07/2003     06/07/2010
1996        24/11/2000            70,000                -                 -)      70,000   135.00p     25/11/2003     23/11/2010
1996        20/12/2002            90,000                -           (30,000)      60,000    11.25p     21/12/2005     19/12/2012
2003        09/12/2003         1,535,708                -        (1,535,708)           -    13.25p     10/12/2006     08/12/2013
2003        25/07/2004           150,000                -                 -)     150,000    12.00p     26/07/2007     24/07/2014
2003        26/07/2004           244,292                -          (144,292)     100,000    12.00p     27/07/2007     27/07/2014
2003        01/07/2005         1,075,000                -          (575,000)     500,000     7.12p     02/07/2008     30/06/2015
2003        05/09/2005         2,500,000                -                 -)   2,500,000     8.20p     06/09/2008     04/09/2015
2003        21/09/2005            50,000                -                 -)      50,000    10.25p     22/09/2008     20/09/2015
2003        10/10/2005           250,000                -          (250,000)           -     9.42p     11/10/2008     09/10/2015
2003        10/02/2006           250,000                -          (250,000)           -    10.87p     11/02/2009     09/02/2016
2003        01/04/2006                 -           50,000                 -)      50,000    11.00p     02/04/2009     31/03/2016
2003        06/03/2007                 -        3,300,000                 -)   3,300,000     6.00p     07/03/2010     05/03/2017
                               7,974,335        3,350,000        (2,906,000)   8,418,335


The Group operates three share option schemes. Under the terms of the Sterling Publishing Group 1996 Scheme (“1996”),
options may only be exercised provided the average annual growth in earnings per share over a three-year period exceeds
inflation by at least 2%.

The Sterling Publishing Group 2000 Scheme (“2000”) was approved to grant options by way of compensation for rights
given up under the long term incentive plan. The options were exercisable as to 40% immediately, 35% after one year (10
March 2001) and 25% after two years (10 March 2002). 50 of the share options are subject to a requirement that average
earnings per share over a three year period exceed inflation by at least 2%. Provision also exists for option holders to
receive the cash equivalent of the excess of the market price of shares over the option exercise price in the event of a
general offer for the shares in the Company. No further options may be granted under this scheme.

The third scheme is the Sterling Publishing Group 2003 Scheme (“2003”) approved by shareholders on 28 July 2003 and
excludes the awards made under the 2000 scheme from the calculation of limits of share options to be awarded. Option
granted under the 2003 scheme are subject to the requirement that earnings per share grow at an annual rate of the
increase in the retail price index plus either 5% (where the market value of the options granted is less than or equal to 50% of
the recipients salary) or 8% (where the market value of the options granted is greater than 50% of the recipients salary).

Apart from the 2000 scheme, all employees including directors are eligible to participate in the share option schemes. No
awards have been made under the 1996 scheme since December 2005.

The fair value of options granted on 1 April 2006 and 6 March 2007 determined using the Black-Scholes valuation model
was 4.32 pence and 2.59 pence per option respectively (2006: nil pence per option). The significant inputs into the model
were the share price at the date of grant, exercise prices of 11.00 pence and 6.00 pence, volatility 52.05% and 58.89%
respectively (as measured on the statistical analysis of weekly share prices over the previous three years from the date of
grant), expected option life of three years and an annual risk-free interest rate of 4.5%.


6
                                                                          SPG Media Group PLC • Annual Report and Accounts 2007




21. Statement of movement on reserves

                                                   Share                 Capital                   Other                 Profit)
                                                premium             redemption                  reserves               and loss)
                                                                        reserve                                        account)
                                                   £’000                  £’000                    £’000                 £’000)
Group
At 31 March 2006                                   7,262                 7,874                       733               (17,614)

Retained profit for the year                           -                      -                         -                  254)
Share based payments                                   -                      -                         -                   17)
Exchange rate differences                              -                      -                         -                   (4)
At 1 March 2007                                  7,262                  7,874                       7               (17,47)



                                                   Share                 Capital                   Other                 Profit)
                                                premium             redemption                  reserves               and loss)
                                                                        reserve                                        account)
                                                   £’000                  £’000                    £’000                 £’000)
Company
At 31 March 2006 as previously stated              7,262                 7,874                     1,701                 (6,040)
Retained loss for the period                           -                     -                         -                   (949)
Share based payments                                   -                     -                         -                     17)
At 31 March 2007                                   7,262                 7,874                     1,701                 (6,972)


At the 31 March 2007, the Group’s EBT held 1,214,395 Ordinary Shares in the Company. The historical cost of the Ordinary
Shares is £1,755,000. Under UITF 38 this has been set off against the profit and loss account. In prior years this was shown
as a separate reserve.




22. Contingent liabilities

All the companies within the Group, with the exception of SPG Media Private Limited, are subject to a right of set-off
agreement with Lloyds TSB plc. As the Group has no borrowings there is no contingent liability existing under any banking
arrangements at 31 March 2007 (2006: £nil).




2. Capital commitments

There were no capital commitments at 31 March 2007 (2006: £nil).




                                                                                                                                  7
     SPG Media Group PLC • Annual Report and Accounts 2007




24. Reconciliation of operating loss to net cash inflow from operating activities

                                                                                                 2007)                2006)
                                                                                                £’000)               £’000)
Operating profit
 - Group                                                                                         290)                1,546)
Amortisation of goodwill                                                                         241)                  248)
Depreciation of tangible fixed assets                                                            848)                  921)
Share based payment                                                                               17)                    -)
Loss on disposal of tangible fixed assets                                                         26)                    -)
Write-off of tangible fixed assets                                                                81)                    -)
Write-off of leasehold improvements                                                                -)                  369)
Decrease/(increase) in debtors                                                                   77)                 (511)
Write-off of joint venture investment                                                              -)                  (47)
(Decrease)/increase in creditors                                                                 (42)                  908)
Movement in provision for liabilities and charges                                             (1,27)               (1,235)
Net cash inflow from operating activities                                                        981)               2,199)




2. Analysis of net funds

                                                                   1 April 2006)             Cash flow        1 March 2007
                                                                          £’000)                 £’000               £’000
Cash at bank and in hand                                                 2,329)                   710                ,09
Finance leases                                                             (47)                    47                    -
Net funds                                                                2,282)                   757                ,09




26. Post balance sheet event

On 14 May heads of agreement were signed with Visage Media Services Pvt Limited whereby Visage would purchase the
share capital and assets of SPG Media Private Limited. The consideration is $100,000 (United States dollars). As a result
the carrying value of the assets held in the consolidated balance sheet were reviewed for the year ended 31 March 2007
and an impairment provision of £81,000 was made against these assets.




8
                                                                           SPG Media Group PLC • Annual Report and Accounts 2007




Five-year Financial Summary
Consolidated profit and loss account

                                                                                               Restated
31 March                                                               2003)        2004)        2005)         2006)        2007)
                                                                      £’000)       £’000)       £’000)        £’000)       £’000)
Turnover                                                             24,709)     23,951)       18,840)      18,191)      16,97)

Operating profit/(loss) before joint venture and exceptional items     (221)          72)        (569)        1,392)        49)

Share of joint venture loss                                               -)           -)          (10)         (44)           -)
Exceptional items
- Provision against intangible fixed assets                               -)        (500)           -)            -)          -)
- Costs of potential offer                                                -)           -)           -)            -)        (44)
- Redundancy costs                                                        -)        (677)        (416)            -)       (80)
- Provision for Indian employee tax and impairment of assets              -)           -)           -)            -)       (182)
- Profit on disposal                                                      -)           -)         429)           51)          -)
- Loss on termination of joint venture                                    -)           -)           -)          (57)          -)
- Property provision                                                   (682)        (340)      (2,445)          154)        60)

Interest and similar charges                                           (164)         (96)          (75)        (152)         (4)

Profit/(loss) before tax                                             (1,067)      (1,541)      (3,086)        1,344)        26)
Taxation                                                               (607)           -)          (6)            -)         (2)

Profit/(loss) after tax                                              (1,674)      (1,541)      (3,092)        1,344)        24)
Dividends                                                               (10)           -)           -)            -)          -)

Retained (loss)/profit for the period                                (1,684)      (1,541)      (3,092)        1,344)        24)

Basic earnings/(loss) per share – continuing operations               (2.04)p      (1.83)p       (3.65)p       1.59p        0.0p
Dividends per ordinary share                                              -)           -)            -)           -)           -)


Consolidated balance sheet
As at 31 March                                                         2003)        2004)         2005)        2006)        2007)
                                                                      £’000)       £’000)        £’000)       £’000)       £’000)
Intangible fixed assets                                               6,274)       5,116)       4,407)        4,159)      ,918)
Tangible fixed assets                                                 3,553)       3,038)       2,580)        1,590)        96)
Investments in joint venture                                              -)           -)          55)            -)          -)
Net working capital                                                   4,177)       2,269)      (2,677)       (3,250)     (,921)
Net (cash)/debt                                                      (1,859)        (341)         178)        2,329)      ,09)
Deferred consideration                                                 (307)           -)           -)            -)          -)
Provision for liabilities and charges                                (1,088)      (1,179)      (3,347)       (2,280)     (1,17)

Shareholders’ funds                                                  10,750)      8,903)        1,196)        2,548)      2,81)


2005 has been restated for the change in accounting policy relating to work-in-progress.




                                                                                                                                   9
     SPG Media Group PLC • Annual Report and Accounts 2007




Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the Company will be held at Hilton Metropole
Hotel, 2 Edgware Road, London on Wednesday 1st August 2007 at 11.00 am, for the transaction of the
following business:

To consider and if thought fit, pass the following resolutions of which resolutions 1, 2, 3, 4, 5, 6 and 7 will be proposed as ordinary
resolutions (resolution 2 is advisory only) and resolutions 8, 9 and 10 will be proposed as a special resolution:

Ordinary business
1. To receive and adopt the report of the directors and the audited accounts for the year ended 31 March 2007.
2. To receive and adopt the report to the shareholders on directors’ remuneration for the year ended 31 March 2007.
3. To re-elect Christopher Haines retiring by rotation pursuant to the Company’s Articles of Association and being eligible, offers
   himself for re-election.
4. To elect Ken Appiah a director of the Company.
5. To elect Adrian Howe a director of the Company
      A description of the each of the above individuals is provided on page 2
6. To reappoint PricewaterhouseCoopers LLP auditors of the Company to hold office until the conclusion of the next general
   meeting at which accounts are laid before the Company.
7. That the directors be authorised to set the auditors’ remuneration.

Special business
8.	 Allot	shares
    That the directors be and are hereby generally and unconditionally authorised to exercise all the powers of the Company to
    allot relevant securities (within the meaning of Section 80 of the Companies Act 1985 “the Act”) up to an aggregate nominal
    amount of £1,415,000 during the period commencing on the date that this resolution is passed and ending at the conclusion
    of the next Annual General Meeting of the Company after the passing of this resolution, unless previously renewed, varied
    or revoked by the Company in General Meeting, save that the Company may before such expiry make any offer or agreement
    which would or might require relevant securities to be allotted after that date and the Company may implement the same as if
    the authority conferred hereby had not expired.
9.	 Non-pre-emptive	issue	of	ordinary	shares	in	limited	circumstances
    That subject to and conditional upon resolution 8 above being passed, the directors be and hereby authorised and empowered
    pursuant to Section 95 of the Act during the period commencing on the date of the passing of the resolution and expiring
    at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution, unless previously
    renewed, varied or revoked by the Company in General Meeting, to allot equity securities (within the meaning of Section 94 of
    the Act) for cash pursuant to the authority conferred by resolution 8 above as if Section 89 (1) of the Act did not apply to any
    such allotment, provided that this power shall be limited:
    a. to the allotment of equity securities in connection with a rights issue in favour of holders of ordinary shares where such equity
       securities are offered to holders of ordinary shares in proportion (as nearly as may be) to the number of ordinary shares then
       held or deemed to be held by them, subject only to such exceptions, exclusions or other arrangements as the directors may, in
       their opinion, deem necessary or expedient to deal with fractional entitlements, legal or practical problems under the laws of
       any territory, or the requirements of any regulatory body or stock exchange; and
    b. to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal
       amount of £214,600.
10. Power	to	purchase	shares
    That the Company be and it is hereby generally and unconditionally authorised to make market purchases (within the meaning of
    section 163 (3) of the Companies Act 1985 (as amended)) of the ordinary shares of 5p each of the Company provided that:
    a. the maximum number of ordinary shares which may be purchased is 8,500,000;
    b. the minimum price which may be paid for each ordinary share is 5p;
    c. the maximum price (exclusive of expenses) which may be paid for any such share is an amount equal to 105% of the middle of the
       average of the market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five
       business days immediately preceding the day on which the ordinary share is contracted to be purchased; and
    d. the authority hereby conferred shall expire fifteen months from the date of this resolution or, if earlier, at the conclusion
       of the Annual General Meeting of the Company t be held in 2008, save that the Company may, prior to the expiry of
       such authority, make an offer or agreement which would or might require ordinary shares to be purchased by the
       Company after such expiry and the Company may purchase ordinary shares pursuant to any such offer or agreement
       notwithstanding such expiry.
11. To	transact	any	other	business	of	an	Annual	General	Meeting.

By order of the Board
KK Appiah
Secretary
29 June 2007




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