Strong Sales Growth of 114%. Increased Brand Awareness delivers significant growth in. Website Traffic, Registered Base and Active Users

Transcription

1 Interim Results RNS Number : 5510S Koovs PLC 22 December 22 December Strong Sales Growth of 114%. Increased Brand Awareness delivers significant growth in Website Traffic, Registered Base and Active Users Koovs plc (AIM:KOOV), ("Koovs" or the "Company") the fashion-forward business focused on the young Indian e-commerce market, today announces its interim results for the six months to 30 September. The business continues to deliver rapid sales growth through the KOOVS.COM website and on its stated strategic objectives to build scale and establish Koovs as the favourite western fashion brand for the style conscious 20-something consumer in India. BUSINESS HIGHLIGHTS Koovs.com KPIs (H1 FY17 v H1 FY16) Sales growth * +114% To 7.9m from 3.7m Website traffic +132% To 38.0m from 16.4m Registered base +150% to 1.5m from 0.6m Active customers** +138% to 431,000 from 181,000 Investment in Koovs multi-channel marketing programme has further increased brand awareness from 8% to 18%, resulting in a step change in web traffic, registered base, active customers and customer orders, more than doubling sales to 8m. Orders via mobile have increased to 62% of transactions, including a significant increase of 421% YoY in orders using the Koovs App. By placing social media activity at the heart of customer engagement programme, Koovs has more than doubled its social following (102%) YoY to 1.7m. The company now has three times the Instagram followers and twice as many engaged users on Facebook than its nearest competitor on each platform.

2 Koovs stated aim to extend product offering has seen the exclusive Koovs private label collections continue to expand as the most popular brand on the KOOVS.COM web site, growing 124% and accounting for 40% of all sales. Invested in improving operational and business performance during H1 FY17 by strengthening the management team with the appointment of a new Chief Financial Officer, Chief Technology Officer and Chief Marketing Officer, and partnering to access an additional and expandable 2,800m 2 in warehouse space. Mary Turner, CEO, said: "It has been another amazing six months of growth for both sales and new customers. We have delivered on both our strategic and financial objectives and are in line with expectations. The increases in our customer base, registered base and social followers will provide an excellent opportunity for future growth. Whilst demonetisation had a short-term impact on the market and ecommerce we have seen good growth in November and had some of our best days for sales in December. The Indian online fashion market is projected to grow to 2.5bn by 2020 and the combination of a strengthened management team, our exclusive London based designs and operational expertise in India, mean Koovs is well positioned to capture a significant market share in this rapidly growing market. " * Gross Sales (Gross Order Value) order value placed through the KOOVS.COM website including taxes ** Customers who have transacted at least once during the previous 12-month period. Comment on demonetisation since 8 November On 8 November the Indian Government announced it would immediately replace the Rs500 and Rs1000 notes with new Rs500 and Rs2000 denominations. This was a significant move and has caused short-term cash liquidity issues. With cash on delivery a standard feature in India, ecommerce companies have been affected. The management's rapid response to offer flexible customer payment options, including door step conversion to card and e-wallet payments, and an increased focus on highly targeted marketing promotions, has resulted in a shift to 50% digital payments (from 30%), strong YoY growth in November and one of our best sales days ever during December. With the recent approval by the Reserve Bank of India for new simplified online payments up to Rs2000, Koovs is in a strong position in the medium term to capitalise on increased digital transactions and to maximise the space in the market created by this monetary transition. FINANCIAL OVERVIEW KOOVS PLC

3 Six months to 30 September Six months to 30 September 2015 Six months to 30 September Memorandum^ Six months to 30 September 2015 Memorandum^ INR million INR million Revenue # ,989 2,000 Operating result (850.4) (607.4) (9,251) (6,098) Loss before tax (835.2) (570.6) (9,085) (5,729) Net assets 1, , ,793 13,827 Closing net cash and bank deposits ,740 5,623 Koovs plc Group revenue +100% to 4.0m (INR366.7m), (H1 FY15: 2.0m (INR199.2m)). Loss before tax of 9.1m (INR835m), (H1 FY15: loss of 5.7m (INR571m), in line with expectations as the business continues increase its investment in marketing and technology, to build presence in the market and grow revenues, and expand operational capabilities. 26.2m / INR 2,483.2m of additional share capital was raised in the six months to 30 September Group structure normalised through 9m acquisition of minority stake in Koovs Marketing Consulting Private Limited bringing Koovs PLC ownership to 100%. Notes to Editors The Company is headquartered in London, where the majority of its design and buying team is based, with all other operational functions based in India. For further information, please contact: Koovs plc Tel: +44 (0) Mary Turner/Rob Pursell Peel Hunt LLP Dan Webster Tel: +44 (0) George Sellar Jock Maxwell Macdonald (ECM) Brunswick Group LLP Nick Claydon / Quintilla Wikeley Tel: +44 (0)

4 # Koovs plc revenue reflects the wholesale value of products supplied to the KOOVS.COM website. ^ Sterling equivalent of Indian Rupee values at exchange rates ruling in the relevant period or on the relevant date. The information presented in this report has not been audited nor reviewed by the Company's auditors. CHAIRMAN'S STATEMENT FOR THE SIX MONTHS TO 30 SEPTEMBER Targeted and efficient marketing campaigns have delivered another period of excellent sales growth for KOOVS.COM. In addition, consumer engagement with the company has grown strongly. Amplification of the brand, unique design collaborations and popular social media campaigns have generated 1.7m social followers and 1.5m registered users providing the platform for significant future growth. H1 FY16: Vs. H1 FY17 1 April 2015 to 30 Sept 2015 Sales Growth +114% to 7.9m (INR730m) 3.7m (INR365m) Website Traffic +132% to 38.0 million 16.4 million Registered Base +150% to 1.5m 0.6m Active customers +138% to 431, ,000 These results have been achieved through our continued focus on the five strategic objectives set out in our Annual Report for the year to 31 March. Build the Koovs private label - Koovs private label now accounts for 40% of sales and has grown 124% YoY and the number of style options has increased by 42%. Bring international brands to India -new brands introduced included Boohoo, Liquor n' Poker, Fila Black and First & I. Extend fashion credentials - Authoritative fashion forward content has made KOOVS.COM the clear leaders on social media, with 2 to 3 times the number of engaged users than Koovs biggest rival. Exclusive collaborations with high-profile designers, including Manish Arora and graphic artist Hattie Stewart have generated extensive media coverage and have seen these collections worn by Indian celebrities and Bollywood stars. Develop delivery and price promises - Improved distribution and continual focus on price architecture has enhanced customer satisfaction. Review scores are now significantly ahead of all competitors. Use technology to empower customers - Koovs has increased App and Desktop scalability and performance, and has adopted a "Mobile First" approach to technology with new Android and IOS Apps to be released in H2, reflecting the development that smartphones are now the preferred channel for our consumers to access the web. Fund raising

5 During the period 17.2m has been raised as part of the capital raise program announced in October Also during the period an additional 9m was raised to take 100% ownership of Koovs Marketing Consulting Pvt Ltd our Indian subsidiary. In November and additional 12.9m. was raised. As previously disclosed these amounts include strategic investments from the Hindustan Times ( 3.0M) and the Times of India group of companies ( 3.9M), also providing significant partnerships with two of the leading media companies in India. Waheed Alli Chairman 22 December INTERIM REVIEW Strategy Koovs commercial strategy and goal to become India's number one international fashion destination is aimed at rapidly building scale in the business. We will do this by leveraging our established fashion credibility and extending the Koovs range into new categories that appeal to and meet more consumer lifestyle needs. New categories such as leisure wear, work wear, active wear and fashion basics further underpin the Koovs trend ranges to ensure we can deliver the right fashion at the right price. We will provide the most engaging customer experience through fashion and lifestyle related content and develop a seamless experience across web, mobile and tablet. Further, we will become the undisputed brand for affordable international style for the fashion lover in India by amplifying our voice to become "famous for fashion" through an extensive and targeted marketing campaign across multiple channels in India's major cities. Trading performance Sales generated on the KOOVS.COM website during the six months to 30 September amounted to 7.9m (equivalent to INR730m), representing an increase of 114% in sales over the first half of the previous financial year. Net Sales after returns and tax amounted to Orders generated in the period increased by 135% to 559,000 due an increase in web traffic and an increase in conversion rate from 1.4% to 1.5%. The "Mobile First" approach to development has helped accelerate growth with 62% of all orders coming though mobile devices (45% in H1 FY16), a growth of 223% compared to H1 FY16. Most encouragingly orders though the Koovs App increased by 421% to 41% of all orders, and now represent the most popular method of ordering for our customer. With the introduction of the Koovs Essentials range, a lower value fashion basics range, average order value has decreased by 11% from (INR 1570) to (INR 1305). The range has proved very popular increasing the average units per order by 10% from 1.7 to 1.8. The overall numbers of units shipped in H1 FY17 have now broken the 1m barrier and have increased by 157% to 1.03m (0.40m in H1 FY16). Operationally the company has manged the growth in sales and orders shipped by investing in warehouse capacity and customer support. Customer satisfaction has increased with improved review

6 scores which now exceed all other major clothing and fashion e-retailers in India. (mouthshut.com on 12/12/, scores out of 5: Koovs 4.07, ABOF 3.29, Myntra 3.11, Jabong 2.84, AJIO 2.27) Financial results, cash flow and funds Revenue in the period, representing the wholesale price of products sold was 4.0m / INR 366.7m (Six months to 30 September 2015: 2.0m / INR 199.2m). After cost of sales and overhead costs, the net loss before tax in the period was in line with expectations at 9.1m / INR 835.2m (Six months to 30 September 2015: 5.7m / INR 570.6m). Other than one off costs of 0.2m (INR 18.0m) for the restructure of the senior management team, the increase in overheads was due to the additional investment in marketing. At 1 April, including both short- and long-term deposits, the business had access to 2.5 / INR 241m (2015: 13.7m / INR 1,266.9m) for the purposes of funding the business. During the period, 12.2m / INR 1,118.2m (Six months to 30 September 2015: 7.3m / INR 728.6m) was utilised in funding losses and additional working capital, including a 3.2m (INR 291m) prepayment of marketing expenses. 26.2m / INR 2,534.0m of additional share capital was raised through a series of fundraising rounds, of which 9.0m INR 869.8m was utilised in in acquiring the remaining issued share capital of Koovs India, resulting in the Group's subsidiary being 100% owned. At 30 September, including both short- and long-term deposits, the business had access to INR 667.9m / 7.7m (30 September 2015: INR 568.6m / 5.6m) for the purposes of funding the business. The funds are held in term deposits or current accounts, mainly in India. Additionally, 3.2m (INR 291m) of marketing funds have been prepaid to secure significantly reduced media rates, and been recorded in the Statement of Financial Position under "Trade receivables, other receivables, prepayments and other assets". Since 30 September, a further 12.9m / INR 1,091m has been secured in equity funding. Principal risks and uncertainties The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report published in the annual report for the period ended 31 March. The board considers the principal risks and uncertainties facing the Group to be unchanged from those set out in the Annual Report and Accounts for the period ended 31 March, summarised as follows: Funding risk, including the ability of the Board to secure the funding required to implement its plans; Market and economic risks, including the economic climate and competition in India; Financial risks, including interest rate and currency risk; Technological risk; Warehouse disruption; and Reliance on key personnel.

7 These are set out in detail in the Group's Annual Report and Accounts for the period ended 31 March, a copy of which is available on the Group's website. Capital Raising and Going Concern The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report set out in the Annual Report for the year ended 31 March. This Interim Report has been prepared on the assumption that the business is a going concern. The Board and its advisors have been engaged in a staged capital raising process which has secured additional equity funding amounting to INR4,166.2 million / 44.6 million by the date of this report. Of this, INR869.8 million / 9 million was used, during May to acquire the remaining shares in Koovs India, which is now a wholly owned subsidiary. The success of the recently completed capital raising and the ongoing support from existing shareholders give the Board a high level of confidence that further funding will be secured in due course and therefore the Board has reasonable expectation that the Group and Company will have adequate resources to continue in operational existence for the foreseeable future. The Directors therefore consider it appropriate for this report to be prepared on a going concern basis. Events occurring after the period end Demonetisation The announcement by the Indian Government on 8 November that it would remove 500 and 1000 Rupee notes from circulation was a significant move which has caused short-term cash liquidity issues. Consumers have been able to exchange these notes but within daily limits. Cash on delivery is a normal feature of the Indian ecommerce market today and therefore ecommerce companies have been affected by this. While Koovs cannot underplay the impact of demonetisation, the company has quickly and cost effectively adapted marketing activity to increase focus on highly targeted promotions and to offer flexible and additional digital customer payment options. This move has resulted not only in a shift to 50% digital payments from 30%, but also has delivered strong YoY growth for the month of November and one of Koovs best sales days during December. RBI (Reserve Bank of India) has recently approved the simplification of online payment to remove a second level of authentication for 'card not present' transactions up to 2000 Rupees. Requiring only a one-time registration, this initiative can only accelerate the transition to digital payments.

8 Koovs, as an established and unique ecommerce brand in India, is in a strong position in the medium term to capitalise on the move to digital transactions and to exploit the space in the market created by this market transition. Fundraising In November and additional 12.9m / INR 1,091m was raised including a 3.9m / INR 330m investment from the Times of India group of companies Outlook We intend to remain resolutely focused on our strategy in order to capitalise on the growing ecommerce market in India. On behalf of the board of directors Mary Turner Director Robert Pursell Director 22 December 22 December Condensed Consolidated Income Statement for the six month period to 30 September MEMORANDUM Notes 1 April to 30 Sept 1 April 2015 to 30 Sept 2015 Year to 31 March 1 April to 30 Sept 1 April 2015 to 30 Sept 2015 Unaudited Unaudited INR million INR million INR million Revenue ,989 2,000 Cost of sales (440.4) (243.1 (747.4) (4,791) (2,441) Gross loss (73.7) (43.9) (235.0) (802) (441) Operating expenses (776.7) (563.5) (1,452.8) (8,449) (5,657)

9 Operating loss (850.4) (607.4) (1,687.8) (9,251) (6,098) Finance income Finance expense (3.9) (5.6) (10.4) (42) (56) Loss for the period before tax (835.2) (570.6) (1,650.4) (9,085) (5,729) Tax expense Loss for the period (835.2) (570.6) (1,650.4) (9,085) (5,729) Loss attributable to: Equity holders of the Company Non-controlling interests (806.4) (347.2) (1,045.2) (8,772) (3,486) (28.8) (223.4) (605.2) (313) (2,243) Loss for the period (835.2) (570.6) (1,650.4) (9,085) (5,729) Loss per share Basic and diluted loss per share 5 INR(5.7) INR(14.4) INR(36.7) (6.2)p (14.5)p All results relate to continuing operations. Condensed Consolidated Statement of Comprehensive Income for the six month period to 30 September 1 April to 30 Sept 1 April 2015 to 30 Sept 2015 Year to 31 March MEMORANDUM 1 April to 1 April 2015 to 30 Sept 30 Sept 2015 Unaudited Unaudited INR million INR million INR million Loss for the period (835.2) (570.6) (1,650.4) (9,085) (5,729) Other comprehensive income

10 Items that may be reclassified to income statement in subsequent periods: Currency translation differences from operations denominated in currencies other than Rupee - equity holders of the parent, net of tax Items that will not be reclassified to income statement in subsequent periods: Re-measurement of defined benefits plan, net of tax Other comprehensive income, net of tax (11.0) (0.3) 3.5 (120) (3) - (0.3) (3) (11.0) (0.6) 5.6 (120) (6) Total comprehensive loss for the period (846.2) (571.2) (1,644.8) (9,205) (5,735) Total comprehensive income attributable to: Equity holders of the Company (817.4) (347.7) (1,040.5) (8,892) (3,491) Non-controlling interests (28.8) (223.5) (604.3) (313) (2,244) Total income and expense recognised in the period All results relate to continuing operations. (846.2) (571.2) (1,644.8) (9,205) (5,735) Condensed Consolidated Statement of Financial Position at 30 September 30 September Unaudited 30 September March MEMORANDUM 30 September 30 September Unaudited INR million INR million INR million Non-current assets Intangible assets ,218 6,177 Property, plant & equipment Non-current financial assets Total non-current assets ,920 6, Current assets Inventories ,157 3,260

11 Trade receivables, other receivables, prepayments , and other assets Bank deposits ,532 5,692 Cash and cash equivalents , Total current assets 1, , ,156 10,299 Total assets 2, , , ,076 16,821 Non-current liabilities Long-term liabilities (13.7) (10.5) (11.0) (158) (103) Total non-current liabilities (13.7) (10.5) (11.0) (158) (103) Current liabilities Bank short-term borrowing (57.8) (73.2) (125.5) (670) (724) Trade and other payables (384.3) (219.1) (308.2) (4,455) (2,167) Total current liabilities (442.1) (292.3) (433.7) (5,125) (2,891) Total liabilities (455.8) (302.8) (444.7) (5,283) (2,994) NET ASSETS 1, , ,793 13,827 Capital and reserves Equity share capital , Share premium reserve 5, , , ,664 22,464 Other reserves - (7.6) (1.6) - (75) Retained earnings (3,672.5) (1,205.1) (1,978.0) (42,565) (11,920) Non-controlling interest ,116 TOTAL EQUITY 1, , ,793 13,827 All results relate to continuing operations. Condensed Consolidated Statement of Changes in Equity for the six month period to 30 September Equity share capital Share premium reserve Share based payment reserve Currency translation reserve Total other reserves Retained earnings Total Noncontrolling interests Total Equity INRm INRm INRm INRm INRm INRm INRm INRm INRm At 31 March , (12.2) (9.1) (857.7) 1,

12 Loss for the period (347.2) (347.2) (223.4) (570.6) Other comprehensive income Total comprehensive income Share based payments reserve (0.3) (0.3) (0.2) (0.5) (0.1) (0.6) (0.3) (0.3) (347.4) (347.7) (223.5) (571.2) At 30 Sept , (12.5) (7.6) (1,205.1) 1, ,397.9 At 31 March , (8.7) (1.6) (1,978.0) Loss for the period (806.4) (806.4) (28.8) (835.2) Other comprehensive income Total comprehensive income (11.0) (11.0) - (11.0) - (11.0) (11.0) (11.0) (806.4) (817.4) (28.8) (846.2) Equity issue , , ,534.0 Costs of equity issue - (53.3) (53.3) - (53.3) Acquisition of shares in a subsidiary (note 8) (888.1) (888.1) 18.3 (869.8) Share based payments reserve At 30 Sept , (19.7) - (3,672.5) 1, ,621.5 MEMORANDUM At 30 Sept 1,694 59, (228) - (42,565) 18,793-18,793 Condensed Consolidated Statement of Cash Flows for the six month period to 30 September Operating activities 1 April to 30 Sept 1 April 2015 to 30 Sept 2015 Year to MEMORANDUM 1 April 1 April 2015 to 30 Sept to 30 Sept 31 March 2015 Unaudited Unaudited INR million INR million INR million

13 Loss for the period (835.2) (570.6) (1,650.4) (9,085) (5,729) Adjustments to reconcile profit for the period to net cash flow from operating activities Depreciation and amortisation Share based payments Other non-cash items Interest income and finance expense (15.2) (36.8) (37.4) (166) (369) Taxation charge in period Working capital adjustments: Decrease/(Increase) in inventories 3.0 (134.2) (80.0) 33 (1,347) (Increase)/Decrease in trade receivables (25.9) (287) 213 (Increase) in other receivables (338.0) (34.9) 70.8 (3,672) (352) Increase in trade and other payables Cash flows from operations (1,118.2) (728.6) (1,537.2) (12,164) (7,316) Income tax paid Net cash flow from operating activities (1,118.2) (728.6) (1,537.2) (12,164) (7,316) Investing activities Acquisition of remaining shares in Koovs India (869.7) - - (9,039) - Withdrawals: original maturity greater than 12 months - 1, , ,789 Deposits: original maturity less than 12months (372.2) (337.2) (106.3) (4,049) (3,386) Purchase of plant and equipment (32.8) (10.3) (13.5) (357) (102) Purchase of intangible assets (0.5) - - (5) - Interest income received Net cash flow from investing activities (1,260.8) ,157.2 (13,293) 7,726 Financing activities Proceeds from issue of shares 2, ,200 - Costs of share issues (53.3) - (27.6) (581) - Repayment of lease liability Proceeds from short-term borrowings Repayment of short-term borrowings (29.9) - (2.8) (325) - Interest and finance expense (3.2) (5.5) (8.1) (35) (55) Net cash flow from financing activities 2,447.6 (5.5) ,259 (55) Net change in cash and cash equivalents (198) (355) Cash and cash equivalents at start of period (54.7) (54.7) 1,340 (592) Exchange differences (14.3) 3.7 (9.5) Cash and cash equivalents at end of period (15.6) (2,108) (154) Notes 1. Authorisation of condensed interim financial statements The condensed consolidated financial statements of Koovs plc (the "Company") and it subsidiary (together, the "Group") for the six month period to 30 September were authorised for issue by

14 the board of directors on 21 December and the Condensed Consolidated Statement of Financial Position was signed on the board's behalf by Mary Turner and Rob Pursell. Koovs plc is a public limited company incorporated and domiciled in England and Wales. The address of its registered office is York House, 23 Kingsway, London, WC2B 6UJ. 2. Basis of preparation and accounting policies 2.1. Basis of preparation The interim condensed consolidated financial statements for the six months ended 30 September have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's audited financial statements as at 31 March. This interim report has not been audited or reviewed by the Group's auditors Going concern This Interim Report has been prepared on the assumption that the business is a going concern. The Company's business activities, together with the factors likely to affect its future development, financial position, financial risk management objectives, details of its financial instruments and its exposures to price, credit, liquidity and cash flow risk are described in the Chairman's Statement and the Strategic Report set out in the Annual Report for the year ended 31 March. This Interim Report has been prepared on the assumption that the business is a going concern. The Board and its advisors have been engaged in a staged capital raising process which has secured additional equity funding amounting to INR4,166.2 million / 44.6 million by the date of this report. Of this, INR869.8 million / 9 million was used, during May to acquire the remaining shares in Koovs India, which is now a wholly-owned subsidiary. The success of the recently completed capital raising and the on-going support from existing shareholders give the Board a high level of confidence that further funding will be secured in due course and therefore the Board has reasonable expectation that the Group and Company will have adequate resources to continue in operational existence for the foreseeable future. The Directors therefore consider it appropriate for this report to be prepared on a going concern basis Accounting policies The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's consolidated financial statements for the period ended 31 March. There are no revisions to adopted IFRS that became applicable for the period ended 30 September which have had a significant impact on the Group's financial statements.

15 2.4. Reporting currency To assist UK-based readers of the accounts, translations into Sterling have be supplied on a memorandum basis to allow a clear understanding of the results and financial position of the business. The memorandum information does not form part of the financial reporting of the Group representing, as they do, simple translations of the Rupee information. The exchange rates used are shown in the table below. 6 Months to 30 Sept INR/ 6 months to 30 Sept 2015 INR/ Year to 31 Mar Balance Sheet Trading statements INR/ 2.5. Comparative information This interim report of the Group includes for comparison purposes the trading results for the six month period ended 30 September 2015 and the year to 31 March and the balance sheets at 30 September 2015 and 31 March. The comparative figures are not the company's statutory accounts. Statutory accounts for the period ended 31 March have been delivered to the registrar and are available on the Company's website. The report of the auditors did not include any statement under s498(2) or under s498(3) of the Companies Act Definitions Sales (Gross order value): Total value of orders placed by consumers on the KOOVS.COM website for products supplied by the Group. Web Traffic: Total number of visits to the KOOVS.COM website or use of the KOOVS.COM app. Registered Users: Number of website visitors who have registered an account on Koovs.com Conversion: ratio of orders placed to visits. Active customers: number of customers who have placed at least one order during the preceding 12 months. 3. Revenue All of the Group's revenue is generated by the Group's subsidiary in India through its operations as a supplier of branded fashion products. The chief operating decision maker is the Chief Executive Officer who makes resource allocation decisions based on Group management accounts and operating reports for the entire Group. The Group therefore represents a single cash generating unit and a single operating segment. All of the Group's revenue in both periods was generated in the Republic of India. 4. Taxation

16 No income tax liability arose during the six months to 30 September, the six months to 30 September 2015, or the year ended 31 March. There is no tax charge or credit relating to items charged or credited to other comprehensive income. 5. Earnings Per Share Basic earnings per share is calculated by dividing the earnings attributable to the owners of the Parent Company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by amending the weighted average number of ordinary shares in issue during the period for the effect of dilutive share options in issue. 6 months to 30 Sept 6 months to 30 Sept 2015 Year to 31 March Weighted average shares in issue for basic earnings per share Unaudited Unaudited 142,630,139 24,110,719 24,110,719 Effect of dilutive options Weighted average shares in issue for diluted earnings per share 142,630,139 24,110,719 28,482,540 Earnings attributable to the owners of the Parent (INR million) (806.4) (347.2) (1,045.2) Basic and diluted loss per share (Rupees) (5.7) (14.4) (36.7) Memorandum basic and diluted loss per share (pence) (6.2) (14.5) (37.2) The effect of the share options in issue is anti-dilutive and therefore no adjustment has been made to the weighted average shares in issue when calculating diluted earnings per share. There is therefore no difference between basic earnings per share and diluted earnings per share. 6. Cash and bank deposits 30 Sept 30 Sept March MEMORANDUM 30 Sept 30 Sept 2015 Current assets: Bank deposits with an original maturity of more than 12 months Bank deposits with an original maturity of not more than 12 months Unaudited Unaudited INRm INRm INRm , ,532 4,153 Cash at bank and in hand , ,905 6,262 Non-current assets: Security deposits

17 Bank overdrafts (22.8) (73.2) (61.3) (265) (724) Total net cash and bank deposits ,740 5, Sept 30 Sept March MEMORANDUM 30 Sept 30 Sept 2015 Unaudited Unaudited INRm INRm INRm Cash and cash equivalents Cash at bank and in hand , Bank overdrafts (22.8) (73.2) (61.3) (265) (724) Total cash and cash equivalents (15.6) (2,108) (154) Cash and cash equivalents comprise cash in hand and cash held in bank accounts from which deposits can be drawn without any substantial delay and which have not been deposited under any agreement for a fixed term, net of any bank overdrafts which are utilised for operational cash flow purposes. 7. Issued share capital During the six months to 30 September the following shares were issued: Shares Issue price Proceeds Nominal Share premium value 29 April 87,600,000 25p 21,900, ,000 21,024, June 13,200,000 25p 3,300, ,000 3,168,000 4 July 4,000,000 25p 1,000,000 40, ,000 Total 104,800,000 26,200,000 1,048,000 25,152,000 INRm INRm INRm Translated to Rupees at the date of the transaction: 2, ,432.7 The share capital of the parent company, Koovs plc, is denominated in Sterling and therefore the information provided in relation to the share capital of the Company is given in Sterling but has been translated into Rupees at the rates ruling on the date of the issue of the shares for the purposes of the consolidated accounts.

18 In November, the Company issued a further 25,700,000 ordinary shares of 1p each raising a further INR1,091m / 12.9 million to support the operations of the Group. 8. Acquisition of remaining shares in subsidiary In May the Company acquired the remaining shares in Koovs India at a cost of INR869.7m / 9.0m. Consequently, Koovs India became a wholly-owned subsidiary. As there was no change of control no goodwill could be created so the cost of the acquisition and the non-controlling interest in the net liabilities of the subsidiary at the date of acquisition have been charged to reserves in the period. 9. Fair value of financial instruments The fair value of cash and cash equivalents, inventories, trade receivables, trade payables, and other current liabilities approximate their carrying amounts due to the short-term maturities of these instruments. There is no material difference between the carrying amount and the fair value of any other assets or liabilities in the Statement of Financial Position. 10. Related parties During the period, the Group entered into transactions in the ordinary course of business with certain related parties as follows: Purchases Recharges Amounts Amounts from between owed by owed to related related related related party parties parties parties INRm INRm INRm INRm Period ended 30 September Parties related to Koovs plc: Silvergate Media Holdings Limited Olga TV Limited Silvergate Investments Limited Period ended 30 September 2015 Parties related to Koovs plc: Silvergate Media Holdings Limited Olga TV Limited Other related parties -shareholder in Koovs India Infotel E-commerce Pvt Ltd There have been no changes in the list of related parties since 31 March except that since Infotel E-commerce Pvt Ltd is no longer a shareholder in Koovs India. This information is provided by RNS The company news service from the London Stock Exchange END