Preliminary Results for the period ended 30 September 2006

India Outsourcing Services plc (AIM: IOS), a company formed to capitalise on acquisition and investment opportunities in the business process outsourcing (BPO) industry, is pleased to announce its preliminary results for the period ended 30 September 2006.

Highlights 









Amit Pau, Chief Executive of India Outsourcing Services, commented: “Whilst 
it is disappointing that the expectations of the vendors of many potential 
target companies in India have moved to a degree that makes acquisitions 
unrealistic, we continue to believe that the BPO market is the ideal focus for 
our acquisition and investment activities. We are therefore broadening our 
search for potential targets to geographies outside of India, including the USA 
and Europe.” 






For further information:










India Outsourcing Services plc



Tel: 020 7297 0010





Haresh Kanabar, Chairman








Amit Pau, Chief Executive
















Teather & Greenwood Ltd



Tel: 020 7426 9000





Mark Dickenson








Sindre Ottesen








 








Buchanan Communications



Tel: 020 7466 5000





Mark Court









Extracts from the Chairman’s statement and the report of the 
directors




I am pleased to report India Outsourcing Services’ financial results for the 
year ended 30 September 2006. The period under review has in many ways been 
challenging but we enter the current year with a sound appreciation of the 
Indian Business Process Outsourcing (BPO) market and a revised strategy to 
ensure the delivery of our first acquisition as soon as practicably 
possible.




The company’s financial performance in the year was in line with management 
expectations. The post tax loss in the year was £875,555 compared with a loss of 
£424,369 for the 13 months period ending September 2005 and the loss per share 
has been reduced to 14.1p compared with 34.8p in the corresponding period the 
loss per share has been reduced due to share issue. More than half of the loss 
incurred is due to the due diligence costs of an aborted transaction. The 
Company’s net cash as at 30 September 2006 was £2.76 million. 




In March 2006 the Company raised £3 million gross by placing 6,666,667 shares 
at a price of 45p. At the same time the Company’s shares were consolidated one 
share for every ten shares held. Also in March the Company raised a further 
£500,000 from Wheddon Limited who is a strategic investor in the company by 
placing 1,000,000 shares at a price of 50p per share.




India Outsourcing floated on AIM with the strategy of seeking, evaluating and 
completing the acquisition of companies in the Business Process Outsourcing 
(BPO) industry primarily in India. The BPO industry has grown quite 
substantially over the past few years and is expected to continue to grow 
strongly in the coming years.




During the year we pursued in detail an acquisition by commissioning full 
legal accounting and commercial due diligence on a support services company 
operating within the US healthcare sector with a delivery facilities in the US 
and in India . However, after a very lengthy process, and in consultation with 
our advisers, we decided to abandon pursuit of the acquisition. Whilst, 
obviously, we are determined to complete our first acquisition as soon as 
practicable we are only prepared to entertain an acquisition if it offers a very 
clear opportunity to enhance shareholder value. It does not make sense to do a 
transaction at valuations that reduce the returns for our shareholders.




The BPO market continues to grow steadily and is a very exciting sector in 
which to be involved. However, we have seen that valuation expectations from 
vendors, particularly in India, are quite high and verging on the unrealistic. 
This environment will make it very challenging for us to achieve our stated 
strategy of BPO acquisitions in India. Therefore we are now also looking at 
acquisitions in Europe and the USA. 




Outlook




Whilst BPO is an exciting and growing sector in which to be involved, 
valuations particularly in India are becoming stretched. It is increasingly hard 
to find the type of value enhancing transaction in India that we require and we 
are therefore expanding our search for acquisitions to wider geographies.




Results and dividends




The profit and loss account is set out above and shows the loss for the 
year.




The directors do not recommend the payment of a dividend for the year.




Principal activities, trading review and future developments 




The principal activity of the company is to capitalise on acquisition and 
investment opportunities within the Business Process Outsourcing sector 
primarily in India. 





India Outsourcing Services Plc




Profit and Loss Account for the year ended 30 September 2006

















Notes



Year ended 30 September 
2006 






13 month period ended 30 September 2005 











£






£ 






















Administrative expenses








960,459






432,503







































Operating loss






(960,459)






(432,503)



























Net interest receivable 






84,904






8,134






















Loss on ordinary activities before taxation






(875,555)






(424,369)






















Tax on loss on ordinary activities






- 






-






















Loss for the financial year






(875,555)








(424,369)






















Loss per share-basic and diluted 





2



(14.1)p










(34.8)p

























All amounts relate to continuing activities.




All recognised gains and losses for the year ended have been included in the 
profit and loss account.









India Outsourcing Services Plc




Balance sheet as at 30 
September 2006




















2006 






2005 











£






£






















Fixed assets

















Tangible assets






1,141






4,078













































1,141 






4,078






















Current assets 

















Debtors






24,404






5,037





Cash at bank and in hand






2,800,000






359,795

















2,824,404 






364,832





Creditors: amounts falling due within one year






(186,777)






(106,015)











Net current assets






2,637,627






258,817






















Net assets






2,638,768






262,895
























Capital and reserves

















Called up share capital






947,917






181,250





Share premium account






2,990,775






506,014





Profit and loss account






(1,299,924) 






(424,369)






















Shareholders’ funds 






2,638,768






262,895






















India Outsourcing Services Plc




Cash Flow Statement for the year ended 30 September 2006




















Year ended 30 September 2006 



13 month period ended 30 September 2005 











£



£



















Net cash outflow from operating activities






(933,272)



(329,729)



















Returns on investments and servicing of finance














Interest received






84,904



8,134



















Net cash inflow from returns on investments and servicing of finance






84,904



8,134



















Capital expenditure














Purchase of tangible fixed assets






-



(5,874)



















Net cash outflow for capital expenditure






-



(5,874) 



















Net cash outflow before financing






(848,368)



(327,469)



















Financing














Issue of ordinary shares






3,500,000



800,000





Expenses paid in connection with share issues






(248,572)



(112,736)



















Cash inflow from financing






3,251,428



687,264



















Increase in net cash 






2,403,060



359,795



















India Outsourcing Services Plc








1 Accounting policies




Basis of preparation




The results have been prepared using accounting policies consistent with 
those used in the preparation of the statutory accounts. The financial 
information is derived from the financial statements for the Year ended 30 
September 2006,and does not constitute full accounts within the meaning of 
Section 240 of the Companies Act 1985. The financial statements on which the 
auditors have given an unqualified report do not contain a statement under 
Section 237 (2) or (3) of the Companies Act and will be delivered to the 
Registrar of Companies in due course.




The financial statements have been prepared under the historical cost 
convention and in accordance with the United Kingdom, Generally Accepted 
Accounting Practice. 




2 Loss per share




The calculation of loss per share of 14.1 pence (2005 – 34.8 pence) is based 
on the loss for the year of £875,555 (2005 - £424,369) and on the weighted 
average number of ordinary shares in issue during the year of 6,197,116 (2005 – 
1,221,156).




Due to the loss in the year the effect of all potential ordinary shares is 
considered to be antidilutive. 




The loss per share in the prior year has been restated as a result of share 
consolidation..




The Annual Report will be sent to all shareholders. Additional copies are 
available from 22 Soho Square, London W1D 
4NS.

	
	
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