koovs plc formerly silvergate retail limited report · pdf filekoovs plc formerly silvergate...

2 0 1 4KOOVS PLC formerly Silvergate Retail Limited R E P O R T A N D F I N A N C I A L S TAT E M E N T S

CONTENTS

1 CORPORATE INFORMATION

2 CHAIRMAN’S STATEMENT

4 STRATEGIC REPORT

10 BOARD OF DIRECTORS

11 CORPORATE GOVERNANCE REPORT

13 DIRECTORS’ REPORT

16 DIRECTORS’ REMUNERATION REPORT

21 STATEMENT OF DIRECTORS’ RESPONSIBILITIES

22 INDEPENDENT AUDITOR’S REPORT

24 CONSOLIDATED INCOME STATEMENT

25 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

26 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

27 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

28 CONSOLIDATED STATEMENT OF CASH FLOWS

29 COMPANY STATEMENT OF FINANCIAL POSITION

30 COMPANY STATEMENT OF CHANGES IN EQUITY

31 COMPANY STATEMENT OF CASH FLOWS

32 NOTES TO THE FINANCIAL STATEMENTS

KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2014 1

CORPORATE INFORMATION

DirectorsWaheed Alli ChairmanRobert Bready Creative and Brand DirectorRoy Naismith Group Chief Financial Officer (appointed 18 December 2013)

Anant Nahata Non-executive Director (appointed 18 December 2013)

Dame Gail Rebuck dbe Non-executive Director (appointed 10 March 2014)

Emily Sheffield Non-executive Director (appointed 10 March 2014)

David Cole Director (resigned 18 December 2013)

AuditorsErnst & Young LLP

1 More London Place

London SE1 2AF

BankersBarclays Bank PLC

27 Soho Square

London W1D 3QR

SolicitorsFoot Anstey LLP

Salt Quay House

4 North East Quay

Sutton Harbour

Plymouth

PL4 0BN

Registered officeAldwych House

81 Aldwych

London WC2B 4HN

Company registration number: 08166410

Name change and re-registrationThe company changed its name on 24 January 2014 from Silvergate Retail Limited to Koovs Limited.

The company was re-registered as a public company on 27 February 2014 and changed its name to Koovs plc.

Corporate informationFurther information, including the AIM Admission document, is available on the Koovs plc corporate website at:

www.koovs.com/corporate

2 KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2014

Dear Shareholders,

Following our successful fundraising and admission

to AIM we are now firmly focused on supporting

Koovs.com to become India’s number one fashion

destination.

We are at the beginning of a journey to deliver a

focused and exclusive range of high-fashion products

to India’s increasingly aspirational young population.

We believe we will succeed by building fashion

credibility through strong brands, carefully curated

collections and exclusive, high fashion own-label

products delivered in the environment of a fashion-

forward, knowledgeable and respected website.

We have made good progress since the IPO, having

grown traffic by 46% and resulting sales by 57%, albeit

from a low base. The conversion rate and average

basket size are both consistent and have been

running slightly ahead of our expectations.

At the time of the admission we set out five key

steps which we would focus on to achieve our goals:

• to build the Koovs private label and establish

its fashion credibility;

• to bring strong international brands to the new

Indian consumer;

• to extend Koovs.com’s fashion credentials by

bringing both established and new designers to

the consumer in India through exclusive design

collaborations;

• to develop delivery and price promises for the

consumer that are reliable, affordable and price-

worthy; and

• to use technology to power the consumers’

fashion needs.

I’m pleased to say we are making good progress

in each of these areas:

Build the Koovs private label – the spring 2014 ranges

were launched on the website in February and the

autumn 2014 ranges were presented to the press

to an enthusiastic reception in early June.

Bring international brands to India – we launched

New Look, Lipsy, Gas and AX Paris to complement

the existing fashion brands on the site.

Extend fashion credentials – we introduced an

exclusive product collaboration with Patrick Cox

and a high-profile partnership with Henry Holland.

Develop delivery and price promises – the delivery

timeframe has been shortened to five days and 70%

of the private label product on the site is priced below

the key £20 level.

Use technology to empower customers – we launched

a mobile version of the site; 25% of our visitors are

using mobile devices when they access the site.

Encouraged by progress so far, we intend to remain

focused on our strategy while working hard to maintain

a strong level of growth.

It has been a very busy few months for Koovs plc and

I thank all of our staff for their focus and hard work,

while looking forward to an exciting and even busier

year ahead.

Waheed Alli Chairman

30 June 2014

CHAIRMAN’S STATEMENT


Our aim is to build Koovs.com into India’s number one fashion destination over the next five years.


STRATEGIC REPORT

OPERATING REVIEW

Objectives and strategyOur objective is to build Koovs.com into India’s leading

fashion destination over the next five years and

thereafter continue to increase market share.

The five steps which the Directors consider are key

to achieving this objective are:

• to build the Koovs private label and establish its

fashion credibility;

• to bring strong international brands to the new

Indian consumer;

• to extend Koovs.com’s fashion credentials by

bringing both established and new designers to

the consumer in India through exclusive design

collaborations;

• to develop delivery and price promises for the

consumer that are reliable, affordable and price-

worthy; and

• to use technology to power the consumers’ fashion

needs.

Backed by an experienced and credible management

team, the Group is well placed to benefit from the

expected explosive growth in connectivity, retail and

e-commerce across India.

Acquisition of Koovs IndiaFollowing a successful placing of shares on 10 March

2014 Koovs plc acquired a 57.5% stake in Koovs

Marketing Consulting Private Limited (“Koovs India”).

This created the Koovs plc Group (the “Group”)

allowing closer liaison between the two businesses

while providing appropriate funds for the development

of the fledgling operations.

OperationsFollowing the acquisition of Koovs India, the Group

supplies branded fashion garments and accessories for

exclusive distribution through the Koovs.com website

including international fashion brands, iconic British

high street brands and Koovs own-label product

designed by a talented team based in London. The

Koovs Group wholesales these products exclusively

to Marble E-retail Private Limited (“Marble”), an

independently owned and managed company which

operates the Koovs.com website and the associated

e-commerce retail distribution business under a

licence granted by the Koovs Group.

Recent developments

Koovs private labelWe continue to expand our ranges with a constant

pipeline of new ranges and the addition of new

categories including shoes, accessories, jewellery and

lingerie. Menswear was launched in February 2014 and

is growing as planned. The ranges for autumn 2014

were recently previewed to the press in Delhi and Mumbai

resulting in excellent feed-back and immediate requests

for product to be featured in the fashion press.

International brandsThe brand mix is key to our fashion credibility and

accounts for 60% of our sales, as planned. We are

introducing fashionable high-street brands to the

consumer in India including New Look, Lipsy, AX Paris,

Daisy Street and Dead Lovers.

CollaborationsIn January 2014 we launched our collaboration with

Patrick Cox with a range of shoes and accessories for

both men and women and in May we launched a range

of products designed in association with Henry Holland

which gathered a high level of press interest and drove

further traffic to the website. We have further

collaborations planned for the rest of the year.

Delivery and price promiseOur pricing reflects the quality of design and

manufacture invested in our products yet is

competitive in the market and attractive to the

consumer. Over 70% of private label products

are priced below the critical INR2000 (£20) level.

We offer free deliver on orders over £5. In May the

delivery promise was improved to 5 days but over

80% of orders received are delivered by the operators

of the website well within that target.

TechnologyThrough engaging with a new technology supplier

the web site load times have been improved to be best-

in-class and a mobile version of the site was launched

in support of the 25% of visits which are made from

mobile devices. Home page features are updated

weekly and more video content and celebrity style

features have been added with easy links to the

product shopping pages.

Key performance indicators We monitor the Group’s performance in a number

of ways including assessing the performance of

Koovs.com which, although it is operated by a third

party, reflects the performance of the products and

marketing managed by the Group. The Group monitors

such metrics as traffic to the website, the rate of

conversion of that traffic to sales orders, the size of

those orders and the resulting sales generated. Each

of these reflect the success of the Koovs.com website

which is the Group’s major customer and whose

success is fundamental to the success of the Group.

Since the acquisition of Koovs India weekly traffic

has shown good growth and both conversion rate

and average basket size have been consistent and

are running slightly ahead of expectations, resulting

in strong growth in sales.


We have made good progress since the IPO, having grown traffic by 46% and resulting sales by 57%, albeit from a low base.


STRATEGIC REPORTCONTINUED

We are at the beginning of a journey to deliver a focused and exclusive range of high-fashion products to India’s increasingly aspirational young population.


Trading performanceIt remains very early days in the development of

our business but we continue to be encouraged by

progress so far and intend to remain focused on our

strategy while working hard to maintain a strong level

of growth. In these early days of development, revenue

is at a low level and gross margins are compromised by

the low volumes. Our overhead structure is considerably

higher than the gross profit generated and we expect

therefore to generate trading losses in the immediate

future as revenues and gross margins improve. The

results for the six months to 31 March 2014 include

only 21 days of trading of the newly combined group.

Trading in that period and since the year end has been

slightly ahead of our expectations.

OutlookWe intend to remain resolutely focused on our strategy

in order to capitalise on the growing Indian market.

FINANCE REVIEWThe financial results of the Koovs plc group in this report

cover the six-month period from 1 October 2013 to

31 March 2014 and include the effects of a significant

share issue and the acquisition of Koovs India on

10 March 2014. The comparable period was the first

period of trading for the Company and covered the

period from 2 August 2012 to 30 September 2013

during which time the Company had no subsidiaries.

Prior to the acquisition of Koovs India the Company’s

principal activity was that of providing proprietary

design and merchandising services to Koovs India

in connection with the development of its fashion

business in India. These services were fulfilled by a

talented team of designers and merchandisers based in

London along with strategic and positioning guidance

supplied by the senior management team.

Following the acquisition, the Group’s principal

activity is that of supplying branded fashion garments

and accessories for sale by a third party through

a branded website principally in the Republic of

India. The Company changed its accounting period

shortly following the acquisition in recognition of

the significantly changed nature of the operations

of the Group.

IPO and acquisition of Koovs IndiaThe most significant financial event during the period

was the IPO and the acquisition of Koovs India on

10 March 2014. In connection with an IPO on the AIM

market of the London Stock Exchange, Koovs plc

issued 14,666,667 new shares at £1.50, raising a total

of £22,000,000. Of this, £16,826,000 was invested in

165,986,056 newly issued shares of Koovs India on the

same day resulting in a 57.5% shareholding in Koovs

India. Costs of the share issue amounted to £861,000

which has been deducted from equity. The cost of the

IPO amounted to £749,000 and the costs associated

with the investment in Koovs India amounted to

£52,000 both of which have been expensed within

operating expenses. More details of the acquisition

are given in Note 11.

Financial resultsPrior to the acquisition, the Company generated

revenue of £544,000 through the arrangements

to supply designs and merchandising services to

Koovs India. Following the acquisition the revenue

of the Group reflects the sale of products in India

at wholesale to the business which operates the

Koovs.com website and amounted to £89,000

in the 21 day period since acquisition.

Overhead costs in the UK amounted to £2,379,000

during the six month period including £801,000 of

expense arising from the IPO, listing and investment

process. In addition the Group incurred £235,000 of

overhead expense arising in Koovs India during the

21 days of ownership.

Net interest income arising mainly in India amounted

to £101,000.

In total the Group incurred trading losses amounting

to £2,076,000 during the period.

TaxationThe charge for taxation in the period amounted

to £88,000 and related entirely to withholding tax

deducted at source in India on payments made to

Koovs plc in relation to services provided to Koovs

India. This withholding tax is available to offset against

Corporation Tax liabilities arising in the same period,

but since there was no Corporation Tax liability arising,

the entire amount has been expensed.

Basic earnings per shareEarnings per share amounted to a loss of 27.2 pence

per share based on earnings attributable to equity

holders of £2,011,000 and weighted shares in issue

of 7,400,568 reflecting the shares issued during the

period. The earnings per share in the previous period

was £940 based on the weighted shares in issue

of 653 at that time.

Cash flow and fundsAs a result of the shares issued in the period,

£22,417,000 (net of expenses) was received by the

Group during the period. Much of this funding was

used to acquire newly issued shares in Koovs India

and the funds therefore remained in the Group. The

net cash effect of the acquisition was to generate

an additional inflow of £857,000.

Cash of £2,181,000 was utilised in funding losses

incurred in the period and investment in working

capital, mainly inventory.


STRATEGIC REPORTCONTINUED

In total, net cash increased in the period by

£21,164,000 and cash at the close of the period

was £21,735,000 which will be carefully managed

to fund the operations in future periods.

Financial positionFollowing the injection of capital as a result of the IPO,

the net assets of the Group amount to £28,924,000.

This includes £6,213,000 of goodwill arising on the

acquisition.

Reporting currencyThe main operational currency of the Group is the

Indian Rupee and therefore it is intended to change the

reporting currency of the Group to Rupees with effect

from the next published financial report of the Group

which is expected to be the half-year statement for the

period to 30 September 2014. Appropriate translations

into Sterling will be supplied to allow a clear understanding

of the results and financial position of the business for

readers in the UK.

Principal risks and uncertaintiesThere are a number of market and business risks that

could affect the Company and the Group. We set out

below the Group’s view of the main risks which, should

any actually materialise, could materially adversely

affect the Group’s business, financial condition and

return to shareholders. Further risks and uncertainties

which are not presently known to the Directors at the

date of this document, or that the Directors currently

deem less significant, may also have an adverse effect

on the business, financial condition or results of

the Group.

Market and Economic Risks

Economic outlookThe Group’s revenue is dependent on the sales by

Koovs India to Marble which, in turn, is dependent

on the retail sales Marble achieves, so the Group

is sensitive to the impacts of the general economic

climate in India and on the population’s propensity

to spend on fashion clothing and accessories. Global

economic factors may impact the costs of inputs such

as cotton and fuel and the Group’s ability to pass on

such cost increases may be limited.

Market and competitionThe retail fashion industry and market is subject to

changing customer tastes. The Group’s performance

is dependent upon effectively predicting and quickly

responding to changing consumer demands and

translating market trends into saleable merchandise.

Internet fashion retailing is global and highly

competitive. Any failure by Koovs.com to compete

effectively with bricks and mortar retailers and other

internet retailers may affect the Group’s revenue.

SuppliersThe Group makes arrangements with manufacturers

for the supply of products designed by the Group.

The ability to source products promptly at competitive

prices and at appropriate quality is key to the success

of the business and while there is a broad range of

potential suppliers and well-developed competition

in the market, the Group is dependent on being able

to find appropriate manufacturing capability for its

products in order to meet delivery, quality and price

expectations.

Foreign country and political riskMost of the Group’s personnel, operations and other

assets including Koovs India’s warehouse, all inventory

and computer servers are located in India and,

consequently, the Group is subject to changes in

regulations or market conditions in that country.

Financial risks

Interest rate riskThe Group’s exposure to interest rate risk arises

from the fluctuations in the rate of interest income

or charges on cash and cash equivalent balances. In

the period under review, the Group has predominately

operated in a net cash position. UK interest rates

continue to be very low and therefore the potential

adverse interest rate risk in the UK is very low. Interest

rates in India are in the region of 9% and the majority

of the Group’s cash is held in Indian Rupees in India.

There is therefore a potential adverse interest rate risk

affecting the interest income generated in India. No

interest rate hedging is in place.

Currency riskThe Group operates in the United Kingdom and India.

Following the acquisition of Koovs India, all revenues

are earned on the provision of products in India and

are denominated in Indian Rupees and the majority

of the cost of sales are also denominated in Rupees.

Approximately one half of the overhead costs of

the business are incurred in Rupees. Further, the

majority of the assets and liabilities of the Group

are denominated in Rupees. The Group results

and financial position are therefore susceptible to

fluctuations as a result of changes in exchange rates.

No foreign currency hedging is in place.

Credit and customer riskThe Group’s revenues arise predominately from

invoices for goods to a single customer. As Marble is

currently the only channel through which Koovs India’s

products are sold to consumers, the Group’s revenue

is dependent upon the relationship with Marble and

upon the success of Marble in servicing its customers,

delivering products as promised, recovering payment

from its customers and maintaining high levels of


customer service. The Group has considered the credit

risk associated with the customer and has assessed

the credit worthiness of the customer to be good. The

Group minimises the risk through a requirement for

prompt, monthly payment of invoices issued to which

the customer is committed and has demonstrated

consistent adherence.

Liquidity riskLiquidity risk is managed through the assessment of

short, medium and long-term cash flow forecasts to

ensure the adequacy of funding in order to meet the

Company’s working capital requirements. The funds

raised through the share placing are expected to be

sufficient for the Company’s needs over a period of

more than one year.

Other risks

Technological risksThe Group is dependent on its IT infrastructure and

any system performance issues (for example system

or infrastructure failure, damage or denial of access)

could seriously affect our ability to trade.

Warehouse disruptionAny disruption to the Group’s warehousing facilities

due to physical property damage, breakdown in

warehouse systems, capacity shortages or poor

logistics management could lead to significant

operational difficulties in order fulfilment, which may

have a consequent adverse effect on the Group’s

business.

Intellectual property and content liability The business of the Group carries with it the risk of

intellectual property right infringement. The Group may

need to engage in litigation to enforce its intellectual

property rights, or to protect itself from third party

claims.

Key personnelThe Group depends on the services of its key technical,

marketing and management personnel.

On behalf of the Board of Directors

Roy Naismith Robert Bready

Director Director

30 June 2014 30 June 2014


BOARD OF DIRECTORS

Waheed Alli 49, Executive ChairmanWaheed founded the company in 2012. He was previously Chairman of ASOS plc between 2000

and 2012. He has extensive knowledge of international fashion, coupled with a keen eye for innovation.

Waheed’s vision is to develop Koovs.com as the fashion destination of choice in India. Waheed was

appointed to the House of Lords in 1998 and is currently Chairman of Silvergate Media Limited, part

of a group of media companies which specialise in children’s television, publishing and merchandising.

Robert Bready 46, Creative and Brand DirectorRobert joined the Board in 2012. He leads the creative team at Koovs, supported by design and

buying teams based in London and Delhi. Robert began his career at River Island, holding a variety

of merchandising roles in women’s wear and menswear. In 1997, he moved to the Arcadia Group,

spending eight years working across young fashion retailers including Miss Selfridge and TopMan,

eventually becoming Senior Executive for the Miss Selfridge brand. Robert was the Product Director

of ASOS plc between 2006 and 2012.

Roy Naismith 52, Group Chief Financial Officer Roy joined the Board in 2013. He was Group Finance Director of French Connection Group plc

between 2001 and 2013. Roy trained as a chartered accountant with KPMG and has held senior finance

positions at Capital Radio plc and the Starbucks Coffee Company.

Anant Nahata 30, Non-executive Director Anant joined the Board in 2013. He represents the Nahata family interests in Koovs and is also

Managing Director of Exicom, a leading telecom infrastructure business in India. Anant has investment

banking experience with Credit Suisse, having worked in Singapore and New York. He holds an

Economics degree from the University of Pennsylvania, USA.

Dame Gail Rebuck DBE 62, Non-executive DirectorGail joined the Board in 2014. She is Chair of Penguin Random House UK and sits on the company’s

Global Board of Representatives. She was Chair and CEO of Random House from 1991-2012 and a

Non-executive Director of BskyB from 2002-2012. She sits on the Group Management Committee

of the Board of Bertelsmann. Gail also chairs the Cheltenham Literature Festival and the Quick Reads

charity. She is a Trustee of the National Literacy Trust and on the Council of the Royal College of Art,

taking a particular interest in their fashion department.

Emily Sheffield 41, Non-executive DirectorEmily joined the Board in 2014 and has been a fashion advisory consultant to the Company since

2013. She is deputy editor of British Vogue and works on a wide range of projects within the magazine.

More recently she also become editor of Miss Vogue, Vogue’s new biannual magazine for teenagers.

Emily began her career as a journalist at the Guardian newspaper after winning the Guardian student

journalism award and then worked for a variety of publications, including the Evening Standard. She

has been attending the international fashion shows regularly for over ten years and was a consultant

and creative designer at Jigsaw.


CORPORATE GOVERNANCE REPORT

Corporate Governance standards The Directors recognise the value and importance of high standards of corporate governance and intend, where

practicable given the Company’s size and the constitution of the Board, to comply with appropriate standards.

Independence of DirectorsBased on the UK Corporate Governance Code, the following interests have an impact on the independence of

the Directors:

Waheed Alli, Executive Chairman, is interested, through Silvergate Investments Limited, in 19.6% of the share

capital. The Board believes that Waheed Alli’s appointment as Executive Chairman benefits the Group given

that he is the founder of the Company and his knowledge of the fashion business is important to the future

development of Koovs.

Emily Sheffield, Non-executive Director, has been granted share options and provides fashion consultancy

services to the Company, further details of which are set out in the Directors’ Remuneration Report.

Gail Rebuck, Non-executive Director, has also been granted share options.

Anant Nahata, Non-executive Director, represents the Nahata family interests in Koovs which, through a

family-owned company, is interested in 15.0% of the share capital of Koovs plc.

Board compositionThe Board of Directors at the date of this report comprises three Executive Directors and three Non-executive

Directors.

During the six months to 31 March 2014 there were three Board meetings and three meetings of a committee of

the Board constituted to deal with matters relating to the listing. All of the meetings were fully attended by the

Directors in office on the relevant dates or the designated members of the committee except for one meeting

for which Robert Bready was unavailable.

The Company’s Articles of Association give power to the Board to appoint Directors, but require Directors to

submit themselves for election at the first AGM following their appointment. All Directors are required to retire

and, if appropriate, offer themselves for re-election every three years. At the first Annual General Meeting

following admission to AIM, all of the Directors will offer themselves for re-election.

The Board reserves to itself certain key matters to approve or monitor on behalf of the shareholders including

the strategic direction, development and control of the Group. It approves strategic plans and annual capital

and revenue budgets. It reviews significant investment proposals and the performance of past investments and

maintains an overview and control of the Group’s operating and financial performance. It monitors the Group’s

overall system of internal controls, governance and compliance and ensures that the necessary financial and

human resources are in place for the Company to meet its objectives.

The Board delegates responsibility for the day-to-day operation of the business to the Executive Directors within

the framework of agreed prudent and effective controls.

The Directors comply, and procure compliance with, Rule 21 of the AIM Rules for Companies relating to dealings

by Directors and other applicable employees in the Company’s securities and, to this end, the Company has

adopted an appropriate share dealing code.

All Directors are briefed by the use of comprehensive papers circulated in advance of Board meetings and

by presentations at the meetings in addition to receiving minutes of previous meetings. The training needs of

Directors are formally considered on an annual basis and are also monitored throughout the year with appropriate

training being provided if required.

Any member of the Board may take independent professional advice at the Company’s expense. All Directors

have access to the advice and services of the Company Secretary.

The Company Secretary’s responsibilities include ensuring good information flows to the Board and between

senior management and the Non-executive Directors. The appointment and removal of the Company Secretary is

a matter reserved for the Board. The Company Secretary is responsible, through the Chairman, for advising the

Board on all corporate governance matters and for assisting the Directors with their professional development.

All Directors of the Company are covered by a comprehensive Directors and Officers insurance policy.

The Company intends to appoint at least two further Non-executive Directors, including at least one with recent,

relevant financial experience.


CORPORATE GOVERNANCE REPORTCONTINUED

Board committeesOn recruitment of the additional Directors, the Board will establish an Audit Committee, a Remuneration

Committee and a Nomination Committee with formally delegated responsibilities.

The Audit Committee will have primary responsibility for monitoring the quality of internal controls and ensuring

that the financial performance of the Company is properly measured and reported on. It will receive and review

reports from the Company’s management and auditors relating to the interim and annual accounts and the

accounting and internal control systems in use throughout the Group. The Audit Committee will meet at least

twice a year and will have unrestricted access to the Company’s auditors.

The Remuneration Committee will review the performance of the Executive Directors and make recommendations

to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee

will also make recommendations to the Board on proposals for the granting of share options and other equity

incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The

remuneration and terms and conditions of appointment of the Non-executive Directors of the Company will be

set by the Board.

The Nomination Committee will be responsible for ensuring that the Board has a formal and transparent

appointment procedure and will have primary responsibility for reviewing the balance and effectiveness of the

Board and identifying the skills needed on the Board and those individuals who might best provide them.

Membership of the Audit Committee, Remuneration Committee and Nomination Committee and the chairmanship

of each of the committees will be finalised once the Company has appointed further Non-executive Directors.

Codes of conductThe Board has adopted a Code of Business Conduct and Ethics for its Board and Senior Management Personnel

in order to ensure adoption and maintenance of appropriate standards within the business. Further, the Board has

adopted Anti-bribery and Whistle Blower policies.

Internal control and risk management The Board recognises the importance of robust procedures for identifying, evaluation and managing significant

risks faced by the Group and is committed to ensuring that appropriate procedures are in place.

The culture and size of the business results in the Executive Directors being closely involved in managing the

business at a detailed level. This provides a high degree of direct monitoring of risks and control processes,

conducted against the background of a culture of integrity, quality and high levels of communication.

This is supported by reviews of weekly and monthly detailed analyses of the performance of the business, the key

performance indicators associated with the trading risks facing the Company and the detailed operational results.

The Group does not have a separate internal audit function but certain elements of internal audit work are

conducted on behalf of the Company by third parties.

Tax Board level oversight of tax matters is part of the Company’s tax risk governance process. All significant tax

matters are reported to the Board by the Group CFO.

By order of the Board

Roy Naismith

Company Secretary

30 June 2014


The Directors of Koovs Plc (“the Company”) present their Report together with the audited financial statements

of Koovs Plc and its subsidiaries (“the Group”) for the six months ended 31 March 2014. The purpose of the Report

is to provide information to members of the Company.

The Report contains certain forward looking statements with respect to the operations, performance and financial

condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances

can cause results to differ from those anticipated. Nothing in this Report should be construed as a profit forecast.

Composition of the Group and principal activities The Company changed its name on 24 January 2014 from Silvergate Retail Limited to Koovs Limited. The

Company was re-registered as a public company on 27 February 2014 and changed its name to Koovs plc.

The Koovs Group, comprising Koovs plc and its 57.5% owned subsidiary Koovs Marketing Consulting Private Ltd

(“Koovs India”), was formed on 10 March 2014 following an initial public offering of shares in Koovs plc on the AIM

market of the London Stock Exchange (“the IPO”). Funds raised from the IPO were invested in the acquisition of

a majority shareholding in Koovs India through the issue of new ordinary shares in that company so that, subject

only to the costs of the IPO, all of the funds raised from the IPO were retained within the newly formed Group in

order to fund the development plans.

The Group’s principal activity is that of supplying branded fashion garments and accessories for sale by a third

party through a branded website principally in the Republic of India. Prior to the acquisition of Koovs India the

Company’s principal activity was that of providing proprietary design and merchandising services to Koovs India

in connection with the development of its online fashion business in India.

Business ReviewThe Companies Act 2006 requires the Company to set out in this Report a fair review of the business of the

Group during the period under review including an analysis of the position of the Group at the end of the financial

period. The information that fulfils these requirements can be found in the following sections of the Report which

are incorporated into this report by reference:

• Chairman’s Statement on page 2.

• Strategic Report on pages 4–9.

This Directors’ Report (together with the sections of the Report incorporated by reference) has been drawn

up and presented in accordance with and reliant upon applicable English law and the liabilities of the Directors

in connection with that report shall be subject to the limitations and restrictions provided by such law.

Results and dividend The results for the six-month period ended 31 March 2014 comprise 23 weeks during which the Company had

no subsidiary and three weeks following the acquisition of Koovs India. The loss for the period, after taxation,

was £2,076,000 (2013: profit of £614,000). The Directors have not recommend payment of a dividend.

Given the Company’s early stage of development, the Directors do not envisage that the Company will pay

dividends in the foreseeable future.

Directors of the CompanyThe current Directors are shown on page 1.

Roy Naismith and Anant Nahata were appointed as Directors on 18 December 2013. Dame Gail Rebuck and

Emily Sheffield were appointed to the Board on 10 March 2014.

David Cole resigned from the Board on 18 December 2013.

Committees of the BoardAs presented in the AIM admission document, the Board intends to appoint at least two further Non-executive

Directors and then to establish an Audit Committee, a Remuneration Committee and a Nomination Committee

each with formally delegated responsibilities. The terms of reference of these committees are available on the

Group’s corporate website.

DIRECTORS’ REPORT


DIRECTORS’ REPORTCONTINUED

Significant shareholdersAs at 30 June 2014 the Company is aware of the following shareholders who were interested in more than 3%

of the issued share capital of the Company:

Shareholder Shares

Proportion of

issued share capital

Silvergate Investments Ltd 4,714,286 19.6%

Exicom Telesystems (Singapore) Pvt Ltd 3,622,283 15.0%

J O Hambro Capital Management Ltd 2,451,083 10.2%

JP Morgan Asset Management (UK) Ltd 1,918,080 8.0%

BlackRock Fund Managers Ltd 1,876,142 7.1%

Hargreave Hale Limited 1,664,959 7.0%

Henderson Global Investors Limited 1,677,080 6.8%

Mr Robert Bready 838,095 3.5%

Capital management The primary objective of the Company’s capital management is to safeguard the Company’s ability to continue as

a going concern in order to provide returns for shareholders and benefits for other stakeholders over the longer

term. The Company manages its capital structure and makes adjustments to it in light of changes in economic

and trading conditions.

In order to maintain or adjust the capital structure, the Company may adjust the value of dividends paid to

shareholders, return capital to shareholders, issue new shares or seek short-term debt funding.

During the period to 31 March 2014 the Company issued shares to raise £22 million of new capital. Subject only

to the cost of raising the capital and admitting the shares to trading on AIM all of the funds raised have been

retained in the Group in order to fund the strategic plan, including the funding of trading losses during the start-

up phase of the business. No changes were made in the capital management objectives or policies during the

period from 1 October up to 31 March 2014.

Financial instrumentsThe Group finances its activities with cash generated from equity investment from shareholders and cash

generated from trading. Other financial assets and liabilities, such as trade debtors and trade creditors, arise

directly from the Group’s operating activities. In relation to our financial risk management objectives and policies

and the extent of price, credit, liquidity and cash flow risk, refer to Note 24 in the financial statements.

Employee involvementThe Group operates a framework for employee information and consultation which complies with the

requirements of the Information and Consultation of Employees Regulations 2005. During the period, the policy

of providing employees with information, including information relating to the economic and financial factors

affecting the performance of the Group, has been enacted through staff meetings in which employees have also

been encouraged to present their suggestions and views on the Group’s performance. These meetings are held

between management and employees regularly to allow a free flow of information and ideas. The Group operates

a share option scheme which it intends to extend to a broader range of employees in due course.

Disabled employeesThe Group gives full consideration to applications for employment from disabled persons where the candidate’s

particular aptitudes and abilities are consistent with adequately meeting the requirements of the job.

Opportunities are available to disabled employees for training, career development and promotion.

Where existing employees become disabled, it is the Group’s policy to provide continuing employment wherever

practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

Directors’ liabilitiesAt the date of signing these financial statements, the Company does not have any indemnity provisions to or in

favour of one or more of its Directors against liability in respect of proceedings brought by third parties, subject

to the conditions set out in the Companies Act 2006.


Going concernThe 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.

These financial statements have been prepared on the assumption that the business is a going concern.

The Group is in the early stages of a business plan to build a new business in India. The business plan envisages

a period of development and investment for which funding has been secured through the Initial Public Offering

of shares completed on 10 March 2014. The Company raised £22 million and has retained the majority of that cash

in order to fund the development plans described in the review of operations.

Based on these plans and the existing capital, the Directors have a reasonable expectation that the Group has

adequate resources to continue in operational existence for at least 12 months from the date of this report.

Accordingly, the Directors continue to adopt the going concern basis in preparing the report and accounts.

Events occurring after the period endThere have been no significant or important events occurring after the period end which are not reflected in this

annual report.

AuditorsA resolution to reappoint Ernst & Young LLP as auditors will be put to the members at the Annual General

Meeting.

Directors’ statement as to disclosure of information to auditorsThe Directors who were members of the board at the time of approving the Directors’ Report are listed on page 1.

Having made enquiries of fellow Directors and of the Company’s auditors, each of these Directors confirms that:

• to the best of each Director’s knowledge and belief, there is no information (that is, information needed by

the Group’s auditors in connection with preparing their report) of which the Company’s auditors are unaware;

and

• each Director has taken all the steps a Director might reasonably be expected to have taken to be aware

of relevant audit information and to establish that the Group’s auditors are aware of that information.


Roy Naismith

Director

30 June 2014


DIRECTORS’ REMUNERATION REPORT

Directors’ Remuneration Policy This report is presented by the Board of Directors until such time as the Remuneration Committee is convened.

FrameworkThe Board’s policy objective on Directors’ remuneration is to align Executive Directors’ remuneration packages

to support the Group’s core business strategy while ensuring that rewards are competitive in the market. In the

early stages of the development of the Company, the remuneration packages have been limited to basic salary,

insurance benefits, pension contributions and limited share option grants. The Board recognises that further

elements of remuneration may be appropriate and also expects to grant further share option awards. Once

convened, the Remuneration Committee will consider the policy and framework further and will make proposals

for the approval of members at an appropriate General Meeting.

Remuneration policy table, Executive DirectorsThe table below summarises the existing remuneration policy for Executive Directors.

Component of remuneration package, purpose and link to strategy Operation

Framework used to assess performance and provisions for the recovery of sums paid

Basic salary

The level of basic salary is set with the

purpose of attracting and retaining

individuals with the appropriate

knowledge, skills and experience

to lead the Group.

Salaries are reviewed annually and fixed

for 12 months from 1 April. Salaries are

paid monthly in arrears in cash.

In setting salary levels the Board

considered each Director’s skills and

experience and took account of relevant

comparators within companies in a

similar sector.

There are no proposed salary increases

for any Executive Directors.

Benefits

The level of benefits is set with the

purpose of attracting and retaining

individuals with the appropriate

knowledge, skills and experience

to lead the Group.

R Bready and R Naismith receive private

health insurance for themselves and

their family and income protection

insurance.

The value of private health insurance

is dependent on the individual’s

circumstances.

Directors may not elect to receive cash

allowances in place of these benefits.

Pensions

Pension arrangements help recruit and

retain key executives and reward their

on-going contribution during their

career with the business.

R Naismith is entitled to a contribution

to his defined contribution pension plan

at 10% of his basic salary. No other

pensions are paid.

Not applicable.

Share options

Share option awards are designed to

incentivise executive performance over

the longer term and encourage retention

of executives over the performance

period.

R Naismith has been awarded share

options as part of his recruitment

package. Further awards will be made

under the Company Share Schemes

in due course following consideration

by the Remuneration Committee.

Under normal circumstances the options

are capable of exercise only after expiry

of five years from the grant date.


Changes to executive remunerationR Naismith joined the business as Group Chief Financial Officer on 2 December 2013 on a salary of £225,000.

R Bready’s salary was increased with effect from 1 February 2014 from £200,000 per annum to £250,000.

Prior to 31 January 2014, US$50,000 per month was paid to Silvergate Investments Ltd in respect of the

services of W Alli. From 1 February 2014 W Alli’s salary is £200,000 per annum.

Recruitment remunerationThe remuneration package for a newly recruited Executive Director will be determined by the remuneration

committee using the approved remuneration policy. The remuneration committee reserves the discretion to

depart from the policy where necessary due to significantly unusual circumstances.

Loss of officeThe entitlement of a Director can depend on whether the Director is designated as a “good leaver”. A leaver is

defined as a “good leaver” where the reason for leaving is retirement, ill health, disability or redundancy. A leaver

who resigns voluntarily is not defined as a “good leaver” unless so designated by the remuneration committee.

The Company’s policy is for all Executive Directors to have contracts of service with a rolling notice period of

6 months by either party. Payments on termination are restricted to the value of salary for the notice period

payable on termination by the Company.

Shares options will lapse on the date of termination of employment except that a Director who was in office for

the whole of the performance period will receive the share options at the same vesting date as would be the case

if the Director had not left provided the termination was not for cause. “Good leavers” who leave in the course of

a performance period will be entitled to a pro rata vesting of share options for the period worked as a proportion

of the respective performance period, such awards to vest at the same date as would be the case if the Director

had not left.

Other appointmentsThe Executive Directors are permitted to serve as Non-executive Directors of other companies provided that their

appointment is first approved by the remuneration committee. Directors are allowed to retain their fees for such

appointments.

Non-executive DirectorsThe remuneration policy for Non-executive Directors is set out in the table below.

Component of remuneration package, purpose and link to strategy Operation

Fees

The basic fee is a fixed annual fee commensurate with the

time each Director is expected to spend on the Company’s

affairs and with the responsibility assumed as Director of

the Company.

Fees are set at a level to attract and retain individuals with

appropriate expertise by reference to similar companies.

The remuneration of the Non-executive Directors comprises

an annual fee set annually be the board. There are no separate

travel and attendance allowances nor additional fees in relation

to committee membership.

The current annual fee is set at £50,000. A Nahata’s fee is

£100,000.

Share options

Share options are granted to Non-executive Directors at the

discretion of the Board of Directors. Share option awards are

designed to incentivise performance over the longer term and

encourage retention of Directors over the performance period.

G Rebuck and E Sheffield were awarded share options upon

appointment to the Board.

Consultancy

Consultancy contracts may be considered in areas where the

Non-executive Director has specific expertise.

E Sheffield is retained under a consultancy contract to supply

guidance and insight into emerging fashion trends.


DIRECTORS’ REMUNERATION REPORTCONTINUED

Each of the Non-executive Directors has a letter of appointment, dated 5 February 2014 in the case of A Nahata

and G Rebuck, and dated 11 December 2013 in the case of E Sheffield. The letters of appointment allow for an

initial period of three years and may be terminated by the Company or the Director on three months’ notice.

New non-executive appointmentsThe same principles as above will be applied in setting the remuneration of any new Non-executive Director.

Remuneration will comprise fees, paid at prevailing rates for the existing Non-executive Directors, and the grant

of share options at the discretion of the Board of Directors.

Retirement and re-election of DirectorsAll Directors are required, under the Articles of Association, to be elected by the shareholders at the AGM

following appointment and to retire and be subject to re-election at the AGM at intervals of not more than three

years. Non-executive Directors who have served for more than nine years are subject to annual re-election.

Statement of consideration of employment conditions elsewhere in the Group and others’ viewsThe majority of the Group’s employees are based in the Republic of India where remuneration levels are

significantly different to those in the UK. In setting Directors’ remuneration, consideration is given to pay and

employment conditions of employees of the Company and policies throughout the Group. The Company has not

formally consulted with employees when drawing up the Directors’ remuneration policy nor has it had any input

from shareholders, although any such input would be taken seriously.

Total level of expenditure on employeesThe significant change in the nature, ownership and structure of the Group has resulted in significant changes to

the cost base and distributions. The following table sets out details of the remuneration paid to all employees of

the Group along with details of the distributions made by the Company while under the ownership of Silvergate

Investments Ltd.

6 month

period to

31 March

2014

£000

13 month

period to

30 September

2013

£000

Remuneration to all Group employees 607 517

Dividends paid – 599


Annual Report on Remuneration

Remuneration table

2014Executive Directors

Period in office Salary

£

Pension

£

Total

£

W Alli 6 months 208,766 – 208,766

R Bready 6 months 123,995 – 123,995

R Naismith 4 months 75,000 7,500 82,500

D Cole 2 1/2 months – – –

407,761 7,500 415,261

Non-executive DirectorsFees

£

Consultancy

£

Total

£

A Nahata 1 month 8,333 – 8,333

G Rebuck 1 month 4,167 – 4,167

E Sheffield 1 month 4,167 2,083 6,250

16,667 2,083 18,750

W Alli, Chairman, is considered the Chief Executive Officer. There was no structured variable element of

remuneration for any Director during the period.

The table below shows the current annual salaries and fees of the Directors as at the date of signing of this report.

Executive DirectorsAnnual salary

£

W Alli 200,000

R Bready 250,000

R Naismith 225,000

Non-executive DirectorsAnnual fees

£

A Nahata 100,000

G Rebuck 50,000

E Sheffield 50,000

Directors’ beneficial interest in sharesAt 31 March

2014

At 30 September 2013 or subsequent

date of appointment

Executive Directors Ordinary shares Ordinary shares Preference shares

W Alli 4,714,286 740 140

R Bready 838,095 40 40

Non-executive Directors

A Nahata (appointed 18 December 2013) 3,622,283 3,622,283 –


No other Directors had any beneficial interest in shares in the Company at 31 March 2014 or on their date of

appointment other than the share options disclosed below. The Board has not set any guidelines for Directors

to own shares in the Company. W Alli is interested in the shares held by Silvergate Investments Ltd through his

ownership of that company. A Nahata is interested in the shares held by Exicom Tele-systems (Singapore) Private

Limited through his involvement with that company.

Interests in options Date of grant Exercise

price

At 1 October

2013

Number

Granted during

the period

Number

At 31 March

2014

Executive Directors

R Naismith 4 March 2014 150p – 241,107 241,107

Non-executive Directors

G Rebuck 4 March 2014 150p – 60,277 60,277

E Sheffield 4 March 2014 150p – 60,277 60,277

The options issued to R Naismith have been issued under the Koovs plc Unapproved Share Option Plan. The

options issued to G Rebuck and E Sheffield were made by way of separate deeds of option on terms equivalent to

the Unapproved Share Option Scheme. The options may be exercised between 4 March 2019 and 4 March 2024.

During the period the Company’s share price varied between 163 pence and 224 pence.


Roy Naismith

Director

30 June 2014

DIRECTORS’ REMUNERATION REPORTCONTINUED


STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Directors’

Remuneration Report, the Corporate Governance Report and the financial statements in accordance with

applicable UK law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law

the Directors have elected to prepare the financial statements in accordance with International Financial

Reporting Standards (“IFRS”) as adopted by the European Union. Under company law the Directors must

not approve the financial statements unless they are satisfied that they give a true and fair view of the

state of affairs of the Group and of the profit or loss 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; and

• state whether applicable IFRS have been followed, subject to any material departures disclosed and

explained in the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of

the Group and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps

for the prevention and detection of fraud and other irregularities.


INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF KOOVS PLC

We have audited the financial statements of Koovs plc for the period ended 31 March 2014 which comprise the

Group and Parent Company Statements of Financial Position, the Group’s Income Statement, the Group Statement

of Other Comprehensive Income, the Group and Parent Company Statements of Cash Flow, the Group and Parent

Company Statements of Changes in Equity and the related Notes 1 to 33. The financial reporting framework that

has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs)

as adopted by the European Union and, as regards the parent company financial statements, as applied in

accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members

those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and

the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorAs explained more fully in the Statement of Directors’ Responsibilities set out on page 21, the Directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and

fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply

with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient

to give reasonable assurance that the financial statements are free from material misstatement, whether caused

by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s

and the Parent Company’s circumstances and have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the

financial statements. In addition, we read all the financial and non-financial information in the annual report to

identify material inconsistencies with the audited financial statements and to identify any information that is

apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the

course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies

we consider the implications for our report.

Opinion on financial statementsIn our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s

affairs as at 31 March 2014 and of the Group’s loss for the period then ended;

• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the

European Union;

• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted

by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act

2006.


Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Chairman’s Statement, Strategic Report, Corporate Governance Report,

Directors’ Remuneration Report and the Directors’ Report for the financial period for which the financial

statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit

have not been received from branches not visited by us; or

• the Parent Company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Julie Carlyle (Senior Statutory Auditor)

For and on behalf of Ernst & Young LLP (Statutory Auditor)London

30 June 2014

Notes:

1. The maintenance and integrity of the Koovs plc web site 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 web site.

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


CONSOLIDATED INCOME STATEMENTFOR THE PERIOD FROM 1 OCTOBER 2013 TO 31 MARCH 2014

Notes

1 October 2013

to 31 March

2014

£000

2 August 2012 to

30 September

2013

£000

3 Revenue 633 3,225

Cost of sales (108) –

Gross profit 525 3,225

Operating expenses (2,614) (2,021)

4 Operating (loss)/profit (2,089) 1,204

Other expenses – (156)

7 Finance income 102 –

7 Finance expense (1) –

(Loss)/profit for the period before tax (1,988) 1,048

8 Tax expense (88) (434)

(Loss)/profit for the period (2,076) 614

(Loss)/profit for the year attributable to:

Equity holders of the Company (2,011) 614

Non-controlling interests (65) –


(Loss)/profit per share

10 Basic (loss)/profit per share (27.2)p £940

10 Diluted (loss)/profit per share (27.2)p £940

The accompanying notes are an integral part of the Consolidated Income Statement.

All results relate to continuing operations.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD FROM 1 OCTOBER 2013 TO 31 MARCH 2014

1 October 2013

to 31 March

2014

£000

2 August 2012 to

30 September

2013

£000


Other comprehensive income

Items that may be reclassified to income statement in subsequent periods:

Currency translation differences from overseas operation – equity holders of the Parent 411 –

Currency translation differences from overseas operation – non-controlling interest 196 –

Other comprehensive income, net of tax 607 –

Total comprehensive (loss)/ income for the period (1,469) 614

Total comprehensive income attributable to:

Equity holders of the Company (1,600) 614

Non-controlling interests 131 –

Total income and expense recognised in the period (1,469) 614

The accompanying notes are an integral part of the Consolidated Statement of Comprehensive Income.

All results relate to continuing operations.


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAT 31 MARCH 2014

Notes

31 March

2014

£000

30 September

2013

£000

Non-current assets

12 Intangible assets 6,240 –

13 Property, plant and equipment 219 –

15 Non-current cash deposits 124 –

Total non-current assets 6,583 –

Current assets

16 Inventories 1,089 –

17 Trade receivables, other receivables, prepayments and other assets 621 212

18 Cash and cash equivalents 21,735 140

Total current assets 23,445 352

Total assets 30,028 352

Non-current liabilities

19 Long-term liabilities (34) –

Total non-current liabilities (34) –

Current liabilities

22 Trade and other payables (1,070) (336)

Total current liabilities (1,070) (336)

Total liabilities (1,104) (336)

NET ASSETS 28,924 16

Capital and reserves

26 Equity share capital 241 1

27 Share premium reserve 22,194 –

Other reserves 412 –

Retained earnings (1,996) 15

Non-controlling interest 8,073 –

TOTAL EQUITY 28,924 16

The accompanying notes are an integral part of the Consolidated Statement of Financial Position.

Waheed Alli Roy Naismith

Chairman Director

30 June 2014 30 June 2014


Attributable to the equity holders of the Parent

Equity

share

capital

£000

Share

premium

reserve

£000

Share

based

payment

reserve

£000

Currency

translation

reserve

£000

Total

other

reserves

£000

Retained

earnings

£000

Total

£000

Non–

controlling

interests

£000

Total

equity

£000

At 2 August 2012 – – – – – – – – –

Profit for the period – total comprehensive

income – – – – – 614 614 – 614

Shares issued 1 – – – – – 1 – 1

Equity dividends paid (Note 9) – – – – – (599) (599) – (599)

At 30 September 2013 1 – – – – 15 16 – 16

Loss for the period – – – – – (2,011) (2,011) (65) (2,076)

Other comprehensive income – – – 411 411 – 411 196 607

Total comprehensive income – – – 411 411 (2,011) (1,600) 131 (1,469)

Shares issued 240 23,055 – – – – 23,295 – 23,295

Cost of share issue – (861) – – – – (861) – (861)

On acquisition of subsidiary – – – – – – – 7,942 7,942

Share based payments reserve – – 1 – 1 – 1 – 1

At 31 March 2014 241 22,194 1 411 412 (1,996) 20,851 8,073 28,924

The accompanying notes are an integral part of the Consolidated Statement of Changes in Equity.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE PERIOD FROM 2 AUGUST 2012 TO 31 MARCH 2014


CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE PERIOD FROM 1 OCTOBER 2013 TO 31 MARCH 2014

Notes

1 October 2013

to 31 March

2014

£000

2 August 2012 to

30 September

2013

£000

Operating activities


Adjustments to reconcile (loss)/profit for the period to net cash flow

from operating activities

Depreciation and amortisation 13 –

Cost of acquisition 52 –

Other non-cash items (1) –

Interest income (102) –

Taxation charge in period 88 434

Working capital adjustments:

Increase in inventories (159) –

Decrease/(increase) in trade and other receivables 52 (212)

Increase in trade and other payables 40 336

Cash flows from operations (2,093) 1,172

Income tax paid (88) (434)

Net cash flow from operating activities (2,181) 738

Investing activities

Net cash from purchase of a subsidiary 857 –

Purchase of plant and equipment (32) –

Proceeds from sale of plant and equipment 2 –

Interest income 102 –

Net cash flow from investing activities 929 –

Financing activities

Proceeds from issue of shares 23,295 1

Costs of share issues (878) –

Interest expense (1) –

9 Dividends paid to the Parent Company – (599)

Net cash flow from financing activities 22,416 (598)

Net increase in cash and cash equivalents 21,164 140

Cash and cash equivalents at start of period 140 –

Exchange differences 431 –

18 Cash and cash equivalents at end of period 21,735 140

The accompanying notes are an integral part of the Consolidated Statement of Cash Flows.


COMPANY STATEMENT OF FINANCIAL POSITIONAT 31 MARCH 2014

Notes

31 March

2014

£000

30 September

2013

£000

Non-current assets

13 Property, plant and equipment 10 –

14 Investment in subsidiary 16,826 –

Total non-current assets 16,836 –

Current assets

17 Trade and other receivables 183 212

18 Cash and cash equivalents 3,960 140

Total current assets 4,143 352

Total assets 20,979 352

Current liabilities

22 Trade and other payables (451) (336)

Total current liabilities (451) (336)

NET ASSETS 20,528 16

Capital and reserves

26 Equity share capital 241 1

27 Share premium reserve 22,194 –

Other reserves 1 –

Retained earnings (1,908) 15

TOTAL EQUITY 20,528 16

The accompanying notes are an integral part of the Company Statement of Financial Position.

Waheed Alli Roy Naismith

Chairman Director

30 June 2014 30 June 2014


Equity

share

capital

£000

Share

premium

reserve

£000

Share

based

payment

reserve

£000

Retained

earnings

£000

Total

equity

£000

At 2 August 2012 – – – – –

Profit for the period – total comprehensive income – – – 614 614

Shares issued 1 – – – 1

Equity dividends paid (Note 9) (599) (599)

At 30 September 2013 1 – – 15 16

Loss for the period – total comprehensive income – – – (1,923) (1,923)

Charge in period – – 1 – 1

Shares issued 240 23,055 – – 23,295

Cost of share issue – (861) – – (861)

At 31 March 2014 241 22,194 1 (1,908) 20,528

The accompanying notes are an integral part of the Company Statement of Changes in Equity.

COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE PERIOD FROM 2 AUGUST 2012 TO 31 MARCH 2014


Notes

1 October 2013

to 31 March

2014

£000

2 August 2012 to

30 September

2013

£000

Operating activities

Profit for the period (1,923) 614

Adjustments to reconcile profit for the period to net cash flow

from operating activities

Depreciation 3 –

Cost of acquisition 52 –

Other non-cash items 1 –

Taxation charge in period 88 434

Working capital adjustments:

Decrease/(increase) in trade and other receivables 27 (212)

Increase in trade and other payables 117 336

Cash flows from operations (1,635) 1,172

Income tax paid (88) (434)

Net cash flow from operating activities (1,723) 738

Investing activities

14 Investment in subsidiary (16,826) –

Costs of investment in subsidiary (52) –

Purchase of plant and equipment (13) –

Net cash flow from investing activities (16,891) –

Financing activities

Proceeds from issue of shares 23,295 1

Costs of share issues (861) –

9 Dividends paid to the Parent Company – (599)

Net cash flow from financing activities 22,434 (598)

Net increase in cash and cash equivalents 3,820 140

Cash and cash equivalents at start of period 140 –

18 Cash and cash equivalents at end of period 3,960 140

The accompanying notes are an integral part of the Company Statement of Cash Flows.

COMPANY STATEMENT OF CASH FLOWSFOR THE PERIOD FROM 1 OCTOBER 2013 TO 31 MARCH 2014


Notes to the Financial Statements

1 Authorisation of financial statements The consolidated financial statements of Koovs plc (the “Company”) and it subsidiary (together, the “Group”)

were authorised for issue by the board of Directors on 30 June 2014 and the Statement of Financial Position

was signed on the board’s behalf by Waheed Alli and Roy Naismith.

Koovs plc is a public limited company incorporated and domiciled in England and Wales. The address of its

registered office is Aldwych House, 81 Aldwych, London WC2B 4HN.

2 Accounting policies

2.1 Basis of preparationThe Group’s consolidated financial statements and the Company’s financial statements have been prepared in

accordance with IFRS as adopted by the European Union as they apply to the financial statements for the period

ended 31 March 2014 and applied in accordance with the Companies Act 2006. The accounting policies which

follow set out those policies which apply for the period ended 31 March 2014.

The financial statements are prepared under the historical cost convention except for assets valued at fair value

on acquisition.

The statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000)

except when otherwise indicated.

There were no revisions to Adopted IFRS that became applicable in the year ended 31 March 2014 which had

a significant impact on the Group’s or Company’s financial statements.

The preparation of the financial statements in conformity with adopted IFRS requires management to make

judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and

liabilities, income and expenses. Actual results may differ from these assumptions. The estimates and assumptions

are based on historical experience and are reviewed on an ongoing basis and are disclosed in Note 2.4. Revisions

to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only

that period, or in the period of revision and future periods if the revision affects both current and future periods.

As permitted by the exemption in Section 408 of the Companies Act 2006, the Company has not presented its

own profit or loss account. The loss for the period was £1,923,000.

The accounting policies set out below have been applied consistently to all periods in the consolidated financial

statements.

2.2 Basis of consolidationThe consolidated financial statements of the Group comprise the accounts of the Company and its subsidiary

undertaking, the accounts of which are made up to 31 March each year. The results of companies acquired or

disposed of in the year are dealt with from or up to the date control commences or ceases. The net assets of

companies acquired are incorporated in the consolidated accounts at their fair values to the Group at the date

of acquisition. Intra-Group balances and any unrealised gains or losses or income and expenses arising from

intra-Group transactions are eliminated in preparing the consolidated financial statements.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the

financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,

potential voting rights that presently are exercisable are taken into account.

2.3 Significant accounting policies

a. Going concernAs disclosed in the Director’s Report the financial statements have been prepared on the going concern basis,

which assumes that, for the foreseeable future, the Group will be able to meet its liabilities as and when they

fall due.

b. Business combinations and goodwillBusiness combinations are accounted for by applying the purchase method of accounting. Goodwill arising on

business combinations represents the difference between the cost of the acquisition and the fair value of the

identifiable assets and liabilities acquired.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is tested annually for impairment.


The carrying amount is compared with the recoverable amount annually. The recoverable amount is assessed

as the higher of value in use and fair value less cost of disposal. The value in use calculations refer to cash flow

projections based on actual operating results extrapolated forward for five years.

An appropriate pre-tax discount rate is used in discounting the projected cash flows based on the weighted

average cost of capital applicable to the cash generating units concerned. For the purpose of impairment

testing, goodwill is allocated to the lowest level of cash generating unit within the Group at which the goodwill

is monitored for internal management purposes. Where goodwill forms part of a cash generating unit and part

of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included

in the carrying amount of the operation when determining the gain or loss on disposal.

For each business combination, the Group elects whether to measure any non-controlling interests in the acquiree

at fair value or at the proportionate share of the acquiree’s identifiable net assets.

c. Foreign currency translationThe Group’s financial statements are presented in sterling.

The functional currency of Koovs India is the Indian Rupee. Since the functional currency of the major operating

unit of the Group is the Rupee, it is intended to change the reporting currency of the Group to the Indian Rupee

with effect from 1 April 2014.

Transactions in foreign currencies are initially recorded in the Company’s functional currency by applying the

spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign

currencies are retranslated at the functional currency rate of exchange ruling at the period end date. All

differences are taken to the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the

exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign

currency are translated using the exchange rates at the date when the fair value was determined.

d. Financial Instruments

i. Financial assetsAll financial assets are recorded on initial recognition at fair value.

Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount.

Where the time value of money is material, receivables are carried at amortised cost. A provision is made when

there is objective evidence that the Group will not be able to recover balances in full. Balances are written off

when the probability of recovery is assessed as being remote.

Cash and short-term deposits in the Statement of Financial Position comprise cash at banks and in hand and

short-term deposits with an original maturity of three months or less. For the purpose of the cash flow statement,

cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank

overdrafts.

ii. Financial liabilitiesFinancial liabilities and equity instruments issued by the Company are classified according to the substance of

the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting

all of its liabilities.

Trade and other payables mainly originate from the financing of assets used in the Group’s ongoing operations

for working capital. These assets are considered part of the Group’s overall liquidity risk.

The fair value of trade and other payables is estimated as the present value of future cash flows, discounted

at the market rate of interest at the period end if the effect is material.

iii. Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount reported in the Statement of Financial

Position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there

is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.


Notes to the Financial StatementsCONTINUED

2 Accounting policies continued

2.3 Significant accounting policies continuedd. Financial Instruments continued

iv. Fair valuesFor financial instruments not traded in an active market, the fair value is determined using appropriate valuation

techniques. Such techniques may include using recent arm’s length market transactions; reference to the current

fair value of another instrument that is substantially the same; discounted cash flow analysis or other valuation

models.

e. Preference sharesPreference share capital which has no fixed redemption date, carries no voting rights and is not entitled to receive

any distribution other than return of capital are classified in shareholders’ equity, net of transaction costs.

f. Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received,

excluding discounts, rebates, value added tax and other sales taxes. The following criteria for each of the

Company’s revenue categories must also be met before revenue is recognised:

i. One time initial revenueDuring the period ended 30 September 2013 the Company recognised £947,000 of revenue in accordance

with IAS 18 “Revenue” using the percentage of completion method in relation to the initial access to the senior

management of the Company provided to Koovs India during the period and early-stage advice on the viability,

positioning, pricing and look-and-feel of the proposed website supporting a fashion-oriented e-commerce

business. This revenue was recognised from the date of the contract to the re-launch of the Koovs.com website.

ii. Pre-acquisition Revenue relating to the supply of proprietary apparel designs and technical support to Koovs India prior to its

acquisition has been recognised in the month in which the work was completed. These amounts were billed in

advance, which created an amount of deferred revenue as at 30 September 2013. This revenue was recognised

gross of withholding tax withheld on remittance of amounts owed.

iii. Post-acquisition Following the acquisition of Koovs India, revenue represents sale of products made to the Group’s customers and

is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually

on delivery of the goods.

Revenue is recognised to the extent it is probable that economic benefits will flow to the Group which can be

reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the

consideration received or receivable, taking into account contractually defined terms of payment and excluding

taxes or duty.

The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as

principal or agent.

Revenue excludes value added taxes (VAT), rebates and other discounts.

g. Property, plant and equipment Property, plant and equipment is stated at cost (including capitalised borrowing costs where appropriate) less

accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the

acquisition of the asset. Depreciation is charged to the income statement on a straight-line basis over the

estimated useful lives of the assets. Residual values are reviewed at each reporting date.

The estimated useful lives are as follows:

Leasehold improvements: period of the lease

Plant, equipment, fixtures and fittings: 3 to 10 years


h. Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,

intangible assets are carried at cost less any accumulated amortisation and/or accumulated impairment losses,

if any. Internally generated intangible assets are not capitalised and expenditure is reflected in profit and loss in

the period in which the expenditure is incurred.

Intangible assets are amortised over the useful economic life and assessed for impairment whenever there

is an indication that the intangible asset may be impaired.

The estimated useful lives are as follows:

Software licences: period of the licence

i. Leased assets Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as

finance leases. Finance lease assets are stated at an amount equal to the lower of its fair value and the present

value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment

losses. Leased assets are depreciated over the shorter of the lease term and their estimated useful lives unless

it is reasonably certain that the Group will obtain ownership by the end of the lease term.

Operating leases are leases where substantially all of the risks and rewards of ownership have not been

transferred.

j. Inventories Inventories and work in progress are stated at the lower of cost and net realisable value. Cost includes the

purchase price of manufactured products, materials, direct labour, transport costs and a proportion of attributable

design and production overheads calculated on a first in, first out basis. Net realisable value is the estimated

selling price in the ordinary course of business. Provision is made for obsolete, slow moving or defective items

where appropriate.

k. Impairment The carrying amount of the Group’s assets, other than inventories and deferred tax assets, are reviewed each

balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the

asset’s recoverable amount is estimated. An impairment loss is recognised in the income statement whenever the

carrying amount of an asset exceeds its recoverable amount. For tangible fixed assets, the recoverable amount is

determined with reference to the cash generating unit to which the asset belongs.

l. Lease payments Operating lease rentals are charged to the income statement on a straight-line basis over the term of the lease.

Lease incentives received are recognised in the income statement on a straight-line basis over the term of the

lease. Rentals receivable under operating leases are included in the income statement on a straight-line basis.

Minimum lease payments made under finance leases are apportioned between the finance expense and the

reduction of the outstanding liability. The finance expense is allocated to each period during the lease term

so as to produce a constant periodic rate of interest on the remaining balance of the liability.

m. Income tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income

statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised

in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or

substantially enacted at the balance sheet date, plus any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the

carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation

purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of

goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that

affects neither accounting nor taxable profit and differences relating to investments in subsidiaries and jointly

controlled entities to the extent that they will probably not reverse in the foreseeable future. Deferred tax is

measured at the tax rates that are expected to be applied to the temporary differences when they reverse,

based on the laws that have been enacted or substantially enacted by the reporting date. A deferred tax asset is

recognised only to the extent that it is probable that future taxable profits will be available against which the asset

can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax

benefit will be realised.



2 Accounting policies continued

2.3 Significant accounting policies continued

n. Pensions The Group operates an unfunded defined benefit gratuity plan for its employees in India. The costs of

providing benefits under this plan are determined on the basis of actuarial valuation at each year end. The cost

is determined using the projected unit credit method. Re-measurements, comprising actuarial gains and losses,

are recognised immediately in the Statement of Financial Position with a corresponding charge (or credit) as part

of Other Comprehensive Income in the period in which they occur. Re-measurements are not reclassified to the

income statement in subsequent periods.

The Group also contributes to defined contribution pension schemes. Pension costs charged to the income

statement represent the amount of contributions payable to such schemes in respect of the period.

o. Share-based payment The Group operates share option incentive schemes for Directors and key employees. The fair value of

options granted is recognised as an employee expense in the income statement with a corresponding increase

in equity. The fair value is measured at grant date and spread over the period during which the employees

become unconditionally entitled to the options. The fair value of the options is measured using the “Black-

Scholes” option valuation model, taking into account the terms and conditions upon which the options were

granted. The amount recognised in the income statement is adjusted at each balance sheet date to reflect the

number of share options that are expected to vest revised for expected leavers and estimated achievement of

non-market based vesting conditions.

p. ProvisionsA provision is recognised in the balance sheet when the Group has a present legal or constructive obligation

as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the

obligation. Provisions are recognised at an amount equal to the best estimate of the expenditure required to settle

the Group’s liability. Obligations arising from restructuring plans are recognised when detailed formal plans have

been established and when there is a valid expectation that such a plan will be carried out.

q. Finance income and expenseFinance income comprises interest receivable on funds invested. Finance income is recognised in the Group

statement of comprehensive income using the effective interest method.

Finance expenses comprise interest payable on interest-bearing borrowings. Finance expenses are recognised

in the Group statement of comprehensive income using the effective interest method.

r. Segmental informationThe Directors consider that the business comprises a single operating segment for reporting purposes.

2.4 Judgements and key sources of estimation uncertaintyThe preparation of financial statements requires management to make judgements, estimates and assumptions

that affect the amounts reported for assets and liabilities as at the period end date and the amounts reported for

revenues and expenses during the period. However, the nature of estimation means that actual outcomes could

differ from those estimates.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts

recognised in the financial statements:

a. TaxesUncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the

amount and timing of future taxable income.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be

available against which the losses can be utilised. Significant management judgement is required to determine the

amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable

profits together with future tax planning strategies.


b. Share-based paymentsEstimating fair value for share-based payment transactions requires determination of the most appropriate

valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires

determination of the most appropriate inputs to the valuation model including the expected life of the share

option, volatility and dividend yield and making assumptions about them. The assumptions and models used

for estimating fair value for share-based payment transactions are disclosed in Note 28.

c. Employee benefitsThe cost of the defined benefit gratuity plan is determined using actuarial valuation at each year end. An actuarial

valuation involves making various assumptions that may differ from actual developments in the future. These

include the determination of the discount rate, future salary increases, mortality rates and employee turnover.

Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive

to changes in these assumptions. All assumptions are reviewed at each reporting date.

Further details about the assumptions used are given in Note 21.

d. Fair values of assets acquiredThe assessment of the fair value of the assets acquired and any potential value of intangible assets acquired in

relation to the investment in Koovs India has required judgement to be applied affecting the accounting for the

acquisition and the resulting goodwill.

No value has been attributed to the Koovs brand at the date of acquisition due to the brand being in its infancy.

No value has been attributed to the supply agreement with the Group’s customer as the relationship was

established only shortly before acquisition and the customer had no pre-existing relationships with customers.

e. Impairment reviewsImpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,

which is the higher of its fair value less costs of disposal and its value in use. Value in use is calculated based on a

Discounted Cash Flow model. The cash flows are derived from the business plan for the next five years. The value

in use is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the

growth rate used for extrapolation purposes.

2.5 IFRSs issued but not yet effectiveThe following standards, amendments to the existing standards and interpretations have not yet been endorsed

for use in EU:

S. No. New and revised standards

Effective for annual periods beginning on or after

1 IFRS 9 Financial Instruments (issued in November 2009) and subsequent amendments

from October 2010 and November 2013

Not yet decided

2 Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:

Disclosures – Mandatory Effective Date and Transition Disclosures (issued in

December 2011)

Not yet decided

3 IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements 1 January 2014

4 IFRS 11 Joint Arrangements, IAS 28 Investments in Associates and Joint Ventures 1 January 2014

5 IFRS 12 Disclosure of Interests in Other Entities 1 January 2014

6 Amendments to IAS 19 Defined Benefit plan: Employee Contributions (issued in

November 2013)

1 July 2014

7 Annual Improvements to IFRSs 2010 – 2012 Cycle (issued in December 2013) 1 July 2014

8 Annual Improvements to IFRSs 2011 – 2013 Cycle (issued in December 2013) 1 July 2014

9 IFRIC 21 Levies (issued in May 2013) 1 January 2014



3 RevenueRevenue recognised in the Income Statement is analysed as follows:

2014

£000

2013

£000

Supply of proprietary information 544 3,225

Sale of fashion garments 89 –

Total revenue 633 3,225

During the period the Group operated in two principal areas of activity, being those of providing proprietary

know-how and design services for the fashion industry and, following the acquisition of Koovs India, the wholesale

of fashion garments. Both revenue streams make up more than 10% of the total revenue.

Geographical information

Revenue from external customers

2014

£000

2013

£000

India 633 3,225

Operating segmentAll of the Group’s revenue is generated by Koovs India through its operations as a supplier of branded fashion

products. The chief operating decision maker is the Chairman 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.

Information about major customersRevenue from Koovs India prior to its acquisition amounted to £544,000 (2013: £3,225,000) arising from

the provision of proprietary know-how and design services. Revenue from one customer, subsequent to the

acquisitions of Koovs India, amounted to £89,000 (2013: Nil) arising from the supply of fashion garments in India.

4 Operating profitOperating profit is stated after charging:

2014

£000

2013

£000

Auditor’s remuneration (Note 5) 296 37

Operating lease payments 54 97

Depreciation expense 12 –

Amortisation expense 1 –

Employee benefits expense – share based payment 1 –

Staff costs (Note 6) 684 –

Net foreign currency exchange differences – 3


5 Auditor’s remunerationThe Group paid the following amounts to the Group’s auditor or its associates in respect of the audit of the

financial statements and for other services provided to the Group.

2014

£000

2013

£000

Audit of the financial statements – audit services 73 22

Audit related assurance services – non–audit services 18 –

Taxation compliance and advisory services 6 –

Corporate finance transaction services 199 15

296 37

6 Staff costs and Directors’ emoluments

a. Staff costs

2014

£000

2013

£000

Wages and salaries 607 517

Social security costs 64 59

Pension contributions 13 –

684 576

The average monthly number of employees during the period was made up as follows:

2014

Number

2013

Number

UK operations 15 7

India operations 98 –

113 7

b. Directors’ remunerationAt 31 March 2014 the Company had six Directors. The aggregate remuneration of the Directors of the Company

was as follows:

2014

£000

2013

£000

Total Directors’ remuneration 434 612

Amounts in respect of highest paid Director were as follows:

2014

£000

2013

£000

Highest paid Directors’ remuneration 209 419

The Directors’ remuneration shown above includes amounts paid to Silvergate Investments Limited, the former

Parent Company, in relation to the services of Waheed Alli. Waheed Alli is the sole shareholder of Silvergate

Investments Limited. There are no amounts paid to or receivable by Directors under long term incentive plans

in respect of qualifying services. Further information is given in the Directors’ Remuneration Report.



7 Finance income and expense

2014

£000

2013

£000

Finance income

Interest on deposits 102 –

Finance expense

Bank charges (1) –

8 Taxation

a. Tax charged in the Income Statement

2014

£000

2013

£000

Current income tax

UK corporation tax – –

Overseas tax 88 434

Total current income tax expense in the Income Statement 88 434

There is no tax charge or credit relating to items charged or credited to other comprehensive income. The

Company has incurred withholding tax on income received from its customer in India. Such withholding tax

credits may be set against UK corporation tax liabilities arising in the year in which the withholding tax is paid and

therefore no liability to UK Corporation tax has arisen in either period. The overseas tax reported above reflects

withholding tax paid on income received from India in the period.

b. Reconciliation of the total tax chargeThe tax expense in the Income Statement for the period is higher than the standard rate of corporation tax in the

UK of 23%. The differences are reconciled below:

2014

£000

2013

£000

Profit from continuing operations before taxation (1,988) 1,048

Tax calculated at UK standard rate of corporation tax of 23% (2013: 23.5%) (457) 246

Expenses not deductible for tax purposes 184 –

Deferred tax asset not recognised 273 –

Effect of withholding taxes arising on overseas income 88 188

Total tax expense reported in the Income Statement 88 434

c. Change in corporation tax rateA reduction in the UK corporation tax rate from 24% to 23% took effect from 1 April 2013 and a further reduction

to 21% took effect on 1 April 2014.

In addition, the Government announced its intention to further reduce the UK corporation tax rate to 20% from

1 April 2015.

d. Deferred taxThe Group has £1.2 million of tax losses, the majority in the UK, which are available to carry forward against

taxable profits generated in future periods. No deferred tax asset has been recognised in relation to these losses.


9 Dividends paid and proposed

2014

£000

2013

£000

Declared and paid during the period

Equity dividends on ordinary shares

First interim for 2012: $633 per share – 239

Second interim for 2013: $633 per share – 239

Third interim for 2013: $300 per share – 121

Dividends paid – 599

The dividends in the prior period were paid in US dollars. No dividends were paid or declared in the period from

1 October 2013 to 31 March 2014.

10 Earnings per shareBasic 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.

2014

£000

2013

£000

Weighted average shares in issue for basic earnings per share 7,400,568 653

Effect of dilutive options – –

Weighted average shares in issue for diluted earnings per share 7,400,568 653

Earnings attributable to the owners of the Parent (£000) (2,011) 614

Basic (loss)/earnings per share (27.2)p £940

Diluted (loss)/earnings per share (27.2)p £940

Diluted 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, adjusted for the effects

of potentially dilutive share options. 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 for diluted earnings per share.



11 Acquisition of Koovs IndiaAs part of the strategic development of the Group and in accordance with an undertaking which was subject to

the successful listing of the Company on AIM, on 10 March 2014 the Company acquired 57.5% of the issued share

capital and voting rights of Koovs Marketing Consulting Private Limited (“Koovs India”) a company incorporated

in the Republic of India. Koovs India operates a wholesale business supplying fashion clothing and accessories.

The Koovs.com website is operated independently by a third party under an exclusive contract and Koovs India

sources appropriate fashion products and supplies them for sale through the Koovs.com website.

Assets acquired and liabilities assumedThe provisional fair values of the identifiable assets and liabilities of Koovs India as at the date of acquisition were:

Provisional

fair value

£000

Assets

Property plant and equipment 202

Intangible assets 26

Other non-current assets 113

Cash and cash equivalents 17,735

Trade and other receivables 455

Inventories 906

Liabilities

Trade payables (624)

Other liabilities (108)

Total identifiable net assets at fair value 18,705

Non-controlling interest measured at fair value (7,942)

Goodwill arising on acquisition 6,063

Purchase consideration, entirely in cash 16,826

Analysis of cash flow on acquisition £000

Consideration paid (16,826)

Transaction costs of the acquisition (52)

Net cash acquired with the subsidiary 17,735

Net cash flow on acquisition 857

The underlying goodwill is denominated in Indian Rupees and has therefore been retranslated at 31 March 2014

to £6,213,000. The goodwill is entirely allocated to the Group’s single cash generating unit. None of the goodwill

is expected to be deductible for taxation purposes.

The value of the non-controlling interest in Koovs India has been calculated as the relevant proportion of the fair

values of the identifiable net assets of Koovs India as at the date of acquisition.

The gross value of receivables acquired was £467,000. The fair value of the receivables and the best estimate of

the cash flows expected to arise from these receivables is £455,000.

From the date of acquisition, Koovs India has contributed £89,000 of revenue and a loss before tax of £153,000.

If the combination had taken place at the beginning of the period, Group revenue would have been £502,000 and

the loss before tax for the Group would have been £4,550,000.

Transaction costs of £52,000 have been expensed within operating expenses in the income statement.


12 Intangible assets

GroupComputer

software

£000

Goodwill

£000

Total

£000

Cost

Acquired with Koovs India 26 6,063 6,089

Additions in period 2 – 2

Exchange difference on goodwill denominated in Rupees – 150 150

Closing balance 28 6,213 6,241

Amortisation

Amortisation charge in period 1 – 1

Closing balance 1 – 1

Net Book Value 27 6,213 6,240

Intangible assets includes the cost of licences for computer programmes. These assets are assumed to have a

finite useful life and are amortised on a straight-line basis over the life of the licence.

The goodwill is not amortised. The carrying value of the goodwill is tested against the value of the Group,

comprising a single cash generating unit. The Directors have considered the carrying value of the goodwill at

31 March 2014 in the light of the recent placing of shares with investors and the market capitalisation of the Group.

The market capitalisation is in excess of £34 million which is greater than the carrying value of the net assets and

goodwill. The Directors have therefore concluded that no impairment is required. The level of fair value hierarchy

is level 1 – market observable inputs.



13 Property, plant and equipment

GroupLeasehold

improvements

£000

Computer

equipment

£000

Office

equipment

£000

Fixtures

and fittings

£000

Motor

vehicle

£000

Total

£000

Cost

Additions in period – 12 8 12 – 32

Acquired with Koovs India 87 43 53 9 10 202

Disposals in period – (3) – – – (3)

Closing balance 87 52 61 21 10 231

Depreciation

Depreciation charge 2 1 6 3 – 12

Closing balance 2 1 6 3 – 12

Net Book Value 85 51 55 18 10 219

The motor vehicle shown above was acquired under a finance lease.

CompanyFixtures

and fittings

£000

Cost

Additions in period 13

Closing balance 13

Depreciation

Depreciation charge in period 3

Closing balance 3

Net Book Value 10

14 Company investment in subsidiaryOn 10 March 2014 the Company subscribed for 165,986,056 shares in Koovs Marketing Consulting Private Limited

(“Koovs India”) at a cost of £16,826,000 all of which was paid in cash on acquisition. Koovs India owns the rights

to the Koovs brand and operates a wholesale business supplying fashion clothing and accessories. As a result,

Koovs plc holds 57.5% of both the issued share capital and the voting rights of its subsidiary.

15 Non-current cash deposits

Group

2014

£000

2013

£000

Security deposits 83 –

Deposit with original maturity for more than 12 months 40 –

Interest accrued on deposits 1 –

124 –

Security deposits primarily comprise interest free security deposits given towards rental premises and

Governmental liabilities in India.


16 Inventories

Group

2014

£000

2013

£000

Raw materials 66 –

Goods in transit 81 –

Finished goods (at lower of cost and net realisable value) 942 –

1,089 –

During the period, £18,000 (2013: £nil) was recognised as an expense for inventories carried at net realisable

value. This is recognised in cost of sales.

17 Trade receivables, other receivables, prepayments and other assets

Group Company

2014

£000

2013

£000

2014

£000

2013

£000

Trade receivables 122 164 – 164

Due from related parties 80 – – –

Loans to employees 106 – – –

VAT and other taxes recoverable 198 – 183 –

Prepayments, advances and accrued income 115 48 – 48

621 212 183 212

Within the carrying amount of trade receivables is £122,000 due from one customer. This amount has been

received by the date of these accounts.

Trade receivables are non-interest bearing and are shown net of a provision for impairment. During the period,

the Group recognised no charge for the impairment of trade receivables. As at 31 March 2014 the provision for

impairment of other receivables was £5,000.

As at the end of the financial periods, none of the trade receivables was past due.

Credit quality of financial assetsThe credit quality of financial assets is assessed by reference to external credit ratings where available, or if no

independent rating exists, a rating based on historical information relating to counterparty default rates is used.

The trade receivables balance includes amounts due from the Group’s one major customer for goods provided.

In the period to 31 March 2014 the Company’s trade receivable from this counterparty has never been past due

or impaired therefore management considers the credit quality to be certain.

18 Cash and cash equivalents

Group Company

2014

£000

2013

£000

2014

£000

2013

£000

Cash and cash equivalents

Cash on hand 1 – – –

Cash at banks 21,734 140 3,960 140

21,735 140 3,960 140



19 Non-current liabilities

Group

2014

£000

2013

£000

Finance lease liability – Note 20 6 –

Provision for employment benefits – Note 21 18 –

Lease equalisation 10 –

34 –

20 Obligations under Finance Leases

Group

2014

£000

2013

£000

Secured loan from bank

Vehicle lease – between two and five years 6 –

Vehicle lease – due within one year 3 –

9 –

The vehicle lease carries interest at 10.5% and is repayable in 48 monthly instalments of £300 and is secured on

the vehicle. The non-current portion of the borrowing will be repaid within three years from the balance sheet

date. The present value of minimum lease payments amounts to £9,000.

21 Provision for employment benefitsKoovs India has a defined benefit gratuity plan as required by India regulation. There are no other defined

benefit pension plans. The gratuity plan is governed by the laws of India which require payment of a gratuity on

termination of employment where continuous service has been greater than five years. There are no assets held

in relation to these liabilities. The movements during the period and the balance at the end of the period were:

£000

Provisions for gratuity liabilities (unfunded)

On acquisition of Koovs India 16

Arising during the period 2

At 31 March 2014 18

The gratuity is based on final salary and length of service. The expense recognised in the period is as follows:

2014

£000

2013

£000

Net benefit expense

Current service cost 1 –

Net actuarial loss in the period 1 –

Net benefit expense 2 –


The principal assumptions used in determining the post-employment benefit obligations for the plans outlined

above are:

Discount rate per annum 9.25%

Salary increases per annum 5.00%

Mortality rate reference table India Assured Lives Mortality (2006-08) Ult.

Withdrawal rate per annum 2.00%

A quantitative sensitivity analysis shows that for the key assumptions, increases or decreases of 100 basis points

have an individual impact of not more than £6,000 on the defined benefit plans obligation at 31 March 2014.

The following payments are expected to be made in the future years out of the defined benefit plans obligation:

2014

£000

2013

£000

Prior to 31 March 2015 1 –

Between 2 and 5 years 15 –

Between 5 and 10 years 2 –

Beyond 10 years 15 –

Total expected payments 33 –

22 Trade and other payables

Group Company

2014

£000

2013

£000

2014

£000

2013

£000

Trade payables 532 36 95 36

Amounts owed to Parent Company – 42 – 42

Amounts owed to other Group companies – 24 – 24

Amounts owed to other related parties 14 – 14 –

Other payables 31 49 – 49

Other taxes and social security costs 113 21 83 21

Deferred income – 164 – 164

Accrued expenses 380 – 259 –

1,070 336 451 336

Trade and other payables are non-interest bearing and are normally settled on 30 day terms.



23 Commitments and contingencies

Operating lease agreements where the Company is lesseeThe Group has entered into commercial leases on the Group’s offices and warehouse premises. The leases have

an average duration of between two and five years with no right of renewal. There are no restrictions placed upon

the lessee by entering into these leases.

Future minimum rents payable under non-cancellable operating leases are as follows:

Group Company

2014

£000

2013

£000

2014

£000

2013

£000

Not later than one year 325 33 104 33

After one year but not more than five years 740 – 112 –

After five years 657 – – –

Other contingenciesKoovs India has issued a bank guarantee to a supplier amounting to £65,000 in support of planned purchase

orders. A claim of £13,000 has been made to Koovs India but which has not been acknowledged as a debt.

24 Financial risk managementAn explanation of the Group’s financial instrument risk management objectives, policies and strategies are set

out in the discussion of capital management policies in the Strategic Report.

Exposure to credit, interest rate and currency risk arises in the normal course of the Company’s business.

Market risk – interest rate riskThe Company’s exposure to interest rate risk arises from the fluctuations in the rate of interest income arising

from cash and cash equivalents balances as impacted on by the changes in the bank base rates in the UK and

India. Interest rate fluctuations in the UK are unlikely to have a significant effect on the financial results of the

Company. In India, interest is currently earned at rates in the region of 9% on bank balances of £17.8 million. A 1%

change in this interest rate either way would have an impact in the region of £178,000 on the income statement

and equity.

Market risk – foreign currency risk Following the acquisition of Koovs India, all of the income of the Group is denominated in Indian Rupees and

the majority of the cost of sales and overheads are also denominated in Rupees. The Group holds substantial

cash deposits in rupees and the majority of both receivables and liabilities at 31 March 2014 were denominated in

Rupees. The income statement is therefore susceptible to fluctuations as a result of changes in the exchange rate.

In the period to 31 March 2014 the exposure in relation to the income statement was not significant as the period

since acquisition was very short. A 5% increase (or decrease) in the exchange rate would create a £387,000

decrease (£387,000 increase) in equity.

Since the main operational currency of the Group is the Indian Rupee, it is intended to report the result of the

Group in Rupees with effect from the next published financial report of the Group which is expected to be the

half-year statement for the period to 30 September 2014. Variations arising from changes in currency exchange

rates will remain following this change in relation to overheads and certain assets and liabilities which are

denominated in Sterling.

Credit riskOf the carrying amount of trade receivables £122,000 is against one major customer. This amount has been

received by the date of this report. No provision is made against these amounts. Cash deposits in the UK are held

with the Company’s principal banker, Barclays Bank PLC. Cash deposits in India are held by substantial local banks.

There is no concern over the credit quality of the banks holding any of the cash deposits.

The Group has established procedures to minimise the risk of default by trade debtors including detailed credit

checks undertaken before a customer is accepted.


Liquidity riskLiquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.

The table below summarises the maturity profile of the Company’s financial liabilities at 31 March 2014 based on

contractual undiscounted payments.

Period ended 31 March 2014

On demand

£000

Less than

3 months

£000

3 to 12

months

£000

1 to 5

years

£000

Over

5 years

£000

Total

£000

Non–derivative financial liabilities

Trade and other payables – 940 – – – 940

Lease liabilities – 1 3 6 – 10

Lease equalisation – – 3 10 – 13

Total – 941 6 16 – 963

Trade and other payables mainly originate from the financing of assets used in the Company’s ongoing operations

for working capital. These assets are considered part of the Company’s overall liquidity risk.

25 Fair value of financial instrumentsThe 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.

26 Issued share capital

2014

Number

2014

£

2013

Number

2013

£

Ordinary shares of £0.01 each 24,110,719 241,107 – –

Ordinary shares of £1 each – – 600 600

Ordinary shares of £1 each – Class A – – 60 60

Ordinary shares of 1 pence each – Class B – – 140 1

Preference shares of £1 each – Class A, 0% coupon – – 100 100

Preference shares of £1 each – Class B, 0% coupon – – 60 60

Preference shares of £1 each – Class C, 0% coupon – – 40 40

Allotted, called up and fully paid 24,110,719 241,107 1,000 861

Ordinary shares

At start of period 800 661

Conversion of Preference shares to Ordinary shares 200 200

1,000 861

Conversion of £1 shares to £0.01 shares in December 2013 86,140 861

Rights issue 5,735,629 57,356

Issued for cash – ordinary shares 18,288,950 182,890 800 661

Issued for cash – preference shares – – 200 200

At end of period 24,110,719 241,107 1,000 861



26 Issued share capital continuedOn 2 August 2012, 100 ordinary shares with aggregate nominal value of £100 were issued at £1 each.

On 30 October 2012, 500 ordinary shares with aggregate nominal value of £500 were issued at £1 each, 60 Class

A ordinary shares with aggregate nominal value of £60 were issued at £1 each and 140 Class B ordinary shares

with aggregate nominal value of £1.40 were issued at £0.01 each.

On 30 October 2012, 100 Class A preference shares were issued at £1 each, 60 Class B preference shares were

issued at £1 each and 40 Class C preference shares were issued at £1 each. The preference shares had no fixed

redemption date and did not entitle the holder to voting rights or to receive a dividend.

Class A, B and C preference shares ranked pari passu in respect of distributions and in terms of rights on the issue

and allotment of new shares. On return of capital on a liquidation or otherwise, surplus assets and retained profits

available would be distributed in preference to the holders of Class A, Class B and Class C Preference shares over

the holders of ordinary shares and Class A ordinary shares. Holders of Class B ordinary shares had no right to

receive a distribution related to return of capital on a liquidation or otherwise.

On 11 December 2013 the 60 Class A ordinary shares, the 100 Class A preference shares, the 60 Class B

preference shares and the 40 Class C preference shares were converted and re-designated as 260 ordinary shares

of £1 each. Subsequently the 860 Ordinary shares of £1 each were subdivided into 86,000 Ordinary shares of

£0.01 each The 140 Class B ordinary shares of £0.01 each were then converted and re-designated as Ordinary

shares of £0.01.

On 11 December 2013 the Company made a rights issue of 5,735,629 shares to existing shareholders at par value

of £0.01 per share.

On 18 December 2013 3,622,283 shares of £0.01 were issued for cash of £0.3417 each to Exicom Tele-systems

(Singapore) Private Limited.

On 10 March 2014, 14,666,667 shares of £0.01 were issued for cash of £1.50 each in conjunction with an admission

to trading on the AIM market of the London Stock Exchange.

27 Reserves

Equity share capitalThe amount classified as equity share capital represents the nominal value of shares issued comprising ordinary

shares of £0.01 each. At 30 September 2013 this amount comprised ordinary shares and preference shares of £1

or £0.01 each.

Share premiumThe amount classified as share premium represents the premium received on subscription for shares as follows:

Shares

issued

Number

Premium

per share

£

Share

premium

£000

Rights issued on 11 December 2013 5,735,629 – –

Shares issued on 18 December 2013 3,622,283 0.3317 1,202

Shares issued on 10 March 2014 14,666,667 1.4900 21,853

Costs associated with share issue – – (861)

Total share premium 22,194

Share based paymentThe amount classified as share based payment reserve represents the accumulated charge made in the income

statement in relation to share based payments reduced by the effect of any shares issued in settlement of

liabilities.

Currency translation reserveThe translation reserve comprises foreign currency differences arising from the translation of the financial

statements of foreign operations.


Non-controlling interestsThe amount classified as Non-controlling Interests represents the proportionate share of the fair value of the net

assets of the Group’s subsidiary, Koovs India, held by third parties.

28 Share-based payments

Share optionsAt 31 March 2014 the following equity settled share options had been granted and remained outstanding in

respect of Ordinary Shares of 1p each in the Company:

Date of grant Number Option price Vesting date Contractual life

4 March 2014 408,328 150p 4 March 2019 10 years

The exercise price of the options of 150p is equal to the issue price of the shares at IPO. There are no cash

settlement alternatives.

The fair value of the share options has been estimated at the grant date using a Black-Scholes option pricing

model taking account of the terms and conditions upon which the share options were granted.

The following inputs were used for the valuation of the options:

Dividend yield 0%

Share price volatility 10.2%

Risk-free interest rate 2.67%

The expected share price volatility was assessed based on the volatility of the share price experienced between

March and June 2014. The fair value of the options issued on 4 March 2014 has been assessed at 24.2 pence per

option.

The expense recognised for employee services during the year is £1,000.

29 Additional cash flow information

Analysis of net cash

Start of

period

£000

Cash

flow

£000

Exchange

differences

£000

Non-cash

movements

£000

End of

period

£000

Period from 1 October 2013 to 31 March 2014

Lease liabilities 140 21,164 431 – 21,735

Period from 2 August 2012 to 30 September 2013

Cash and cash equivalents – 143 (3) – 140

30 Directors’ interestsAt 31 March 2014, Mr Robert Bready held a 3.5% equity interest in the Company. During the period, the

Company paid remuneration to Mr Bready of £123,995. At 31 March 2014, the Company did not owe any

amounts to Robert Bready for his services as a Director.

During the period, purchases totalling £58,000 (2013: £58,000), at normal market prices were made by the

Company from Silvergate Media Limited, of which Waheed Alli is Chairman and Director and David Cole was

a Director. £24,000 was outstanding at 30 September 2013.

During the period, sales totalling £544,000 (2013: £3,225,000) at normal market prices were made by the

Company to Koovs India, for which Waheed Alli acted as Consultant Chairman. £164,000 was outstanding

at 30 September 2013.



31 Off-balance sheet arrangements The Group enters into operating lease arrangements for the hire of buildings and plant and equipment as these

arrangements are a cost effective way of obtaining the short-term benefits of these assets. The annual

commitments under these arrangements are disclosed in Note 23.

Koovs India is party to an Option Agreement pursuant to which Koovs India has granted to Marble’s shareholders

an option to require Koovs India to purchase all of the issued share capital of Marble, Koovs India’s customer and

operator of the Koovs.com website. Similarly Koovs India has been granted a call option over the same shares.

The option period commences on the date of a change in law in India allowing foreign direct investment into the

business of multi-brand e-commerce retailing in India. The price payable for the shares will be the fair market

value of such shares as determined by a valuer appointed by Koovs India.

There are no other material off-balance sheet arrangements.

32 Related partiesDuring the period, the Group entered into transactions in the ordinary course of business with certain related

parties as follows:

Purchases

from

related

party

£000

Recharges

between

related

parties

£000

Amounts

owed by

related

party

£000

Amounts

owed to

related

party

£000

Period ended 31 March 2014

Silvergate Investments Limited 244 2 – 7

Other related parties – subsidiaries and associates of

Silvergate Investments Limited

Silvergate Media Limited 58 – – 7

BM Creative Management Limited – 78 – –

Olga TV Limited – 38 – –

Other related parties – shareholder in Koovs India

Infotel E-commerce Pvt Ltd – – 80 –

Period ended 30 September 2013

Silvergate Investments Limited 419 – – 42

Other related parties – subsidiaries of Silvergate Investments Limited

Silvergate Media Limited 58 – – 24

BM Creative Management Limited – 46 – –

Silvergate Investments LimitedSilvergate Investments Ltd is wholly owned by Waheed Alli, a Director of the Company. At 30 September 2013,

Silvergate Investments Limited owned 92.5% of the ordinary shares in the Company and was the Company’s

immediate and ultimate parent undertaking. Following a capital reconstruction and issues of new shares in

December 2013 and March 2014 Silvergate Investments Limited owns 19.6% of the ordinary shares in the Company

on the date of approval of these financial statements. The dividends paid during the period ended 30 September

2013 of £599,000 were all paid to Silvergate Investments Limited.

Subsidiaries and associates of Silvergate Investments LimitedSilvergate Media Limited and BM Creative Management Limited are subsidiaries of Silvergate Investments Limited.

Olga TV Limited is an associate of Silvergate Investments Limited. Waheed Alli is a Director of all three companies.

Infotel E-commerce Private LimitedInfotel E-commerce Private Limited (“IEPL”) is a company incorporated in the Republic of India and is a substantial

minority shareholder in Koovs India. At 31 March 2014 IEPL owed £80,000 to Koovs India in relation to employee

related expenses. This amount has since been settled.


Terms and conditions of transactions with related partiesPurchases from Silvergate Investments Limited were in relation to the supply of the services of Waheed Alli and

purchases from Silvergate Media Limited related to property and other services supplied. Outstanding balances

with related parties are at normal market prices, unsecured, interest free and cash settlement is expected within

30 days of invoice.

Terms and conditions for transactions with other Group companies are the same, with the exception that balances

are placed on intercompany accounts with payables operating an expected cash settlement within 30 days of

invoice.

The Group has not provided or benefited from any guarantees for any related party receivables or payables.

Following the investment in Koovs India, Koovs plc and Koovs India are related parties. No transactions were

entered into between the parties during the period from 10 March 2014 until 31 March 2014 and there were no

amounts outstanding between the parties at 31 March 2014.

33 Ultimate Group undertakingThe Company’s immediate and ultimate parent undertaking at 30 September 2013 was Silvergate Investments

Limited, a company incorporated in the United Kingdom. Silvergate Investments Limited was the parent

undertaking of a small group and as such was not required by the Companies Act 2006 to prepare group

accounts.

Following the share issues completed on 18 December 2013 and 10 March 2014 the Company is no longer under

the control of a single shareholder.

Koovs Plc

Aldwych House

31 Aldwych

London WC2B 4HN

koovs.com/corporate

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