Interim Results

RNS Number:0831Z
India Outsourcing Services PLC
27 June 2007


For immediate release                                               27 June 2007


                         INDIA OUTSOURCING SERVICES PLC
                     ("India Outsourcing" or "the Company")

             Interim Results for the six months ended 31 March 2007

India Outsourcing Services plc (AIM: IOS), a company formed to capitalise on
acquisition and investment opportunities primarily in the business process
outsourcing (BPO) market, is pleased to announce its interim results for the six
months to 31 March 2007.

Highlights

*   The Company continues to evaluate potential acquisitions, both within and 
    outside of the BPO market, and is currently carrying out due diligence on
    two potential transactions


*   The rising valuations of BPO companies in India, as reported in our full 
    year results, has prompted the Company to broaden its investment search
    geographically and also to include sectors outside of the BPO market


*   Strong balance sheet - net cash of #2.62 million at 31 March 2007, 
    equivalent to 27.9p per share


*   Reduced net loss in the period of #127,977 (H1 2006: net loss #213,808) and 
    loss per share of 1.35p (H1 2006: 7.33p)


Amit Pau, Chief Executive of India Outsourcing Services, said: "Following the
rise in valuations of BPO companies in India, we have broadened our investment
search to include geographies outside of India and investment opportunities
outside of the BPO sector. In consultation with our key investors, we are now
moving forward with two potential acquisition opportunities, and  we hope to be
in a position to announce further details in respect of one of these in the
coming weeks."


For further information:


India Outsourcing Services plc                              Tel: [phone]

Haresh Kanabar, Chairman

Amit Pau, Chief Executive


Teather & Greenwood                                         Tel: [phone]

Mark Dickenson

Sindre Ottesen


Buchanan Communications                                     Tel: [phone]

Mark Court


CHAIRMAN'S STATEMENT



I am pleased to report that, for the six months ended 31March 2007,  we have
substantially reduced our post-tax loss to #127,977  compared with the post-tax
loss of #213,808 incurred in the corresponding six month period last year. The
loss per share has also been significantly reduced, to 1.35p in the period under
review compared with a loss per share of 7.33p in the six month period last
year.



The reduction in losses is a result of very careful cost control at the Company,
even though there has been a significant level of activity during the period
under review.



Our balance sheet remains strong with net cash at the balance sheet date of 31
March 2007 of #2.62 million (H1 2006: #3.42m). This half-year cash balance is
equivalent to 27.9 pence per share, representing a very significant premium to
the Company's share price during the period and into the current half.



As we indicated in our annual report the business process outsourcing (BPO)
market continues to grow strongly but that in India the valuation expectations
of vendors were quite high. Valuations of BPO companies in India are continuing
at a level where the creation of value from an acquisition is difficult to
deliver.



As a result the Board, in consultation with its key shareholders, has decided to
widen its search for potential acquisitions and investments to ensure that any
transaction that we do carry out will create value for our shareholders.



During the period we have looked at various potential projects both in India and
elsewhere, within and outside the BPO sector. Most of the initial due diligence
on these projects has been carried out in-house, thereby minimising external
professional and other costs. After a systematic and detailed review of these
potential projects, some of them have failed to meet our criteria and hence we
will not be proceeding further with these projects.



However, we have been encouraged by some of the potential transactions that we
have seen.  In particular we are continuing to carry out due diligence work on
two transactions, both of which look promising. Our current expectation,
assuming the successful completion of the on-going due diligence, is that we
will be able to announce further details on at least one of these opportunities
in the next few weeks. We look forward to updating shareholders on progress as
appropriate.


Outlook


India Outsourcing benefits from a strong cash position and an encouraging
pipeline of potential deals, which allows us to look forward to the future with
confidence. By broadening our investment search into new geographies and sector,
we are confident that we will be able to deliver a transaction that will create
value for our shareholders.



Haresh Kanabar

Chairman

26 June 2007


India Outsourcing Services Plc

Profit and loss account for the period ended 31 March 2007

                                                  6 months ended        6 months ended              Year ended
                                                   31 March 2007         31 March 2006       30 September 2006
                                                     (unaudited)           (unaudited)               (audited)
                                                               #                     #                       #

Administrative expenses                                  196,241               226,888                 960,459

Operating Loss                                         (196,241)             (226,888)               (960,459)

Net Interest receivable                                   68,264                13,080                  84,904

Loss on ordinary activities before taxation            (127,977)             (213,808)               (875,555)

Tax on loss on ordinary activities                                                   -                       -

Loss on ordinary activities after taxation             (127,977)             (213,808)               (875,555)

Loss per share- basic and diluted                        (1.35p)               (7.33p)                 (14.1p)

All amounts relate to continuing activities.

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


India Outsourcing Services Plc

Balance sheet at 31 March 2007

                                                       6 months ended       6 months ended          Year ended
                                                        31 March 2007        31 March 2006   30 September 2006
                                                          (unaudited)          (unaudited)           (audited)
                                                                    #                    #                   #

Fixed assets

Tangible assets                                                    15                2,609               1,141

Current assets

Debtors                                                        27,921               44,777              24,404
Cash at bank and in hand                                    2,624,866            3,373,237           2,800,000

                                                            2,652,787            3,418,014           2,824,404

Creditors falling due within one year                       (142,011)            (111,843)           (186,777)


Net current assets                                          2,510,776            3,306,171           2,637,627

Net assets                                                  2,510,791            3,308,780           2,638,768

Capital and reserves
Called up share capital                                       947,917              947,917             947,917
Share premium account                                       2,999,775            2,999,040           2,990,775
Profit and loss account                                   (1,427,901)            (638,177)         (1,299,924)

Shareholders' funds                                         2,510,791            3,308,780           2,638,768


India Outsourcing Services Plc


Cash flow statement for the period ended 31 March 2007


                                                       6 months ended       6 months ended          Year ended
                                                        31 March 2007        31 March 2006   30 September 2006
                                                          (unaudited)          (unaudited)           (audited)
                                                                    #                    #                   #

Net cash outflow from operating activities                  (206,253)            (259,330)           (933,272)

Returns on investments and servicing
of finance

Interest received                                              68,264               13,080              84,904

Net cash inflow from returns on investments and                68,264               13,080              84,904
servicing of finance

Capital expenditure
Purchase of tangible fixed assets                                   -                    -                   -

Net cash outflow for capital expenditure

Net cash outflow before financing                           (137,989)            (246,250)           (848,368)

Financing

Issue of ordinary shares                                                         3,500,000           3,500,000
Expenses paid in connection with share issues                                    (240,308)           (248,572)

Cash inflow from financing                                                       3,259,692           3,251,428

Increase (decrease) in net cash                             (137,989)            3,013,442           2,403,060


India Outsourcing Services Plc


Notes to the Interim Report


1. Basis of preparation


The interim accounts for the six months ended 31 March 2007 are unaudited and do
not constitute statutory accounts in accordance with section 240 of the
Companies Act 1985.


The financial statements have been prepared in accordance with currently
applicable Accounting Standards in the United Kingdom, which have been applied
consistently, and under the historical cost convention.


Accounting policies consistent with those applied in the financial statements
for the year ended 30 September 2006 have been used in preparing the unaudited
interim financial statements for the 6 months ended March 2007.


2. Taxation


There is no tax charge for the period due to the loss arising.


3. Dividends


The Directors are not declaring a dividend for the six months ended 31 March
2007.


4. Loss per ordinary share


The calculation of basic and diluted loss per share of 1.35 (2006 - 7.33) pence
is based on the loss for the period of #127,977 (2006 - #213,808 and on
9,479,167 (2006 -2,915,064) ordinary shares, being the weighted average number
of ordinary shares in issue during the period ended 31 March 2007.

The effect of all potential ordinary shares is antidilutive and therefore
dilutive EPS is the same as basic EPS.


5. Copies of interim results


Copies of the interim results are available from the Company's office, 22 Soho
Square, London W1D 4NS, and from the Company's website.



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