IFRS Re-Statement 2005/2006

ASOS PLC 24 November 2006 FOR RELEASE 7.00 am 24 November 2006 ASOS plc ('ASOS' or 'the Company') (Leading online fashion retailer) IFRS RE-STATEMENT OF 2005/2006 RESULTS Ahead of the interim results to be released on Tuesday, 28 November 2006, ASOS today releases financial information prepared under International Financial Reporting Standards (IFRS) for the twelve months ended 31 March 2006 and explains the impact of the adoption of IFRS on these results. Under IFRS, ASOS's Profit before Tax and Amortisation for the year ended 31 March 2006 reduces from Â£1.65m under UK GAAP to Â£1.53m under IFRS. Profit before Tax increases from Â£1.42m to Â£1.53m. Net assets at 31 March 2006 increases from Â£4.98m to Â£5.46m. It is estimated that the adoption of IFRS in the financial year ending 31 March 2007 will reduce Profit before Tax and Amortisation by Â£350,000 and reduce Profit before Tax by Â£120,000. The adoption of IFRS represents an accounting change only, and does not affect the underlying operation of the business or ASOS's cash flows. Interim results for the 6 months to 30 September 2006 prepared in accordance with IFRS will be announced on Tuesday, 28 November 2006. ASOS plc Nick Robertson, Chief Executive Tel: 020 7240 7070 Jon Kamaluddin, Finance Director Website: www.asos.com Cubitt Consulting Brian Coleman-Smith / Nia Thomas Tel: 020 7367 5100 Seymour Pierce Mark Percy / Nicola Marrin Tel: 020 7107 8000 Background note: ASOS plc is an Internet Retail and Marketing Services Group, established in June 2000 and admitted to AIM in October 2001. Its principal business is ASOS.com, a leading online fashion and beauty retailer. Aimed primarily at an Internet savvy 18-34 year old, ASOS had over 1,075,000 registered users at 10 October 2006 and offers over 4000 products across womenswear, menswear, footwear, accessories, jewellery and beauty. ASOS PLC Explanation of the financial impact following adoption of IFRS 1). Introduction The Interim Financial Statements for the 6 months ended 30 September 2006 will be prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) for the first time. The comparative information in those financial statements must be restated to IFRS and a reconciliation of the differences disclosed. The disclosures required by IFRS 1 concerning the transition from UK Generally Accepted Accounting Practice (UK GAAP) to IFRS are set out below in schedules a) to e) of section 3. Reconciliations from UK GAAP to IFRS of ASOS's net assets at 1 April 2005, 30 September 2005 and 31 March 2006 and ASOS's net profit and loss for the 6 months ended 30 September 2005 and year ended 31 March 2006 are also included. The next annual financial statements of the Group will be prepared in accordance with International Financial Reporting Standards as adopted for use in the EU. The IFRS standards that principally affect adjustments between UK GAAP and IFRS are: IFRS 1 - First Time Adoption of International Financial Reporting Standards IFRS 2 - Share Based Payments IFRS 3 - Business Combinations IAS 19 - Employee Benefits IAS 12 - Income Tax IFRS 1, First Time Adoption of IFRS, outlines how to apply IFRS for the first time. ASOS's transition date is 1 April 2005, and the standard permits certain exemptions from the full requirements of IFRS at that date. 2). Exemptions ASOS has taken the following exemptions or options available as at transition a). Business Combinations ASOS has taken the option not to restate business combinations that occurred prior to 1 April 2005 on an IFRS 3, Business Combinations basis. Consequently, goodwill balances relating to ASOS's acquisitions have been frozen at 1 April 2005. b). Share-based Payments ASOS has applied IFRS 2, Share-based Payment only to equity instruments that were granted after 7 November 2002, and which had not vested before 1 April 2005. 3. Reconciliations to International Financial Reporting Standards a) Consolidated balance sheet as at 1 April 2005, IFRS reconciliation UK GAAP UK GAAP IFRS IFRS (1) (ii) (iii) Presentation Share Employee Total Options Benefits IFRS Fixed Assets 1,248,482 1,248,482 1,248,482 Goodwill Intangible Assets 1,248,482 (1,248,482) (1,248,482) - Intangible Assets Tangible Fixed 327,315 327,315 Property Plant & Assets Equipment 270,000 270,000 270,000 Deferred Tax asset _______________________________________________________________ Fixed Assets 1,575,797 270,000 - - 270,000 1,845,797 Non Current Assets Current Assets Stocks 1,587,308 1,587,308 Inventories Debtors 1,216,615 (270,000) (270,000) 946,615 Trade & Other Receivables Cash at bank and on 2,059,581 2,059,581 Cash & Cash hand Equivalents _______________________________________________________________ Current Assets 4,863,504 (270,000) - - (270,000) 4,593,504 Current Assets (273,446) (273,446) (273,446) Current Tax Liabilities Creditors: amounts (2,827,586) 273,446 (17,382) 256,064 (2,571,522) Trade and other falling due within 1 Payables year _______________________________________________________________ (2,827,586) - - (17,382) (17,382) (2,844,968) Current Liabilities Total Assets less 3,611,715 - - (17,382) (17,382) 3,594,333 Total Assets current liabilities less current liabilities Creditors: Amounts - - - Non Current falling due after 1 Liabilities year _______________________________________________________________ Net Assets 3,611,715 - - (17,382) (17,382) 3,594,333 Net Assets =============================================================== Capital and Reserves Called up share 2,511,026 2,511,026 Ordinary Shares capital Share premium 2,995,931 34,936 34,936 3,030,867 Share premium Profit and loss (1,895,242) (34,936) (17,382) (52,318) (1,947,560) Retained account Earnings - Other Reserves _______________________________________________________________ Shareholders' Funds 3,611,715 - - (17,382) (17,382) 3,594,333 Shareholders (All equity) Funds - Equity =============================================================== b) Consolidated Income Statement reconciliation for the year ended 31 March 2006 UK GAAP UK GAAP IFRS IFRS (i) (ii) (iii) (iv) Share Employee Deferred Total Goodwill Options Benefits Tax IFRS Turnover 18,807,980 18,807,980 Revenue Cost of Sales (10,028,398) (10,028,398) Cost of Sales _________________________________________________________________________________ Gross Profit 8,779,582 - - - - - 8,779,582 Gross Profit Distribution Costs (315,656) (315,656) Distribution Costs Administration Expenses (9,547,458) 228,334 (102,638) (13,917) 111,779 (9,435,678) Administration Expenses Exceptional Exceptional item - item - Business Business disruption 2,439,078 2,439,078 disruption _________________________________________________________________________________ Operating Profit/(Loss) 1,355,546 228,334 (102,638) (13,917) - 111,779 1,467,325 Interest Interest Receivable 61,774 61,774 Receivable Interest Interest Payable and Payable and Similar Similar Charges (426) (426) Charges _________________________________________________________________________________ Profit/(Loss) Profit/(Loss) on ordinary on ordinary activities 1,416,894 228,334 (102,638) (13,917) - 111,779 1,528,673 activities before tax before tax Tax charge (65,000) 279,519 279,519 214,519 Tax charge _________________________________________________________________________________ Profit/(Loss) Profit/(Loss) for the for the Financial Year 1,351,894 228,334 (102,638) (13,917) 279,519 391,298 1,743,192 Financial Year After Tax After Tax Earnings per share Basic 1.88p 0.32p (0.14p) (0.02p) 0.39p 0.55p 2.43p Fully Diluted 1.81p 0.31p (0.14p) (0.02p) 0.37p 0.52p 2.33p c) Consolidated balance sheet as at 31 March 2006, IFRS reconciliation UK GAAP UK GAAP (1) (i) (ii) (iii) (iv) Share Employee Deferred Total Presentation Goodwill Options Benefits Tax IFRS IFRS IFRS Fixed Assets 1,020,148 228,334 1,248,482 1,248,482 Goodwill Intangible Intangible Assets 1,020,148 (1,020,148) (1,020,148) Assets Property Tangible Fixed Plant & Assets 990,426 990,426 Equipment Investments - 205,000 279,519 484,519 484,519 Deferred Tax Assets _______________________________________________________________________________________ Fixed Assets 2,010,574 205,000 228,334 - - 279,519 712,853 2,723,427 Non Current Assets Current Assets Stocks 2,563,862 2,563,862 Inventories Debtors 2,082,197 (205,000) (205,000) 1,877,197 Trade & Other Receivables Cash at bank Cash & Cash and on hand 3,743,551 3,743,551 Equivalents _______________________________________________________________________________________ Current Assets 8,389,610 (205,000) - - - - (205,000) 8,184,610 Current Assets Creditors: amounts Trade and falling due Other within 1 year (5,420,109) 354,996 354,996 (5,065,113)Payables Current Tax (354,996) (31,298) (386,294) (386,294)Liabilities ________________________________________________________________________________________ Current (5,420,109) - - - (31,298) - (31,298)(5,451,407)Liabilities Total Assets Total Assets less current Less Current liabilities 4,980,076 - 228,334 - (31,298) 279,519 476,555 5,456,630 Liabilities Creditors: Amounts falling due after 1 Non Current year - - Liabilities _______________________________________________________________________________________ Net Assets 4,980,076 - 228,334 - (31,298) 279,519 476,555 5,456,630 Net Assets ======================================================================================= Capital and Reserves Called up Ordinary share capital 2,516,649 2,516,649 Shares Share premium 3,006,776 137,574 137,574 3,144,350 Share Premium Profit and Retained loss account (543,350) 228,334 (137,574) (31,298) 279,519 338,980 (204,370)Earnings - Other Reserves _______________________________________________________________________________________ Shareholders' Shareholder Funds (All Funds equity) 4,980,075 - 228,334 - (31,298) 279,519 476,555 5,456,629 Equity ======================================================================================= d) Consolidated Income Statement reconciliation for the 6 months ended 30 September 2005 UK GAAP UK GAAP IFRS IFRS (i) (ii) (iii) (iv) Share Employee Deferred Total Goodwill Options Benefits Tax IFRS Turnover 8,345,022 8,345,022 Revenue Cost of Sales (4,332,884) (4,332,884) Cost of Sales _____________________________________________________________________________ Gross Profit 4,012,138 - - - - - 4,012,138 Gross Profit Administation Administation Expenses (4,052,984) (42,522) 5,152 (37,370) (4,090,354) Expenses _____________________________________________________________________________ Operating Operating Profit before Profit before Amortisation Amortisation of Goodwill (40,846) - (42,522) 5,152 - (37,370) (78,215) of Goodwill Amortisation Amortisation of Goodwill (114,167) 114,167 114,167 - of Goodwill _____________________________________________________________________________ Operating Operating Profit/(Loss) (155,013) 114,167 (42,522) 5,152 - 76,797 (78,215) Profit/(Loss) - Interest Interest Receivable/(Pa Receivable/ yable) 34,615 34,615 (Payable) _____________________________________________________________________________ Profit Profit BeforeTax (120,397) 114,167 (42,522) 5,152 - 76,797 (43,600) BeforeTax Tax charge 66,978 66,978 66,978 Tax charge _____________________________________________________________________________ Profit/(Loss) Profit/(Loss) for the for the Financial Year (120,397) 114,167 (42,522) 5,152 66,978 143,775 23,378 Financial Year After Tax After Tax Earnings per share Basic (0.17p) 0.16p (0.06p) 0.01p 0.09p 0.2p 0.03p Fully Diluted (0.16p) 0.15p (0.06p) 0.01p 0.09p 0.19p 0.03p e) Consolidated balance sheet as at 30 September 2005, IFRS reconciliation UK GAAP UK GAAP (1) (i) (ii) (iii) (iv) IFRS IFRS Presentation Goodwill Share Employee Deferred Total Options Benefits Tax IFRS Fixed Assets 1,134,315 114,167 1,248,482 1,248,482 Goodwill Intangible Intangible Assets 1,134,315 (1,134,315) (1,134,315) - Assets Property Tangible Fixed Plant & Assets 921,254 921,254 Equipment Deferred Tax 270,000 66,978 336,978 336,978 Assets _____________________________________________________________________________________ Non Current Fixed Assets 2,055,569 270,000 114,167 - 66,978 451,145 2,506,714 Assets Current Assets Stocks 1,487,346 1,487,346 Inventories Trade & Other Debtors 1,553,975 (270,000) (270,000) 1,283,975 Receivables Cash at bank Cash & Cash and on hand 1,398,605 1,398,605 Equivalents _____________________________________________________________________________________ Current Assets 4,439,927 (270,000) - - - - (270,000) 4,169,927 Current Assets Creditors: amounts falling due Current within 1 year (3,004,183) (12,230) (12,230)(3,016,413) Liabilities Total Assets Total Assets less current Less Current liabilities 3,491,313 - 114,167 - (12,230) 66,978 168,915 3,660,229 Liabilities Creditors: Amounts falling due after 1 Non Current year - - Liabilities _____________________________________________________________________________________ Net Assets 3,491,313 - 114,167 - (12,230) 66,978 168,915 3,660,229 Net Assets ===================================================================================== Capital and Reserves Called up share capital 2,511,026 2,511,026 Ordinary Shares Share premium 2,995,931 77,458 77,458 3,073,389 Share Premium Profit and Retained loss account (2,015,644) 114,167 (77,458) (12,230) 66,978 91,457 (1,924,186) Earnings - Other Reserves _____________________________________________________________________________________ Shareholders' Shareholders Funds (All Funds - equity) 3,491,313 - 114,167 - (12,230) 66,978 168,915 3,660,228 Equity ===================================================================================== 4). Explanation of Principal Changes Under IFRS Note a). To e). contain reconciliations to assist in understanding the nature and value of differences between UK GAAP and IFRS that affect ASOS. 1). Presentation Adjustments The financial information is in IFRS format, and reflects a number of differences in presentation between UK GAAP and IFRS as follows; 1). Disclosure of Goodwill as separate from Intangible Assets on the balance sheet; 2). Disclosure of Deferred Tax Asset as a separate item on the face of the balance sheet; and 3). Disclosure of Current Tax Liabilities as a separate item on the face of the balance sheet 2). IFRS Adjustments (i) IFRS 3 - Business Combinations Under UK GAAP, goodwill arising on business combinations is amortised over a period not exceeding twenty years. Under IFRS 3, regular amortisation of Goodwill is prohibited. Instead, an annual impairment test is required to support the carrying value of goodwill. Amortisation of goodwill arising on the purchase of ASOS.com Limited and Entertainment Marketing (UK) Limited ceased on 1 April 2005 resulting in an increase in pre tax profits of Â£228,000 in the twelve months ended 31 March 2006 and an increase of pre tax profits of Â£114,000 in the six months to 30 September 2005. As at both 1 April 2005 and 31 March 2006 an impairment review was carried out as required by IAS 38. The board believe there has been no impairment of Goodwill. Goodwill Restatement in line with IFRS 3 UK GAAP IFRS 31 March 2006 31 March 2006 At Cost 3,690,119 Goodwill 1,248,482 Amortisation Impairment Brought forward (2,441,637) Brought forward - Charge for period (228,334) Impairment - Charge Carried Forward (2,669,971) Carried Forward - NBV 1,020,148 Carrying Value 1,248,482 (ii) IFRS 2 - Share Based Payment IFRS 2 requires a charge to be made to the income statement for the cost of providing share options to employees. The expense is calculated as the fair value of the award on the date of grant and is recognised over the expected life of the grant. The Black Scholes method has been used to calculate the fair value of options on their grant date. ASOS has applied the provisions of IFRS 2 only to awards made after 7 November 2002 that had not vested at the IFRS effective date (1 April 2005), an exemption allowed on transition by IFRS 1. The result of adoption of IFRS 2 has meant an adjustment to the balance sheet at 1 April 2005 of Â£35,000, a charge to retained profit with a corresponding increase to equity. In the twelve months ending 31 March 2006, the application of IFRS 2 results in a pre tax charge to the income statement of Â£102,600. In the six months ending 30 September 2005 , the application of IFRS 2 results in a pre tax charge to the income statement of Â£42,500. (iii) IAS 19 - Employee Benefits Under UK GAAP, no provision is made for annual leave accrued. Under IAS 19 the expected cost of compensated short term absences should be recognised at the time the related service is provided. As a result, on transition, a provision of Â£17,400 has been recognised. The result on pre tax income for the year ended 31 March 2006 is an additional expense of Â£14,000, for the six months to 30 September 2006 a reduction in staff costs of Â£5,100. (iv) IAS 12 - Income Tax Under UK GAAP, no deferred tax asset was recognised in respect of Share Options. Under IAS 12 a deferred tax asset can be recognised for all deductible temporary differences. The calculation of deferred tax asset on transition should be based on the facts, circumstances and probabilities that existed at the time of preparation of the UK GAAP financial accounts. As a result, on transition, there was no increase in the deferred tax asset. For the year ending 31 March 2006 an additional deferred tax asset of Â£280,000 has been recognised. In the income statement this has had the effect of reversing the Â£65,000 charge to a credit of Â£215,000. For the six months to 30 September 2005 an additional deferred tax asset of Â£67,000 has been recognised. This information is provided by RNS The company news service from the London Stock Exchange

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