TIDMORNT

RNS Number : 4905W

Orient Telecoms PLC

22 December 2021

ORIENT TELECOMS PLC

INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2020

Director's Statement

I have pleasure in presenting the interim financial statements of Orient Telecoms Plc and its subsidiary (the "Group") for the six months ended 30 September 2021.

During the financial period, the Group reported a net profit of GBP44,804 (0.045 pence profit per share).

The Group operates as a fully managed overlay network service provider in the South East Asia Region, which makes it very light weight and thus not requiring heavy investment towards building the network infrastructure. In the past six (6) months, especially in Malaysia, the Group has seen an increasing approach towards rolling out 5G network as quickly as possible. With this new development the Board believes there will be fairly large opportunities to expand its own product called "OfficeMate" throughout Malaysia.

There has been an increasing demand for bigger bandwidth and managed connectivity solutions in the region, hence the Group is very much focused on increasing its sales and reach in various countries through its strong partnership with the infrastructure owners.

The Group has been continuously working to enhance its own Product and Managed Services offerings. The Technology team is focused on creating a customised operating system which will help us manage the services for customers in a much more efficient and productive way. This project is expected to be completed by the fourth (4) quarter of 2022.

Despite the challenges brought on by the Covid pandemic, the Group have shown positive results due to its aggressive sales and marketing activities. And with mass immunisation programs initiated by the Governments which have contributed to the declining number of covid cases worldwide, we expect the coming years to be less challenging and more fruitful.

The Group have engaged new partners and network owners to negotiate better rates, which the Board believes will have a positive effect on the Group's pricing and gross margin levels. The market remains competitive and requires continuous effort to engage customers effectively and to introduce new services or features into its offerings

The Group's entire operational team remains dedicated and committed towards this goal which we plan to achieve through hard work and unwavering commitment in the face of the forthcoming challenges.

Withthe emergence of new variants of the covid, the effect of which we are unable to quantify at the present moment, but we believe that, with our perseverance and unrelenting commitment we will be able to overcome those challenges

During the AGM 2021, one of the non-executive directors was not re-elected. The Board considers that the current composition of the board, which comprise a CEO, a non-executive Chairman and a not-executive director, is adequate given the size of the Company.

Responsibility Statement

The Directors are responsible for preparing the interim financial statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ('DTR') and with International Accounting Standard 34 on Interim Financial Reporting as adopted by United Kingdom (IAS 34).

The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with IAS 34. The interim financial statements include a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-- an indication of important events that have occurred during the first six months and their impact on the interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial period; and

-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

Sayed Mustafa Ali

Director

22(nd) December 2021

CONDENSED CONSOLIDATED STATEMENT OF COMPREHESIVE INCOME

FOR THE SIX MONTHSED 30 SEPTEMBER 2021

 
                                                     6 months        6 months 
                                                    period ended    period ended 
                                                    30 September    30 September 
                                                        2021            2020 
                                           Notes        GBP             GBP 
                                                    (Unaudited)     (Unaudited) 
 
 INCOME                                      4           404,614      317,512 
 DIRECT COST                                           (122,205)     (143,238) 
                                                  --------------  -------------- 
 GROSS PROFIT                                            282,409      174,274 
 Administrative expenses                               (236,586)       (173,223) 
                                                  --------------  -------------- 
 OPERATING PROFIT                                         45,823           1,051 
 Other income                                              2,368               - 
 Finance income                                              292           7,316 
 Finance expense                                         (3,679)               - 
                                                  --------------  -------------- 
 OPERATING PROFIT BEFORE TAXATION                         44,804           8,367 
 Income tax expense                                            -         (1,321) 
                                                  --------------  -------------- 
 PROFIT FOR THE PERIOD ATTRIBUTABLE 
  TO EQUITY HOLDERS                                       44,804           7,046 
 OTHER COMPREHENSIVE INCOME 
 Items that will or may be reclassified 
  to profit or loss: 
 Translation of foreign operation                       (17,653)         (3,532) 
 TOTAL COMPREHENSIVE INCOME FOR THE 
  PERIOD                                                  27,151           3,514 
                                                  --------------  -------------- 
 
 Basic and diluted profit per share 
  (pence)                                    5         0.45            0.07 
                                                  --------------  -------------- 
 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

 
                                              As at         As at 
                                           30 September    31 March 
                                               2021          2021 
                                  Notes        GBP           GBP 
                                           (Unaudited)    (Audited)) 
 
 ASSETS 
 
 NON-CURRENT ASSETS 
 Right-of-use assets                6           171,116      219,356 
 
 CURRENT ASSETS 
 Bank                               7           458,844      391,783 
 Trade and other receivables        8           193,084      306,455 
                                                651,928      698,238 
                                         --------------  ----------- 
 CURRENT LIABILITIES 
 Trade and other payables           9           165,303      238,828 
 Lease liabilities                 10           175,550      223,726 
                                                340,853      462,554 
                                         --------------  ----------- 
 
 NET ASSETS                                     482,191      455,040 
                                         ==============  =========== 
 
 EQUITY ATTRIBUTABLE TO EQUITY 
  HOLDERS OF THE COMPANY 
 Share capital                     11         1,000,000    1,000,000 
 Translation reserve                           (41,366)     (23,713) 
 Accumulated losses                           (476,443)    (521,247) 
                                         -------------- 
 TOTAL EQUITY                                   482,191      455,040 
                                         ==============  =========== 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHSED 30 SEPTEMBER 2021

 
                                                  6 months         6 month 
                                                 period ended    period ended 
                                                   30 Sept         30 Sept 
                                                     2021            2020 
                                                     GBP             GBP 
 
 Cash flow from operating activities 
 Profit before tax                                     44,804           8,367 
 Adjustment for: 
 Unrealised exchange loss                                 395           1,512 
 Depreciation of right-of-use-assets                   49,594          49,954 
 Finance income                                         (292)        (10,998) 
 Tax expense                                                -         (1,321) 
 Interest on lease liabilities                          3,679           4,631 
 Gain on lease termination                                  -         (2,461) 
                                               --------------  -------------- 
                                                       98,180          49,684 
 Changes in working capital 
 Increase/ (Decrease) in trade and other 
  receivables                                         113,371        (70,766) 
 Increase/(Decrease) in trade and other 
  payables                                           (91,179)          61,755 
                                               --------------  -------------- 
 Cash flow from operations                             22,192         (9,011) 
 Interest received                                        292          10,998 
                                               --------------  -------------- 
 Net cash flow generated from operating 
  activities                                          120,664          51,671 
                                               --------------  -------------- 
 
 Cash flow from financing activities 
 Interest paid                                        (3,679)         (2,170) 
 Repayment on lease liability                        (48,176)        (57,121) 
                                               --------------  -------------- 
 Net cash flow used in financing activities          (51,855)        (59,291) 
 
 Net movement in cash and cash equivalents             68,809         (7,620) 
 Cash and cash equivalents at beginning 
  of period                                           391,783         350,692 
 Exchange gain on cash and cash equivalents           (1,748)             623 
                                               --------------  -------------- 
 Cash and cash equivalents at end of period           458,844         343,695 
                                               ==============  ============== 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Period from 1 April 2021 to 30 September 2021 (unaudited)

 
                               Share capital   Translation   Accumulated    Total 
                                                 reserve        losses 
                                    GBP                GBP       GBP         GBP 
 As at 1 April 2021                1,000,000    (23,713)       (521,247)    455,040 
 Profit for the period                     -             -        44,804     44,804 
 Translation of foreign 
  operation                                -    (17,653)               -   (17,653) 
                              --------------  ------------  ------------  --------- 
 Total comprehensive profit 
  / (loss) for the period                  -    (17,653)          44,804     27,151 
                              --------------  ------------  ------------  --------- 
 
 As at 30 September 2021           1,000,000    (41,366)       (476,443)    482,191 
                              ==============  ============  ============  ========= 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

Period from 1 April 2020 to 31 March 2021 (audited)

 
                           Share capital   Translation   Accumulated    Total 
                                             reserve        losses 
                                GBP                GBP       GBP         GBP 
 As at 1 April 2020            1,000,000      4,072        (604,819)    399,253 
                          --------------  ------------  ------------  --------- 
 Profit for the year                   -             -        83,572     83,572 
 Translation of foreign 
  operation                            -      (27,785)             -   (27,785) 
                          --------------  ------------  ------------  --------- 
 Total comprehensive 
  income for the year                  -      (27,785)        83,572     55,787 
 
 As at 31 March 2021           1,000,000      (23,713)     (521,247)    455,040 
                          ==============  ============  ============  ========= 
 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT

FOR THE SIX MONTHSED 30 SEPTEMBER 2021

   1.   GENERAL INFORMATION 

The Company was incorporated in England and Wales on 26 February 2016, as a public company limited by shares under the Act. The principal legislation under which the Company operates is the Act. The registered office of the Company is at the offices of London Registrar, Suite A, 6 Honduras St, London EC1Y 0TH United Kingdom.

   2.   ACCOUNTING POLICIES 

Basis of preparation

The condensed financial information for the period ended 30 September 2021 and 30 September 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting. The condensed financial information is unaudited and does not constitute statutory financial statements. The comparative interim financial information covers the period from 1 April 2020 to 30 September 2020.

The principal accounting policies used in preparing the interim financial statements are the same as those applied in the Company's financial statements as at and for the year ended 31 March 2021, which have been prepared in accordance with the International Accounting Standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards as adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union ("IFRS"). The auditors' report on those accounts was unqualified and unmodified.

The condensed financial information is presented in British Pound Sterling ("GBP").

The interim financial statements for the six months ended 30 September 2021 was approved by the Directors on 22 December 2021.

Going concern

These interim financial statements have been prepared on a going concern basis.

The COVID-19 pandemic lock downs in Malaysia which was implemented in March 2020 have since been removed as the country have reached herd immunity and with the easing of restriction businesses are moving towards normalisation. Hence, opening up more opportunities for businesses.

The company is already in an active discussion with some of the potential clients to secure new business in the forthcoming year.

The Company has enough cash balances to run its operations for the next 24 months.. The Company also relies heavily on outsourcing companies to perform its international service maintenance which helps the company to manage its cashflows better and also keep the lowest possible headcount on the payroll.

   3.   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 

The preparation of unaudited interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses for the current and its corresponding financial period under review. Actual results may differ from these estimates.

In preparing the unaudited interim financial statements, the significant judgements made by the management in applying the Company's accounting policies and the sources of estimates uncertainty were consistent as those applied to the 2021 Audited Financial Statements.

There were no changes in estimates of amounts of the Company that may have a material effect on financial period ended 30 September 2021.

   4.   REVENUE 
 
              6 months      Year ended 
             period ended    31 March 
             30 September      2021 
                 2021 
                 GBP           GBP 
              Unaudited      Audited 
 Revenue          404,614      807,133 
           --------------  ----------- 
                  404,614      807,133 
           --------------  ----------- 
 
 

Revenue is recognised either when the performance obligation in the contract have been performed (so "point in time" recognition) or "overtime" as control of the performance obligation is transferred to the customer. Revenue represents rendered managed telecommunication services to the customers, the end users, which is recognised over the period of time when the services is performed.

Invoicing and payment terms are generally monthly in advance except for a single customer who has been granted extended timeframe for settlement. A contract liability represents the obligation of the Group to render services to a customer for which consideration has been received (or the amount is due) from the customer

In addition, under contract with customer, the customer is also entitled to claim rebates if the service performed / downtime is more that the allowed hours in any given month. The Group has implemented an open source fully customised Network Performance Monitoring system, which can provide an in-depth view of performance by customer. Due to the high level of service provided under each contract with a customer, the Group has no history of having to provide rebates. On that basis, the variable consideration was considered as remote.

Revenue is derived substantially from Malaysia, Singapore and Thailand. Revenue excludes value added tax and other sales taxes.

   5.   PROFIT PER SHARE 

Basic profit per ordinary share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. There are currently no dilutive potential ordinary shares.

Profit per share attributed to ordinary shareholders

 
                                         6 months        6 months 
                                        period ended    period ended 
                                        30 September    30 September 
                                            2021            2020 
 Profit for the period (GBP)              44,804           7,046 
 Weighted average number of shares 
  (Unit)                                10,000,000      10,000,000 
 Basic and diluted profit per share 
  (pence)                                    0.45            0.07 
 
   6.   RIGHT-OF-USE 
 
                                             6 months      Year ended 
                                            period ended    30 March 
                                            30 September      2021 
                                                2021 
                                                GBP           GBP 
                                             Unaudited      Audited 
 Cost 
 Balance at beginning of period                  292,474      165,119 
 Addition during the period                            -      292,474 
 Derecognition due to lease termination                -     (44,098) 
 Exchange difference                               1,807     (10,775) 
                                          --------------  ----------- 
 At end of period                                294,281      402,720 
                                          --------------  ----------- 
 Accumulated depreciation 
 Balance at beginning of period                   73,119       94,354 
 Charges for the period                           49,594       99,010 
 Exchange difference                                 452     (10,000) 
 
 Balance at end of period                        123,165      183,364 
                                          --------------  ----------- 
 
 Net book value                                  171,116      219,356 
                                          --------------  ----------- 
 

The Group subsidiary leased an office which the subsidiary has entered into a non-cancellable operating lease agreement. The lease is for a period of 24 months operating lease agreement with an option to renew the lease for a further 12 months.

   7.   BANK 

Cash and Cash equivalents are denominated in the following currencies:

 
                             As at         As at 
                          30 September    31 March 
                              2021          2021 
                              GBP           GBP 
 Great Britain Pound            20,102      20,102 
 Singapore Dollar               18,230      18,494 
 United States Dollar           25,232      25,370 
 Malaysia Ringgit              395,280     327,817 
                        --------------  ---------- 
                               458,844     391,783 
                        --------------  ---------- 
 
   8.   TRADE AND OTHER RECEIVABLES 
 
                          As at         As at 
                       30 September    31 March 
                           2021          2021 
                           GBP           GBP 
 Trade receivables          117,636     217,037 
 Deposit                     22,182      64,374 
 Other receivables           53,266      25,044 
                            193,084     306,455 
                     --------------  ---------- 
 
   9.   TRADE AND OTHER PAYABLES 
 
                                        As at         As at 
                                     30 September    31 March 
                                         2021          2021 
                                         GBP           GBP 
 Amount due to related companies                -           - 
 Amount due to directors                    2,990       3,004 
 Trade creditors                           57,333     134,551 
 Accruals                                  34,523      40,703 
 Contract liability                        25,049      10,418 
 Other payables                            45,408      50,152 
                                          165,303     238,828 
                                   --------------  ---------- 
 
 

10. LEASE LIABILITIES

Lease liabilities are payable as follow:

 
                           As at         As at 
                        30 September    31 March 
                            2021          2021 
                            GBP           GBP 
 Less than one year           47,130      96,094 
 More than one year          128,420     127,632 
                             175,550     223,726 
                      --------------  ---------- 
 

11. SHARE CAPITAL

Ordinary shares of LIR1 each

 
                                              As at         As at 
                                           30 September    31 March 
                                               2021          2021 
                                               GBP           GBP 
 Paid up: 
 10,000,000 ordinary shares at LIR0.10 
  each                                      1,000,000     1,000,000 
 

At 31 March 2021 and 30 September 2021, the total issued ordinary share of the Company were 10,000,000.

12. SEASONAL OR CYCLICAL FACTORS

There are no seasonal factors that materially affect the Group's operation.

13. RELATED PARTY TRANSACTIONS

 
                                As at         As at 
                             30 September    31 March 
                                 2021          2021 
                                 GBP           GBP 
 Amount due to directors 
  - Sayed Mustafa Ali               1,250       1,250 
  - Wong Chee Keong                 1,740     1,754 
 

The amount due to related party is interest-free and they are payable on demand.

14. SUBSEQUENT EVENT

There were no subsequent events immediately after the reporting period.

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END

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December 22, 2021 04:03 ET (09:03 GMT)

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