Source - LSE Regulatory
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 £44,804 (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

22nd December 2021

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHESIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 

 

 

6 months period ended 30 September 2021

 

6 months period ended 30 September 2020

 

Notes

£

 

£

 

 

(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

30 September

2021

 

As at

31 March 2021

 

Notes

 

£

 

£

 

 

 

(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 MONTHS ENDED 30 SEPTEMBER 2021

 

 

 

6 months period ended

30 Sept 2021

 

6 month period ended

30 Sept 2020

 

 

£

 

£

 

 

 

 

 

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 reserve

 

Accumulated losses

 

Total

 

£

 

£

 

£

 

£

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 reserve

 

Accumulated losses

 

Total

 

£

 

£

 

£

 

£

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 MONTHS ENDED 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 ("£").

 

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

period ended

30 September 2021

 

Year ended 31 March 2021

 

£

 

£

 

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

period ended

30 September 2021

6 months

period ended

30 September 2020

Profit for the period (£)

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

period ended

30 September 2021

 

Year ended 30 March 2021

 

£

 

£

 

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

30 September

2021

 

As at

31 March

2021

 

£

 

£

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

30 September

2021

 

As at

31 March

2021

 

£

 

£

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

30 September

2021

 

As at

31 March

2021

 

£

 

£

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

30 September

2021

 

As at

31 March

2021

 

£

 

£

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 ₤1 each

 

As at

30 September

2021

£

As at

31 March

2021

£

Paid up:

 

 

10,000,000 ordinary shares at ₤0.10 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

30 September

2021

As at

31 March

2021

 

£

£

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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