Half-year Report 2020

Orient Telecoms

16/12/2020 08:02

RNS Number : 8341I

Orient Telecoms PLC

16 December 2020

 

 

 

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 undertaking (the "Group") for the six months ended 30 September 2020.

 

During the financial period, the Group reported a net profit of £7,046 (£0.001 profit per share).

 

The Group has positioned itself as fully managed overlay network service provider which makes the company very light weight and not requiring to invest heavily in building the network infrastructure which may later be at risk due to sudden change in the technology. Evolution from 4G to 5G is only going to make the company stronger to offer better services to its customers with greater reach.

 

With the introduction and race to deploy 5G services across the region, Orient Telecoms finds itself in a very safe and secure place by having its approach to provide connectivity riding on 3rd party infrastructure. As the fixed line telecommunication companies keeps on growing their 5G reach, Orient Telecoms will follow their infrastructure to offer its services/platforms to its clients regionally.

 

The Group is also working with its partners to introduce new platforms, cloud based services and other technology solutions. The next goal is to have its business unit focus on other service sectors such as Satellite based high speed internet and Smart City solutions.

 

The Group expects 2021 to be another challenging year and competition remain intense as well as the COVID-19 situation globally slowing down the businesses. Whilst it may not be an easy year ahead, the Group is committed to continue its efforts in improving its competitiveness by implementing various strategies include further negotiating better deals with other network provider as our business grows, which will enable efficiency in cost management and optimization. The Group promises to continuously tap the growth opportunities available in the market. Barring any unforeseen circumstances, the Group expects better performance for the year ahead.

 

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 (IAS 34) as adopted by European Union.

The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union. 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

 

16 December 2020

 

6 months period ended 30 September 2020
6 months period ended 30 September 2019
Notes
£
£
(Unaudited)
(Unaudited)
INCOME
4
317,512
266,445
COST OF SALES
(143,238)
(87,293)
GROSS PROFIT
174,274
179,152
Other operating expenses
(173,223)
(206,680)
Finance income/(expenses)
7,316
(1,997)
OPERATING PROFIT/(LOSS) BEFORE TAXATION
8,367
(29,525)
Income tax expense
(1,321)
-
PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
7,046
(29,525)
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified to profit or loss:
Translation of foreign operation
(3,532)
7,439
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD
3,514
(22,086)
Basic and diluted profit/(loss)per share (₤)
5
0.001
(0.003)


 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHESIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020

 

As at
30 September
2020
As at
31 March
2020
Notes
£
£
(Unaudited)
(Audited)
ASSETS
NON-CURRENT ASSETS
Right-of-use assets
6
184,556
70,765
CURRENT ASSETS
Bank
7
343,695
350,692
Trade and other receivables
8
299,858
229,092
643,553
579,784
CURRENT LIABILITIES
Trade and other payables
9
239,226
177,471
Lease liabilities
10
186,116
73,825
425,342
251,296
NET ASSETS
402,767
399,253
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital
11
1,000,000
1,000,000
Translation reserve
540
4,072
Accumulated losses
(597,773)
(604,819)
TOTAL EQUITY
402,767
399,253


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020

 

6 months period ended
30 Sept 2020
6 month period ended
30 Sept 2019
£
£
Cash flow from operating activities
Profit/(loss) before tax
8,367
(29,525)
Adjustment for:
Unrealised exchange loss
1,512
-
Depreciation of right-of-use-assets
49,954
47,177
Finance income
(10,998)
(3,097)
Tax expense
(1,321)
-
Interest on lease liabilities
4,631
5,094
Gain on lease termination
(2,461)
-
49,684
19,649
Changes in working capital
Increase in trade receivables
(40,577)
(78,137)
(Increase)/Decrease in other receivables
(30,189)
213,852
Increase/(Decrease) in trade and other payables
61,755
(241,644)
Cash flow from operations
(9,011)
(105,929)
Interest received
10,998
3,097
Net cash flow generated from/(used in) operating activities
51,671
(83,183)
Cash flow from financing activities
Interest paid
(2,170)
(5,094)
Repayment on lease liability
(57,121)
(50,642)
Net cash flow used in financing activities
(59,291)
(55,736)
Net movement in cash and cash equivalents
(7,620)
(138,919)
Cash and cash equivalents at beginning of period
350,692
529,278
Exchange gain on cash and cash equivalents
623
7,115
Cash and cash equivalents at end of period
343,695
397,474

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

Period from 1 April 2020 to 30 September 2020 (unaudited)

Share capital
Translation reserve
Accumulated losses
Total
£
£
£
£
As at 1 April 2020
1,000,000
4,072
(604,819)
399,253
Profit for the period
-
-
7,046
7,046
Translation of foreign operation
-
(3,532)
-
(3,532)
Total comprehensive loss for the period
-
(3,532)
7,046
3,514
As at 30 September 2020
1,000,000
540
(597,773)
402,767

 

Period from 1 April 2019 to 30 Sept 2019 (unaudited)

Share capital
Translation reserve
Accumulated losses
Total
£
£
£
£
As at 1 April 2019
1,000,000
(11,721)
(589,509)
398,770
Initial application of IFRS 16
-
-
(1,395)
(1,395)
As at 1 April 2019 (Restated)
1,000,000
(11,721)
(590,904)
397,375
Profit for the period
-
-
(29,525)
(29,525)
Translation of foreign operation
-
7,439
-
7,439
Total comprehensive loss for the period
-
7,439
(29,525)
(22,086)
As at 30 September 2019
1,000,000
(4,282)
(623,894)
371,824


 

 

 

 

Period from 1 April 2019 to 31 March 2020 (audited)

Share capital
Translation reserve
Accumulated losses
Total
£
£
£
£
As at 1 April 2019
1,000,000
(11,721)
(589,509)
398,770
Initial application of IFRS 16
-
-
(1,395)
(1,395)
As at 1 April 2019 (Restated)
1,000,000
(11,721)
(590,904)
397,375
Loss for the period
-
-
(13,915)
(13,915)
Translation of foreign operation
-
15,793
-
15,793
Total comprehensive loss for the year
-
15,793
(13,915)
1,878
As at 31 March 2020
1,000,000
4,072
(604,819)
399,253

 

 

 

 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED TO 30 SEPTEMBER 2020

 

 

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.

 

Shares of the Company are traded on London Stock Exchange's main market for listed securities since 2017.

 

 

2.   ACCOUNTING POLICIES

 

Basis of preparation

 

The condensed financial information for the period ended 30 September 2020 and 30 September 2019 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 2019 to 30 September 2019.

 

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 2020, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") issued by the International Accounting Standards Board ("IASB"), including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). 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 2020 was approved by the Directors on 16 December 2020.

 

Going concern

 

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

 

The Board's review of the accounts, budgets and financial plan leads the directors to believe that the Company has sufficient resources to continue operation for the foreseeable future. The financial accounts are therefore prepared on a going concern basis.

 

The COVID-19 pandemic led to movement controls in Malaysia from March 2020 onwards which have the impact including (i) staff may be unable to attend their normal place of work and fulfil their normal duties due to falling ill or being required to self-isolate: (ii) the efficiency of our operation may be reduced; (iii) the various providers of 3rd party infrastructure used to supply our services may be unable to cope with the increased demands placed upon them.

 

 

 

These are mitigated by: (i) the Group has proven technology to enable most employees to carry out their duties remotely; (ii) the Group has a strong balance sheet with no gearing, and be able to access equity financing (if required) to cover any temporary pressure on working capital.

 

 

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 2020 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 2020.

 

 

4.   REVENUE

 

Revenue represents the fair value of the consideration received or receivables for communication services. Revenue is recognised when it is probable that the economic benefits associated with a transaction will flow to the Company and the amount of revenue and associated costs can be measured reliably and over the period to which the charges relate.

 

All revenue derived from South East Asia region. Revenue excludes value added tax and other sales taxes.

 

 

5.   LOSS PER SHARE

 

Basic loss per ordinary share is calculated by dividing the loss 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.

 

Loss per share attributed to ordinary shareholders

6 months
period ended
30 September 2020
6 months
period ended
30 September 2019
Profit/(Loss) for the period (£)
7,046
(29,525)
Weighted average number of shares (Unit)
10,000,000
10,000,000
Basic and diluted profit/(loss) per share (£)
0.001
(0.003)

 

 

6.   RIGHT-OF-USE

 

6 months
period ended
30 September 2020
6 months
period ended
30 September 2019
Year ended 30 March 2020
£
£
£
Unaudited
Unaudited
Audited
Cost
Balance at beginning of period
188,707
188,707
188,707
Addition during the period
210,922
-
-
Termination of lease
(188,707)
-
-
Balance at end of period
210,922
188,707
188,707
Accumulated depreciation
Balance at beginning of period
(117,942)
(23,588)
(23,588)
Charges for the period
(49,954)
(47,177)
(94,354)
Termination of lease
141,530
-
-
Balance at end of period
(26,366)
(70,765)
(117,942)
Net book value
184,665
117,942
70,765

 

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
2020
As at
31 March
2020
£
£
Great Britain Pound
20,327
20,703
Singapore Dollar
19,508
19,514
United States Dollar
27,265
26,667
Malaysia Ringgit
276,595
283,808
343,695
350,692

 

 

 

8.   TRADE AND OTHER RECEIVABLES

 

As at
30 September
2020
As at
31 March
2020
£
£
Trade receivables
250,801
210,224
Deposit
23,585
-
Other receivables
25,472
18,868
299,858
229,092

 

 

9.   TRADE AND OTHER PAYABLES

 

As at
30 September
2020
As at
31 March
2020
£
£
Amount due to related companies
-
89,674
Amount due to directors
6,066
4,166
Trade creditors
208,147
35,847
Accruals
9,222
33,800
Other payables
15,791
13,984
239,226
177,471

 

 

10. LEASE LIABILITIES

 

Lease liabilities are payable as follow:

 

As at
30 September
2020
As at
31 March
2020
£
£
Less than one year
103,601
73,825
More than one year
82,515
-
186,116
73,825

 

 

 

 

 

11. SHARE CAPITAL

Ordinary shares of ₤1 each

As at
30 September
2020
£
As at
31 March
2020
£
Paid up:
10,000,000 ordinary shares at ₤0.10 each
1,000,000
1,000,000

 

At 31 March 2020 and 30 September 2020, 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

 

In 2017 the company entered into an agreement with a third party which provides consultancy service agreement in relation to the listing exercise of the Company. Orient Management Services Limited is partly owned by Sayed Mustafa Ali, directors of the Company.

 

As at
30 September
2020
As at
31 March
2020
£
£
Amount due to related parties
- Orient Managed Services Limited
-
44,391
- Orient Telecoms Sdn Bhd
-
45,283
Amount due to directors
- Sayed Mustafa Ali
1,666
1,666
- Ross Andrews
1,250
1,250
- Leon Santos
1,250
1,250
- Wong Chee Keong
1,900
-

 

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

Sayed Mustafa Ali is a director of both, the Company and Orient Telecoms Sdn Bhd

 

 

14. SUBSEQUENT EVENT

 

There were no subsequent events after the reporting period.

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