REG - Orient Telecoms PLC - FINAL ANNUAL RESULTS YEAR ENDED 31 MARCH 2022
03/08/2022 13:45
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RNS Number : 8140U Orient Telecoms PLC 03 August 2022
ORIENT TELECOMS PLC
("ORIENT" or the "Company")
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2022
ORIENT is an information technology company that offers managed services as
its core business, which include managed services in machine-to-machine
networking, solutions for internet of things (IOT), cyber security, big data
solutions as well as full spectrum of other managed services, announces its
results for the year ended 31 March 2022
Highlights for the period:
· The Group recorded a below average performance for the year ended 31
March 2022, which saw revenue decrease by 24.2% to £611,544 (2021: £807,000)
and the basic and diluted profit per share decrease from a profit per share of
0.84p to a profit per share of 0.35p.
· Our strategy for the coming year is to put extra effort in securing
AI integration into our MS solution and to increase the reach to potential
clients.
· Cash position remains strong at £466,623 (2021: £391,783) with no
borrowings.
The annual report and accounts is available on the Company's website
at: www.orient-telecoms.com (http://www.orient-telecoms.com/)
For more information please contact:
Orient Telecoms plc
mustafa@orient-telecoms.com
Sayed Mustafa Ali
CHAIRMAN'S STATEMENT
On behalf of the Board of Directors, I have great pleasure in presenting the
Annual Report and Audited Financial Statements of Orient Telecoms Plc (the
"Company") and its subsidiary undertaking (together the "Group") for the
financial year ended 31(st) March 2022.
OVERVIEW
Due to COVID-19 Pandemic, a sudden change in the working culture,
work-from-anywhere becoming the de-facto work style, creating immense pressure
on the Telco industry to ensure strong and dependable connectivity to major
cloud operators. Having quality connection to internet and cloud networks
became essential part of working life for which the market was not ready
initially.
On the other hand, even before this demand took the Telcos with great
surprise, The Group was already working on a solution which enables users to
not only connect to the internet and cloud with reliability but also provide
highly secure and fully managed connectivity for all office use with an
embedded feature of mobility.
The Group recorded an below average performance for the year ended 31 March
2022, which saw revenue decrease by 24.2% to £611,544 (2021: £807,000) and
the basic and diluted profit per share decrease from a profit per share of
0.84p to a profit per share of 0.35p.
The company reported a decline in revenues during quarter 3 of the financial
year and this was mainly due to loss of business by the end customers due to
COVID related matters, which affected the company's performance as well.
However, the management team is extremely focused on onboarding some large
international clients to not only fill this gap, but also to grow the revenue
even higher.
Cash at the end of the period was £466,623 (2021: £391,783) with no
borrowings.
The Group has always positioned itself as a light weight network operator with
no borders to its coverage area. This provides the group flexibility to offer
its next generation services literally anywhere in the region or the world.
Recently regional governments giving a push to 5G deployment and roll outs,
Orient Telecoms finds itself in a great position and ready to adopt the 5G
network as its primary technology to offer its managed service solutions.
Deployment of 5G brings huge amounts of opportunities to the Group as it will
enable the Group to deliver its managed services to any place under coverage
within shortest possible time.
The research and development continue to enhance the readily available
solutions, now the company has focused on introducing certain Artificial
Intelligence (AI) features in its flagship product called "Office Mate", this
will not only enable the customers to drive more with less cost, but also
enter the world of AI seamlessly.
The technical team remains committed and passionate to enhance the services
for its customers and to continue to deliver world class technology solutions.
Our strategy for the coming year is to put extra effort in securing AI
integration into our MS solution and also to increase the reach to potential
clients. Focus on Sales and marketing is the key to success, and hence we will
continue to invest into building a strong sales and marketing team, not only
by increasing the number of experts, but also with participation in the
regional technology and telecom events to gain much larger visibility, reach
and awareness.
COVID-19 effect started to reduce since end of 2021, and this is a positive
news for the industry. Sales teams are increasingly busy with customer
meetings and new opportunities. We hope the situation gets better as the time
passes by and we are very optimistic about the company's growth moving
forward.
OUTLOOK
The Board views the future with confidence and expects to report another solid
performance as it makes further progress towards its medium-term strategy of
being a leading regional network telecommunications provider offering
connectivity and selling network services across Southeast Asia.
Sayed Mustafa Ali
Director
3 August, 2022
STRATEGIC REPORT
Strategy, objective and business model
The Group provides managed telecommunications services using the network
infrastructure owned by other network operators to enable cost effective and
rapid connectivity to large bandwidth consumers in Malaysia, Thailand and
Singapore. Over time the Group aims to be a leading regional network
telecommunications provider offering connectivity and selling managed network
services across Southeast Asia. The Group's service offering and the
construction of its overlay network requires low capital expenditure and
management believe this will enable it to offer attractive pricing to
customers in the region.
Fair review of business development and performance
The Group's cash resources are sufficient for general corporate purposes and
its operational activities such as the Group's on-going operating costs and
expenses including Directors' fees and salaries.
Principal risks and uncertainties
The Directors have identified the following as the key risks facing the
business:
- The Telecommunication sectors
The Group operates in a highly competitive and saturated market as the Group
is not involved in building its own network infrastructure which would require
significant capital expenditure. The Group will be dependent on entering into
agreements with licensed network operators in the territories in which it
operates in respect of their infrastructure in order to provide a managed
service offering to customers and developing its own overlay network. The
ability to establish a strong and diversified set of agreements with network
operators is important to enable the Group to be able to offer competitive
solutions for its customers.
In addition, the Group's operation can be disrupted by a variety of tasks and
hazards which are beyond its control such as governmental delays, increase in
costs and the availability of equipment or services.
- The Group's relationship with the Executive Director
The Group is dependent on the Executive Director to identify potential
business opportunities and to execute, and the loss of the services of the
Executive Director could materially affect it.
- The Group's existing customers & suppliers
The Group is currently dependent on the business from several major customers,
as set out in note 16. The company has undertaken an initiative to resolve
this issue by way of sourcing and negotiating with various new potential
customers with the view to mitigating the risk factor.
The management also is actively looking into engaging more suppliers, which
some of it now in final phase to commence the works.
-
- Business Strategy
The Group is an entity with around 4 years of operating history. The
probability that the Group may fail to execute its business plan has been
mitigated with experienced management, the recruitment of a high calibre sales
team to secure revenue contracts and the board's regular review of the Group's
business plan. The Group is also confident that its product has a better edge
to support SMEs and will be able to support the target growth of the Group.
- COVID-19 Pandemic
The COVID-19 virus led to movement control order in Malaysia from March 2020
onwards which have had the impact of including (i) staff being unable to
attend their normal place of work and fulfil their normal duties due to
falling ill or being required to self-isolate: (ii) reducing the efficiency of
our operation; (iii) disrupting the services of the various providers of 3(rd)
party infrastructure who used to supply our services who 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 balance
sheet with no gearing and be able to access equity financing (if required) to
cover any temporary pressure on working capital.
The Board seeks to mitigate and manage these risks through continual review,
policy setting and enforcement of contractual rights and obligations.
Going concern
As described in note 2, these financial statements have been prepared on a
going concern basis. After making due enquiry, the directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for a period of at least 12 months from
the date of approval of these financial statements. For this reason, they
continue to adopt the going concern basis in preparing the financial
statements.
Capital and returns management
The Company expects that any returns for Shareholders would derive primarily
from capital appreciation of the Ordinary Shares and in the medium-term
dividends paid pursuant to the Group's dividend policy.
Section 172 Report
The revised UK Corporate Governance Code ('2018 Code') was published in July
2018 and applies to accounting periods beginning on or after January 1, 2019.
The Companies (Miscellaneous Reporting) Regulations 2018 ('2018 MRR') require
Directors to explain how they considered the interests of key stakeholders and
the broader matters set out in section 172(1) (A) to (F) of the Companies Act
2006 ('S172') when performing their duty to promote the success of the Company
under S172. This includes considering the interest of other stakeholders which
will have an impact on the long-term success of the company. The S172
statement, explains how Directors:
· have engaged with employees, suppliers, customers and others; and
· have had regard to employee interests, the need to foster the company's
business relationships with suppliers, customers and other, and the effect of
that regards, including on the principal decisions taken by the company during
the financial year.
The S172 statement focuses on matters of strategic importance to the Group,
and the level of information disclosed is consistent with the size and the
nature of the business.
The Board has a clear framework for determining the matters within its remit
and has approved Terms of Reference for the matters delegated to its
committees. Certain financial and strategic thresholds have been determined to
identify matters requiring Board consideration and approval. The Manual of
Authority sets out the delegation and approval process across the broader
business. When making decisions, each Director ensures that he/she acts in the
way he/she considers, in good faith, would most likely promote the Group's
success for the benefit of its members as a whole, and in doing so have regard
(among other matters) to:
The likely consequences of any decision in the long term
The Directors understand the business and the evolving environment in which
the Group operates. The strategy set by the Board is intended to strengthen
our position as a leading network services provider while keeping safety and
social responsibility fundamental to our business approach. In 2020, to help
achieve all strategic ambitions, the Board refreshed our strategy to further
focus on developing the Group's business. However, while investing for the
future, the Board also recognise we must meet today's connectivity and
technology demand.
The interests of the company's employees
The Directors recognise that Orient employees are fundamental and core to our
business and delivery of our strategic ambitions. The success of our business
depends on attracting, retaining and motivating employees. In ensuring that we
remain a responsible employer, including pay and benefits to our health,
safety and workplace environment, the Directors factor the implications of
decisions on employees and the wider workforce, where relevant and feasible.
The need to foster the company's business relationships with suppliers,
customers and others
Delivering our strategy requires strong mutually beneficial relationships with
suppliers, customers, and government agencies. Orient seeks the promotion and
application of certain general principles in such relationships. The ability
to promote these principles effectively is an important factor in the decision
to enter into or remain in such relationships and this alongside other
standards are described in The General Business Principles, which are reviewed
and approved by the Board periodically. The Board also reviews and approves
the Group's approach to suppliers which is set out in the Supplier Principles.
The businesses continuously assess the priorities related to customers and
those with whom we do business, and the Board engages with the businesses on
these topics, for example, within the context of business strategy updates and
investment proposals.
Moreover, the Directors receive information updates on a variety of topics
that indicate and inform how these stakeholders have been engaged. These range
from information provided from the Projects & Technology function to
information provided by the businesses.
The impact of the company's operations on the community and the environment
This aspect is inherent in our strategic ambitions, most notably on our
ambitions to thrive through the Telecommunication and Technology transition
and to sustain a strong societal and business licence to operate. As such, the
Board receives information on these topics to both provide relevant
information for specific Board decisions (e.g. those related to specific
strategic initiatives) and to provide ongoing overviews at the Orient group
level (e.g., regular Safety & Environment Performance Updates, reports
from the Chief Ethics & Compliance Officer and Chief Internal Auditor). In
2020, certain Board Committee members conducted site visits of various Orient
operations and overseas offices and held external stakeholder engagements,
where feasible.
The desirability of the company maintaining a reputation for high standards of
business conduct
Orient aims to meet the region's growing need of connectivity and cloud-based
services with high performance solutions in ways which are economically,
technologically, and socially responsible. The Board periodically reviews and
approves clear frameworks, such as The General Business Principles, Company's
Code of Conduct, specific Ethics & Compliance manuals, and its Modern
Slavery Statements, to ensure that its high standards are maintained both
within Orient Telecoms businesses and the business relationships we maintain.
This, complemented by the ways the Board is informed and monitors compliance
with relevant governance standards help assure its decisions are taken and
that the Group acts in ways that promote high standards of business conduct.
The need to act fairly as between members of the company
After weighing up all relevant factors, the Directors consider which course of
action best enables delivery of our strategy through the long-term, taking
into consideration the impact on stakeholders. In doing so, our Directors act
fairly as between the Company's members but are not required to balance the
Company's interest with those of other stakeholders, and this can sometimes
mean that certain stakeholder interests may not be fully aligned.
Culture
The Board recognises that it has an important role in assessing and monitoring
that our desired culture is embedded in the values, attitudes, and behaviours
we demonstrate, including in our activities and stakeholder relationships. The
Board has established honesty, integrity, and respect for people as Orient
Telecoms' core values. The General Business Principles, Code of Conduct, and
Code of Ethics help everyone at Orient Telecoms act in line with these values
and comply with relevant laws and regulations. The Commitment and Policy on
Health, Safety, Security, Environment & Social Performance applies across
the Group and is designed to help protect people and the environment. We
relentlessly pursue Goal Zero, our safety goal to achieve no harm and no leaks
across all our operations. We also strive to maintain a diverse and inclusive
culture.
The Board considers the People Survey to be one of its principal tools to
measure employee engagement, motivation, affiliation, and commitment to Orient
Telecoms. It provides insights into employee views and has a consistently high
response rate. The Board also utilises this engagement to understand how
survey outcomes are being leveraged to strengthen the Group's culture and
values.
Stakeholder engagement (including employee engagement)
The Board recognises the important role Orient Telecoms has to play in society
and is deeply committed to public collaboration and stakeholder engagement.
This commitment is at the heart of the Company's strategic ambitions. The
Board strongly believes that Orient Telecoms will only succeed by working with
customers, governments, business partners, investors, and other stakeholders.
We continue to build on our long track record of working with others, such as
partners, industry and trade groups, universities, government agencies, and
in some instances our competitors through mutually beneficial business
dealings. We believe that working together and sharing knowledge and
experience with others offers us greater insight into our business. We also
appreciate our long-term relationships with our customers, investors and
acknowledge the positive impact of ongoing engagement and dialogue.
To support strengthening the Board's knowledge of the significant levels of
engagement undertaken by the broader business, guidance on information,
proposals or discussion items provided to the Board was updated in 2022 to
further promote and focus considerations of the views, interests and concerns
of our stakeholders and how these were considered by Management. The Board
also engaged with certain stakeholders directly, to understand their views.
Sayed Mustafa Ali
Director
3 August, 2022
Directors' report
The Directors present their report together with the audited financial
statements of the Company and its subsidiary undertaking (together with the
"Group") for the year ended 31 March 2022.
An indication of the likely future developments in the business of the Group
are included in the Strategic Report.
Results and dividends
The results for the reporting year are set out in the Statement of
Comprehensive Income on page 21. The Directors do not recommend the payment of
a dividend on the ordinary shares.
Directors
The Directors of the Company during the year were:
Sayed Mustafa Ali
Ross Andrews
Leon Santos (resigned 23(rd) November 2021)
Wong Chee
Keong
Directors' interest
None of the Directors held any interest and deemed interest in the share
capital of the Company and its related corporation at the end of financial
period.
No Director currently has any share options and no share options were granted
to or exercised by a Director in the reporting period.
Share capital, restrictions on transfer of shares, arrangements affected by
change of control and other additional information
The Company has one class of share capital, ordinary shares. All the shares
rank pari passu. The articles of association of the Company contain provisions
governing the transfer of shares, voting rights, the appointment and
replacement of Directors and amendments to the articles of association. This
accords with usual English company law provisions. There are no special
control rights in relation to the Company's shares. There are no significant
agreements to which the Company is a party which take effect, alter or
terminate in the event of a change of control of the Company. There are no
agreements providing for compensation for Directors or employees on change of
control.
Liability insurance for Company officers
The Company has not obtained any third-party indemnity for its Directors.
Dividend policy
The Company's current intention is to retain any earnings for use in its
business operations, and the Company does not anticipate declaring any
dividends in the foreseeable future. The Company will only pay dividends to
the extent that to do so is in accordance with all applicable laws.
Substantial shareholders
The Company has been notified of the following interests of 3 per cent or more
in its issued share capital as at 31 March 2022.
Shareholder name Number of ordinary shares Percentage of share capital
Jim Nominees Ltd 6390000 63.90%
Eastman Ventures Limited 600000 6.00%
Nordic Alliance Holdings Ltd 600000 6.00%
Belldom Limited 450000 4.50%
Standard Minerals Limited 4400000 4.40%
Link Summit Limited 425000 4.25%
Infinity Mission Limited 400000 4.00%
Financial risk management and future development
An explanation of the Group's financial risk management objectives, policies
and strategies is set out in note 18.
Events after the reporting date
There were no subsequent events after the reporting period.
Employee and Greenhouse Gas (GHG) Emissions
The Company is trading with less than 20 employees including directors, and
therefore has minimal carbon emissions. As the Group's annual energy
consumption is below 40,000 kwh no energy and carbon report are presented.
Equality
The Company promotes a policy for the creation of equal and ethnically diverse
employment opportunities including with respect to gender. The Company
promotes and encourages employee involvement wherever practical as it
recognises employees as a valuable asset and is one of the key contributions
to the Company's success.
Corporate governance
The Company adopted corporate governance and follow its policies and practices
that set out in Corporate Governance Statement.
Auditors
The auditors, Shipleys, . LLP, have expressed their willingness to continue in
office and a resolution to reappoint them will be proposed at the Annual
General Meeting.
Auditors and disclosure of information
The directors confirm that:
· there is no relevant audit information of which the Company's
statutory auditor is unaware; and
· each Director has taken all the necessary steps he ought to have
taken as a Director in order to make himself aware of any relevant audit
information and to establish that the Company's statutory auditor is aware of
that information.
This confirmation is given and should be interpreted in accordance with the
provisions of Section 418 of the Companies Act 2006.
This was approved by the Board of Directors on 3 August 2022 and is signed on
its behalf by;
Sayed Mustafa Ali
Director
3 August 2022
CORPORATE GOVERNANCE STATEMENT
Corporate governance
The board is committed to maintaining appropriate standards of corporate
governance. The statement below explains how the Group has observed principles
set out in The UK Corporate Governance Code ("the Code") as relevant to the
Group and contains the information required by section 7 of the UK Listing
Authority's Disclosure and Transparency Rules ("DTR").
Although the UK Corporate Governance Code is not compulsory for companies
whose shares are admitted to trading on the Main Market (Standard Listing),
the Board recognises the importance of sound corporate governance and have
developed governance policies appropriate for the Group, given its current
size and resources. The Group is a small group with modest resources. The
Group has a clear mandate to optimise the allocation of limited resources to
support its expansion and future plans. As such the Group strives to maintain
a balance between conservation of limited resources and maintaining robust
corporate governance practices. As the Group evolves, the board is committed
to enhancing the Group's corporate governance policies and practices deemed
appropriate to the size and maturity of the organisation.
Board of directors
The board currently consists of one executive director and three independent
non-executive directors. Following its Admission, the board meets regularly
throughout the year to discuss key issues and to monitor the overall
performance of the Group. The board has a formal schedule of matters reserved
for its decision. The board met five times during the year. The board, led by
the independent non-executive directors, evaluates the annual performance of
the board and the chairman.
The table below sets out the board meetings held by the Company for the year
ended 31 March 2022 and attendance of each director:
Board meetings
Sayed Mustafa Ali 5 / 5
Ross Andrews 5 / 5
Leon Santos 3 / 5
Wong Chee Keong 5 / 5
Audit committee
The audit committee, which is chaired by Ross Andrews, comprises independent
non-executive directors. The Board is satisfied that Ross Andrews has recent
and relevant financial experience to guide the committee in its deliberations.
The Audit Committee determines the terms of engagement of the Group's auditors
and will determine, in consultation with the auditors, the scope of the audit.
The Audit Committee receives and reviews reports from management and the
Group's auditors relating to the interim and annual accounts and the
accounting and internal control systems in use throughout the Group. The
ultimate responsibility for reviewing and approving the Annual Report and
financial statements and the half-yearly reports remains with the Board.
The Audit Committee is responsible for:
· monitoring in discussion with the auditors the integrity of the
financial statements of the Company, any formal announcements relating to the
Company's financial performance and reviewing significant financial reporting
judgements contained in them;
· reviewing the Company's internal financial controls and the Company's
internal control and risk management systems;
· considering annually whether there is a need for an internal audit
function and make a recommendation to the Board;
· making recommendations to the Board for it to put to the shareholders
for their approval in the general meeting, in relation to the appointment,
re-appointment and removal of the external auditor and to approve the
remuneration and terms of engagement of the external auditor;
· reviewing and monitoring the external auditor's independence and
objectivity and the effectiveness of the audit process, taking into
consideration relevant UK professional and regulatory requirements;
· developing and implementing policy on the engagement of the external
auditor to supply non-audit services, taking into account relevant external
guidance regarding the provision of non-audit services by the external audit
firm; and
· reporting to the Board, identifying any matters in respect of which it
considers that action or improvement is needed and making recommendations as
to the steps to be taken.
For the year under review, there were no non- audit services rendered to the
Group and the Company. The audit committee considered the nature, scope of
engagement and remuneration paid were such that the independence and
objectivity of the auditors were not impaired. Fees paid for audit are
provided in Note 5.
Remuneration committee
The remuneration committee consists of both executive and non-executive
directors and is chaired by Leon Santos until 23(rd) November 2021. Due to Mr
Leon's non re-election by the shareholders, the board elected Mr Ross Andrews
as the chairman of Remuneration committee. It meets when required to
consider aspects of directors' and staff remuneration, share options and
service contracts.
The Directors' Remuneration Report is presented on page 16 to 17.
Nominations committee
Mr Wong Chee Keong (Chairman) and the Nomination Committee which consists of
both executive director and independent non-executive directors. The
nomination committee meets, when required, to examine the selection and
appointment practises in meeting the company's need. No such meeting took
place during the year.
Internal financial control
Financial controls have been established to provide safeguards against
unauthorised use or disposition of the assets, to maintain proper accounting
records and to provide reliable financial information for internal use.
Key financial processes include:
· the maintenance of proper records;
· a schedule of matters reserved for the approval of the board;
· evaluation, approval procedures and risk assessment required close
involvement of the chief executive in the day-to-day operational matters of
the company.
The directors consider the size of the company and the close involvement of
executive directors in the day-to-day operations makes the maintenance of an
internal audit function unnecessary. The directors will continue to monitor
this situation.
Relations with shareholders
The Company maintains a corporate website at http://www.orient-telecoms.com/.
This website is updated regularly and includes information on the Company's
share price as well as other relevant information concerning the Company,
which is available for downloading.
Statement of Directors' Responsibilities
The directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare the Group and the Company
financial statements for each financial year. Under that law the directors
have elected to prepare the Group financial statements in accordance with
UK-adopted International Accounting Standards and elected to prepare the
Company financial statements under United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable laws
including FRS 101 Reduced Disclosure Framework) and applicable law.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
for that period. In preparing these financial statements, the directors are
required to:
- select suitable accounting policies and then apply them
consistently;
- make judgements and accounting estimates that are reasonable and
prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
- prepare the Strategic Report, Directors' report and Directors'
Remuneration report which comply with the requirements of the Companies Act
2006;
- prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and the Company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and the Company's transactions and
disclose with reasonable accuracy at any time, the financial position of the
Group and the Company to enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors are responsible for ensuring that the Strategic Report,
Directors' report and other information included in the annual report and the
financial statements are made in accordance with applicable law in the United
Kingdom. The maintenance and integrity of the Orient Telecoms Plc website is
the responsibility of the Directors.
Legislation in the United Kingdom governing the preparation and dissemination
of the accounts and the other information included in annual reports may
differ from legislation in other jurisdictions.
The Directors are responsible for preparing the Financial Statements in
accordance with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority ("DTR") and with UK-adopted International
Accounting Standards..
The directors confirm, to the best of their knowledge that:
· the financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and Company;
· the Strategic and Directors' Report include a fair review of the
development and performance of the business and the financial position of the
Group and the Company, together with a description of the principal risks and
uncertainties that it faces; and
· the annual report and financial statements, taken as a whole, are
fair, balanced, and understandable and provide the information necessary for
shareholders to assess the group's position, performance, business model and
strategy.
Directors' Remuneration Report
The Directors' Remuneration Report sets out the Group's policy on the
remuneration of Directors together with the details of Directors' remuneration
packages and services contracts for the period 1 April 2021 to 31 March 2022.
The Board as a whole will review the scale and structure of the Directors'
fees, taking into account the interests of the shareholders and the
performance of the Company and Directors.
The items included in this report are unaudited unless otherwise stated.
The Company maintains contact with its shareholders about remuneration in the
same way as other matters and, as required by Section 439 of the Companies Act
2006, this remuneration report will be put to an advisory vote of the
Company's shareholders at the forthcoming Annual General Meeting.
Statement of Orient Telecoms plc's policy on Directors' remuneration
As set out in the Company's Prospectus dated 18 October 2017, each of the
Directors may be paid a fee at such rate as may from time to time be
determined by the Board. However, the aggregate of all fees payable to the
Directors must not exceed £150,000 a year or such higher amount as may from
time to time be decided by ordinary resolution of the Company.
In addition, any fees payable to the Directors shall be distinct from any
salary, remuneration or other amounts payable to a Director under any other
provisions and shall accrue from day to day.
The Board may also make provisions for pension entitlement for Directors.
There have been no changes to the Directors' remuneration or remuneration
policy since the publication of the Company's Prospectus dated 18 October
2017.
Terms of employment
Sayed Mustafa Ali has been appointed by the Company to act as an executive
director under a service agreement dated 12 October 2017. His appointment
commenced on 12 October 2017 and is terminable on six months' written notice
on either side. He is entitled to a fee of £15,000 per annum.
Wong Chee Keong has been appointed by the Company to act as a non-executive
director under a service agreement dated 9 April 2020. His appointment
commenced on 9 April 2020 and is terminable on six months' written notice on
either side. He is entitled to a fee of RM120,000 (approximately £19,900) per
annum.
Ross Andrews has been appointed by the Company to act as a non-executive
director under a service agreement dated 12 October 2017. His appointment
commenced on 12 October 2017 and is terminable on three months' written notice
on either side. He is entitled to a fee of £20,000 per annum.
Leon Santos has been appointed by the Company to act as a non-executive
director under a service agreement dated 12 October 2017. His appointment
commenced on 12 October 2017 and was in full force until 23(rd) November 2021.
He was entitled to a fee of £15,000 per annum.
Policy for new appointments
Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience and their current base
salary. Where an individual is recruited below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
Directors' emoluments and compensation
Directors' emoluments for the year ended 31 March 2022 are set out in note 15.
Statement of Directors' shareholding and share interest
The Directors who served during the year ended 31 March 2022, and their
interests at that date, are disclosed on Page 9. There were no changes between
the reporting date and the date of approval of this report.
None of the Directors has any potential conflicts of interest between their
duties to the Company and their private interests or other duties they may
also have.
Other Matters
The Company does not currently have any annual or long-term incentive schemes
in place for any of the Directors and as such there are no disclosures in this
respect.
The Company does not have any pension plans for any of the Directors and does
not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors.
Approved on behalf of the Board of Directors.
Ross Andrews
Chairman, Remuneration Committee
3 August 2022
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ORIENT TELECOMS PLC
FOR THE YEAR ENDED 31 MARCH 2022
Opinion
We have audited the financial statements of Orient Telecoms Plc (the
"Company") and its subsidiary undertakings (together referred to as the
"Group") for the year ended 31 March 2022, which comprise:
· the consolidated statement of comprehensive income for the year ended
31 March 2022;
· the consolidated and the Company statement of financial position as
at 31 March 2022;
· the consolidated statement of cash flows for the year ended 31 March
2022;
· the consolidated and the Company statement of changes in equity for
the year ended 31 March 2022; and
· notes to the financial statements, which include a summary of
significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and International Accounting
Standards in conformity with the requirements of the Companies Act 2006. The
financial reporting framework that has been applied in the preparation of the
Company financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 Reduced Disclosure
Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
· the financial statements give a true and fair view of the state of
the Group's and the Company's affairs as at 31 March 2022 and of the Group's
profit for the year then ended; and
· the Group financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards;
· the Company financial statements have been properly prepared in
accordance with United Kingdom Accounting Standards; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Our audit opinion is consistent with our reporting to the audit committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report.
Independence
We remained independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services
prohibited by the FRC's Ethical Standard were not provided.
We have provided no non-audit services to the Company or its controlled
undertakings in the period under audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors' assessment of the Group's ability to continue
to adopt the going concern basis of accounting included carrying out a risk
assessment which covered the nature of the group, its business model and
related risks including where relevant the impact of Coronavirus, the
requirements of the applicable financial reporting framework and the system of
internal control. We evaluated the directors' assessment of the group's
ability to continue as a going concern, including challenging the underlying
data and key assumptions used to make the assessment, and evaluated the
directors' plans for future actions in relation to their going concern
assessment. Additionally, we reviewed and challenged the results of
management's stress testing, to assess the reasonableness of economic
assumptions on the Group's solvency and liquidity position.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company's or Group's ability
to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £19,564, based on an average of
approximately 4% of the Group's net assets at the year end, and approximately
3% of turnover for the year.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial statements.
Performance materiality is set based on the audit materiality as adjusted for
the judgements made as to the entity risk and our evaluation of the specific
risk of each audit area having regard to the internal control environment. We
determined performance materiality to be £3,074.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of £205. Errors below that threshold would also be reported to it if,
in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The Company is accounted for from one central operating location based in
Kuala Lumpur, Malaysia where all the Group's records were maintained.
In establishing our overall approach to the Group audit, we determined the
type of work that needed to be undertaken at the significant component by us,
as the primary audit engagement team. For the full scope component in
Malaysia, we determined the appropriate level of involvement to enable us to
determine that sufficient audit evidence had been obtained as a basis for our
opinion on the Group as a whole.
We engaged with the component auditors at all stages during the audit process
and directed the audit work on the non-UK subsidiary undertakings. We directed
the component auditor regarding the audit approach at the planning stage,
issued instructions that detailed the significant risks to be addressed
through the audit procedures and indicated the information we required to be
reported on. At the planning s
This, together with the additional procedures performed at Group level, gave
us appropriate evidence for our opinion on the Group financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance on our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
Going concern was identified as a key audit matter and has been addressed
within the "Conclusions relating to going concern" section of the audit
report. We have determined that there are no other key audit matters to
communicate in our report.
Our audit procedures in relation to the matter were designed in the context of
our audit opinion as a whole. They were not designed to enable us to express
an opinion on the matter individually and we express no such opinion.
Other Information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
In this context, matters that we are specifically required to report to you as
uncorrected material misstatements of the other information include where we
conclude that:
· Fair, balanced and understandable - the statement given by the
directors that the y consider the annual report and financial statements taken
as a whole is fair, balanced and understandable and provides the information
necessary for shareholders to assess the groups' position and performance,
business model and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
· Audit committee reporting - the section describing the work of the
audit committee does not appropriately address matters communicated by us to
the audit committee;
We have nothing to report in respect of these matters.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company
and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company and Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
· We obtained an understanding of the legal and regulatory frameworks
within which the Group operates, focusing on those laws and regulations that
have a direct effect on the determination of material amounts and disclosures
in the financial statements. The laws and regulations we considered in this
context were relevant company law and taxation legislation in the UK and
Malaysia jurisdictions in which the Group operates.
· We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment
of the risks of irregularities, sample testing on the posting of journals, and
reviewing accounting estimates for biases.
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances on non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain
transactions and balances. However, it typically involves selecting a limited
number of items for testing, rather than testing complete populations. We will
often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to
draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
Appointment
We were appointed by the board on 21 February 2022 to audit the financial
statements for the year ended 31 March 2022. Our total uninterrupted period of
engagement is 1 year, covering the year ended March 2022.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
BENJAMIN BIDNELL
For and on behalf of
SHIPLEYS LLP
Chartered Accountants and Statutory Auditor
10 Orange Street, Haymarket, London, WC2H 7DQ
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
AS AT 31 MARCH 2022
Year Year
31-Mar-22 31-Mar-21
Notes £ £
Revenue 4 611,544 807,133
Direct cost (135,156) (276,424)
GROSS PROFIT 476,388 530,709
Administrative expenses 5 (439,640) (441,203)
OPERATING PROFIT 89,506
36,749
Other income 7,512 2,972
Finance income 595 850
Finance cost (10,136) (9,756)
PROFIT BEFORE TAXATION 34,719 83,572
Income tax expense 6 - -
PROFIT FOR THE YEAR ATTRIBUTABLE TO EQUITY HOLDERS 34,719 83,572
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified to profit or loss:
Translation of foreign (27,785)
operation
6,976
TOTAL COMPREHENSIVE PROFIT FOR THE YEAR 41,695 55,787
Basic and diluted profit per share (pence) 7 0.34 0.84
The notes to the financial statements form an integral part of these financial
statements.
All amounts are derived from continuing operations.
As at As at
31-Mar-22 31-Mar-21
Notes £ £
ASSETS
NON-CURRENT ASSET
Right-of -use asset 8 294,776 219,356
CURRENT ASSETS
Trade and other receivables 9 125,935 306,455
Bank 10 466,623 391,783
592,558 698,238
TOTAL ASSETS 887,334 917,594
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 11 1,000,000 1,000,000
Translation reserve (16,737) (23,713)
Accumulated loss (486,528) (521,247)
496,735 455,040
CURRENT LIABILITIES
Trade and other payables 12 95,823 238,828
Lease liability 13 93,552 96,094
189,375 334,922
NON-CURRENT LIABILITIES
Lease liability 13 201,224 127,632
201,224 127,632
TOTAL EQUITY AND LIABILITIES 887,334 917,594
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
The notes to the financial statements form an integral part of these financial
statements.
All amounts are derived from continuing operations.
This report was approved by the board and authorised for issue on 03 August
2022 and signed on its behalf by;
………………………
Sayed Mustafa Ali
Director
Year Year
31-Mar-22 31-Mar-21
£ £
Cash flow from operating activities
Profit before tax 34,719 83,572
Adjustment for:
Unrealised exchange loss 3,703 5,927
Depreciation of right-of-use-assets 97,496 99,010
Gain on lease termination (3.586) (4,174)
Interest income (595) (850)
Interest on lease liabilities 10,136 9,756
141,873 193,241
Changes in working capital
Trade and other receivables 180,520 (77,362)
Trade and other payables (143,005) 47,168
Cash flow from operations 179,388 163,046
Interest received 595 850
Net cash generated from/ (used in) operating activities 179,983 163,896
Cash flow from financing activities
Interest paid (10,136) (9,756)
Repayment on lease liability (98,392) (90,885)
Net cash used in financing activities (108,528) (100,641)
Net movement in cash and cash equivalents 71,455 63,255
Cash and cash equivalents at beginning of period 391,783 350,692
Exchange gain on cash and cash equivalents 3,385 (22,164)
Cash and cash equivalents at end of period 466,623 391,783
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Share capital Translation reserve Accumulated loss Total
£ £ £ £
As at 31 March 2020 1,000,000 4,072 (604,819) 399,253
Translation of foreign operation - (27,785) - (27,785)
Profit for the year - - 83,572 83,572
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
Translation of foreign operation - 6,976 - 6,976
Profit for the year - - 34,719 34,719
Total comprehensive income for the year - 6,976 34,719 41,695
As at 31 March 2022 1,000,000 (16,737) (486,528) 496,735
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
1. GENERAL INFORMATION
The Company was incorporated in England and Wales on 26 February 2016, as a
public company limited by shares under the UK Companies Act 2006. The
registered office of the Company is at the offices of London Registrar, Suite
A, 6 Honduras St, London EC1Y 0TH United Kingdom.
The financial statements comprise of financial information of the Company and
its subsidiary (together referred to as the "Group").
2. ACCOUNTING POLICIES
The Board has reviewed the accounting policies set out below and considers
them to be the most appropriate to the Group's business activities.
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards. . The
financial statements have been prepared under the historical cost convention
as modified for financial assets carried at fair value.
The financial information of the Company is presented in British Pound
Sterling ("£") which is the functional currency of the Company.
Going concern
The Group meets its day to day working capital requirements through existing
cash reserves. In undertaking this assessment, they have considered the
principal risks and uncertainties as set out in the Strategic Report and have
assessed that the Group will have adequate working capital for the Company and
the Group to be able to meet its liabilities as they fall due.
COVID-19 pandemic has affected the business and economic environments of the
Group. Different measures taken by the governments and various private
corporations to prevent the spread of the virus such as travel bans, closures
of non-essential services, social distancing and home quarantine requirements
may impact consumers' spending pattern and the Group's operations directly or
indirectly which may affect operating cash flows and liquidity.
The directors have prepared financial projections and plans for a period of at
least 12 months from the date of approval of these financial statements. In
view of the prolonged Covid-19 global pandemic, the directors believe the
Group has considerable financial resources together with a diverse corporate
customer base and long-standing relationship with a number of key suppliers.
As a consequence, the Group is well placed to manage its business risks.
For the year under review, the Group remained profitable and was net cash
generating from the operating activities. The Group had a cash balance of
approximately £467,000 at the reporting date and the cash balance was
approximately £350,000 at 30 July 2022, which the Directors believe will be
sufficient to pay its ongoing expenses and to meet its liabilities as they
fall due for a period of at least 12 months from the date of approval of the
financial statements. These financial statements have been prepared on a going
concern basis at the end of reporting period.
After making this enquiry, the directors have a reasonable expectation that
the Company and the Group have adequate resources to continue in operational
existence. For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
Standards and interpretations issued but not yet applied
The following standards, amendments and interpretations became effective from
1 January 2020, however none of these new standards has had an impact on the
Group financial statements:
· IAS 1 Presentation of Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors (Amendment - Disclosure
Initiative - Definition of Material)
· IFRS 3 Business Combinations (Amendment - Definition of Business)
Conceptual Framework for Financial Reporting (Revised)
· IBOR Reform and its Effects on Financial Reporting
· COVID-19 Related Rent Concessions - Amendment to IFRS 16
A number of new standards and amendments to standards and interpretations have
been issued by International Accounting Standards Board but are not yet
effective. The Directors do not expect that the adoption of these standards
will have a material impact on the financial statements of the Group in future
periods.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries drawn up to 31 March each year. Control is
achieved where the Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with those used by
other members of the Group.
All intra-company transaction, balances, income and expenses are eliminated in
full on consolidation.
Revenue recognition
The accounting policies for the group's revenue from contracts with customers
are explained in note 4.
Taxation
The tax currently payable is based on the taxable profit for the period.
Taxable profit differs from net profit as reported in the income statement
because the taxable profits exclude items of income or expense that are
taxable or deductible in other periods and it further excludes items that are
not taxable or deductible. The Group's liability for corporate tax is
calculated using the income tax rates that have been gazetted for the current
reporting date.
Deferred income tax is provided for using the liability method on temporary
differences at the reporting date between the tax basis of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised in full for all temporary
differences. Deferred income tax assets are recognised for all deductible
temporary differences carried forward of unused tax credits and unused tax
losses to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences and carry-forward
of unused tax credits and unused losses can be utilised.
The carrying amount of deferred income tax assets is assessed at each
reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the
deferred income tax asset to be utilised. Unrecognised deferred income tax
assets are reassessed at each reporting date and are recognised to the extent
that is probable that future taxable profits will allow the deferred income
tax asset to be recovered.
Foreign currency
The Group's consolidated financial statements are presented in Sterling. The
functional currency of the Group's subsidiary is Ringgit Malaysia ("MYR"). The
Group determines the functional currency and items included in the financial
statements of each entity are measured using that functional currency.
The assets and liabilities of foreign operations are translated into sterling
at the rate of exchange ruling at the reporting date. Income and expenses are
translated at weighted average exchange rates for the period. The exchange
differences arising on translation for consolidation are recognised in other
comprehensive income.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive income
(OCI), and fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component or for which the Group has applied
the practical expedient are measured at the transaction price determined under
IFRS 15.
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is de-recognised,
modified or impaired.
The Group's financial assets at amortised cost includes trade receivables and
loan to related parties, are included under other non-current financial
assets. In the periods presented the Group does not have any financial assets
categorised as fair value through OCI.
Impairment provisions for current and non-current trade receivables are
recognised based on the simplified approach within IFRS 9 using a historical
provision matrix in the determination of the lifetime expected credit losses
except for the key customer which are separately assessed with its standalone
credit risk profile. During this process the probability of the non-payment of
the trade receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the lifetime
expected credit loss for the trade receivables. For trade receivables, which
are reported net, such provisions are recorded in a separate provision account
with the loss being recognised within administration expenses in the
consolidated statement of comprehensive income. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward-looking expected credit loss
model. The methodology used to determine the amount of the provision is based
on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those for which credit risk has
increased significantly, lifetime expected credit losses are recognised,
unless further information becomes available contrary to the increased credit
risk. For those that are determined to be permanently credit impaired,
lifetime expected credit losses are recognised.
Trade and other payables
Trade and other payables are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost, where
applicable, using the effective interest method, with interest expense
recognised on an effective yield basis.
Cash and cash equivalents
The Group considers any cash on short-term deposits and other short-term
investments to be cash equivalents.
Leases
The Group assesses whether a contract is or contains a lease, at the inception
of the contract. The Group recognises a right-of-use asset and corresponding
lease liability with respect to all lease arrangements in which it is the
lessee, except for low-value assets and short-term leases with 12 months or
less. For these leases, the Group recognises the lease payments as an
operating expense on a straight-line method over the term of the lease unless
another systematic basis is more representative of the time pattern in which
economic benefits from the leased assets are consumed.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use assets and the associated lease
liabilities are presented as a separate line item in the statement of
financial position.
The right-of-use asset is initially measured at cost. Cost includes the
initial amount of the corresponding lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred, less any incentives received.
The right-of-use asset is subsequently measured at cost less accumulated
depreciation and any impairment losses, and adjustment for any remeasurement
of the lease liability. The depreciation starts from the commencement date of
the lease. If the lease transfers ownership of the underlying asset to the
Group or the cost of the right-of-use asset reflects that the Group expects to
exercise a purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. Otherwise, the Group depreciates the
right-of-use asset to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
incremental borrowing rate is calculated on a lease by lease basis.
The lease liability is subsequently measured at amortised cost using the
effective interest method. It is remeasured when there is a change in the
future lease payments (other than lease modification that is not accounted for
as a separate lease) with the corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recognised in profit or loss if the
carrying amount has been reduced to zero.
Operating segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the management team including the two
main directors and two non-executive directors.
The Board considers that the Group's activity constitutes one operating and
one reporting segment, as defined under IFRS 8. Management reviews the
performance of the Group by reference to total results against budget.
The total profit measures are operating profit and profit for the period, both
disclosed on the face of the income statement. No differences exist between
the basis of preparation of the performance measures used by management and
the figures in the Group's financial information.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in compliance with IFRSs requires the
use of certain critical accounting estimates or judgements. The estimates and
judgements which have a significant risk of causing a material adjustment to
the carrying amount of assets and liabilities within the next financial year
are discussed below:
Lease liability discount rate
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• Where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in
financing conditions since third party financing was received;
• Uses a build-up approach that starts with a risk-free interest
rate adjusted for credit risk for leases held by the company, which does not
have recent third-party financing; and
• Makes adjustments specific to the lease, e.g. term, currency and
security.
The Group used incremental borrowing rates at a prevailing rate of 6.9%.
4. REVENUE
Year Year
31-Mar-22 31-Mar-21
£ £
Revenue 611,544 807,133
611,544 807,133
Year
31-Mar-21
£
Revenue
611,544
807,133
611,544
807,133
Revenue is recognised either when the performance obligation in the contract
has been performed (so 'point in time' recognition) or 'over time' 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 is 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 performance/downtime is more than 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.
All revenue derived from Malaysia, Singapore and Thailand. Revenue excludes
value added tax and other sales taxes.
5. MATERIAL PROFIT OR LOSS ITEMS
A number of items which are material due to the significance of their nature
and/or amount is stated as follow:
Year Year
31-Mar-22 31-Mar-21
£ £
Consultancy fee 18,573 23,128
Staff costs (include directors) 192,116 161,442
Depreciation of right-of-use assets 97,496 99,010
Advertising and marketing 28,941 45,034
Interest on lease liability 10,136 9,756
Auditors' remuneration:
Fees payable to the Group's auditor for the audit of the Group's annual 18,500 22,000
accounts
Fees payable to the Group's subsidiary auditor for the audit of the 1,809 4,587
subsidiary's annual accounts
Year
31-Mar-21
£
Consultancy fee
18,573
23,128
Staff costs (include directors)
192,116
161,442
Depreciation of right-of-use assets
97,496
99,010
Advertising and marketing
28,941
45,034
Interest on lease liability
10,136
9,756
Auditors' remuneration:
Fees payable to the Group's auditor for the audit of the Group's annual
accounts
18,500
22,000
Fees payable to the Group's subsidiary auditor for the audit of the
subsidiary's annual accounts
1,809
4,587
6. INCOME TAX EXPENSE
The corporation tax in the UK applied during the year was 19% (2021: 19%).
The charge for the year can be reconciled to the profit/(loss) in the
Statement of Comprehensive income as follow:
As at As at
31-Mar-22 31-Mar-21
£ £
Profit/(loss) before tax on continuing operations 34,719 83,572
Tax at the UK corporation tax rate 6,597 15,879
Tax effect of expenses that are not deductible in determining taxable profit 442 3,664
Difference in oversea tax rate - (1,065)
Utilised tax loss 7,039 (19,924)
Unutilised tax loss carried forward - 1,446
Tax charge for the year - -
The Group has accumulated tax losses of approximately £102,961 (2021:
£110,000) which can be carried forward indefinitely. No deferred tax asset
has been recognised in respect of the losses carried forward, due to the
uncertainty as to whether the Group will generate sufficient future profits in
the foreseeable future to prudently justify this.
7. PROFIT / (LOSS) PER SHARE
Basic and diluted profit per ordinary share is calculated by dividing the
profit attributable to equity holders of the Group 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
Year Year
31-Mar-22 31-Mar-21
£ £
Profit for the year (£) 34,719 83,572
Weighted average number of shares (Unit) 10,000,000 10,000,000
Basic and diluted profit per share (Pence) 0.35 0.84
Year
31-Mar-21
£
Profit for the year (£)
34,719
83,572
Weighted average number of shares (Unit)
10,000,000
10,000,000
Basic and diluted profit per share (Pence)
0.35
0.84
8. RIGHT-OF-USE ASSET
Office
Cost £
At 1 April 2021 292,474
Addition due to increase in lease term 167,304
Exchange difference 7,484
At 31 March 2022 467,262
Accumulated depreciation
At 1 April 2021 73,118
Depreciation for the year 97,496
Exchange difference 1,872
At 31 March 2022 172,486
Net Book Value
At 31 March 2022 294,7765
At 31 March 2021 219,356
The Group subsidiary entered into a lease agreement for an office. The lease
was renewed for a period of three (3) years commence of 1(st) April 2022.
9. TRADE AND OTHER RECEIVABLES
As at As at
31-Mar-22 31-Mar-21
£ £
Trade receivables 21,478 217,037
Prepayment and deposit 47,230 64,374
Other receivables 57,226 25,044
125,934 306,455
As at
31-Mar-21
£
Trade receivables
21,478
217,037
Prepayment and deposit
47,230
64,374
Other receivables
57,226
25,044
125,934
306,455
The Group allows credit terms of 30 days to all customers. During the
pandemic, the Group made an exception to allow certain customers to settle the
debts at the agreed extended timeframe. Subsequent to the year end, the Group
received the payment of the overdue debts in full before the date of approval
of these financial statements. Accordingly, these past due trade receivables
are not impaired and no expected credit loss is recognised in these financial
statements.
10. BANK
Cash and cash equivalents are denominated in the following currencies:
As at As at
31-Mar-22 31-Mar-21
£ £
Great Britain Pound 15,302 20,102
Singapore Dollar 19,249 18,494
United States Dollar 26,592 25,370
Malaysia Ringgit 405,480 327,817
466,623 391,783
As at
31-Mar-21
£
Great Britain Pound
15,302
20,102
Singapore Dollar
19,249
18,494
United States Dollar
26,592
25,370
Malaysia Ringgit
405,480
327,817
466,623
391,783
11. SHARE CAPITAL
Ordinary shares of £0.10 each
Number of shares Amount
£
Issued and paid up
As at 31 March 2022 and 31 March 2021 10,000,000 1,000,000
At 31 March 2022, the total issued ordinary share of the Group were
10,000,000.
12. TRADE AND OTHER PAYABLES
Year Year
31-Mar-22 31-Mar-21
£ £
Amount due to directors 3,051 3,004
Trade creditors - 134,551
Accruals 33,487 40,703
Contract liability 8,136 10,418
Other payables 51,149 50,152
95,823 238,828
Year
31-Mar-21
£
Amount due to directors
3,051
3,004
Trade creditors
-
134,551
Accruals
33,487
40,703
Contract liability
8,136
10,418
Other payables
51,149
50,152
95,823
238,828
13. LEASE LIABILITY
Year Year
31-Mar-22 31-Mar-21
£ £
At 1 April 223,726 73,825
Addition 167,303 292,474
Changes due to lease modification (3,586) (48,272)
Repayment of principal (98,392) (90,885)
Exchange differences 5,725 (3,416)
At 31 March 294,776 223,726
Lease liabilities are payable as follow:
Current liability 93,552 96,094
Non-current liability 201,224 127,632
294,776 223,726
14. SUBSIDIARY UNDERTAKING
The details of the subsidiary in the Group are as follows:
Name of subsidiary Country of incorporation Effective holding Principal activities
Orient BB Sdn. Bhd. Malaysia 100% IT managed services
Below is the registered address of the subsidiary undertakings.
ORIENT BB Sdn Bhd 28, 3(rd) Floor, Lorong Medan Tuanku Satu,
50300 Kuala Lumpur, Malaysia
Orient Telecoms Ltd Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands
15. EMPLOYEES AND DIRECTORS' EMOLUMENTS
Year ended Year ended
31-Mar-22 31-Mar-21
£ £
Staff costs (include directors) 198,874 161,442
Directors' fee during the year
Year ended at Year ended at
31-Mar-22 31-Mar-21
£ £
Wong Chee Keong 21,144 19,856
Sayed Mustafa Ali 15,000 15,000
Ross Andrews 24,000 20,000
Leon Santos 10,000 15,000
70,144 69,856
The Directors' fees are payable to the third-party companies in respect of
their services as the directors of the Group.
The average monthly number of employees, including directors, during the year
was 11 (2021: 12)
16. SEGMENTAL ANALYSIS
The chief operating decision maker has determined that in the year end 31
March 2022, the Group had a single operating segment, the provision of managed
telecommunications services.
Apart from holding Group activities in the UK the Group's operations where
predominantly revenue derived from Malaysia, representing 50% (2021: 52%) of
total revenue, and the remaining revenue derived from the countries within the
South East Asia region during the reporting year.
There are 2 customers (2021: 2 customers) with revenue greater than 10% during
the reporting year as follow:
As at As at
31-Mar-22 31-Mar-21
£ £
Customer A 278,151 390,270
Customer B 120,000 88,073
398,151 478,343
17. FINANCIAL INSTRUMENTS
The Group's principal financial instruments comprise trade & other
receivables and other payables. The Group's accounting policies and method
adopted, including the criteria for recognition, the basis on which income and
expenses are recognised in respect of each class of financial assets,
financial liability and equity instrument are set out in Note 2. The Group
does not use financial instruments for speculative purposes.
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
As at As at
31-Mar-22 31-Mar-21
£ £
Financial assets
Loans and receivables
Cash and cash equivalent 466,623 391,783
Trade and other receivable 65,520 242,081
Total financial assets 532,143 633,864
Financial liabilities at amortised cost
Amount due to directors 3,051 3,004
Trade and other payables 81,953 225,406
Total financial liabilities 85,004 228,410
The Group uses a limited number of financial instruments, comprising cash,
short-term deposits and various items such as trade receivables and payables,
which arise directly from operations. The Group does not trade in financial
instruments and it has no external borrowing.
18. FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group's activities expose it to a variety of financial risks: currency
risk, credit risk, liquidity risk and cash flow interest rate risk. The
Group's overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the
Group's financial performance.
a) Currency risk
The Group has transactional currency exposures arising from sales, and
expenses that are denominated in a currency other than in Pounds Sterling. The
foreign currency in which these transactions are denominated in Ringgit
Malaysia ("MYR"). The Group also holds cash and cash equivalents denominated
in foreign currencies, predominantly in MYR, for working capital purposes.
At the reporting date, the following Group's financial instruments are
denominated in MYR:
As at As at
31-Mar-22 31-Mar-21
£ £
Financial assets
Loans and receivables
Cash and cash equivalent 405,479 327,817
Trade and other receivable 72,721 122,872
Total financial assets 478,200 450,689
Financial liabilities at amortised cost
Trade and other payables 66,672 50,555
Total financial liabilities 66,672 50,555
Net financial asset 411,528 400,134
If the GBP strengthened by 5% against the MYR, with all other variables in
each case remaining constant, then the impact on the group's post-tax profit
for the year would be loss of approximately £20,500 (2021: loss of £19,000)
or vice versa.
b) Credit risk
The Group's exposure to credit risk or the risk of counterparties defaulting,
is primarily attributable to trade receivables. The Group manages its exposure
to credit risk by the application of credit approvals, credit limits and
monitoring procedures on an ongoing basis. For other financial assets
(including cash and bank balances), the Group minimises credit risk by (i)
customer is compulsory to place security deposit (ii) 1-month payment in
advance for monthly recurring invoice (iii) no credit risk for past 12 month
(i) Credit Risk Concentration Profile
The Group's major concentration of credit risk relates to amounts owing by one
(1) customer which constitute 24% (2021: 55%) of its trade receivables as at
the end of the reporting period.
(ii) Exposure to credit risk
At the end of the financial year, the maximum exposure to credit risk is
represented by the carrying amount of each class of the financial assets
recognised in the statement of financial position of the company after
deducting any allowance for impairment losses (where applicable)
(iii) Assessment of Impairment Losses
At each reporting date, the Group assesses whether any of the financial assets
at amortised cost are credit impaired
The gross carrying amounts of those financial assets are written off when
there is no reasonable expectation of recovery (i.e. the debtor does not have
assets or sources of income to generate sufficient cash flows to repay the
debt). However, those assets are still subject to enforcement activities.
Trade Receivables
The Group applies the simplified approach to measure expected credit losses
which uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivable has been grouped based
on shared credit risk characteristic and the days past due.
The Group considers any receivables having financial difficulty or with
significant balances outstanding for more than one year, as credit impaired.
However, due to the pandemic, exceptions have been granted to specified trade
receivables, which is valued on case-by-case basis and subject to approval.
The expected loss rates are based on the payment profiles of sales over a
period of 12 months from the measurement date and the corresponding historical
credit losses experienced within this period. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle their debts.
The information about the exposure to credit risk and the loss allowances
calculated under IFRS 9 for trade receivables is summarised below: -
Gross ECL Carrying
Amount Provision Amount
£ £ £
2022
Current (not past due) 14,597 - 14,597
1 to 30 days past due 3,660 - 3,660
31 to 60 days past due 2,569 - 2,569
61 to 90 days past due 652 - 652
more than 90 days - - -
21,478 - 21,478
Gross ECL Carrying
Amount Provision Amount
£ £ £
2021
Current (not past due) 79,412 - 79,412
1 to 30 days past due 61,052 - 61,052
31 to 60 days past due 11,349 - 11,349
61 to 90 days past due 8,721 - 8,721
more than 90 days 56,503 - 56,503
217,037 - 217,037
Deposit with a Licensed Bank and Bank Balances
The company considers the banks and financial institutions have low credit
risks. Therefore, the Company is of the view that the loss allowance is
immaterial and hence, it is not provided for.
Other receivables
The company applies the 3-stage general approach to measuring expected credit
losses for other receivables. No expected credit loss is recognised on these
balances as it is negligible.
c) Liquidity risk
Liquidity risk arises from general funding and business activities. The Group
practices prudent risk management by maintaining sufficient cash balances and
adequate working capital to meet its obligations as and when they fall due The
Group ensures it has adequate resource to discharge all its liabilities. The
directors have considered the liquidity risk as part of their going concern
assessment. (See note 2)
d) Maturity Analysis
The following table sets out the maturity profile of the financial liabilities
at the end of the reporting period based on contractual undiscounted cash
flows (including interest payments computed using contractual rates or if
floating based on the rates at the end of the reporting period). The Group
ensures it has adequate resource to discharge all its liabilities. The
directors have considered the liquidity risk as part of their going concern
assessment.
Carrying Amount Contractual Undiscounted cash flow Within 1 year More than 1 year
£ £ £ £
2022
Trade and other payables 92,772 92,772 92,772 -
Amount due to directors 3,051 3,051 3,051 -
Lease liabilities 294,776 294,776 93,552 201,224
390,599 390,599 189,375 201,224
2021
Trade and other payables 225,406 225,406 225,406 -
Amount due to directors 3,004 3,004 3,004 -
Lease liabilities 223,726 238,095 105,820 132,275
452,136 466,505 334,230 132,275
Fair values
Management assessed that the fair values of cash and short-term deposits,
trade receivables, trade payables and other current liabilities approximate
their carrying amounts largely due to the short-term maturities of these
instruments.
19. CAPITAL RISK MANAGEMENT POLICY
The Group defines capital as the total equity and debt of the Group. The
objective of the Group's capital management is to safeguard and maintain the
Group's ability to continue as a going concern in order to provide returns to
and benefits for all stakeholders and to maintain an optimal capital structure
to reduce the cost of capital and towards ensuring availability of funds in
order to support its businesses and related shareholders value. To achieve
this objective, the Group may make adjustments to the capital structure in
view of changes in economic conditions such as adjusting the amount of
dividend payments or issuing new shares. The capital structure of the Group
consists of the equity attributable to equity holders of the Group which
comprises of issued share capital and reserves.
The Group monitors and maintains a prudent level of total debt to total equity
ratio to optimise shareholders value and to ensure compliance with debt
covenants and regulatory,
There was no change in the Group's approach to capital management during the
financial year.
20. NET DEBT RECONCILIATION
The below table sets out an analysis of net debt and the movement in net debt
for the years presented:
As at As at
31-Mar-22 31-Mar-21
£ £
Cash and cash equivalent 466,623 391,783
Lease liabilities (294,776) (223,726)
171,847 168,057
21. RELATED PARTY TRANSACTIONS
Key management are considered to be the directors and the key management
personnel compensation has been disclosed in note 15.
In 2017, Orient Managed Services Limited entered into an agreement with a
third party which provides consultancy services in relation to the listing
exercise of the Group. Orient Managed Services Limited is partly owned by
Sayed Mustafa Ali, a director of the Group.
As at As at
31-Mar-22 31-Mar-21
£ £
Amount due to directors
- Sayed Mustafa Ali 1,250 1,250
- Wong Chee Keong 1,801 1,754
3,051 3,004
The amount due to the related parties are interest-free and is payable on
demand.
Sayed Mustafa Ali is a director in both, the Group and Orient Telecoms Sdn
Bhd.
22. CONTROL
The directors consider there is no ultimate controlling party.
23. SUBSEQUENT EVENTS
There were no subsequent events after the reporting period.
As at As at
31-Mar-22 31-Mar-21
Notes £ £
ASSETS
NON-CURRENT ASSETS
Investment in subsidiary 4 591,684 517,574
CURRENT ASSETS
Bank 61,142 63,967
Trade and other receivables 5 53,213 119,207
114,355 183,174
TOTAL ASSETS 706,039 700,748
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 1,000,000 1,000,000
Accumulated loss (348,112) (477,106)
TOTAL EQUITY 651,888 522,894
CURRENT LIABILITIES
Amount due to 3,004
director
3,051
Trade and other payables 6 51,100 174,850
54,151 177,854
TOTAL EQUITY AND LIABILITIES 706,039 700,748
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
Theprofit for the Company for the year ended 31 March 2022 was £128,994
(2021: £77,571).
The notes to the financial statements form an integral part of these financial
statements.
This report was approved and authorised for issue by the Board of Directors on
3 August, 2022 and signed on behalf by:
Sayed Mustafa Ali
Director
Registered number: 10028222
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Share capital Accumulated loss Total
£ £ £
As at 1 April 2020 1,000,000 (554,677) 445,323
Profit for the year 77,571 77,571
Total comprehensive income for the year 77,571 77,571
As at 31 March 2021 1,000,000 (477,106) 522,894
Profit for the year 128,994 128,994
Total comprehensive income for the year 128,994 128,994
As at 31 March 2022 1,000,000 (348,112) 651,888
Share capital comprises the ordinary issued share capital of the Company.
Accumulated loss represents the aggregate retained earnings of the Company.
The notes to the financial statements form an integral part of these financial
statements.
NOTES TO THE COMPANY FINANCIAL STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
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
Group is at the offices of London Registrar, Suite A, 6 Honduras St, London
EC1Y 0TH United Kingdom.
2. Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with the historical
cost convention. The financial statements have been prepared in accordance
with FRS 101 - The Financial Reporting Standard applicable in the UK and
Republic of Ireland and the Companies Act 2006. The principal accounting
policies are described below.
The Company meets the definition of a qualifying entity under FRS 101 and has
therefore taken advantage of the disclosure exemptions available to it in
respect of its separate financial statements, which are presented alongside
the consolidated financial statements. Exemptions have been taken in relation
to financial instruments, presentation of a cash flow statement and
remuneration of key management personnel.
The Company has taken advantage of section 408 of the Companies Act 2006 and,
consequently, a profit and loss account for the Company alone has not been
presented.
Investment
Investments in subsidiaries are stated at cost less provision for impairment.
Intercompany receivables are regarded as net investment which is subject to
the impairment assessment whenever events or changes in circumstances indicate
that the carrying value of these investment and intercompany receivables may
not be recoverable.
Cash and cash equivalents
Cash in the statement of financial position is cash held on call with banks.
Financial assets
The directors classify the Company's loan and receivable as financial assets
held at amortised cost less provisions for impairment.
The directors determine the classification of its financial assets at initial
recognition.
Financial liabilities
Financial liabilities are classified as financial liabilities measured at
amortised cost.
Creditors
Short term creditors are measured at the transaction price. Other financial
liabilities, including bank loans, are measured initially at fair value, net
of transaction costs, and are measured subsequently at amortised cost using
the effective interest method.
Taxation
Tax is recognised in the Statement of comprehensive income, except that a
charge attributable to an item of income and expense recognised as other
comprehensive income or to an item recognised directly in equity is also
recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the reporting date in the
countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all temporary differences
that have originated but not reversed by the Statement of financial position
date, except that:
• The recognition of deferred tax assets is limited to the extent that
it is probable that they will be recovered against the reversal of deferred
tax liabilities or other future taxable profits; and
• Any deferred tax balances are reversed if and when all conditions for
retaining associated tax allowances have been met.
3. Staff costs
The directors are regarded as the key management and their remunerations are
disclosed in note 15 to the consolidated financial statements.
4. Investment in subsidiary
Cost of investment Loan to group undertaking Total
£ £ £
Balance as at 1 April 2020 93,800 272,896 366,696
Advance loan to group undertaking - 150,878 150,878
Balance as at 31 Mar 2021 93,800 423,774 517,574
Addition 1 - 1
Advance loan to group undertaking - 74,109 74,109
Balance as at 31 Mar 2022 93,801 497,883 591,684
The loan was advanced to the subsidiary to support and fund certain
operational costs required in the business and there is no contractual
obligation on the subsidiary to repay these loans. Judgment has been applied
and classified the loan to group undertaking as part of the cost of investment
in the subsidiary.
The company is required to assess the carrying value of the investment in
subsidiary and loans to group undertaking for impairment. Recoverable value of
these balances is dependent upon the subsidiary producing sufficient cash
surplus such that the subsidiary achieves a positive net asset position.
The details of the subsidiary are set out in the note 14 to the consolidated
financial statements.
5. Trade and other receivables
As at As at
31-Mar-22 31-Mar-21
£ £
Trade receivables - 119,207
Other receivables 19,043 -
Amount due by related company 25,000 -
- Orient Telecoms Ltd
Prepayment 9,170 -
53,213 119,207
6. Trade and other payables
As at As at
31-Mar-22 31-Mar-21
£ £
Amount due to directors 3,051 3,004
Trade creditors - 134,551
Accruals 18,000 14,482
Other payables 33,100 25,817
51,100 177,854
The detail of the related company is set out in the note 20 to the
consolidated financial statements.
7. Share capital
The details are set out in the note 11 to the consolidated financial
statements.
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