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Orient Telecoms PLC (ORNT)

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Wednesday 16 December, 2020

Orient Telecoms PLC

Half-year Report 2020

RNS Number : 8341I
Orient Telecoms PLC
16 December 2020
 

 

 

ORIENT TELECOMS PLC

 

INTERIM FINANCIAL STATEMENTS

 

For the six months ended 30 September 2020

 

 

 

Director's Statement

 

I have pleasure in presenting the interim financial statements of Orient Telecoms Plc and its subsidiary undertaking (the "Group") for the six months ended 30 September 2020.

 

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

 

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

 

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

 

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

 

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

 

Responsibility Statement

 

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

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

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

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

Sayed Mustafa Ali

Director

 

16 December 2020

 

 

 

6 months period ended 30 September 2020

 

6 months period ended 30 September 2019

 

Notes

£

 

£

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

INCOME

4

317,512

 

266,445

COST OF SALES

 

(143,238)

 

(87,293)

GROSS PROFIT

 

174,274

 

179,152

Other operating expenses

 

(173,223)

 

(206,680)

Finance income/(expenses)

 

7,316

 

(1,997)

OPERATING PROFIT/(LOSS) BEFORE TAXATION

 

8,367

 

(29,525)

Income tax expense

 

(1,321)

 

-

PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

 

7,046

 

(29,525)

OTHER COMPREHENSIVE INCOME

 

 

 

 

Items that will or may be reclassified to profit or loss:

 

 

 

 

Translation of foreign operation

 

(3,532)

 

7,439

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD

 

3,514

 

(22,086)

 

 

 

 

 

Basic and diluted profit/(loss)per share (₤)

5

0.001

 

(0.003)

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHESIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020

 

 

 

 

As at

30 September

2020

 

As at

31 March

2020

 

Notes

 

£

 

£

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

Right-of-use assets

6

 

184,556

 

70,765

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Bank

7

 

343,695

 

350,692

Trade and other receivables

8

 

299,858

 

229,092

 

 

 

643,553

 

579,784

CURRENT LIABILITIES

 

 

 

 

 

Trade and other payables

9

 

239,226

 

177,471

Lease liabilities

10

 

186,116

 

73,825

 

 

 

425,342

 

251,296

 

 

 

 

 

 

NET ASSETS

 

 

402,767

 

399,253

 

 

 

 

 

 

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

 

 

 

 

 

Share capital

11

 

1,000,000

 

1,000,000

Translation reserve

 

 

540

 

4,072

Accumulated losses

 

 

(597,773)

 

(604,819)

TOTAL EQUITY

 

 

402,767

 

399,253

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020

 

 

 

6 months period ended

30 Sept 2020

 

6 month period ended

30 Sept 2019

 

 

£

 

£

 

 

 

 

 

Cash flow from operating activities

 

 

 

 

Profit/(loss) before tax

 

8,367

 

(29,525)

Adjustment for:

 

 

 

 

Unrealised exchange loss

 

1,512

 

-

Depreciation of right-of-use-assets

 

49,954

 

47,177

Finance income

 

(10,998)

 

(3,097)

Tax expense

 

(1,321)

 

-

Interest on lease liabilities

 

4,631

 

5,094

Gain on lease termination

 

(2,461)

 

-

 

 

49,684

 

19,649

Changes in working capital

 

 

 

 

Increase in trade receivables

(40,577)

 

(78,137)

(Increase)/Decrease in other receivables

(30,189)

 

213,852

Increase/(Decrease) in trade and other payables

61,755

 

(241,644)

Cash flow from operations

 

(9,011)

 

(105,929)

Interest received

 

10,998

 

3,097

Net cash flow generated from/(used in) operating activities

 

51,671

 

(83,183)

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

Interest paid

 

(2,170)

 

(5,094)

Repayment on lease liability

 

(57,121)

 

(50,642)

Net cash flow used in financing activities

 

(59,291)

 

(55,736)

 

 

 

 

 

Net movement in cash and cash equivalents

 

(7,620)

 

(138,919)

Cash and cash equivalents at beginning of period

 

350,692

 

529,278

Exchange gain on cash and cash equivalents

 

623

 

7,115

Cash and cash equivalents at end of period

 

343,695

 

397,474

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

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

 

Share capital

 

Translation reserve

 

Accumulated losses

 

Total

 

£

 

£

£

£

As at 1 April 2020

1,000,000

 

4,072

 

(604,819)

 

399,253

Profit for the period

-

 

-

 

7,046

 

7,046

Translation of foreign operation

-

 

(3,532)

 

-

 

(3,532)

Total comprehensive loss for the period

-

 

(3,532)

 

7,046

 

3,514

 

 

 

 

 

 

 

 

As at 30 September 2020

1,000,000

 

540

 

(597,773)

 

402,767

 

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

 

Share capital

 

Translation reserve

 

Accumulated losses

 

Total

 

£

 

£

£

 

£

As at 1 April 2019

1,000,000

 

(11,721)

 

(589,509)

 

398,770

Initial application of IFRS 16

-

 

-

 

(1,395)

 

(1,395)

As at 1 April 2019 (Restated)

1,000,000

 

(11,721)

 

(590,904)

 

397,375

Profit for the period

-

 

-

 

(29,525)

 

(29,525)

Translation of foreign operation

-

 

7,439

 

-

 

7,439

Total comprehensive loss for the period

-

 

7,439

 

(29,525)

 

(22,086)

 

 

 

 

 

 

 

 

As at 30 September 2019

1,000,000

 

(4,282)

 

(623,894)

 

371,824

                       

 

 

 

 

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

 

Share capital

 

Translation reserve

 

Accumulated losses

 

Total

 

£

 

£

 

£

 

£

As at 1 April 2019

1,000,000

 

(11,721)

 

(589,509)

 

398,770

Initial application of IFRS 16

-

 

-

 

(1,395)

 

(1,395)

As at 1 April 2019 (Restated)

1,000,000

 

(11,721)

 

(590,904)

 

397,375

Loss for the period

-

 

-

 

(13,915)

 

(13,915)

Translation of foreign operation

-

 

15,793

 

-

 

15,793

Total comprehensive loss for the year

-

 

15,793

 

(13,915)

 

1,878

 

 

 

 

 

 

 

 

As at 31 March 2020

1,000,000

 

4,072

 

(604,819)

 

399,253

 

 

 

 

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED TO 30 SEPTEMBER 2020

 

 

1.  GENERAL INFORMATION

 

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

 

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

 

 

2.  ACCOUNTING POLICIES

 

Basis of preparation

 

The condensed financial information for the period ended 30 September 2020 and 30 September 2019 have been prepared in accordance with IAS 34, Interim Financial Reporting. The condensed financial information is unaudited and does not constitute statutory financial statements. The comparative interim financial information covers the period from 1 April 2019 to 30 September 2019.

 

The principal accounting policies used in preparing the interim financial statements are the same as those applied in the Company's financial statements as at and for the year ended 31 March 2020, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") issued by the International Accounting Standards Board ("IASB"), including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). The auditors' report on those accounts was unqualified and unmodified.

 

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

 

The interim financial statements for the six months ended 30 September 2020 was approved by the Directors on 16 December 2020.

 

Going concern

 

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

 

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

 

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

 

 

 

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

 

 

3.  CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

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

 

In preparing the unaudited interim financial statements, the significant judgements made by the management in applying the Company's accounting policies and the sources of estimates uncertainty were consistent as those applied to the 2020 Audited Financial Statements.

 

There were no changes in estimates of amounts of the Company that may have a material effect on financial period ended 30 September 2020.

 

 

4.  REVENUE

 

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

 

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

 

 

5.  LOSS PER SHARE

 

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

 

Loss per share attributed to ordinary shareholders

 

6 months

period ended

30 September 2020

6 months

period ended

30 September 2019

Profit/(Loss) for the period (£)

7,046

(29,525)

Weighted average number of shares (Unit)

10,000,000

10,000,000

Basic and diluted profit/(loss) per share (£)

0.001

(0.003)

 

 

6.  RIGHT-OF-USE

 

 

6 months

period ended

30 September 2020

 

6 months

period ended

30 September 2019

 

Year ended 30 March 2020

 

£

 

£

 

£

 

Unaudited

 

Unaudited

 

Audited

Cost

 

 

 

 

 

Balance at beginning of period

188,707

 

188,707

 

188,707

Addition during the period

210,922

 

-

 

-

Termination of lease

(188,707)

 

-

 

-

Balance at end of period

210,922

 

188,707

 

188,707

Accumulated depreciation

 

 

 

 

 

Balance at beginning of period

(117,942)

 

(23,588)

 

(23,588)

Charges for the period

(49,954)

 

(47,177)

 

(94,354)

Termination of lease

141,530

 

-

 

-

Balance at end of period

(26,366)

 

(70,765)

 

(117,942)

 

 

 

 

 

 

Net book value

184,665

 

117,942

 

70,765

 

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

 

 

7.  BANK

 

Cash and Cash equivalents are denominated in the following currencies:

 

 

As at

30 September

2020

 

As at

31 March

2020

 

£

 

£

Great Britain Pound

20,327

 

20,703

Singapore Dollar

19,508

 

19,514

United States Dollar

27,265

 

26,667

Malaysia Ringgit

276,595

 

283,808

 

343,695

 

350,692

 

 

 

8.  TRADE AND OTHER RECEIVABLES

 

 

As at

30 September

2020

 

As at

31 March

2020

 

£

 

£

Trade receivables

250,801

 

210,224

Deposit

23,585

 

-

Other receivables

25,472

 

18,868

 

299,858

 

229,092

 

 

9.  TRADE AND OTHER PAYABLES

 

 

As at

30 September

2020

 

As at

31 March

2020

 

£

 

£

Amount due to related companies

-

 

89,674

Amount due to directors

6,066

 

4,166

Trade creditors

208,147

 

35,847

Accruals

9,222

 

33,800

Other payables

15,791

 

13,984

 

239,226

 

177,471

 

 

10. LEASE LIABILITIES

 

Lease liabilities are payable as follow:

 

 

As at

30 September

2020

 

As at

31 March

2020

 

£

 

£

Less than one year

103,601

 

73,825

More than one year

82,515

 

-

 

186,116

 

73,825

 

 

 

 

 

11. SHARE CAPITAL

Ordinary shares of ₤1 each

 

As at

30 September

2020

£

As at

31 March

2020

£

Paid up:

 

 

10,000,000 ordinary shares at ₤0.10 each

1,000,000

1,000,000

 

At 31 March 2020 and 30 September 2020, the total issued ordinary share of the Company were 10,000,000.

 

 

12. SEASONAL OR CYCLICAL FACTORS

 

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

 

 

13. RELATED PARTY TRANSACTIONS

 

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

 

 

As at

30 September

2020

As at

31 March

2020

 

£

£

Amount due to related parties

 

 

- Orient Managed Services Limited

-

44,391

- Orient Telecoms Sdn Bhd

-

45,283

Amount due to directors

 

 

- Sayed Mustafa Ali

1,666

1,666

- Ross Andrews

1,250

1,250

- Leon Santos

1,250

1,250

- Wong Chee Keong

1,900

-

 

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

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

 

 

14. SUBSEQUENT EVENT

 

There were no subsequent events after the reporting period.

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