ORIENT TELECOMS PLC

Interim / Quarterly Report • Dec 12, 2024

National Storage Mechanism | Additional information

RNS Number : 8076P

Orient Telecoms PLC

12 December 2024

ORIENT TELECOMS PLC

("ORIENT" or the "Company")

HALF YEAR REPORT ENDED 30 SEPTEMBER 2024

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 half year report ended 30 September 2024

The interim report and accounts is available on the Company's website at:  www.orient-telecoms.com  

For more information please contact:  

Orient Telecoms plc
Sayed Mustafa Ali	mustafa@orient-telecoms.com

I am pleased to present the interim financial statements for Orient Telecoms Plc for the six-month period ending September 30, 2024. In this period, the Group reported a net loss of £68,309, translating to earnings per share of (0.68) pence. The directors have also assessed the principal risks and uncertainties and have disclosed this in this report.

The condensed interim report has not been audited.

Financial Performance and Strategic Path to Profitability

The net loss reported for this period primarily stems from the expiration of several high-value contracts, leading to a temporary dip in revenue. While these transitions have posed short-term challenges, the management team has been diligently pursuing new opportunities to address the impact and rebuild revenue streams.

Efforts are well underway to secure significant new contracts that will offset the revenue loss and provide a stable foundation for future growth. Additionally, Orient Telecoms is actively engaging with key domestic institutions to explore potential collaborations, many of which are expected to materialize in the next 3-6 months. These initiatives are strategically aligned to not only stabilize revenues but also support long-term growth and profitability.

Through these proactive measures and a commitment to operational excellence, Orient Telecoms remains confident in its ability to navigate current challenges while positioning itself for sustained success in the future.

Strengthening Regional Managed Services and Strategic Engagements

Over the past six months, Orient Telecoms has continued to establish itself as a leader in managed service solutions across Southeast Asia. Our operational model prioritizes agility and customer-centered service, enabling enterprises to leverage top-tier connectivity solutions without the significant capital expenditure of managing network infrastructure. To further this vision, we are actively engaging some of the largest telcos worldwide to extend our managed service offerings across the region. These strategic partnerships position us to deliver robust, high-performance services in collaboration with industry leaders.

We have also made concerted efforts to connect with large institutions within Malaysia, particularly in the education sector. Management is actively pursuing opportunities to bring our state-of-the-art solutions to these institutions, where we can support their digital transformation goals with seamless, advanced network services.

Innovating with AI and Advanced Service Management

Orient Telecoms is also advancing its technology strategy, with significant progress in AI applications to enhance our managed services portfolio. Our technology team has made strides in building a custom operating system that improves operational efficiency and service management. This strong foundation is enabling us to explore additional AI applications, with active discussions underway to secure partnerships that will amplify our AI-driven capabilities.

Strengthened Marketing and Sales Efforts

Our marketing and sales teams have bolstered their efforts through strategic digital marketing initiatives and an expanded sales force to strengthen our market presence and attract more regional clients. This proactive approach is already supporting our growth objectives and enhancing brand visibility in competitive markets.

Increasing Visibility in the B2B Market

Orient Telecoms is committed to expanding our footprint in the B2B market. To achieve this, our marketing team is actively implementing a comprehensive outreach strategy aimed at connecting with potential clients across various platforms. We are leveraging targeted social media campaigns, which allow us to engage with businesses more directly and create awareness of our unique managed service solutions.

In addition to digital efforts, we're also strengthening our presence through participation in industry seminars and key regional technology events. These initiatives not only enhance our brand visibility but also provide valuable opportunities to network with industry leaders and demonstrate our expertise in connectivity solutions. Through this multifaceted approach, Orient Telecoms is focused on building lasting relationships and capturing new opportunities within the B2B market.

Commitment to Operational Excellence

Orient Telecoms is dedicated to delivering outstanding service quality that exceeds customer expectations. Our support framework ensures reliable, responsive service, allowing our clients to operate confidently with the assurance of swift and dependable assistance.

Positive Outlook

With a clear strategy, a focused effort on key sectors, and our commitment to ongoing innovation, Orient Telecoms is well-positioned for growth. We anticipate a strong financial performance by the close of our fiscal year in March 2025, as we continue to meet the evolving needs of our customers and expand our impact.

Responsibility Statement

The Board of Directors of Orient Telecoms Plc assumes full responsibility for the accurate preparation of the interim financial statements. These statements are crafted in adherence to the standards set by the United Kingdom's Financial Conduct Authority (DTR) and in accordance with International Accounting Standard 34 on Interim Financial Reporting (IAS 34).

We affirm that, to the best of our knowledge and expertise, these interim financial statements have been carefully prepared with due diligence in full compliance with IAS 34. They provide a comprehensive and objective overview of all relevant information required by DTR 4.2.7 and DTR 4.2.8, including a clear outline of key events during the first half of the fiscal year and their impacts on these interim financial statements.

Additionally, this document offers an in-depth view of the main risks and uncertainties anticipated for the remainder of the fiscal period. It includes a thorough analysis of significant related-party transactions during the first six months, along with any notable changes relative to the related-party transactions disclosed in the previous annual report.

Sayed Mustafa Ali

Director

CONDENSED CONSOLIDATED STATEMENT OF COMPREHESIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

				6 months		6 months
				period ended		period ended
				30-Sep-24		30-Sep-23
			Notes	£		£
				(Unaudited)		(Unaudited)
INCOME			4	118,137		212,120
DIRECT COST				(29,409)		(20,940)
GROSS PROFIT				88,728		191,180
Administrative expense				(156,151)		(173,255)
OPERATING (LOSS)/PROFIT				(67,422)		17,925
Other income				-		1,713
Finance income				877		1,351
Finance cost				(1,764)		(6,119)
OPERATING (LOSS)/PROFIT BEFORE TAXATION				(68,309)		14,870
Income tax expense				-		-
(LOSS)/PROFIT FOR THE PERIOD
ATTRIBUTABLE TO EQUITY HOLDERS				(68,309)		14,870
OTHER COMPREHENSIVE INCOME
Items that will or may be reflected to profit or loss:
Translation of foreign operation				-		-
TOTAL COMPREHENSIVE (LOSS)/PROFIT FOR THE PERIOD				(68,309)		14,870
Basic and diluted profit per share (pence)			5	(0.69)		0.14

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2024

				As at			As at		As at
				30-Sep-24		31-Mar-24			30-Sep-23
				£			£		£
			Notes	(Unaudited)			(Audited)		(Unaudited)
ASSETS
NON-CURRENT ASSETS
Computer equipment			6	2,587			-		-
Right-of-use assets			7	44,464			50,127		142,193
				47,051			50,127		142,193
CURRENT ASSETS
Bank			8	277,426			336,380		263,148
Trade and other receivables			9	344,481			308,167		360,411
				621,906			644,547		623,559
CURRENT LIABILITIES
Trade and other payables			10	128,632			103,538		68,377
Lease liability			11	9,472			17,176		47,865
				138,105			120,715		116,242
NET ASSETS				530,853			573,960		649,510
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share Capital			12	1,000,000			1,000,000		1,000,000
Translation reserve				(16,921)			(39,339)		(20,011)
Accumulated loss				(488,092)			(419,783)		(431,339)
				494,987			540,879		548,650
NON-CURRENT LIABILITIES
Lease liability			11	35,865			33,082		100,860
				35,865			33,082		100,860
TOTAL EQUITY AND NON-CURRENT LIABILITIES				530,853			573,960		649,510

The unaudited condensed interim financial statements were approved by the Board of Directors and authorized for issue on 12 December 2024 and were signed on its behalf by:

Sayed Mustafa Ali

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

Period from 1 April 2024 to 30 September 2024 (Unaudited)
		Share capital		Translation reserve		Accumulated losses		Total
		£		£		£		£
As at 1 April 2024		1,000,000		(39,339)		(419,783)		540,879
Profit/(Loss) for the period		-		-		(68,309)		(68,309)
Translation of foreign operation		-		22,418		-		22,418
Total comprehensive income for the period		-		22,418		(68,309)		(45,891)
As at 30 September 2024		1,000,000		(16,921)		(488,092)		494,987
Period from 1 April 2023 to 30 September 2023 (Unaudited)
		Share capital		Translation reserve		Accumulated losses		Total
		£		£		£		£
As at 1 April 2023		1,000,000		(13,132)		(446,209)		540,659
Profit/(Loss) for the period		-		-		14,870		14,870
Translation of foreign operation		-		(6,879)		-		(6,879)
Total comprehensive income for the period		-		(6,879)		14,870		7,991
As at 30 September 2023		1,000,000		(20,011)		(431,339)		548,650
Period from 1 April 2023 to 31 March 2024 (Audited)
		Share Capital		Translation reserve		Accumulated losses		Total
		£		£		£		£
As at 1 April 2023		1,000,000		(13.132)		(446,209)		540,658
Profit/(Loss) for the period		-		-		26,426		26,426
Translation of foreign operation		-		(26,206)		-		(26,206)
Total comprehensive income for the period		-		(26,206)		26,426		220
As at 30 September 2024		1,000,000		(39,339)		(419,783)		540,879

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

	6 months		6 months
	period ended		period ended
	30-Sep-24		30-Sep-23
	£		£
	(Unaudited)		(Unaudited)
Cash flow from operating activities
(Loss)/Profit after tax	(68,309)		14,870
Adjustment for:
Translation of foreign operation	22,418		(6,880)
Depreciation	9,929		56,569
Finance income	(877)		(1,351)
Interest on lease liabilities	1,764		6,119
	(35,076)		69,327
Change in working capital
(Increase)/Decrease in trade and other receivables	(36,313)		(84,799)
Increase/(Decrease) in trade and other payables	25,094		9,259
Cash flow from operating activities	(46,295)		(6,213)
Cash flow from investing activities
Purchase of fixed asset	(2,634)		-
Interest received	877		1,351
Net cash used in investing activities	(1,757)		1,351
Net cash flow generated from/(used in) financing
activities
Interest paid	(1,764)		(6,119)
Repayment on lease liability	(4,920)		(55,663)
Exchange difference	(4,218)		-
Net cash flow used in financing activities	(10,903)		(61,782)
Net movement in cash and cash equivalents	(58,954)		(66,644)
Cash and cash equivalents at beginning of the period	336,380		329,792
Exchange gain on cash and cash equivalents	-		-
Cash and cash equivalents at end of the period	277,426		263,148

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

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 Eastcastle House, 27/28 Eastcastle Street, London W1W 8DH 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 consolidated financial information for the period ended 30 September 2024 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 interim financial information covers the six-month period from 1 April 2024 to 30 September 2024, with comparative figures for the corresponding period from 1 April 2023 to 30 September 2023.

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 2024, which have been prepared in accordance with International Financial Reporting Standards as adopted by the UK ("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 ("£").

Going concern

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

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

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

3.   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

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

In preparing the unaudited interim financial statements, the significant judgements made by the management in applying the Company's accounting policies and the sources of estimates uncertainty were consistent as those applied to the 2024 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 2024.

4.   REVENUE

Revenue represents the fair value of the consideration received or receivable 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.

		6 months period ended		6 months period ended
		30-Sep-24		30-Sep-23
Revenue		118,137		212,120
		118,137		212,120

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

5.   PROFIT PER SHARE

Basic profit per ordinary share is calculated by dividing the 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.

Profit per share attributed to ordinary shareholders:

		6 months period ended	Year ended	6 months period ended
		30-Sep-24	31-Mar-2024	31-Sep-23
(Loss)/Profit for the period (£)		(68,309)	26,426	14,870
Weighted average number of shares (Unit)		10,000,000	10,000,000	10,000,000
Basic and diluted profit per share (pence)		(0.68)	0.26	0.14

6.   COMPUTER EQUIPMENT

	6 months period ended 30-Sep-24 £		Year ended 31-Mar-24 £		6 months period ended 30-Sep-23 £
Cost
Balance at beginning of period	-		-		-
Addition during the period	2,634		-		-
Exchange difference	-		-		-
At the end of period	2,634		-		-
Accumulated depreciation
Balance at beginning of period	-		-		-
Charges for the period	47		-		-
Exchange difference	-		-		-
Balance at end of period	47		-		-
Net book value	2,587		-		-

7.   RIGHT-OF-USE

	6 months		Year		6 months
	period ended		ended		period ended
	30-Sep-24		31-Mar-24		30-Sep-23
	£		£		£
Cost
Balance at beginning of period	54,685		472,598		472,598
Reduction due to early termination during the period	-		(472,598)		-
Addition due to new lease term	-		54,685
Exchange difference	4,601		-		-
At the end of period	59,286		54,685		472,598
Accumulated depreciation
Balance at beginning of period	4,557		273,836		273,836
Charges for the period	9,881		72,913		56,569
Reversal of accumulated depreciation due to early termination	-		(342,192)		-
Exchange difference	383		-		-
Balance at the end of period	14,821		4,557		330,405
Net book value	44,464		50,128		142,193

The Group subsidiary early terminated the lease agreement for an office with effect from 31 December 2023 and entered to a new lease period of three (3) years commence of 1st January 2024.

8.   BANK

Cash and Cash equivalents are denominated in the following currencies:

		6 months period ended		Year ended		6 months period ended
		30-Sep-24		31-Mar-24		30-Sep-2023
		£		£		£
Great Britain Pound		11,659		32,175		38,423
Singapore Dollar		19,903		20,111		20,579
United States Dollar		101,361		107,628		48,374
Malaysia Ringgit		144,502		176,466		155,772
		277,426		336,380		263,148

9.   TRADE AND OTHER RECEIVABLES

		6 months		Year		6 months
		period ended		ended		period ended
		30-Sep-24		31-Mar-24		30-Sep-23
		£		£		£
Trade receivables		160,891		158,477		189,580
Prepayment and Deposit		21,453		6,801		37,092
Other receivables		162,136		142,890		133,739
		344,481		308,167		360,411

10. TRADE AND OTHER PAYABLES

		6 months		Year		6 months
		period ended		ended		period ended
		30-Sep-24		31-Mar-24		30-Sep-23
		£		£		£
Amount due to directors		3,750		4,159		12,068
Trade creditors		-		6,030		-
Accruals		29,240		42,712		24,433
Contract liability		11,615		12,559		-
Other payables		84,028		38,078		31,876
		128,632		103,538		68,377

11. LEASE LIABILITIES

Lease liabilities are payable as follow:

		6 months		Year		6 months
		period ended		ended	period ended
		30-Sep-24		31-Mar-24	30-Sep-23
		£		£		£
Less than one year		9,472		17,176		47,865
More than one year		35,865		33,082		100,860
		45,338		50,258		148,725

12. SEGMENTAL ANALYSIS

As of 30 September 2024, the Group operated as a single operating segment, specializing in the provision of managed telecommunication services. While the Group's headquarters and corporate activities are based in the United Kingdom, the majority of its revenue originated from Malaysia totalling £ 88,137, accounting for 75% of total revenue. The remaining revenue was primarily generated from other countries within the South East Asia region.

13. RISK ARISING FROM FINANCIAL ASSETS AND LIBILITIES AND FAIR VALUE DISCLOSURES

Categories of financial assets and liabilities

The following table categorises the carrying value of the financial assets and liabilities at the balance sheet date. In each case the fair value is not materially different to the carrying value.

				Fair value
		As at
		30-Sep-24 Carrying value
		£
Financial assets
Cash and cash equivalent		277,426		Not materially different
Trade and other receivables		300,442		Not materially different
Total financial assets		577,868

The contractual maturities of financial assets are all within 1 period of the balance sheet date.

				Fair value
		As at
		30-Sep-24 Carrying value
		£
Financial liabilities
Amount due to directors		3,750		Not materially different
Trade and other payable		124,882		Not materially different
Total financial liabilities		128,632

The contractual maturities of financial liabilities are all within 1 period of the balance sheet date.

Risk arising from financial assets and liabilities

The following paragraphs summarize the principal risks associated with the company's financial assets and liabilities and how those risks are managed.

Liquidity and capital risk management

The Company's capital structure consists of items in shareholders' equity. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

This is done primarily through equity financing. Future financings are dependent on market conditions. There were no changes to the Company's approach to capital management during the period.

The Company has adequate sources of capital to complete its business plan, current obligations and ultimately the development of its business over the long term, and will need to raise adequate capital by obtaining equity financing and/or incurring debt.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. As at 30 September 2024, the Company had a cash balance of £ 277,426 to settle current liabilities of £128,632. The Company's current financial liabilities are due on demand and are subject to normal trade terms.

Interest rate risk

The Company does not currently have financial instruments that expose the Company to significant interest rate risk as the Company does not have any debt that bears variable interest rate.

Currency risk

The Company operates in two currencies: Pound Sterling ("GBP"), the functional currency of the parent company, and Ringgit Malaysia ("MYR"), the functional currency of the subsidiary. Currency risk arises primarily from the translation of the subsidiary's financial results into GBP for reporting purposes.

As at 30 September 2024, the Company's exposure to MYR-denominated assets and liabilities amounted to £115,584. A 5% fluctuation in the MYR/GBP exchange rate would result in an estimated impact of £5,779 on the Company's profit and net assets, assuming all other variables remain constant. The Company monitors foreign currency exposures regularly and considers appropriate risk management strategies as needed.

The following Group's financial instruments are denominated in MYR:

		As at			As at
		30-Sep-24			30-Sep-24
		£			£
Financial assets
Cash and cash equivalent		144,502			155,771
Trade and other receivable		46,231			63,780
Total financial assets		190,733			219,551
Financial liabilities
Trade and other payables		75,149			47,500
Total financial liabilities		75,149			47,500
Net financial assets		115,584			172,051

Price risk

The Company does not hold any equity securities and therefore is not exposed to price risk.

Credit risk

The company has receivables and remains confident in its ability to collect these amounts due to the creditworthiness of its customers and effective collection processes.

14. SHARE CAPITAL

		Number of		£
		ordinary shares
Paid up:
10,000,000 ordinary shares at ₤0.10 each		10,000,000		1,000,000

At 30 September 2024, the total issued ordinary share of the Company were 10,000,000.

15. CHANGES IN ACCOUNTING POLICIES

There have been no changes in the accounting policies applied during the interim period, which remain consistent with those applied in the most recent annual financial statements.

16. SEASONAL OR CYCLICAL FACTORS

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

17. RELATED PARTY TRANSACTIONS

There were no related party transactions except for the payments of directors' transactions disclosed in the interim financial statements.

		6 months		6 months
		period ended		period ended
		30-Sep-24		30-Sept-23
		£		£
Amount due to directors
- Sayed Mustafa Ali		3,750		1,251
- Wong Chee Keong		-		1,817
- Michael Goh Seng Kim		-		9,000
		3,750		12,068

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

18. SIGNIFICANT EVENTS AND TRANSACTION

There were no significant events or transactions during the interim period that require disclosure.

19. CONTINGENT LIABIITIES AND CONTINGENT ASSETS

The company has no material contingent liabilities or contingent assets as at 30 September 2024.

20. CONTROL

The directors consider there is no ultimate controlling party.

21. SUBSEQUENT EVENT

No subsequent events have occurred that require disclosure.

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