Orient Telecom. Regulatory News (ORNT)

24 July 2018

ORIENT TELECOMS PLC

("ORIENT" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2018

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 2018.

Highlights for the period:

· Orient Telecoms was admitted to the Official List (by way of Standard Listing) and to trading on the London Stock Exchange's main market for listed securities.

· The Company has rolled-out a new product, which could potentially disrupt and revolutionise the way in which SME's (Small & Medium Sized Enterprises) manage and commercialise their telecommunications requirements, office assets and equipment.

· Sufficient funding in hand to support administration expenses

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

The annual report and accounts for the year ended 31 March 2018 has been uploaded to the National Storage Mechanism and will be available for viewing shortly at http://www.morningstar.co.uk/uk/NSM For more information please contact: 

It gives me great pleasure to present the financial statements of Orient Telecoms Plc. (the "Company" or "Orient Telecom") for year ended 31st March, 2018.

As with most start-ups, Orient Telecoms' current year of operation has been one of excitement and challenges, which has included a steep learning curve for all concerned. After the initial euphoria of completing the standard listing on the Main Market of the London Stock Exchange ("Admission") we concluded the recruitment of key senior management, and overcome the challenges of filling some of the middle management positions.

Despite this early setback, in the subsequent to year end, Orient Telecoms has contracted new Sales Managers who have responded to the challenges of working for a start-up head-on and it is safe to say that the entire Sales Team has exceeded expectations and continues to do so with energy, passion and integrity. All key attributes when competing in a highly competitive market segment.

For FY2019, Orient Telecoms has also rolled-out a new product, which could potentially disrupt and revolutionise the way in which Small & Medium Sized Enterprises ("SME") manage and commercialise their telecommunications requirements, office assets and equipment.

For the customers, with this products, rather that engaging and negotiating directly with up to a dozen different service providers and vendors, all of whom will have different service levels, contracts, delivery & payment terms, hotlines and troubleshooting procedures, Orient Telecoms' Product is a one-stop, added value product and service that can coordinate and manage all their office requirements under one point of contact. Thus, allowing SME's to focus their attention and energy on core business activities such as developing and fine-tuning their products, understanding their market better and satisfying the requirements of their customers.

It should also be noted that Orient Telecoms has not embarked on a grandiose general marketing campaign, preferring instead to engage directly with potential customers on a one-to-one basis via the use of Business Consultants armed with a Marketing Tool Kit and instructed to conduct market research, identify potential leads and act as Brand Ambassadors for the company. To date, this strategy has proven successful and we will look to increase the number of our Business Consultants if the right candidates can be found.

The first year has therefore been rewarding, yet despite minor setbacks, the Management Team is optimistic about FY2019 and is very much looking forward to leveraging on the good work that has been done by the Sales and Marketing Teams during our first year of operations.

Our strategy for FY2019 is to further increase the size of our Sales and Marketing Teams and to continue to develop customer-led end-to-end solutions in relation to outsourcing and managed services in the information and communication technology industry.

Following the Admission, the company has sufficient funds available for FY2019 which include but are not limited to standard corporate operations, contracted staff costs, Directors' fees and other administrative expenses.

I look forward to the year ahead with gratitude to our shareholders for their continued support and will update you as and when new milestones are reached.

MARK PINCOCK

Director

24 July 2018

STRATEGIC REPORT

Strategy, objective and business model

The Company has been incorporated with the intention of providing managed telecommunications services using the network infrastructure owned by other network operators to enable cost effective and rapid connectivity to large bandwidth consumers initially in Singapore and subsequently within other Southeast Asian countries. The Company aims to be a new regional network telecommunications provider offering connectivity and selling managed network services across Southeast Asia. The Company's service offering and the construction of its overlay network will require low capital expenditure and management believe this will enable it to offer attractive pricing to customers in the region.

On 25 October 2017, the Company was admitted to the Official List (by way of Standard Listing) and to trading on the London Stock Exchange's main market for listed securities.

Upon Admission, the Directors utilised their network of contacts within the region and initiated discussions with several current fibre optic infrastructure owners within the region in respect of the use of their infrastructure. The Company has been working with the relevant parties and are confident that managed communications deals and revenue will flow into the Company by 3rd quarter 2018.

Fair review of business development and performance

As described in the Chairman's statement, the Company's cash resources are sufficient for general corporate purposes and its operational activities such as the Company's on-going operating costs and expenses including Directors' fees and salaries.

The Company continues to keep administrative costs to a minimum so that a substantial part of funds can be dedicated to the review of and potentially investment in, suitable projects.

The administrative expense of approximately £186,000 (2016: £171,000) and cash at bank balance of approximately £751,000 (2017: £nil) whilst staging the company for operational roll out in FY 2019 with a motivated sales team and new managed services product are regarded as the key performance indicators (KPIs) of the Company.

Principal risks and uncertainties

The Directors have identified the following as the key risks facing the business:

- The Telecommunication sector

The company operates in a highly competitive and saturated market as the company does not involve in building its own network infrastructure which would require significant capital expenditure. The company 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 company to be able to offer competitive solutions for its customers.

In addition, a company'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 Company's relationship with the Directors

The Company is dependent on the Directors to identify potential business opportunities and to execute, and the loss of the services of the Directors could materially affect it.

- Business Strategy

The Company is an entity with no operating history. The Company may fail to execute its business plan or strategy that the Company will be unable to secure a customer base or to complete a business deal. This has been mitigated with experienced management, the recruitment of a calibre sales team to secure revenue contracts and the board's regular review of the company's business plan. The Company is also confident that its product has a better edge to support SMEs and will be able to support the target growth of the Company.

Going concern

These financial statements have been prepared on a going concern basis. After making due enquiry, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence. 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 any dividends paid pursuant to the Company's dividend policy.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2018

All amounts are derived from continuing operations.

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2018

The notes to the financial statements form an integral part of these financial statements.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2018

The material non-cash transaction are disclosed in note 10.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2018

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2018

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.

The Company was admitted to the Official List (by way of a Standard Listing) and to trading on the London Stock Exchange's main market for listed securities on 25 October, 2017.

2. ACCOUNTING POLICIES

The Board has reviewed the accounting policies set out below and considers them to be the most appropriate to the Company's business activities.

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use by the European Union (EU) and IFRIC interpretations applicable to companies reporting under IFRS. 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 ("£").

Comparative figures

Comparative figures are stated for period from date of incorporation on 26 February 2016 to 31 March 2017.

Going concern

The company meets its day to day working capital requirements through existing cash reserves. As the company has yet to generate any revenue or income, there can be considerable unpredictable variations in the timing of cash flows. The Directors have considered the planned activities for a twelve month period until 31 July 2019. In undertaking this assessment, they have considered the expected revenue generation in the period and have assessed that the company will have adequate working capital for the company to be able to meet its liabilities as they fall due. Should there be delays in revenue, the Company will manage the ongoing commitments made by the company. At this present moment, the Directors will not commit the company to any liabilities if it does not have sufficient cash resources to meet.

At the balance sheet date, the Company had a cash surplus of approximately £751,387, 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 has 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

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2018, and have not yet been early adopted in preparing these financial statements. The Company has considered the impact of these, including IFRS 9 and IFRS 15, and concluded that none of these are expected to have a significant effect on the financial position or results of the Company.

Cash and cash equivalents

The Company considers any cash on short-term deposits and other short-term investments to be cash equivalents.

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 it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided for using the liability method on temporary timing differences at the balance sheet 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 balance sheet 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 balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred income tax asset to be recovered.

Financial instruments

Financial assets and financial liabilities are recognised on the statement of financial position when the company becomes a party to the contractual provisions of the instrument.

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost less any provision for impairment.

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.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in compliance with IFRS as adopted for use by the European Union requires the use of certain critical accounting estimates or judgements. The directors do not consider there to be any key sources of estimation and uncertainty. In respect of critical judgements, the only key judgement is the adoption of going concern on the basis for preparing the financial statements, details of which are set out in note 2.

4. LOSS BEFORE TAXATION

The loss before income tax is stated after charging:

5. INCOME TAX EXPENSE

The corporation tax in the UK applied during the year was 19% (2017: 20%).

The charge for the period can be reconciled to the loss in the Statement of Comprehensive income as follow:

The Company has accumulated tax losses of approximately £357,000. No deferred tax asset has been recognised in respect of the losses carried forward, due to the uncertainty as to whether the Company will generate sufficient future profits in the foreseeable future to prudently justify this.

6. 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

7. BANK

Cash and cash equivalents are denominated in the following currencies:

8. OTHER RECEIVABLES

9. OTHER PAYABLES

10. SHARE CAPITAL

Ordinary shares of £0.10 each

On 26 February 2016, the Directors approved the issue of 50,000 ordinary shares in the Company to Orient Managed Services Limited ("OMSL") for £1 each, of which £12,500 have been paid and called up. The remaining £37,500 have not been called up at 31 March 2017.

On 29 September 2017, the existing 50,000 ordinary shares of £1.00 each was converted to 500,000 shares of £0.10 each and balance of £37,500 being fully paid. A further 500,000 new ordinary shares of £0.10 each were issued concurrently to the existing shareholder. These ordinary shares were fully paid through the conversion of the shareholder's loan owed by the Company, amounted to £87,500.

On 25 October 2017, the Company was admitted to the Official List (by way of a Standard Listing) and to trading on the London Stock Exchange's Main Market. On admission, 9,000,000 shares of £0.10 each were issued and fully paid. From listing total proceed of £900,000, the Company received net proceed of £769,860, after deduction of listing and broker cost.

At 31 March 2018, the total issued ordinary share of the Company were 10,000,000.

11. EMPLOYEES AND DIRECTORS' EMOLUMENTS

Directors fee during the year

The Directors' fees are payable to the third party companies in respect of their services as the directors of the Company.

There is no employee employed by the Company other than its directors. The average monthly number of employees, including directors, during the year were 4 (2017: 2).

12. FINANCIAL RISK MANAGEMENT

The Company 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 Company does not trade in financial instruments.

Financial risk factors

The Company's activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance.

a) Currency risk

The Company does not operate internationally and its exposure to foreign exchange risk is limited to the transactions and balances that are denominated in currencies other than Pounds Sterling. As set out in note 7, the impact of any change in the foreign currency will be minimal and not considered material.

b) Credit risk

The Company does not have any major concentrations of credit risk related to any individual customer or counterparty. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. The Group has taken necessary steps and precautions in minimising the credit risk by lodging cash and cash equivalents only with reputable licensed banks.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and available funding through an adequate amount of committed credit facilities. The Company 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).

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.

13. CAPITAL MANAGEMENT POLICY

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. The capital structure of the Company consists of the equity attributable to equity holders of the Company which comprises of issued share capital and reserves.

14. FINANCIAL INSTRUMENTS

The Company's principal financial instruments comprise other receivables and other payables. The Company'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 Company do not use financial instruments for speculative purposes.

The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows:

There are no financial assets that are either past due or impaired.

15. RELATED PARTY TRANSACTIONS

Key management are considered to be the directors and the key management personnel compensation has been disclosed in note 11.

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 Company. Orient Management Services Limited is jointly owned by Mark Richard Logan Pincock and Sayed Mustafa Ali, directors of the Company.

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

16. CONTROL

The directors consider there is no ultimate controlling party.

17. SUBSEQUENT EVENTS

There were no subsequent events after the reporting period.