TIDMORNT
RNS Number : 5983A
Orient Telecoms PLC
30 September 2020
ORIENT TELECOMS PLC
("ORIENT" or the "Company")
FINAL RESULTS FOR THE YEARED 31 MARCH 2020
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 2020.
Highlights for the period:
-- the Group has recorded a solid performance, with the revenue
increase by nearly threefold to approximately GBP600,000 (2019:
GBP219,000)
-- Cash position remains strong at GBP350,692 with no borrowing.
-- COVID-19 has adversely affected almost all industries and markets. However the impact on telecommunication business was not as severe.
The annual 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
Chairman's statements
On behalf of the Board of Directors, I have great pleasure to
present 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 March
2020.
OVERVIEW
With the increasing demand for cloud based services,
telecommunication companies are expected to be ready to offer cost
effective cloud based services along with virtual platforms to
operate and monitor them. The customers also require that this has
to be supported with efficient and effective connectivity of high
speed and low latency network. Orient Telecoms has specialized in
exactly the same area by developing its solutions and service
operable by leveraging on 3rd party infrastructures. We are able to
deliver this seamlessly at the cloud platform and supported by its
super high-speed network connectivity.
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.
By introducing disruptive and innovative communications and
technology solutions, the Group has recorded a solid performance,
with the revenue increase by nearly threefold to approximately
GBP600,000 (2019: GBP219,000) and net loss per share reduced from
2.12p to 0.14p.
Cash position remains strong at GBP350,692 with no
borrowings.
After having good response from the market last year, the Group
has decided to roll-out a new low cost and high performance Cloud
based Internet security service platform which helps organisations
managing the cleanliness of e-mails coming from external sources,
and also to ensure the e-mails contents are not compromised. With
this next generation cloud based security services, the
organisations are not only able to secure their e-mail services but
also able to substantially reduce the cost spent on such features
which was previously managed using dedicated hardware at site.
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.
Continuing its policy of cost-saving, Orient Telecoms has
launched its Reseller Program to widen-up its reach to the
customers and to achieve better results. Along with other
initiatives, the reseller program not only gives the Group a quick
reach to many businesses, but also helps to generate quick and
larger awareness in the market.
The technology teams has shown good commitment and operationally
the Group has achieved excellent performance feedback from its
customers. We will continue to ensure the performance keeps on
improving and the company to become a major operator in the
region.
The financial year ending March 2020 has been a great year, the
management team is optimistic about the next financial year despite
minor setbacks due to challenging business environment mainly
caused by COVID-19 pandemic and is looking forward to leveraging on
the good work that has been done by our team.
Our strategy for coming year is to continue to develop
customer-led end-to-end hi-tech solutions not only to serve the B2B
sector but also to attend to the government agencies and public
work departments.
COVID-19 has adversely affected almost all industries and
markets. However the impact on telecommunication business was not
as severe. As a result of this effect, the cycle time to convert an
opportunity into sales has increased significantly. The sales team
is having challenges meeting customers frequently and following up
with the relevant people to ensure the deal is closed. The Group
foresees this effect to continue in coming year. The Group has put
in place all the necessary tools, processes and systems to reduce
the cycle time as much as possible. Over all, the Group do not
anticipate any adverse effect on its business for the next
financial year.
MARKET REVIEW AND OUTLOOK
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.
Sayed Mustafa Ali
Director
30 September, 2020
STRATEGIC REPORT
Strategy, objective and business model
The Group has been 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 Malaysia and subsequently within other
Southeast Asian countries. 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 will
require 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.
The Group continues to keep administrative costs to a
minimum.
The administrative expense of approximately GBP423,000 (2019:
GBP359,000) and cash at bank balance of approximately GBP351,000
(2019: GBP529,000) whilst staging the company for operational roll
out in FY 2020 with a motivated sales team and new customer
acquisition.
Principal risks and uncertainties
The Directors have identified the following as the key risks
facing the business:
- The Telecommunication sector
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 Directors
The Group 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 Group is an entity with limited operating history. The Group
may fail to execute its business plan or strategy that the Group
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 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 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 3(rd) 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.
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 month 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 any dividends paid pursuant to the Company'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 Board welcomes the direction of the UK Financial Reporting
Council (the 'FRC'). This S172 statement, which is reported for the
first time, 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 2020 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
30 September, 2020
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 2020.
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 24. 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
Mark Richard Logan Pincock (resigned - 25 October 2019)
Wong Chee Keong (appointed - 9 April 2020)
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
2020.
Shareholder name Number of ordinary Percentage of
shares share capital
VCB A.G. 1,000,000 10.00%
Nordic Alliance Holding Limited 600,000 6.00%
Eastman Ventures Limited 600,000 6.00%
Belldom Limited 450,000 4.50%
Link Summit Limited 425,000 4.30%
Infinity Mission Limited 400,000 4.00%
Peel Hunts Holdings Limited 300,000 3.00%
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
Events after the reporting date have been disclosed in note 22
to the financial statements.
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 is presented.
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.
Auditors
The auditors, Crowe U.K. 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 con rmation 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 30 September 2020 and is signed on its behalf by;
Sayed Mustafa Ali
Director
30 September 2020
Corporate governance Statement
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 directors 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 three 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 2020 and attendance of each
director:
Board meetings
Sayed Mustafa Ali 3 / 3
Mark Richard Logan Pincock 2 / 2
Ross Andrews 3 / 3
Leon Santos 3 / 3
Audit committee
The audit committee, which is chaired by Ross Andrews, comprises
both 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 also consists of both non-executive
directors and is chaired by Leon Santos. It meets when required to
consider all aspects of directors' and staff remuneration, share
options and service contracts.
The Directors' Remuneration Report is presented on page 16 to
17.
Nominations committee
Following of the resignation of Mark Pincock, Sayed Mustafa Ali
will chair the nominations committee which also consists of both
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 so as 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.
The presentations are given to institutional investors by the
chairman when requested, normally following the publication of the
Company's results, when the annual reports are delivered to all
shareholders. The results of such meetings are discussed with board
members to assist them in understanding the views of investors and
others.
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 International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU)
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 nancial
statements unless they are satis ed that they give a true and fair
view of the state of affairs of the Group and the Company and of
the pro t or loss of the Group for that period. In preparing these
nancial 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.
Website publication
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 International Financial Reporting Standards as adopted by the
European Union.
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 Company; and
-- 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.
-- 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 performance,
business model and strategy.
Directors' Remuneration Report
The Directors' Remuneration Report sets out the Company's policy
on the remuneration of Directors together with the details of
Directors' remuneration packages and services contracts for the
period 1 April 2019 to 31 March 2020.
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 GBP150,000 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 GBP15,000 per annum.
Wong Chee Keong has been appointed by the Company to act 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 GBP22,700) 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 GBP20,000 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 is
terminable on three months' written notice on either side. He is
entitled to a fee of GBP15,000 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 2020 are set
out in note 15.
Statement of Directors' shareholding and share interest
The Directors who served during the year ended 31 March 2020,
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.
Leon Santos
Chairman, Remuneration Committee
30 September 2020
INDEPENT AUDITOR'S REPORT
Opinion
We have audited the financial statements of Orient Telecoms Plc
(the "Company") and its subsidiary (the "Group") for the year ended
31 March 2020, which comprise:
-- the consolidated statement of comprehensive income for the year ended 31 March 2020;
-- the consolidated and the Company statements of financial position as at 31 March 2020;
-- the consolidated statements of cash flows for the year ended 31 March 2020;
-- the consolidated and the Company statements of changes in equity for the year then ended; 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 Financial Reporting Standards (IFRSs) as adopted by
the European Union. 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 2020
and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union;
-- the Company financial statements have been properly prepared
in accordance United Kingdom Accounting Standards ; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
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. We are independent of the Company
and 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, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which ISAs (UK) require us to report to you when:
-- The directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- The directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the Group or the Company's ability to continue to adopt
the going concern basis of accounting for a period of at least
twelve months from the date when the financial statements are
authorised for issue.
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 Group financial statements as a whole to be
GBP12,000 (2019: GBP12,000), based on 3% of the Group's net assets
at the year end.
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.
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 GBP360 (2019: GBP360). 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, where the work was
performed by a member firm of Crowe Global Network, 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 auditor at all stages during the
audit process and directed the audit work on the non-UK subsidiary
undertaking. 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 stage, due to quarantine restrictions imposed by the
Covid-19 pandemic, we determined that the audit team would maintain
communication with the component auditor and undertake remote audit
file reviews in the current circumstances. We therefore discussed
key findings directly with the component audit team and concluded
on significant issues.
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
judgement, were of most significance in 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. These matters included 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. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our
audit.
Key audit matter How the scope of our audit addressed
the key audit matter
================================ ==================================================================
Revenue recognition Our audit procedures included the following:
The Group enters into We carried out procedures to test the
a range of client contract revenue and to consider whether the application
types. The revenue recognition of the revenue recognition policy was
policy varies depending appropriate, having regard to the contractual
on the underlying contract terms and service obligations.
and could result in revenue We agreed the performance obligations
being recognised at a identified by management to a sample
point in time or over of contracts to ensure the adopted accounting
time where certain conditions policy was appropriate.
are met. For a sample of transactions, we selected
contracts with the customers and reviewed
their terms and conditions. Based on
this understanding, we considered if
the underlying income was recognised
in accordance with the stated accounting
policy and IFRS 15.
================================ ==================================================================
Going concern, COVID-19 Note 2 of the Group financial statements
impact assessment At 31 March 2020 the Group had cash and
The risk that the COVID-19 cash equivalents of GBP351,000 (2019:
pandemic and the resulting GBP529,000).
economic consequences We obtained management's assessment of
would adversely impact the impact of COVID-19 on the business
on the Group and its ability of the Group and the re-forecast financial
to operate as a going projections. We performed audit procedures,
concern was considered including challenge regarding reasonableness
to be a key audit matter. on the inputs into the model as follows:
* reviewed the revised forecast revenues and resulting
cash flows within the assessment period;
* compared the re-forecast to available management
information for the business in July 2020; and
* reviewed and challenged the financial impact of the
steps taken by the directors to protect and manage
the business during the coming period, including the
introduction of overhead reductions and suspension of
certain capital investment projects.
We considered management's sensitivity
analysis and also performed an additional
range of sensitivities to assess whether
a reasonably likely change to a key input
would result in an erosion of revised
headroom in the re-forecast.
We tested to ensure the mathematical
accuracy of the model presented.
We reviewed the appropriateness of the
disclosure made and its consistency with
our knowledge of the business and its
COVID-19 impairment assessment.
================================ ==================================================================
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 directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. 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.
In connection with our audit of the financial statements, 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
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. 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.
We have nothing to report in this regard.
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 our
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 directors' report and strategic report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the
Company and their 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:
-- we have not received all the information and explanations we require for our audit; or
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- the Company's financial statements and the part of the
directors' remuneration report to be audited are not in agreement
with the accounting records and returns.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page 14, 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 Group and the Company'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 the Company 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.
We gained an understanding of the legal and regulatory framework
applicable to the Group and the Company and considered the risk of
acts by the Group and the Company which were contrary to applicable
laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising
that 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
Our tests included, but were not limited to: review of the
financial statement disclosures to underlying supporting
documentation and enquiries of management. There are inherent
limitations in the audit procedures described above and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we would become aware of it.
We did not identify any key audit matters relating to
irregularities, including fraud. As in all of our audits we also
addressed the risk of management override of internal controls,
including testing journals and evaluating whether there was
evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board on 10 July 2017 to audit the
financial statements for the year ended 31 March 2017. Our total
uninterrupted period of engagement is 4 years, covering the period
ended 31 March 2017 until the year ended 31 March 2020.
The provision of non-audit services to the company is prohibited
under the FRC's Ethical Standard. We confirm that we have not
provided any non-audit services to the Company during the financial
year ended 31 March 2020 and we remain independent of the Company
in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
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.
Leo Malkin
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
30 September 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2020
Year ended Year ended
31 March 31 March
2020 2019
Notes GBP GBP
Revenue 4 600,596 218,822
Direct cost (187,403) (75,153)
GROSS PROFIT 413,193 143,669
Administrative expenses 5 (423,392) (358,717)
----------- ------------
OPERATING LOSS (10,199) (215,048)
Finance income 4,879 2,068
Finance cost (8,595) -
LOSS BEFORE TAXATION (13,915) (212,980)
Income tax expense 6 - -
----------- ------------
LOSS FOR THE YEAR ATTRIBUTABLE TO
EQUITY HOLDERS OF THE COMPANY (13,915) (212,980)
OTHER COMPREHENSIVE INCOME
Items that will or may be reclassified
to profit or loss:
Translation of foreign operation 15,793 (11,721)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR 1,878 (224,701)
=========== ============
Basic and diluted profit/(loss) per
share (pence) 7 (0.14) (2.12)
----------- ------------
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 March 31 March
2020 2019
Notes GBP GBP
ASSETS
NON-CURRENT ASSET
Right-of -use asset 8 70,765 -
---------- ----------
CURRENT ASSETS
Trade and other receivables 9 229,092 230,011
Bank 10 350,692 529,278
579,784 759,289
---------- ----------
TOTAL ASSETS 650,549 759,289
========== ==========
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY
Share capital 11 1,000,000 1,000,000
Translation reserve 4,072 (11,721)
Accumulated loss (604,819) (589,509)
---------- ----------
399,253 398,770
---------- ----------
CURRENT LIABILITIES
Trade and other payables 12 177,471 360,519
Lease liability 13 73,825 -
---------- ----------
251,296 360,519
---------- ----------
TOTAL EQUITY AND LIABILITIES 650,549 759,289
========== ==========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2020
The notes to the financial statements form an integral part of
these financial statements.
This report was approved by the board and authorised for issue
on 30 September 2020 and signed on its behalf by;
Sayed Mustafa Ali
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 MARCH 2020
Year ended Year ended
31 March 31 March
2020 2019
GBP GBP
Cash flow from operating activities
( 212,980
Loss before tax (13,915) )
Adjustment for:
Unrealised exchange gain 15,793 -
Depreciation of right-of-use-assets 94,354
Finance income (4,879) (2,068)
Interest on lease liabilities 8,595
----------- -----------
99,948 (215,048)
Changes in working capital
Trade and other receivables 919 (17,097)
Amount due to related companies - 45,283
Trade and other payables (184,785) (37,315)
----------- -----------
Cash flow from operations (83,918) (224,177)
Interest received 4,879 2,068
----------- -----------
Net cash outflow from operating
activities (79,039) (222,109)
----------- -----------
Cash flow from financing activities
Interest paid (8,595) -
Repayment on lease liability (92,690) -
----------- -----------
Net cash outflow from financing (101,285) -
activities
Net movement in cash and cash equivalents (180,324) (222,109)
Cash and cash equivalents at beginning
of period 529,278 751,387
Exchange gain on cash and cash equivalents 1,738 -
----------- -----------
Cash and cash equivalents at end
of period 350,692 529,278
=========== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2020
Translation Accumulated
Share capital reserve loss Total
GBP GBP GBP GBP
As at 31 March 2018 1,000,000 - (376,529) 623,471
-------------- ------------ ------------ ----------
Translation of foreign
operation - (11,721) - (11,721)
( 212,980 ( 212,980
Loss during the year - - ) )
-------------- ------------ ------------ ----------
Total comprehensive ( 212,980 ( 224,701
loss for the year - (11,721) ) )
-------------- ------------ ------------ ----------
As at 31 March 2019 1,000,000 (11,721) (589,509) 398,770
Initial application
of IFRS 16 (1,395) (1,395)
-------------- ------------ ------------ ----------
As at 31 March 2019
(Restated) 1,000,000 (11,721) (590,904) 397,375
-------------- ------------ ------------ ----------
Translation of foreign
operation - 15,793 - 15,793
Loss during the year - - (13,915) (13,915)
-------------- ------------ ------------ ----------
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 CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 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 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
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 ("GBP") 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, the expected revenue generation in the
period 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.
The outbreak of COVID-19 in early 2020 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.
In addition, the COVID-19 pandemic may also affect the
recoverability of Group's financial assets that are subject to the
expected credit loss assessment, and carrying amounts of
investments, if any, in the future. Given the widespread nature of
the outbreak and the unpredictability of future development of
COVID-19, the Group believes it 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 directors believe that the Company is well placed
to manage its business risks.
The Group had a cash balance of GBP350,692 at the reporting date
and the cash balance was approximately GBP375,000 at 30 July 2020,
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
A number of new standards and amendments to standards and
interpretations have been issued by International Accounting
Standards Board but are not yet effective and in some cases have
not yet been adopted by the EU. 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.
During the year, the Group adopted the following new standards,
amendments and interpretations with a date of initial application
of 1 January 2019. The impact of these adopted standards is
described as follow:
a) IFRS 16, Leases
The Group applied IFRS 16 using the modified retrospective
approach, under which the cumulative effect of initial application
is recognised in retained earnings at 1 January 2019. Accordingly,
the comparative information presented for 2018 is not restated -
i.e. it is presented, as previously reported, under IAS 17 and
related interpretations. Additionally, the disclosure requirements
in IFRS 16 have not generally been applied to comparative
information. An adjusted position at 1 January 2019 is presented in
the Consolidated Statement of Changes in Equity, in order to
reflect the prior period impact of transition to IFRS 16 on brought
forward balances at that date. On transition to IFRS 16, the Group
recognised a right-of-use asset and a lease liability in relation
to its operating lease on an office in Kuala Lumpur, Malaysia. The
difference between these items was recognised in retained earnings
at 1 April 2019. The impact on transition is summarised below:
GBP
Operating lease commitments disclosed on 31
March 2019 (186,200)
Discounted using weighted average of Group's
incremental borrowing rate 19,685
----------
Lease liability recognised as at 1 April 2019 (166,515)
----------
1 April
2019
GBP
Right-of-use asset 165,120
Lease liability (166,515)
Retained earning 1,395
When measuring the lease liability, the Group discounted lease
payments using its incremental borrowing rate at 1 April 2019. The
rate applied is 6.9%.
Several other amendments and interpretations apply for the first
time in 2019, but do not have an impact on the consolidated
financial statements of the Group.
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 Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the 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 ("RM"). 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.
Loan and receivables
Loans and receivables are Loans and receivables are held with an
objective to collect contractual cash flows which are solely
payments of principal and interest on the principal amount
outstanding. Such assets are recognised initially at fair value
plus any directly attributable transaction costs.
Subsequent to initial recognition, loans and receivables are
measured at amortised cost using the effective interest method,
less any impairment losses.
Loans and receivables comprise cash and cash equivalents and
other receivables.
Trade receivables are recognised initially at the transaction
price and subsequently measured at amortised cost, less any
impairment losses.
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. 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 costs 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 Group uses its incremental
borrowing rate.
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.
Accounting Policies Applied Until 31 March 2019
Operating Leases
All leases that do not transfer substantially to the Company all
the risks and rewards incidental to ownership are classified as
operating leases and, the leased assets are not recognised on the
statement of financial position of the Company.
Payments made under operating leases are recognised as an
expense in the profit or loss on a straight-line method over the
term of the lease. Lease incentives received are recognised as a
reduction of rental expense over the lease term on a straight-line
method. Contingent rentals are charged to profit or loss in the
reporting period in which they are incurred.
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 IFRS
as adopted for use by the European Union 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 ended Year ended
31 March 31 March
2020 2019
GBP GBP
Revenue 600,596 110,286
Commission income - 108,536
----------- -----------
600,596 218,822
----------- -----------
Revenue from the rendered of managed telecommunication services
to the customers, the end users, which is recognised over the time
when the service is performed.
The revenue is recognised based on the delivery of performance
obligations and an assessment of when control is transferred to the
customer. In determining the amount of revenue and profits to
record, and associated statement of financial position items (such
as trade receivables, accrued income and deferred income),
management is required to review performance obligations within
individual contracts.
For the year under review, the Group recognises that it acts as
both an agent and a principal. The Group is a principal if it is
responsible for the specified good or service before that good or
service is transferred to a customer. The Group is an agent if it
is not responsible for arranging for the provision of the specified
good or service by another party. In this case, the Group does not
control the specified good or service provided by another party
before that good or service is transferred to the customer.
Between 1 July 2018 and 31 December 2018, the Group receives
payment for services from channel partner who onwardly sell to end
users. The channel partner is treated as the principal in that
transaction because the channel partner has the primary
responsibility for providing the services to the end user; the
channel partner is free to establish its own prices with or without
bundling with other goods or services which are not supplied by the
Group; and the channel partner bears the credit risk for the amount
receivable from the end user. Accordingly the Group acts as an
agent, it recognises revenue in the amount of any fee or commission
to which it expects to be entitled in exchange for arranging for
the specified goods or services to be provided by the other
party.
Subsequent to 31 December 2018, the Group operates as a
principal through Orient BB Sdn Bhd, a newly incorporated wholly
owned subsidiary undertaking, when the Group has identified that
they are primarily the principal as it primarily controls the
specified services before this is transferred to the customer, as
the economic risk lies with the Group. The service revenue is
therefore recognised over the contract period when the customer
obtains control of the distinct service.
All revenue and commission income derived from South East Asian
region. Revenue excludes value added tax and other sales taxes.
5. LOSS BEFORE TAXATION
The loss before income tax is stated after charging:
Year ended Year ended
31 March 31 March
2020 2018
GBP GBP
Consultancy fee 21,580 4,000
Operating rental payments - 59,930
Depreciation of right-of-use assets 94,354 -
Interest on lease liability 8,595 -
Auditors' remuneration:
Fees payable to the Group's auditor
for the audit of the Group's annual
accounts 22,000 21,000
Fees payable to the Group's subsidiary
auditor for the audit of the subsidiary's
annual accounts 4,918 2,000
6. INCOME TAX EXPENSE
The corporation tax in the UK applied during the year was 19%
(2019: 19%).
The charge for the period can be reconciled to the loss in the
Statement of Comprehensive income as follow:
Year ended Year ended
31 March 31 March
2020 2019
GBP GBP
Loss before tax on continuing operations (13,915) (212,980)
----------- -----------
Tax at the UK corporation tax rate (2,644) (40,466)
Tax effect of expenses that are not
deductible in determining taxable profit - -
Unutilised tax loss carry forward 2,644 40,466
----------- -----------
Tax charge for the period - -
----------- -----------
The Group has accumulated tax losses of approximately GBP265,000
(2019: GBP271,000) . 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. LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss
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.
Loss per share attributed to ordinary shareholders
Year ended Year ended
31 March 31 March
2020 2019
Loss for the year (GBP) (13,915) (212,980)
Weighted average number of shares (Unit) 10,000,000 10,000,000
Basic and diluted loss per share (Pence) (0.14) (2.12)
8. RIGHT-OF-USE ASSET
1/4/2019
As previously Initial As restated Depreciation As at 31
reported application charged March 2020
of IFRS
16
- 165,119 165,119 (94,354) 70,765
Analysed by:
Cost 188,707
Accumulated depreciation (117,942)
----------
70,765
----------
The comparative information is not presented as the Group has
applied IFRS 16 using the modified retrospective approach.
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.
9. TRADE AND OTHER RECEIVABLES
As at As at
31 March 31 March
2020 2019
GBP GBP
Trade receivables 210,224 16,159
Amount due from related company - 212,914
Other receivables 18,868 938
---------- ----------
229,092 230,011
---------- ----------
As the group has no overdue trade receivables the assessed
expected credit loss is not material and is not recognised in these
financial statements
10. BANK
Cash and cash equivalents are denominated in the following
currencies:
As at As at
31 March 31 March
2020 2019
GBP GBP
Great Britain Pound 20,703 18,975
Singapore Dollar 19,514 19,514
United States Dollar 26,667 26,667
Malaysia Ringgit 283,808 464,122
---------- ----------
350,692 529,278
---------- ----------
11. SHARE CAPITAL
Ordinary shares of GBP0.10 each
Number of Amount
shares GBP
Issued and paid up
At 31 March 2019 and 31 March 2020 10,000,000 1,000,000
At 31 March 2020, the total issued ordinary share of the Group
were 10,000,000.
12. TRADE AND OTHER PAYABLES
As at As at
31 March 31 March
2020 2019
GBP GBP
Amount due to related company 89,674 302,588
Amount due to directors 4,166 -
Trade creditors 35,847 -
Accruals 33,800 55,431
Other payables 13,984 2,500
---------- ----------
177,471 360,519
---------- ----------
13. LEASE LIABILITY
As at
31 March
2020
GBP
At 1(st) April 2019
-
* As previously reported
* Initial application of IFRS 16 166,515
----------
As restated 166,515
Interest expense recognised in profit
or loss 8,595
Repayment of principal (92,690)
Interest expense paid (8,595)
----------
73,825
----------
Lease liabilities are payable as follow:
Less than one year 73,825
The comparative information is not presented as the Company has
applied IFRS 16 using the modified retrospective approach.
14. SUBSIDIARY UNDERTAKING
The details of the subsidiary in the Group are as follows:
Name of subsidiary Country Effective Principal
of incorporation holding 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
15. EMPLOYEES AND DIRECTORS' EMOLUMENTS
Year ended Year ended
31 March 31 March
2020 2019
GBP GBP
Staff costs (include directors) 192,216 200,366
----------- -----------
Directors fee during the year
Year ended Year ended
31 March 31 March
2020 2018
GBP GBP
Mark Richard Logan Pincock 8,750 15,000
Sayed Mustafa Ali 15,000 15,000
Ross Andrews 19,992 19,992
Leon Santos 15,000 15,000
----------- -----------
58,742 64,992
----------- -----------
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 were 11 (2019: 16).
16. SEGEMENTAL ANALYSIS
The chief operating decision maker has been identified as the
management team including the two main directors and two
non-executive directors. The chief operating decision-maker
allocates resources and assesses performance of the business and
other activities at the operating segment level.
The chief operating decision maker has determined that in the
year end 31 March 2020, the Group had a single operating segment,
the provision of managed telecommunications services.
Apart from holding Group activities in the UK the Group's had
operation in Malaysia in the reporting year.
There are 3 customers with revenue greater than 10% during the
reporting year.
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 March 31 March
2020 2019
GBP GBP
Financial assets
Loans and receivables
Cash and cash equivalent 350,692 529,278
Trade and other receivable 229,092 230,011
Total financial assets 579,784 759,289
========== ==========
Financial liabilities at amortised
cost
Amount due to related company 89,674 302,588
Amount due to directors 4,166 -
Trade and other payables 83,631 57,931
Lease liability 73,825 -
Total financial liabilities 251,296 360,519
========== ==========
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 ow
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 is mainly Ringgit Malaysia ("RM").
All of the Group's sales are denominated in foreign currencies
whilst all of the Group's trade receivables are denominated in
foreign currencies. The Group also holds cash and cash equivalents
denominated in foreign currencies, predominantly in RM, for working
capital purposes.
At the reporting date, the Group's financial instruments are
denominated in RM at each reporting year:
At At
31 March 31 March
2020 2019
GBP GBP
Financial assets
Loans and receivables
Cash and cash equivalent 283,808 464,122
Trade and other receivable 60,412 17,098
---------- ----------
Total financial assets 344,220 481,220
---------- ----------
Financial liabilities at amortised
cost
Trade and other payables 20,534 17,682
Lease liability 73,825 -
Total financial liabilities 94,359 17,682
---------- ----------
Net financial asset 249,861 463,538
========== ==========
If the GBP strengthened or weakened by 5% against the RM, with
all other variables in each cast remaining constant, then the
impact on the group's post-tax profit for the year would be loss of
approximately GBP12,000 (2019: loss of GBP22,000).
b) Credit risk
The Group's credit risk is primarily attributable to deposit
with banks and credit exposures to customer or counterparty. The
Group has credit policies in place and the exposures to these
credit risks are monitored on an ongoing basis. The Group manages
its deposits with reputable licensed banks and financial
institutions by monitoring credit ratings and limiting the
aggregate risk to any individual counterparty.
The group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables (including the amount due from
related company). At 31 March 2019 and 2020, Group exposes net
amount due to the related company (see note 20).
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and available funding through an adequate amount of committed
credit facilities. 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).
The maturity of the Group's financial liabilities at the
statement of financial position date, based on the contracted
undiscounted payments as disclosed in note 17, falls within one
year and payable on demand.
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 MANAGEMENT POLICY
The Group's objectives when managing capital are to safeguard
the Group'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 Group consists of
the equity attributable to equity holders of the Group which
comprises of issued share capital and reserves.
20. 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 Management
Services Limited is partly owned by Sayed Mustafa Ali, a director
of the Group.
31 March 31 March
2020 2019
GBP GBP
Net amount due to related party
* Orient Managed Services Limited 44,391 44,391
* Orient Telecoms Sdn Bhd 45,283 45,283
Amount due to directors
1,250 -
* Sayed Mustafa Ali
1,666 -
* Ross Andrews
1,250 -
* Leon Santos
--------- ---------
4,166 -
--------- ---------
The amount due to related party is interest-free and they are
payable on demand.
31 March 31 March
2020 2019
GBP GBP
Transaction with Orient Telecoms
Sdn Bhd
- Commission income - 108,537
- Overhead costs settled on behalf
by related party - (153,820)
Sayed Mustafa Ali is a director of the Company, Orient Telecoms
Sdn Bhd. and Orient Management Services Limited.
21. CONTROL
The directors consider there is no ultimate controlling
party.
22. SUBSEQUENT EVENTS
There were no subsequent events after the reporting period.
As at As at
31 March 31 March
2020 2019
Notes GBP GBP
ASSETS
NON CURRENT ASSETS
Investment in subsidiary 4 366,696 500,000
---------- ----------
CURRENT ASSETS
Bank 66,884 65,156
Trade and other receivables 5 168,680 212,914
---------- ----------
235,564 278,070
---------- ----------
TOTAL ASSETS 602,260 778,070
========== ==========
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY
Share capital 1,000,000 1,000,000
Accumulated loss (554,677) (564,767)
---------- ----------
TOTAL EQUITY 445,323 435,233
---------- ----------
CURRENT LIABILITIES
Trade and other payables 6 156,937 342,837
---------- ----------
TOTAL EQUITY AND LIABILITIES 602,260 778,070
========== ==========
The profit for the Company for the year ended 31 March 2020 was
GBP10,090 (2019: loss of GBP188,238) .
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 30 September, 2020 and signed on behalf by:
Sayed Mustafa Ali
Director
Registered number: 10028222
Accumulated
Share capital loss Total
GBP GBP GBP
( 376,529
As at 31 March 2018 1,000,000 ) 623,471
-------------- ------------ ----------
( 188,238 ( 188,238
Loss during the year - ) )
-------------- ------------ ----------
Total comprehensive loss for ( 188,238 ( 188,238
the year - ) )
-------------- ------------ ----------
( 564,767
As at 31 March 2019 1,000,000 ) 435,233
-------------- ------------ ----------
Profit during the year - 10,090 10,090
-------------- ------------ ----------
Total comprehensive income
for the year - 10,090 10,090
-------------- ------------ ----------
As at 31 March 2020 1,000,000 (554,677) 445,323
-------------- ------------ ----------
Share capital comprises the ordinary issued share capital of the
Company.
Retained earnings represent the aggregate retained earnings of
the Company.
The notes to the financial statements form an integral part of
these financial statements.
1.
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.
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 financial assets as loans
and receivables 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 Loan to
investment group undertaking Total
GBP GBP GBP
Addition 93,800 - 93,800
Advance loan to group undertaking - 406,200 406,200
------------ ------------------- ----------
Balance as at 1 April 2019 93,800 406,200 500,000
Repayment of intercompany
loan - (133,304) (133,304)
------------ ------------------- ----------
93,800 272,896 366,696
------------ ------------------- ----------
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 March 31 March
2020 2019
GBP GBP
Amount due from related company - 212,914
Amount due from trade receivables 168,680 -
---------- ----------
168,680 212,914
---------- ----------
The detail of the related company is set out in the note 20 to
the consolidated financial statements.
6. Trade and other payables
As at As at
31 March 31 March
2020 2019
GBP GBP
Amount due to related company 89,674 302,588
Amount due to directors 4,166 -
Trade creditors 35,847 -
Accruals 27,250 37,749
Other payables - 2,500
---------- ----------
156,937 342,837
---------- ----------
7. Share capital
The details are set out in the note 11 to the consolidated
financial statements.
At 31 March 2020, the total number of issued ordinary shares of
the Company was 10,000,000.
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