Telecom Service One : Announcement of Third Quarterly Results for the nine months ended 31 December 2015

43230-01A 1..20

Telecom Service One Holdings Limited

電 訊 首 科 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8145)

ANNOUNCEMENT OF THIRD QUARTERLY RESULTS FOR THE NINE MONTHS ENDED 31 DECEMBER 2015

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (''GEM'') OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE ''STOCK EXCHANGE'')

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement, for which the directors of Telecom Service One Holdings Limited (the ''Company'') collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange (the ''GEM Listing Rules'') for the purpose of giving information with regard to the Company. The directors of the Company (the ''Directors''), having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

THE FINANCIAL STATEMENTS THIRD QUARTERLY RESULTS

The board of Directors (the ''Board'') of the Company announces the condensed consolidated financial results of the Company and its subsidiaries (collectively referred to as the ''Group'') for the nine months ended 31 December 2015 (the ''Period''), together with the corresponding comparative figures as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the nine months ended 31 December 2015

Three months ended 31 December

Nine months ended 31 December

2015 2014 2015 2014

HK$'000 HK$'000 HK$'000 HK$'000

Revenue	Notes 3	(unaudited) 31,019	(unaudited) 34,719	(unaudited) 93,332	(unaudited) 93,663
Cost of sales	(17,480)	(17,645)	(53,176)	(47,734)
Gross profit	13,539	17,074	40,156	45,929
Other income	5	678	408	2,013	1,659
Other operating expenses, net	6	(3,519)	(3,852)	(11,841)	(10,769)
Administrative expenses	(3,709)	(5,528)	(11,186)	(11,768)
Finance costs	7	(57)	(69)	(175)	(109)
Profit before tax	6,932	8,033	18,967	24,942
Income tax expense	8	(1,180)	(1,744)	(2,914)	(4,688)
Profit for the period	5,752	6,289	16,053	20,254
Item that may be subsequently

reclassified to profit or loss:

Exchange differences arising on

translation of foreign operations (45) (5) (63) -

Other comprehensive expense

for the period (45) (5) (63) -

Total comprehensive income

for the period 5,707 6,284 15,990 20,254

Earnings per share (HK$)	10
Basic	0.05	0.05	0.13	0.17

Diluted 0.05 0.05 0.13 0.17

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the nine months ended 31 December 2015

Share
Share	Share	Other	Translation	Statutory	Warrant	option	Retained
capital	premium	reserve	reserve	reserve	reserve	reserve	profits	Total
HK$'000	HK$'000	HK$'000 Note (i)	HK$'000	HK$'000 Note (ii)	HK$'000	HK$'000	HK$'000	HK$'000

At 1 April 2014 (audited) 12,000 23,907 7 0 ( 6 0) 133 100 - 36,482 72,632

Profit for the period and total comprehensive income for

the period - - - - - - - 20,254 20,254

Payment of dividends Note 9 - - - - - - - (42,000) (42,000)

At 31 December 2014

(unaudited) 12,000 23,907 7 0 ( 6 0) 133 100 - 14,736 50,886

At 1 April 2015 (audited)	12,000	23,907	70	(60)	137	100	- 18,986	55,140
Profit for the period Exchange differences arising	-	-	-	-	-	-	- 16,053	16,053

on translation of foreign

operations - - - (63) - - - - (63)

Total comprehensive income

for the period - - - (63) - - - 16,053 15,990

Recognition of equity-settled share-based payments

expenses Note 11 - - - - - - 583 - 583

Issue of shares upon exercise

of share options	1	37	- - - - (7)	-	31
Lapse of share options	-	-	- - - - (25)	25	-

Payment of dividends Note 9 - - - - - - - (24,003) (24,003)

At 31 December 2015

(unaudited) 12,001 23,944 7 0 ( 123) 137 100 551 11,061 47,741

Notes:

1. During the year ended 31 March 2014, the Group acquired 100% of equity interest in Telecom Service One (Macau) Limited (''TSO Macau'') from East-Asia Pacific Limited (''East-Asia''), the immediate holding company of the Company which was incorporated in the British Virgin Islands (''BVI''). The acquisition was accounted for using merger accounting. Other reserve represents the difference between the issued share capital of TSO Macau and the consideration paid for acquiring it.

   
   

   In addition, other reserve represents the difference between the nominal value of the issued capital of subsidiaries acquired pursuant to a group reorganisation over the consideration paid for acquiring these subsidiaries during the year ended 31 March 2013.

   
   

2. As stipulated by regulations in Taiwan, Telecom Service One Taiwan Limited, a subsidiary of the Company, is required to appropriate 10% of its after tax profit (after offsetting prior year losses) to statutory reserve before declaring any dividends to shareholders until the balance of the reserve reaches the relevant registered capital. Subject to certain restrictions as set out in the relevant Taiwan regulations, the statutory reserve may be used to offset against accumulated losses of the relevant Taiwan company. The amount of transfer is subject to the approval of the board of directors of the relevant Taiwan company.

In addition, in accordance with the People's Republic of China (the ''PRC'') laws applicable to wholly-foreign owned investment enterprises, subsidiary of the Company operating in the PRC is required to set up a general reserve fund and appropriate at least 10% of relevant company's annual profit after tax, as determined under the PRC accounting rules and regulations, to the general reserve fund until the balance of the reserve equals to 50% of its registered capital. This fund can be used to make good losses and to convert into paid-up capital.