Telecom Service One : Final Results Announcement for the year ended 31 March 2019

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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: 3997)

FINAL RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 MARCH 2019

The board of directors (the "Board") of Telecom Services One Holdings Limited (the "Company") announces the audited consolidated results of the Company and its subsidiaries (collectively referred to as the "Group") for the year ended 31 March 2019, together with the comparative figures for the year ended 31 March 2018:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 March 2019

	Notes	2019		2018
	HK$'000	HK$'000
Revenue	4	65,992		99,295
Cost of sales		(36,318)	(49,007)
Gross profit	6	29,674		50,288
Other income	3,870		5,110
Other operating expenses, net	7	(8,418)	(9,968)
Administrative expenses	8	(14,023)	(15,906)
Finance costs	-	(1)
Profit before tax	9	11,103		29,523
Income tax expense	(1,701)	(4,253)
Profit for the year	10	9,402		25,270
Other comprehensive income (expense)
Items that will not be reclassified to profit or loss:		(75)	(87)
Remeasurement of long service payment obligations
Items that may be reclassified subsequently to profit or loss:		(10)	3
Exchange differences arising on translation of foreign operations
Other comprehensive expense for the year		(85)	(84)
Total comprehensive income for the year		9,317		25,186
Earnings per share (HK$)
12	0.0733		0.1972
Basic
Diluted		0.0731		0.1970

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2019

		2019	2018
	Notes	HK$'000		HK$'000
Non-current assets
Plant and equipment		651	1,799
Deferred tax asset		586		809
		1,237	2,608
Current assets
Inventories		1,294	1,715
Trade and other receivables	13	12,921	18,952
Amounts due from related companies		428	296
Tax recoverable		3,637	409
Pledged bank deposits		201	8,521
Bank balances and cash		86,749		78,170
		105,230	108,063
Current liabilities
Trade and other payables	14	5,277	7,465
Amounts due to related companies		104		53
		5,381		7,518
Net current assets		99,849		100,545
Total assets less current liabilities		101,086	103,153
Non-current liability
Long service payment obligations		-		91
Net assets		101,086	103,062
Capital and reserves
Share capital	15	12,834	12,820
Reserves		88,252		90,242
Total equity		101,086	103,062

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 March 2019

1. GENERAL
   The Company is a company incorporated in the Cayman Islands as an exempted company with limited liability under Companies Law, Chapter 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands on 3 August 2012 and its shares are listed on GEM of the Stock Exchange on 30 May 2013. On 27 March 2018, its shares have been transferred from GEM to the Main Board of the Stock Exchange (Stock Code: 3997). The address of the registered office of the Company is Clifton House, 75 Fort Street, P.O. Box 1350, Grand Cayman KY1-1108, Cayman Islands and the principal place of business of the Company is at Portion B of Unit 1806 and Unit 1807, 18/F., Riley House, 88 Lei Muk Road, Kwai Chung, New Territories, Hong Kong.
   The directors of the Company consider the immediate holding company is East-Asia Pacific Limited, a company incorporated in the British Virgin Islands (the "BVI") and the ultimate parent is Cheung Family Trust.
   The Company is principally engaged in investment holding. The principal activities of its subsidiaries are provision of repair and refurbishment services for mobile phones and other personal electronic products as well as the sales of related accessories.
   The functional currency of the Company is Hong Kong dollars ("HK$") while the functional currencies for certain subsidiaries are Renminbi ("RMB"), Macau Patacas ("MOP") and United States dollars ("US$"). For the purpose of presenting the consolidated financial statements, the Group adopted HK$ as its presentation currency which is the same as the functional currency of the Company.
2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS ("HKFRSs")
   In the current year, the Group has applied for its first time, the following new and amendments to HKFRSs issued by the Hong Kong Institute of Certificated Public Accountants.

HKFRS 9	Financial Instruments
HKFRS 15	Revenue from Contracts with Customers and related
	Amendments
Amendments to HKFRS 2	Classification and Measurement of Share-based
	Payment Transactions
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with
	HKFRS 4 Insurance Contracts
Amendments to HKAS 28	As part of Annual Improvements to HKFRSs 2014-
	2016 Cycle
Amendments to HKAS 40	Transfers of Investment Property
HK(IFRIC)-Int 22	Foreign Currency Transactions and Advance
	Consideration

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The impact of the adopation of HKFRS 9 Financial Instruments and HKFRS 15 Revenue from Contracts with Customers have been summarised below. The application of other new and amendments to HKFRSs in the current year has had no material impact on the Group's financial performance and positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements.

HKFRS 9 Financial instruments

HKFRS 9 replaces the provisions of HKAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. The Group has applied HKFRS 9 retrospectively to financial instruments that have not been derecognised at the date of initial application (i.e. 1 April 2018) in accordance with the transition provisions under HKFRS 9, and chosen not to restate comparative information. Differences in the carrying amounts of financial assets and financial liabilities on initial application are recognised in retained profits as at 1 April 2018.

1. Classification and measurement of financial instruments
   The directors of the Company reviewed and assessed the Group's existing financial assets and financial liabilities as at 1 April 2018 based on the facts and circunstances that existed at that date and concluded that all recognised financial assets and financial liabilities that are within the scope of HKFRS 9 are continued to be measured at amortised cost as were previously measured under HKAS 39.
2. Loss allowance for expected credit losses ("ECL")
   The adoption of HKFRS 9 has changed the Group's accounting for impairment losses for financial assets by replacing HKAS 39's incurred loss model with a forward-looking ECL approach. As at 1 April 2018, the directors of the Company reviewed and assessed the Group's existing financial assets for impairment using reasonable and supportable information that is available without undue cost or effort in accordance with the requirement of HKFRS 9.
   It is concluded that, as at 1 April 2018, no additional credit loss allowance has been recognised against retained profits as the estimated allowance under the ECL model were not significantly different to the impairment losses previously recognised under HKAS 39.
   All financial liabilities have not been impacted by the application of HKFRS 9 and continue to be classified and measured on the same basis as they were under HKAS 39.

HKFRS 15 Revenue from Contracts with Customers

HKFRS 15 superseded HKAS 11 Construction Contracts, HKAS 18 Revenue and related interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard established a five-step model for determining whether, how much and when revenue is recognised. The Group has elected to adopt the modified retrospective approach for contracts with customers that are not completed

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as at the date of initial application (i.e. 1 April 2018) with the cumulative effect of initially applying HKFRS 15 as an adjustment to the opening balance of retained profits and comparative information is not restated.

The impact of transition to HKFRS 15 was insignificant on the retained profits at 1 April 2018.

New and amendments to HKFRSs issued but not yet effective

The Group has not early applied the following new and amendments to HKFRSs and interpretation that have been issued but are not yet effective:

HKFRS 16

HKFRS 17 HK(IFRIC)-Int 23 Amendments to HKFRS 3 Amendments to HKFRS 9

Amendments to HKFRS 10 and HKAS 28

Amendments to HKAS 1 and HKAS 8 Amendments to HKAS 19 Amendments to HKAS 28 Amendments to HKFRSs

Leases1

Insurance Contracts4

Uncertainty over Income Tax Treatments1 Definition of a Business3

Prepayment Features with Negative Compensation1 Sale or Contribution of Assets between an Investor

and its Associate or Joint Venture5 Definition of Material2

Plan Amendment, Curtailment or Settlement1 Long-term Interests in Associates and Joint Ventures1 Annual Improvements to HKFRSs 2015-2017 Cycle1

1

2

3

4

5

Effective for annual periods beginning on or after 1 January 2019. Effective for annual periods beginning on or after 1 January 2020.

Effective for business combinations and asset acquisitions for which the acquisition date is on or after the beginning of the first annual period beginning on or after 1 January 2020.

Effective for annual periods beginning on or after 1 January 2021. Effective for annual periods beginning on or after a date to be determined.

The directors of the Company anticipate that, except as described below, the application of the other new and amendments to HKFRSs will have no material impact on the results and the financial position of the Group.

HKFRS 16 Leases

HKFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessors and lessees.

In respect of the lessee accounting, the standard introduces a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases with the lease term of more than 12 months, unless the underlying asset has a low value.

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