STRATEGIC REPORT

Strategy, objective and business model

The Group delivers managed telecommunications services by leveraging third-party network infrastructure to provide cost-effective, high-speed connectivity solutions to high-bandwidth users across Malaysia, Thailand, and Singapore.

Its strategic objective is to establish itself as a leading regional telecommunications provider, offering comprehensive connectivity and managed network services across Southeast Asia.

The Group's business model and the development of its overlay network are designed to require relatively low capital expenditure. Management believes this capital-efficient approach enables the Group to offer competitive pricing, supporting stronger market penetration and improved customer retention within the region.

In alignment with emerging technological trends-particularly in artificial intelligence (AI)-the Group has also embarked on the development and commercialisation of AI-based solutions. These offerings are designed to complement its core telecommunications services and position the Group for sustained innovation and long-term growth.

Fair review of business development and performance

A comprehensive and fair review of the business development and performance of the Group reveals a stable financial outlook, supported by prudent management of cash resources. The Group's financial foundation remains sound, underpinned by healthy cash reserves and expected future earnings, which collectively support the organisation's strategic initiatives and operational requirements.

One key factor contributing to this favourable outlook is the Group's continued ability to meet its general corporate needs. These include strategic investments, product development, marketing, and other essential growth-driving activities. The Group's consistent emphasis on maintaining adequate cash resources ensures readiness to capture market opportunities and sustain its competitive position in the region.

Moreover, the Group's cash resources play a central role in supporting its ongoing operations. These include regular operational costs, infrastructure maintenance, and core service delivery expenditures. With careful oversight of its financial activities, the Group ensures uninterrupted day-to-day operations and continued service quality to its customers.

An additional strength highlighted during the year is the Group's dedication to its human capital. Through responsible allocation of resources for Directors' remuneration and staff costs, the Group demonstrates its commitment to attracting, retaining, and motivating capable professionals. The dedication of the team remains instrumental in sustaining innovation and excellence across the business.

The effective management of cash flows reflects the Group's proactive approach to financial stewardship and long-term planning. In an evolving business environment, maintaining sufficient cash reserves enables the Group to respond to changing market conditions, take advantage of new growth avenues, and maintain operational continuity across its markets.

Since its establishment, the Group has progressed steadily-from initial development stages between 2017 and 2020 to launching its core managed telecommunications solutions from 2020 onwards. From 2021, the Group established a strong commercial track record, and over the years, has earned recognition as a reliable service provider in the managed telecommunications sector. Its range of solutions continues to be well received by customers across Southeast Asia, enabling expansion and increased brand presence.

Sources of Funding and Target Capital Structure

Orient Telecoms Plc funds its operations through a combination of shareholder equity and trade and other payables. Management maintains a disciplined approach to capital management, targeting a liabilities-to-equity ratio of approximately 1:1. As at 31 March 2025, the actual ratio was 1.54:1 (31 March 2024: 0.28:1), reflecting the Group's continued investment in its operations and the growth in total assets from £694,674 in 2024 to £773,763 in 2025. This capital structure supports the Company's strategic objectives and positions it to meet ongoing operational and growth requirements.

In conclusion, a fair review of the Group's business development and performance for the year highlights the importance of financial discipline, operational focus, and strategic foresight. The Group remains well-positioned to pursue its long-term objectives, manage its financial responsibilities effectively, and invest in its people and innovation. Looking ahead, the Board remains confident in the Group's continued progress, and its ability to adapt, grow, and create sustainable value for stakeholders.

Principal risks and uncertainties

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

Business Operation Risk

-    Strategic Focus on Telecommunications Sector

The Group continues to serve customers in the telecommunications sector, which remains a core area of focus due to its long-term growth potential and alignment with the Group's capabilities. In the financial year ended 31 March 2025, customers from this segment contributed approximately 47% of total revenue (FYE 2024: 53%).

The reduction in concentration reflects the Group's successful efforts to broaden its customer portfolio across multiple sectors while maintaining strong ties with long-term telecommunications clients. The Group remains agile and well-prepared to respond to any changes in regulatory frameworks, particularly in Malaysia, and is committed to delivering high-quality services that support both compliance and customer satisfaction.

-     Diversification Beyond Key Legacy Customers

During FYE 2025, the Group achieved broader market penetration by expanding its customer base across multiple sectors and regions. This strategic diversification reduced reliance on individual clients and contributed to more balanced revenue streams, enhancing long-term financial resilience.

As part of this transition, Bharti International (Singapore) Pte. Limited ("Bharti"), a valued partner under a Marketing Agreement established in 2022, contributed 3% to Group revenue in FYE 2025 (FYE 2024: 31%). While Bharti remains a strategic client, the lower contribution reflects the Group's successful efforts to capture new opportunities and reduce dependency on any single customer.

The Group continues to maintain a strong relationship with Bharti and is currently in active discussions to secure further contracts that are expected to support future growth. This balanced approach enables the Group to strengthen commercial partnerships while pursuing new business opportunities across the region.

-     Credit Risk

The Group generally grants credit terms of 30 to 45 days to its customers. Any extension beyond these terms is assessed on a case-by-case basis, taking into account the nature and duration of the business relationship, the customer's financial position, and historical payment behaviour.

During the financial year ended 31 March 2025, the Group maintained careful oversight of receivables. While some payments occasionally exceeded the standard credit period, collections remained largely effective due to strong customer relationships and the consistent delivery of high-quality services.

For FY2025, the Group recognised bad debts of £133,549, reflecting specific exposures where recoverability was uncertain. No bad debts were recorded in the previous financial year ended 31 March 2024, highlighting the historically effective credit management practices. The Group remains confident that a significant portion of these amounts can be recovered in the coming year, and proactive measures will continue to be taken to mitigate credit risk and strengthen collection processes.

-     Dependency of Executive Directors

The continued success of the Group is closely tied to the expertise and leadership of its Executive Director, Mr. Sayed Mustafa Ali. With over 25 years of experience in the telecommunications industry, Mr. Sayed Mustafa Ali has held senior leadership roles in several prominent telecommunications companies and multinational corporations in India, where he has made significant contributions through his technical and strategic insights.

Given his pivotal role, the unexpected loss of his services-without a suitable and timely successor-could potentially impact the Group's operations and strategic direction.

To mitigate this risk, Mr. Sayed Mustafa Ali is supported by a capable and experienced operations team. The Group is committed to retaining key leadership personnel by offering competitive remuneration packages and providing ongoing professional development and training.

As at the close of the financial year, the Group has not experienced any loss of directors or key personnel that has materially affected the business, reflecting the effectiveness of its retention and succession strategies.

-     Business Strategy

The Group's profitability and financial performance are closely linked to its ability to secure new customers and retain existing contracts for the provision of managed services. Any potential loss of key customers, or difficulties in acquiring new clients or expanding business with existing ones, could negatively affect the Group's performance.

To address this risk, and with over five years of operational experience, the Group has implemented proactive strategies to remain competitive. These include leveraging the expertise of its experienced management team, strategically recruiting a highly competent sales force to pursue and secure critical revenue-generating contracts, and conducting regular reviews of its business plan at board level to ensure strategic alignment and operational efficiency.

In addition, the Group maintains strong confidence in the competitive advantage of its product offerings, particularly in addressing the needs of small and medium-sized enterprises (SMEs). This belief supports the Group's outlook for continued strong performance and targeted growth.

Through these initiatives, the Group remains committed to sustainable expansion and maintaining a leading position within its sector.

-     Climate Related Financial Disclosures (TCFD)

a)   Governance arrangements

The Board has overall responsibility for oversight of climate‑related risks and opportunities. This oversight is exercised through the Audit & Risk Committee, which considers environmental and climate matters at least annually. The Chief Executive Officer is accountable for identifying and monitoring climate‑related issues and reporting them to the Board. Day‑to‑day operational monitoring is undertaken by management, who assess exposure to potential physical and transition climate risks across the Group's operations and supply chain.

b)    Identification, assessment and management

·      Regular review of industry‑specific regulatory developments in the UK, Malaysia, and other markets in which we operate.

·      Monitoring changes in customer expectations related to sustainability.

·      Assessing the resilience of our office and IT infrastructure against extreme weather events and temperature variation.
Management assesses each risk for likelihood, potential financial impact, and time horizon, and implements mitigation or adaptation measures where necessary - e.g., ensuring critical systems have back‑up power and temperature control.

c)   Integration into overall risk management

Climate‑related risks are embedded into the Group's risk management framework. They are recorded, where material, in the Group risk register alongside operational, financial, and strategic risks. The Board reviews this register quarterly, and climate risks are considered in setting strategic plans and capital allocation decisions.

d)   Principal climate‑related risks and opportunities & time horizons

Principal risks:

1.   Regulatory/transition risk - Possible increased costs from energy efficiency regulations, carbon pricing, or mandatory reporting (short‑ to medium‑term).

2.   Physical risk - Increased frequency of extreme heat or storms could disrupt office operations and network partners (medium‑ to long‑term).
Opportunities:

·      Demand from clients for lower‑carbon connectivity solutions and more energy‑efficient data transmission.
Time horizons used:

·      Short‑term: 0-3 years

·      Medium‑term: 3-10 years

·      Long‑term: >10 years

e)   Actual and potential impacts on business model and strategy

To date, climate‑related matters have not had a material adverse impact on our results or operations. Potential future impacts may include:

·      Higher operating costs due to climate‑related regulation.

·      The need to invest in more energy‑efficient technologies.

·      Opportunities to provide "green connectivity" solutions to meet customer sustainability goals.

f)    Resilience Analysis

·    Scenario analysis undertaken in FY2025 considered:

·    Low‑carbon transition scenario (1.5°C) - Increased regulation and carbon pricing; opportunity in sustainable service differentiation; minimal physical disruption.

·    High‑warming scenario (>4°C) - Lower regulation changes but higher incidence of heat‑ and storm‑related operational disruption.
In both scenarios, the Group remains resilient due to its asset‑light model, long‑term client relationships, and diversified geographic supply partners.

g)   Targets

We have set internal targets to:

·      Reduce Scope 2 emissions from office electricity usage by 5% from the FY2024 baseline by FY2026, while supporting revenue growth through improved energy efficiency.

·      Improve energy intensity to ≤ 0.021 tCO₂e per £1,000 revenue by FY2026.

·      Transition to 100% renewable electricity in the Kuala Lumpur office by FY2028.

h)   KPIs

FY2025 KPI and baseline:

·      Scope 2 location‑based GHG emissions: 4.8 tCO₂e (office electricity use).
Calculation based on UK DEFRA 2024 emission factors and Malaysian grid factors.

·      Energy intensity: 0.022 tCO₂e per £'000 of revenue.
These KPIs will be monitored and reported annually, with improvement against our efficiency and renewable sourcing targets

Table 1 - Climate-Related KPIs (FY2025)

 Summary:
 In FY2025, the Group maintained a low carbon footprint with a 4% reduction in emissions compared to the prior year. The business model remains low-intensity, and energy efficiency initiatives continue to be explored, including the potential adoption of renewable energy contracts.

Industry Risk

-     Competition

The Group operates in a highly competitive environment where industry players differentiate themselves through pricing, service packages, technology, and service quality. Many of our competitors benefit from longer operating histories and more advanced technological capabilities. As a result, we currently face - and expect to continue facing - intense competition from both established providers and new market entrants.

New entrants may adopt innovative technologies and aggressive pricing strategies, further intensifying market pressures. These dynamics may adversely impact the Group's market share, pricing power, and overall business performance.

To remain competitive, the Group has adopted a capital-light model by offering managed services without the need to invest in extensive infrastructure. In parallel, we continue to develop our own overlay network, allowing for greater flexibility in service offerings and enabling us to respond swiftly to evolving customer needs and market trends

-     Technology Advancement

The telecommunications sector is marked by rapid technological innovation and evolving industry standards, driven by developments in digital infrastructure, artificial intelligence (AI), 5G deployment, and the growing demand for cloud-based and edge computing services. The inability to anticipate, adapt to, or adopt these technological shifts may impair the Group's competitiveness and its capacity to meet changing customer expectations.

To mitigate this risk, the Group actively monitors emerging technologies and trends, ensuring that its service offerings and infrastructure remain current and future-ready. This includes continuous investment in system enhancements, upgrading service delivery platforms, and embedding a culture of innovation and agility across its operations.

Additionally, the Group prioritises ongoing technical training and professional development to ensure its teams are equipped with the skills necessary to leverage the latest advancements in managed telecommunications services. This proactive approach supports sustained service excellence, strengthens the Group's ability to respond to market changes, and reinforces its position as a forward-looking, competitive service provider.

-     Political and regulatory environment

The Group's operations are primarily based in Malaysia and are therefore subject to the political, economic, and regulatory conditions within the country. Changes in government policies - including those relating to taxation, monetary policy (such as interest rates), trade regulations, or telecommunications licensing - may have a direct impact on the Group's operational performance, cost structure, and long-term growth prospects.

Although the Group remains attentive to global geopolitical tensions, such as the Russia-Ukraine conflict and the crisis in Gaza, these events currently have no material impact on the Group's operations. This is largely due to the Group's regional focus on Malaysia, Singapore, and Thailand, and the absence of reliance on imported equipment or foreign service providers.

The Group's asset-light and locally anchored service delivery model provides agility and resilience in navigating political and regulatory uncertainties. This strategic positioning helps to reduce exposure to international disruptions and supports operational continuity within its core markets.

Key Performance Indicators (KPIs)

Key Performance Indicators (KPIs) are essential metrics that provide insights into the performance and success of the Group. These indicators help measure progress towards the organization's goals and objectives. Here are some potential KPIs for the Group:

1.   Revenue Growth Rate: This KPI measures the percentage increase in the Group's revenue over a specific period. It indicates the effectiveness of the sales and marketing efforts and the Group's ability to generate more income.

2.   Profit Margin: The profit margin KPI evaluates the Group's profitability by calculating the percentage of profit earned from revenue after deducting all expenses. It reflects the efficiency of cost management and revenue generation.

3.   Customer Acquisition Cost (CAC): CAC measures the average cost required to acquire a new customer. It helps assess the efficiency of the Group's marketing and sales strategies.

4.   Customer Retention Rate: This KPI indicates the percentage of customers who continue to do business with the Group over a specific period. High retention rates are a sign of customer satisfaction and loyalty.

5.   Return on Investment (ROI): ROI assesses the profitability of investments made by the Group. It helps evaluate the success of various projects and initiatives.

6.   Employee Satisfaction and Engagement: This KPI measures employee satisfaction and engagement through surveys or other feedback mechanisms. High employee satisfaction often correlates with increased productivity and reduced turnover.

7.   Market Share: Market share represents the Group's portion of the total market sales within its industry. Monitoring changes in market share helps evaluate the effectiveness of the Group's competitive strategies.

8.   Debt-to-Equity Ratio: This financial KPI indicates the level of debt relative to equity. A healthy ratio suggests a well-balanced capital structure and financial stability.

9.   Customer Lifetime Value (CLV): CLV measures the total value a customer brings to the Group over their entire relationship. It helps assess the long-term impact of customer relationships on the Group's revenue.

10. Average Order Value (AOV): AOV calculates the average value of each customer transaction. Monitoring AOV can help identify opportunities to upsell or cross-sell to increase revenue per customer.

11. Website Traffic and Conversion Rates: These KPIs assess the effectiveness of the Group's online presence and marketing efforts in attracting potential customers and converting them into paying ones.

12. R&D Investment Ratio: This ratio measures the proportion of revenue invested in research and development. A higher ratio indicates a commitment to innovation and potential future growth.

13. Health and Safety Incidents: Tracking the number of health and safety incidents helps ensure a safe working environment for employees and can indicate the effectiveness of safety protocols.

14. Environmental Impact Metrics: These KPIs assess the Group's environmental sustainability efforts, such as carbon emissions reduction and waste management.

Going concern

As detailed in Note 2, these financial statements have been prepared on a going concern basis. After conducting a thorough assessment, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue operating for at least 12 months from the date of approval of these financial statements. Accordingly, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Capital and returns management

The Company anticipates that shareholder returns will primarily be driven by the capital appreciation of its Ordinary Shares. In the medium term, additional returns are expected through dividends in line with the Group's dividend policy. The Board remains committed to delivering sustainable long-term value to shareholders by balancing reinvestment for growth with appropriate capital distribution strategies

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 S172 statement, 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 remain fully informed of the Group's operating environment and evolving industry trends. Strategic decisions taken by the Board are designed to reinforce the Group's position as a leading network services provider, while embedding safety, sustainability, and social responsibility at the core of its business practices.

In 2020, the Board undertook a strategic refresh to realign the Group's long-term ambitions with market opportunities, placing greater emphasis on business development, service innovation, and operational efficiency. While these initiatives are focused on long-term growth and resilience, the Board also recognises the importance of responding to the current demand for reliable connectivity and advanced technology services.

The Group's strategy balances future-focused investment with short-term operational responsiveness, ensuring that decisions made today are sustainable, commercially sound, and aligned with shareholder and stakeholder interests over the long term.

The interests of the company's employees

The Directors recognise that the Group's employees are fundamental to the success of Orient Telecoms and central to the achievement of its strategic objectives. The ability to attract, retain, and motivate skilled personnel is critical to sustaining high-quality service delivery and fostering innovation across the business.

As part of its commitment to being a responsible and supportive employer, the Board considers the implications of its decisions on employees and the wider workforce. This includes maintaining fair and competitive pay structures, providing comprehensive benefits, and promoting a safe, inclusive, and engaging work environment.

Employee well-being, development, and workplace satisfaction remain key priorities. The Board regularly reviews human capital policies to ensure they align with the Group's long-term strategy and core values, while supporting the continued growth and resilience of the business.

The need to foster the company's business relationships with suppliers, customers and others

The successful execution of the Group's strategy relies on strong, collaborative relationships with suppliers, customers, regulators, and other key stakeholders. Orient Telecoms is committed to nurturing these relationships through transparency, integrity, and mutual benefit, underpinned by a clearly defined set of core principles.

These principles are embedded in the Group's General Business Principles, which are reviewed and approved by the Board on a regular basis to ensure they remain aligned with the Group's strategic direction and operational realities. Similarly, the Group's Supplier Principles set out expectations for ethical conduct, sustainability, and legal compliance, providing a consistent framework for evaluating new and existing business relationships.

Management actively monitors stakeholder priorities, with a particular focus on key customers and strategic partners. Feedback is gathered through various touchpoints across business functions to ensure that stakeholder expectations are fully integrated into service delivery and business planning.

The Board plays an active role in this process by reviewing management proposals, strategy updates, and investment decisions through a stakeholder lens. Directors also receive regular briefings on stakeholder engagement activities, including updates from operations, project teams, and customer service functions, enabling them to maintain oversight of relationship health across the Group's value chain.

This approach ensures that stakeholder considerations are embedded in decision-making, supporting the Group's long-term resilience and reputation in the markets in which it operates.

The impact of the company's operations on the community and the environment

The Group recognises that its long-term success is closely linked to its ability to operate responsibly within the communities it serves and to minimise its environmental impact. These considerations are central to the Group's strategic ambitions - particularly in its efforts to navigate the evolving telecommunications and technology landscape while maintaining a strong societal and regulatory licence to operate.

The Board receives regular updates on environmental, social, and ethical matters to ensure these factors are incorporated into both strategic and operational decision-making. This includes briefings on environmental and safety performance, updates from the Chief Ethics & Compliance Officer, and reports from the Chief Internal Auditor.

In 2020, members of the Board and relevant Committees conducted site visits to various Orient operations and overseas offices to gain first-hand insight into local practices and stakeholder engagement efforts. Where feasible, these visits also included direct dialogue with external stakeholders to better understand community expectations and environmental challenges.

The Group remains committed to continuous improvement in sustainability practices, including efficient use of energy, responsible procurement, and maintaining a positive presence in the communities where it operates. These efforts help ensure that Orient Telecoms remains a trusted and responsible partner in its markets.

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 continues to recognise the pivotal role Orient Telecoms plays in society and remains deeply committed to fostering meaningful engagement with all stakeholders. This includes customers, employees, suppliers, regulators, investors, and broader communities. Such engagement is not only integral to the Group's values but also central to achieving its long-term strategic ambitions.

Throughout FY2025, the Group sustained and expanded its collaborative efforts with a wide range of stakeholders - including industry partners, government agencies, academic institutions, and in select instances, competitors - through mutually beneficial business initiatives and knowledge-sharing forums. These engagements have continued to inform the Board's strategic oversight and provided deeper insights into emerging market needs and opportunities.

The Board values its long-standing relationships with key customers and institutional investors, and recognises the importance of maintaining a two-way dialogue. Continuous stakeholder feedback helps shape investment decisions, service development, and broader strategic direction.

To further strengthen the quality of Board-level oversight, internal guidance was updated during the year to ensure management proposals more clearly reflect stakeholder considerations. This initiative aims to improve the consistency and transparency of how the Group integrates stakeholder priorities into business planning.

Additionally, the Board actively participates in stakeholder engagement activities and, where appropriate, holds direct discussions with key parties to better understand their expectations, concerns, and evolving priorities. This reinforces Orient Telecoms' commitment to responsible governance, inclusive decision-making, and building enduring, trust-based relationships.

Sayed Mustafa Ali

Director

19 August 2025