REG - GSTechnologies Ltd - Interim Results
20/12/2022 07:00
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RNS Number : 2293K GSTechnologies Ltd 20 December 2022
20 December 2022
GSTechnologies Limited
("GST" or the "Company", or, together with its subsidiaries, the "Group")
Interim Results for the six months ended 30 September 2022
GSTechnologies Limited (LSE: GST), the fintech company, announces the
Company's interim results for the six months ended 30 September 2022.
Period Highlights
· First full reporting period following the completion of the acquisition of
Angra Limited ("Angra") in February 2022, a UK-based foreign exchange and
payment services company. During the period, Angra traded profitably, in
line with the Board's expectations
· Completion of the acquisition of UAB Glindala ("Glindala"), a holder of a
Crypto Currency Exchange Licence registered in Lithuania, in August 2022
· Agreement entered into to dispose of EMS Wiring Systems Pte Ltd ("EMS"), a
non-core loss-making business, to a member of its management team
· GS Money Stablecoin Regulatory Sandbox application process commenced
· Net loss for the period of US$1,153,000 (H1 2021: US$1,094,000 loss) as EMS
continued to underperform and the Company invested in developing its GS Money
solutions
· As of 30 September 2022, the Company had US$3,334,000 in cash and cash
equivalents (30 September 2021: US$2,749,000)
Post Period Highlights
· Group's transition to focus purely on next-generation digital money solutions
achieved with the completion of the disposal of EMS, just after the period
end, on 5 October 2022
· GS20 Exchange soft launched in November 2022
Chairman's Statement
I'm pleased to present on behalf of the board of directors of GST (the
"Board") the interim report of the Company for the six months ended 30
September 2022.
The period was again one of significant progress for the Group as it focused
on the Company's plans to launch a borderless neobanking platform providing
next-generation digital money solutions. In particular, the agreement to
dispose of EMS, completed just after the period end, will enable the Group to
focus solely on its stated strategy as a 'pure play' fintech group and has
removed a non-core loss making business from the Group.
EMS, based in Singapore, provides wireless, electronic cabling, security, and
other solutions to clients operating in the infrastructure development
space. In the period it saw revenues decline and it continued to be loss
making, as a limited number of new contracts were won and trading conditions
remained difficult. The binding agreement entered into on 17 July 2022 has
subsequently seen EMS disposed of to Teo Chiah Chiu Raphael ("Raphael Teo"),
the Chairman of EMS. The consideration paid was the transfer to the Company,
by way of a share buyback, 60,000,000 ordinary shares of no par value in GST
held by him (the "Consideration Shares"). At the closing mid-price of 1.09p
of the Company's shares on 15 July 2022, the Consideration Shares were valued
at £654,000 and they represented approximately 3.87 per cent. of the
Company's issued share capital. The Company intends to hold the
Consideration Shares in treasury for future issue or cancellation in due
course.
The primary focus for the Group has, since early 2021, been on the 'GS
Fintech' subsidiaries in the UK and Singapore and the Company's expansion into
blockchain related technologies applied to the financial services sector,
specifically its plans to launch a borderless neobanking platform providing
next-generation digital money solutions. During the period the Company has
made significant progress in implementing its stated strategy to roll-out a
suite of offerings under its GS Money banner based on three initial use-cases:
international money transfers, borderless accounts, and private stablecoin.
Following the completion of the acquisition of Angra, a UK-based foreign
exchange and payment services company, announced on 8 March 2022, Angra has
been successfully integrated within the Group and was a consolidated
subsidiary throughout the period.
Angra, which operates under the AngraFX brand name, is an established
Financial Conduct Authority ("FCA") approved Authorised Payment Institution
("API"), conducting fast, secure, and low-cost foreign exchange business and
payment services internationally, the first pillar of GS Money. Angra has
provided the Group with an operating business in the UK and an API licence in
order to be able to connect to traditional banking payment systems and agent
networks, operate a remittance business in the UK and ultimately grow revenues
from the stablecoin network and applications that are being developed.
During the period Angra traded profitably, in line with the Board's
expectations.
On 24 August 2022, the Company completed the acquisition of Glindala, a holder
of a Crypto Currency Exchange Licence, registered in Lithuania. Glindala's
Crypto Currency Exchange Licence is supervised by the Lithuanian Financial
Crime Investigation Service ("FCIS") and it covers two types of crypto
activities, cryptoasset exchange services, both crypto-fiat and crypto-crypto,
and cryptoasset depository wallet services, including generating and storing
encrypted client keys. The Company believes the exchange will be a
significant enabler for its GS Money stablecoin business and will integrate
well with Angra.
Following the acquisition of Glindala, GST entered into an agreement with an
exchange infrastructure technology partner to provide the technology and
software to run the exchange and integrate it with the Company's other
offerings. Post period end, on 16 November 2022, the Company was pleased to
announce the soft launch of its cryptoasset exchange, the GS20 Exchange.
Glindala was also renamed to GS Fintech UAB, trading as the GS20 Exchange.
GS Fintech UAB is being led by Shayne Tan, the Company's COO, who has been
appointed as the CEO of the GS20 Exchange.
The GS20 cryptoasset exchange, based in Lithuania, will focus on offering spot
trading and over-the-counter trading desk services for popular cryptoassets,
such as Bitcoin, Ethereum and USDT, and other regulated stablecoins, to a
controlled group of retail account holders, as well as a select number of
institutional participants, including existing customers of Angra. The GS20
Exchange is not a pure cryptocurrency exchange, so users can expect to see
greater technology integration with regulated stablecoins as well as the
introduction of more convenient onramp and offramp services for those
stablecoins in due course. During the soft launch period, participants have
full access to the GS20 Exchange, serving as its first official users.
Those accepted by GS20 Exchange to take part in its soft launch and commence
trading on the platform are required to give feedback on their experience
using the exchange. This feedback is already providing substantive data
which is allowing the GST team to better assess users' needs for the
development of the finalised user experience of the GS20 cryptoasset exchange.
As a further key pillar of the stablecoin activities that the Group intends to
carry out in strategic jurisdictions, including the UK, the Company appointed
Pinsent Masons LLP as its legal advisor to assist with the Company's
stablecoin application for admission to the FCA Regulatory Sandbox. Founded
on the precept that innovation and technology can benefit consumers and the
financial services industry, the FCA Regulatory Sandbox provides a production
environment for firms to test innovative propositions in the market with real
consumers.
The Pinsent Masons team have been advising on the application to the FCA,
which has made substantial progress, including refining GS Fintech's
stablecoin business plan and ensuring the proposed technical and operational
procedures are compliant with all electronic money and relevant payments
regulations in the UK.
Utilising the FCA Regulatory Sandbox is designed is to encourage more
participants to experiment with the Company's fiat-linked (full-reserve
backed) stablecoins, that were launched in late November 2021, and conduct
stress tests in the stablecoin-based payment system, in a similar manner to
how it performs in the banking world. Ultimately, the Company's goal is to
be the first publicly quoted company to obtain an electronic money institution
licence from the FCA to issue stablecoins and provide trusted stablecoin-based
payments services to the UK market and beyond.
Summary
GS Money is intended to make cross-border payments quick and affordable to an
addressable market of millions of participants by netting and settling trades
through its stablecoin-based payments network. With the acquisition of
Angra, the Group now has an FCA approved API conducting fast, secure, and
low-cost foreign exchange business and payment services internationally, and
the first pillar of GS Money in place. In 2023 we will be looking to grow
revenues substantially from this business via the stablecoin network and
applications that are being developed.
Unlocking the demand for a large user base also requires a platform that can
meet the clearing and settlement needs of both retail and institutional
customers with high compliance and security standards. The acquisition of
Glindala and subsequently its transformation into the GS20 Exchange has
provided such a platform.
With the Angra and GS20 Exchange platforms in place, the FCA Regulatory
Sandbox application being progressed, and further progress being made on the
development of the Company's GS Money solutions, coupled with the disposal of
EMS, GST has come a long way in a short period of time. We are now a
focused, 'pure play' fintech group with a solid platform on which build and to
role out our GS Money solutions. We will also continue to explore any
further value enhancing acquisition opportunities that may become available
and that can assist with accelerating the development of the Group.
Whilst we will continue to invest in developing the Group's stablecoin-based
cross-border payments network, with a firm focus on minimising costs, the
disposal of EMS has removed a significant drag on our finances. I therefore
believe there is a very bright future for GST and I look forward to reporting
on our further progress in the coming months.
Tone Kay Kim GOH
Chairman
Financial Highlights
· Despite the contribution from Angra, the continued poor performance
of EMS resulted in a decrease in revenue for H1 2022 to US$1,799,000 (H1 2021:
US$2,261,000).
· As of 30 September 2022, the Company had US$3,334,000 in cash and
cash equivalents (30 September 2021: US$2,749,000).
· Net loss for the period of US$1,153,000 (H1 2020: US$1,094,000 loss).
Despite the positive contribution from Angra, the poor performance of EMS in
the period was the major contributing factor to the increased net loss for the
period.
Enquiries:
The Company
Tone Goh, Executive Chairman +65 6444 2988
Financial Adviser
VSA Capital Limited +44 (0)20 3005 5000
Simon Barton / Pascal Wiese
Broker
OvalX +44 (0)20 7392 1400
Tom Curran / Thomas Smith
Financial PR & Investor Relations
IFC Advisory Limited +44 20 (0) 3934 6630
Tim Metcalfe / Graham Herring / Florence Chandler gst@investor-focus.co.uk
For more information please see: https://gstechnologies.co.uk/
(https://gstechnologies.co.uk/)
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the period 1 April 2022 to 30 September 2022
6 months ended 30 September
Notes 2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Net operating income
Sales 1,799 2,261
Other income 49 92
1,848 2,353
Net operating expense
Continuing Operations 6 (2,915) (3,447)
Foreign exchange loss (86) (0)
Operating loss (1,153) (1,094)
Income tax expense - -
Net loss for the year (1,153) (1,094)
Other comprehensive loss
Movement in foreign exchange reserve (521) (58)
Total comprehensive loss for the year (1,674) (1,152)
Net Loss for the year attributable to:
Equity holders for the parent (1,153) (1,094)
Non-controlling interest - -
Total comprehensive loss for the year attributable to:
Equity holders for the parent (1,674) (1,152)
Non-controlling interest 20 - -
(Loss)/Earnings per share attributable to members
of the Parent
Basic (loss) per share 9 (0.00074) (0.00090)
Diluted (loss) per share 9 (0.00074) (0.00090)
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
As at 30 September 2022
6 months ended 30 September
Notes 2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 11 3,334 2,749
Trade and other receivables 12 3,038 2,638
Other Assets 299 299
Work in progress 15 198 272
Inventories 13 16 8
Total current assets 6,885 5,966
Non-current assets
Property, plant and equipment 14 305 192
Intangible Assets 16 44 6
Total non-current assets 349 198
TOTAL ASSETS 7,234 6,164
EQUITY
Share Capital 19 7,795 5,331
Reserves (1,336) (768)
Retained Earnings (2,126) (637)
Total Equity 4,333 3,926
Equity attributable to owners of the parent 4,333 3,926
Non-controlling equity interest 20 - -
4,333 3,926
LIABILITIES
Current liabilities
Trade and other payables 21 1,974 818
Loans payable 22 261 222
Total current liabilities 2,235 1,040
Non-current liabilities
Lease Liabilities 7 -
Loans payable 22 659 1,198
Total current liabilities 666 1,198
Total Liabilities 2,901 2,238
TOTAL EQUITY & LIABILITIES 7,234 6,164
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the period 1 April 2022 to 30 September 2022
6 months ended 30 September
Notes 2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations (1,153) (1,094)
Adjustments:
Depreciation of property, plant and equipment 61 81
Exchange loss 19 2
Operating loss before working capital changes (1,073) (1,011)
Decrease/(Increase) in inventories - 10
Decrease/(Increase) in trade and other receivables (759) 711
(Decrease)/Increase in trade and other payables 979 (317)
Net cash flow used in operating activities (853) (607)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and equipment (115) -
Net cash flow from investing activities (115) -
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares - 1,907
Decrease in loans payable (281) (235)
Forex reserves (521) (58)
Net cash flow from financing activities (802) 1,614
Net increase/(decrease) in cash and cash equivalents (1,770) 1,007
Cash and cash equivalents at beginning of the year 5,104 1,742
Cash and cash equivalents at end of the year 11 3,334 2,749
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
For the period 1 April 2022 to 30 September 2022
Shareholder Capital FX Reserve Retained Earnings Total
2022 CONSOLIDATED US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2022 7,795 (815) (973) 6,007
Comprehensive Income
Loss for the year - - (1,153) (1,153)
Other comprehensive loss for the year - (521) - (521)
Total comprehensive loss for the year - (521) (1,153) (1,674)
Balance at 30 September 2022 7,795 (1,336) (2,126) 4,333
Notes to the Financial Statements
Accounting Policies
1. General Information
1.1 Corporate information
The consolidated financial statements of GSTechnologies Ltd (the "Company")
and its subsidiaries (collectively referred to as the "Group" for the
financial period from 1 April 2022 and ended 30 September 2022 were authorised
for issue in accordance with a resolution of the Directors on 20 December
2022.
The registered office of GSTechnologies Ltd, the ultimate parent of the Group,
is Ritter House, Wickhams Cay II, Road Town, Tortola, BVI VG1110.
The principal activity of the Company comprises of fintech services through
the use of blockchain technology; and the provision of data infrastructure,
storage and technology services by its subsidiaries.
2. Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB) and adopted by the
European Union (EU) as they apply to the financial statements of the Group for
the period 1 April 2022 to 30 September 2022.
The consolidated financial statements have been prepared on a historical cost
convention basis, except for certain financial instruments that have been
measured at fair value. The consolidated financial statements are presented in
US dollars and all values are rounded to the nearest thousand except when
otherwise indicated.
2.1 Consolidation
The consolidated financial statements comprise the financial statements of the
Group as of 30 September 2022, and for the period then ended.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control, and continue to be consolidated until
the date when such control ceases.
The financial statements of the subsidiaries are prepared for the same
reporting period as the GSTechnologies Ltd (parent company), using consistent
accounting.
All intra-group balances, transactions, unrealised gains and losses resulting
from intra-group transactions and dividends are eliminated in full.
Total comprehensive income within a subsidiary is attributed to the
non-controlling interest even if it results in a deficit balance. A change
ownership interest of a subsidiary, without a loss of control, is accounted
for as an equity transaction.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more
businesses. A business combination is accounted for by applying the
acquisition method, unless it is a combination involving entities or
businesses under common control. The business combination will be accounted
for from the date that control is attained, whereby the fair value of the
identifiable assets acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business combination, any
asset or liability resulting from a contingent consideration arrangement is
also included. Subsequent to initial recognition, contingent consideration
classified as equity is not re-measured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as an asset
or liability is re-measured in each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the change in
value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations are
expensed to the statement of comprehensive income. The acquisition of a
business may result in the recognition of goodwill or a gain from a bargain
purchase.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
liabilities at the date of the consolidated financial statements, and the
reported amounts of revenues and expenses during the reporting period.
Estimates and assumptions are continuously evaluated and are based on
management's experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. However,
actual outcomes would differ from these estimates if different assumptions
were used and different conditions existed.
In particular, the Group has identified the following areas where significant
judgements, estimates and assumptions are required, and where actual results
were to differ, may materially affect the financial position or financial
results reported in future periods. Further information on these and how they
impact the various accounting policies is in the relevant notes to the
consolidated financial statements.
Going concern
This report has been prepared on the going concern basis, which contemplates
the continuation of normal business activity and the realisation of assets and
the settlement of liabilities in the normal course of business.
At 30 September 2022, the Group held cash reserves of US$3,334,000 (2021:
US$2,749,000).
On this basis, the Directors believe that there are sufficient funds to meet
the Group's working capital requirements.
The Group recorded a loss of US$ 1,153,000 for the six months ended 30
September 2022 and had net assets of US$4,333,000 as of 30 September 2022
(2021: loss of US$1,094,000 and net assets of US$3,926,000).
Subsidiaries Angra Ltd and GS Fintech are expected to contribute profit to the
Group.
Accruals
Management has used judgement and prudence when estimating certain accruals
for contractor claims. The accruals recognised are based on work performed but
are before settlement.
Contingencies
By their nature, contingencies will only be resolved when one or more
uncertain future events occur or fail to occur. The assessment of the
existence, and potential quantum, of contingencies inherently involves the
exercise of significant judgement and the use of estimates regarding the
outcome of future events. Please refer to Note 23 for further details.
The preparation of the Company's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent
liabilities at the end of each reporting period. Uncertainty about these
assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in the
future periods.
Judgements made in applying accounting policies
Management is of the opinion that there are no significant judgements made in
applying accounting estimates and policies that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period are discussed below. The
Company based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions
about future developments, however, may change due to market changes or
circumstances arising beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.
Provision for expected credit losses (ECL) on trade receivables and contract
assets
ECLs are unbiased probability-weighted estimates of credit losses which are
determined by evaluating a range of possible outcomes and taking into account
past events, current conditions and assessment of future economic conditions.
The Company uses a provision matrix to calculate ECLs for trade receivables
and contract assets. The provision rates are based on days past due for
groupings of various customer segments that have similar loss patterns. The
provision matrix is initially based on the Company's historical observed
default rates. The Company will calibrate the matrix to adjust historical
credit loss experience with forward-looking information. At every reporting
date, historical default rates are updated and changes in the forward- looking
estimates are analysed.
The assessment of the correlation between historical observed default rates,
forecast economic conditions and ECLs is a significant estimate. The amount of
ECLs is sensitive to changes in circumstances and of forecast economic
conditions. The Company's historical credit loss experience and forecast of
economic conditions may also not be representative of customer's actual
default in the future.
The carrying amount of the Company's trade receivables at the end of the
reporting period is disclosed in Note 12 to the financial statements.
Revenue recognition
The Company uses the percentage-of-completion method to account for its
contract revenue. The stage of completion is measured in accordance with the
accounting policy stated in Note 5. Significant assumptions are required in
determining the stage of completion, the extent of the contract cost incurred,
the estimated total contract cost and the recoverability of the contracts. In
making these assumptions, management has relied on past experience and the
work of specialists.
Significant judgement is also required to assess allowance made for
foreseeable losses, if any, where the contract cost incurred for any job
exceeds its contract sum. The carrying amounts of contract balances at the
reporting date are disclosed in Note 15 to the financial statements.
Allowance for inventory obsolescence
The Company reviews the ageing analysis of inventories at each reporting date,
and makes provision for obsolete and slow moving inventory items identified
that are no longer suitable for sale. The net realisable value for such
inventories are estimated based on the most reliable evidence available at the
reporting date. These estimates take into consideration market demand,
competition, selling price and cost directly relating to events occurring
after the end of the financial year to the extent that such events confirm
conditions existing at the end of the financial year. Possible changes in
these estimates could result in revisions to the valuation of inventories. The
carrying amounts of the Company's inventories at the reporting date are
disclosed in Note 13 to the financial statements.
4. Adoption of new and amended standards and interpretations
There are several new Accounting standards and interpretations issued by the
IASB that are not yet mandatorily applicable to the Group and have not been
applied in preparing these consolidated financial statements. The Group does
not plan to adopt these standards early.
These standards are not expected to have a material impact on the Group in the
current or future reporting periods.
5. Summary of significant accounting policies
Property, plant and equipment
Plant and equipment are shown at cost less accumulated depreciation and
impairment losses. The initial cost of an asset comprises its purchase price
or construction cost, any costs directly attributable to bringing the asset
into operation, any incidental cost of purchase, and associated borrowing
costs. The purchase price or construction cost is the aggregate amount paid
and the fair value of any other consideration given to acquire the asset.
Directly attributable costs include employee benefits, professional fees and
costs of testing whether the asset is functioning properly. Capitalised
borrowing costs include those that are directly attributable to the
construction of mining and infrastructure assets.
Property, plant and equipment relate to plant, machinery, fixtures and
fittings and are shown at historical cost less accumulated depreciation and
impairment losses.
The depreciation rates applied to each type of asset are as follows:
Plant and machinery 2 to 10 years
Motor Vehicles 2 to 10 years
Fixtures and fittings 3 years
Lease Improvements 5 years
Subsequent expenditure is capitalised when it is probable that future economic
benefits from the use of the asset will be increased. All other subsequent
expenditure is recognised as an expense in the period in which it is incurred.
Assets that are replaced and have no future economic benefit are derecognised
and expensed through profit or loss. Repairs and maintenance which neither
materially add to the value of assets nor appreciably prolong their useful
lives are charged against income. Gains/ losses on the disposal of fixed
assets are credited/charged to income. The gain or loss is the difference
between the net disposal proceeds and the carrying amount of the asset.
The asset's residual values, useful lives and methods of depreciation are
reviewed at each reporting period and adjusted prospectively if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Financial instruments
(a) Financial assets
(i) Classification, initial recognition and measurement
The Company classifies its financial assets into the following measurement
categories: amortised cost; fair value through other comprehensive income
(FVOCI); and fair value through profit or loss (FVPL).
Financial assets are recognised when, and only when the entity becomes party
to the contractual provisions of the instruments.
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at FVPL, transaction costs
that are directly attributable to the acquisition of the financial assets.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Trade receivables are measured at the amount of consideration to which the
Company expects to be entitled in exchange for transferring promised goods or
services to a customer, excluding amounts collected on behalf of third party,
if the trade receivables do not contain a significant financing component at
initial recognition.
(ii) Subsequent measurement
Debt instruments
Subsequent measurement of debt instruments depends on the Company's business
model for managing the asset and the contractual cash flow characteristics of
the asset. The Company only has debt instruments at amortised cost.
Financial assets that are held for the collection of contractual cash flows
where those cash flows represent solely payments of principal and interest are
measured at amortised cost. Financial assets are measured at amortised cost
using the effective interest method, less impairment. Gains and losses are
recognised in profit or loss when the assets are derecognised or impaired, and
through the amortisation process.
Debt instruments of the Company comprise cash and cash equivalents and trade
and other receivables.
Equity instruments
On initial recognition of an investment in equity instrument that is not held
for trading, the Company may irrevocably elect to present subsequent changes
in fair value in other comprehensive income which will not be reclassified
subsequently to profit or loss. Dividends from such investments are to be
recognised in profit or loss when the Company's right to receive payments is
established. For investments in equity instruments which the Company has not
elected to present subsequent changes in fair value in other comprehensive
income, changes in fair value are recognised in profit or loss.
(iii) Derecognition
A financial asset is derecognised where the contractual right to receive cash
flows from the asset has expired. On derecognition of a financial asset in its
entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been
recognised in other comprehensive income for debt instruments is recognised in
profit or loss.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Company becomes
a party to the contractual provisions of the financial instrument. The Company
determines the classification of its financial liabilities at initial
recognition.
All financial liabilities are recognised initially at fair value plus in the
case of financial liabilities not at FVPL, directly attributable transaction
costs.
(ii) Subsequent measurement
After initial recognition, financial liabilities that are not carried at FVPL
are subsequently measured at amortised cost using the effective interest
method. Gains and losses are recognised in profit or loss when the liabilities
are derecognised, and through the amortisation process.
Financial liabilities measured at amortised cost comprise trade and other
payables.
(iii) Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. On derecognition, the difference
between the carrying amounts and the consideration paid is recognised in
profit or loss.
Offsetting
Financial assets and liabilities are offset and the net amount presented in
the statement of financial position when, and only when, the Company has a
legal right to offset the amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously
Cash and cash equivalents
Cash and cash equivalents are measured at fair value, based on the relevant
exchange rates at balance sheet date. Cash and cash equivalents comprise cash
balances and short-term deposit that are readily convertible to known amount
of cash and that are subject to an insignificant risk of changes in their fair
value and are used by the Company in the management of its short-term
commitments. For the purpose of the consolidated statement of cash flows, cash
and cash equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
Impairment
Financial Assets
The Company recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at FVPL and contract assets. ECLs are based on the
difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Company expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is recognised for credit losses expected
over the remaining life of the exposure, irrespective of timing of the default
(a lifetime ECL).
For trade receivables and contract assets, the Company applies a simplified
approach in calculating ECLs. Therefore, the Company does not track changes in
credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Company has established a provision matrix that is
based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment which could
affect debtors' ability to pay.
The Company considers a financial asset in default when contractual payments
are past due for more than 90 days. However, in certain cases, the Company may
also consider a financial asset to be in default when internal or external
information indicates that the Company is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the Company. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
Non-financial assets
The carrying amounts of the Company's non-financial assets, other than
inventories, are reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. An impairment loss is recognised if the
carrying amount of an asset or its related cash-generating unit (CGU) exceeds
its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use
and its fair value less costs to sell. For the purpose of impairment testing,
the recoverable amount is determined on an individual asset basis unless the
asset does not generate cash inflows that are largely independent of those
from other assets. If this is the case, the recoverable amount is determined
for the CGU to which the asset belongs. If the recoverable amount of the asset
(or CGU) is estimated to be less than its carrying amount, the carrying amount
of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is
recognised as an impairment loss in profit or loss.
An impairment loss for an asset other than goodwill is reversed only if, there
has been a change in the estimates used to determine the asset's recoverable
amount since the last impairment loss was recognised. The carrying amount of
this asset is increased to its revised recoverable amount, provided that this
amount does not exceed the carrying amount that would have been determined
(net of any accumulated amortisation or depreciation) had no impairment loss
been recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognised
in profit or loss
Trade and other payables
Trade and other payables are non-derivative financial liabilities that are not
quoted in an active market. It represents liabilities for goods and services
provided to the Group prior to the year end and which are unpaid. These
amounts are unsecured and have 7-30 day payment terms. Trade and other
payables are presented as current liabilities unless payment is not during
within 12 months from the reporting date. They are recognised initially at
their fair value and subsequently measured at amortised cost using the
effective interest method.
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost using the effective interest (EIR) method. The fair value
implies the rate of return on the debt component of the facility. This rate of
return reflects the significant risks attaching to the facility from the
lenders' perspective.
Determination of Fair Values
A number of the Company's accounting policies and disclosures require the
determination of fair value, for both financial and non-financial assets and
liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. When applicable, further
information about the assumptions made in determining fair values is disclosed
in the notes specific to that asset or liability.
Trade and other receivables
The fair values of trade and other receivables are estimated as the present
value of future cash flows, discounted at the market rate of interest at the
measurement date. Current receivables with no stated interest rate are
measured at the original invoice amount if the effect of discounting is
immaterial. Fair value is determined at initial recognition and, for
disclosure purposes, at each annual reporting date.
Non-derivative financial liabilities
Non-derivative financial liabilities are measured at fair value at initial
recognition and for disclosure purposes, at each annual reporting date. Fair
value is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the
measurement date.
Other financial assets and liabilities
The carrying amount of financial assets and liabilities with a maturity of
less than one year is assumed to approximate their fair values.
Provisions
Provisions are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value is a
pre-tax amount that reflects current market assessments of the time value of
money, and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
Finance income
Interest income is made up of interest received on cash and cash equivalents.
Deferred taxation
Deferred income tax is provided using the balance sheet method on temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary
differences.
Deferred income tax assets are recognised for all deductible temporary
differences, carry forward of unused tax credits and unused tax losses, to the
extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses, can be utilised, except: In respect of
deductible temporary differences associated with investments in subsidiaries,
deferred income tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred income tax assets is reviewed at the end of
each reporting period and reduced to the extent that it is no longer probable
that sufficient taxable profit 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 the end of each reporting period and are recognised
to the extent that it has become probable that future taxable profit will be
available to allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that
are expected to apply to the year when the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred income tax assets and deferred income tax liabilities are offset if a
legally enforceable right exists to set off current tax assets against current
income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.
Foreign currencies
i) Functional and presentation currency
The consolidated financial statements are presented in US dollars, which is
the Group's presentation currency.
ii) Transaction and Balances
Transactions in foreign currencies are initially recorded in the functional
currency at the respective functional currency rates prevailing at the date of
the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the spot rate of exchange ruling at the
reporting dates. All differences are taken to the profit or loss, should
specific criteria be met.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate as at the date of the initial
transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
iii) Group Companies
The results and financial position of foreign operations (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
• Assets and liabilities for each statement of
financial position presented as translated at the closing rate at the date of
the statement of financial position;
• Income and expenses for each income statement and
statement of profit or loss and other comprehensive income are translated at
average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transactions dates, in which
case income and expenses are translated at the dates of the transactions); and
• All resulting exchange differences are recognised
in other comprehensive income.
Revenue Recognition
Revenue is measured based on the consideration to which the Company expects to
be entitled in exchange for transferring promised goods or services to a
customer, excluding amounts collected on behalf of third parties.
Revenue is recognised when the Company satisfies a performance obligation by
transferring a promised good or service to the customer, which is when the
customer obtains control of the good or service. A performance obligation may
be satisfied at a point in time or over time. The amount of revenue recognised
is the amount allocated to the satisfied performance obligation.
Rendering of services
Revenue from rendering of services is recognised as performance obligations
are satisfied. Payments are due from customers based on the agreed billing
milestone stipulated in the contracts or based on the amounts certified by the
customers.
Where performance obligations are satisfied over time as work progresses,
revenue is recognised progressively based on the percentage of completion
method. The stage of completion is assessed by reference to the cost incurred
relative to total estimated costs (input method). The related costs are
recognised in profit or loss when they are incurred, unless they relate to
future performance obligations.
If the value of services rendered for the contract exceeds payments received
from the customer, a contract asset is recognised and presented separately on
the balance sheet. The contract assets are transferred to receivables when the
entitlement to payment becomes unconditional. If the amounts invoiced to the
customer exceeds the value of services rendered, a contract liability is
recognised and separately presented in the statement of financial position.
Interest Income
Interest income is recognised using the effective interest method. When a
receivable is impaired, the Group reduces the carrying amount to its
recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues unwinding
the discount as interest income.
Contract assets and liabilities
Contract assets primarily relate to the Company's rights to consideration for
work completed but not billed at the reporting date on project work. Contract
assets are transferred to trade receivables when the rights become
unconditional. This usually occurs when the Company invoices the customer.
Contract liabilities primarily relate to advance consideration received from
customers and progress billings issued in excess of the Company's rights to
the consideration.
6. Net Operating Expenses
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Continuing Operations
Costs of goods sold 516 1,217
Employee Cost 1,650 1,151
Travel Expenses 6 3
Admin Expense 393 813
Lease Expenses 38 1
Distribution, Advertising and promotion 12 4
General Expenses 46 105
Depreciation of property plant and equipment 61 81
Doubtful accounts 156 -
Interest on lease expenses 2 3
Occupancy costs 15 43
Finance costs 20 26
2,915 3,447
7. Key Management Personnel
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Directors' emoluments 301 229
8. Employee costs
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Wages and salaries 207 91
Wages and salaries - Cost of sales 836 722
Other employee costs 306 109
Total 1,349 922
9. Earnings per share
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Loss for the period attributable to members of the parent (1,153) (1,094)
Basic loss per share is calculated by dividing the loss attributable
to owners of the Parent by the weighted average number of ordinary
share in issue during the period.
Basic weighted average number of ordinary shares in issue 1,548,558,192 1,215,794,502
Basic loss per share-cents (0.00074) (0.00090)
Diluted loss per share-cents (0.00074) (0.00090)
10. Segment Reporting
The consolidated entity's operating segments have been determined with
reference to the monthly management accounts used by the chief operating
decision maker to make decisions regarding the consolidated entity's
operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board has been
determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being information
data technology and infrastructure.
The revenues and results are those of the consolidated entity as a whole and
are set out in the statement of profit and loss and other comprehensive
income. The segment assets and liabilities of this segment are those of the
consolidated entity and are set out in the Statement of Financial Position.
11. Cash and Cash Equivalents
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Cash at Bank 3,334 2,749
12. Trade and Other Receivables
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Trade Receivables 1,258 1,228
Prepayments 1,431 63
Other Receivables 349 1,347
3,038 2,638
13. Inventories
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Inventories 16 8
14. Property, Plant and Equipment
Right-of-Use Assets Building and improvts Furniture & Office Equipment Vehicle Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
As at 31 March 2022 403 52 581 139 1,175
Additions / Transfer in - 106 9 - 115
Adjustments/Forex translation (23) (3) (39) (8) (73)
As at 30 September 2022 380 155 551 131 1,217
Accumulated depreciation
As at 31 March 2022 296 52 474 83 905
Charge for the year 29 12 15 5 61
Adjustments/Forex translation (17) (4) (29) (4) (54)
As at 30 September 2022 308 60 460 84 912
Net book value
As at 31 March 2022 107 - 107 56 270
As at 30 September 2022 72 95 91 47 305
15. Work in Progress
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Contract assets 198 272
Contract assets primarily relate to the Company's right to consideration for
work completed but not billed at the reporting date. If the value of services
rendered exceeds payments received from the customer, a contract assets is
recognised and presented separately. The contract assets is transferred to
receivables when the entitlement to payment becomes unconditional.
16. Intangible Assets
US$'000
Opening net book value 1 April 2021 44
Addition -
Amortisation charge -
Closing net book value 30 September 2021 44
There was no impairment during the period.
17. Subsidiaries
Details of the Company's subsidiaries as of 30 September 2022 are as follows:
Name of Subsidiary Place of Incorporation Proportion of Proportion
Ownership of Voting
Interest Power
Golden Saint Technologies Australia 100 100
(Australia) Pty Ltd
EMS Wiring Systems Pte. Ltd Singapore 100 100
GS Fintech Ltd UK 100 100
GS Fintech Pte Ltd Singapore 100 100
Angra Limited UK 100 100
UAB Glindala Lithuania 100 100
18. Taxation
Unrecognised tax losses
Where the realisation of deferred tax assets is dependent on future taxable
profits, losses carried forward are recognised only to the extent that
business forecasts predict that such profits will be available to the
companies in which losses arose.
The parent, GSTechnologies Ltd, is not liable to corporation tax in BVI, so it
has no provision for deferred tax. However, Golden Saint Technologies
(Australia) Pty Ltd is liable to tax in Australia, EMS Wiirng Systems Pte Ltd
and GS Fintech Pte Ltd is liable for tax in Singapore while Angra Limited and
GS Fintech Ltd is liable in UK.
19. Share Capital and Reserves
The share capital of the Company is denominated in UK Pounds Sterling. Each
allotment during the period was then translated into the Group's functional
currency, US Dollars at the spot rate on the date of issue.
Authorised Number of Shares US$'000
Ordinary Shares
As at 31 March 2021 1,193,482,002 2,077
Issues during the period
1 Apr 2021 - 30 Sep 2022 355,076,190 5,718
As at 30 September 2022 1,548,558,192 7,795
20. Non-Controlling Equity Interest
All entities within the Group are currently 100% owned and accordingly a
non-controlling interest does not arise.
21. Trade and Other Payables
6 months ended 30 September
2022 2021
US$'000 US$'000
(Unaudited) (Unaudited)
Trade Payables 1,034 223
Accruals 555 485
Unearned revenue 284 -
Other Payables 35 43
Lease liabilities 66 67
1,974 818
Trade payables are non-interest bearing and are normally settled on 60-day
terms.
22. Loans Payable
30-September 2022 30-September 2021
Term Current Non-current Current Non-current
US$'000 US$'000 US$'000 US$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Loan 1 5 years 176 616 136 975
Loan 2 3 years 85 43 86 223
261 659 222 1,198
23. Commitments and Contingencies
The Group is subject to no material commitments or contingent liabilities.
24. Subsequent Events
As announced, on 5 October 2022, the disposal of its subsidiary, EMS Wiring
Systems Pte Ltd, was completed via share buyback of 60,000,000 no par value
ordinary shares to be held in treasury. The current total number of voting
rights is 1,488,558,192.
25. Financial risk management objectives and policies
The Group's activities expose it to a variety of financial risks. The Group's
Board provides certain specific guidance in managing such risks, particularly
as relates to credit and liquidity risk. Any form of borrowings requires
approval from the Board and the Group does not currently use any derivative
financial instruments to manage its financial risks. The key financial risks
and the Group's major exposures are as follows:
Credit risk
The maximum exposure to credit risk is represented by the carrying amount of
the financial assets. In relation to cash and cash equivalents, the Group
limits its credit risk with regards to bank deposits by only dealing with
reputable banks. In relation to sales receivables, the Group's credit risk is
managed by credit checks for credit customers and approval of letters of
credit by the Group's advising bank.
Foreign Currency Risk
Currency risk is the risk that the value of a financial instrument will
fluctuate due to changes in foreign exchange rates. The company is exposed to
currency risk on sales and purchases, that are denominated in foreign
currencies.
26. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due.
The Group monitors its risk to a shortage of funds using a combination of cash
flow forecasts, budgeting and monitoring of operational performance.
27. Capital management
Capital includes equity attributable to the equity holders of the parent.
Refer to the statement of changes in equity for quantitative information
regarding equity.
The Group's primary objectives when managing capital are to safeguard its
ability to continue as a going concern in order to provide returns for
shareholders. For details of the capital managed by the Group as of 30
September 2022, please see Note 19.
The Group is not subject to any externally imposed capital requirements.
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