REG - GSTechnologies Ltd - Interim Results
17/12/2024 07:00
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RNS Number : 3069Q GSTechnologies Ltd 17 December 2024
17 December 2024
GSTechnologies Limited
("GST" or the "Company", or, together with its subsidiaries, the "Group")
Interim Results for the six months ended 30 September 2024
GSTechnologies Limited (LSE: GST), the fintech company, announces the
Company's unaudited interim results for the six months ended 30 September 2024
("H1 25" or the "Period").
Period Highlights
· Further significant progress for the Group as it focused on
developing a borderless neobanking platform providing next-generation digital
money solutions, both organically and through complementary acquisitions
· Revenue for the Period grew nearly nine fold to US$2.23 million (H1
24 US$0.26 million), as the Group continued to execute its strategy and all
Group entities demonstrated significant growth and expansion of their
operations
· Net loss for the Period reduced to US$69k (H1 24: US$737k loss) as
the Company's operating businesses gain traction whist the Group continues to
invests in developing its GS Money solutions
· Placing to raise gross proceeds of £1.25 million in April 2024 at
1.05 pence per share
· As of 30 September 2024, the Company had US$2.91 million in cash and
cash equivalents (30 September 2023: US$2.19 million)
· Net assets as at 30 September 2024 increased significantly to US$7.13
million compared to US$4.38 million at 30 September 2023, following the
acquisition of Semnet and the progress of the Group's businesses
Post Period Highlights
· On 18 November 2024 GST signed a legally binding Heads of Terms with
Trident Global Capital Pte Ltd, regarding strategic preparations for a
potential listing of Sement on NASDAQ in the US
· On 11 December 2024 the Company's wholly owned subsidiary GS Fintech
UAB entered into a legally binding Business Purchase Agreement to acquire the
business and assets of Cake Pte. Ltd. and Cake DeFi UAB. The acquisition
comprises a leading cryptocurrency investment platform, Bake, and is in line
with the Company's strategy to expand and enhance the international presence
and capabilities of its GS20 Exchange platform
Chairman's Statement
I am 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 2024.
Operational review
Angra Global
Angra Global operates under the AngraFX and Angra Global brand names and is an
FCA approved Authorised Payment Institution ("API"), as well as holding a
Canadian Money Services Business ("MSB") licence.
Angra Global provides a multi-currency e-wallet service, currently covering
Sterling, Euro, US Dollar, Canadian Dollar, Chinese Yuan Renminbi and US
Dollar Tether Token transactions. This service enables Angra customers to
securely store their funds within Angra Global business accounts and
facilitate seamless foreign exchange conversions and fund transfers through
Angra's established and reliable banking partnerships, akin to a conventional
business bank account, utilising technology developed by the Group's
subsidiary in Singapore, GS Fintech Pte Ltd. Additionally, the MSB licence
enables Angra to issue Sterling local accounts and Euro SEPA IBAN accounts to
its clients, thereby providing a comprehensive one-stop business banking
solution.
Angra has experienced substantial revenue growth during H1 25, which has
continued post Period end. This growth has been closely linked to a
significant rise in client volumes as the business continues to gain traction
and market share following the establishment of Angra Global in H1 24. The
Group's focus has been on expanding Angra's operations and sales teams as part
of the Group's strategic intention for Angra Global to be a B2B-focused
Neobank. By increasing headcount in these critical areas, Angra has
effectively bolstered its service delivery capabilities, allowing the company
to meet heightened demand while maintaining high service standards.
In addition to operational improvements, Angra is actively targeting over
2,000 UK-based Small Payment Institutions ("SPIs") as part of its growth
strategy. This targeted approach aims to build a larger UK-focused client
base for the company. Through these efforts, Angra is seeking to enhance its
footprint, particularly in the UK market, capitalizing on rising demand for
reliable and efficient foreign exchange services among SPIs.
GS20 Exchange
The Group's GS Fintech UAB business is a holder of a Crypto Currency Exchange
Licence, registered in Lithuania, and launched the Company's GS20 cryptoasset
exchange in November 2022. The GS20 Exchange is offering spot trading and
over-the-counter trading desk services for popular cryptoassets, although it
is not a pure cryptocurrency exchange.
The GS20 Exchange continues to attract increasing interest from high-net-worth
individuals and corporate clients, leading to a steady rise in account
openings and transaction volumes. The positive growth trend is in line with
the Board's expectations for the exchange within the crypto asset market.
Operationally, the GS20 Exchange has been focused on ensuring its technology
is robust and appropriately enabled for future growth. The GS20 Exchange has
made a number of improvements during the Period and it is expected that 2025
will be a pivotal year for the sector. The GS20 Exchange is well-positioned
to benefit substantially from this favourable market outlook.
As part of the GS20 Exchange's growth plans, Noewe UAB, a Lithuania-based
professional services firm, was recently engaged. This partnership aims to
align GS Fintech UAB's financial year-end reporting with the Group's 31 March
year-end. Additionally, Noewe UAB is providing guidance on regulatory
compliance expectations through 2025, which will be invaluable in ensuring
regulatory adherence is maintained and supporting GS Fintech UAB's ongoing
growth.
Post Period end, on 11 December 2024, we were pleased to announce that GS
Fintech UAB had entered into a legally binding Business Purchase Agreement to
acquire the business and assets of Cake Pte. Ltd. and Cake DeFi UAB (together
"CAKE"). The CAKE acquisition comprises a leading cryptocurrency investment
platform, Bake, with a particularly strong presence in the DACH region, and is
in line with the Company's strategy to expand and enhance the international
presence and capabilities of the GS20 Exchange platform, providing greater
value to both retail and institutional customers. I believe the acquisition
marks a significant step for GST in strengthening the offering and scalability
of its GS20 Exchange platform, which is central to the Company's GS Money
initiative. In particular, the acquisition will: significantly expand GS20
Exchange's user base, adding approximately 50,000 active crypto users; enhance
the GS20 Exchange's technology stack, providing seamless clearing and
settlement of cross-border cryptoasset trades and related fiat currency
payments; and create opportunities for substantial revenue growth, leveraging
CAKE's strong historic financial performance and established market
presence. The acquisition of CAKE is expected to complete on 2 January 2025.
Semnet
Prior to the start of the Period, on 6 December 2023 we announced that the
Company had entered into an agreement to acquire 66.67% of the issued share
capital of Semnet Pte Ltd ("Semnet"), a cybersecurity company based in
Singapore, for a total consideration of US$1.8 million, payable through US$0.8
million in cash and US$1.0 million in new shares in the Company. The
acquisition completed prior to the start of the Period on 29 February 2024 and
Semnet is therefore consolidated in the Group results for the whole of H1
25. The share consideration was satisfied on the nine-month anniversary of
completion, as anticipated and announced on 2 December 2024, through the
provision of 58,844,713 ordinary shares in the Company to the vendors,
allocated from the 60,000,000 ordinary shares held by the Company in
treasury. This ensured that the acquisition of Semnet did not increase the
issued share capital of the Company.
During the Period, Semnet has been focused on its core operations in
cybersecurity and hardware across the ASEAN region, together with providing
support to the Group's other businesses. Since the completion of the
acquisition, Semnet has performed ahead of the Board's expectations and given
the wider opportunities that Semnet is seeing, GST, in conjunction with
Semnet's minority shareholders, explored options for the future of the
business.
We were therefore delighted to announce, post Period end, on 15 October 2024,
the signing of a non-binding Memorandum of Understanding ("MOU") with Trident
Global Capital Pte Ltd ("TGC"), led by its director, Soon Huat Lim, who also
serves as the CEO of Nasdaq-listed Trident Digital Tech Holdings Ltd
(NASDAQ:TDTH). The MOU outlined TGC's proposed role in guiding and assisting
Semnet through strategic preparations for a potential listing on NASDAQ in the
US (the "Potential Listing"). This was followed on 18 November 2024 by GST
and TGC signing a legally binding Heads of Terms ("HoT") covering in more
detail the assistance to be provided by TGC to the Company with regard to the
Potential Listing.
The HoT contained certain legally binding clauses including:
- TGC will be responsible for, and will provide, necessary transaction
expenses of both parties, which are expected to be approximately US$2 million.
GST will commit an advance of 20% for the payment of the listing expenses and
upon a successful IPO this amount will be reimbursed to GST.
- That TGC shall identify a suitable US-based corporate finance adviser and
broker for the purpose of the Potential Listing and send a copy of its
proposed engagement letter for GST's review before it is signed.
- The parties agree that the proposed valuation ascribed to 100% of Semnet for
the Potential Listing will be US$54 million, of which GST's 67% ownership of
Semnet is agreed to be valued at US$36 million subject to the Potential
Listing being successfully completed.
We look forward to providing further updates in due course, as the Potential
Listing progresses.
Corporate
On 29 November 2023, the Company entered into an option to purchase agreement
to acquire 60% of the share capital of EasySend Ltd ("EasySend"), a Northern
Ireland incorporated company operating a cross-border payments business.
EasySend is a an FCA approved API, conducting cross-border payment services.
Completion of the acquisition of EasySend is conditional, inter alia, on final
due diligence, the entering into of definitive sale and purchase documentation
and also on GST obtaining approval from the FCA for the change of control of
EasySend, a regulated entity. Whilst the formally agreed period for entering
into a definitive sale and purchase agreement ended on 30 November 2024, the
parties continue to work towards the completion of the acquisition. In
particular, EasySend, in consultation with GST, has been working on completing
its development activities in Poland. Both parties wish to see this work
completed before completion of the acquisition. The Group's acquisition of
EasySend is therefore currently expected to complete in Q1 2025.
On 9 July 2024 the Company entered into a conditional agreement to acquire the
entire issued share capital of Bonfirepay SL ("Bonfirepay"), a company
incorporated and operating under the laws of Spain. As stated at the time of
entering into the conditional agreement, completion of the acquisition is
conditional on the finalisation of Bonfirepay's registration as a Small
Payment Institution (SPI) with the central bank of Spain, which has not yet
occurred. Additionally, we continue to conduct due diligence on
Bonfirepay. Whilst we believe the acquisition of Bonfirepay would be a good
addition to the Group, it is not an immediate strategic priority and a
decision will be taken in Q1 2025 whether to continue with this proposed
acquisition.
The Group continues to assess further potential complementary acquisition
opportunities, in addition to the acquisition of CAKE announced on 11 December
2024, and further acquisitions remain a key part of the Group's expansion
strategy.
Funding
In order to accelerate the implementation of the Group's GS Money strategy,
including via acquisition, the Company has undertaken fundraising activities,
as the Board has deemed appropriate, to facilitate the maximisation of overall
shareholder value. Against this background, on 29 April 2024 the Company
raised gross proceeds of £1,250,000 through a placing of 119,047,619 Ordinary
Shares at a price of 1.05 pence per share.
The Board is mindful of dilution for existing shareholders, and the Company
will only undertake further fundraising activities if the Board believes
additional capital is required to achieve the Company's strategic goals.
Summary
H1 25 was a period of significant development for the Group, with a
substantial increase in revenues and significantly reduced losses. We are a
focused, 'pure play' fintech group with solid platforms on which to build as
we continue to develop and roll out our GS Money solutions.
Our stated strategy with GS Money is to make cross-border payments quick and
affordable to an addressable market of millions of participants by netting and
settling trades through a stablecoin-based payments network. With Angra
Global, the Group has both an FCA approved API and a Canadian MSB licence to
enable the Group to conduct fast, secure, and low-cost foreign exchange
business and payment services internationally, together with the ability to
offer further services.
With the GS20 Exchange we have a regulated, operational, trading platform
offering spot trading and over-the-counter trading desk services for popular
cryptoassets, although it is much more than a pure cryptocurrency exchange,
providing the clearing and settlement needs of both retail and institutional
customers with high compliance and security standards.
The addition of Semnet has provided vital cybersecurity skills to the Group
and we are excited to be progressing the plans for Semnet to list on NASDAQ in
the US.
In the second half of the financial year we are looking to continue to grow
revenues substantially from all the Group's businesses and we look forward to
completing the acquisition of CAKE, and integrating it with our GS20
Exchange. We will also continue to explore further value enhancing
acquisition opportunities that can assist with accelerating the development of
the Group.
I believe GST is extremely well positioned for the future and I look forward
to reporting on our further progress in the coming months.
Tone Kay Kim GOH
Chairman
Financial Review
The Group's interim financial statements represent a full six month
contribution from all subsidiaries, including Semnet.
Income Analysis
Revenue for the Period grew nearly nine fold to US$2.23 million (H1 24 US$0.26
million), as the Group continued to execute its strategy and all Group
entities demonstrated significant growth and expansion of their operations.
Whilst the Group continues to invest in the development of its businesses,
losses narrowed significantly in the Period, reflecting more stable and
efficient operations. The net loss for the Period of US$0.07 million
compared to a net loss of US$0.74 million in H1 24. While losses persisted,
the trend of reducing losses and significantly increased revenues provides the
Board with confidence for the future of the Group.
Balance Sheet Analysis
The Group cash position improved to US$2.91 million as at 30 September 2024
(30 September 2023 US$2.20 million). The increase in cash reserves are
reflective of better cash flow management, driven by higher revenues and more
efficient cost control, coupled with the fundraise undertaken to raise gross
proceeds of £1.25 million in April 2024.
Net assets as at 30 September 2024 increased significantly to US$7.13 million
compared to US$4.38m at 30 September 2023 following the acquisition of Semnet
and the progress of the Group's businesses.
Summary
The financial performance for the Period shows marked improvement compared to
the previous year. The Group's net loss has significantly narrowed, driven by
higher revenues, especially from Semnet, GS Fintech Singapore, GS Fintech UAB
and Angra (UK). The strengthened cash position and increased net assets
suggest that the Group is on a path to sustainable financial stability.
Continued focus on profitability and operational efficiency will be critical
in maintaining this upward momentum moving forward.
Director's Responsibilities Statement
We confirm that to the best of our knowledge:
(a) the unaudited condensed interim financial statements for the Period have
been prepared in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their impact during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year); and
(c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
Enquiries:
The Company
Tone Goh, Executive Chairman
+61 8 6189 8531
Financial Adviser
First Sentinel Corporate Finance
+44 (0)20 3855 5551
Brian Stockbridge / Gabrielle Cordeiro
Broker
CMC Markets
+44 (0)20 3003 8632
Douglas Crippen
Financial PR & Investor Relations
IFC Advisory Limited
Tim Metcalfe / Graham Herring / Florence Chandler
+44 20 (0) 3934 6630
For more information please see: https://gstechnologies.co.uk/
(https://gstechnologies.co.uk/)
Unaudited condensed consolidated statement of profit or loss and other
comprehensive income for the period ended 30 September 2024
(Expressed in US$)
Unaudited Audited Unaudited
Six months Year Six months
Notes ended ended ended
30.09.2024 31.03.2024 30.09.2023
Net operating income
Revenue 6 2,227 1,466 256
Other income 7 7 88 2
2,234 1,554 258
Net operating expense
Continuing operations 8 (2,330) (2,535) (1,029)
Foreign exchange loss (15) (242) 35
Operating loss before tax (110) (1,223) (737)
Income tax expense 22 (41) - -
Net loss for the period (69) (1,223) (737)
Other comprehensive loss
Movement in foreign exchange reserve (655) 1,370 (42)
Total comprehensive loss for the period (724) 147 (779)
Net Loss for the period attributable to:
Equity holders for the parent (46) (1,223) (737)
Non-controlling interest 24 (23) 13 -
(69) (1,210) (737)
Total comprehensive loss for the period
attributable to:
Equity holders for the parent (701) 134 (779)
Non-controlling interest (23) 13 -
(724) 147 (779)
Basic (loss) per share 11 (0.00003) (0.00064) (0.00040)
Diluted (loss) per share (0.00003) (0.00064) (0.00040)
Unaudited condensed consolidated statement of financial position
as at 30 September 2024
(Expressed in US$)
Unaudited Audited Unaudited
Six months Year Six months
Notes ended ended ended
30.09.2024 31.03.2024 30.09.2023
ASSETS
Current assets
Cash and cash equivalents 13 2,917 2,611 2,198
Trade and other receivables 14 381 607 73
Other assets 277 276 277
Inventories 15 10 10 -
Total current assets 3,585 3,504 2,547
Non-current assets
Property, plant and equipment 16 514 280 43
Intangible assets 18 3,743 3,713 1,996
Total non-current assets 4,257 3,993 2,039
TOTAL ASSETS 7,842 7,497 4,586
EQUITY
Share Capital 23 12,124 10,563 9,491
Treasury Shares (808) (808) (808)
Reserves (287) 368 (960)
Retained Earnings (3,893) (3,876) (3,338)
Total Equity 7,136 6,247 4,385
Equity attributable to owners of the parent 7,103 6,195 4,385
Non-controlling equity interest 24 33 52 -
7,136 6,247 4,385
LIABILITIES
Current liabilities
Trade and other payable 25 538 1,034 201
Lease liabilities 17 19 69 -
Total current liabilities 557 1,103 201
Non-current liabilities
Lease liabilities 17 107 102 -
Loans payable 27 38 41 -
Other payable 4 4 -
Total non-current liabilities 149 147 -
Total Liabilities 706 1,250 201
TOTAL EQUITY & LIABILITIES 7,842 7,497 4,586
Unaudited condensed consolidated statement of changes in equity
for the period ended 30 September 2024
(Expressed in US$)
2024 CONSOLIDATED INTERIM (Unaudited) Shareholder Capital Treasury Shares FX Reserve Retained Earnings Total
Balance at 1 April 2024 10,563 (808) 368 (3,876) 6,247
Comprehensive Income / (Loss)
Loss for the period - - - (69) (69)
Other comprehensive loss for the period - - (655) - (655)
Total comprehensive loss for the period - - (655) (69) (724)
Transactions with owners in their capacity as owners:
Shares issued during the period 1,561 - - - 1,561
Balance at 30 September 2024 12,124 (808) (287) (3,963) 7,136
2024 CONSOLIDATED Shareholder Capital Treasury Shares FX Reserve Retained Earnings Total
(Audited)
Balance at 1 April 2023 8,281 (808) (1,002) (1,002) (2,601) 3,870
Comprehensive Income / (Loss)
Loss for the year - - - (1,223) (1,223)
Other comprehensive income for the year - - 1,370 - 1,370
Total comprehensive income/(loss) for the year - - 1,370 (1,223) 147
Transactions with owners in their capacity as owners:
Shares issued during the year 2,282 - - - 2,282
Balance at 31 March 2024 10,563 (808) 368 (3,876) 6,247
Unaudited condensed consolidated statement of cash flow for the period ended
for the period ended 30 September 2024
(Expressed in US$)
Unaudited Audited Unaudited
Six months Year Six months
Notes ended ended ended
30.09.2024 31.03.2024 30.09.2023
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations (110) (1,223) (737)
Adjustments:
Depreciation on property, plant and equipment 16 31 69 9
Impairment - 106 -
Interest expense on lease 4 3 -
Income tax 41 - -
Exchange loss 6 (52) 10
Operating loss before working capital changes (28) (1,097) (718)
Decrease/(Increase) in inventories - (10) -
Decrease/(Increase) in trade and other receivables 226 529 (5)
(Decrease)/Increase in trade and other payables (496) (1,412) (2,245)
Net cash flow used in operating activities (298) (3,048) (2,967)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (265) (254) 43
Purchase of intangible asset (30) (1,823) -
Net cash flow from investing activities (295) (2,077) 43
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares 1,561 2,282 1,210
Treasury shares - - -
Principal elements of lease payments (4) 129 (43)
Decrease in loans payable (3) (297) (338)
Forex reserves (656) 1,370 42
Net cash flow from financing activities 899 3,484 871
Net increase/(decrease) in cash and cash equivalents 306 (1,641) (2,054)
Cash and cash equivalents at beginning of the period 2,611 4,252 4,252
Cash and cash equivalents at end of the period 13 2,917 2,611 2,198
Notes to the Group Unaudited Condensed Consolidated Financial Statements
These notes form an integral part of and should be read in conjunction with
the accompanying
financial statements.
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 2024 and ended 30 September 2024 were authorised
for issue in accordance with a resolution of the Directors on 17 December
2024.
The registered office of GSTechnologies Ltd, the ultimate parent of the Group
is Luna Tower, Waterfront Drive, Road Town, Tortola, VG1110, British Virgin
Islands.
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
2.1 Statement of compliance
These condensed consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by United Kingdon Accounting Standards, including Financial
Reporting Standard 102, The Financial Reporting Standard applicable in the
United Kingdon and Ireland and the Companies Act 2006 as they apply to the
financial statements of the Group for the period 1 April 2024 to 30 September
2024.
The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting and the Disclosure and
Transparency Rules of the Financial Conduct Authority".
The annual financial statements of the Group will be prepared in accordance
with UK adopted International Financial Reporting Standards. They do not
constitute statutory accounts within the meaning of section 434(3) of the
Companies Act 2006 and should be read in conjunction with the financial
statements prepared for GSTechnologies Ltd for the twelve months ended 31
March 2024, which were prepared in accordance with International Financial
Reporting Standards (IFRS) and are available to shareholders on request. The
information for the period ended 30 September 2024 has neither been audited
nor reviewed and does not constitute statutory accounts as defined in Section
434 of the Companies Act 2006.
The information for the period ended 30 September 2024 has neither been
audited nor reviewed and does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006.
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.
The preparation of financial statements in conformity with FRS requires
management to exercise its judgement in the process of applying the Group's
accounting policies. It also requires the use of accounting estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
financial year. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates. Critical accounting estimates and assumptions used that
are significant to the financial statements, and areas involving a higher
degree of judgement or complexity, are disclosed in Note 3.
2.2 Consolidation
The consolidated financial statements comprise the financial statements of the
Group as of 30 September 2024, and for the period then ended.
The financial statements of the subsidiaries are prepared for the same
reporting period as the GSTechnologies Ltd (parent company), using consistent
accounting.
Subsidiaries are consolidated from the date on which control is transferred to
the Group to the date on which that control ceases. In preparing the
consolidated financial statements, intercompany transactions, balances and
unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Where necessary, adjustments are
made to the financial statements of subsidiaries to ensure consistency of
accounting policies with those of the Group.
Minority interest is that part of the net results of operations and of net
assets of a subsidiary attributable to interests which are not owned directly
or indirectly by the Group. It is measured at the minorities' share of the
fair value of the subsidiaries' identifiable assets and liabilities at the
date of acquisition by the Group and the minorities' share of changes in
equity since the date of acquisition, except when the losses applicable to the
minority in a subsidiary exceed the minority interest in the equity of that
subsidiary. In such cases, the excess and further losses applicable to the
minority are attributed to the equity holders of the Company, unless the
minority has a binding obligation to, and is able to, make good the losses.
When that subsidiary subsequently reports profits, the profits applicable to
the minority are attributed to the equity holders of the Company until the
minority's share of losses previously absorbed by the equity holders of the
Company has been recovered.
3. Significant accounting judgements, estimates and
assumptions
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Critical accounting 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 2024, the Group held cash reserves of US$2,917,000 (2023:
US$2,198,000).
The Directors believe that there are sufficient funds to meet the Group's
working capital requirements.
The Group recorded a loss of US$ 69,000 for the six months ended 30 September
2024 and had net assets of US$7,135,000 as of 30 September 2024 (2023: loss
of US$ 737,000 and net assets of US$4,385,000).
Subsidiaries GS Fintech UAB, Angra Limited, and Semnet Pte Ltd are expected to
contribute profit to the Group.
Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in Note 5.5. The recoverable
amounts of cash-generating units have been determined based on value-in-use
calculations.
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant
judgement is required in determining the capital allowances and deductibility
of certain expenses during the estimation of the provision for income taxes.
There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group
recognises liabilities for anticipated tax audit issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred income tax provisions in
the period in which such determination is made.
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 25 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.
Critical judgements in applying the entity's 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 14 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 is 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
IFRS 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
5.1 Revenue recognition
The Group's revenue is primarily derived from consideration paid by customers
to transfer money internationally. The Group recognises revenue when
performance obligations are satisfied, meaning when the funds are received by
the recipients.
Sale of goods
Revenue from the sale of goods is recognised when a Group entity has delivered
the products to the customer, the customer has accepted the products and
collectability of the related receivables is reasonably assured.
Component parts and products are often sold with a right of return.
Accumulated experience is used to estimate and provide for such returns at the
time of sale.
Rendering of services
Revenue from remittance services is recognised over the period in which the
services are rendered, by reference to completion of the specific transaction
assessed on the basis of the actual service provided as a proportion of the
total services to be performed. A customer enters into the contract with the
Group at the time of initiating a transfer by formally accepting the
contractual terms and conditions with the details of the performance
obligations and service fees on the Group's website.
The transaction price is comprised of the money transfer service fee and a
foreign exchange margin. The foreign exchange margin results from the
difference between the exchange rate set by the entity to the customer and the
rate sourced in the market. Both the transaction fee and foreign exchange rate
are agreed by the customer in the Group's terms and conditions. The
transaction price is readily determinable at the time the transaction is
settled. Due to the short-term nature of the Group's
Interest income
Interest income is recognised on a time-proportion basis using the effective
interest method. When a receivable is impaired, the Group reduces the carrying
amount to its recoverable amount, being the estimated future cashflow
discounted at original effective interest rate of the instrument, and
thereafter amortising the discount as interest income.
Government grants
Grants from the government are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the group will comply
with all attached conditions. Note 7 provides further information on how the
group accounts for government grants.
5.2 Property, Plant and Equipment
Measurement
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.
Depreciation
Depreciation of property, plant and equipment are computed on a straight-line
basis over the estimated useful life of the assets.
The depreciation rates applied to each type of asset are as follows:
Computer Equipment 3 years
Fixtures and fittings 3 years
Lease improvements 5 years
The residual values and useful lives of property, plant and equipment are
reviewed, and adjusted as appropriate, at each balance sheet date.
Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has
already been recognised is added to the carrying amount of the asset when it
is probable that future economic benefits, in excess of the standard of
performance of the asset before the expenditure was made, will flow to the
Group and the cost can be reliably measured. Other subsequent expenditure is
recognised as an expense during the financial year in which it is incurred.
Disposal
On disposal of an item of property, plant and equipment, the difference
between the net disposal proceeds and its carrying amount is taken to the
income statement. Any amount in revaluation reserve relating to that asset is
transferred to retained earnings.
5.3 Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition of subsidiaries,
joint ventures or associated companies over the fair value at the date of
acquisition of the Group's share of their identifiable net assets.
Trademark and licences
Acquired trademarks and licences are stated at cost less accumulated
amortisation and accumulated impairment losses (Note 5.5). Amortisation is
calculated using the straight-line method to allocate the cost of trademarks
and licenses over their estimated useful lives of 10 to 15 years.
Computer software
Acquired computer software licences are capitalised on the basis of the costs
incurred to acquire and bring to use the specific software. Direct
expenditure, which enhances or extends the performance of computer software
beyond its specifications and which can be reliably measured, is recognised as
a capital improvement and added to the original cost of the software. Costs
associated with maintaining computer software are recognised as an expense as
incurred.
Computer software licences are stated at cost less accumulated amortisation
and accumulated impairment losses (Note 5.5). These costs are amortised using
the straight-line method over their estimated useful lives of three to five
years.
5.4 Investments in subsidiaries, joint ventures and
associated companies
Investments in subsidiaries, joint ventures and associated companies are
stated at cost less accumulated impairment losses (Note 5.5) in the Company's
balance sheet. On disposal of investments in subsidiaries, joint ventures and
associated companies, the difference between net disposal proceeds and the
carrying amount of the investment is taken to the income statement.
5.5 Impairment of assets
Goodwill is tested annually for impairment, as well as when there is any
indication that the goodwill may be impaired. Impairment loss on goodwill is
not reversed in a subsequent period.
Intangible assets, property, plant and equipment and investments in
subsidiaries are reviewed for impairment whenever there is any indication that
these assets may be impaired. If any such indication exists, the recoverable
amount (i.e. the higher of the fair value less cost to sell and value in use)
of the asset is estimated to determine the amount of impairment loss.
5.6 Financial instruments
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.
Financial liabilities
i. Classification, 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.
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.
5.7 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.
5.8 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.
5.9 Interest-bearing loans and borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is
taken to the income statement over the period of the borrowings using the
effective interest method.
Borrowings which are due to be settled within twelve months after the balance
sheet date are included in current borrowings in the balance sheet even though
the original term was for a period longer than twelve months and an agreement
to refinance, or to reschedule payments, on a long-term basis is completed
after the balance sheet date and before the financial statements are
authorised for issue. Other borrowings due to be settled more than twelve
months after the balance sheet date are included in non-current borrowings in
the balance sheet.
5.10 Fair value estimation
The fair value of financial instruments traded in active markets (such as
exchange- traded and over-the-counter securities and derivatives) is based on
quoted market prices at the balance sheet date. The quoted market price used
for financial assets held by the Group is the current bid price; the
appropriate quoted market price for financial liabilities is the current ask
price. The fair value of interest-rate swaps is calculated as the present
value of the estimated future cash flow, discounted at actively quoted
interest rates. The fair value of forward foreign exchange contracts is
determined using forward exchange market rates at the balance sheet date.
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The Group uses a variety
of methods and makes assumptions that are based on market conditions existing
at each balance sheet date. Quoted market prices or dealer quotes for similar
instruments are used for long-term debt. Other techniques, such as estimated
discounted cash flows, are used to determine fair value for the remaining
financial instruments.
The carrying amount of current receivables and payables are assumed to
approximate their fair values. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash
flows at the current market interest rate that is available to the Group for
similar financial instruments.
5.11 Leases
Finance leases
Leases of assets in which the Group assumes substantially the risks and
rewards of ownership are classified as finance leases. Finance leases are
capitalised at the inception of the lease at the lower of the fair value of
the leased property and the present value of the minimum lease payments. Each
lease payment is allocated between the liability and finance charges so as to
achieve a constant rate on the finance balance outstanding. The corresponding
rental obligations, net of finance charges, are included in borrowings. The
interest element of the finance cost is taken to the income statement over the
lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Operating leases
Leases of assets in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the
lessor) are taken to the income statement on a straight-line basis over the
period of the lease.
When an operating lease is terminated before the lease period has expired, any
payment required to be made to the lessor by way of penalty is recognised as
an expense in the period in which termination takes place.
5.12 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.
5.13 Inventories
Inventories are stated at the lower of cost and net realisable value. The net
realisable value is the estimated selling price in the ordinary course of
business.
5.14 Income Tax
The income tax expense or credit for the period is the tax payable on the
current period's taxable income, based on the applicable income tax rate for
each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority
will accept an uncertain tax treatment. The group measures its tax balances
either based on the most likely amount or the expected value, depending on
which method provides a better prediction of the resolution of the
uncertainty.
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.
5.15 Provisions for other liabilities and charges
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.
5.16 Employee benefits
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the
Group pays fixed contributions into separate entities and will have no legal
or constructive obligation to pay further contributions if any of the funds do
not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years. The Group's
contribution to defined contribution plans are recognised in the financial
year to which they relate.
Termination benefits
Termination benefits are payable when employment is terminated before the
normal retirement date, or whenever an employee accepts voluntary redundancy
in exchange for these benefits. The Group recognises termination benefits when
it is demonstrably committed to either: terminating the employment of current
employees according to a detailed formal plan without possibility of
withdrawal; or providing termination benefits as a result of an offer made to
encourage voluntary.
5.17 Currency translation
i) Functional and presentation currency
Items included in the financial statements of each entity in the Group are
measured using the currency of the primary economic environment in which the
entity operates ("the functional 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) Translation of Group entities' financial statements
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
5.18 Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
is subject to risks and returns that are different from those of segments
operating in other economic environments. The analysis of revenue by type of
customer and geographical region, is set out in Note 6.
5.19 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits with financial
institution and short-term deposits 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. Bank overdrafts are included in borrowings on the
balance sheet.
5.20 Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference
shares are classified as liabilities. Incremental costs directly attributable
to the issuance of new equity instruments are taken to equity as a deduction,
net of tax, from the proceeds.
Where any Group company purchases the Company's equity share capital (Treasury
shares), the consideration paid, including any directly attributable
incremental costs (net of income taxes), is deducted from equity attributable
to the Company's equity holders until the shares are cancelled, reissued or
disposed of. Where such shares are subsequently disposed or reissued, any
consideration received, net of any directly attributable incremental
transaction costs and the related income tax effects, is included in equity
attributable to the Company's equity holders. Realised gain or loss on
disposal or reissue of Treasury shares are included in retained profits of the
Company.
5.21 Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the company, excluding any costs of
servicing equity other than ordinary shares.
• by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during
the year and excluding treasury shares (Note 11).
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account:
• The after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares.
• The weighted average number of additional ordinary shares that would have
been outstanding, assuming the conversion of all dilutive potential ordinary
shares.
5.22 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded
off to the nearest thousand in United States Dollar, unless otherwise stated.
6. Revenue
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Rendering of services 1,695 -
Transfer fees and charges 532 256
2,277 256
Revenue by geographical region:
Singapore 1,695 -
UK and others 532 256
2,277 256
Transaction fees and charges are from Angra Ltd and GS Fintech UAB with
transaction volume of US$67.20 million and US$63.20 million respectively.
7. Other income
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Interest income 5 -
Government grant 2 2
7 2
8. Net operating expenses
6 months ended 30 September
Net operating expenses 2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Continuing Operations
Costs of goods sold 936 148
Employee cost 667 402
Admin expense 491 349
Travel expense 49 22
Lease expense 46 31
Office expense 46 39
Depreciation 31 9
Occupancy cost 30 10
Distribution, advertising and promotion 23 14
Finance cost 7 7
Interest expense on lease 4 -
2,330 1,029
9. Key management personnel
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Directors' emoluments 285 183
10. Employee cost
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Wages and salaries 320 141
Staff welfare and other employee costs 62 79
Total 382 220
Average number of employees for the Group 36 18
11. Earnings per share
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Loss for the period attributable to members of the parent (69) (737)
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Parent by the weighted average number of ordinary shares in
issue during the period.
Basic weighted average number of ordinary shares in issue 2,056,187,607 1,824,745,771
Basic loss per share-cents (0.00003) (0.00040)
Diluted loss per share-cents (0.00003) (0.00040)
12. Segment reporting
The consolidated entity's operating segments have been determined with
reference to the monthly management accounts used by the chief operating
decision maker to make decisions regarding the consolidated entity's
operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board has been
determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being information
data technology and infrastructure.
The revenues and results are those of the consolidated entity as a whole and
are set out in the statement of profit and loss and other comprehensive
income. The segment assets and liabilities of this segment are those of the
consolidated entity and are set out in the Statement of Financial Position.
13. Cash and cash equivalents
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Cash at bank 2,917 2,198
14. Trade and other receivables
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Trade receivables 105 -
Prepayments 143 58
Other debtors 133 15
381 73
15. Inventories
Inventories are valued at the lower of cost and net realisable value.
Semnet Pte Ltd inventory as at 30 September 2024:
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Inventories 10 -
16. Property, plant and equipment
Right-Of-Use Furniture
Assets Renovation US$'000 & Office Software Total US$'000
(Unaudited) US$'000 Equipment US$'000 US$'000
Cost
As at 31 March 2024 202 14 171 115 502
Additions / Transfer in - 4 - 292 296
Disposal / Write-off (51) - - - (51)
Forex translation - - (72) - (72)
As at 30 September 2024 151 18 99 407 675
Accumulated depreciation
As at 31 March 2024 29 2 164 27 222
Charge for the period 23 4 3 1 31
Disposal / Write-off (20) - - - (20)
Forex translation 1 1 (72) (1) (71)
As at 30 September 2024 33 7 94 27 161
Net book value 173 12 7 88 280
As at 31 March 2024
As at 30 September 2024 118 11 4 380 514
17. Lease liabilities
Lease liabilities recognized in the balance sheet
The balance sheet shows the following amounts relating to lease liabilities
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Current 19 -
Non-current 107 -
126 -
Amounts recognized in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to
leases:
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Depreciation on ROU 23 -
Interest expense on lease 4 -
27 -
18. Intangible assets
Trademark US$'000 Goodwill US$'000 Digital Asset US$'000 Software & Total
(Unaudited) Licenses US$'000 US$'000
As at 31 March 2023 6 38 347 1,605 1,996
Additions - 1,723 100 - 1,823
Impairment - - (319) (17) (336)
As at 31 March 2024 6 1,761 358 1,588 3,713
Additions - - - 30 30
Impairment - - - - -
As at 30 September 2024 6 1,761 358 1,618 3,743
No impairment is recognized during the interim reporting period.
19. Subsidiaries
The Group's subsidiaries as at 30 September 2024 are set out below. Unless
otherwise stated, they have share capital consisting solely of ordinary
shares, and the proportion of ownership interests held equals the voting
rights held by the Group. The country of incorporation or registration is also
their principal place of business.
Name of Subsidiary Place of Incorporation Proportion of Proportion
Ownership of Voting
Interest Power
Golden Saint Technologies Australia 100 100
(Australia) Pty Ltd
GS Fintech Ltd UK 100 100
GS Fintech Pte Ltd Singapore 100 100
GS Fintech UAB Lithuania 100 100
Angra Limited UK 100 100
Angra Global Limited Canada 100 100
Semnet Pte Ltd Singapore 66.67 66.67
20. Discontinued operations
In September 2022, the Group disposed of its 100% interest its subsidiaries,
EMS Wiring Systems Pte Ltd, which management deemed as its non-core business.
This strategic decision was made to place greater focus on the Group's key
competencies in developing the "GS Fintech" subsidiaries in the UK, Lithuania
and Singapore.
September 2023 served as the comparative period following the completion of
the EMS disposal in September 2022 and preceding the acquisition of Semnet Pte
Ltd in 29 February 2024.
The reporting period September 2024 represents the first interim Group
reporting inclusive of Semnet Pte Ltd Pte Ltd.
21. Acquisition of subsidiary
On 29 February 2024 the Company acquired 66.67% of the issued share capital of
Semnet Pte. Ltd. for US$1.8 million in cash and new shares of no-par value in
the Company ("Ordinary Shares"). US$800,000 of the total consideration is
payable in cash ("Cash Consideration") and the remaining US$1.0 million
through the issue of new Ordinary Shares ("Consideration Shares"). US$580,000
of the Cash Consideration has, or will shortly, be paid and the remaining
US$220,000 is payable four months from Completion.
Semnet had a turnover of US$1.39 million and reported profit before tax of
approximately US$0.14 million for six-month period ending 30 September 2024.
The subsidiary's assets and liabilities as at 30 September 2024 were US$
567,651 and US$ 98,490 respectively.
Fair value of net identifiable assets at the date of acquisition amounted to
US$115,105 resulting in goodwill on acquisition of US$1,723,270.
The goodwill is attributable to high profitability of the acquired business
and the significant synergies expected to arise after the acquisition.
22. 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, GS Fintech Pte Ltd and
Semnet Pte Ltd is liable for tax in Singapore, Angra Limited and GS Fintech
Ltd is liable in UK, Angra Global Limited in Canada and GS Fintech UAB is
liable in Lithuania.
Tax liability of Semnet Pte Ltd as at 30 September 2024 is US$326,851
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Current income tax 368 -
Adjustments for prior year (41) -
327 -
Deferred tax expenses - -
Provision for income tax 327 -
23. Share capital and reserves
The share capital of the Company is denominated in UK Pounds Sterling. Each
allotment during the period was then translated into the Group's functional
currency, US Dollars at the spot rate on the date of issue.
Authorised Number of Shares US$'000)
1. Ordinary Shares
As at 31 March 2024 1,915,222,227 10,563
Issues during the period
1 April 2024 to 30 September 2024 119,047,169 1,561
Total shares issued as at 30 September 2024 2,034,269,896 12,124
Treasury Shares during the period (60,000,000) (808)
1 April 2024 to 30 September 2024
24. Non-controlling equity interest
All entities within the group are currently 100% owned, with the exception of
Semnet Pte Ltd, in which GST holds a 66.67% stake, while the remaining 33.33%
is owned by non-controlling interests.
25. Trade and other payables
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Trade payable 57 155
Accruals 57 20
Deferred revenue 61 -
Other payable 36 22
Income tax provision 327 4
538 201
Trade payables are non-interest bearing and are normally settled on 60-day
terms.
26. Auditor's remuneration
During the period, the Group (including its overseas subsidiaries) obtained
the following services from the company's auditors and its associates:
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Audit of the financial statements of the Company's subsidiaries 11 -
Audit-related assurance services 9 -
Tax compliance services 1 -
21 -
27. Loans payable
30-Sep-24 30-Sep-23
Term Current Non-current Current Non-current
US$0'000 US$0'000 US$0'000 US$0'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Loan 1 5 years - 38 - -
- 38 - -
28. Commitments and contingencies
The Group is subject to no material commitments or contingent liabilities.
29. Ultimate controlling parties
The Company is owned by a number of private shareholders and companies, none
of whom own more than 25% of the issued share capital of the Company.
Accordingly, there is no parent entity nor ultimate controlling party by
virtue of shareholding. Jack Bai is considered a person with significant
control (PSC).
The significant shareholders as of 30 September 2024 are the following:
Entities Quantity of Ordinary Shares Percentage of Ordinary Shares
Hargreaves Lansdown (Nominees) Limited 408,358,428 20.68%
Securities Services Nominees Limited 215,840,560 10.93%
HSDL Nominees Limited 174,194,947 8.82%
Interactive Investor Services Nominees Limited 165,958,382 8.41%
James Brearley Crest Nominees Limited 139,358,082 7.06%
Bai Guojin 124,200,000 6.29%
Chong Loong Fatt Garies 122,612,081 6.21%
Wise MPay Pte Ltd 100,000,000 5.07%
30. Related party transactions
The following is the significant related party transactions entered into by
the Company with related parties on terms agreed between the parties:
6 months ended 30 September
2024 2023
US$'000 US$'000
(Unaudited) (Unaudited)
Rendering of services to parent company 273 -
Rendering of services to related parties 23 -
296 -
31. 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:
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.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. A sensitivity analysis is not presented, as all borrowing costs have
been capitalised as at 31 March 2024; therefore, profit or loss and equity
would have not been affected by changes in the interest rate.
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.
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.
Numbers in the table below represent the gross, contractual, undiscounted
amount payable in relation to the financial liabilities.
On Demand Less than three months Three to twelve One to five years Total
months
US$'000 US$'000 US$'000 US$'000 US$'000
As of 30 September 2024:
Trade and other payables 538 538
32. 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 2024, please see Note 23.
The Group is not subject to any externally imposed capital.
33. Events after balance sheet date
Semnet
On 6 December 2023 the Company had entered into an agreement to acquire 66.67%
of the issued share capital of Semnet Pte Ltd ("Semnet") for a total
consideration of US$1.8 million, payable through US$0.8 million in cash and
US$1.0 million in new shares in the Company. The acquisition completed prior
on 29 February 2024. The share consideration was satisfied on the nine-month
anniversary of completion, as anticipated and announced on 2 December 2024,
through the provision of 58,844,713 ordinary shares in the Company to the
vendors, allocated from the 60,000,000 ordinary shares held by the Company in
treasury. On 15 October 2024 the Company signed a non-binding Memorandum of
Understanding ("MOU") with Trident Global Capital Pte Ltd ("TGC"). The MOU
outlined TGC's proposed role in guiding and assisting Semnet through strategic
preparations for a potential listing on NASDAQ in the US (the "Potential
Listing"). This was followed on 18 November 2024 by GST and TGC signing a
legally binding Heads of Terms ("HoT") covering in more detail the assistance
to be provided by TGC to the Company with regard to the Potential Listing.
CAKE
On 11 December 2024 GS Fintech UAB entered into a legally binding Business
Purchase Agreement to acquire the business and assets of Cake Pte. Ltd. and
Cake DeFi UAB (together "CAKE") for an undisclosed cash consideration.
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