REG - GSTechnologies Ltd - Results for the year ended 31 March 2022
28/07/2022 07:00
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RNS Number : 9886T GSTechnologies Ltd 28 July 2022
28 July 2022
GSTechnologies Limited
("GST" or the "Company" or the "Group")
Results for the year ended 31 March 2022
GSTechnologies Limited (LSE: GST), the fintech and information technology
solutions company, is pleased to announce the Company's audited results for
the year ended 31 March 2022.
Period Highlights
· Focus on the Company's expansion into blockchain-related
technologies, specifically its plans to launch a borderless neobanking
platform providing next-generation digital money solutions
· Collaboration agreement signed with Wise MPay to provide the
Company with software and services to facilitate the Company's fintech plans
· Completion of the acquisition of Angra Limited, a UK-based foreign
exchange and payment services company
· Entering into a legally binding sale and purchase agreement to
acquire the whole of the issued share capital of UAB Glindala, a holder of a
Crypto Currency Exchange Licence registered in Lithuania
· Appointment of Jack Bai as CEO, Shayne Tan as COO and Galvin Bai as
an Executive Director
· Three equity fund raises, each at incrementally higher prices,
providing gross proceeds of £3.74 million to fund the Group's fintech
expansion plans
Post Period Highlights
· On 17 July 2022 the Company entered into a binding agreement to
sell EMS Wiring Systems
· Significant further progress in implementing the Group's stated
strategy to roll-out a suite of offerings under its GS Money banner
CHAIRMAN'S STATEMENT
During the year, the primary focus of the Group was on developing the 'GS
Fintech' subsidiaries in the UK and Singapore, established just before the
start of the financial year. This involves the Company's expansion into
blockchain-related technologies, specifically its plans to launch a borderless
neobanking platform providing next-generation digital money solutions. This
expansion was undertaken whilst still retaining sufficient focus on our EMS
Wiring Systems Pte Ltd ("EMS Wiring Systems") business as it recovered from
the worst of the Covid-19 pandemic.
GS Fintech
In May 2021 the Company entered into a collaboration agreement with Wise MPay
Pte, Ltd ("Wise MPay"), the Singaporean blockchain payment solution provider,
with a view to Wise MPay providing the Company with software and services to
facilitate the Company's fintech plans. Under the agreement, Wise MPay is
supplying the Company with a number of standard and bespoke software packages
which include, inter alia, software to enable the Company to establish a
remittance portal (GSend), an eWallet app (GS Money), Know Your Client (KYC)
administration and an encryption engine. These software packages being
supplied by Wise MPay are being integrated on the Company's cloud server,
together with software supplied by the Company and third-party payment gateway
packages.
Additionally, Wise MPay supplied during the year four enterprise blockchain
consensus nodes that came with 25 million stake tokens each, based on the
Coalculus blockchain platform, to enable transaction validation on the
Coalculus network for transactions undertaken by GST's proposed customers in
US dollars, Euros, Sterling and Chinese Yuan. On 30 November 2021, we
reported that we had successfully tested all four of the enterprise chains
provided by Wise MPay, together with implementing a mainnet upgrade on the
Coalculus platform, provided by Wise MPay. This marked the launch of the GS
Money protocol. This was followed on 17 December 2021 by GST receiving 100
million COAL tokens from Wise MPay and the enabling of the COAL token staking
capability on four full nodes managed by the Company. The web remittance
portal and complex blockchain e-wallet application is currently under
development in conjunction with Wise MPay.
The four digital currencies are strictly pegged to the US Dollar, the Pound,
the Euro and the Yuan which has allowed GST to carry out transactions through
blockchain ledgers, which can be used in place of wire transfers that
generally take several days to complete. The four enterprise chains work
alongside one another to form a decentralised and highly efficient
multicurrency cross border payment system for digital transactions that
utilise the Coalculus blockchain ledger technology. Additionally, each
enterprise chain's total supply will allow GST to issue up to 10 billion
digital currency units.
The future roll-out of GS Money is intended to be focused on three initial
use-cases: international money transfers, borderless accounts and private
stablecoins. GS Money will initially be used in restricted cross-border
payment testing before being gradually expanded to include commercial
activities. Ultimately it is intended that GS Money will also be focused on
private stablecoin. The objective is to establish public trust, maintain
stability, and enable claims backed by reserves. By establishing a private
stablecoin ecosystem, GST intends to encourage market players to allow
transactions to settle in GS Money digital currencies, as well as be
integrated into various other payment services. The Company is aware of the
regulatory treatment of GS Money's stablecoins and is exploring the
possibility of providing the proposed services in strategic jurisdictions,
including the UK.
On 7 March 2022, just before the period end, we were delighted to complete the
acquisition of Angra Limited ("Angra"), a UK-based foreign exchange and
payment services company. This followed the UK Financial Conduct Authority
("FCA") approval for the change of control of Angra.
Angra, which operates under the AngraFX brand name, is an established FCA
approved Authorised Payment Institution ("API"), conducting fast, secure and
low-cost foreign exchange business and payment services internationally. We
intend to utilise Angra as the basis on which to build the UK arm of the
Group's planned blockchain-enabled neobanking business. Since the completion
of the acquisition Angra has been successfully integrated within the Group and
is trading in line with the GST Board's expectations.
To further enhance the Group's neobanking offerings, the Company announced on
20 January 2022 that it had entered into a legally binding sale and purchase
agreement to acquire the whole of the issued share capital of UAB Glindala
("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 completion of
the acquisition is subject only to the approval of the FCIS. The Company
understands that approval will be granted shortly upon the completion of
certain administrative matters by the Lithuanian authorities. The Company
believes the exchange will be a significant enabler for its GS Money
stablecoin business, forming the third pillar for GS Money, and will integrate
well with Angra and its other activities.
During the year the Company has made significant progress in implementing its
stated strategy to roll-out a suite of offerings under its GS Money and this
progress has continued at a rapid pace post period end.
EMS Wiring Systems
Following the unprecedented events in the previous financial year with the
onset of the Covid-19 pandemic, 2021/22 was a year of gradual recovery for our
EMS Wiring Systems business as the worst of the pandemic receded. EMS Wiring
Systems remained a predominantly Singapore focused business providing
wireless, electronic cabling, security, and other solutions to clients
operating in the infrastructure development space. Whilst its revenue for
the year recovered to US$4.19 million (2021: US$2.83 million), it continued to
be loss making and made a net loss of US$0.56 million (2021: net loss of
US$0.13 million, after receiving US$0.58 million of Covid-19 related financial
assistance from the Singapore Government).
Post period end on 18 July 2022 the Company announced that on 17 July 2022, it
had entered into a binding agreement to sell EMS Wiring Systems, to Teo Chiah
Chiu Raphael ("Raphael Teo"), the Chairman of EMS. The consideration payable
by Raphael Teo for the entire issued share capital of EMS Wiring Systems,
which is currently held by the Company, will be the transfer to the Company,
by way of a share buyback, of 60,000,000 ordinary shares in GST held by him.
The Company intends to hold the consideration shares in treasury for future
issue or cancellation in due course. Completion of the disposal is
conditional, inter alia, on completion of the buyback of the consideration
shares, and the Company and EMS Wiring Systems entering into a deed of
agreement to waive all outstanding liabilities between the Company and EMS
Wiring Systems.
We look forward to completing the disposal shortly, which is in line with our
strategy to concentrate on our blockchain enabled neobanking activities. In
particular, it removes a lossmaking subsidiary from the Group, that is not
part of our future plans, and will enable us to focus all our resources on
accelerating the roll out of our suite of GS Money offerings.
Fund Raising
During the year the Company undertook three fund raises, each pleasingly at
incrementally higher prices to fund its fintech expansion plans: on 6
September 2021 the Company raised gross proceeds of £1.41 million through a
placing of 141,500,000 ordinary shares at a price of 1.0p per share; on 19
November
2021, with a placing of 50,000,000 ordinary shares at a price of 2.0p per
share, the Company raised gross proceeds of £1.00 million; and on 11 January
2022 a placing and subscription raised gross proceeds of £1.33 million
through the issue of 63,576,190 ordinary shares at a price of 2.1p per share.
Management Changes
In October 2021 we were delighted to announce that Mr Bai GuoJin ("Jack Bai"),
an existing Executive Director, was appointed as the Company's new Chief
Executive Officer. Jack Bai, who joined the GST board in January 2021, has
over 30 years' experience in software development for the financial and
telecommunication industries. He is a successful technology entrepreneur,
who has successfully built and exited multiple companies, including in fintech
and payment solutions. He is a co-founder of Wise MPay, the Company's
collaboration partner, and leads the development of the Coalculus blockchain
technology. He is leading the Group's blockchain technology activities and
its plans to launch a borderless neobanking platform providing next-generation
digital money solutions.
Later in October 2021, we were also delighted to announce that Mr. Tan Guan
Han, Shayne ("Shayne Tan"), an existing Executive Director, was appointed as
the Company's new Chief Operating Officer. Shayne Tan, who joined the GST
board in January 2021, holds a Bachelor of Business Management Degree from
Singapore Management University and has more than five years of sales,
operations, and management experience in growth-stage companies operating
exclusively within the blockchain and cryptocurrency sector. He is, alongside
Jack Bai, a co-founder of the Coalculus blockchain platform.
The Company's board was further strengthened from 1 March 2022 with the
appointment of Mr Bai Zhencong ("Galvin Bai") as an Executive Director of the
Company. Galvin Bai has over 15 years' experience in a variety of business
development and process implementation roles, including at All Best Enterprise
Pte Ltd, the Singapore based regulated money transfer and exchange company.
Galvin has considerable experience of the workflows and processes involved in
payment and remittance businesses, including the implementation of Know Your
Client ("KYC") and Anti-Money Laundering ("AML") processes. Galvin has a
degree in Manufacturing Engineering from Boston University in the USA.
Summary
The year to 31 March 2022 was a pivotal one for the Company and one in which
we made great progress in implementing our strategy to drive forward our GS
Fintech plans. With the signing of the collaboration agreement with Wise
Mpay we have been able to access the required knowledge and resources to build
a world-class blockchain-enabled neobanking platform. The acquisition of
Angra, completed just before the end of the financial year, has added an
established UK platform for our activities and coupled with the anticipated
completion of the acquisition of Glindala shortly we believe we are very well
positioned for the next stage of our development with the role out of our GS
Money offerings commercially.
In closing I would like to take the opportunity to thank all our staff for
their outstanding commitment and hard work during the year, and our
shareholders for their continuing support. GST has come a long way in a very
short period of time and I believe we are very well positioned to roll out our
borderless neobanking platform. Following the completion of the disposal of
EMS Wiring Systems the Group will be able to focus all its resources on
developing its blockchain enabled neobanking activities and it will be a 'pure
play' fintech group. I look forward to the remainder of 2022 and beyond with
confidence.
Tone Kay Kim GOH
Chairman
FINANCIAL REVIEW
The Group's financial statements include a full 12-month contribution from EMS
Wiring Systems and Angra has been consolidated from 7 March 2022.
Income Analysis
For the 12-months ended 31 March 2022 the Company had operating revenue of
US$4.24 million (2021: US$2.83 million). The Group's operating loss before tax
for the financial year is US$1.43 million, compared to the operating loss
incurred in previous financial year of US$0.50 million. In addition, the
Group received grants and other income during the year of US$0.24 million
(2021: US$0.58 million), leading to total income recognised in the year of
US$4.47 million (2021: US$3.41 million).
Angra for the period from 7 March to 31 March 2022 had US$10.28 million in
transaction volume, which contributed US$0.05 million in revenue to the Group.
EMS Wiring Systems, despite slowly recovering sales to record US$4.19 million
for the year (2021: US$2.83 million), remained loss making due to margin
pressures, bad debts and the requirement for continued research and
development.
Balance Sheet Analysis
Net assets as at 31 March 2022 amounted to US$6.01 million (2021: US$1.82
million).
As at 31 March 2022, the Group had available cash of US$5.10 million, an
increase of US$3.36 million from the preceding financial year (2021: US$1.74
million) due to new share issuance proceeds during the year.
The Directors believe that the Group is in a stable financial position and has
the financial resources to enable it to expand and grow its current operations
and meet all its current liabilities, together with the ability to access
further capital should an appropriate need arise.
Enquiries:
The Company
Tone Goh, Executive Chairman +65 6444 2988
Financial Adviser
VSA Capital Limited +44 (0)20 3005 5000
Simon Barton / Pascal Wiese
Broker
ETX Capital +44 (0)20 7392 1400
Tom Curran / Thomas Smith
Financial PR & Investor Relations
IFC Advisory Limited +44 20 (0) 3934 6630
gst@investor-focus.co.uk (mailto:gst@investor-focus.co.uk)
Tim Metcalfe / Graham Herring / Florence Chandler
For more information please see: https://gstechnologies.co.uk/
(https://gstechnologies.co.uk/)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
For the financial year ended 31 March 2022
Notes 2022 2021
US$'000 US$'000
Net operating income
Sales 6 4,238 2,830
Other income 236 578
4,474 3,408
Net operating expense
Continuing Operations 7 (5,903) (3,903)
Foreign exchange loss (1) (0)
Operating loss (1,430) (495)
Income tax expense - 5
Net loss for the year (1,430) (490)
Other comprehensive loss
Movement in foreign exchange reserve (105) 156
Total comprehensive loss for the year (1,535) (334)
Net Loss for the year attributable to:
Equity holders for the parent (1,430) (490)
Non-controlling interest - -
Total comprehensive loss for the year attributable to:
Equity holders for the parent (1,535) (334)
Non-controlling interest 21 - -
(Loss)/Earnings per share attributable to members
of the Parent
Basic (loss) per share 10 (0.00106) (0.00041)
Diluted (loss) per share 10 (0.00105) (0.00041)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
Notes 2022 2021
US$'000 US$'000
ASSETS
Current assets
Cash and cash equivalents 12 5,104 1,742
Trade and other receivables 13 2,445 2,081
Other Assets 299 299
Work in progress 16 32 193
Inventories 14 16 18
Total current assets 7,896 4,333
Non-current assets
Property, plant and equipment 15 270 275
Intangible Assets 17 44 6
Total non-current assets 314 281
TOTAL ASSETS 8,210 4,614
EQUITY
Share Capital 20 7,795 2,077
Reserves (815) (710)
Retained Earnings (973) 457
Total Equity 6,007 1,824
Equity attributable to owners of the parent 6,007 1,824
Non-controlling equity interest 21 - -
6,007 1,824
LIABILITIES
Current liabilities
Trade and other payables 22 894 1,006
Lease liabilities 15 66 129
Loans payable 23 502 445
Total current liabilities 1,462 1,580
Non-current liabilities
Lease Liabilities 15 42 -
Loans payable 23 699 1,210
Total current liabilities 741 1,210
Total Liabilities 2,203 2,790
TOTAL EQUITY & LIABILITIES 8,210 4,614
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2022
Notes 2022 2021
US$'000 US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations (1,430) (495)
Adjustments:
Depreciation of property, plant and equipment 162 180
Exchange loss (0) -
Goodwill (38) -
Operating loss before working capital changes (1,306) (315)
Decrease/(Increase) in inventories 2 (5)
Decrease/(Increase) in trade and other receivables (364) (880)
Decrease in capital work in progress 161 54
(Decrease)/Increase in trade and other payables (251) 285
Net cash flow used in operating activities (1,758) (861)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and equipment (159) (160)
Proceeds from disposal of property, plant and equipment - -
Net cash flow from investing activities (159) (160)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares 5,718 273
Principal elements of lease payments 118 118
Increase in loans payable (454) 1,655
Forex reserves (103) 156
Net cash flow from financing activities 5,279 2,202
Net increase/(decrease) in cash and cash equivalents 3,362 1,181
Cash and cash equivalents at beginning of the year 1,742 561
Cash and cash equivalents at end of the year 12 5,104 1,742
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2022
Shareholder Capital FX Reserve Retained Earnings Total
2022 CONSOLIDATED US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2021 2,077 (710) 457 1,824
Comprehensive Income
Loss for the year - - (1,430) (1,430)
Other comprehensive loss for the year - (105) - (105)
Total comprehensive loss for the year - (105) (1,430) (1,535)
Transactions with owners in their
capacity as owners:
Shares issued during the year 5,718 - - 5,718
5,718 - - 5,718
Balance at 31 March 2022 7,795 (815) (973) 6,007
Shareholder Capital FX Reserve Retained Earnings Total
2021 CONSOLIDATED US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2020 1,804 (866) 947 1,885
Comprehensive Income
Loss for the year - - (490) (490)
Other comprehensive loss for the year - 156 - 156
Total comprehensive loss for the year - 156 (490) (334)
Transactions with owners in their
capacity as owners:
Shares issued during the year 273 - - 273
273 - - 273
Balance at 31 March 2021 2,077 (710) 457 1,824
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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 year ended 31 March 2022 were authorised for issue in accordance
with a resolution of the Directors on 27 July 2022. The shares of the Company
are publicly traded on the London Stock Exchange.
The registered office of GSTechnologies Ltd, the ultimate parent of the Group,
is Ritter House, Wickhams Cay II, Tortola VG1110, British Virgin Islands.
The principal activity of the Group is data infrastructure, storage and
technology services.
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) as adopted by the
European Union (EU) as they apply to the financial statements of the Group for
the year ended 31 March 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 at 31 March 2022, and for the year 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 located 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 31 March 2022, the Group held cash reserves of $5.10 million (2021: 1.74
million).
The Directors believe that there are sufficient funds to meet the Group's
working capital requirements.
The Group recorded a loss of US$1.43 million for the year ended 31 March 2022
and had net assets of US$6.01 million as at 31 March 2022 (2021: loss of $0.49
million and net assets of US$1.82 million).
With the disposal of the unprofitable subsidiary EMS, the continuing
subsidiaries will be Angra Ltd and GS Fintech subsidiaries which are expected
to contribute profit to the Group.
Accruals
Management have 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 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.
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 13 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 16 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 14 to the financial statements.
4. Adoption of new and amended standards and interpretations
The Group adopted all of the new and revised Standards and Interpretations
issued by the IASB that are relevant to its operations and effective for
annual reporting periods beginning on or after 1 April 2021. It has been
determined by the Group, there is no impact, material or otherwise, of the new
and revised standards and interpretations on its business and therefore no
change is necessary to Group accounting policies.
Any new or amended Accounting Standards or Interpretations that are not yet
mandatory have not been early adopted.
5. Summary of significant accounting policies
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 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 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:
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 comprise cash balances 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. For the purpose of the
statement of cash flows, pledged deposits are excluded whilst bank overdrafts
that are repayable on demand and that form an integral part of the Company's
cash management are included in cash and cash equivalents.
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.
Income tax
Tax expense comprises current and deferred tax. Current tax and deferred tax
is recognised in profit or loss except to the extent that it relates to a
business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
years.
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 date. 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. Revenue
2022 2021
US$'000 US$'000
Rendering of services 4,193 2,830
Transfer Fees and Charges 45 -
4,238 2,830
Transaction fees and charges are from the newly acquired Angra Ltd with
transaction volume of US$10.28 million for period 7-31 March.
The disaggregation of revenue is as follows:
2022 2021
US$'000 US$'000
Singapore 4,193 2,830
UK and others 45 -
4,238 2,830
7. Net Operating Expenses
2022 2021
US$'000 US$'000
Continuing Operations
Costs of goods sold 2,012 1,118
Employee Cost 2,538 1,951
Travel Expenses 5 1
Admin Expense 594 455
Lease Expenses 24 - 5
Distribution, Advertising and promotion 32 18
General Expenses 66 33
Depreciation of property plant and equipment 162 170
Doubtful accounts 71 -
Interest on lease expenses 3 9
Occupancy costs 64 19
Finance costs 332 134
5,903 3,903
8. Key management personnel
2022 2021
US$'000 US$'000
Directors' emoluments 391 229
9. Employee cost
2022 2021
US$'000 US$'000
Wages and salaries 749 479
Wages and salaries - Cost of sales 1,583 1,226
Staff welfare and other employee costs 206 246
Total 2,538 1,951
10. Earnings per share
2022 2021
US$'000 US$'000
Loss for the period attributable to members (1,430) (490)
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Parent by the weighted average number of ordinary share in issue
during the year.
Basic weighted average number of ordinary 1,354,950,456 1,028,482,002
shares in issue
Basic loss per share-cents (0.00106) (0.00041)
Diluted loss per share-cents (0.00105) (0.00041)
11. Segment Reporting
The consolidated entity's operating segments have been determined with
reference to the monthly management accounts used by the chief operating
decision maker to make decisions regarding the consolidated entity's
operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board as a whole
has been determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being information
data technology and infrastructure.
The revenues and results are those of the consolidated entity as a whole and
are set out in the statement of profit and loss and other comprehensive
income. The segment assets and liabilities of this segment are those of the
consolidated entity and are set out in the Statement of Financial Position.
12. Cash and cash equivalents
2022 2021
US$'000 US$'000
Cash at bank 5,104 1,742
13. Trade and Other Receivables
2022 2021
US$'000 US$'000
Trade receivables 814 1,291
Less: Allowance for expected credit losses (71) -
743 1,291
Advances to supplier (i) 1,287 -
Due from related party (see note 26) 258 -
Other receivables 157 790
2,445 2,081
(i) The collaboration agreement with Wise Mpay to supply
the Company with software and services for its fintech plans is reflected as
advances to supplier pending completion. The web remittance portal and complex
blockchain e-wallet application is currently under development and is still a
work in progress.
14. Inventories
2022 2021
US$'000 US$'000
Inventories 329 334
Less: Allowance for inventory obsolescence (313) (316)
16 18
The movement in the allowance for inventory obsolescence is as follows:
2022 2021
US$'000 US$'000
Balance at beginning of year 316 290
Additional allowance for inventory obsolescence -3 26
Balance at end of year 313 316
15. Property, plant and equipment
Right-of-Use Assets Building and improvts Furniture & Office Equipment Vehicle Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
As at 31 March 2020 169 46 502 148 865
Impact of IFRS 16 (Note 4) 124 - - - 124
Additions / Transfer in - - 7 - 7
Disposal / Write-off - - - - -
Adjustments/Forex translation 10 7 20 (8) 29
As at 31 March 2021 303 53 529 140 1025
Additions / Transfer in 103 - 56 - 159
Disposal / Write-off - - - - -
Adjustments/Forex translation (3) (1) (4) (1) (9)
As at 31 March 2022 403 52 581 139 1,175
Right-of-Use Assets Building and improvts Furniture & Office Equipment Vehicle Total
US$'000 US$'000 US$'000 US$'000 US$'000
Accumulated depreciation
As at 31 March 2020 55 39 401 75 570
Charge for the year 120 3 34 13 170
Disposal/Write-off - - - - -
Adjustments/Forex translation 3 8 13 (14) 10
As at 31 March 2021 178 50 448 74 750
Charge for the year 119 3 30 10 162
Disposal/Write-off - - - - -
Adjustments/Forex translation (1) (1) (4) (1) (7)
As at 31 March 2022 296 52 474 83 905
Net book value
As at 31 March 2021 125 3 81 66 275
As at 31 March 2022 107 - 107 56 270
Lease liabilities recognized in the balance sheet
The balance sheet shows the following amounts relating to lease liabilities
2022 2021
US$'000 US$'000
Current 66 129
Non-current 42 -
108 129
Amounts recognized in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to
leases:
2022 2021
US$'000 US$'000
Depreciation 126 120
Interest expense 4 9
129 129
16. Work in progress
2022 2021
US$'000 US$'000
Contract assets 32 193
The contract assets primarily relate to the Company's rights to consideration
for work completed but not billed at the reporting date. If the value of
services rendered exceeds payments received from the customer, a contract
asset is recognised and presented separately. The contract asset is
transferred to receivables when the entitlement to payment becomes
unconditional.
The contract liabilities primarily relate to advance consideration received
from customers for contract revenue. If the amounts invoiced to the customer
exceeds the value of services rendered, a contract liability is recognised and
presented separately.
The changes in contract balances are due to the differences between the agreed
payment schedule and progress of project work.
17. Intangible Assets
2022 2021
US$'000 US$'000
Cost as at 1 April and 31 March 44 6
6 6
Fair value :
As at 1 April
Angra acquisition /Goodwill 38 -
As at 31 March 44 6
There was no impairment during the period.
The acquisition of Angra Limited for £800,000 on March 7, 2022 resulted in
the creation of goodwill. Angra Limited is a UK Financial Conduct Authority
(FCA) accredited Authorised Payment Institution ("API"), which runs under the
AngraFX brand name.
US$'000
Consideration paid 1,058
Less: Fair value of net assets acquired 1,019
Goodwill 38
18. Subsidiaries
Details of the Company's subsidiaries on 31 March 2022 are as follows:
Name of Subsidiary Place of Incorporation 2022 2021 Ownership Interest and voting power
Ownership Interest and voting 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 (see note 17 for details of the acquisition) UK 100 -
19. 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, GSTechnologies (Australia) Pty Ltd
is liable to tax in Australia and EMS is liable for tax in Singapore.
2022 2021
US$'000 US$'000
Current income tax - -
Adjustments for prior year - -
- -
Deferred tax expenses (5) (5)
(5) (5)
The tax expense on the results of the financial year for the Company varies
from the amount of income tax determined by applying the Singapore statutory
rate of income tax on Company's profit.
20. 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.
Number of Shares US$'000
Authorised
Ordinary Shares
As at 31 Mar 2021 1,193,482,002 2,077
Issues during the period
1 April 2021 to 31 March 2022 355,076,190 5,718
As at 31 March 2022 1,548,558,192 7,795
21. Non-controlling equity interest
All entities within the group are currently 100% owned and accordingly a
non-controlling interest does not arise.
22. Trade and other payables
2022 2021
US$'000 US$'000
Trade payables 218 471
Accruals 338 502
Unearned revenue 301 -
Other payables 37 33
Lease liabilities 66 129
894 1,006
Trade payables are non-interest bearing and are normally settled on 60-days
terms.
23. Loans Payable
Term Amount Interest rate Current Non-current
Loan 1 5 yrs 977 2.5% pa 324 653
Loan 2 3 yrs 224 4.5% pa 178 46
1,201 502 699
24. Auditor renumeration
During the financial year the following fees were paid or payable for services
provided by Elderton Pty Ltd, the auditor of the Group:
2022 2021
US$'000 US$'000
Audit Services
Audit of financial statements 19 16
Other Services
Acting Reporting Accountant - Prospectus 13 -
25. Commitments and Contingencies
The Group is subject to no material commitments or contingent liabilities.
26. Related party transactions
The following is the significant related party transactions entered into by
the Company with related parties on terms agreed between the parties:
2022 2021
US$'000 US$'000
Loans/Advances with related parties 258 -
27. Financial risk management objectives and policies
The Group's activities expose it to a variety of financial risks. The Group's
Board provides certain specific guidance in managing such risks, particularly
as relates to credit and liquidity risk. Any form of borrowings requires
approval from the Board and the Group does not currently use any derivative
financial instruments to manage its financial risks. The key financial risks
and the Group's major exposures are as follows:
Credit risk
The maximum exposure to credit risk is represented by the carrying amount of
the financial assets. In relation to cash and cash equivalents, the Group
limits its credit risk with regards to bank deposits by only dealing with
reputable banks. In relation to sales receivables, the Group's credit risk is
managed by credit checks for credit customers and approval of letters of
credit by the Group's advising bank.
Foreign Currency Risk
Currency risk is the risk that the value of a financial instrument will
fluctuate due to changes in foreign exchange rates. The company is exposed
to currency risk on sales and purchases, that are denominated in foreign
currencies.
28. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. Numbers in the table below represent
the gross, contractual, undiscounted amount payable in relation to the
financial liabilities.
The Group monitors its risk to a shortage of funds using a combination of cash
flow forecasts, budgeting and monitoring of operational performance.
On Demand Less than three months Three to twelve months One to five years Total
US$'000 US$'000 US$'000 US$'000 US$'000
As at 31 March 2022:
Trade and other payables 613 347 - 960
29. Operating lease commitments
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.
The Group is not subject to any externally imposed capital requirements.
30. Capital management
The Company manages its capital to ensure that it will be able to continue as
a going concern while maximising the returns to shareholders through the
optimisation of the debt and equity balance.
Capital consists of total equity.
The directors review the capital structure on an ongoing basis. As a part of
the review, the directors consider the cost of capital and the risks
associated with each class of capital. Based on the recommendation of the
directors, the Company will balance its overall capital structure through the
payment of dividends, new share issues as well as the issue of new debts or
the redemption of existing debt.
There were no changes in the Company's approach to capital management during
the year.
The Company is registered with the Building and Construction Authority in
Singapore and is required to maintain certain minimum capital and net worth.
The Company has complied with the applicable capital requirements for the
financial years ended 31 March 2022 and 31 March 2021.
31. 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 2022; therefore, profit or loss and equity
would have not been affected by changes in the interest rate.
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