REG - GSTechnologies Ltd - Results for the year ended 31 March 2023
31/07/2023 08:00
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RNS Number : 7063H GSTechnologies Ltd 31 July 2023
31 July 2023
GSTechnologies Limited
("GST" or the "Company" or the "Group")
Results for the year ended 31 March 2023
GSTechnologies Limited (LSE: GST), the fintech company, is pleased to announce
the Company's audited results for the year ended 31 March 2023.
The Company's Annual Report for the financial year ending 31 March 2023 will
shortly be available on the Company's website at
https://www.gstechnologies.co.uk/annual-reports
(https://www.gstechnologies.co.uk/annual-reports) .
Highlights
· First full year reporting period following the completion of the acquisition
of Angra Limited ("Angra") in February 2022, a UK-based foreign exchange and
payment services company
· Completion of the acquisition of UAB Glindala ("Glindala"), a holder of a
Crypto Currency Exchange Licence registered in Lithuania, in August 2022
· Completion of the disposal of EMS Wiring Systems Pte Ltd ("EMS"), a non-core
loss-making business, to a member of its management team, in September 2022
· GS20 Exchange soft launch
· Net loss for the year of US$1,628,000 (2022: US$1,430,000 loss) as loss making
EMS consolidated until completion of its disposal and the Company continued to
invest in developing its GS Money solutions
· As of 31 March 2023, the Company had US$4,252,000 in cash and cash equivalents
(31 March 2022: US$5,104,000)
Post Period Highlights
· Company admitted to UK Financial Conduct Authority ("FCA") Innovation Pathway
Programme to assist the progression of its GS Money Stablecoin plans
· Company entered into a legally binding sale and purchase agreement on 20 July
2023 to acquire the entire issued share capital of PAYPT Finance Ltd
("PAYPT"), a Canadian company holding a Canadian Money Services Business
("MSB") licence. The acquisition is subject to approval by the Financial
Transactions and Reports Analysis Centre of Canada ("FINTRAC"), the regulatory
authority overseeing financial transactions in Canada.
CHAIRMAN'S STATEMENT
During the year GST made further significant progress as the Company focused
on its plans to launch a borderless neobanking platform providing
next-generation digital money solutions. In particular, the disposal of EMS,
completed in September 2022, has removed a loss-making business from the Group
and has transformed GST to be a 'pure play' fintech group.
GS Fintech
The primary focus for the Group has, since early 2021, been on the 'GS
Fintech' subsidiaries in the UK and Singapore and the Company's expansion into
blockchain related technologies applied to the financial services sector,
specifically its plans to launch a borderless neobanking platform providing
next-generation digital money solutions. During the year the Company has
made significant progress in implementing its stated strategy to roll-out a
suite of offerings under its GS Money banner based on three initial use-cases:
international money transfers, borderless accounts, and private stablecoin.
Following the completion of the acquisition of Angra, a UK-based foreign
exchange and payment services company, in March 2022, Angra has been
successfully integrated within the Group and was a consolidated subsidiary
throughout the year.
Angra, which operates under the AngraFX brand name, is an established
Financial Conduct Authority ("FCA") approved Authorised Payment Institution
("API"), conducting fast, secure, and low-cost foreign exchange business and
payment services internationally, the first pillar of GS Money. Angra has
provided the Group with an operating business in the UK and an API licence in
order to be able to connect to traditional banking payment systems and agent
networks, operate a remittance business in the UK and ultimately grow revenues
from the stablecoin network and applications that are being developed.
During the first full year as part of the Group, Angra performed well and in
line with the Board's expectations.
On 24 August 2022, the Company completed the acquisition of Glindala, a holder
of a Crypto Currency Exchange Licence, registered in Lithuania. Glindala's
Crypto Currency Exchange Licence is supervised by the Lithuanian Financial
Crime Investigation Service ("FCIS") and it covers two types of crypto
activities, cryptoasset exchange services, both crypto-fiat and crypto-crypto,
and cryptoasset depository wallet services, including generating and storing
encrypted client keys.
Following the acquisition of Glindala, GST entered into an agreement with an
exchange infrastructure technology partner to provide the technology and
software to run the exchange and integrate it with the Company's other
offerings. This led to the soft launch of the Company's GS20 cryptoasset
exchange in November 2022. Glindala has also been renamed to GS Fintech UAB,
trading as the GS20 Exchange. GS Fintech UAB is being led by Shayne Tan, the
Company's COO, who has been appointed as the CEO of the GS20 Exchange.
The GS20 Exchange is offering spot trading and over-the-counter trading desk
services for popular cryptoassets, although it is not a pure cryptocurrency
exchange, so users will see greater technology integration with regulated
stablecoins as well as the introduction of more convenient onramp and offramp
services for those stablecoins in due course. The GS20 Exchange has
initially been open to a controlled group of retail account holders, as well
as a select number of institutional participants, including existing customers
of Angra. The soft launch period has progressed in accordance with the
Company's plans and valuable feedback has been received from the initial
participants. Development of the GS20 cryptoasset exchange continues,
utilising the substantive data provided during the soft launch period and the
Company anticipates a wider rollout of the GS20 exchange in the second half of
2023.
As a further key pillar of the stablecoin activities that the Group intends to
carry out in strategic jurisdictions, including the UK, the Company applied to
the FCA for the Company's stablecoins to be admitted to the FCA Regulatory
Sandbox. Post period end, as announced on 30 June 2023, the Company was
informed by the FCA that they had concluded that the Company's stablecoin
application for admission to the FCA Regulatory Sandbox does not currently
meet the FCA's strict criteria for admission to the FCA Regulatory Sandbox.
As an alternative the FCA offered the Company a place on their Innovations
Pathway programme, an initiative designed to support financial services firms
in launching innovative products and services, which the Company has
accepted. Under the FCA Innovation Pathway programme, the Company will be
provided with a dedicated FCA case officer, with a comprehensive range of
support services, designed to assist GST to further develop the appropriate
path for the progression of its stablecoin plans. This may involve a future
Regulatory Sandbox application or preparation for regulatory authorisation
without the need for supervised testing.
Although the Company initially viewed admission of its stablecoins to the FCA
Regulatory Sandbox as an appropriate next step, the Innovations Pathway
programme will enable GST to benefit further from the guidance of the FCA and
progress its stablecoin plans.
After the year end, on 20 July 2023, the Company entered into a legally
binding sale and purchase agreement to acquire the entire issued share capital
of PAYPT Finance Ltd ("PAYPT"), a Canadian company holding a Canadian Money
Services Business ("MSB") licence. The acquisition is subject to approval by
the Financial Transactions and Reports Analysis Centre of Canada ("FINTRAC"),
the regulatory authority overseeing financial transactions in Canada.
The MSB license held by PAYPT encompasses a range of financial activities,
including: foreign exchange dealing; cryptoasset dealing; money transfer
services; and authorizations for the issuance of debit cards and IBANs.
Subject to FINTRAC's approval of the change of control, the Group plans to
rename PAYPT to Angra Global Ltd ("Angra Global"), signifying the Group's
strategic intention for Angra's transformation into a B2B-focused Neobank.
Assuming the successful completion of the Acquisition, following the change of
control process, Angra Global would be combined with the Group's existing
UK-based foreign exchange and payment services company, Angra, paving the way
for the Group to launch a multi-currency e-wallet service. This service will
enable 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.
Additionally, the MSB licence would enable Angra to issue Sterling local
accounts and Euro SEPA IBAN accounts to its clients, thereby providing a
comprehensive one-stop business banking solution.
Aligned with its overarching strategy, the Group aims to accelerate Angra's
revenue while simultaneously bolstering the Angra team to expand its B2B
Neobank operations beyond the UK, serving companies of all sizes worldwide.
EMS
EMS, based in Singapore, provides wireless, electronic cabling, security, and
other solutions to clients operating in the infrastructure development
space. In the period before the completion of the disposal of EMS on 30
September 2022, when it was consolidated in the Group, it saw revenues decline
and it continued to be loss making, as a limited number of new contracts were
won and trading conditions remained difficult. EMS was disposed of to Teo
Chiah Chiu Raphael ("Raphael Teo"), the Chairman of EMS. The consideration
paid was the transfer to the Company, by way of a share buyback, 60,000,000
Ordinary Shares held by him (the "Consideration Shares"). At the closing
mid-price of 1.09p of the Company's shares on 15 July 2022, the Consideration
Shares were valued at £654,000 and they represented approximately 3.87 per
cent. of the Company's issued share capital.
Fund Raising
During the year the Company entered into an unsecured convertible loan
facility to receive funding of up to US$1.6 million (the "Loan Facility") with
an institutional investor. US$800,000 of the Loan Facility was drawn down
and was all subsequently converted into new Ordinary Shares in the Company.
The Loan Facility was cancelled on 29 March 2023, with the second instalment
of US$800,000 undrawn.
Post period end on 17 May 2023, the Company raised gross proceeds of £750,000
through a placing of 75,000,000 shares at a price of 1.0 pence per share.
Climate Change
The Board is, in addition to committing to a borderless neobanking platform
providing next-generation digital money solutions, committed to setting
strategic directions that are relevant to the management of carbon emissions.
Our management of carbon emissions starts with lowering our workplace carbon
footprint by:
1) Measuring our office carbon footprint, reviewing our utility bills and travel
information during our financial year; and
2) Encouraging the GST team to support recycling by installing "recycling
stations" in the office.
We are also planning to reduce our carbon footprint by improving office
lighting using LED bulbs instead of fluorescent technology.
As the Company expands its business activities, GST will consider the impact
and risks its activities have on the climate and vice versa.
GST's energy consumption and carbon emissions were mainly based on electricity
consumed per meter supplied by the municipality. Further, we have also
included our business travel, which includes long-haul flights, vehicle rental
and rail-travel. For the intensity ratio, we use revenue as a quantifiable
factor as revenue will naturally drive increases or decreases in our energy
consumption and emissions.
We follow the guidance and use the GHG emission conversion factors provided by
the GHG Protocol.
Name of Subsidiary Measurement Intensity Ratio
Energy consumption 48,772 kWh 0.0215 kWh per dollar revenue
CO2 gas emissions 325.90 tonnes CO2 0.0001 tonnes CO2 per dollar revenue
Excluding EMS Wiring Systems Pte Ltd, which was disposed of on 30 September
2022, the total energy consumption and emissions is 1,383 kWh and 5.1 tonnes
of CO2 respectively, and the intensity ratio is 0.0031 kWh per dollar of
revenue and 0.0000 tonnes of CO2 per dollar of revenue respectively.
Board and People
I would like to take this opportunity to thank all of the GST Board and team
for their hard work and dedication throughout the year.
Post the year end, in June 2023, Chong Loong Fatt Garies ("Garies Chong"), a
Non-executive Director of the Company, resigned from the Board in order to
focus on his other business interests. I would like to thank Garies for his
contribution to GST and we wish him well for the future.
Summary
Following the disposal of EMS, GST is now a focused, 'pure play', fintech
group with a solid operational platform on which to build and continue to role
out our GS Money solutions. We also enjoy a healthy balance sheet to fund
our continued expansion.
GS Money is intended to make cross-border payments quick and affordable to an
addressable market of millions of participants by netting and settling trades
through its stablecoin-based payments network. With Angra the Group has a
fully operational, FCA approved API conducting fast, secure, and low-cost
foreign exchange business and payment services internationally, and the first
pillar of GS Money in place.
Unlocking the demand for a large user base also requires a platform that can
meet the clearing and settlement needs of both retail and institutional
customers, with high compliance and security standards. The GS Exchange
provides such a platform that is designed offer users greater technology
integration with regulated stablecoins as well as the introduction of more
convenient onramp and offramp services for those stablecoins in due course,
the second pillar of GS Money.
With the Angra and GS20 Exchange platforms in place and properly integrated,
ongoing discussions with the FCA regarding the Company's UK stablecoin plans,
and further progress being made on the development of the Company's GS Money
solutions, coupled with the disposal of EMS, GST has come a long way in a
short period of time.
Additionally, the recently announced proposed acquisition of PAYPT, which is
only subject to FINTRAC's approval of the change of control, will pave the way
for the Group to launch a multi-currency e-wallet service and enable Angra to
issue Sterling local accounts and Euro SEPA IBAN accounts to its clients,
thereby providing a comprehensive one-stop business banking solution.
We will also continue to explore any further value enhancing acquisition
opportunities that may become available and that can assist with accelerating
the development of the Group.
Whilst we will continue to invest in developing the Group's stablecoin-based
cross-border payments network, with a firm focus on minimising costs, the
disposal of EMS has removed a significant drag on our finances. I therefore
believe there is a very bright future for GST and I look forward to reporting
on our further progress in the coming months.
Tone Kay Kim GOH
Chairman
FINANCIAL REVIEW
The Group's financial statements include a full 12-month contribution from
Angra and EMS for the period from 1 April 2022 to 30 September 2022.
Income Analysis
Despite the contribution from Angra, the continued poor performance of EMS and
its disposal during the year resulted in a decrease in revenue for the
12-months ended 31 March 2023 to US$2.27 million (2022: US$4.24 million). The
Group's operating loss before tax for the financial year is US$1.61 million,
compared to the operating loss incurred in previous financial year of US$1.43
million. In addition, the Group received grants and other income during the
year of US$0.05 million (2022: US$0.24 million), leading to total income
recognised in the year of US$2.32 million (2022: US$4.47 million).
Angra had US$132.87 million in transaction volume during the year, which
contributed US$0.43 million in revenue to the Group.
Balance Sheet Analysis
Net assets as at 31 March 2023 amounted to US$3.87 million (31 March 2022:
US$6.01 million). As at 31 March 2023, the Group had available cash of
US$4.25 million (31 March 2022: US$5.10 million).
The Directors believe that the Group is in a stable financial position and has
the financial resources to enable it to expand and grow its current operations
and meet all its current liabilities, together with the ability to access
further capital should an appropriate need arise.
Enquiries:
The Company
Tone Goh, Executive Chairman
+65 6444 2988
Financial Adviser
VSA Capital Limited
+44 (0)20 3005 5000
Simon Barton / Thomas Jackson
Broker
CMC Markets
+44 (0)20 3003 8632
Douglas Crippen
Financial PR & Investor Relations
IFC Advisory Limited
Tim Metcalfe / Graham Herring / Florence Chandler
+44 20 (0) 3934 6630
gst@investor-focus.co.uk
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
For the financial year ended 31 March 2023
Notes 2023 2022
US$'000 US$'000
Net operating income
Sales 6 442 45
Other income 1 2
443 47
Net operating expense
Continuing Operations 7 (1,627) (918)
Foreign exchange loss (25) (1)
Operating loss (1,209) (872)
Income tax expense 21 (21) -
Loss from continuing operations (1,230) (872)
Discontinued operations
Loss for the year from discontinued operations (398) (558)
8
Loss for the year (1,628) (1,430)
Other comprehensive loss
Movement in foreign exchange reserve (187) (105)
Total comprehensive loss for the year (1,815) (1,535)
Net Loss for the year atttributable to:
Equity holders for the parent (1,628) (1,430)
Non-controlling interest - -
Total comprehensive loss for the year atttributable to:
Equity holders for the parent (1,815) (1,535)
Non-controlling interest 23 - -
(Loss)/Earnings per share attributable to members
of the Parent
Basic (loss) per share 12 (0.00104) (0.00106)
Diluted (loss) per share 12 (0.00104) (0.00106)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2023
Notes 2023 2022
US$'000 US$'000
ASSETS
Current assets
Cash and cash equivalents 14 4,252 5,104
Trade and other receivables 15 78 2,445
Other Assets 276 299
Work in progress 18 - 32
Inventories 16 - 16
Total current assets 4,606 7,896
Non-current assets
Property, plant and equipment 17 95 270
Intangible Assets 19 1,996 44
Total non-current assets 2,090 314
TOTAL ASSETS 6,697 8,210
EQUITY
Share Capital 22 8,281 7,795
Treasury Shares (808) -
Reserves (1,002) (815)
Retained Earnings (2,601) (973)
Total Equity 3,870 6,007
Equity attributable to owners of the parent 3,870 6,007
Non-controlling equity interest 23 - -
3,870 6,007
LIABILITIES
Current liabilities
Trade and other payables 24 2,446 894
Lease Liabilities 17 43 66
Loans payable 25 297 502
Total current liabilities 2,786 1,462
Non-current liabilities
Lease Liabilities 17 - 42
Loans payable 25 41 699
Total non-current liabilities 41 741
Total Liabilities 2,827 2,203
TOTAL EQUITY & LIABILITIES 6,697 8,210
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2023
Notes 2023 2022
US$'000 US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations (1,944) (1,430)
Adjustments:
Depreciation of property, plant and equipment 116 162
Income tax (0) -
Operating loss before working capital changes (1,828) (1,268)
Decrease in inventories 39 2
Decrease/(Increase) in trade and other receivables 2,367 (364)
Increase/(Decrease) in trade and other payables 1,531 (251)
Net cash flow from/ (used) in operating activities 2,109 (1,881)
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal / (Addition) of property, plant and equipment 59 (159)
Decrease in capital work in progress 32 161
Gain on disposal of subsidiary 337 -
Intangible Assets (1,952) (38)
Net cash flow from investing activities (1,524) (36)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares 486 5,718
Treasury Shares (808)
Principal elements of lease payments (65) 118
Decrease in loans payable (863) (454)
Forex reserves (187) (103)
Net cash flow from financing activities (1,437) 5,279
Net (decrease)/ increase in cash and cash equivalents (852) 3,362
Cash and cash equivalents at beginning of the year 5,104 1,742
Cash and cash equivalents at end of the year 14 4,252 5,104
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2023
Shareholder Capital FX Reserve Retained Earnings Treasury Shares Total
2023 CONSOLIDATED US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2022 7,795 (815) (973) - 6,007
Comprehensive Income
Loss for the year - - (1,628) - (1,628)
Other comprehensive loss for the year - (187) - - (187)
Total comprehensive loss for the year - (187) (1,628) - (1,815)
Transactions with owners in their
capacity as owners:
Shares issued during the year 486 - - (808) (322)
486 - - (808) (322)
Balance at 31 March 2023 8,281 (1,002) (2,601) (808) 3,870
Shareholder Capital FX Reserve Retained Earnings Treasury Shares Total
2022 CONSOLIDATED US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2021 2,077 (710) 457 - 1,824
Comprehensive Income
Loss for the year - - (1,430) - (1,430)
Other comprehensive loss for the year - (105) - - (105)
Total comprehensive loss for the year - (105) (1,430) - (1,535)
Transactions with owners in their
capacity as owners:
Shares issued during the year 5,718 - - - 5,718
5,718 - - - 5,718
Balance at 31 March 2022 7,795 (815) (973) - 6,007
1. General Information
1.1 Corporate information
The consolidated financial statements of GSTechnologies Ltd (the "Company")
and its subsidiaries (collectively referred to as the "Group") for the
financial year ended 31 March 2023 were authorised for issue in accordance
with a resolution of the Directors on 31 July 2023. The shares of the Company
are publicly traded on London Stock Exchange.
The registered office of GSTechnologies Ltd, the ultimate parent of the Group,
is Ritter House, Wickhams Cay II, Tortola VG1110, British Virgin Islands.
The principal activity of the Group is data infrastructure, storage and
technology services.
2. Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB) as adopted by the
European Union (EU) as they apply to the financial statements of the Group for
the year ended 31 March 2023.
The consolidated financial statements have been prepared on a historical cost
convention basis, except for certain financial instruments that have been
measured at fair value. The consolidated financial statements are presented in
US dollars ("US$") 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 2023, 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 2023, the Group held cash reserves of US$4,252,000 (2022:
US$5,104,000).
The Directors believe that there are sufficient funds to meet the Group's
working capital requirements.
The Group recorded a loss of US$1.63 million for the year ended 31 March 2023
and had net assets of US$3.87 million as at 31 March 2023 (2022: loss of
US$1.43 million and net assets of US$6.01 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 23 for further details.
The preparation of the Company's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent
liabilities at the end of each reporting period. Uncertainty about these
assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in the
future periods.
Judgements made in applying accounting policies
Management is of the opinion that there are no significant judgements made in
applying accounting estimates and policies that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period are discussed below. The
Company based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions
about future developments, however, may change due to market changes or
circumstances arising beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.
Provision for expected credit losses (ECL) on trade receivables and contract
assets
ECLs are unbiased probability-weighted estimates of credit losses which are
determined by evaluating a range of possible outcomes and taking into account
past events, current conditions and assessment of future economic conditions.
The Company uses a provision matrix to calculate ECLs for trade receivables
and contract assets. The provision rates are based on days past due for
groupings of various customer segments that have similar loss patterns. The
provision matrix is initially based on the Company's historical observed
default rates. The Company will calibrate the matrix to adjust historical
credit loss experience with forward-looking information. At every reporting
date, historical default rates are updated and changes in the forward- looking
estimates are analysed.
The assessment of the correlation between historical observed default rates,
forecast economic conditions and ECLs is a significant estimate. The amount of
ECLs is sensitive to changes in circumstances and of forecast economic
conditions. The Company's historical credit loss experience and forecast of
economic conditions may also not be representative of customer's actual
default in the future.
The carrying amount of the Company's trade receivables at the end of the
reporting period is disclosed in Note 12 to the financial statements.
Allowance for inventory obsolescence
The Company reviews the ageing analysis of inventories at each reporting date
and makes provision for obsolete and slow-moving inventory items identified
that are no longer suitable for sale. The net realisable value for such
inventories are estimated based on the most reliable evidence available at the
reporting date. These estimates take into consideration market demand,
competition, selling price and cost directly relating to events occurring
after the end of the financial year to the extent that such events confirm
conditions existing at the end of the financial year. Possible changes in
these estimates could result in revisions to the valuation of inventories. The
carrying amounts of the Company's inventories at the reporting date are
disclosed in Note 13 to the financial statements.
4. Adoption of new and amended standards and interpretations
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.
Intangible Assets
Digital Assets
The company's digital assets is accounted using the revaluation model. It is
initially recognized at cost at acquisition date. Subsequent to initial
recognition, the Company revalues its at fair value less any accumulated
amortization and impairment. Movements above costs are recognized in other
comprehensive income and movements below costs are recognized in profit and
loss.
Software
Software is initially capitalized at cost in preparing the asset for its
intended use. Direct expenditure which enhances or extends the performance is
added to the original cost. The amortization of the software will only
commence when it is brought into actual use.
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
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
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 services, there were no
contract assets and immaterial contract liabilities relating to customers.
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
2023 2022
US$'000 US$'000
Transfer Fees and Charges 442 45
442 45
Transaction fees and charges are from Angra Ltd and GS Fintech UAB with
transaction volume of US$132.87 million and US$20.60 million respectively. GS
Fintech UAB has been operational since 1 February 2023.
7. Net Operating Expenses
GST Before EMS Adj EMS GST Continuing Operations
2023 2022 2023 2022 2023 2022
US'000 US'000 US'000 US'000 US'000 US'000
Costs of goods sold 740 2,012 717 2,012 23 0
Employee Cost 1,828 2,538 1,276 2,191 552 347
Travel Expenses 24 5 6 5 18 0
Admin Expense 874 594 111 239 763 355
Lease Expenses 47 24 36 17 11 7
Distribution, Advertising 19 32 9 60 10 - 28
General Expenses 106 66 19 45 87 21
Depreciation 116 162 29 139 87 23
Doubtful accounts - 71 306 71 (306) 0
Interest on leases 7 3 - - 7 3
Occupancy costs 93 64 9 20 84 44
Impairment of Digital asset 230 - - - 230 -
Finance costs 154 332 93 187 61 145
4,238 5,903 2,611 4,985 1,627 918
8. Discontinued operations
In September 2022, the Group sold one of its subsidiary, EMS Wiring Systems
Pte Ltd which management deemed as its non-core business to place greater
focus on the Group's key competencies in developing the "GS Fintech"
subsidiaries in the UK and Singapore. The segment was not previously presented
as a discontinued operation or classified as held for sale as at 31 March
2022. Thus, the comparative statement of profit or loss has been re-presented
to show the discontinued operation separately from continuing operations.
Details of the assets and liabilties disposed of, and the calculation of the
profit or loss on disposal, are disclosed in Note 9. The results of the
discontinued operation, which have been included in the profit for the year,
were as follows:
Apr2022-Sep2022 Apr2021 - Mar2022
US$'000 US$'000
Revenue 1,826 4,193
Cost of sales (1,554) (3,595)
Other income 49 235
Distribution Cost (46) (70)
Administrative expenses (997) (1,321)
Other Operating Expenses (15) -
Profit before tax (736) (558)
Income tax - -
Profit after tax from discontinued operation (736) (558)
Gain on disposal of discontinued operation (Note 9) 338 -
Income tax - -
Loss for the year from discontinued operation (attributable to owners of the (398) (558)
company)
9. Disposal of subsidiary
The net assets of EMS Wiring Systems Pte Ltd as at date of disposal were as
follows:
Current Assets
Cash 662
Trade and Other Receivables 1223
Inventories 178
Prepayment 16
Total current asset 2079
Non-current assets
Property, plant and equipment 301
Current liabilities
Trade and other payables 615
Lease Liabilities 42
Loans payable 393
Total current liabilities 1050
Non-current liabilities
Lease Liabilities 74
Loans payable 527
Total non-current liabilities 601
Net assets disposed off 729
Consideration received
GST shares 808
Forfeited debt 259
Total consideration received 1,067
Gain on disposal
Consideration received 1,067
Net assets derecognised 729
Gain on disposal of subsidiary 338
The gain on disposal is included in the profit for the year from discontinued
operation in Note 8.
10. Key management personnel
2023 2022
US$'000 US$'000
Directors' emoluments 442 391
11. Employee cost
2023 2022
US$'000 US$'000
Wages and salaries 829 749
Wages and salaries - Cost of sales 836 1,583
Staff welfare and other employee costs 163 206
Total 1,828 2,538
The average number of employees of the Group are 48 and 76 for 2023 and 2022
respectively.
12. Earnings per share
2023 2022
US$'000 US$'000
Loss for the period attributable to members (1,628) (1,430)
Basic earnings per share is calculated by dividing the profit attributable to
owners of the Parent by the weighted average number of ordinary share in issue
during the year.
Basic weighted average number of ordinary 1,563,152,455 1,354,950,456
shares in issue
Basic loss per share-cents (0.00104) (0.00106)
Diluted loss per share-cents (0.00104) (0.00106)
13. Segment Reporting
The consolidated entity's operating segments have been determined with
reference to the monthly management accounts used by the chief operating
decision maker to make decisions regarding the consolidated entity's
operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board as a whole
has been determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being information
data technology and infrastructure.
The revenues and results are those of the consolidated entity as a whole and
are set out in the statement of profit and loss and other comprehensive
income. The segment assets and liabilities of this segment are those of the
consolidated entity and are set out in the Statement of Financial Position.
14. Cash and cash equivalents
2023 2022
US$'000 US$'000
Cash at bank 4,252 5,104
15. Trade and Other Receivables
2023 2022
US$'000 US$'000
Trade receivables 19 814
Less: Allowance for expected credit loss - (71)
19 743
Advances to supplier - 1,287
Due from related party - 258
Other receivables 59 157
78 2,445
16. Inventories
Following the disposal of EMS Wiring Systems Pte Ltd, no inventory left to be
reported at the end of the financial year.
2023 2022
US$'000 US$'000
Inventories - 329
Less: Allowance for inventory obsolescence - (313)
- 16
The movement in the allowance for inventory obsolescence is as follows:
2023 2022
US$'000 US$'000
Balance at beginning of year 313 316
Additional allowance for inventory obsolescence - (3)
Disposal of subsidiary (313) -
Balance at end of year - 313
17. Property, plant and equipment
Right-of-Use Assets Building and improvts Furniture & Office Equipment Vehicle Total
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
As at 31 March 2021 303 53 529 140 1025
Additions / Transfer in 103 - 56 - 159
Disposal / Write-off - - - - -
Forex translation (3) (1) (4) (1) (9)
As at 31 March 2022 403 52 581 139 1,175
Additions / Transfer in - 106 12 - 118
Disposal / Write-off (264) (148) (474) (131) (1,017)
Forex translation (13) (3) (33) (8) (57)
As at 31 March 2023 126 7 86 - 219
Accumulated depreciation
As at 31 March 2021 178 50 448 74 750
Charge for the year 119 3 30 10 162
Disposal/Write-off - - - - -
Forex translation (1) (1) (4) (1) (7)
As at 31 March 2022 296 52 474 83 905
Charge for the year 82 11 18 5 116
Disposal/Write-off (279) (53) (430) (84) (846)
Forex translation (16) (3) (28) (4) (51)
As at 31 March 2023 83 7 34 0 124
Net book value
As at 31 March 2022 107 - 107 56 270
As at 31 March 2023 43 - 52 - 95
Lease liabilities recognized in the balance sheet
The balance sheet shows the following amounts relating to lease liabilities
2023 2022
US$'000 US$'000
Current 43 66
Non-current - 42
43 108
Amounts recognized in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to
leases:
2023 2022
US$'000 US$'000
Depreciation 82 126
Interest expense 5 3
87 129
18. Work in progress
2023 2022
US$'000 US$'000
Contract assets - 32
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.
No contract assets at the end of the year due to disposal of subsidiary, EMS
Wiring Systems Pte Ltd.
19. Intangible Assets
Intangible Assets Trademark Goodwill Digital Asset Software Total
US$'000 US$'000 US$'000 US$'000 US$'000
As at 31 March 2021 6 - - - 6
Additions - 38 - - 38
Impairment - - - - -
As at 31 March 2022 6 38 - - 44
Additions - - 577 1,605 2,182
Impairment - - (230) - (230)
As at 31 March 2023 6 38 347 1,605 1,996
Impairment is recognized this year for the 100,000,000 COAL tokens on hand.
20. Subsidiaries
Details of the Company's subsidiaries at financial year end are as follows:
Name of Subsidiary Place of Incorporation Proportion of Ownership Interest
2023 2022
EMS Wiring Systems Pte Ltd Singapore - 100
Golden Saint Technologies Australia 100 100
(Australia) Pty Ltd
GS Fintech Ltd UK 100 100
GS Fintech Pte Ltd Singapore 100 100
Angra Limited UK 100 100
GS Fintech UAB Lithuania 100 -
21. Taxation
Unrecognised tax losses
Where the realisation of deferred tax assets is dependent on future taxable
profits, losses carried forward are recognised only to the extent that
business forecasts predict that such profits will be available to the
companies in which losses arose.
The parent, GSTechnologies Ltd, is not liable to corporation tax in BVI, so it
has no provision for deferred tax. However, the subsidiaries are liable to tax
to the respective countries they are tax resident.
2023 2022
US$'000 US$'000
Current income tax 21 -
Adjustments for prior year - -
21 -
Deferred tax expenses - (5)
- (5)
22. Share capital and reserves
The share capital of the Company is denominated in UK Pounds Sterling. Each
allotment during the period was then translated into the Group's functional
currency, US Dollars at the spot rate on the date of issue.
Authorised Number of Shares US$'000
Ordinary Shares
As at 31 March 2022 1,548,558,192 7,795
Issues during the period
1 April 2022 to 31 March 2023 133,474,178 486
Total shares issued as at 31 Mar 2023 1,682,032,370 8,281
Treasury Shares during the period
1 April 2022 to 31 March 2023 (60,000,000) (808)
Total outstanding shares as at 31 Mar 2023 1,622,032,370 7,473
23. Non-controlling equity interest
All entities within the group are currently 100% owned and accordingly a
non-controlling interest does not arise.
24. Trade and other payables
2023 2022
US$'000 US$'000
Trade payables 2,298 218
Accruals 129 338
Unearned revenue - 301
Other payables 19 37
2,446 894
Trade payables are non-interest bearing and are normally settled on 30-days
terms.
25. Loans Payable
2023 US$'000
Type Term Amount Interest rate Current Non-Current
Convertible loan 285 10% pa 285 -
Bank Loan 1 5 yrs 53 2.5% pa 12 41
338 297 41
2022 US$'000
Type Term Amount Interest rate Current Non-Current
Bank Loans
Bank Loan 1 5 yrs 977 2.5% pa 324 653
Bank Loan 2 3 yrs 224 4.5% pa 178 46
1201 502 699
Convertible loan was subsequently exercised on 11 Apr 2023.
26. Commitments and Contingencies
The Group is subject to no material commitments or contingent liabilities.
27. 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:
2023 2022
US$'000 US$'000
Loans/Advances with related parties - 258
28. 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.
29. 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.
Less than three months Three to twelve months One to five years Total
US$'000 US$'000 US$'000 US$'000
As at 31 March 2023:
Trade and other payables 2,446 - - 2,446
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.
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 2023; therefore, profit or loss and equity
would have not been affected by changes in the interest rate.
32. Subsequent event
On 11 April 2023, the remaining portion of the convertible loan was converted
into ordinary shares of no par value in the Company ("Ordinary Shares"). On
17 May 2023 the Company raised gross proceeds of £750,000 through a placing
of 75,000,000 Ordinary Shares at a price of 1.0 pence per share.
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