TIDMGST
RNS Number : 1805Y
GSTechnologies Ltd
30 December 2019
30 December 2019
GSTechnologies Ltd
("GST", the "Company", and together with its subsidiaries the
"Group"))
Interim Results for the period ended 30 September 2019
GSTechnologies Ltd (LSE: GST), the integrated information and
communication technology infrastructure solutions provider, is
pleased to announce the Company's reviewed interim results for the
six months ended 30 September 2019.
Period Highlights
-- Revenue up 1.11% year on year to US$2.598,000
-- Operating income of US$2,594,000 (2018: 2,326,000)
-- For the six months to 30 September 2019 the Company had
positive net cash from operating activities of US$20,000 (H1 2018:
216,000)
-- At 30 September 2019 the Company had US$398,000 of cash and
cash equivalents (30 September 2018: US$815,000)
-- A loss for the period of US$470,000 (H12018: US$210,000 loss)
due to decrease in profit margin and increase in employee costs
Post Period Highlights
-- Wholly-owned subsidiary EMS Wiring Systems Pte Ltd has
internally restructured its workforce to align with the Group's
strategic plans and have decreased monthly costs by an estimated
20% from November 2019
-- IS-EMS investment withdrawn; no longer an associate of the Company
Enquiries
The Company
Tone Goh, Executive Chairman Singapore +65 6444 2988
Financial PR & Investor Relations
IFC Advisory Limited London +44 20 3934 6630
Tim Metcalfe / Graham Herring / Florence
Chandler
About GST
GST provides optimal wireless, electronic cabling, security, and
other solutions to clients operating in the infrastructure
development space. GST builds on the profitable ICT business of its
Singaporean subsidiary EMS Wiring Systems, which has been supplying
governments and large private organisations with intelligent
building solutions for the last 28 years. GST's strategy is to
develop solutions to meet the needs of the ICT industry, acting on
the surging opportunities in the technology and innovation sectors
- data Centres, intelligent buildings, smart cities and the
Internet of Things - particularly targeting emerging markets where
the demand for ICT infrastructure is increasing rapidly.
For more information please see: www.GSTechnologies.co.uk
Executive Chairman's Statement
Dear Shareholder,
I'm pleased to present on behalf of the Board of Directors (the
"Board") of GSTechnologies Limited ("GST", the "Company", together
with its subsidiaries, the "Group"), the Interim report of the
Company for the six months ended 30 September 2019.
Overview
The group benefits from the background of its core business as a
stable ICT operator in the high growth south east Asian region over
the past 29 years. In the current year, the ICT / IDC industry
demonstrated strong signs of growth in the emerging East Asian
countries of Thailand, Cambodia, Vietnam and Myanmar with strong
economic expansion forecast. This was true of Thailand, in
particular, where our joint-venture partnership with a local
Blue-Chip Thai Publicly Listed Conglomerate is expected to start
early next year focused on our data centre business model,
targeting corporate clients and government sectors locally,
together with other regional clients. Our CEO, Garies Chong, who
has strong data centre connections in the Asia Pacific region,
leads the team as we plan and work on the ecosystem partnership
with other data center vendors locally and further afield.
The Group having adopted the corporate "4i Strategy" offering:
Infrastructure Integration Innovation Intelligence is focused on
our "4i Tech Vision Ramp-up" in new exciting high growth and
profitable tech areas, focusing mainly on new innovations,
recurring fees and managed services. On area of particular focus is
opportunities arising from the recent Singapore government
announcement and supporting funds for the "Smart Innovation &
Green Initiative".
The Board believes that GST can leverage on its existing
strengths and move into further profitable areas by providing
innovative products and solutions and therefore expanding into new
geographies with a more diversified client base
Financial Highlights
GST's financial performance in the period reflected the
increasing market complexity both our global and local clients
operate in, particularly in a time of uncertainty with global trade
wars, political upheavals, and unprecedented environmental issue.
Against this background and at a time when Singapore's economy
slowed with GDP growth for first three quarters of 2019 falling to
0.5% from 3.2% in 2018, I am pleased that we still maintained
comparable revenues to the same period in 2018.
Our ongoing and new ICT / security businesses continued to
deliver healthy performance, in particular through recurring
business with key corporate clients, maintaining stability and
long-term value to the Group.
For the period the Company generated revenue of US$2,594,000, up
from $2,326,000 in H1 2018, generating positive net cash from
operating activities of US$20,000.
Looking into FY2020, we are forecasting sales of between US$2
million and US$2.5 million over the second half of our financial
year ending 31 March 2020, with overall sales for the year
forecasted to be between US$4.5 million and US$5 million.
Moving forward, the Board strongly believes FY2020 to hold
greater opportunities in both South East Asia and in Post-Brexit
Great Britain for the Group.
Dividend policy
The Board believes that the interests of shareholders are best
served by retaining capital within the Company at the present time
and maintaining flexibility to be able to take advantage of the
many attractive investment and business development opportunities
open to GST at this time and expected to be seen over the next few
years. GST is looking to generate long term value for customers and
shareholders in a sustainable manner. As a result, GST's dividend
policy for this financial year is not to pay dividends to
shareholders but rather meet their interests by creating value that
leads to capital growth.
Summary
Before ending, I would like to take the opportunity to thank
Pierre Fourie, who left the Company to focus on his mining business
interests, for his contribution towards taking EMS / GST public in
November 2018 and William Knight, who left the Board earlier in
December 2019, for his contribution since listing.
I would also like to express my heartfelt gratitude to our
stakeholders, including all our shareholders, customers, business
partners and hardworking staff, for their support during the
period.
With continual support, we are confident in taking on new
challenges and embarking on new opportunities for the Group in
2020.
Tone Goh
Executive Chairman
Consolidated Interim Statement of Comprehensive Income
for the period 1 April 2019 to 30 September 2019
6 months 6 months
ended ended
30 September 30 September
Notes 2019 2018
US$'000 US$'000
(Unaudited) (Unaudited)
Net operating income
Sales 2,594 2,326
Other income 4 6
------------------ ------------------
2,598 2,332
Net operating expense
Continuing Operations 2 (3,067) (2,542)
Operating loss (470) (210)
------------------ ------------------
Other comprehensive income
Movement in foreign exchange
reserve (35) -
Total comprehensive loss for
the period (505) (210)
Net Loss for the period atttributable
to:
Equity holders for the parent (505) (210)
Non-controlling interest - -
------------------ ------------------
Total comprehensive loss for the period atttributable
to:
Equity holders for the parent (505) (210)
Non-controlling interest 16 - -
------------------ ------------------
Earnings per share attributable
to members
of the Parent
Basic (loss) per share 5 (0) (0)
Diluted (loss) per share 5 (0) (0)
Consolidated Interim Statement of Financial Position
as at 30 September 2019
6 months ended Year ended
30 September
2019 31 March 2019
US$'000 US$'000
Notes (Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents 7 398 871
Trade and other receivables 8 1,765 2,142
Work in progress 11 356 550
Inventories 9 319 315
Total current assets 2,837 3,878
------------------------------ ------------------------------
Non-current assets
Property, plant and equipment 10 166 177
Intangible Assets 12 6 6
Total non-current assets 171 183
------------------------------ ------------------------------
TOTAL ASSETS 3,008 4,061
------------------------------ ------------------------------
EQUITY
Share Capital 15 1,804 1,804
Reserves 15 (713) (678)
Retained Earnings 752 1,222
Total Equity 1,843 2,348
------------------------------ ------------------------------
Equity attributable to owners
of the parent 1,843 2,348
Non-controlling equity interest 16 - -
1,843 2,348
------------------------------ ------------------------------
LIABILITIES
Current Liabilities
Trade and other payables 17 1,166 1,713
Total Liabilities 1,166 1,713
------------------------------ ------------------------------
TOTAL EQUITY & LIABILITIES 3,008 4,061
------------------------------ ------------------------------
Consolidated Interim Statement of Cash Flows
for the period 1 April 2019 to 30 September 2019
6 months 6 months
ended ended
30 September 30 September
2019 2018
Notes US$'000 US$'000
Cash Flows from operating activities
Profit (Loss) before taxation from
operations (470) (210)
Adjustments to add/(deduct) non-cash
items:
Depreciation of property, plant
and equipment 21 15
Other non-cash
Unrealised foreign exchange losses
------------------ ------------------
Operating loss before working capital
changes (449) (195)
Decrease/ (increase) in inventories (4) (296)
Decrease / (increase) in prepayments
and other receivables 571 (142)
(Decrease) / increase in financial
liabilities 1
(Decrease)/ Increase in trade and
other payables (547) 653
------------------ ------------------
Net cash flow from operating
activities 20 216
Cash flows from investing activities
Payments to acquire property plant
and equipment (10)
Proceeds from sale of property plant
and equipment - 6
------------------ ------------------
Net cash flow from investing
activities (10) 6
Cash flows from financing activities
Proceeds of ordinary share issue -
Forex reserves (35) -
------------------ ------------------
Net cash flow from financing
activities (35) -
Net increase/(decrease) in cash and
cash equivalents (473) 27
------------------ ------------------
Cash and cash equivalents at beginning
of period 871 788
------------------ ------------------
Cash and cash equivalents at
end of period 398 815
------------------ ------------------
Consolidated Interim Statement of Changes in Equity
for the period 1 April 2019 to 30 September 2019 (Unaudited)
Shareholder Retained
Capital FX Reserve Earnings Total
US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2019 (1,804) 678 (1,222) (2,348)
Comprehensive Income
Loss for the year - - 470 470
Other comprehensive loss
for the year - 35 - 35
----------------- ---------------- ---------------- ----------------
Total comprehensive loss
for the year (1,804) 713 (752) (1,843)
Transactions with owners
in their
capacity as owners:
Shares issued during the
year - - - -
----------------- ---------------- ---------------- ----------------
Balance at 30 September
2019 (1,804) 713 (752) (1,843)
----------------- ---------------- ---------------- ----------------
Notes to the Financial Statements
Accounting Policies
1.1 Corporate information
The consolidated financial statements of GSTechnologies Ltd for
the financial period from 1 April 2019 and ended 30 September 2019
were authorised for issue in accordance with a resolution of the
Directors on 30 December 2019.
The registered office of GSTechnologies Ltd, the ultimate parent
of the Group, is Intertrust Corporate Services (BVI) Limited,
Ritter House, Wickhams Cay II, Tortola, BVI VG1110.
The principal activity of the Group is data infrastructure,
storage and technology services.
1.2 Basis of preparation
The consolidated financial statements of GSTechnologies Ltd and
its controlled entities ("the Group") have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB)
and adopted by the European Union (EU) as they apply to the
financial statements of the Group for the period 1 April 2019 to 30
September 2019.
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.
Following the reverse takeover, and in accordance with IFRS, the
acquired entity is taken to have acquired the parent entity and
accordingly comparative information represents that of the acquired
entity.
1.3 Consolidation
The consolidated financial statements comprise the financial
statements of the Group as at 30 September 2019, and for the period
then ended.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date when such control
ceases.
The financial statements of the subsidiaries are prepared for
the same reporting period as the GSTechnologies Ltd (parent
company), using consistent accounting.
All intra-group balances, transactions, unrealised gains and
losses resulting from intra-group transactions and dividends are
eliminated in full.
Total comprehensive income within a subsidiary is attributed to
the non-controlling interest even if it results in a deficit
balance. A change ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
Pooling of Interests on Incorporation of Parent Entity
On incorporation of the entity, subsidiaries have been
consolidated using the pooling of interest method on the basis that
the entities being combined are ultimately controlled by the same
parties, both before and after the combination.
Under this method the assets and liabilities of the acquiree are
recorded at book value and intangible assets and contingent
liabilities are only recognised if they were previously recognised
by the acquiree. No goodwill is recorded, and expenses of the
combination are written off immediately in profit or loss.
The excess of consideration over the value of the acquiree's net
assets is recognised in the merger reserve, a negative reserve
within equity.
Any non-controlling interest in the acquiree is recognised as
the proportion of the assets and liabilities of the acquiree at the
date of acquisition. From the date of acquisition forward, a
proportionate share of profits, or losses, in the related
subsidiary is then attributed to the non- controlling interest.
Subsequent 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.
1.4 Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements
requires management to make judgements, estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent liabilities at the date of the
consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on
management's experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. However, actual outcomes would differ from these
estimates if different assumptions were used and different
conditions existed.
In particular, the Group has identified the following areas
where significant judgements, estimates and assumptions are
required, and where actual results were to differ, may materially
affect the financial position or financial results reported in
future periods. Further information on these and how they impact
the various accounting policies is in the relevant notes to the
consolidated financial statements.
1.4.1 Key Judgements
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts recognised in the consolidated
financial statements.
Going concern
This report has been prepared on the going concern basis, which
contemplates the continuation of normal business activity and the
realisation of assets and the settlement of liabilities in the
normal course of business.
At 30 September 2019, the Group held cash reserves of US$398,000
(March 2019: US$871,000).
The Directors are confident the Group will generate revenue from
data and technology services which will contribute to cash flow in
the next 6-month period.
On this basis, the Directors believe that there are sufficient
funds to meet the Group's working capital requirements.
The Group recorded a loss of $470,000 for the six months ended
30 September 2019 and had net assets of US$1,843,000 as at 30
September 2019 (2018: loss of US$210,000 and net assets of
($1,650,000).
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 18 for further details.
Key estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are described below. The Group based its assumptions and estimates
on parameters available when the consolidated 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 Group. Such changes
are reflected in the assumptions when they occur.
1.5 New standards and amendments and interpretations adopted by the Group
There are several new Accounting standards and interpretations
issued by the IASB that are not yet mandatorily applicable to the
Group and have not been applied in preparing these consolidated
financial statements. The Group does not plan to adopt these
standards early.
These standards are not expected to have a material impact on
the Group in the current or future reporting periods.
1.6 Summary of significant accounting policies
Property, plant and equipment
Plant and equipment are shown at cost less accumulated
depreciation and impairment losses. The initial cost of an asset
comprises its purchase price or construction cost, any costs
directly attributable to bringing the asset into operation, any
incidental cost of purchase, and associated borrowing costs. The
purchase price or construction cost is the aggregate amount paid
and the fair value of any other consideration given to acquire the
asset. Directly attributable costs include employee benefits,
professional fees and costs of testing whether the asset is
functioning properly. Capitalised borrowing costs include those
that are directly attributable to the construction of mining and
infrastructure assets.
Property, plant and equipment relate to plant, machinery,
fixtures and fittings and are shown at historical cost less
accumulated depreciation and impairment losses.
The depreciation rates applied to each type of asset are as
follows: Plant and machinery 2 to 10 years
Motor Vehicles 2 to 10 years Fixtures and fittings 3 years
Lease Improvements 5 years
Subsequent expenditure is capitalised when it is probable that
future economic benefits from the use of the asset will be
increased. All other subsequent expenditure is recognised as an
expense in the period in which it is incurred. Assets that are
replaced and have no future economic benefit are derecognised and
expensed through profit or loss. Repairs and maintenance which
neither materially add to the value of assets nor appreciably
prolong their useful lives are charged against income. Gains/
losses on the disposal of fixed assets are credited/charged to
income. The gain or loss is the difference between the net disposal
proceeds and the carrying amount of the asset.
The asset's residual values, useful lives and methods of
depreciation are reviewed at each reporting period and adjusted
prospectively if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable
value.
Financial instruments: Initial recognition and measurement
Trade and other receivables
Trade and other receivables are stated at amortised cost less
provision for doubtful debts. Trade and other receivables are
non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market.
Trade receivables are generally due for settlement between 30
and 90 days. They are presented as current assets unless collection
is not expected for more than 12 months after reporting date.
Collectability of trade receivables is reviewed on an ongoing
basis. Debts which are known to be uncollectible are written off by
reducing the carrying amount directly. A provision for impairment
of trade receivables is used when there is objective evidence that
the Group will not be able to collect all amounts due according to
the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value, based on
the relevant exchange rates at balance sheet date. Cash and cash
equivalents comprise cash balances and short-term deposit that are
readily convertible to known amount of cash and that are subject to
an insignificant risk of changes in their fair value and are used
by the Company in the management of its short-term commitments. For
the purpose of the consolidated statement of cash flows, cash and
cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Impairment
The Group assesses at each reporting date whether there is any
objective evidence that a financial asset is impaired. A financial
asset is deemed to be impaired if there is objective evidence of
impairment as a result of one or more events that has occurred
after the initial recognition of the asset (a loss event) and that
loss event has an impact on the estimated future cash flows of the
financial asset that can be reliably estimated.
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.
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance income
in profit or loss.
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or
sale are capitalised as part of the cost of the respective assets.
All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds e.g. arrangement
fees.
The Group capitalises borrowing costs for all eligible assets.
Where funds are borrowed specifically to finance the project, the
amount capitalised represents the actual borrowing costs incurred.
Early repayment of borrowings, specifically for reasons of
refinancing do not qualify for capitalising as borrowing costs
under IAS 23 and are recognised as a loss on de-recognition in the
statement of comprehensive income.
Fair value of financial instruments
The following methods and assumptions are used to estimate the
fair values:
-- Cash and short-term deposits, trade and other receivables,
trade and other payables and other current liabilities approximate
their carrying amounts largely due to the short-term maturities of
these instruments.
-- Initial fair value of interest-bearing borrowings is normally
the transaction price, i.e. the fair value of the consideration
received. When part of the consideration is for something other
than the loan, the fair value is estimated using an appropriate
valuation technique.
-- For disclosure purpose only, the fair value of unquoted
instruments, such as loans and other financial liabilities, is
estimated by discounting future cash flows using rates currently
available for debt on similar terms, credit risk and remaining
maturities.
Provisions
Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax amount that
reflects current market assessments of the time value of money, and
the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
Finance income
Interest income is made up of interest received on cash and cash
equivalents.
Deferred taxation
Deferred income tax is provided using the balance sheet method
on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences.
Deferred income tax assets are recognised for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused
tax losses, can be utilised, except:
-- In respect of deductible temporary differences associated
with investments in subsidiaries, deferred income tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at
the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at the end of each reporting period and are recognised to the
extent that it has become probable that future taxable profit will
be available to allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of
the reporting period.
Deferred income tax assets and deferred income tax liabilities
are offset if a legally enforceable right exists to set off current
tax assets against current income tax liabilities and the deferred
income taxes relate to the same taxable entity and the same
taxation authority.
Foreign currencies
i) Functional and presentation currency
The consolidated financial statements are presented in US
dollars, which is the Group's presentation currency.
ii) Transaction and Balances
Transactions in foreign currencies are initially recorded in the
functional currency at the respective functional currency rates
prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the spot rate of exchange ruling at
the reporting dates. All differences are taken to the profit or
loss, should specific criteria be met.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate as at
the date of the initial transaction. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
iii) Group Companies
The results and financial position of foreign operations (none
of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
-- Assets and liabilities for each statement of financial
position presented as translated at
the closing rate at the date of the statement of financial
position.
-- Income and expenses for each income statement and statement
of profit or loss and other comprehensive income are translated at
average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transactions dates, in which case income and expenses are
translated at the dates of the transactions), and
-- All resulting exchange differences are recognised in other comprehensive income
Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable.
The Group recognizes when the amount of revenue can be reliably
measured, it is probably that future economic benefits will flow to
the entity and specific criteria have been met as described
below.
i) 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.
ii) Sale of Goods
Revenue from sale of goods is recognised at the point of
delivery as this corresponds to the transfer of significant risks
and rewards of ownership of the goods and the cessation of all
involvement in those goods.
2. Net Operating Expenses
6 months 6 months
ended 30 ended 30
September September
2019 US$'000 2018 US$'000
(Unaudited) (Unaudited)
Continuing operations
Depreciation of property plant
and equipment 21 14
Cost of goods sold 2,030 1,659
Occupancy costs 14 10
Employee costs 656 389
General expenses 26 35
Distribution, Advertising and
promotion expenses 71 91
Admin expenses 158 245
Lease expenses 73 69
Travel expenses 19 30
----------------- -----------------
3,067 2,542
----------------- -----------------
3. Key Management Personnel
6 months 6 months
ended 30 ended 30
September September
2019 US$'000 2018 US$'000
(Unaudited) (Unaudited)
Directors' emoluments 202 217
4. Employee costs
6 months 6 months
ended 30 ended 30
September September
2019 US$'000 2018 US$'000
(Unaudited) (Unaudited)
Wages and salaries 91 80
Wages and salaries - Cost of
sales 886 685
Total 978 765
----------------- ----------------
5. Earnings per share
6 months 6 months
ended 30 ended 30
September September
2019 US$'000 2018 US$'000
(Unaudited) (Unaudited)
Loss for the period attributable
to members of the parent (505) (210)
Basic loss per share is calculated by dividing
the loss attributable
to owners of the Parent by the weighted average number
of ordinary
share in issue during the period.
Basic weighted average number of
ordinary shares in issue 995,482,002 669,126,659
Basic loss per share-cents (0) (0)
Diluted loss per share-cents (0) (0)
6. Segment Reporting
The consolidated entity's operating segments have been
determined with reference to the monthly management accounts used
by the chief operating decision maker to make decisions regarding
the consolidated entity's operations and allocation of working
capital.
Due to the size and nature of the consolidated entity, the Board
has been determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being
information data technology and infrastructure.
The revenues and results are those of the consolidated entity as
a whole and are set out in the statement of profit and loss and
other comprehensive income. The segment assets and liabilities of
this segment are those of the consolidated entity and are set out
in the Statement of Financial Position.
7. Cash and Cash Equivalents
6 months Year ended
ended 30 31 March
September 2019 US$'000
2019 US$'000
(Unaudited) (Audited)
Current accounts 398 871
There are no restrictions on the cash currently held by the
Group.
8. Trade and Other Receivables
6 months Year ended
ended 30 31 March
September 2019
2019
US$'000 US$'000
(Unaudited) (Audited)
Trade receivables 1,485 1,889
Prepayments 280 253
Total receivables 1,765 2,142
---------------- ----------------
9. Inventories
6 months Year ended
ended 30 31 March
September 2019 US$'000
2019 US$'000
(Unaudited) (Audited)
Inventories 319 315
10. Property, Plant and Equipment
Furniture
Building Renovation & Office
and improvements in Progress Equipment Vehicle Total
US$'000 US$'000 US$'000 US$'000 US$'000
Period 1 April
2019 to 30 September
2019
Opening net book
value 13 0 67 97 177
Additions 9 1 10
Disposals 0
Depreciation charge -6 -6 -9 -21
Closing net book
value at 30 September
2019 16 0 62 88 166
--------------------- ---------------- ---------------- ---------------- ----------------
At 30 September
2019
Cost 47 - 448 191 686
Accumulated
depreciation (31) - (386) (103) (520)
--------------------- ---------------- ---------------- ---------------- ----------------
Net book value
at 30 September
2019 16 - 62 88 166
--------------------- ---------------- ---------------- ---------------- ----------------
11. Work in Progress
6 months Year ended
ended 30 31 March
September 2019 US$'000
2019 US$'000
(Unaudited) (Audited)
Contract assets 356 550
Contract assets primarily relate to the Company's right to
consideration for work completed but not billed at the reporting
date. If the value of services rendered exceeds payments received
from the customer, a contract assets is recognised and presented
separately. The contract assets is transferred to receivables when
the entitlement to payment becomes unconditional.
12. Intangible Assets
Trade Mark Total
Opening net book value as at
1 April 2019 6 6
Additions - -
Amortisation charge - -
----------- ------
Closing net book value as
at 30 September 2019 6 6
----------- ------
There was no impairment during the period.
13. Subsidiaries
Details of the Company's subsidiaries at 30 September 2019 are
as follows:
Name of Subsidiary Place of Incorporation Proportion of Proportion of
Ownership Interest Voting Power
Golden Saint Technologies
(Australia) Pty
Ltd Australia 100 100
EMS Singapore 100 100
EMS completed a reverse takeover during the period and
accordingly, the presentation of the financial statements
represents the operations of this entity, with the parent entity
treated as a business combination. Financial comparatives are
therefore of EMS.
14. Taxation
Unrecognised tax losses
Where the realisation of deferred tax assets is dependent on
future taxable profits, losses carried forward are recognised only
to the extent that business forecasts predict that such profits
will be available to the companies in which losses arose.
The parent, GSTechnologies Ltd, is not liable to corporation tax
in BVI, so it has no provision for deferred tax. However, Golden
Saint Technologies (Australia) Pty Ltd is liable to tax in
Australia and EMS is liable for tax in Singapore.
15. 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 Ordinary shares at 30 September 2019: 995,482,002
(US$1,623,000)
16. Non-Controlling Equity Interest
All entities within the group are currently 100% owned and
accordingly a non-controlling interest does not arise
17. Trade and Other Payables
6 months
ended 30 Year ended
September 31 March
2019 2019
US$'000 US$'000
(Unaudited) (Audited)
Trade payables 725 1,365
Accruals 433 291
Other payables 7 57
Total accruals 1,166 1,713
------------------- ------------------
Trade payables are non-interest bearing and are normally settled
on 60-day terms.
18. Commitments and Contingencies
The Group is subject to no material commitments or contingent
liabilities.
19. Subsequent Events
Subsequent to the reporting date, EMS Wiring Systems Pte Ltd has
withdrawn its investment from IS-EMS Pte Ltd. As a result, IS-EMS
Pte Ltd is no longer an associate.
20. Related Party Transactions
During the period 1 April 2019 to 30 September 2019, there were
no related party transactions other than loans between wholly owned
subsidiaries.
22. 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 table below indicates the currencies to which the Group had
significant exposure at 30 September 2019 on its monetary assets
and liabilities. The analysis calculates the effect of a reasonably
possible movement of the currency rate against the US dollar, with
all other variables held constant on the statement of comprehensive
income (due to the fair value of currency sensitive non- trading
monetary assets and liabilities). A positive amount in the table
reflects a potential net increase in the consolidated statement of
comprehensive income.
23. 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.
As at 30 On Demand Less than Two to five Over five TOTAL US$'000
September US$'000 one year years US$'000 years US$'000
2019: US$'000
Trade and
other payables - 1,166 0 - 1,166
24. Capital management
Capital includes equity attributable to the equity holders of
the parent. Refer to the statement of changes in equity for
quantitative information regarding equity.
The Group's primary objectives when managing capital are to
safeguard its ability to continue as a going concern in order to
provide returns for shareholders. For details of the capital
managed by the Group as at 30 September 2019, please see Note
15.
The Group is not subject to any externally imposed capital
requirements.
25. 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 30
September 2019; therefore, profit or loss and equity would have not
been affected by changes in the interest rate.
A copy of the reviewed results for the six months ended 30
September 2018 is available on the
Company's website www.gstechnologies.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FEMSUAFUSELE
(END) Dow Jones Newswires
December 30, 2019 02:00 ET (07:00 GMT)
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