TIDMGST
RNS Number : 2585W
GSTechnologies Ltd
21 December 2021
21 December 2021
GSTechnologies Limited
("GST" or the "Company" or the "Group")
Interim Results
GSTechnologies Limited (LSE: GST), the fintech and information
technology solutions company, announces the Company's interim
results for the six months ended 30 September 2021.
Period Highlights
-- Collaboration agreement signed with Wise MPay, the
Singaporean blockchain payment solution provider, to provide the
Company with software and services to facilitate the Company's
blockchain related fintech plans.
-- Placing to raise GBP1.4 million at 1.0 pence per ordinary
share and publication of a prospectus on 6 September 2021.
-- Resumption of EMS operations following the relaxation of
government measures against Covid-19 controls resulted in an
increase in revenue for H1 2021 to US$2,261,000 (H1 2020:
US$769,000).
-- Net loss for the period of US$1,094,000 (H1 2020: US$561,000 loss).
-- As of 30 September 2021, the Company had US$2,749,000 in cash
and cash equivalents (30 September 2020: US$1,789,000).
Post Period Highlights
-- Appointment of Jack Bai as Chief Executive Officer and Shayne Tan as Chief Operating Officer.
-- Conditional acquisition of Angra Limited.
-- Placing to raise gross proceeds of GBP1.0 million at 2.0
pence per ordinary share on 19 November 2021.
-- Launch of the GS Money protocol on the Coalculus platform.
-- Receipt of 100 million COAL tokens as part of the ongoing collaboration with Wise MPay.
Chairman's Statement
Despite the backdrop of the continuing pandemic the period has
been one of significant progress for the Group. The Group's revenue
continues to be provided by our subsidiary, EMS Wiring Systems Pte
Ltd ("EMS"), whilst the GS Fintech companies are currently
pre-revenue.
Although the world has had to shut and open its doors repeatedly
and often shifted into a lower gear, our EMS corporate customers
still needed IT support and new services, whilst navigating the
uncertainty and challenges of the global pandemic.
EMS remains a predominantly Singapore focused business and
Singapore's GDP showed positive growth in the first half of 2021,
even though the growth was from the lower base in 2020. For 2021,
Singapore's GDP expanded by 1.5% in the first quarter, followed by
14.7% in the second. Likewise, the construction sector grew
sharply, up by 106.2% on a year-on-year basis in the second quarter
of 2021, compared to the same period last year when construction
activities ground to a halt during Singapore's circuit breaker
measures. While the Ministry of Trade and Industry, upgraded
Singapore's official growth forecast for 2021 to between 6% and 7%,
labour shortages arising from restrictions on the entry of migrant
workers, are weighing on the recovery of the construction sector.
Against this background we are pleased with the performance of EMS
during the period and anticipate that the business will recover
further in the second half.
However, the primary focus for the future of the Group has been
on the new 'GS Fintech' subsidiaries in the UK and Singapore and
the Company's planned expansion into blockchain related
technologies, specifically its plans to launch a borderless
neobanking platform providing next-generation digital money
solutions.
During the period we significantly progressed these activities
with the signing of a collaboration agreement with Wise MPay, the
Singaporean blockchain payment solution provider, on 28 May 2021,
with a view to Wise MPay providing the Company with software and
services to facilitate the Company plans. The collaboration is
progressing according to plan and post period end we announced a
number of developments which are described below.
Fund Raising
On 6 September 2021 the Company raised gross proceeds of
GBP1.415 million through a placing of 141,500,000 ordinary shares
at a price of 1p per share. This was followed, post period end, on
19 November 2021, with a placing of 50,000,000 ordinary shares at a
price of 2p per share raising gross proceeds of GBP1.0 million.
The funds raised from the two placing are being principally used
to accelerate the implementation of the Group's strategy, in
particular covering the planned sales and marketing costs, and the
costs of further development and implementation of the Wise MPay
technology.
Management Changes
Post period end we were delighted that Mr Bai GuoJin ("Jack
Bai"), an existing Executive Director, was appointed as the
Company's new Chief Executive Officer on 12 October 2021. Jack Bai,
who joined the GST board in January 2021, has over 30 years'
experience in software development for the financial and
telecommunication industries. He is a successful technology
entrepreneur, who has successfully built and exited multiple
companies, including in fintech and payment solutions. He is a
co-founder of Wise MPay, the Company's collaboration partner, and
leads the development of the Coalculus blockchain technology. He is
leading the Group's blockchain technology activities and its plans
to launch a borderless neobanking platform providing
next-generation digital money solutions.
On 20 October 2021, additionally Mr. Tan Guan Han, Shayne
("Shayne Tan"), an existing Executive Director, was appointed as
the Company's new Chief Operating Officer. Shayne Tan, who joined
the GST board in January 2021, holds a Bachelor of Business
Management Degree from Singapore Management University and has more
than five years of sales, operations, and management experience in
growth-stage companies operating exclusively within the blockchain
and cryptocurrency sector. He is, alongside Jack Bai, a co-founder
of the Coalculus blockchain platform.
Post Period End Developments
On 5 October 2021 the Company announced that it had entered into
a conditional agreement to acquire the whole of the issued share
capital of Angra Limited ("Angra"), a UK-based foreign exchange and
payment services company. Angra, which operates under the AngraFX
brand name, is a Financial Conduct Authority ("FCA") approved
Authorised Payment Institution ("API"), conducting fast, secure and
low-cost foreign exchange business and payment services
internationally.
The acquisition of Angra is now only subject to FCA approval for
the change of control. If approved Angra will provide the Company
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 grow revenues
from the stablecoin network and applications that are being
developed.
On 30 November we reported that we had successfully tested all
four of the enterprise chains provided by Wise MPay (representing
four digital currencies pegged to the US Dollar, the Pound, the
Euro, and the Yuan), together with implementing a mainnet upgrade
on the Coalculus platform, provided by Wise MPay. This marked the
launch of the GS Money protocol. This was followed on 17 December
2021 by GST receiving 100 million COAL tokens from Wise MPay and
the enabling of the COAL token staking capability on four full
nodes managed by the Company. The value of the COAL tokens provided
by Wise MPay, as one of their deliverables under the collaboration
agreement, was approximately GBP475,000 at the current COAL token
trading price.
The four digital currencies are strictly pegged to the US
Dollar, the Pound, the Euro and the Yuan which will allow GST to
carry out transactions immediately through blockchain ledgers,
which can be used in place of wire transfers that generally take
several days to complete. The four enterprise chains work alongside
one another to form a decentralised and highly efficient
multicurrency cross border payment system for digital transactions
that utilise the Coalculus blockchain ledger technology.
Additionally, each enterprise chain's total supply will allow GST
to issue up to 10 billion digital currency units.
With the launch of the GS Money protocol, this blockchain
technology is now available to GST and its future clients. The
Company intends to deploy GS Money early in 2022 in limited
cross-border payment trials, and then gradually roll out GS Money
for commercial operations in the coming months.
The future roll-out of GS Money is intended to be focused on
three initial use-cases:
International Money Transfers: GS Money will initially be used
in restricted cross-border payment testing before being gradually
expanded to include commercial activities.
Borderless accounts: GS Money will be integrated into a GST
borderless account payment service. This borderless account will
allow customers to retain many digital currencies, but the biggest
advantage is that they may be converted at the prevailing exchange
rate and in any currency, with minimal, transparent fees.
Private Stablecoin: Ultimately it is intended that GS Money will
also be focussed on private stablecoin. The objective is to
establish public trust, maintain stability, and enable claims
backed by reserves. By establishing a private stablecoin ecosystem,
GST intends to encourage market players to allow transactions to
settle in GS Money digital currencies, as well as be integrated
into various other payment services.
Summary
The period under review was one of significant achievement as we
progressed our blockchain based financial services ambitions.
Given the ongoing pandemic situation, forecasting the future is
especially difficult. We expect uncertain worldwide economic
conditions to continue, depending on how the pandemic evolves,
particularly with the emergence of new Covid 19 variants. However,
this is likely to have a much more significant impact on our EMS
business, but with anticipated improvement in future construction
demand we are optimistic for the future of this business.
However, our primary focus is on progressing our plans to launch
a borderless neobanking platform providing next-generation digital
money solutions, based on blockchain technology, which has been
significantly less impacted by the pandemic.
In doing so we will continue to practice prudent financial
management, and working capital management, to ensure the Group
maintains appropriate liquidity, while being mindful of operational
expenditure. Operationally, we are constantly striving to improve
our work methods, and the skills and capabilities of our people. We
continue to advance GST's digital capabilities, developing
innovative technological solutions to improve our project
productivity and efficiency.
I would also like to extend my appreciation to GST's
shareholders for their continued support, and to my fellow board
members and staff for their support and hard work during the
period. Whilst we still have a lot to do, GST has come a long way
in a short period of time. I look forward to the future with
confidence and reporting on our further progress in the coming
months.
Tone Kay Kim GOH
Chairman
Financial Highlights
-- Resumption of operations following the relaxation of
government measures against Covid-19 controls resulted in an
increase in revenue for H1 2021 to US$2,261,000 (H1 2020:
US$769,000).
-- As of 30 September 2021, the Company had US$2,749,000 in cash
and cash equivalents (30 September 2020: US$1,789,000). In the
interim period, the debt/equity structure has shifted to lesser
dependence on debt financing to support its operating activities.
Post period end, on 19 November 2021 the Company raised a further
GBP1m (gross) through a placing of ordinary shares.
-- Net loss for the period is US$1,094,000 (H1 2020: US$561,000
loss). Major contributing factors for the increased net loss for
the period are due to the decrease of US$203,000 in government
grants being received and the increase of US$112,000 in foreign
worker levy paid arising from the cessation of the government
assistance incentive on the foreign worker levy waiver. Costs
incurred in relation to share placement and the preparation of a
prospectus amounted to US$479,000.
Enquiries:
The Company
Tone Goh, Executive Chairman +65 6444 2988
Financial Adviser
+44 (0)20 3005
VSA Capital Limited 5000
Simon Barton / Pascal Wiese
Financial PR & Investor Relations
IFC Advisory Limited
Tim Metcalfe / Graham Herring / Florence +44 20 (0) 3934
Chandler 6630
For more information please see:
https://gstechnologies.co.uk/
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the period 1 April 2021 to 30 September 2021
6 months ended 30 September
2021 2020
Notes US$'000 US$'000
(Unaudited) (Unaudited)
Net operating income
Sales 2,261 769
Other income 92 295
------------------------------ -----------------------------
2,353 1,063
Net operating expense
Continuing Operations 6 (3,447) (1,624)
Net loss for the period (1,094) (561)
------------------------------ -----------------------------
Other comprehensive loss
Movement in foreign exchange
reserve (58) 148
------------------------------ -----------------------------
Total comprehensive loss
for the period (1,152) (412)
Net Loss for the year attributable
to:
Equity holders for the parent (1,094) (561)
Non-controlling interest - -
------------------------------ -----------------------------
Total comprehensive loss for the year attributable
to:
Equity holders for the parent (1,152) (412)
Non-controlling interest 20 - -
------------------------------ -----------------------------
(Loss)/Earnings per share attributable
to members
of the Parent
Basic (loss) per share 9 (0.00090) (0.00056)
Diluted (loss) per share 9 (0.00090) (0.00056)
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
As at 30 September 2021
6 months ended 30 September
2021 2020
Notes US$'000 US$'000
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 11 2,749 1,789
Trade and other receivables 12 2,638 1,480
Work in progress 15 272 186
Inventories 13 307 316
Total current assets 5,966 3,771
---------------------------- ----------------------------
Non-current assets
Property, plant and equipment 14 192 286
Intangible Assets 16 6 6
Total non-current assets 198 292
---------------------------- ----------------------------
TOTAL ASSETS 6,164 4,063
---------------------------- ----------------------------
EQUITY
Share Capital 19 5,331 1,804
Reserves (768) (718)
Retained Earnings (637) 387
Total Equity 3,926 1,473
---------------------------- ----------------------------
Equity attributable to owners
of the parent 3,926 1,473
Non-controlling equity interest 20 - -
3,926 1,473
---------------------------- ----------------------------
LIABILITIES
Current liabilities
Trade and other payables 21 818 748
Loans payable - current 22 222 213
Total current liabilities 1,040 961
---------------------------- ----------------------------
Non-current liabilities
Loans payable 22 1,198 1,629
Total current liabilities 1,198 1,629
---------------------------- ----------------------------
Total Liabilities 2,238 2,590
---------------------------- ----------------------------
TOTAL EQUITY & LIABILITIES 6,164 4,063
---------------------------- ----------------------------
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the period 1 April 2021 to 30 September 2021
6 months ended 30 September
2021 2020
Notes US$'000 US$'000
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations (1,094) (561)
Adjustments:
Depreciation of property, plant
and equipment 81 22
Exchange loss 2 -
Operating loss before working
capital changes (1,011) (538)
Decrease/(Increase) in inventories 10 (4)
Decrease/(Increase) in trade and other
receivables 790 (218)
(Decrease)/Increase in trade
and other payables (317) 12
Decrease in capital work in progress (79) -
Net cash flow used in operating
activities (607) (749)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and
equipment - (13)
Proceeds from disposal of property, - -
plant and equipment
-------------------------- ---------------------------
Net cash flow from investing
activities - (13)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares 1,907 -
Increase in loans payable (235) 1,842
Forex reserves (58) 148
-------------------------- ---------------------------
Net cash flow from financing
activities 1,614 1,991
Net increase/(decrease) in cash and
cash equivalents 1,007 1,229
-------------------------- ---------------------------
Cash and cash equivalents at beginning
of the year 1,742 561
-------------------------- ---------------------------
Cash and cash equivalents at
end of the year 11 2,749 1,789
-------------------------- ---------------------------
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
For the period 1 April 2021 to 30 September 2021
Shareholder FX Reserve Retained Total
Capital Earnings
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
2021 CONSOLIDATED US$'000 US$'000 US$'000 US$'000
---------------------------- ----------------- ------------------ ----------------- ------------------
Balance as at 1 April
2021 2,077 (710) 457 1,824
Comprehensive Income
Loss for the year - - (1,094) (1,094)
Other comprehensive loss
for the year - (58) - (58)
----------------- ------------------ ----------------- ------------------
Total comprehensive loss
for the period - (58) (1,094) (1,152)
Transactions with owners
in their
capacity as owners:
Shares issued during the
period 3,254 - - 3,254
----------------- ------------------ ----------------- ------------------
3,254 - - 3,254
Balance as at 30 September
2021 5,331 (768) (637) 3,926
----------------- ------------------ ----------------- ------------------
Notes to the Financial Statements
1. General Information
1.1 Corporate information
The consolidated financial statements of GSTechnologies Ltd (the
"Company") and its subsidiaries (collectively referred to as the
"Group" for the financial period from 1 April 2021 to 30 September
2021 were authorised for issue in accordance with a resolution of
the Directors on 20 December 2021.
The registered office of GSTechnologies Ltd, the ultimate parent
of the Group, is Ritter House, Wickhams Cay II, Tortola, BVI
VG1110.
The principal activity of the Company comprises of fintech
services through the use of blockchain technology; and the
provision of data infrastructure, storage and technology services
by its subsidiaries.
2. Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and adopted by the European Union (EU) as
they apply to the financial statements of the Group for the period
from 1 April 2021 to 30 September 2021.
The consolidated financial statements have been prepared on a
historical cost convention basis, except for certain financial
instruments that have been measured at fair value. The consolidated
financial statements are presented in US dollars and all values are
rounded to the nearest thousand except when otherwise
indicated.
2.1 Consolidation
The consolidated financial statements comprise the financial
statements of the Group as of 30 September 2021, and for the period
then ended.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date when such control
ceases.
The financial statements of the subsidiaries are prepared for
the same reporting period as the GSTechnologies Ltd (parent
company), using consistent accounting.
All intra-group balances, transactions, unrealised gains and
losses resulting from intra-group transactions and dividends are
eliminated in full.
Total comprehensive income within a subsidiary is attributed to
the non-controlling interest even if it results in a deficit
balance. A change ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
Business Combinations
Business combinations occur where an acquirer obtains control
over one or more businesses. A business combination is accounted
for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business
combination will be accounted for from the date that control is
attained, whereby the fair value of the identifiable assets
acquired and liabilities (including contingent liabilities) assumed
is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
re-measured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or
liability is re-measured in each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition
date.
All transaction costs incurred in relation to business
combinations are expensed to the statement of comprehensive income.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements
requires management to make judgements, estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent liabilities at the date of the
consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on
management's experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. However, actual outcomes would differ from these
estimates if different assumptions were used and different
conditions existed.
In particular, the Group has identified the following areas
where significant judgements, estimates and assumptions are
required, and where actual results were to differ, may materially
affect the financial position or financial results reported in
future periods. Further information on these and how they impact
the various accounting policies is in the relevant notes to the
consolidated financial statements.
Going concern
This report has been prepared on the going concern basis, which
contemplates the continuation of normal business activity and the
realisation of assets and the settlement of liabilities in the
normal course of business.
At 30 September 2021, the Group held cash reserves of
US$2,749,000 (2020:US$1,789,000).
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 US$1,094,000 for the six months
ended 30 September 2021 and had net assets of US$3,926,000 as of 30
September 2021 (2020: loss of US$561,000 and net assets of
($1,473,000).
Accruals
Management has used judgement and prudence when estimating
certain accruals for contractor claims. The accruals recognised are
based on work performed but are before settlement.
Contingencies
By their nature, contingencies will only be resolved when one or
more uncertain future events occur or fail to occur. The assessment
of the existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgement and the
use of estimates regarding the outcome of future events. Please
refer to Note 22 for further details.
The preparation of the Company's financial statements requires
management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities at the
end of each reporting period. Uncertainty about these assumptions
and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability
affected in the future periods.
Judgements made in applying accounting policies
Management is of the opinion that there are no significant
judgements made in applying accounting estimates and policies that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources
of estimation uncertainty at the end of the reporting period are
discussed below. The Company based its assumptions and estimates on
parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising
beyond the control of the Company. Such changes are reflected in
the assumptions when they occur.
Provision for expected credit losses (ECL) on trade receivables
and contract assets
ECLs are unbiased probability-weighted estimates of credit
losses which are determined by evaluating a range of possible
outcomes and taking into account past events, current conditions
and assessment of future economic conditions.
The Company uses a provision matrix to calculate ECLs for trade
receivables and contract assets. The provision rates are based on
days past due for groupings of various customer segments that have
similar loss patterns. The provision matrix is initially based on
the Company's historical observed default rates. The Company will
calibrate the matrix to adjust historical credit loss experience
with forward-looking information. At every reporting date,
historical default rates are updated and changes in the forward-
looking estimates are analysed.
The assessment of the correlation between historical observed
default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in
circumstances and of forecast economic conditions. The Company's
historical credit loss experience and forecast of economic
conditions may also not be representative of customer's actual
default in the future.
The carrying amount of the Company's trade receivables at the
end of the reporting period is disclosed in Note 12 to the
financial statements.
Revenue recognition
The Company uses the percentage-of-completion method to account
for its contract revenue. The stage of completion is measured in
accordance with the accounting policy stated in Note 5. Significant
assumptions are required in determining the stage of completion,
the extent of the contract cost incurred, the estimated total
contract cost and the recoverability of the contracts. In making
these assumptions, management has relied on past experience and the
work of specialists.
Significant judgement is also required to assess allowance made
for foreseeable losses, if any, where the contract cost incurred
for any job exceeds its contract sum. The carrying amounts of
contract balances at the reporting date are disclosed in Note 15 to
the financial statements.
Allowance for inventory obsolescence
The Company reviews the ageing analysis of inventories at each
reporting date, and makes provision for obsolete and slow moving
inventory items identified that are no longer suitable for sale.
The net realisable value for such inventories are estimated based
on the most reliable evidence available at the reporting date.
These estimates take into consideration market demand, competition,
selling price and cost directly relating to events occurring after
the end of the financial year to the extent that such events
confirm conditions existing at the end of the financial year.
Possible changes in these estimates could result in revisions to
the valuation of inventories. The carrying amounts of the Company's
inventories at the reporting date are disclosed in Note 13 to the
financial statements .
4. 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.
5. Summary of significant accounting policies
Property, plant and equipment
Plant and equipment are shown at cost less accumulated
depreciation and impairment losses. The initial cost of an asset
comprises its purchase price or construction cost, any costs
directly attributable to bringing the asset into operation, any
incidental cost of purchase, and associated borrowing costs. The
purchase price or construction cost is the aggregate amount paid
and the fair value of any other consideration given to acquire the
asset. Directly attributable costs include employee benefits,
professional fees and costs of testing whether the asset is
functioning properly. Capitalised borrowing costs include those
that are directly attributable to the construction of mining and
infrastructure assets.
Property, plant and equipment relate to plant, machinery,
fixtures and fittings and are shown at historical cost less
accumulated depreciation and impairment losses.
The depreciation rates applied to each type of asset are as
follows:
Plant and machinery 2 to 10 years
Motor Vehicles 2 to 10 years
Fixtures and fittings 3 years
Lease Improvements 5 years
Subsequent expenditure is capitalised when it is probable that
future economic benefits from the use of the asset will be
increased. All other subsequent expenditure is recognised as an
expense in the period in which it is incurred. Assets that are
replaced and have no future economic benefit are derecognised and
expensed through profit or loss. Repairs and maintenance which
neither materially add to the value of assets nor appreciably
prolong their useful lives are charged against income. Gains/
losses on the disposal of fixed assets are credited/charged to
income. The gain or loss is the difference between the net disposal
proceeds and the carrying amount of the asset.
The asset's residual values, useful lives and methods of
depreciation are reviewed at each reporting period and adjusted
prospectively if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable
value.
Financial instruments
(a) Financial assets
(i) Classification, initial recognition and measurement
The Company classifies its financial assets into the following
measurement categories:
amortised cost; fair value through other comprehensive income
(FVOCI); and fair value through profit or loss (FVPL).
Financial assets are recognised when, and only when the entity
becomes party to the contractual provisions of the instruments.
At initial recognition, the Company measures a financial asset
at its fair value plus, in the case of a financial asset not at
FVPL, transaction costs that are directly attributable to the
acquisition of the financial assets. Transaction costs of financial
assets carried at FVPL are expensed in profit or loss.
Trade receivables are measured at the amount of consideration to
which the Company expects to be entitled in exchange for
transferring promised goods or services to a customer, excluding
amounts collected on behalf of third party, if the trade
receivables do not contain a significant financing component at
initial recognition.
(ii)Subsequent measurement
Debt instruments
Subsequent measurement of debt instruments depends on the
Company's business model for managing the asset and the contractual
cash flow characteristics of the asset. The Company only has debt
instruments at amortised cost.
Financial assets that are held for the collection of contractual
cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Financial
assets are measured at amortised cost using the effective interest
method, less impairment. Gains and losses are recognised in profit
or loss when the assets are derecognised or impaired, and through
the amortisation process.
Debt instruments of the Company comprise cash and cash
equivalents and trade and other receivables.
Equity instruments
On initial recognition of an investment in equity instrument
that is not held for trading, the Company may irrevocably elect to
present subsequent changes in fair value in other comprehensive
income which will not be reclassified subsequently to profit or
loss. Dividends from such investments are to be recognised in
profit or loss when the Company's right to receive payments is
established. For investments in equity instruments which the
Company has not elected to present subsequent changes in fair value
in other comprehensive income, changes in fair value are recognised
in profit or loss.
(iii)Derecognition
A financial asset is derecognised where the contractual right to
receive cash flows from the asset has expired. On derecognition of
a financial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in other
comprehensive income for debt instruments is recognised in profit
or loss.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are recognised when, and only when, the
Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of
its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value
plus in the case of financial liabilities not at FVPL, directly
attributable transaction costs.
(ii) Subsequent measurement
After initial recognition, financial liabilities that are not
carried at FVPL are subsequently measured at amortised cost using
the effective interest method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised, and through
the amortisation process.
Financial liabilities measured at amortised cost comprise trade
and other payables.
(iii) Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged or
cancelled or expires. On derecognition, the difference between
the carrying amounts and the consideration paid is recognised in
profit or loss.
Offsetting
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Company has a legal right to offset the amounts and
intends either to settle on a net basis or to realise the asset and
settle the liability simultaneously
Cash and cash equivalents
Cash and cash equivalents are measured at fair value, based on
the relevant exchange rates at balance sheet date. Cash and cash
equivalents comprise cash balances and short-term deposit that are
readily convertible to known amount of cash and that are subject to
an insignificant risk of changes in their fair value and are used
by the Company in the management of its short-term commitments. For
the purpose of the consolidated statement of cash flows, cash and
cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Impairment
Financial Assets
The Company recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at FVPL and contract
assets. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash
flows that the Company expects to receive, discounted at an
approximation of the original effective interest rate. The expected
cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual
terms.
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that
result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial
recognition, a loss allowance is recognised for credit losses
expected over the remaining life of the exposure, irrespective of
timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company applies a
simplified approach in calculating ECLs. Therefore, the Company
does not track changes in credit risk, but instead recognises a
loss allowance based on lifetime ECLs at each reporting date. The
Company has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment which
could affect debtors' ability to pay.
The Company considers a financial asset in default when
contractual payments are past due for more than 90 days. However,
in certain cases, the Company may also consider a financial asset
to be in default when internal or external information indicates
that the Company is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements
held by the Company. A financial asset is written off when there is
no reasonable expectation of recovering the contractual cash
flows.
Non-financial assets
The carrying amounts of the Company's non-financial assets,
other than inventories, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
such indication exists, then the asset's recoverable amount is
estimated. An impairment loss is recognised if the carrying amount
of an asset or its related cash-generating unit (CGU) exceeds its
estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its
value in use and its fair value less costs to sell. For the purpose
of impairment testing, the recoverable amount is determined on an
individual asset basis unless the asset does not generate cash
inflows that are largely independent of those from other assets. If
this is the case, the recoverable amount is determined for the CGU
to which the asset belongs. If the recoverable amount of the asset
(or CGU) is estimated to be less than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable
amount.
The difference between the carrying amount and recoverable
amount is recognised as an impairment loss in profit or loss.
An impairment loss for an asset other than goodwill is reversed
only if, there has been a change in the estimates used to determine
the asset's recoverable amount since the last impairment loss was
recognised. The carrying amount of this asset is increased to its
revised recoverable amount, provided that this amount does not
exceed the carrying amount that would have been determined (net of
any accumulated amortisation or depreciation) had no impairment
loss been recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill
is recognised in profit or loss
Trade and other payables
Trade and other payables are non-derivative financial
liabilities that are not quoted in an active market. It represents
liabilities for goods and services provided to the Group prior to
the year end and which are unpaid. These amounts are unsecured and
have 7-30 day payment terms. Trade and other payables are presented
as current liabilities unless payment is not during within 12
months from the reporting date. They are recognised initially at
their fair value and subsequently measured at amortised cost using
the effective interest method.
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially
at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost using the effective interest
(EIR) method. The fair value implies the rate of return on the debt
component of the facility. This rate of return reflects the
significant risks attaching to the facility from the lenders'
perspective.
Determination of Fair Values
A number of the Company's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes based on the
following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
Trade and other receivables
The fair values of trade and other receivables are estimated as
the present value of future cash flows, discounted at the market
rate of interest at the measurement date. Current receivables with
no stated interest rate are measured at the original invoice amount
if the effect of discounting is immaterial. Fair value is
determined at initial recognition and, for disclosure purposes, at
each annual reporting date.
Non-derivative financial liabilities
Non-derivative financial liabilities are measured at fair value
at initial recognition and for disclosure purposes, at each annual
reporting date. Fair value is calculated based on the present value
of future principal and interest cash flows, discounted at the
market rate of interest at the measurement date.
Other financial assets and liabilities
The carrying amount of financial assets and liabilities with a
maturity of less than one year is assumed to approximate their fair
values.
Provisions
Provisions are measured at the present value of management's
best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax amount that
reflects current market assessments of the time value of money, and
the risks specific to the liability. The increase in the provision
due to the passage of time is recognised as interest expense.
Finance income
Interest income is made up of interest received on cash and cash
equivalents.
Deferred taxation
Deferred income tax is provided using the balance sheet method
on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences.
Deferred income tax assets are recognised for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused
tax losses, can be utilised, except:
In respect of deductible temporary differences associated with
investments in subsidiaries, deferred income tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at
the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at the end of each reporting period and are recognised to the
extent that it has become probable that future taxable profit will
be available to allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of
the reporting period.
Deferred income tax assets and deferred income tax liabilities
are offset if a legally enforceable right exists to set off current
tax assets against current income tax liabilities and the deferred
income taxes relate to the same taxable entity and the same
taxation authority.
Foreign currencies
i) Functional and presentation currency
The consolidated financial statements are presented in US
dollars, which is the Group's presentation currency.
ii) Transaction and Balances
Transactions in foreign currencies are initially recorded in the
functional currency at the respective functional currency rates
prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the spot rate of exchange ruling at the reporting dates. All
differences are taken to the profit or loss, should specific
criteria be met.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate as at
the date of the initial transaction. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
iii) Group Companies
The results and financial position of foreign operations (none
of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
-- Assets and liabilities for each statement of financial
position presented as translated at
the closing rate at the date of the statement of financial
position.
-- Income and expenses for each income statement and statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transactions dates, in which case income and expenses are translated at the dates of the transactions), and
-- All resulting exchange differences are recognised in other comprehensive income
Revenue Recognition
Revenue is measured based on the consideration to which the
Company expects to be entitled in exchange for transferring
promised goods or services to a customer, excluding amounts
collected on behalf of third parties.
Revenue is recognised when the Company satisfies a performance
obligation by transferring a promised good or service to the
customer, which is when the customer obtains control of the good or
service. A performance obligation may be satisfied at a point in
time or over time. The amount of revenue recognised is the amount
allocated to the satisfied performance obligation.
Rendering of services
Revenue from rendering of services is recognised as performance
obligations are satisfied. Payments are due from customers based on
the agreed billing milestone stipulated in the contracts or based
on the amounts certified by the customers.
Where performance obligations are satisfied over time as work
progresses, revenue is recognised progressively based on the
percentage of completion method. The stage of completion is
assessed by reference to the cost incurred relative to total
estimated costs (input method). The related costs are recognised in
profit or loss when they are incurred, unless they relate to future
performance obligations.
If the value of services rendered for the contract exceeds
payments received from the customer, a contract asset is recognised
and presented separately on the balance sheet. The contract assets
are transferred to receivables when the entitlement to payment
becomes unconditional. If the amounts invoiced to the customer
exceeds the value of services rendered, a contract liability is
recognised and separately presented in the statement of financial
position.
Interest Income
Interest income is recognised using the effective interest
method. When a receivable is impaired, the Group reduces the
carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate
of the instrument, and continues unwinding the discount as interest
income.
Contract assets and liabilities
Contract assets primarily relate to the Company's rights to
consideration for work completed but not billed at the reporting
date on project work. Contract assets are transferred to trade
receivables when the rights become unconditional. This usually
occurs when the Company invoices the customer.
Contract liabilities primarily relate to advance consideration
received from customers and progress billings issued in excess of
the Company's rights to the consideration.
6. Net Operating Expenses
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Continuing Operations
Costs of goods sold 1,217 913
Employee Cost 1,151 318
Travel Expenses 3 1
Admin Expense 839 283
Lease Expenses 1 57
Distribution, Advertising
and promotion 4 4
General Expenses 105 17
Depreciation of property plant
and equipment 81 22
Interest on lease expenses 3 -
Occupancy costs 43 9
3,447 1,624
------------------------------ ------------------------------
7. Key Management Personnel
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Directors' emoluments 229 181
8. Employee costs
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Wages and salaries 91 70
Wages and salaries - Cost
of sales 722 528
Other employee costs 109 68
Total 922 666
----------------------------- -----------------------------
9. Earnings per share
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Loss for the period attributable
to members of the parent (1,152) (412)
Basic loss per share is calculated by dividing
the loss attributable
to owners of the Parent by the weighted average
number of ordinary
share in issue during the
period.
Basic weighted average number
of ordinary shares in issue 1,215,794,502 995,482,002
Basic loss per share-cents (0.00090) (0.00056)
Diluted loss per share-cents (0.00090) (0.00056)
10. Segment Reporting
The consolidated entity's operating segments have been
determined with reference to the monthly management accounts used
by the chief operating decision maker to make decisions regarding
the consolidated entity's operations and allocation of working
capital.
Due to the size and nature of the consolidated entity, the Board
has been determined as the chief operating decision maker.
The consolidated entity operates in one business segment, being
information data technology and infrastructure.
The revenues and results are those of the consolidated entity as
a whole and are set out in the statement of profit and loss and
other comprehensive income. The segment assets and liabilities of
this segment are those of the consolidated entity and are set out
in the Statement of Financial Position.
11. Cash and Cash Equivalents
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Cash at Bank 2,749 1,789*
*Cash at bank includes US$78,000 pledged to the bank as security
for banker guarantee given to customer.
12. Trade and Other Receivables
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Trade Receivables 1,228 1,407
Prepayments 62 73
Other Receivables 1,347 -
2,638 1,480
----------------------------- -----------------------------
13. Inventories
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Inventories 307 316
14. Property, Plant and Equipment
Right-of-Use Building Furniture Vehicle Total
Assets and improvts & Office
Equipment
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
As at 1 Apr 2020 169 46 502 148 865
Impact of IFRS
16 (Note 4) 124 - - - 124
Additions /
Transfer
in - - 7 - 7
Disposal / - - - - -
Write-off
Adjustments/Forex
translation 10 7 20 (8) 29
----------------- ----------------- ----------------- ----------------- -----------------
At 31 March 2021 303 53 529 140 1,025
Impact of IFRS
16 (Note 4) - - - - 0
Additions /
Transfer
in - - 0 - 0
Disposal / - - - - -
Write-off
Adjustments/Forex
translation (3) (1) (7) (1) (12)
----------------- ----------------- ----------------- ----------------- -----------------
At 30 September
2021 300 52 522 139 1,013
Accumulated depreciation
As at 1 Apr 2020 55 39 401 75 570
Charge for the
year 120 3 34 13 170
Disposal/Write-off - - - - -
Adjustments/Forex
translation 3 8 13 (14) 10
----------------- ----------------- ----------------- ----------------- -----------------
At 31 March 2021 178 50 448 74 750
Charge for the
year 60 1 15 5 81
Disposal/Write-off - - - - -
Adjustments/Forex
translation (2) (1) (6) (1) (10)
----------------- ----------------- ----------------- ----------------- -----------------
At 30 September
2021 236 50 457 78 821
Net book value
At 31 March 2021 125 3 81 66 275
================= ================= ================= ================= =================
At 30 September
2021 64 2 65 61 192
================= ================= ================= ================= =================
15. Work in Progress
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Contract assets 272 186
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 asset is recognised and presented
separately. The contract assets is transferred to receivables when
the entitlement to payment becomes unconditional.
16. Intangible Assets
US$'000
Opening net book value 1
April 2021 6
Addition -
Amortisation charge -
-----------------------------
Closing net book value 30
September 2021 6
There was no impairment during the period.
17. Subsidiaries
Details of the Company's subsidiaries as of 30 September 2021
are as follows:
Name of Subsidiary Place of Incorporation Proportion Proportion
of of Voting
Ownership Power
Interest
Golden Saint Technologies
(Australia) Pty Ltd Australia 100 100
EMS Wiring Systems Pte.
Ltd Singapore 100 100
GS Fintech Ltd UK 100 100
GS Fintech Pte Ltd Singapore 100 100
18. Taxation
Unrecognised tax losses
Where the realisation of deferred tax assets is dependent on
future taxable profits, losses carried forward are recognised only
to the extent that business forecasts predict that such profits
will be available to the companies in which losses arose.
The parent, GSTechnologies Ltd, is not liable to corporation tax
in BVI, so it has no provision for deferred tax. However, Golden
Saint Technologies (Australia) Pty Ltd is liable to tax in
Australia and EMS is liable for tax in Singapore.
19. Share Capital and Reserves
The share capital of the Company is denominated in UK Pounds
Sterling. Each allotment during the period was then translated into
the Group's functional currency, US Dollars at the spot rate on the
date of issue.
Authorised Number of Shares US$'000
Ordinary Shares
As at 1 April 2020 995,482,002 1,804
Issues during the period
1 Apr 2020 - 31 Mar 2021 198,000,000 273
------------------------ ----------------------------
As at 31 March 2021 1,193,482,002 2,077
Issues during the period
1 Apr 2021 - 30 Sep 2021 241,500,000 3,254
As at 30 September 2021 1,434,982,002 5,331
------------------------ ----------------------------
20. Non-Controlling Equity Interest
All entities within the group are currently 100% owned and
accordingly a non-controlling interest does not arise.
21. Trade and Other Payables
6 months ended 30 September
2021 2020
US$'000 US$'000
(Unaudited) (Unaudited)
Trade Payables 223 399
Accruals 485 325
Other Payables 43 24
Lease liabilities 67 -
818 748
----------------------------- -----------------------------
Trade payables are non-interest bearing and are normally settled
on 60-day terms.
22. Loans Payable
30-Sep-21 30-Sep-20
-------------------------- ------------------------- -------------------------- -------------------------
Term Current Non-current Current Non-current
US$'000 US$'000 US$'000 US$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Loan 5
1 years 136 975 132 1,238
Loan 3
2 years 86 223 82 391
-------------------------- ------------------------- -------------------------- -------------------------
222 1,198 213 1,629
23. Commitments and Contingencies
The Group is subject to no material commitments or contingent
liabilities.
24. Subsequent Events
As announced, on 25 November 2021, subscription of 50,000,000
ordinary share has been placed at GBP0.02 per ordinary share.
25. Financial risk management objectives and policies
The Group's activities expose it to a variety of financial
risks. The Group's Board provides certain specific guidance in
managing such risks, particularly as relates to credit and
liquidity risk. Any form of borrowings requires approval from the
Board and the Group does not currently use any derivative financial
instruments to manage its financial risks. The key financial risks
and the Group's major exposures are as follows:
Credit risk
The maximum exposure to credit risk is represented by the
carrying amount of the financial assets. In relation to cash and
cash equivalents, the Group limits its credit risk with regards to
bank deposits by only dealing with reputable banks. In relation to
sales receivables, the Group's credit risk is managed by credit
checks for credit customers and approval of letters of credit by
the Group's advising bank.
Foreign Currency Risk
Currency risk is the risk that the value of a financial
instrument will fluctuate due to changes in foreign exchange rates.
The 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.
26. Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
The Group monitors its risk to a shortage of funds using a
combination of cash flow forecasts, budgeting and monitoring of
operational performance.
27. Capital management
Capital includes equity attributable to the equity holders of
the parent. Refer to the statement of changes in equity for
quantitative information regarding equity.
The Group's primary objectives when managing capital are to
safeguard its ability to continue as a going concern in order to
provide returns for shareholders. For details of the capital
managed by the Group as of 30 September 2021, please see Note
19.
The Group is not subject to any externally imposed capital
requirements.
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END
IR FEWFMSEFSEIE
(END) Dow Jones Newswires
December 21, 2021 01:59 ET (06:59 GMT)
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