Interim Results

RNS Number : 2293K

GSTechnologies Ltd

20 December 2022

 

20 December 2022

GSTechnologies Limited

("GST" or the "Company", or, together with its subsidiaries, the "Group")

Interim Results for the six months ended 30 September 2022

GSTechnologies Limited (LSE: GST), the fintech company, announces the Company's interim results for the six months ended 30 September 2022.

Period Highlights

·	First full reporting period following the completion of the acquisition of Angra Limited ("Angra") in February 2022, a UK-based foreign exchange and payment services company.  During the period, Angra traded profitably, in line with the Board's expectations
·	Completion of the acquisition of UAB Glindala ("Glindala"), a holder of a Crypto Currency Exchange Licence registered in Lithuania, in August 2022
·	Agreement entered into to dispose of EMS Wiring Systems Pte Ltd ("EMS"), a non-core loss-making business, to a member of its management team
·	GS Money Stablecoin Regulatory Sandbox application process commenced
·	Net loss for the period of US$1,153,000 (H1 2021: US$1,094,000 loss) as EMS continued to underperform and the Company invested in developing its GS Money solutions
·	As of 30 September 2022, the Company had US$3,334,000 in cash and cash equivalents (30 September 2021: US$2,749,000)

Post Period Highlights

·	Group's transition to focus purely on next-generation digital money solutions achieved with the completion of the disposal of EMS, just after the period end, on 5 October 2022
·	GS20 Exchange soft launched in November 2022

Chairman's Statement

I'm pleased to present on behalf of the board of directors of GST (the "Board") the interim report of the Company for the six months ended 30 September 2022.

The period was again one of significant progress for the Group as it focused on the Company's plans to launch a borderless neobanking platform providing next-generation digital money solutions.  In particular, the agreement to dispose of EMS, completed just after the period end, will enable the Group to focus solely on its stated strategy as a 'pure play' fintech group and has removed a non-core loss making business from the Group.

EMS, based in Singapore, provides wireless, electronic cabling, security, and other solutions to clients operating in the infrastructure development space.  In the period it saw revenues decline and it continued to be loss making, as a limited number of new contracts were won and trading conditions remained difficult.  The binding agreement entered into on 17 July 2022 has subsequently seen EMS disposed of to Teo Chiah Chiu Raphael ("Raphael Teo"), the Chairman of EMS.  The consideration paid was the transfer to the Company, by way of a share buyback, 60,000,000 ordinary shares of no par value in GST held by him (the "Consideration Shares").  At the closing mid-price of 1.09p of the Company's shares on 15 July 2022, the Consideration Shares were valued at £654,000 and they represented approximately 3.87 per cent. of the Company's issued share capital.  The Company intends to hold the Consideration Shares in treasury for future issue or cancellation in due course.

The primary focus for the Group has, since early 2021, been on the 'GS Fintech' subsidiaries in the UK and Singapore and the Company's expansion into blockchain related technologies applied to the financial services sector, specifically its plans to launch a borderless neobanking platform providing next-generation digital money solutions.  During the period the Company has made significant progress in implementing its stated strategy to roll-out a suite of offerings under its GS Money banner based on three initial use-cases: international money transfers, borderless accounts, and private stablecoin.

Following the completion of the acquisition of Angra, a UK-based foreign exchange and payment services company, announced on 8 March 2022, Angra has been successfully integrated within the Group and was a consolidated subsidiary throughout the period.

Angra, which operates under the AngraFX brand name, is an established Financial Conduct Authority ("FCA") approved Authorised Payment Institution ("API"), conducting fast, secure, and low-cost foreign exchange business and payment services internationally, the first pillar of GS Money.  Angra has provided the Group with an operating business in the UK and an API licence in order to be able to connect to traditional banking payment systems and agent networks, operate a remittance business in the UK and ultimately grow revenues from the stablecoin network and applications that are being developed.   During the period Angra traded profitably, in line with the Board's expectations.

On 24 August 2022, t he Company completed the acquisition of Glindala, a holder of a Crypto Currency Exchange Licence, registered in Lithuania.  Glindala's Crypto Currency Exchange Licence is supervised by the Lithuanian Financial Crime Investigation Service ("FCIS") and it covers two types of crypto activities, cryptoasset exchange services, both crypto-fiat and crypto-crypto, and cryptoasset depository wallet services, including generating and storing encrypted client keys.  The Company believes the exchange will be a significant enabler for its GS Money stablecoin business and will integrate well with Angra.

Following the acquisition of Glindala, GST entered into an agreement with an exchange infrastructure technology partner to provide the technology and software to run the exchange and integrate it with the Company's other offerings.  Post period end, on 16 November 2022, the Company was pleased to announce the soft launch of its cryptoasset exchange, the GS20 Exchange.  Glindala was also renamed to GS Fintech UAB, trading as the GS20 Exchange.  GS Fintech UAB is being led by Shayne Tan, the Company's COO, who has been appointed as the CEO of the GS20 Exchange.

The GS20 cryptoasset exchange, based in Lithuania, will focus on offering spot trading and over-the-counter trading desk services for popular cryptoassets, such as Bitcoin, Ethereum and USDT, and other regulated stablecoins, to a controlled group of retail account holders, as well as a select number of institutional participants, including existing customers of Angra.  The GS20 Exchange is not a pure cryptocurrency exchange, so users can expect to see greater technology integration with regulated stablecoins as well as the introduction of more convenient onramp and offramp services for those stablecoins in due course.  During the soft launch period, participants have full access to the GS20 Exchange, serving as its first official users.

Those accepted by GS20 Exchange to take part in its soft launch and commence trading on the platform are required to give feedback on their experience using the exchange.  This feedback is already providing substantive data which is allowing the GST team to better assess users' needs for the development of the finalised user experience of the GS20 cryptoasset exchange.

As a further key pillar of the stablecoin activities that the Group intends to carry out in strategic jurisdictions, including the UK, the Company appointed Pinsent Masons LLP as its legal advisor to assist with the Company's stablecoin application for admission to the FCA Regulatory Sandbox.  Founded on the precept that innovation and technology can benefit consumers and the financial services industry, the FCA Regulatory Sandbox provides a production environment for firms to test innovative propositions in the market with real consumers.

The Pinsent Masons team have been advising on the application to the FCA, which has made substantial progress, including refining GS Fintech's stablecoin business plan and ensuring the proposed technical and operational procedures are compliant with all electronic money and relevant payments regulations in the UK.

Utilising the FCA Regulatory Sandbox is designed is to encourage more participants to experiment with the Company's fiat-linked (full-reserve backed) stablecoins, that were launched in late November 2021, and conduct stress tests in the stablecoin-based payment system, in a similar manner to how it performs in the banking world.  Ultimately, the Company's goal is to be the first publicly quoted company to obtain an electronic money institution licence from the FCA to issue stablecoins and provide trusted stablecoin-based payments services to the UK market and beyond.

Summary

GS Money is intended to make cross-border payments quick and affordable to an addressable market of millions of participants by netting and settling trades through its stablecoin-based payments network.  With the acquisition of Angra, the Group now has an FCA approved API conducting fast, secure, and low-cost foreign exchange business and payment services internationally, and the first pillar of GS Money in place.  In 2023 we will be looking to grow revenues substantially from this business via the stablecoin network and applications that are being developed.

Unlocking the demand for a large user base also requires a platform that can meet the clearing and settlement needs of both retail and institutional customers with high compliance and security standards.  The acquisition of Glindala and subsequently its transformation into the GS20 Exchange has provided such a platform.

With the Angra and GS20 Exchange platforms in place, the FCA Regulatory Sandbox application being progressed, and further progress being made on the development of the Company's GS Money solutions, coupled with the disposal of EMS, GST has come a long way in a short period of time.  We are now a focused, 'pure play' fintech group with a solid platform on which build and to role out our GS Money solutions.  We will also continue to explore any further value enhancing acquisition opportunities that may become available and that can assist with accelerating the development of the Group.

Whilst we will continue to invest in developing the Group's stablecoin-based cross-border payments network, with a firm focus on minimising costs, the disposal of EMS has removed a significant drag on our finances.  I therefore believe there is a very bright future for GST and I look forward to reporting on our further progress in the coming months.

Tone Kay Kim GOH  
Chairman

Financial Highlights

· Despite the contribution from Angra, the continued poor performance of EMS resulted in a decrease in revenue for H1 2022 to US$1,799,000 (H1 2021: US$2,261,000).

· As of 30 September 2022, the Company had US$ 3,334,000 in cash and cash equivalents (30 September 2021: US$2,749,000).

· Net loss for the period of US$1,153,000 (H1 2020: US$1,094,000 loss).  Despite the positive contribution from Angra, the poor performance of EMS in the period was the major contributing factor to the increased net loss for the period.

Enquiries:

The Company
Tone Goh, Executive Chairman		[phone]
Financial Adviser
VSA Capital Limited		[phone]
Simon Barton / Pascal Wiese
Broker
OvalX		[phone]
Tom Curran / Thomas Smith
Financial PR & Investor Relations
IFC Advisory Limited Tim Metcalfe / Graham Herring / Florence Chandler		[phone] [e-mail]

For more information please see: https://gstechnologies.co.uk/

CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the period 1 April 2022 to 30 September 2022

		6 months ended 30 September
	Notes	2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Net operating income
Sales		1,799		2,261
Other income		49		92
		1,848		2,353
Net operating expense
Continuing Operations	6	(2,915)		(3,447)
Foreign exchange loss		(86)		(0)
Operating loss		(1,153)		(1,094)
Income tax expense		-		-
Net loss for the year		(1,153)		(1,094)
Other comprehensive loss
Movement in foreign exchange reserve		(521)		(58)
Total comprehensive loss for the year		(1,674)		(1,152)
Net Loss for the year attributable to:
Equity holders for the parent		(1,153)		(1,094)
Non-controlling interest		-		-
Total comprehensive loss for the year attributable to:
Equity holders for the parent		(1,674)		(1,152)
Non-controlling interest	20	-		-
(Loss)/Earnings per share attributable to members
of the Parent
Basic (loss) per share	9	(0.00074)		(0.00090)
Diluted (loss) per share	9	(0.00074)		(0.00090)

CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

As at 30 September 2022

			6 months ended 30 September
	Notes		2022		2021
			US$'000		US$'000
			(Unaudited)		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	11		3,334		2,749
Trade and other receivables	12		3,038		2,638
Other Assets			299		299
Work in progress	15		198		272
Inventories	13		16		8
Total current assets			6,885		5,966
Non-current assets
Property, plant and equipment	14		305		192
Intangible Assets	16		44		6
Total non-current assets			349		198
TOTAL ASSETS			7,234		6,164
EQUITY
Share Capital	19		7,795		5,331
Reserves			(1,336)		(768)
Retained Earnings			(2,126)		(637)
Total Equity			4,333		3,926
Equity attributable to owners of the parent			4,333		3,926
Non-controlling equity interest	20		-		-
			4,333		3,926
LIABILITIES
Current liabilities
Trade and other payables	21		1,974		818
Loans payable	22		261		222
Total current liabilities			2,235		1,040
Non-current liabilities
Lease Liabilities			7		-
Loans payable	22		659		1,198
Total current liabilities			666		1,198
Total Liabilities			2,901		2,238
TOTAL EQUITY & LIABILITIES			7,234		6,164

CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the period 1 April 2022 to 30 September 2022

		6 months ended 30 September
	Notes	2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations		(1,153)		(1,094)
Adjustments:
Depreciation of property, plant and equipment		61		81
Exchange loss		19		2
Operating loss before working capital changes		(1,073)		(1,011)
Decrease/(Increase) in inventories		-		10
Decrease/(Increase) in trade and other receivables		(759)		711
(Decrease)/Increase in trade and other payables		979		(317)
Net cash flow used in operating activities		(853)		(607)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and equipment		(115)		-
Net cash flow from investing activities		(115)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares		-		1,907
Decrease in loans payable		(281)		(235)
Forex reserves		(521)		(58)
Net cash flow from financing activities		(802)		1,614
Net increase/(decrease) in cash and cash equivalents		(1,770)		1,007
Cash and cash equivalents at beginning of the year		5,104		1,742
Cash and cash equivalents at end of the year	11	3,334		2,749

CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

For the period 1 April 2022 to 30 September 2022

	Shareholder Capital		FX Reserve		Retained Earnings		Total
2022 CONSOLIDATED	US$'000		US$'000		US$'000		US$'000
Balance at 1 April 2022	7,795		(815)		(973)		6,007
Comprehensive Income
Loss for the year	-		-		(1,153)		(1,153)
Other comprehensive loss for the year	-		(521)		-		(521)
Total comprehensive loss for the year	-		(521)		(1,153)		(1,674)
Balance at 30 September 2022	7,795		(1,336)		(2,126)		4,333

Notes to the Financial Statements

Accounting Policies

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 2022 and ended 30 September 2022 were authorised for issue in accordance with a resolution of the Directors on 20 December 2022.

The registered office of GSTechnologies Ltd, the ultimate parent of the Group, is Ritter House, Wickhams Cay II, Road Town, 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 1 April 2022 to 30 September 2022.

The consolidated financial statements have been prepared on a historical cost convention basis, except for certain financial instruments that have been measured at fair value. The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand except when otherwise indicated.

2.1 Consolidation

The consolidated financial statements comprise the financial statements of the Group as of 30 September 2022, 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 2022, the Group held cash reserves of US$3,334,000 (2021: US$2,749,000).

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$ 1,153,000 for the six months ended 30 September 2022 and had net assets of US$4,333,000 as of 30 September 2022 (2021:  loss of US$1,094,000 and net assets of US$3,926,000).

Subsidiaries Angra Ltd and GS Fintech are expected to contribute profit to the Group.

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 23 for further details.

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Judgements made in applying accounting policies

Management is of the opinion that there are no significant judgements made in applying accounting estimates and policies that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period are discussed below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Provision for expected credit losses (ECL) on trade receivables and contract assets

ECLs are unbiased probability-weighted estimates of credit losses which are determined by evaluating a range of possible outcomes and taking into account past events, current conditions and assessment of future economic conditions.

The Company uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially based on the Company's historical observed default rates. The Company will calibrate the matrix to adjust historical credit loss experience with forward-looking information. At every reporting date, historical default rates are updated and changes in the forward- looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company's historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future.

The carrying amount of the Company's trade receivables at the end of the reporting period is disclosed in Note 12 to the financial statements.

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. Adoption of new and amended standards and interpretations

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
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Continuing Operations
Costs of goods sold		516		1,217
Employee Cost		1,650		1,151
Travel Expenses		6		3
Admin Expense		393		813
Lease Expenses		38		1
Distribution, Advertising and promotion		12		4
General Expenses		46		105
Depreciation of property plant and equipment		61		81
Doubtful accounts		156		-
Interest on lease expenses		2		3
Occupancy costs		15		43
Finance costs		20		26
		2,915		3,447

7. Key Management Personnel

	6 months ended 30 September
	2022		2021
	US$'000		US$'000
	(Unaudited)		(Unaudited)
Directors' emoluments	301		229

8. Employee costs

		6 months ended 30 September
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Wages and salaries		207		91
Wages and salaries - Cost of sales		836		722
Other employee costs		306		109
Total		1,349		922

9. Earnings per share

		6 months ended 30 September
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Loss for the period attributable to members of the parent		(1,153)		(1,094)
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		1,548,558,192		1,215,794,502
Basic loss per share-cents		(0.00074)		(0.00090)
Diluted loss per share-cents		(0.00074)		(0.00090)

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
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Cash at Bank		3,334		2,749

12. Trade and Other Receivables

		6 months ended 30 September
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Trade Receivables		1,258		1,228
Prepayments		1,431		63
Other Receivables		349		1,347
		3,038		2,638

13. Inventories

		6 months ended 30 September
		2021		2020
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Inventories		16		8

14. Property, Plant and Equipment

	Right-of-Use Assets		Building and improvts		Furniture & Office Equipment		Vehicle		Total
	US$'000		US$'000		US$'000		US$'000		US$'000
Cost
As at 31 March 2022	403		52		581		139		1,175
Additions / Transfer in	-		106		9		-		115
Adjustments/Forex translation	(23)		(3)		(39)		(8)		(73)
As at 30 September 2022	380		155		551		131		1,217
Accumulated depreciation
As at 31 March 2022	296		52		474		83		905
Charge for the year	29		12		15		5		61
Adjustments/Forex translation	(17)		(4)		(29)		(4)		(54)
As at 30 September 2022	308		60		460		84		912
Net book value
As at 31 March 2022	107		-		107		56		270
As at 30 September 2022	72		95		91		47		305

15. Work in Progress

		6 months ended 30 September
		2021		2020
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Contract assets		198		272

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.

16. Intangible Assets

			US$'000
Opening net book value 1 April 2021			44
Addition			-
Amortisation charge			-
Closing net book value 30 September 2021			44

There was no impairment during the period.

17. Subsidiaries

Details of the Company's subsidiaries as of 30 September 2022 are as follows:

Name of Subsidiary	Place of Incorporation	Proportion of Ownership Interest	Proportion of Voting Power
Golden Saint Technologies (Australia) Pty Ltd	Australia	100	100
EMS Wiring Systems Pte. Ltd GS Fintech Ltd GS Fintech Pte Ltd	Singapore UK Singapore	100 100 100	100 100 100
Angra Limited	UK	100	100
UAB Glindala	Lithuania	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, EMS Wiirng Systems Pte Ltd and GS Fintech Pte Ltd is liable for tax in Singapore while Angra Limited and GS Fintech Ltd is liable in UK.

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 31 March 2021		1,193,482,002		2,077
Issues during the period
1 Apr 2021 - 30 Sep 2022		355,076,190		5,718
As at 30 September 2022		1,548,558,192		7,795

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
		2022		2021
		US$'000		US$'000
		(Unaudited)		(Unaudited)
Trade Payables		1,034		223
Accruals		555		485
Unearned revenue		284		-
Other Payables		35		43
Lease liabilities		66		67
		1,974		818

Trade payables are non-interest bearing and are normally settled on 60-day terms.

22. Loans Payable

		30-September 2022			30-September 2021
	Term	Current	Non-current		Current	Non-current
		US$'000	US$'000		US$'000	US$'000
		(Unaudited)	(Unaudited)		(Unaudited)	(Unaudited)
Loan 1	5 years	176	616		136	975
Loan 2	3 years	85	43		86	223
		261	659		222	1,198

23. Commitments and Contingencies

The Group is subject to no material commitments or contingent liabilities.

24. Subsequent Events

As announced, on 5 October 2022, the disposal of its subsidiary, EMS Wiring Systems Pte Ltd, was completed via share buyback of 60,000,000 no par value ordinary shares to be held in treasury. The current total number of voting rights is 1,488,558,192.

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 company is exposed to currency risk on sales and purchases, that are denominated in foreign currencies.

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 2022, please see Note 19.

The Group is not subject to any externally imposed capital requirements.

 

END

 

 

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