GSTechnologies Ltd
Annual Report 2020

Plain-text annual report

GSTECHNOLOGIES LIMITED formerly known as Golden Saint Technologies Limited ANNUAL REPORT For the financial year ended 31 March 2020 GSTECHNOLOGIES LTD. ANNUAL REPORT For the financial year ended 31 March 2020 CONTENTS Directors’ Statement Consolidated Statement of Profit or loss and Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity PAGE 1 - 6 7 8 9 10 Notes to the Consolidated Financial Statements 11 - 30 Directors’ Remuneration Report Parent Company Statement of Financial Position Parent Company Statement of Changes in Equity Auditor’s Report 31 32 33 34 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 Board of Directors Tone Goh, Executive Chairman Pierre Fourie, GST’s Group MD, has deployed his strategic mind in helping me guide the development of the GST businesses towards ever-stronger, value creating, growth (resigned 31 June 2019) Raphael Teo’s technical expertise has influenced all parts of the engineering and installation teams’ work William Knight brings an invaluable source of reliable counsel to our Board (resigned 2 December 2019) Malcolm Groat is a pillar of support for our company, bringing decades of high-level financial skill and experience to our senior team 1 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 Directors’ Report The Directors present their Annual Report on the affairs of the Group, together with the financial statements and auditor’s report, for the year ending 31 March 2020. Principal Activities GST provides optimal wireless, electronic cabling, security, and other solutions to clients operating in the infrastructure development space. GST builds on the profitable ICT business of its Singaporean subsidiary EMS Wiring Systems, which has been supplying governments and large private organisations with intelligent building solutions for the last 30 years. GST's strategy is to develop solutions to meet the needs of the ICT industry, acting on the surging opportunities in the technology and innovation sectors - data Centres, intelligent buildings, smart cities and the Internet of Things - particularly targeting emerging markets where the demand for ICT infrastructure is increasing rapidly. Business Review A review of the business during the period and to date, including comments on future developments, is contained on the Strategic Report. Dividends The Board believes that the interests of all stakeholders are best served by retaining capital within the Company and maintaining greater flexibility to be able to take advantage of, looking forward, the many attractive investment and business development opportunities open to GST at this time and over the next few years. GST is looking to generate long term value for customers and shareholders in a sustainable manner. As a result, GST’s dividend policy for this financial year is not to pay dividends to shareholders but rather meet their interests by creating value that leads to capital growth. Subsequent Events There were no subsequent events for the year ended 31 March 2020. Financial Instruments The Group’s financial instruments primarily comprise cash, cash equivalents, and other instruments such as trade receivables and payables, which arise directly from its operations. Note 24 to the accounts gives details of the Group’s risks and policies regarding financial instruments. The accompanying notes form an integral part of these consolidated financial statements. 2 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 Directors’ statement as to disclosure of information to the auditor The Directors at the date of approval of this report confirm that: - - to the best of their knowledge and belief, there is no relevant audit information of which the Group’s auditor is unaware and the Directors have taken all the steps that might reasonably be expected to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group’s auditor is aware of that information. On behalf of the Board Tone Goh Executive Chairman 11 September 2020 The accompanying notes form an integral part of these consolidated financial statements. 3 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 15 September 2020 GSTechnologies Limited ("GST", the “Group” or the "Company") Results for the year ended 31 March 2020 Golden Saint Technologies Limited (LSE: GST), the integrated information and communication technology infrastructure solutions provider, is pleased to announce the Company's results for the year ended 31 March 2020. Period Highlights    Introduction of new product from Mitel telephone solutions Continuous expansion of operations in Asia Pacific, US and Germany IS-EMS investment withdrawn; no longer a subsidiary Post Highlights  Signed a DeepAlert SAAS agreement with DeepAlert Limited for AI security, real-time video analytics  Development of Smart Innovation for IoT, security, and energy efficiency applications Chairman’s Statement I am pleased, on behalf of the Board of Directors of GST, to present our annual results for the year ended 31 March 2020 to our valuable shareholders. The COVID-19 pandemic has affected all businesses in ways no one could have imagined when I was writing my Chairman’s statement this time last year. I am truly proud of our 100 strong team of dedicated staff members across all of the areas in which we operate. Our customers have relied on the critical ICT connectivity services we provide more than ever before. The determination, execution and devotion from the whole GST team has enabled our many clients in banking, medical and government sectors, in essential services, to function and succeed during this intense period of need. I am pleased to report that none of our GST staff have so far been infected by the awful corona virus. The accompanying notes form an integral part of these consolidated financial statements. 4 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 The Company continues to prioritise the health, safety and wellbeing of its staff, clients and partners, adhering to strict government guidelines on social distancing and all other COVID-19 preventive measures. Throughout the entire FY20, GST have had continual success in implementing the Company’s 4i Vision - infrastructure innovation integration intelligence, which will remain the Company's long-term direction, developing lucrative relationships with both vendors and potential customers. This has been particularly the case in the Company’s infrastructure integration core competence, catering for data center next generation solutions. I am aware as I write this in the midst of the COVID-19 pandemic, that there's talk of uncertainty and unprecedented change. While we don’t yet know how deep the COVID-19 economic downturn will be, nor how long it will last, we are sure that the years immediately ahead of us will be more difficult for many businesses than the stable conditions we have enjoyed over the last decade. GST will not be spared from those difficulties and challenges. On a brighter note, GST intends to grow and profit from the resultant growth in technology industries and the info communications sector in particular, which must and shall continue to expand in the new normal world where many will work and study from home. Faster, secured and more efficient data centers are required and the forecast is for robust growth in the coming decades. GST intends to capitalise on these opportunities worldwide. EMS is celebrating its 30th anniversary since inception and the business has been through several severe global economic downturns during that time and survived, only to become stronger. We are optimistic for the future and have confidence in remaining profitable and delivering shareholder value in the coming years. I would like to take this opportunity to express my upmost gratitude to all GST team members, suppliers, partners, customers and our valued shareholders for their trust and support. Tone Kay Kim GOH Chairman FINANCIAL REVIEW Income Analysis 1. For the 12-month period ended 31 March 2020 the Company reports revenue of US$4.5 million (2019: US$6.6 million). The Group’s loss before tax for the financial year is US$0.27 million, a reduction of US$0.11 million compared to the loss incurred in previous financial year (2019: US$0.38 million). The operating income has decreased by 32% partially due to the effects of COVID-19 with corresponding operating expenses also decreased by a similar percentage to US$4.8 million (2019: US$7.1 million). 2. The accompanying notes form an integral part of these consolidated financial statements. 5 GSTECHNOLOGIES LTD. DIRECTORS’ STATEMENT For the financial year ended 31 March 2020 Balance Sheet Analysis 1. Net assets at 31 March 2020 amounted to US$1.9 million (2019: US$2.3 million). This decrease is largely due to the overall reduction in current assets significantly contributed by reduced sales that led to reduced cash and cash equivalents, trade and other receivables, and work in progress amounting to US$1.6 million, a reduction of 44% compared to the preceding financial year. 2. However, the acid test ratio (current assets, excluding inventories/current liabilities) has improved to 3.0 as compared to 2.1 in the preceding financial year. As at 31 March 2020, the Group had an available cash balance of US$0.6 million, a decrease of US$0.3 million from the preceding financial year (2019: US$0.9 million). The Directors believe that the Group is in a stable financial position and able to expand and grow its current operations and meet all its current liabilities. Enquiries The Company Tone Goh, Executive Chairman Singapore +65 6444 2988 Financial PR & Investor Relations IFC Advisory Limited London +44 20 3934 6636 Tim Metcalfe / Graham Herring / Heather Armstrong About GST GST provides optimal wireless, electronic cabling, security, and other solutions to clients operating in the infrastructure development space. GST builds on the profitable ICT business of its Singaporean subsidiary EMS Wiring Systems, which has been supplying governments and large private organisations with intelligent building solutions for the last 30 years. GST's strategy is to develop solutions to meet the needs of the ICT industry, acting on the surging opportunities in the technology and innovation sectors - data centres, intelligent buildings, smart cities and the Internet of Things - particularly targeting emerging markets where the demand for ICT infrastructure is increasing rapidly. For more information please see: https://gstechnologies.co.uk/ The accompanying notes form an integral part of these consolidated financial statements. 6 GSTECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME For the financial year ended 31 March 2020 Notes 2020 US$'000 2019 US$'000 Net operating income Sales Other income Net operating expense Continuing Operations Foreign exchange loss Impairment of Goodwill Operating (loss)/profit Income tax expense Net (loss)/profit for the year 6 Other comprehensive income Movement in foreign exchange reserve Total comprehensive (loss)/income for the period Net Loss for the period atttributable to: Equity holders for the parent Non-controlling interest Total comprehensive loss for the period atttributable to: Equity holders for the parent Non-controlling interest 21 (Loss)/Earnings per share attributable to members of the Parent Basic (loss) per share Diluted (loss) per share 10 10 4,527 25 4,552 (4,803) (4) - (255) (20) (275) (188) (463) (275) - (463) - (0) (0) 6,662 25 6,687 (6,700) (6) (350) (369) (17) (385) (678) (1,063) (385) - (1,063) - (0) (0) The accompanying notes form an integral part of these consolidated financial statements. 7 GSTECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March 2020 Notes 2020 US$'000 2019 US$'000 ASSETS Current assets Cash and cash equivalents Trade and other receivables Work in progress Inventories Total current assets Non-current assets Property, plant and equipment Intangible Assets Total non-current assets TOTAL ASSETS EQUITY Share Capital Reserves Retained Earnings Total Equity 11 12 15 13 14 16 19 Equity attributable to owners of the parent Non-controlling equity interest 20 LIABILITIES Current Liabilities Trade and other payables Non-current Liabilities Lease Liabilities Total Liabilities TOTAL EQUITY & LIABILITIES 21 & 14 14 561 1,201 247 312 2,320 295 6 301 2,621 1,804 (866) 947 1,885 1,885 - 1,885 674 62 736 2,621 871 2,142 550 315 3,878 177 6 183 4,061 1,804 (678) 1,222 2,348 2,348 - 2,348 1,713 - 1,713 4,061 The accompanying notes form an integral part of these consolidated financial statements. 8 GSTECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF CASH FLOWS For the financial year ended 31 March 2020 Notes 2020 US$'000 2019 US$'000 CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation from operations Adjustments: Depreciation of property, plant and equipment Exchange loss Gain on disposal Operating loss before working capital changes Decrease/ (increase) in inventories Decrease / (increase) in trade and other receivables (Decrease )/ Increase in trade and other payables Net cash flow (used in)/from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Addition property, plant and equipment Addition in capital work in progress Proceeds from disposal of property, plant and equipment Net cash flow from investing activities Cash flows from financing activities Proceeds of ordinary share issue Forex reserves Principal elements of lease payments Net cash flow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 12 (255) 104 4 (4) (151) 3 941 (1,039) (95) (232) 301 4 73 - (188) 52 (136) (310) 871 561 (385) 36 6 (2) (345) (301) (960) 1,151 (455) (76) (343) 15 (404) 1,620 (678) - 942 83 788 871 The accompanying notes form an integral part of these consolidated financial statements. 9 GSTECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2020 2020 CONSOLIDATED Balance at 1 April 2019 Comprehensive Income Shareholder Capital US$'000 FX Reserve US$'000 Retained Earnings US$'000 Total US$'000 1,804 (678) 1,222 2,348 Loss for the year Other comprehensive loss for the year Total comprehensive loss for the year - - 1,804 - (188) (866) (275) - 947 (275) (188) 1,885 Transactions with owners in their capacity as owners: Shares issued during the year - - - - Balance at 31 March 2020 1,804 (866) 947 1,885 2019 CONSOLIDATED Balance at 1 April 2018 Comprehensive Income Loss for the year Other comprehensive loss for the year Total comprehensive loss for the year Transactions with owners in their capacity as owners: Issue of share capital on acquisition Shares issued during the year Share issue costs Shareholder Capital US$'000 FX Reserve US$'000 Retained Earnings US$'000 Total US$'000 181 - - 181 1,171 1,121 (669) 1,623 - 1,607 1,788 - (678) (678) (385) - 1,222 - - - - (385) (678) 725 1,171 1,121 (669) 1,623 Balance at 31 March 2019 1,804 (678) 1,222 2,348 The accompanying notes form an integral part of these consolidated financial statements. 10 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 1. General Information 1.1 Corporate information The consolidated financial statements of GSTechnologies Ltd (‘the company”) and its subsidiaries (collectively referred to as “the Group”) for the financial year ended 31 March 2020 were authorised for issue in accordance with a resolution of the Directors on 11 September 2020. The shares of the Company are publicly traded on London Stock Exchange. The registered office of GSTECHNOLOGIES Ltd, the ultimate parent of the Group, is Intertrust Corporate Services (BVI) Limited, Ritter House, Wickhams Cay II, Tortola , BVI VG1110. The principal activity of the Group is data infrastructure, storage and technology services. 2. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) as adopted by the European Union (EU) as they apply to the financial statements of the Group for the year ended 31 March 2020. The consolidated financial statements have been prepared on a historical cost convention basis, except for certain financial instruments that have been measured at fair value. The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand except when otherwise indicated. 2.1 Consolidation The consolidated financial statements comprise the financial statements of the Group as at 31 March 2020, 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 The accompanying notes form an integral part of these financial statements. 11 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 2. Basis of preparation (continued) consideration classified as equity is not re-measured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is re-measured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to business combinations are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. 3. Significant accounting judgements, estimates and assumptions The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes would differ from these estimates if different assumptions were used and different conditions existed. In particular, the Group has identified the following areas where significant judgements, estimates and assumptions are required, and where actual results were to differ, may materially affect the financial position or financial results reported in future periods. Further information on these and how they impact the various accounting policies is located in the relevant notes to the consolidated financial statements. Going concern This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. At 31 March 2020, the Group held cash reserves of $561,000 (2019: $871,000). The Directors are confident that 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 $272,000 for the year ended 31 March 2020 and had net assets of $1,888,000 as at 31 March 2020 (2019: loss of $385,000 and net assets of $2,348,000). Accruals Management have used judgement and prudence when estimating certain accruals for contractor claims. The accruals recognised are based on work performed but are before settlement. The accompanying notes form an integral part of these financial statements. 12 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 3. Significant accounting judgements, estimates and assumptions (continued) 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. The accompanying notes form an integral part of these financial statements. 13 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 3. Significant accounting judgements, estimates and assumptions (continued) 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 12 to the financial statements. Allowance for inventory obsolescence The Company reviews the ageing analysis of inventories at each reporting date, and makes provision for obsolete and slow moving inventory items identified that are no longer suitable for sale. The net realisable value for such inventories are estimated based on the most reliable evidence available at the reporting date. These estimates take into consideration market demand, competition, selling price and cost directly relating to events occurring after the end of the financial year to the extent that such events confirm conditions existing at the end of the financial year. Possible changes in these estimates could result in revisions to the valuation of inventories. The carrying amounts of the Company’s inventories at the reporting date are disclosed in Note 13 to the financial statements. 4. Adoption of new and amended standards and interpretations IFRS 16 was adopted as from April 1, 2019. All operating lease contracts, with limited exceptions, were recognised on the balance sheet by recognising right-of-use assets and corresponding lease liabilities at the transition date. Group applied the modified retrospective transition method, and consequently comparative information is not restated. At the adoption date, additional lease liabilities were recognised for leases previously classified as operating leases applying IAS 17. These lease liabilities were measured at the present value of the remaining lease payments and discounted using entity-specific incremental borrowing rates at April 1, 2019. In general, a corresponding right-of-use asset was recognised for an amount equal to each lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the specific lease contract, as recognised on the balance sheet at March 31, 2019. As a practical expedient the recognition exemption for leases with a remaining term of less than 12 months from the adoption date was applied upon adoption. Compared with the previous accounting for operating leases under IAS 17, the application of the new standard has a significant impact on the classification of expenditures and cash flows. It also impacts the timing of expenses recognised in the statement of income. With effect from 2019, expenses related to leases previously classified as operating leases are presented under ‘Depreciation, depletion and amortisation’ and ‘Interest expense’. 5. Summary of significant accounting policies Plant and equipment Plant and equipment are shown at cost less accumulated depreciation and impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, any incidental cost of purchase, and associated borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Directly attributable costs include employee benefits, professional fees and costs of testing whether the asset is functioning properly. Capitalised borrowing costs include those that are directly attributable to the construction of 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 Motor Vehicles Fixtures and fittings Lease Improvements 2 to 10 years 2 to 10 years 3 years 5 years The accompanying notes form an integral part of these financial statements. 14 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Plant and equipment (continued) 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 These accounting policies are applied on and after the initial application date of FRS 109/IFRS 9, 1 April 2018: (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 The accompanying notes form an integral part of these financial statements. 15 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Financial Instruments (continued) 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. The accompanying notes form an integral part of these financial statements. 16 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits that are readily convertible to known amount of cash and that are subject to an insignificant risk of changes in their fair value, and are used by the Company in the management of its short-term commitments. For the purpose of the statement of cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the Company’s cash management are included in cash and cash equivalents. Impairment Financial Assets These accounting policies are applied on and after the initial application date of FRS 109/IFRS 9, 1 April 2018: 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. The accompanying notes form an integral part of these financial statements. 17 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Impairment (continued) 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 accompanying notes form an integral part of these financial statements. 18 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Provisions (continued) the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Finance income Interest income is made up of interest received on cash and cash equivalents. Income tax Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilised, except: • In respect of deductible temporary differences associated with investments in subsidiaries, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. The accompanying notes form an integral part of these financial statements. 19 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Foreign currencies i) Functional and presentation currency The consolidated financial statements are presented in US dollars, which is the Group’s presentation currency. ii) Transaction and Balances Transactions in foreign currencies are initially recorded in the functional currency at the respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange ruling at the reporting date. All differences are taken to the profit or loss, should specific criteria be met. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. iii) Group Companies The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • Assets and liabilities for each statement of financial position presented as translated at the closing rate at the date of the statement of financial position. • Income and expenses for each income statement and statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transactions dates, in which case income and expenses are translated at the dates of the transactions), and • All resulting exchange differences are recognised in other comprehensive income Revenue Recognition These accounting policies are applied on and after the initial application date of FRS 115/IFRS 15, 1 April 2018: 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 The accompanying notes form an integral part of these financial statements. 20 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 5. Summary of significant accounting policies (continued) Revenue Recognition (continued) 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 2020 US$'000 2019 US$'000 Continuing Operations Costs of goods sold Employee Cost Travel Expenses Admin Expense Lease Expenses Distribution, Advertising and promotion General Expenses Depreciation of property plant and equipment Interest expense on leases Occupancy costs Income tax expense 1,420 2,645 40 354 71 93 44 104 10 22 20 4,823 The accompanying notes form an integral part of these financial statements. 3,147 2,793 78 327 111 107 78 39 - 19 17 6,716 21 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 7. Key management personnel Directors’ emoluments 8. Employee cost Wages and salaries Wages and salaries – Cost of sales Total 9. Earnings per share 2020 US$’000 2019 US$’000 327 370 2020 US$’000 2019 US$’000 1,178 529 1,707 1,177 561 1,738 2020 US$’000 2019 US$’000 Loss for the period attributable to members (275) (385) Basic earnings per share is calculated by dividing the profit attributable to owners of the Parent by the weighted average number of ordinary share in issue during the year. Basic weighted average number of ordinary shares in issue Basic earnings per share-cents Diluted earnings per share-cents 10. Segment Reporting 669,126,659 669,126,659 (0.00) (0.00) (0.00) (0.00) The consolidated entity’s operating segments have been determined with reference to the monthly management accounts used by the chief operating decision maker to make decisions regarding the consolidated entity’s operations and allocation of working capital. Due to the size and nature of the consolidated entity, the Board as a whole has been determined as the chief operating decision maker. The consolidated entity operates in one business segment, being information data technology and infrastructure. The revenues and results are those of the consolidated entity as a whole and are set out in the statement of profit and loss and other comprehensive income. The segment assets and liabilities of this segment are those of the consolidated entity and are set out in the Statement of Financial Position. The accompanying notes form an integral part of these financial statements. 22 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 11. Cash and cash equivalents Cash at bank 2020 US$’000 2019 US$’000 561 871 Cash at bank balance includes US$52,849.49 pledged to the bank as security for banker guarantee given to customer. 12. Trade and Other Receivables Trade receivables Other Receivables 13. Inventories Inventories Less: Allowance for inventory obsolescence 2020 US$’000 878 323 1,201 2019 US$’000 1,889 253 2,142 2020 US$’000 2019 US$’000 602 (290) 312 605 (290) 315 The movement in the allowance for inventory obsolescence is as follows: Balance at beginning of year Write-back of allowance for inventory obsolescence Balance at end of year 2020 US$’000 2019 US$’000 290 0 290 322 (32) 290 The accompanying notes form an integral part of these financial statements. 23 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 14. Property, plant and equipment Accumulated depreciation As at 31 March 2018 Charge for the year Adjustments As at 31 March 2019 - - - - Charge for the year Adjustments for disposal As at 31 March 2020 - 55 55 46 12 (34) 25 14 - 39 372 8 380 21 - 401 112 15 (33) 94 14 (33) 75 530 35 (67) 498 104 (33) 569 Net book value As at 31 March 2019 - 13 67 97 177 As at 31 March 2020 114 7 101 73 295 The accompanying notes form an integral part of these financial statements. 24 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 14. Property, Plant and equipment (continued) (i) Lease liabilities recognised in the balance sheet The balance sheet shows the following amounts relating to leases liabilities: Current Non-current (ii) Amounts recognised in the statement of profit or loss The statement of profit or loss shows the following amounts relating to leases: Depreciation Interest expense 15. Work in progress Contract assets Contract liabilities 55 62 117 55 10 65 - - - - - - 2020 US$’000 2019 US$’000 247 - 595 (45) The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed at the reporting date. If the value of services rendered exceeds payments received from the customer, a contract asset is recognised and presented separately. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional. The contract liabilities primarily relate to advance consideration received from customers for contract revenue. If the amounts invoiced to the customer exceeds the value of services rendered, a contract liability is recognised and presented separately. The changes in contract balances are due to the differences between the agreed payment schedule and progress of project work. 16. Intangible Assets Cost as at 1 April and 31 March Fair value : As at 1 April As at 31 March There was no impairment during the period. The accompanying notes form an integral part of these financial statements. 2020 US$’000 2019 US$’000 6 6 6 6 6 6 25 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 17. Subsidiaries Details of the Company’s subsidiaries at 31 March 2020 are as follows: Name of Subsidiary Place of Incorporation Proportion of Ownership Interest Proportion of Voting Power Golden Saint Technologies (Australia) Pty Ltd Australia EMS Wiring Systems Pte. Ltd Singapore 100 100 100 100 18. Taxation Unrecognised tax losses Where the realisation of deferred tax assets is dependent on future taxable profits, losses carried forward are recognised only to the extent that business forecasts predict that such profits will be available to the companies in which losses arose. The parent, GSTechnologies Ltd, is not liable to corporation tax in BVI, so it has no provision for deferred tax. However, GSTechnologies (Australia) Pty Ltd is liable to tax in Australia and EMS is liable for tax in Singapore. Current income tax Adjustments for prior year Deferred tax expenses 2020 US$’000 2019 US$’000 11 - 11 9 20 5 - 5 11 16 The tax expense on the results of the financial year for the Company varies from the amount of income tax determined by applying the Singapore statutory rate of income tax on Company’s profit. The accompanying notes form an integral part of these financial statements. 26 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 19. Share capital and reserves The share capital of the Company is denominated in UK Pounds Sterling. Each allotment during the period was then translated into the Group’s functional currency, US Dollars at the spot rate on the date of issue. Authorised Ordinary shares Issued and Fully Paid – Common Shares At 31 December 2013 Issued during the period 1 January 2014 to 30 June 2014 At 30 June 2014 Issued during the period 1 July 2014 to 31 December 2014 At 31 December 2014 Issued during the period 1 January 2015 to 30 June 2015 At 30 June 2015 Issued during the period 1 July 2015 to 31 December 2015 At 31 December 2015 Issued during the period 1 January 2016 to 30 June 2016 At 30 June 2016 Issued during the period 1 July 2016 to 31 December 2016 At 31 December 2016 Issued during the period 1 January 2017 to 30 June 2017 At 30 June 2017 Issued during the period 1 July 2017 to 31 December 2017 At 31 December 2017 Issued during the period 1 January 2018 to 31 March 2018 At 31 March 2018 Elimination of shares on reverse take over Existing shares on acquisition Issued during the period 1 April to 31 March 2019 At 31 March 2020 Number of Shares US$ 420,172,001 48,753,609 - - 420,172,001 48,753,609 60,124,397 1,326,007 480,296,398 50,079,616 639,946,772 2,119,902 1,120,243,170 52,199,518 1,006,785,674 660,195 2,127,028,884 52,859,713 2,374,694,364 1,825,971 4,501,723,248 54,685,684 1,333,333,333 391,587 5,835,056,581 55,077,271 2,987,200,001 812,370 8,822,256,582 2,927,714,286 11,749,970,868 1,220,333,332 55,868,865 947,135 56,816,000 259,000 12,970,304,200 (12,970,304,200) 259,406,084 736,075,918 57,075,000 (57,075,000) - 1,623,000 995,482,002 1,623,000 27 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 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 Trade payables Accruals Other payables Lease liabilities 2020 US$’000 2019 US$’000 389 211 19 55 674 1365 291 57 - 1,713 Trade payables are non-interest bearing and are normally settled on 60-days terms. 22. Commitments and Contingencies The Group is subject to no material commitments or contingent liabilities. 23. Related party transactions During the period 1 April 2019 to 31 March 2020, there were no related party transactions other than loans between wholly owned subsidiaries. 24. Financial risk management objectives and policies The Group’s activities expose it to a variety of financial risks. The Group’s Board provides certain specific guidance in managing such risks, particularly as relates to credit and liquidity risk. Any form of borrowings requires approval from the Board and the Group does not currently use any derivative financial instruments to manage its financial risks. The key financial risks and the Group’s major exposures are as follows: Credit risk The maximum exposure to credit risk is represented by the carrying amount of the financial assets. In relation to cash and cash equivalents, the Group limits its credit risk with regards to bank deposits by only dealing with reputable banks. In relation to sales receivables, the Group’s credit risk is managed by credit checks for credit customers and approval of letters of credit by the Group’s advising bank. Foreign Currency Risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The company is exposed to currency risk on sales and purchases, that are denominated in foreign currencies. 28 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 24. Financial risk management objectives and policies (continued) variables held constant on the statement of comprehensive income (due to the fair value of currency sensitive nontrading monetary assets and liabilities). A positive amount in the table reflects a potential net increase in the consolidated statement of comprehensive income. 25. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Numbers in the table below represent the gross, contractual, undiscounted amount payable in relation to the financial liabilities. The Group monitors its risk to a shortage of funds using a combination of cash flow forecasts, budgeting and monitoring of operational performance. On Demand US$’000 Less than three months US$’000 Three to twelve months US$’000 One to five years US$’000 Total US$’000 As at 31 March 2020: Trade and other payables 480 194 - 674 26. Operating lease commitments Capital includes equity attributable to the equity holders of the parent. Refer to the statement of changes in equity for quantitative information regarding equity. The Group’s primary objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders. For details of the capital managed by the Group as at 31 March 2020, please see Note 14. The Group is not subject to any externally imposed capital requirements. 27. Capital management The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to shareholders through the optimisation of the debt and equity balance. Capital consists of total equity. The directors review the capital structure on an ongoing basis. As a part of the review, the directors consider the cost of capital and the risks associated with each class of capital. Based on the recommendation of the directors, the Company will balance its overall capital structure through the payment of dividends, new share issues as well as the issue of new debts or the redemption of existing debt. There were no changes in the Company’s approach to capital management during the year. The Company is registered with the Building and Construction Authority and is required to maintain certain minimum capital and net worth. The Company has complied with the applicable capital requirements for the financial years ended 31 March 2020 and 31 March 2019. 29 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 28. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. A sensitivity analysis is not presented, as all borrowing costs have been capitalised as at 31 March 2020; therefore, profit or loss and equity would have not been affected by changes in the interest rate. 30 GSTECHNOLOGIES LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the financial year ended 31 March 2020 Directors’ Renumeration Policy and practice The Group operates on a strictly “capital efficient’ approach and therefore director’s renumeration has been based on conservative market matching rates in order to act in the best interest of the company during the growth phase. At this time, outside of the existing shareholdings, there are no performance components included in directors’ renumeration. A renumeration committee has been formed to oversee this aspect of the Group’s operations. Remuneration Committee is chaired by Mr. Malcolm Groat and the rest of the board as participating members and are responsible for determining and reviewing compensation arrangements for all Executive Directors. The remuneration Committee is undertaking a strategic review of the structure of the director renumeration to ensure that the correct mix of fixed renumeration and performance-related incentives are provided to maintain the Company’s competitiveness in the corporate marketplace. Contracts Directors’ renumeration in its various forms was historically agreed by the Executive Chairman but is now overseen exclusively by the renumeration committee. All contracts are continuous until terminated by either party. Amounts of emoluments & compensation Director's Name Tone Goh Raphael Teo Pierre Fourie William Knight Malcolm Groat Total On behalf of the Board Tone Goh Executive Chairman 11 September 2020 Salary CPF Total US$'000 US$'000 US$'000 110 158 12 29 5 314 4 9 13 114 167 12 29 5 327 31 GSTECHNOLOGIES LTD - BVI PARENT COMPANY STATEMENT OF FINANCIAL POSITION As at 31 March 2020 ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets Non-current assets Intangible Assets Intercompany loan Total non-current assets TOTAL ASSETS EQUITY Share Capital Reserves Retained Earnings Total Equity LIABILITIES Current Liabilities Trade and other payables Total Liabilities TOTAL EQUITY & LIABILITIES 2020 US$'000 3 1 299 304 6 29 35 338 58,698 - (58,476) 222 117 117 338 In accordance with section 408 of the UK Companies Act 2006, the Company is availing itself of the exemption from presenting its individual statement of profit or loss and other comprehensive income. The Company’s loss for the financial year as determined in accordance with IFRS is US$362,300.84. The Company had no operating cash flows in the period, and therefore no cash flow statement has been prepared. 32 GSTECHNOLOGIES LTD - BVI PARENT COMPANY STATEMENT OF CHANGES IN EQUITY For the financial year ended 31 March 2020 2020 CONSOLIDATED Shareholder Capital US$'000 Reserves US$'000 Retained Earnings US$'000 Total US$'000 Balance at 1 April 2019 Comprehensive Income Loss for the year Other comprehensive loss for the year Total comprehensive loss for the year 58,698 - (58,032) - - 58,698 - (82) (82) (362) - (58,394) 666 (362) (82) 222 Transactions with owners in their capacity as owners: Shares issued during the year - - - - Balance at 31 March 2020 58,698 (82) (58,394) 222 33 

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