GSTECHNOLOGIES LTD
ANNUAL REPORT
For the financial year ended 31 March 2021
GSTECHNOLOGIES LTD
ANNUAL REPORT
For the financial year ended 31 March 2021
CONTENTS
PAGE
Board of Directors
Director’s Report
Chairman’s Statement
Financial Review
Consolidated Statement of Profit or loss and
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
1
2
4
5
7
8
9
Consolidated Statement of Changes in Equity
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 2021
Board of Directors
Tone Goh, Executive Chairman, holds a Bachelor of Science degree and an
MBA in International Business from the University of San Francisco. He has
more than 25 years’ experience in corporate real estate advisory, asset
management, finance and development and has held executive positions on the
boards of a number of international companies specialising in mergers and
acquisitions and the private equity industry.
Raphael Teo, Executive Director. holds a Diploma in Computer Science and
Programming and has over 32 years of experience in the Information &
Communications Technology (ICT) industry. He provides IT infrastructure &
turnkey solutions in various sectors of the industry. He has experience in design
and implementation of IT network infrastructure; wireless system; security
access control & surveillance cameras solutions; and energy efficiency
solutions. Mr Teo is also an experienced sales & project manager. Prior to
joining the board of the Company, Mr Teo was the Chairman & Chief Executive
Officer of EMS Wiring Systems Pte Ltd.
Jack Bai, Executive Director, has over 30 years' experience in software
development for the financial and telecommunication industries. He is a
successful technology entrepreneur, who has successfully built and exited
multiple companies, including in fintech and payment solutions. He is a co-
founder of, and leads the development of, the Coalculus blockchain technology,
which enables enterprise-ready blockchain-as-a-service to financial institutions
and enterprises. He until recently held the role of Non-executive Director at
iSentric Ltd (now IOUpay), an ASX-listed company.
Shayne Tan, Executive Director, holds a Bachelor of Business Management
Degree from Singapore Management University and has more than five years
involving
of sales, operations and management experience, primarily
distributed ledger technology in growth stage companies. He is Chief Marketing
Officer for, and a co-founder of, the Coalculus blockchain platform.
Malcolm Groat, Non-executive Director, is a Chartered Accountant and has
a wide range of experience in corporate life, with roles as Chairman, Non-
Executive Director, Chair of Audit, CEO, COO and CFO for several companies.
He is an adviser on compliance and governance, strategy, and operational
improvement, and managing the risks of rapid change.
.
1
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2021
Directors’ Report
The Directors present their Annual Report on the affairs of GSTechnologies Ltd ("the Company” or
“GST") and its subsidiaries collectively referred to as "the Group”), together with the financial
statements and auditor’s report, for the year ending 31 March 2021.
Principal Activities
GST remains focussed on its corporate strategy of operating a profitable information and
communications technology ("ICT") business, serving some of the most respected governmental and
private organisations worldwide. This strategy includes seeking to enable and enhance the current
Internet of Things ("IoT") and ICT offerings through the application of new highly scalable disruptive
technologies, in particular enterprise blockchain solutions and services.
GST, through its operating subsidiary, EMS Wiring Systems, based in Singapore, provides optimal
wireless, electronic cabling, security, and other solutions to clients operating in the infrastructure
development space. EMS Wiring Systems 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, in particular data centres, intelligent buildings, smart cities and IoT, targeting
emerging markets where the demand for ICT infrastructure is increasing rapidly.
Whilst the Company remains focussed on developing the existing business of EMS Wiring Systems, the
Company's goal is to also focus on new higher growth synergistic business areas focussed on blockchain
technology, particularly those applicable in the banking and wider financial services sector. The board
believes that pioneering next-generation digital money solutions based on blockchain technology will
provide the Company with the opportunity to enhance its current offering and enable it to offer
differentiated cutting edge technology solutions to a bigger client base. In order to facilitate this, new
subsidiaries in the UK and Singapore, GS Fintech Ltd and GS Fintech PTE Ltd, have been established.
Business Review
A review of the business during the period and to date, including comments on future developments, is
contained in the Chairman’s Statement.
2
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2021
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 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
Signing of a Collaboration Agreement with Wise MPay Pte Ltd, the Singaporean blockchain payment
solution provider, with a view to Wise MPay providing the Company with software and services to
facilitate the Company's plans to develop new higher-growth synergistic business areas focussed on
blockchain technology, particularly those applicable in the banking and wider financial services sector.
The Agreement builds upon the Memorandum of Understanding between the Company and Wise MPay
announced on 21 April 2021.
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 25 to the accounts
gives details of the Group’s risks and policies regarding financial instruments.
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
9 July 2021
3
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2021
Chairman’s Statement
The events that happened during the 2020/2021 financial year were unprecedented and whilst
improvements have been seen, the Covid-19 pandemic is not yet over. This health crisis has had an
enormous impact on every aspect of our lives, but I am pleased to report that in such a difficult
environment GST’s employees stepped up to the challenge.
With the onset of the pandemic our top priority became the health and safety of our employees and
customers. We also immediately implemented strict cost controls and cash preservation measures in
order to run the business, as far as possible, at a 'cash flow break even' position whilst the full impact of
the pandemic was assessed. Our main trading subsidiary, EMS Wiring Systems Pte Ltd (“EMS”), also
utilised appropriate Singapore Government Covid-19 related economic assistance and relief
programmes where appropriate.
As reported in our interim results, released in January 2021, the first half of the year saw a 70% decrease
in revenue compared to the same period in the previous year, primarily due to the delay or cancellation
of projects in light of the impact of Covid-19. However, I am pleased to report that the second half
performance, and in particular that in the final quarter of the financial year was a significant turnaround.
Overall revenue for the year of $2.83 million was decline of 37% compared to the prior financial year.
Through careful management of our costs and other income in the form of grants of US$0.58 million,
we are pleased that the total loss for the year was contained to $0.33 million, compared to a loss of $0.46
million in the prior year.
Despite the challenges brought by the pandemic, GST has always sought to innovate and explore new
areas of business employing disruptive technologies that can create shareholder value.
In our EMS business one example was the award of a grant valued at approximately US$200,000 from
Enterprise Singapore, to develop a prototype liquid film cooling system for use in data centres. By using
EMS' liquid cooling method we believe we can help businesses manage the total cost of data centre and
computing asset ownership by reducing the cost to provide and maintain a high degree of cooling
efficiency. Once commercialised we believe this solution will be attractive to both new and existing data
centre operators and EMS is well placed to provide both the solution, together with ongoing service,
maintenance and training support.
Whilst the Company remains focussed on developing the existing business of EMS, the Company's goal
is to also focus on new higher growth synergistic business areas. After careful consideration we
concluded that the Company’s strategy should include seeking to enable and enhance the current Internet
of Things ("IoT") and ICT offerings through the application of new highly scalable disruptive
technologies, in particular enterprise blockchain solutions and services.
As part of this strategic move, Jack Bai and Shayne Tan were appointed as Executive Directors of the
Company in January 2021, together with an investor group led by Jack Bai taking a 20% stake in the
Company through a placing of new shares. Subsequent to the appointment of Jack and Shayne we also
incorporated new ‘GS Fintech’ subsidiaries in the UK and Singapore to help facilitate the Company's
planned expansion into blockchain related technologies and services, particularly in the financial sector.
Post period end we advanced these activities further with the signing of a collaboration agreement with
Wise MPay, the Singaporean blockchain payment solution provider, with a view to Wise MPay
providing the Company with software and services. Through the collaboration between GST and Wise
MPay the Company plans to launch a borderless neobanking platform providing next-generation digital
money solutions that we outlined in our announcement on 28 May 2021. We are very pleased to be
working with Wise MPay and I look forward to reporting on our continued progress in due course.
4
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2021
I believe our ability to add a pipeline of meaningful innovations will fuel our future growth and we are
very excited by the potential for blockchain enabled financial services, coupled with the continuing
innovation of the EMS team.
Summary
I believe GST has weathered the pandemic well and has proved its flexibility and resilience in dealing
with an unprecedented and unforeseeable situation, together with continuing to innovate and seek
appropriate new opportunities.
In particular, the appointment of Jack Bai and Shayne Tan to the Company’s board has allowed us focus
on new higher growth synergistic business areas focussed on blockchain technology, particularly those
applicable in the banking and wider financial services sector. We believe that pioneering next-generation
digital money solutions based on blockchain technology will provide GST with the opportunity to
enhance its current offering and enable it to offer differentiated cutting edge technology solutions to a
bigger client base.
I believe that we have the right strategy in place to drive forward both our EMS and GS Fintech
businesses and that GST is extremely well positioned for the future.
In closing I would like to take the opportunity to thank all our staff for their outstanding commitment
and hard work during the year, helping us to overcome the challenges of the pandemic.
Tone Kay Kim GOH
Chairman
5
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2021
FINANCIAL REVIEW
Income Analysis
For the 12-month period ended 31 March 2021 the Company had operating revenue of US$2.83 million
(2020: US$4.53 million). The Group’s operating loss before tax for the financial year is US$0.50
million, compared to the operating loss incurred in previous financial year of US$0.26 million.
In addition, the Group received grants and other income during the year of US$0.58 million (2020:
US$0.03 million), leading to total income recognised in the year of US$3.41 million (2020: US$4.55
million).
The key contributor to the reduction in operating revenue was the delay and cancellation of confirmed
and pending projects arising from the severe impact of the Covid-19 pandemic. Additionally, as the
Covid-19 situation gradually improved in the middle of 2020, the Company was not able to execute
certain of the few projects that were slowly resumed by customers due to immigration and foreign
worker dormitory lockdowns and safe distancing measures that prevented the Company from carrying
out essential works such as site inspection, installation, equipment commissioning and customer
training, amongst others. This contributed to the Group focusing on new areas to generate future
revenues.
Balance Sheet Analysis
Net assets as at 31 March 2021 amounted to US$1.8 million (2020: US$1.9 million). In monitoring the
health of its balance sheet, the Company focuses on two primary liquidity ratios:
Quick ratio (current assets – inventories / current liabilities): which remained similar to
the prior financial year at 3.54 (2020: 3.62); and
Cash ratio (cash & equivalents / current liabilities): 1.53 for the financial period (2020:
0.83), an improvement primarily due to the loan taken out in the year.
As at 31 March 2021, the Group had an available cash resources of US$1.7 million, an increase of
US$1.1 million from the preceding financial year (2020: US$0.6 million) due to new share issuance
proceeds and the loan taken during the year. The leverage ratio (total liabilities / shareholders equity)
was 1.53 at 31 March 2021 (31 March 2020: 0.39).
The Group also monitors balance sheet efficiency ratios, primarily:
Accounts receivable to turnover ratio (sales / accounts receivable): 2.19 for the financial
period (2020: 5.16); and
Asset turnover ratio (sales / total Assets): 0.61 for the financial period (2020: 1.73).
The Directors believe that the Group is in a stable financial position and has the financial resources to
enable it to expand and grow its current operations and meet all its current liabilities, together with the
ability to access further capital should an appropriate need arise.
6
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
For the financial year ended 31 March 2021
Notes
2021
US$'000
2020
US$'000
Net operating income
Sales
Other income
Net operating expense
Continuing Operations
Foreign exchange loss
Operating loss
Income tax expense
Net loss for the year
Other comprehensive loss
Movement in foreign exchange reserve
Total comprehensive loss for the year
Net Loss for the year atttributable to:
Equity holders for the parent
Non-controlling interest
Total comprehensive loss for the year
atttributable to:
Equity holders for the parent
Non-controlling interest
(Loss)/Earnings per share attributable to
members
of the Parent
Basic (loss) per share
Diluted (loss) per share
2,830
578
3,408
4,527
25
4,552
6
(3,903)
(0)
(495)
5
(490)
(4,803)
(4)
(255)
(20)
(275)
156
(334)
(188)
(463)
(490)
(275)
-
-
(334)
(463)
20
-
-
10
10
(0.00041)
(0.00041)
(0.00028)
(0.00028)
7
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2021
Notes
2021
US$'000
2020
US$'000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other Assets
Work in progress
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Intangible Assets
Total non-current assets
TOTAL ASSETS
EQUITY
Share Capital
Reserves
Retained Earnings
Total Equity
Equity attributable to owners of the
parent
11
12
15
13
14
16
19
1,742
2,081
299
193
18
4,333
561
1,201
299
247
13
2,320
275
6
281
295
6
301
4,614
2,621
2,077
(710)
457
1,824
1,804
(866)
947
1,885
1,824
1,885
Non-controlling equity interest
20
-
1,824
-
1,885
LIABILITIES
Current liabilities
Trade and other payables
Loans payable - current
Total current liabilities
Non-current liabilities
Lease Liabilities
Loans payable
Total current liabilities
21 & 14
22
1,135
445
1,580
674
674
14
22
-
1,210
1,210
62
-
62
Total Liabilities
2,790
736
TOTAL EQUITY & LIABILITIES
4,614
2,621
8
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2021
Notes
2021
US$'000
2020
US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations
(495)
(255)
Adjustments:
Depreciation of property, plant and equipment
Exchange loss
Gain on disposal
Operating loss before working capital
changes
180
(0)
-
(315)
104
4
(4)
(151)
Decrease/(Increase) in inventories
Decrease/(Increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Net cash flow used in operating activities
(5)
(880)
285
(915)
3
941
(1,039)
(246)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and equipment
Decrease in capital work in progress
Proceeds from disposal of property, plant and equipment
Net cash flow from investing activities
(160)
54
-
(106)
(232)
301
4
73
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares
Principal elements of lease payments
Increase in loans payable
Forex reserves
Net cash flow from financing activities
273
118
1,655
156
2,202
-
52
-
(188)
(136)
Net increase/(decrease) in cash and cash equivalents
1,181
(310)
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
11
561
1,742
871
561
9
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2021
2021 CONSOLIDATED
Balance at 1 April 2020
Comprehensive Income
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Shares issued during the year
Shareholder
Capital
US$'000
FX
Reserve
US$'000
Retained
Earnings
Total
US$'000
US$'000
1,804
(866)
947
1,885
-
-
-
-
156
156
(490)
-
(490)
(490)
156
(334)
273
273
-
-
-
-
273
273
Balance at 31 March 2021
2,077
(710)
457
1,824
2020 CONSOLIDATED
Balance at 1 April 2019
Comprehensive Income
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Shares issued during the year
Shareholder
Capital
US$'000
FX
Reserve
US$'000
Retained
Earnings
Total
US$'000
US$'000
1,804
(678)
1,222
2,348
-
-
-
-
(188)
(188)
(275)
-
(275)
(275)
(188)
(463)
-
-
-
-
-
-
-
-
Balance at 31 March 2020
1,804
(866)
947
1,885
10
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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 2021 were authorised for issue
in accordance with a resolution of the Directors on 9 July 2021. 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 2021.
The consolidated financial statements have been prepared on a historical cost convention basis, except for
certain financial instruments that have been measured at fair value. The consolidated financial statements are
presented in US dollars and all values are rounded to the nearest thousand except when otherwise indicated.
2.1 Consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 March 2021,
and for the year then ended.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date when such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting period as the GSTechnologies
Ltd. (parent company), using consistent accounting.
All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and
dividends are eliminated in full.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results
in a deficit balance. A change ownership interest of a subsidiary, without a loss of control, is accounted for as
an equity transaction.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses. A business
combination is accounted for by applying the acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will be accounted for from the date that
control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including
contingent liabilities) assumed is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from
a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent
consideration classified as equity is not re-measured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or liability is re-measured in each reporting period to
The accompanying notes form an integral part of these consolidated financial statements
11
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
2. Basis of preparation (continued)
2.1 Consolidation
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 2021, the Group held cash reserves of $1,742,000 (2020: $561,000).
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 $490,000 for the year ended 31 March 2021 and had net assets of $1,824,000 as
at 31 March 2021 (2020: loss of $275,000 and net assets of $1,885,000).
Accruals
Management have used judgement and prudence when estimating certain accruals for contractor claims. The
accruals recognised are based on work performed but are before settlement.
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to
occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the
exercise of significant judgement and the use of estimates regarding the outcome of future events. Please refer
to Note 23 for further details.
The accompanying notes form an integral part of these consolidated financial statements
12
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
3. Significant accounting judgements, estimates and assumptions (continued)
Contingencies (continued)
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 consolidated financial statements
13
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
3. Significant accounting judgements, estimates and assumptions (continued)
Contingencies (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 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
The Group adopted all of the new and revised Standards and Interpretations issued by the IASB that are
relevant to its operations and effective for annual reporting periods beginning on or after 1 April 2020. It has
been determined by the Group, there is no impact, material or otherwise, of the new and revised standards and
interpretations on its business and therefore no change is necessary to Group accounting policies.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
5. Summary of significant accounting policies
Plant and equipment
Plant and equipment are shown at cost less accumulated depreciation and impairment losses. The initial cost
of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the
asset into operation, any incidental cost of purchase, and associated borrowing costs. The purchase price or
construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire
the asset. Directly attributable costs include employee benefits, professional fees and costs of testing whether
the asset is functioning properly. Capitalised borrowing costs include those that are directly attributable to the
construction of assets.
Property, plant and equipment relate to plant, machinery, fixtures and fittings and are shown at historical cost
less accumulated depreciation and impairment losses. Depreciation of property, plant and equipment are
computed on a straight line basis over the estimated useful life of the assets.
The depreciation rates applied to each type of asset are as follows:
Plant and machinery
Motor Vehicles
Fixtures and fittings
Lease Improvements
2 to 10 years
2 to 10 years
3 years
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
The accompanying notes form an integral part of these consolidated financial statements
14
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
5. Summary of significant accounting policies (continued)
Plant and equipment (continued)
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.
The accompanying notes form an integral part of these consolidated financial statements
15
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
5. Summary of significant accounting policies (continued)
Financial instruments (continued)
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 consolidated financial statements
16
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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
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 consolidated financial statements
17
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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.
The accompanying notes form an integral part of these consolidated financial statements
18
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
5. Summary of significant accounting policies (continued)
Provisions
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the present
value is a pre-tax amount that reflects current market assessments of the time value of money, and the risks
specific to the liability. The increase in the provision due to the passage of time is recognised as interest
expense.
Finance income
Interest income is made up of interest received on cash and cash equivalents.
Income tax
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss
except to the extent that it relates to a business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences. Deferred income tax assets
are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilised,
except:
• In respect of deductible temporary differences associated with investments in subsidiaries, deferred income
tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at the end
of each reporting period and are recognised to the extent that it has become probable that future taxable profit
will be available to allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to
set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.
The accompanying notes form an integral part of these consolidated financial statements
19
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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
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.
The accompanying notes form an integral part of these consolidated financial statements
20
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
5. Summary of significant accounting policies (continued)
Revenue Recognition (continued)
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
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 on lease expenses
Occupancy costs
Finance cost
7. Key management personnel
Directors’ emoluments
2021
US$’000
2020
US$’000
1,118
1,951
1
455
- 5
18
33
170
9
19
134
3,903
1,420
2,645
40
354
71
93
44
104
10
22
-
4,803
2021
US$’000
2020
US$’000
229
327
The accompanying notes form an integral part of these consolidated financial statements
21
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
8. Employee cost
Wages and salaries
Wages and salaries – Cost of sales
Staff welfare and other employee costs
Total
9. Earnings per share
2021
US$’000
2020
US$’000
479
1,226
246
1,951
625
1,827
193
2,645
2021
US$’000
2020
US$’000
Loss for the period attributable to members
(490)
(275)
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Parent by the weighted average
number of ordinary share in issue during the year.
Basic weighted average number of ordinary
shares in issue
1,028,482,002
995,482,002
Basic earnings per share-cents
(0.00041)
(0.00028)
Diluted earnings per share-cents
(0.00041)
(0.00028)
10. Segment Reporting
The consolidated entity’s operating segments have been determined with reference to the monthly
management accounts used by the chief operating decision maker to make decisions regarding the
consolidated entity’s operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board as a whole has been determined as the chief
operating decision maker.
The consolidated entity operates in one business segment, being information data technology and
infrastructure.
The revenues and results are those of the consolidated entity as a whole and are set out in the statement of
profit and loss and other comprehensive income. The segment assets and liabilities of this segment are those
of the consolidated entity and are set out in the Statement of Financial Position.
11. Cash and cash equivalents
Cash at bank
2021
US$’000
2020
US$’000
1,742
561
The accompanying notes form an integral part of these consolidated financial statements
22
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
11. Cash and cash equivalents (continued)
Cash at bank balance includes US$52,849.49 pledged to the bank as security for banker guarantee given to
customer.
12. Trade and Other Receivables
Trade receivables
Other Receivables
13. Inventories
Inventories
Less: Allowance for inventory obsolescence
2021
US$’000
1,291
790
2,081
2020
US$’000
878
323
1,201
2021
US$’000
2020
US$’000
334
(316)
18
303
(290)
13
The movement in the allowance for inventory obsolescence is as follows:
Balance at beginning of year
Additional allowance for inventory obsolescence
Balance at end of year
2021
US$’000
2020
US$’000
290
26
316
290
-
290
The accompanying notes form an integral part of these consolidated financial statements
23
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
14. Property, plant and equipment
Right-of-Use
Assets
Building and
improvts
Furniture &
Office
Equipment
Vehicle
Total
US$’000
US$’000
US$’000
US$’000
US$’000
-
38
447
191
169
-
-
-
-
0
8
0
55
0
-
(43)
-
-
-
-
169
46
502
148
124
-
-
-
676
169
63
(43)
-
865
124
-
-
-
-
7
-
-
-
10
7
20
(8)
7
-
29
303
53
529
140
1025
-
55
-
-
25
14
380
21
-
-
-
-
94
14
(33)
-
499
104
(33)
-
55
120
39
3
401
34
75
13
-
-
-
-
3
8
13
(14)
570
170
-
10
178
50
448
74
750
114
125
7
3
101
81
73
66
Cost
As at 31 March 2019
Impact of IFRS 16 (Note
4)
Additions / Transfer in
Disposal / Write-off
Adjustments/Forex
translation
As at 31 March 2020
Impact of IFRS 16 (Note
4)
Additions / Transfer in
Disposal / Write-off
Adjustments/Forex
translation
As at 31 March 2021
Accumulated
depreciation
As at 31 March 2019
Charge for the year
Disposal/Write-off
Adjustments/Forex
translation
As at 31 March 2020
Charge for the year
Disposal/Write-off
Adjustments/Forex
translation
As at 31 March 2021
Net book value
As at 31 March 2020
As at 31 March 2021
The accompanying notes form an integral part of these consolidated financial statements
295
275
24
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
14. Property, Plant and equipment (continued)
Lease liabilities recognized in the balance sheet
The balance sheet shows the following amounts relating to lease liabilities
Current
Non-current
2021
US$’000
2020
US$’000
129
-
129
55
62
117
Amounts recognized 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
2021
US$’000
2020
US$’000
120
9
129
55
10
65
2021
US$’000
2020
US$’000
193
247
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.
The accompanying notes form an integral part of these consolidated financial statements
25
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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.
17.
Subsidiaries
2021
US$’000
2020
US$’000
6
6
6
6
6
6
Details of the Company’s subsidiaries on 31 March 2021 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
GS Fintech Ltd
GS Fintech Pte Ltd
18.
Taxation
UK
Singapore
100
100
100
100
100
100
100
100
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
2021
US$’000
2020
US$’000
-
-
-
(5)
(5)
11
-
11
9
20
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 consolidated financial statements
26
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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
As at 31 Mar 2020
Issues during the period
1 April 2020 to 31 March 2021
As at 31 March 2021
20.
Non-controlling equity interest
Number of
Shares
US$’000
995,482,002
198,000,000
1,804
273
1,193,482,002
2,077
All entities within the group are currently 100% owned and accordingly a non-controlling interest does not
arise.
21.
Trade and other payables
Trade payables
Accruals
Other payables
Lease liabilities
2021
US$’000
2020
US$’000
471
502
33
129
1,135
389
211
19
55
674
Trade payables are non-interest bearing and are normally settled on 60-days terms.
22.
Loans Payable
Loan 1
Loan 2
Term
5 yrs
3 yrs
Amount
1,413
521
1,934
Interest rate
2.5% pa
4.5% pa
Current
273
172
445
Non-current
985
226
1,210
23.
Commitments and Contingencies
The Group is subject to no material commitments or contingent liabilities.
The accompanying notes form an integral part of these consolidated financial statements
27
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
24.
Related party transactions
During the period 1 April 2020 to 31 March 2021, there were no related party transactions other than loans
between wholly owned subsidiaries.
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. 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 2021:
Trade and other payables
976
159
-
1,135
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 2021, please see Note 14.
The Group is not subject to any externally imposed capital requirements.
The accompanying notes form an integral part of these consolidated financial statements
28
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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 in Singapore 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 2021 and 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 2021; therefore, profit or loss and equity would have not been affected by
changes in the interest rate.
The accompanying notes form an integral part of these consolidated financial statements
29
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2021
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 its
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
Jack Bai
Shayne Tan
Malcolm Groat
Total
On behalf of the Board
Tone Goh
Executive Chairman
9 July 2021
Salary
CPF
Total
US$'000
US$'000
US$'000
46
148
12
7
6
219
-
8
1
1
-
10
46
156
13
9
6
229
The accompanying notes form an integral part of these consolidated financial statements
30
GSTECHNOLOGIES LTD - BVI
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2021
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Intangible Assets
Intercompany receivables
Total non-current assets
TOTAL ASSETS
EQUITY
Share Capital
Retained Earnings
Total Equity
LIABILITIES
Current Liabilities
Trade and other payables
Intercompany loan
Total Liabilities
TOTAL EQUITY & LIABILITIES
2021
US$'000
212
1
299
512
6
258
264
776
2,077
(1,696)
381
145
250
395
776
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$300,000.00. The Company had no operating
cash flows in the period, and therefore no cash flow statement has been prepared.
The accompanying notes form an integral part of these consolidated financial statements
31
GSTECHNOLOGIES LTD - BVI
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2021
2021 CONSOLIDATED
Balance at 1 April 2020
Comprehensive Income
Loss for the year
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners:
Shares issued during the year
Shareholder
Capital
US$'000
Retained
Earnings
Total
US$'000
US$'000
1,804
(1,396)
408
-
-
(300)
(300)
(300)
(300)
273
273
-
-
273
273
Balance at 31 March 2021
2,077
(1,696)
381
The accompanying notes form an integral part of these consolidated financial statements
32
REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF GSTECHNOLOGIES LIMITED
Opinion
We have audited the financial statements of GSTechnologies Limited (“the Company”) and its subsidiaries
(collectively referred to as “the Group”) for the year ended 31 March 2021 which comprise Consolidated and
Parent Company Statements of Financial Position as at 31 March 2021; the Consolidated Statement of Profit
and Loss and comprehensive Income, the Consolidated Statements of Cash Flows and the Consolidated and
Parent Company Statements of Changes in Equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion:
-
-
-
the financial statements give a true and fair view of the state of the GSTechnologies Limited (“the
Company”) and its subsidiaries (collectively referred to as “the Group”) affairs as at 31 March 2021 and
of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union; and
the parent company financial statements have been properly prepared in accordance with applicable
law and IFRSs as adopted by the European Union;
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the Financial Statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the Financial Statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matter described below to be a key audit matter to be communicated in our report.
Key audit matter
Revenue recognition in respect of uninvoiced
amounts
The entity has reported revenue of USD2.8 million,
including revenue from services projects.
The application of revenue recognition accounting
standards is complex and involves a number of key
judgements and estimates. There is also a risk
around the timing of revenue recognition. The
Group uses cost to cost method for calculating
percentage of completion for ongoing projects.
This could result in recognizing revenue for work
completed but unbilled at year end.
Based on these factors, we have identified revenue
recognition as a key risk for our audit.
How our audit addressed the key audit matter
Our audit work included, but was not restricted to,
the following:
•
considering the appropriateness of the
revenue recognition accounting policies.
• Reviewed
key
judgements
and
assumptions used in the recognition of
revenue. This
review of
management’s estimation of total project
costs and determination of stage of
completion.
included
• Verified unbilled work at the year end with
invoices sent to clients subsequently
• Performed substantive
to ensure
accuracy and completeness of project cost
incurred till year end.
test
• Verified a sample of progressing billing
traced
invoices and
with customer
amounts in the bank.
• ensuring adequate disclosure
in
the
financial statements
Our Application of Materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of the financial statements. Materiality provides a
basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group financial statements as a whole to be USD 51,100, which represents
1.5% of the Group’s turnover for the year ended 31 March 2021.
This benchmark is considered the most appropriate because this is a key performance measure used by the
Board of Directors to report to investors on the financial performance of the Group.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment
and to drive the extent of our testing, performance materiality was 75% of our planning materiality for the audit
of the Group financial statements. We also determine a lower level of specific materiality for certain areas such
as Directors’ remuneration and related party transactions.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Board that we would report all audit differences in excess of USD 2,600, as well as
differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to
the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
Other Information
The Directors are responsible for the other information. The other information comprises the information included
in the annual report, other than the financial statements and our Auditors' Report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Overview of the Scope of Our Audit
A description of the generic scope of an audit of financial statements is provided on the Financial Reporting
Council’s website at www.frc.org.uk/auditscopeprivate. We conducted our audit in accordance with International
Standards on Auditing (ISAs) (UK). Our responsibilities under those standards are further described in the
‘Responsibilities for the financial statements and the audit’ section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion. We are independent of the Group in accordance with the Auditing Practices Board’s Ethical Standards
for auditors, and we have fulfilled our other ethical responsibilities in accordance with those Ethical Standards.
The Group solely operates in the Singapore with subsidiaries in Australia and United Kingdom. The Group audit
team performed all the work necessary to issue the Group and parent company audit opinion, including
undertaking all of the audit work on the risks of material misstatement.
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for each entity within the Group. Taken together, this enables us to form an opinion
on the consolidated financial statements. Based on the output of our risk assessment, along with our
understanding of the Group structure, we performed full scope audit over the EMS Wiring System Pte Ltd. We
completed review procedures over Golden Saint Technologies (Australia) Pty Ltd., GSFintech UK Ltd. and
GSFintech Pte Ltd. being insignificant components.
We also performed audit procedures over the head office operations and the consolidation process, as well as
over certain other group activities.
Responsibilities of directors
The directors are responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
NICHOLAS HOLLENS
Senior Statutory Auditor for and on behalf of Elderton Audit UK
Statutory Auditor, Chartered Accountants
Perth, Australia
9 July 2021