GSTECHNOLOGIES LTD
ANNUAL REPORT
For the financial year ended 31 March 2022
GSTECHNOLOGIES LTD
ANNUAL REPORT
For the financial year ended 31 March 2022
CONTENTS
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
Consolidated Statement of Changes in Equity
PAGE
1 - 2
3-4
5-9
10-11
12
13
14
15
Notes to the Consolidated Financial Statements
16 - 35
Directors’ Remuneration Report
Parent Company Statement of Financial Position
Parent Company Statement of Changes in Equity
Auditor’s Report
36
37
38
39
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
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.
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
of sales, operations and management experience, primarily
involving
distributed ledger technology in growth stage companies. He is Chief Marketing
Officer for, and a co-founder of, the Coalculus blockchain platform.
Galvin Bai, Executive Director. Galvin has deep knowledge and vast
experience of the workflow and processes of the payment and remittance
business in Singapore and beyond. Some of Galvin’s valuable work experiences
were gained as Director of Business Development at Caliber Technology
Private Limited. His thorough and exhaustive proficiency in Southeast Asia’s
remittance protocols and methodologies, as well as work-related contacts, will
promote and facilitate coordination of plans to expand into Southeast Asia and
beyond.
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 2022
Garies Chong, Non-Executive Director. has more than 30 years experiences
in the Information and Communications Technology (ICT) & Data Centre
industries throughout Southeast Asia. He is currently the Chief Executive
Officer of EMS Wiring Systems Pte Ltd (A wholly-owned subsidiary of
GSTechnologies Ltd) a global integrated ICT Solution Provider. Garies’ vast
experiences in ICT network infrastructure, wireless, smart monitoring &
security and M&E services in data centres for commercial, industrial, banking,
government, education and healthcare has earned him many recognitions in the
fields of ICT & Data Centres.
2
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
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 2022.
Principal Activities
The primary focus for the Group has, since early 2021, been on the GS Fintech Ltd and GS Fintech Pte.
Ltd subsidiaries in the UK and Singapore respectively, and the Company's expansion into blockchain-
related technologies applied to the financial services sector, specifically its plans to launch a borderless
neobanking platform providing next-generation digital money solutions under the GS Money banner
based on three initial use-cases: international money transfers, borderless accounts, and private
stablecoin.
On 7 March 2022 the Company completed the acquisition of Angra Limited (“Angra”). Angra, which
operates under the AngraFX brand name, is a UK Financial Conduct Authority (“FCA”) approved
Authorised Payment Institution (“API”), conducting fast, secure and low-cost foreign exchange business
and payment services internationally.
GST’s subsidiary, EMS Wiring Systems Pte. Ltd (“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. Post period end on 17 July
2022 the Company entered into a binding agreement to sell EMS Wiring Systems to Teo Chiah Chiu
Raphael, the Chairman of EMS.
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.
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
3
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
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
On on 17 July 2022, the Company entered into a binding agreement to sell its subsidiary, EMS Wiring
Systems to Teo Chiah Chiu Raphael, the Chairman of EMS. Consideration for the disposal comprises
the return of the 60,000,000 GST shares held by Raphael Teo to the Company. The disposal will enable
the Group to focus solely on its stated strategy of building a blockchain-enabled neobanking business,
removing a loss-making, no longer core, subsidiary.
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 27 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
27 July 2022
4
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
Chairman’s Statement
During the year, the primary focus of the Group was on developing the ‘GS Fintech’ subsidiaries in the
UK and Singapore, established just before the start of the financial year. This involves the Company's
expansion into blockchain-related technologies, specifically its plans to launch a borderless neobanking
platform providing next-generation digital money solutions. This expansion was undertaken whilst still
retaining sufficient focus on our EMS Wiring Systems Pte Ltd (“EMS Wiring Systems”) business as it
recovered from the worst of the Covid-19 pandemic.
GS Fintech
In May 2021 the Company entered into a collaboration agreement with Wise MPay Pte, Ltd (“Wise
MPay”), the Singaporean blockchain payment solution provider, with a view to Wise MPay providing
the Company with software and services to facilitate the Company's fintech plans. Under the agreement,
Wise MPay is supplying the Company with a number of standard and bespoke software packages which
include, inter alia, software to enable the Company to establish a remittance portal (GSend), an eWallet
app (GS Money), Know Your Client (KYC) administration and an encryption engine. These software
packages being supplied by Wise MPay are being integrated on the Company's cloud server, together
with software supplied by the Company and third-party payment gateway packages.
Additionally, Wise MPay supplied during the year four enterprise blockchain consensus nodes that came
with 25 million stake tokens each, based on the Coalculus blockchain platform, to enable transaction
validation on the Coalculus network for transactions undertaken by GST's proposed customers in US
dollars, Euros, Sterling and Chinese Yuan. On 30 November 2021, we reported that we had successfully
tested all four of the enterprise chains provided by Wise MPay, together with implementing a mainnet
upgrade on the Coalculus platform, provided by Wise MPay. This marked the launch of the GS Money
protocol. This was followed on 17 December 2021 by GST receiving 100 million COAL tokens from
Wise MPay and the enabling of the COAL token staking capability on four full nodes managed by the
Company. The web remittance portal and complex blockchain e-wallet application is currently under
development in conjunction with Wise MPay.
The four digital currencies are strictly pegged to the US Dollar, the Pound, the Euro and the Yuan which
has allowed GST to carry out transactions through blockchain ledgers, which can be used in place of
wire transfers that generally take several days to complete. The four enterprise chains work alongside
5
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
one another to form a decentralised and highly efficient multicurrency cross border payment system for
digital transactions that utilise the Coalculus blockchain ledger technology. Additionally, each
enterprise chain’s total supply will allow GST to issue up to 10 billion digital currency units.
The future roll-out of GS Money is intended to be focused on three initial use-cases: international money
transfers, borderless accounts and private stablecoins. GS Money will initially be used in restricted
cross-border payment testing before being gradually expanded to include commercial activities.
Ultimately it is intended that GS Money will also be focused on private stablecoin. The objective is to
establish public trust, maintain stability, and enable claims backed by reserves. By establishing a private
stablecoin ecosystem, GST intends to encourage market players to allow transactions to settle in GS
Money digital currencies, as well as be integrated into various other payment services. The Company
is aware of the regulatory treatment of GS Money’s stablecoins and is exploring the possibility of
providing the proposed services in strategic jurisdictions, including the UK.
On 7 March 2022, just before the period end, we were delighted to complete the acquisition of Angra
Limited (“Angra”), a UK-based foreign exchange and payment services company. This followed the
UK Financial Conduct Authority (“FCA”) approval for the change of control of Angra.
Angra, which operates under the AngraFX brand name, is an established FCA approved Authorised
Payment Institution (“API”), conducting fast, secure and low-cost foreign exchange business and
payment services internationally. We intend to utilise Angra as the basis on which to build the UK arm
of the Group’s planned blockchain-enabled neobanking business. Since the completion of the
acquisition Angra has been successfully integrated within the Group and is trading in line with the GST
Board’s expectations.
To further enhance the Group’s neobanking offerings, the Company announced on 20 January 2022 that
it had entered into a legally binding sale and purchase agreement to acquire the whole of the issued share
capital of UAB Glindala (“Glindala”), a holder of a Crypto Currency Exchange Licence registered in
Lithuania. Glindala’s Crypto Currency Exchange Licence is supervised by the Lithuanian Financial
Crime Investigation Service (“FCIS”) and completion of the acquisition is subject only to the approval
of the FCIS. The Company understands that approval will be granted shortly upon the completion of
certain administrative matters by the Lithuanian authorities. The Company believes the exchange will
be a significant enabler for its GS Money stablecoin business, forming the third pillar for GS Money,
and will integrate well with Angra and its other activities.
6
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
During the year the Company has made significant progress in implementing its stated strategy to roll-
out a suite of offerings under its GS Money and this progress has continued at a rapid pace post period
end.
EMS Wiring Systems
Following the unprecedented events in the previous financial year with the onset of the Covid-19
pandemic, 2021/22 was a year of gradual recovery for our EMS Wiring Systems business as the worst
of the pandemic receded. EMS Wiring Systems remained a predominantly Singapore focused business
providing wireless, electronic cabling, security, and other solutions to clients operating in the
infrastructure development space. Whilst its revenue for the year recovered to US$4.19 million (2021:
US$2.83 million), it continued to be loss making and made a net loss of US$0.56 million (2021: net loss
of US$0.13 million, after receiving US$0.58 million of Covid-19 related financial assistance from the
Singapore Government).
Post period end on 18 July 2022 the Company announced that on 17 July 2022, it had entered into a
binding agreement to sell EMS Wiring Systems, to Teo Chiah Chiu Raphael (“Raphael Teo”), the
Chairman of EMS. The consideration payable by Raphael Teo for the entire issued share capital of
EMS Wiring Systems, which is currently held by the Company, will be the transfer to the Company, by
way of a share buyback, of 60,000,000 ordinary shares in GST held by him. The Company intends to
hold the consideration shares in treasury for future issue or cancellation in due course. Completion of
the disposal is conditional, inter alia, on completion of the buyback of the consideration shares, and the
Company and EMS Wiring Systems entering into a deed of agreement to waive all outstanding liabilities
between the Company and EMS Wiring Systems.
We look forward to completing the disposal shortly, which is in line with our strategy to concentrate on
our blockchain enabled neobanking activities. In particular, it removes a lossmaking subsidiary from
the Group, that is not part of our future plans, and will enable us to focus all our resources on accelerating
the roll out of our suite of GS Money offerings.
Fund Raising
During the year the Company undertook three fund raises, each pleasingly at incrementally higher prices
to fund its fintech expansion plans: on 6 September 2021 the Company raised gross proceeds of £1.41
million through a placing of 141,500,000 ordinary shares at a price of 1.0p per share; on 19 November
7
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
2021, with a placing of 50,000,000 ordinary shares at a price of 2.0p per share, the Company raised
gross proceeds of £1.00 million; and on 11 January 2022 a placing and subscription raised gross
proceeds of £1.33 million through the issue of 63,576,190 ordinary shares at a price of 2.1p per share.
Management Changes
In October 2021 we were delighted to announce that Mr Bai GuoJin (“Jack Bai”), an existing Executive
Director, was appointed as the Company’s new Chief Executive Officer. Jack Bai, who joined the GST
board in January 2021, has over 30 years’ experience in software development for the financial and
telecommunication industries. He is a successful technology entrepreneur, who has successfully built
and exited multiple companies, including in fintech and payment solutions. He is a co-founder of Wise
MPay, the Company’s collaboration partner, and leads the development of the Coalculus blockchain
technology. He is leading the Group’s blockchain technology activities and its plans to launch a
borderless neobanking platform providing next-generation digital money solutions.
Later in October 2021, we were also delighted to announce that Mr. Tan Guan Han, Shayne (“Shayne
Tan”), an existing Executive Director, was appointed as the Company’s new Chief Operating Officer.
Shayne Tan, who joined the GST board in January 2021, holds a Bachelor of Business Management
Degree from Singapore Management University and has more than five years of sales, operations, and
management experience in growth-stage companies operating exclusively within the blockchain and
cryptocurrency sector. He is, alongside Jack Bai, a co-founder of the Coalculus blockchain platform.
The Company’s board was further strengthened from 1 March 2022 with the appointment of Mr Bai
Zhencong ("Galvin Bai") as an Executive Director of the Company. Galvin Bai has over 15 years'
experience in a variety of business development and process implementation roles, including at All Best
Enterprise Pte Ltd, the Singapore based regulated money transfer and exchange company. Galvin has
considerable experience of the workflows and processes involved in payment and remittance businesses,
including the implementation of Know Your Client ("KYC") and Anti-Money Laundering ("AML")
processes. Galvin has a degree in Manufacturing Engineering from Boston University in the USA.
Summary
The year to 31 March 2022 was a pivotal one for the Company and one in which we made great progress
in implementing our strategy to drive forward our GS Fintech plans. With the signing of the
collaboration agreement with Wise Mpay we have been able to access the required knowledge and
8
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
resources to build a world-class blockchain-enabled neobanking platform. The acquisition of Angra,
completed just before the end of the financial year, has added an established UK platform for our
activities and coupled with the anticipated completion of the acquisition of Glindala shortly we believe
we are very well positioned for the next stage of our development with the role out of our GS Money
offerings commercially.
In closing I would like to take the opportunity to thank all our staff for their outstanding commitment
and hard work during the year, and our shareholders for their continuing support. GST has come a long
way in a very short period of time and I believe we are very well positioned to roll out our borderless
neobanking platform. Following the completion of the disposal of EMS Wiring Systems the Group will
be able to focus all its resources on developing its blockchain enabled neobanking activities and it will
be a ‘pure play’ fintech group. I look forward to the remainder of 2022 and beyond with confidence.
Tone Kay Kim GOH
Chairman
9
GSTECHNOLOGIES LTD.
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2022
FINANCIAL REVIEW
The Group’s financial statements include a full 12-month contribution from EMS Wiring Systems and
Angra has been consolidated from 7 March 2022.
Income Analysis
For the 12-months ended 31 March 2022 the Company had operating revenue of US$4.24 million (2021:
US$2.83 million). The Group’s operating loss before tax for the financial year is US$1.43 million,
compared to the operating loss incurred in previous financial year of US$0.50 million. In addition, the
Group received grants and other income during the year of US$0.24 million (2021: US$0.58 million),
leading to total income recognised in the year of US$4.47 million (2021: US$3.41 million).
Angra for the period from 7 March to 31 March 2022 had US$10.28 million in transaction volume,
which contributed US$0.05 million in revenue to the Group. EMS Wiring Systems, despite slowly
recovering sales to record US$4.19 million for the year (2021: US$2.83 million), remained loss making
due to margin pressures, bad debts and the requirement for continued research and development.
Balance Sheet Analysis
Net assets as at 31 March 2022 amounted to US$6.01 million (2021: US$1.82 million).
As at 31 March 2022, the Group had available cash of US$5.10 million, an increase of US$3.36 million
from the preceding financial year (2021: US$1.74 million) due to new share issuance proceeds during
the year.
The Directors believe that the Group is in a stable financial position and has the financial resources to
enable it to expand and grow its current operations and meet all its current liabilities, together with the
ability to access further capital should an appropriate need arise.
10
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
For the financial year ended 31 March 2022
Net operating income
Sales
Other income
Net operating expense
Continuing Operations
Foreign exchange loss
Operating loss
Income tax expense
Net loss for the year
Notes
2022
US$'000
2021
US$'000
6
7
4,238
236
4,474
2,830
578
3,408
(5,903)
(1)
(1,430)
-
(1,430)
(3,903)
(0)
(495)
5
(490)
Other comprehensive loss
Movement in foreign exchange reserve
Total comprehensive loss for the year
Net Loss for the year attributable to:
Equity holders for the parent
Non-controlling interest
(105)
(1,535)
156
(334)
(1,430)
-
(490)
-
Total comprehensive loss for the year attributable to:
Equity holders for the parent
Non-controlling interest
21
(1,535)
-
(334)
-
(Loss)/Earnings per share attributable to
members
of the Parent
Basic (loss) per share
Diluted (loss) per share
10
10
(0.00106)
(0.00105)
(0.00041)
(0.00041)
11
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
Notes
2022
US$'000
2021
US$'000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other Assets
Work in progress
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Intangible Assets
Total non-current assets
TOTAL ASSETS
EQUITY
Share Capital
Reserves
Retained Earnings
Total Equity
12
13
16
14
15
17
20
Equity attributable to owners of the parent
Non-controlling equity interest
21
5,104
2,445
299
32
16
7,896
1,742
2,081
299
193
18
4,333
270
44
314
275
6
281
8,210
4,614
7,795
(815)
(973)
6,007
2,077
(710)
457
1,824
6,007
-
6,007
1,824
-
1,824
LIABILITIES
Current liabilities
Trade and other payables
Lease Liabilities
Loans payable
Total current liabilities
Non-current liabilities
Lease Liabilities
Loans payable
Total current liabilities
22
15
23
15
23
894
66
502
1,462
1,006
129
445
1,580
42
699
741
-
1,210
1,210
Total Liabilities
2,203
2,790
TOTAL EQUITY & LIABILITIES
8,210
4,614
12
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2022
Notes
2022
US$'000
2021
US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation from operations
(1,430)
(495)
Adjustments:
Depreciation of property, plant and equipment
Exchange loss
Goodwill
Operating loss before working capital
changes
162
(0)
(38)
(1,306)
180
-
-
(315)
Decrease/(Increase) in inventories
Decrease/(Increase) in trade and other receivables
Decrease in capital work in progress
(Decrease)/Increase in trade and other payables
Net cash flow used in operating activities
2
(364)
161
(251)
(1,758)
(5)
(880)
54
285
(861)
CASH FLOWS FROM INVESTING ACTIVITIES
Addition property, plant and equipment
Proceeds from disposal of property, plant and equipment
Net cash flow from investing activities
(159)
(160)
-
-
(159)
(160)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares
Principal elements of lease payments
Increase in loans payable
Forex reserves
Net cash flow from financing activities
5,718
118
(454)
(103)
5,279
273
118
1,655
156
2,202
Net increase/(decrease) in cash and cash equivalents
3,362
1,181
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
12
1,742
5,104
561
1,742
13
GSTECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2022
2022 CONSOLIDATED Notes
Balance at 1 April 2021
Comprehensive Income
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Shares issued during the year 20
Shareholder
Capital
US$'000
FX
Reserve
US$'000
Retained
Earnings
Total
US$'000
US$'000
2,077
(710)
457
1,824
-
-
-
-
(105)
(105)
(1,430)
-
(1,430)
(1,430)
(105)
(1,535)
5,718
5,718
-
-
-
-
5,718
5,718
Balance at 31 March 2022
7,795
(815)
(973)
6,007
2021 CONSOLIDATED
Balance at 1 April 2020
Comprehensive Income
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Shares issued during the year
Shareholder
Capital
US$'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
14
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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 2022 were authorised for issue
in accordance with a resolution of the Directors on 27 July 2022. The shares of the Company are publicly
traded on the London Stock Exchange.
The registered office of GSTechnologies Ltd, the ultimate parent of the Group, is Ritter House, Wickhams
Cay II, Tortola VG1110, British Virgin Islands.
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 2022.
The consolidated financial statements have been prepared on a historical cost convention basis, except for
certain financial instruments that have been measured at fair value. The consolidated financial statements are
presented in US dollars and all values are rounded to the nearest thousand except when otherwise indicated.
2.1 Consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 March 2022,
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
15
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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 2022, the Group held cash reserves of $5.10 million (2021: 1.74 million).
The Directors believe that there are sufficient funds to meet the Group’s working capital requirements.
The Group recorded a loss of US$1.43 million for the year ended 31 March 2022 and had net assets of US$6.01
million as at 31 March 2022 (2021: loss of $0.49 million and net assets of US$1.82 million).
With the disposal of the unprofitable subsidiary EMS, the continuing subsidiaries will be Angra Ltd and GS
Fintech subsidiaries which are expected to contribute profit to the Group.
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 25 for further details.
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 2022
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
13 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
17
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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 16 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
14 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 2021. 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
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 2022
5. Summary of significant accounting policies (continued)
Plant and equipment (continued)
is incurred. Assets that are replaced and have no future economic benefit are derecognised and expensed
through profit or loss. Repairs and maintenance which neither materially add to the value of assets nor
appreciably prolong their useful lives are charged against income. Gains/ losses on the disposal of fixed assets
are credited/charged to income. The gain or loss is the difference between the net disposal proceeds and the
carrying amount of the asset.
The asset’s residual values, useful lives and methods of depreciation are reviewed at each reporting period and
adjusted prospectively if appropriate.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Financial instruments
(a) Financial assets
(i) Classification, initial recognition and measurement
The Company classifies its financial assets into the following measurement categories:
amortised cost; fair value through other comprehensive income (FVOCI); and fair value through profit
or loss (FVPL).
Financial assets are recognised when, and only when the entity becomes party to the contractual
provisions of the instruments.
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a
financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the
financial assets. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Trade receivables are measured at the amount of consideration to which the Company expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third party, if the trade receivables do not contain a significant financing
component at initial recognition.
(ii) Subsequent measurement
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for
managing the asset and the contractual cash flow characteristics of the asset. The Company only has
debt instruments at amortised cost.
Financial assets that are held for the collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Financial assets
are measured at amortised cost using the effective interest method, less impairment. Gains and losses
are recognised in profit or loss when the assets are derecognised or impaired, and through the
amortisation process.
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 2022
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
20
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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
21
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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
22
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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
23
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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
24
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
5. Summary of significant accounting policies (continued)
Revenue Recognition (continued)
Rendering of services
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. Revenue
Rendering of services
Transfer Fees and Charges
2022
US$'000
2021
US$'000
4,193
45
4,238
2,830
-
2,830
Transaction fees and charges are from the newly acquired Angra Ltd with transaction volume of US$10.28
million for period 7-31 March.
The disaggregation of revenue is as follows:
Singapore
UK and others
2022
US$'000
2021
US$'000
4,193
45
4,238
2,830
-
2,830
The accompanying notes form an integral part of these consolidated financial statements
25
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
7. Net Operating Expenses
Continuing Operations
Costs of goods sold
Employee Cost
Travel Expenses
Admin Expense
Lease Expenses
Distribution, Advertising and promotion
General Expenses
Depreciation of property plant and equipment
Doubtful accounts
Interest on lease expenses
Occupancy costs
Finance costs
8. Key management personnel
Directors’ emoluments
9. Employee cost
Wages and salaries
Wages and salaries – Cost of sales
Staff welfare and other employee costs
Total
10. Earnings per share
2022
US$'000
2021
US$'000
2,012
2,538
5
594
24
32
66
162
71
3
64
332
5,903
1,118
1,951
1
455
- 5
18
33
170
-
9
19
134
3,903
2022
US$’000
2021
US$’000
391
229
2022
US$’000
2021
US$’000
749
1,583
206
2,538
479
1,226
246
1,951
2022
US$’000
(1,430)
2021
US$’000
(490)
Loss for the period attributable to members
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Parent by the weighted average
number of ordinary share in issue during the year.
Basic weighted average number of ordinary
shares in issue
1,354,950,456
1,028,482,002
The accompanying notes form an integral part of these consolidated financial statements
26
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
Basic loss per share-cents
Diluted loss per share-cents
11. Segment Reporting
(0.00106)
(0.00041)
(0.00105)
(0.00041)
The consolidated entity’s operating segments have been determined with reference to the monthly
management accounts used by the chief operating decision maker to make decisions regarding the
consolidated entity’s operations and allocation of working capital.
Due to the size and nature of the consolidated entity, the Board as a whole has been determined as the chief
operating decision maker.
The consolidated entity operates in one business segment, being information data technology and
infrastructure.
The revenues and results are those of the consolidated entity as a whole and are set out in the statement of
profit and loss and other comprehensive income. The segment assets and liabilities of this segment are those
of the consolidated entity and are set out in the Statement of Financial Position.
12. Cash and cash equivalents
Cash at bank
13. Trade and Other Receivables
Trade receivables
Less: Allowance for expected credit
losses
Advances to supplier (i)
Due from related party (refer to note 26)
Other receivables
2022
US$’000
2021
US$’000
5,104
1,742
2022
US$'000
2021
US$'000
814
(71)
1,291
-
743
1,291
1,287
258
157
2,445
-
-
790
2,081
(i) The collaboration agreement with Wise Mpay to supply the Company with software and services for its fintech
plans is reflected as advances to supplier pending completion. The web remittance portal and complex blockchain e-
wallet application is currently under development and is still a work in progress.
The accompanying notes form an integral part of these consolidated financial statements
27
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
14. Inventories
Inventories
Less: Allowance for inventory obsolescence
2022
US$’000
2021
US$’000
329
(313)
16
334
(316)
18
The movement in the allowance for inventory obsolescence is as follows:
Balance at beginning of year
Additional allowance for inventory obsolescence
Balance at end of year
15. Property, plant and equipment
2022
US$’000
2021
US$’000
316
-3
313
290
26
316
Right-of-Use
Assets
Building and
improvts
US$’000
US$’000
Furniture &
Office
Equipment
US$’000
Vehicle
Total
US$’000
US$’000
169
46
502
148
124
-
-
-
-
-
10
-
-
7
7
-
20
-
-
303
53
529
(8)
140
865
124
7
-
29
1025
103
-
-
-
56
-
-
-
159
-
(3)
403
(1)
52
(4)
581
(1)
139
(9)
1,175
Cost
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
Additions / Transfer in
Disposal / Write-off
Adjustments/Forex
translation
As at 31 March 2022
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 2022
15. Property, Plant and equipment (continued)
Accumulated
depreciation
As at 31 March 2020
Charge for the year
Disposal/Write-off
Adjustments/Forex
translation
As at 31 March 2021
Charge for the year
Disposal/Write-off
Adjustments/Forex
translation
As at 31 March 2022
Net book value
As at 31 March 2021
Right-of-Use
Assets
Building and
improvts
US$’000
US$’000
Furniture &
Office
Equipment
US$’000
Vehicle
Total
US$’000
US$’000
55
120
39
3
-
3
-
8
401
34
-
13
178
119
-
50
3
-
448
30
-
75
13
-
(14)
74
10
-
570
170
-
10
750
162
-
(1)
296
(1)
52
(4)
474
(1)
83
125
3
81
66
(7)
905
275
270
As at 31 March 2022
107
-
107
56
Lease liabilities recognized in the balance sheet
The balance sheet shows the following amounts relating to lease liabilities
Current
Non-current
2022
US$’000
2021
US$’000
66
42
108
129
-
129
Amounts recognized in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
2022
US$’000
2021
US$’000
Depreciation
Interest expense
The accompanying notes form an integral part of these consolidated financial statements
126
4
129
120
9
129
29
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
16. Work in progress
Contract assets
2022
US$’000
2021
US$’000
32
193
The contract assets primarily relate to the Company’s rights to consideration for work completed but not billed
at the reporting date. If the value of services rendered exceeds payments received from the customer, a contract
asset is recognised and presented separately. The contract asset is transferred to receivables when the
entitlement to payment becomes unconditional.
The contract liabilities primarily relate to advance consideration received from customers for contract revenue.
If the amounts invoiced to the customer exceeds the value of services rendered, a contract liability is
recognised and presented separately.
The changes in contract balances are due to the differences between the agreed payment schedule and progress
of project work.
17.
Intangible Assets
Cost as at 1 April and 31 March
Fair value :
As at 1 April
Angra acquisition /Goodwill (i)
As at 31 March
There was no impairment during the period.
2022
US$’000
2021
US$’000
44
6
38
44
6
6
-
6
The acquisition of Angra Limited for £800,000 on March 7, 2022 resulted in the creation of goodwill. Angra
Limited is a UK Financial Conduct Authority (FCA) accredited Authorised Payment Institution ("API"),
which runs under the AngraFX brand name.
Consideration paid
Less: Fair value of net assets acquired
Goodwill
US$'000
1,058
- 1,019
38
The accompanying notes form an integral part of these consolidated financial statements
30
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
18.
Subsidiaries
Details of the Company’s subsidiaries on 31 March 2022 are as follows:
Name of Subsidiary
Place of
Incorporation
2022
Ownership
Interest and
Voting Power
2021
Ownership
Interest and
Voting Power
Golden Saint Technologies
(Australia) Pty Ltd
Australia
EMS Wiring Systems Pte. Ltd
Singapore
GS Fintech Ltd
GS Fintech Pte Ltd
Angra Limited (refer to note 17 for
details of acquisition)
UK
Singapore
UK
100
100
100
100
100
100
100
100
100
-
19.
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
2022
US$’000
2021
US$’000
-
-
-
(5)
(5)
-
-
-
(5)
(5)
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.
20.
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 2021
Issues during the period
1 April 2021 to 31 March 2022
As at 31 March 2022
Number of Shares
1,193,482,002
355,076,190
1,548,558,192
US$’000
2,077
5,718
7,795
The accompanying notes form an integral part of these consolidated financial statements
31
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
21.
Non-controlling equity interest
All entities within the group are currently 100% owned and accordingly a non-controlling interest does not
arise.
22.
Trade and other payables
Trade payables
Accruals
Unearned revenue
Other payables
2022
US$’000
2021
US$’000
218
338
301
37
894
471
502
-
33
1,006
Trade payables are non-interest bearing and are normally settled on 60-days terms.
23. Loans Payable
Loan 1
Loan 2
Term
5 yrs
3 yrs
Amount
977
224
1,201
Interest rate
2.5% pa
4.5% pa
Current
324
178
502
Non-current
653
46
699
24. Auditor renumeration
During the financial year the following fees were paid or payable for services provided by Elderton Pty Ltd,
the auditor of the Group:
2022
US$'000
2021
US$'000
Audit Services
Audit of financial statements
19
16
Other Services
Acting Reporting Accountant - Prospectus
13
-
25. Commitments and Contingencies
The Group is subject to no material commitments or contingent liabilities.
The accompanying notes form an integral part of these consolidated financial statements
32
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
26. Related party transactions
The following is the significant related party transactions entered into by the Company with related parties
on terms agreed between the parties:
2022
US$'000
2021
US$'000
Loans/Advances with related parties
258
-
27. Financial risk management objectives and policies
The Group’s activities expose it to a variety of financial risks. The Group’s Board provides certain specific
guidance in managing such risks, particularly as relates to credit and liquidity risk. Any form of borrowings
requires approval from the Board and the Group does not currently use any derivative financial instruments to
manage its financial risks. The key financial risks and the Group’s major exposures are as follows:
Credit risk
The maximum exposure to credit risk is represented by the carrying amount of the financial assets. In relation
to cash and cash equivalents, the Group limits its credit risk with regards to bank deposits by only dealing with
reputable banks. In relation to sales receivables, the Group’s credit risk is managed by credit checks for credit
customers and approval of letters of credit by the Group’s advising bank.
Foreign Currency Risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates. The company is exposed to currency risk on sales and purchases, that are denominated in
foreign currencies.
28. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Numbers in the table below represent the gross, contractual, undiscounted amount payable in relation to the
financial liabilities.
The Group monitors its risk to a shortage of funds using a combination of cash flow forecasts, budgeting and
monitoring of operational performance.
On
Demand
US$’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 2022:
Trade and other payables
613
347
-
960
The accompanying notes form an integral part of these consolidated financial statements
33
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
29.
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.
The Group is not subject to any externally imposed capital requirements.
30.
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 2022 and 31 March 2021.
31.
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 2022; 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
34
GSTECHNOLOGIES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the financial year ended 31 March 2022
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
Jack Bai
Shayne Tan
Galvin Bai (appt 1 Mar 22)
Raphael Teo (resigned 6 Aug 21)
Malcolm Groat
Garies Chong (appt 6 Aug 21)
Total
Salary
US$
84,859
91,774
55,360
5,905
47,050
5,258
81,563
371,770
CPF
US$
-
4,052
8,156
753
2,303
-
3,802
19,067
Total
US$
84,859
95,826
63,516
6,658
49,353
5,258
85,365
390,836
On behalf of the Board
Tone Goh
Executive Chairman
27 July 2022
The accompanying notes form an integral part of these consolidated financial statements
35
GSTECHNOLOGIES LTD - BVI
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
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
Reserves
Retained Earnings
Total Equity
LIABILITIES
Current Liabilities
Trade and other payables
Intercompany loan
Total Liabilities
TOTAL EQUITY & LIABILITIES
2022
US$'000
2,701
1,304
299
4,304
6
1,565
1,571
5,875
7,795
-
(2,432)
5,363
252
260
512
5,875
The accompanying notes form an integral part of these consolidated financial statements
36
GSTECHNOLOGIES LTD - BVI
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2022
2022 CONSOLIDATED
Balance at 1 April 2021
Comprehensive Income
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners:
Shares issued during the year
Shareholder
Capital
US$'000
Retained
Earnings
Total
US$'000
US$'000
2,077
(1,696)
381
-
-
(736)
(736)
(736)
(736)
5,718
5,718
-
-
5,718
5,718
Balance at 31 March 2022
7,795
(2,432)
5,363
The accompanying notes form an integral part of these consolidated financial statements
37
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 2022 which comprise Consolidated and Parent Company
Statements of Financial Position as at 31 March 2022; 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 International Financial Reporting Standards (IFRSs).
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 2022 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); and
the parent company financial statements have been properly prepared in accordance with IFRSs.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’). 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 International Ethics Standards Board for
Accountants Code of Ethics for Professional Accountants (‘IESBA Code’), 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 key audit matters to be communicated in our report.
Key audit matter
Revenue recognition in respect of uninvoiced
amounts
The entity has reported revenue of USD4.2 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
for
Group uses cost
calculating percentage of completion for ongoing
projects. This could result in recognizing revenue
for work completed but unbilled at year end.
to complete method
Based on these factors, we have identified revenue
recognition as a key risk for our audit.
Accounting for the acquisition of Angra Limited
On 7 March 2022, a purchase agreement was
concluded for the acquisition of Angra Limited. The
acquisition was completed after all necessary
regulatory approvals were obtained as per Sale
Purchase Agreement date 5 October 2021. The
purchase price amounted to £800,000.
The business combination
according to IFRS 3.
is accounted
for
The assets, liabilities and contingent liabilities
acquired were stated at their fair values which were
determined in the course of the purchase price
allocation performed. This results in preliminary net
assets measured at fair value in the amount of
£770,582 and goodwill in the amount of £29,418.
The purchase price allocation performed requires
the Management Board to make discretionary
decisions, estimates and assumptions. Changes in
these assumptions may have a material impact on
the fair values.
Due to the matter described, we considered the
the
business combination and
purchase price allocation as a key audit matter in
our audit.
in particular
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
of
management’s estimation of total project
costs and determination of stage of
completion.
included
review
• 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 with
customer invoices and traced amounts in
the bank.
• ensuring adequate disclosure
in
the
financial statements
Our audit work included, but was not restricted to,
the following:
• We verified, based on
the purchase
agreements and the criteria defined in IFRS
the
the assessment made by
10,
Management Board with regard to the
control over the shares taken over and the
consolidation in the consolidated financial
statements.
• Assessed
the methodical approach
in
identifying the assets acquired and liabilities
assumed at the acquisition date.
• Verified the measurement methods applied
and examined in the determination of the
identifiable assets acquired as well as of the
liabilities and contingent liabilities assumed
and examined
the
acquisition made in the notes in accordance
with the requirements of IFRS 3.
the disclosures on
The accounting and measurement methods applied
are in accordance with IFRSs. We consider the
underlying
and measurement
parameters to be plausible and reasonable.
assumptions
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 67,100, which represents 1.5% of
the Group’s turnover for the year ended 31 March 2022.
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 3,355, 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.
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 in accordance with IFRS, 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 auditors’ 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 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.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls.
• Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal controls that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Elderton Audit Pty Ltd
Rafay Nabeel
Audit Director
Perth
27 July 2022