Gstechnologies Regulatory News (GST)

31 July 2023

GSTechnologies Limited

("GST" or the "Company" or the "Group")

Results for the year ended 31 March 2023

GSTechnologies Limited (LSE: GST), the fintech company, is pleased to announce the Company's audited results for the year ended 31 March 2023.

The Company's Annual Report for the financial year ending 31 March 2023 will shortly be available on the Company's website at https://www.gstechnologies.co.uk/annual-reports.

Highlights

Post Period Highlights

CHAIRMAN'S STATEMENT

During the year GST made further significant progress as the Company focused on its plans to launch a borderless neobanking platform providing next-generation digital money solutions. In particular, the disposal of EMS, completed in September 2022, has removed a loss-making business from the Group and has transformed GST to be a 'pure play' fintech group.

GS Fintech

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

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

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

On 24 August 2022, the Company completed the acquisition of Glindala, a holder of a Crypto Currency Exchange Licence, registered in Lithuania. Glindala's Crypto Currency Exchange Licence is supervised by the Lithuanian Financial Crime Investigation Service ("FCIS") and it covers two types of crypto activities, cryptoasset exchange services, both crypto-fiat and crypto-crypto, and cryptoasset depository wallet services, including generating and storing encrypted client keys. 

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

The GS20 Exchange is offering spot trading and over-the-counter trading desk services for popular cryptoassets, although it is not a pure cryptocurrency exchange, so users will see greater technology integration with regulated stablecoins as well as the introduction of more convenient onramp and offramp services for those stablecoins in due course. The GS20 Exchange has initially been open to a controlled group of retail account holders, as well as a select number of institutional participants, including existing customers of Angra. The soft launch period has progressed in accordance with the Company's plans and valuable feedback has been received from the initial participants. Development of the GS20 cryptoasset exchange continues, utilising the substantive data provided during the soft launch period and the Company anticipates a wider rollout of the GS20 exchange in the second half of 2023.

As a further key pillar of the stablecoin activities that the Group intends to carry out in strategic jurisdictions, including the UK, the Company applied to the FCA for the Company's stablecoins to be admitted to the FCA Regulatory Sandbox. Post period end, as announced on 30 June 2023, the Company was informed by the FCA that they had concluded that the Company's stablecoin application for admission to the FCA Regulatory Sandbox does not currently meet the FCA's strict criteria for admission to the FCA Regulatory Sandbox. As an alternative the FCA offered the Company a place on their Innovations Pathway programme, an initiative designed to support financial services firms in launching innovative products and services, which the Company has accepted. Under the FCA Innovation Pathway programme, the Company will be provided with a dedicated FCA case officer, with a comprehensive range of support services, designed to assist GST to further develop the appropriate path for the progression of its stablecoin plans. This may involve a future Regulatory Sandbox application or preparation for regulatory authorisation without the need for supervised testing.

Although the Company initially viewed admission of its stablecoins to the FCA Regulatory Sandbox as an appropriate next step, the Innovations Pathway programme will enable GST to benefit further from the guidance of the FCA and progress its stablecoin plans. 

After the year end, on 20 July 2023, the Company entered into a legally binding sale and purchase agreement to acquire the entire issued share capital of PAYPT Finance Ltd ("PAYPT"), a Canadian company holding a Canadian Money Services Business ("MSB") licence. The acquisition is subject to approval by the Financial Transactions and Reports Analysis Centre of Canada ("FINTRAC"), the regulatory authority overseeing financial transactions in Canada.

The MSB license held by PAYPT encompasses a range of financial activities, including: foreign exchange dealing; cryptoasset dealing; money transfer services; and authorizations for the issuance of debit cards and IBANs. Subject to FINTRAC's approval of the change of control, the Group plans to rename PAYPT to Angra Global Ltd ("Angra Global"), signifying the Group's strategic intention for Angra's transformation into a B2B-focused Neobank.

Assuming the successful completion of the Acquisition, following the change of control process, Angra Global would be combined with the Group's existing UK-based foreign exchange and payment services company, Angra, paving the way for the Group to launch a multi-currency e-wallet service. This service will enable Angra customers to securely store their funds within Angra Global business accounts and facilitate seamless foreign exchange conversions and fund transfers through Angra's established and reliable banking partnerships, akin to a conventional business bank account.

Additionally, the MSB licence would enable Angra to issue Sterling local accounts and Euro SEPA IBAN accounts to its clients, thereby providing a comprehensive one-stop business banking solution.

Aligned with its overarching strategy, the Group aims to accelerate Angra's revenue while simultaneously bolstering the Angra team to expand its B2B Neobank operations beyond the UK, serving companies of all sizes worldwide.

EMS

EMS, based in Singapore, provides wireless, electronic cabling, security, and other solutions to clients operating in the infrastructure development space. In the period before the completion of the disposal of EMS on 30 September 2022, when it was consolidated in the Group, it saw revenues decline and it continued to be loss making, as a limited number of new contracts were won and trading conditions remained difficult. EMS was disposed of to Teo Chiah Chiu Raphael ("Raphael Teo"), the Chairman of EMS. The consideration paid was the transfer to the Company, by way of a share buyback, 60,000,000 Ordinary Shares held by him (the "Consideration Shares"). At the closing mid-price of 1.09p of the Company's shares on 15 July 2022, the Consideration Shares were valued at £654,000 and they represented approximately 3.87 per cent. of the Company's issued share capital.

Fund Raising

During the year the Company entered into an unsecured convertible loan facility to receive funding of up to US$1.6 million (the "Loan Facility") with an institutional investor. US$800,000 of the Loan Facility was drawn down and was all subsequently converted into new Ordinary Shares in the Company. The Loan Facility was cancelled on 29 March 2023, with the second instalment of US$800,000 undrawn.

Post period end on 17 May 2023, the Company raised gross proceeds of £750,000 through a placing of 75,000,000 shares at a price of 1.0 pence per share.

Climate Change

The Board is, in addition to committing to a borderless neobanking platform providing next-generation digital money solutions, committed to setting strategic directions that are relevant to the management of carbon emissions.

Our management of carbon emissions starts with lowering our workplace carbon footprint by:

We are also planning to reduce our carbon footprint by improving office lighting using LED bulbs instead of fluorescent technology.

As the Company expands its business activities, GST will consider the impact and risks its activities have on the climate and vice versa.

GST's energy consumption and carbon emissions were mainly based on electricity consumed per meter supplied by the municipality. Further, we have also included our business travel, which includes long-haul flights, vehicle rental and rail-travel. For the intensity ratio, we use revenue as a quantifiable factor as revenue will naturally drive increases or decreases in our energy consumption and emissions.

We follow the guidance and use the GHG emission conversion factors provided by the GHG Protocol.

Excluding EMS Wiring Systems Pte Ltd, which was disposed of on 30 September 2022, the total energy consumption and emissions is 1,383 kWh and 5.1 tonnes of CO2 respectively, and the intensity ratio is 0.0031 kWh per dollar of revenue and 0.0000 tonnes of CO2 per dollar of revenue respectively.

Board and People

I would like to take this opportunity to thank all of the GST Board and team for their hard work and dedication throughout the year.

Post the year end, in June 2023, Chong Loong Fatt Garies ("Garies Chong"), a Non-executive Director of the Company, resigned from the Board in order to focus on his other business interests. I would like to thank Garies for his contribution to GST and we wish him well for the future.

Summary

Following the disposal of EMS, GST is now a focused, 'pure play', fintech group with a solid operational platform on which to build and continue to role out our GS Money solutions. We also enjoy a healthy balance sheet to fund our continued expansion.

GS Money is intended to make cross-border payments quick and affordable to an addressable market of millions of participants by netting and settling trades through its stablecoin-based payments network. With Angra the Group has a fully operational, FCA approved API conducting fast, secure, and low-cost foreign exchange business and payment services internationally, and the first pillar of GS Money in place. 

Unlocking the demand for a large user base also requires a platform that can meet the clearing and settlement needs of both retail and institutional customers, with high compliance and security standards. The GS Exchange provides such a platform that is designed offer users greater technology integration with regulated stablecoins as well as the introduction of more convenient onramp and offramp services for those stablecoins in due course, the second pillar of GS Money.

With the Angra and GS20 Exchange platforms in place and properly integrated, ongoing discussions with the FCA regarding the Company's UK stablecoin plans, and further progress being made on the development of the Company's GS Money solutions, coupled with the disposal of EMS, GST has come a long way in a short period of time.

Additionally, the recently announced proposed acquisition of PAYPT, which is only subject to FINTRAC's approval of the change of control, will pave the way for the Group to launch a multi-currency e-wallet service and enable Angra to issue Sterling local accounts and Euro SEPA IBAN accounts to its clients, thereby providing a comprehensive one-stop business banking solution.

We will also continue to explore any further value enhancing acquisition opportunities that may become available and that can assist with accelerating the development of the Group.

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

Tone Kay Kim GOH

Chairman

FINANCIAL REVIEW

The Group's financial statements include a full 12-month contribution from Angra and EMS for the period from 1 April 2022 to 30 September 2022.

Income Analysis

Despite the contribution from Angra, the continued poor performance of EMS and its disposal during the year resulted in a decrease in revenue for the 12-months ended 31 March 2023 to US$2.27 million (2022: US$4.24 million). The Group's operating loss before tax for the financial year is US$1.61 million, compared to the operating loss incurred in previous financial year of US$1.43 million. In addition, the Group received grants and other income during the year of US$0.05 million (2022: US$0.24 million), leading to total income recognised in the year of US$2.32 million (2022: US$4.47 million).

Angra had US$132.87 million in transaction volume during the year, which contributed US$0.43 million in revenue to the Group.

Balance Sheet Analysis

Net assets as at 31 March 2023 amounted to US$3.87 million (31 March 2022: US$6.01 million). As at 31 March 2023, the Group had available cash of US$4.25 million (31 March 2022: US$5.10 million).

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.

Enquiries:

The Company

Tone Goh, Executive Chairman

+65 6444 2988

Financial Adviser

VSA Capital Limited

+44 (0)20 3005 5000

Simon Barton / Thomas Jackson

Broker

CMC Markets

+44 (0)20 3003 8632

Douglas Crippen

Financial PR & Investor Relations

IFC Advisory Limited

Tim Metcalfe / Graham Herring / Florence Chandler

+44 20 (0) 3934 6630

gst@investor-focus.co.uk

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

For the financial year ended 31 March 2023

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2023

CONSOLIDATED STATEMENT OF CASH FLOWS

For the financial year ended 31 March 2023

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 March 2023

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 2023 were authorised for issue in accordance with a resolution of the Directors on 31 July 2023. The shares of the Company are publicly traded on London Stock Exchange.

The registered office of GSTechnologies Ltd, the ultimate parent of the Group, is 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 2023.

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 ("US$") 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 2023, 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 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 2023, the Group held cash reserves of US$4,252,000 (2022: US$5,104,000).

The Directors believe that there are sufficient funds to meet the Group's working capital requirements.

The Group recorded a loss of US$1.63 million for the year ended 31 March 2023 and had net assets of US$3.87 million as at 31 March 2023 (2022: loss of US$1.43 million and net assets of US$6.01 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 23 for further details.

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

Judgements made in applying accounting policies

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

Key sources of estimation uncertainty

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

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

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

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

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

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

Allowance for inventory obsolescence

The Company reviews the ageing analysis of inventories at each reporting date and makes provision for obsolete and slow-moving inventory items identified that are no longer suitable for sale. The net realisable value for such inventories are estimated based on the most reliable evidence available at the reporting date. These estimates take into consideration market demand, competition, selling price and cost directly relating to events occurring after the end of the financial year to the extent that such events confirm conditions existing at the end of the financial year. Possible changes in these estimates could result in revisions to the valuation of inventories. The carrying amounts of the Company's inventories at the reporting date are disclosed in Note 13 to the financial statements.

4. Adoption of new and amended standards and interpretations

The Group adopted all of the new and revised Standards and Interpretations issued by the IASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 April 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 2 to 10 years

Motor Vehicles 2 to 10 years

Fixtures and fittings 3 years

Lease Improvements 5 years

Subsequent expenditure is capitalised when it is probable that future economic benefits from the use of the asset will be increased. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Assets that are replaced and have no future economic benefit are derecognised and expensed through profit or loss. Repairs and maintenance which neither materially add to the value of assets nor appreciably prolong their useful lives are charged against income. Gains/ losses on the disposal of fixed assets are credited/charged to income. The gain or loss is the difference between the net disposal proceeds and the carrying amount of the asset.

The asset's residual values, useful lives and methods of depreciation are reviewed at each reporting period and adjusted prospectively if appropriate.

Inventories

Inventories are valued at the lower of cost and net realisable value.

Financial instruments

(a) Financial assets

(i) Classification, initial recognition and measurement

The Company classifies its financial assets into the following measurement categories:

amortised cost; fair value through other comprehensive income (FVOCI); and fair value through profit or loss (FVPL).

Financial assets are recognised when, and only when the entity becomes party to the contractual provisions of the instruments.

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Trade receivables are measured at the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party, if the trade receivables do not contain a significant financing component at initial recognition.

(ii) Subsequent measurement

Debt instruments

Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the contractual cash flow characteristics of the asset. The Company only has debt instruments at amortised cost.

Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Financial assets are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the assets are derecognised or impaired, and through the amortisation process.

Debt instruments of the Company comprise cash and cash equivalents and trade and other receivables.

Equity instruments

On initial recognition of an investment in equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in other comprehensive income which will not be reclassified subsequently to profit or loss. Dividends from such investments are to be recognised in profit or loss when the Company's right to receive payments is established. For investments in equity instruments which the Company has not elected to present subsequent changes in fair value in other comprehensive income, changes in fair value are recognised in profit or loss.

(iii)Derecognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income for debt instruments is recognised in profit or loss.

(b) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at FVPL, directly attributable transaction costs.

(ii) Subsequent measurement

After initial recognition, financial liabilities that are not carried at FVPL are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

Financial liabilities measured at amortised cost comprise trade and other payables.

(iii) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or

cancelled or expires. On derecognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss.

Offsetting

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Cash and cash equivalents

Cash and cash equivalents 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.

Intangible Assets

Digital Assets

The company's digital assets is accounted using the revaluation model. It is initially recognized at cost at acquisition date. Subsequent to initial recognition, the Company revalues its at fair value less any accumulated amortization and impairment. Movements above costs are recognized in other comprehensive income and movements below costs are recognized in profit and loss.

Software

Software is initially capitalized at cost in preparing the asset for its intended use. Direct expenditure which enhances or extends the performance is added to the original cost. The amortization of the software will only commence when it is brought into actual use.

Impairment

Financial Assets

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at FVPL and contract assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect debtors' ability to pay.

The Company considers a financial asset in default when contractual payments are past due for more than 90 days. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Non-financial assets

The carrying amounts of the Company's non-financial assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then

the asset's recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. For the purpose of impairment testing, the recoverable amount is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss.

An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.

Trade and other payables

Trade and other payables are non-derivative financial liabilities that are not quoted in an active market. It represents liabilities for goods and services provided to the Group prior to the year end and which are unpaid. These amounts are unsecured and have 7-30 day payment terms. Trade and other payables are presented as current liabilities unless payment is not during within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost using the effective interest (EIR) method. The fair value implies the rate of return on the debt component of the facility. This rate of return reflects the significant risks attaching to the facility from the lenders' perspective.

Determination of Fair Values

A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Trade and other receivables

The fair values of trade and other receivables are estimated as the present value of future cash flows, discounted at the market rate of interest at the measurement date. Current receivables with no stated interest rate are measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date.

Non-derivative financial liabilities

Non-derivative financial liabilities are measured at fair value at initial recognition and for disclosure purposes, at each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the measurement date.

Other financial assets and liabilities

The carrying amount of financial assets and liabilities with a maturity of less than one year is assumed to approximate their fair values.

Provisions

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax amount that reflects current market assessments of the time value of money, and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Finance income

Interest income is made up of interest received on cash and cash equivalents.

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.

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

The Group's revenue is primarily derived from consideration paid by customers to transfer money internationally. The Group recognises revenue when performance obligations are satisfied, meaning when the funds are received by the recipients

A customer enters into the contract with the Group at the time of initiating a transfer by formally accepting the contractual terms and conditions with the details of the performance obligations and service fees on the Group's website.

The transaction price is comprised of the money transfer service fee and a foreign exchange margin. The foreign exchange margin results from the difference between the exchange rate set by the entity to the customer and the rate sourced in the market. Both the transaction fee and foreign exchange rate are agreed by the customer in the Group's terms and conditions. The transaction price is readily determinable at the time the transaction is settled. Due to the short-term nature of the Group's services, there were no contract assets and immaterial contract liabilities relating to customers.

 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

Transaction fees and charges are from Angra Ltd and GS Fintech UAB with transaction volume of US$132.87 million and US$20.60 million respectively. GS Fintech UAB has been operational since 1 February 2023.

7. Net Operating Expenses

8. Discontinued operations

In September 2022, the Group sold one of its subsidiary, EMS Wiring Systems Pte Ltd which management deemed as its non-core business to place greater focus on the Group's key competencies in developing the "GS Fintech" subsidiaries in the UK and Singapore. The segment was not previously presented as a discontinued operation or classified as held for sale as at 31 March 2022. Thus, the comparative statement of profit or loss has been re-presented to show the discontinued operation separately from continuing operations. Details of the assets and liabilties disposed of, and the calculation of the profit or loss on disposal, are disclosed in Note 9. The results of the discontinued operation, which have been included in the profit for the year, were as follows:

9. Disposal of subsidiary

The net assets of EMS Wiring Systems Pte Ltd as at date of disposal were as follows:

The gain on disposal is included in the profit for the year from discontinued operation in Note 8.

10. Key management personnel

11. Employee cost

The average number of employees of the Group are 48 and 76 for 2023 and 2022 respectively.

12. Earnings per share

13. Segment Reporting

The consolidated entity's operating segments have been determined with reference to the monthly management accounts used by the chief operating decision maker to make decisions regarding the consolidated entity's operations and allocation of working capital.

Due to the size and nature of the consolidated entity, the Board as a whole has been determined as the chief operating decision maker.

The consolidated entity operates in one business segment, being information data technology and infrastructure.

The revenues and results are those of the consolidated entity as a whole and are set out in the statement of profit and loss and other comprehensive income. The segment assets and liabilities of this segment are those of the consolidated entity and are set out in the Statement of Financial Position.

14. Cash and cash equivalents

15. Trade and Other Receivables

16. Inventories

Following the disposal of EMS Wiring Systems Pte Ltd, no inventory left to be reported at the end of the financial year.

The movement in the allowance for inventory obsolescence is as follows:

17. Property, plant and equipment

Lease liabilities recognized in the balance sheet

The balance sheet shows the following amounts relating to lease liabilities

Amounts recognized in the statement of profit or loss

The statement of profit or loss shows the following amounts relating to leases:

18. Work in progress

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.

No contract assets at the end of the year due to disposal of subsidiary, EMS Wiring Systems Pte Ltd.

19. Intangible Assets