Attached files
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EX-32.2 - CERTIFICATION - UNI CORE HOLDINGS CORP | v237262_ex32-2.htm |
EX-31.1 - CERTIFICATION - UNI CORE HOLDINGS CORP | v237262_ex31-1.htm |
EX-31.2 - CERTIFICATION - UNI CORE HOLDINGS CORP | v237262_ex31-2.htm |
EX-32.1 - CERTIFICATION - UNI CORE HOLDINGS CORP | v237262_ex32-1.htm |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
x
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended June 30, 2011
¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________________ to __________________
Commission File Number 0-30430
Uni Core Holdings Corporation
(Formerly known as “Intermost Corporation”)
(Exact name of registrant as specified in its charter)
Wyoming
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87-0418721
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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Room 2602, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong
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(Address of principal executive offices, including zip code)
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Registrant’ telephone number including area code (852) 2827-6898
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Securities pursuant to section 12(b) of the Act:
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NONE
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Securities registered pursuant to Section 12(g) of the Act:
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Common Stock, $0.001 par value
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Yes o No o
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).
Yes ¨ No x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and ask price of such common equity: As of September 19, 2011, the aggregate value of voting and non-voting common equity held by non-affiliates was $72,862,908.
DOCUMENTS INCORPORATED BY REFERENCE: None
EXPLANATORY NOTE
Following the initial filing of this Form 10-K, Uni Core Holdings Corporation discovered incorrect numbering of the paragraphs in the auditor’s report and financial statement. Consequently, the Registrant is amending this Form 10-K to include the revised auditor’s report and financial statement. No disclosure was changed as a result of the numbering change.
TABLE OF CONTENTS
Page
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PART II
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ITEM 8
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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4 | |||
PART IV
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|||||
ITEM 15
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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4 | |||
SIGNATURE AND EXHIBITS
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42 |
2
Note Regarding Forward Looking Statements
This document contains “forward-looking statements.” These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our business and our industry and involve a number of risks and uncertainties, as well as assumptions that, if they were to materialize or if they prove incorrect, would likely cause our results to differ materially from those expressed or implied by such forward-looking statements. Although our forward-looking statements reflect the good faith judgment of our management, these statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in the forward-looking statements.
Words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “could,” “should,” hope,” “seek,” “may,” and other similar expressions (including their use in the negative) identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, the following:
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·
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our lack of capital and whether or not we will be able to raise capital when we need it,
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·
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government regulation of the Internet and Internet services in China,
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·
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our ability to successfully compete in our markets and industries,
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·
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our ability to find suitable acquisition targets and, once acquired, to integrate these acquisitions into our business;
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·
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adverse changes to the political, economic or social conditions in China
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and other factors, some of which will be outside our control. You are cautioned not to place undue reliance on these forward-looking statements, which relate only to events as of the date on which the statements are made. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. You should refer to and carefully review the information in future documents we file with the Securities and Exchange Commission.
Forward-looking statements include, but are not limited to, statements under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as other captions in this Annual Report. You should be aware that the occurrence of any of the events or risk factors discussed under the heading “Risk Factors” and elsewhere in this Annual Report could substantially harm our business, results of operations and financial condition. If any of these events occur, the trading price of our common stock could decline and you could lose all or a part of the value of your shares of our common stock.
3
PART II
ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Refer to Item 15 Financial Statement Schedules
ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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The following auditor’s report and financial statements are filed as part of this annual report:
PAGE | ||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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5
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CONSOLIDATED BALANCE SHEET
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6
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CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
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8
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CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
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9
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CONSOLIDATED STATEMENT OF CASH FLOWS
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10
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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12
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4
ALBERT WONG & CO.
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CERTIFIED PUBILC ACCOUNTANTS
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Room 701, 7th Floor, Nan Dao Commercial Building
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359-361 Queen’s Road Central
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Hong Kong
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Tel : 2851 7954
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Fax: 2545 4086
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ALBERT WONG
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B.Soc., Sc., ACA., LL.B., CPA(Practising)
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To:
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The board of directors and stockholders of
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Uni Core Holdings Corporation (formerly known as Intermost Corporation)
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Report of Independent Registered Public Accounting Firm
We have audited the accompanying consolidated balance sheet of Uni Core Holdings Corporation (formerly known as Intermost Corporation) and subsidiaries as of June 30, 2011 and 2010 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
We were not engaged to examine management’s assertion about the effectiveness of the Company’s internal control over financial reporting as of June 30, 2011 included in the Company’s Item 9A “Controls and Procedures” in the Annual Report on Form 10-K and, accordingly, we do not express an opinion thereon.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Uni Core Holdings Corporation (formerly known as Intermost Corporation) as of June 30, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 19 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 20. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Hong Kong
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Albert Wong & Co.
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October 11, 2011
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Certified Public Accountants
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5
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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CONSOLIDATED BALANCE SHEETS
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AS AT JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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Notes
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2011
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2010
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||||||||
ASSETS
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||||||||||
Current assets
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||||||||||
Cash and cash equivalents
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2(e)
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$ | 2,177,729 | $ | 2,108,546 | |||||
Accounts receivable, net
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2(f)
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5,094,329 | 4,496,210 | |||||||
Deposits, prepayment and other receivables
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3
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3,011,746 | 1,582,148 | |||||||
Amount due from related company
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5
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634,768 | 413,929 | |||||||
Other loan receivables
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6
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112,447 | 236,292 | |||||||
Inventory
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8
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1,863,474 | 2,435,369 | |||||||
Total current assets
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$ | 12,894,493 | $ | 11,272,494 | ||||||
Unlisted investment
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2(g)
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949,873 | 949,873 | |||||||
Investment in associated companies
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2(l)
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1 | 1 | |||||||
Goodwill
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4
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8,779,715 | 11,157,681 | |||||||
Plant and equipment, net
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7
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7,229,808 | 8,165,308 | |||||||
Intangible assets, net
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9
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1,234,368 | 1,197,300 | |||||||
TOTAL ASSETS
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$ | 31,088,258 | $ | 32,742,657 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||||
Current liabilities
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||||||||||
Accounts payable
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$ | 4,598,085 | $ | 3,509,165 | ||||||
Accrued liabilities and other payable
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10
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2,943,009 | 2,889,068 | |||||||
Customers deposits
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19,705 | 18,280 | ||||||||
Advance from a shareholder
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11
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976,561 | 337,658 | |||||||
Finance leases
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12
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- | 132,763 | |||||||
Short term loan
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13
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6,118,679 | 5,527,978 | |||||||
Business and other taxes payable
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1,104 | 1,141 | ||||||||
Total current liabilities
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$ | 14,657,143 | $ | 12,416,053 | ||||||
TOTAL LIABILITIES
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$ | 14,657,143 | $ | 12,416,053 |
See accompanying notes to consolidated financial statements
6
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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CONSOLIDATED BALANCE SHEETS (Continued)
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AS AT JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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Notes
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2011
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2010
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||||||||
STOCKHOLDERS’ EQUITY
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||||||||||
Preferred stock at $0.001 par value, 5,000,000 (2010: Nil) shares authorized, Nil (2010: Nil) shares issued and outstanding.
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- | - | ||||||||
Common stock at $0.001 par value, 2,000,000,000 (2010: 2,000,000,000) shares authorized, 707,406,873 (2010: 664,031,873) shares issued and outstanding at June 30, 2011;
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15
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$ | 707,407 | $ | 664,032 | |||||
Additional paid-in capital
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15
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57,556,806 | 54,050,181 | |||||||
Accumulated deficit
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(44,076,475 | ) | (36,120,023 | ) | ||||||
Non-control interest
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1,406,863 | 1,229,502 | ||||||||
Accumulated other comprehensive income
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2(t),15
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836,514 | 502,912 | |||||||
$ | 16,431,115 | $ | 20,326,604 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 31,088,258 | $ | 32,742,657 |
See accompanying notes to consolidated financial statements
7
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
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FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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Notes
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2011
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2010
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||||||||
Net revenues
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2(m)
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$ | 19,735,344 | $ | 2,706,118 | |||||
Cost of net revenues
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(19,125,664 | ) | (1,252,343 | ) | ||||||
Gross profit
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$ | 609,680 | $ | 1,453,775 | ||||||
Selling, general and administrative expenses
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(5,913,562 | ) | (3,188,394 | ) | ||||||
Loss from operations
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$ | (5,303,882 | ) | $ | (1,734,619 | ) | ||||
Interest income
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12,523 | 1,148 | ||||||||
Interest expense
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(609,447 | ) | (34,882 | ) | ||||||
Dividend income
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950,542 | 439,405 | ||||||||
Bad debts recovery
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- | 49,587 | ||||||||
Bad debts written off
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3(d)
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(38,154 | ) | (300,441 | ) | |||||
$ | (4,988,418 | ) | $ | (1,579,802 | ) | |||||
Unusual items
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||||||||||
Impairment on Goodwill
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4
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(2,854,023 | ) | (11,099,123 | ) | |||||
Loss before income taxes and minority interests
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$ | (7,842,441 | ) | $ | (12,678,925 | ) | ||||
Income taxes
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14
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- | - | |||||||
Net loss before minority interests
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$ | (7,842,441 | ) | $ | (12,678,925 | ) | ||||
Non-control interest
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(114,011 | ) | (158,828 | ) | ||||||
Net loss
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$ | (7,956,452 | ) | $ | (12,837,753 | ) | ||||
Net loss per share:
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||||||||||
-Basic and diluted
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$ | (0.0115 | ) | $ | (0.0507 | ) | ||||
Weighted average no. of common stock
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||||||||||
-Basic and diluted
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690,079,476 | 253,343,004 |
See accompanying notes to consolidated financial statements
8
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
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FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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Additional
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Accumulated
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|||||||||||||||||||||||||||
No.
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paid
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Other
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||||||||||||||||||||||||||
shares
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Common
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In
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comprehensive
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Accumulated
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Non-control
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|||||||||||||||||||||||
outstanding
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stock
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capital
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Income/(loss)
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deficit
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interest
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Total
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||||||||||||||||||||||
Balance, July 1, 2009
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213,281,873 | $ | 213,282 | $ | 24,997,931 | $ | (32,062 | ) | $ | (23,282,270 | ) | $ | 446,361 | $ | 2,343,242 | |||||||||||||
Net (loss)/profit
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- | - | - | - | (12,837,753 | ) | 158,828 | (12,678,925 | ) | |||||||||||||||||||
Issuance of common stock on August 19, 2009
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500,000 | 500 | 24,500 | - | - | - | 25,000 | |||||||||||||||||||||
Cancellation of common stock on October 8, 2009
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(1,750,000 | ) | (1,750 | ) | (320,250 | ) | - | - | - | (322,000 | ) | |||||||||||||||||
Issuance of common stock on October 15, 2009
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12,000,000 | 12,000 | 1,188,000 | - | - | - | 1,200,000 | |||||||||||||||||||||
Issuance of common stock on January 8, 2010
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110,000,000 | 110,000 | 7,040,000 | - | - | - | 7,150,000 | |||||||||||||||||||||
Issuance of common stock on June 1, 2010
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330,000,000 | 330,000 | 21,120,000 | - | - | - | 21,450,000 | |||||||||||||||||||||
Issuance of common stock by CEPHGL
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- | - | - | - | - | 615,750 | 615,750 | |||||||||||||||||||||
Foreign currency translation adjustment
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- | - | - | 534,974 | - | 8,563 | 543,537 | |||||||||||||||||||||
Balance, June 30, 2010
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664,031,873 | $ | 664,032 | $ | 54,050,181 | $ | 502,912 | $ | (36,120,023 | ) | $ | 1,229,502 | $ | 20,326,604 | ||||||||||||||
Balance, July 1, 2010
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664,031,873 | $ | 664,032 | $ | 54,050,181 | $ | 502,912 | $ | (36,120,023 | ) | $ | 1,229,502 | $ | 20,326,604 | ||||||||||||||
Net (loss)/profit
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- | - | - | - | (7,956,452 | ) | 114,011 | (7,842,441 | ) | |||||||||||||||||||
Issuance of common stock on November 18, 2010
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37,500,000 | 37,500 | 2,962,500 | - | - | - | 3,000,000 | |||||||||||||||||||||
Issuance of common stock for service fee on November 18, 2010
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1,875,000 | 1,875 | 148,125 | - | - | - | 150,000 | |||||||||||||||||||||
Issuance of common stock on January 18, 2011
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4,000,000 | 4,000 | 396,000 | - | - | - | 400,000 | |||||||||||||||||||||
Foreign currency translation adjustment
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- | - | - | 333,602 | - | 63,350 | 396,952 | |||||||||||||||||||||
Balance, June 30, 2011
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707,406,873 | 707,407 | 57,556,806 | 836,514 | (44,076,475 | ) | 1,406,863 | 16,431,115 |
See accompanying notes to consolidated financial statements
9
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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Note
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2011
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2010
|
||||||||
Cash flows from operating activities
|
||||||||||
Net loss
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$ | (7,956,452 | ) | $ | (12,837,753 | ) | ||||
Amortization of intangible assets
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23,906 | 23,805 | ||||||||
Bad debts
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3(d)
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38,154 | 300,441 | |||||||
Depreciation
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1,055,646 | 143,138 | ||||||||
Loss on disposal of fixed assets
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422,391 | - | ||||||||
Impairment of goodwill
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4
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2,854,023 | 11,099,123 | |||||||
Consultant fee by issuances of common stock
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150,000 | 900,000 | ||||||||
Non-control interest
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114,011 | 158,828 | ||||||||
Issuances of common stock by CEPHGL
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- | 615,827 | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||||
Accounts receivable, net
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(367,701 | ) | (85,025 | ) | ||||||
Deposits, prepayment and other receivable
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(1,318,295 | ) | 258,410 | |||||||
Inventory
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674,493 | 181,476 | ||||||||
Accounts payables
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893,663 | (264,637 | ) | |||||||
Accrued liabilities and other payable
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206,797 | (148,156 | ) | |||||||
Customers deposits
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513 | 135,879 | ||||||||
Deferred revenue
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- | (493 | ) | |||||||
Business and other taxes payable
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(481 | ) | (23,897 | ) | ||||||
Net cash (used in)/provided by operating activities
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$ | (3,209,332 | ) | $ | 456,966 | |||||
Cash flows from investing activities
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||||||||||
Acquisition of plant and equipment
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$ | (174,205 | ) | $ | (9,957 | ) | ||||
Bank balance acquired from issuance of common stock
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- | 592,971 | ||||||||
Acquisition of intangible assets
|
(2,459 | ) | (28,561 | ) | ||||||
Net cash (used in)/provided by investing activities
|
$ | (176,664 | ) | $ | 554,453 |
10
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
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FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
|
2011
|
2010
|
|||||||
Cash flows from financing activities
|
||||||||
Advance from a related party
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$ | (195,517 | ) | $ | (58,587 | ) | ||
Advance from a shareholder
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606,874 | - | ||||||
Repayment of finance lease
|
(296,065 | ) | (21,059 | ) | ||||
Bank loans
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310,993 | 218,359 | ||||||
Insurance of common stock
|
3,550,000 | - | ||||||
Net cash provided by financing activities
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$ | 3,976,285 | $ | 138,713 | ||||
Net increase in cash and cash equivalents
|
$ | 590,289 | $ | 1,150,132 | ||||
Effect of foreign currency translation on cash and cash equivalents
|
(521,106 | ) | 382,891 | |||||
Cash and cash equivalents–beginning of year
|
2,108,546 | 575,523 | ||||||
Cash and cash equivalents–end of year
|
$ | 2,177,729 | $ | 2,108,546 |
2011
|
2010
|
|||||||
Supplementary cash flow information:
|
||||||||
Interest received
|
$ | 12,523 | $ | 1,148 | ||||
Interest expense
|
(609,447 | ) | (34,882 | ) |
See accompanying notes to consolidated financial statements
11
UNI CORE HOLDINGS CORPORATION
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(Formerly Known As INTERMOST CORPORATION)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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(Stated in US Dollars)
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1.
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ORGANIZATION AND PRINCIPAL ACTIVITIES
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Uni Core Holdings Corporation (formerly known as Intermost Corporation) (hereinafter referred to as the “Company”, including its subsidiaries and associated companies when the context so requires) was originally incorporated in the State of Utah on March 6, 1985 under the name Utility Communications International, Inc. The Company changed its name from Utility Communications International, Inc. to Uni Core Holdings Corporation (formerly known as Intermost Corporation) on October 23, 1998. In February 2003, the Company re-domiciled from the State of Utah to the State of Wyoming.
On October 23, 1998, the Company acquired a 100% interest in Intermost Limited ("IL"), a company incorporated in the British Virgin Islands, by issuing 4,970,000 shares of its common stock with a par value of US$0.001 per share (after the redenomination of par value and a stock split) to the shareholders of IL.
The acquisition of IL by the Company was treated as a reverse acquisition since IL was the continuing entity as a result of the exchange reorganization.
On May 31, 2010, the Company acquired a 100% interest in APT Paper Group Limited (“APTPGL”), a company incorporated in the Cayman Islands, by issuing 440,000,000 shares of its common stock with a par value of US$0.001 per share to the shareholders of APTPGL. The acquisition was treated as a normal acquisition since the Uni Core management team will control the new combined companies to oversight the entire operation of the whole group of companies.
The Company is engaged in providing, directly and through its subsidiaries and associated companies, business equity and financial consulting services in the People’s Republic of China (the "PRC" or "China"). The Company's fiscal year-end is June 30.
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(a)
|
Method of Accounting
|
The Group maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The consolidated financial statements and notes are representations of management. Accounting policies adopted by the Group conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of consolidated financial statements, which are compiled on the accrual basis of accounting.
12
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(b)
|
Principles of Consolidation
|
The consolidated financial statements include the accounts of Uni Core Holdings Corporation (formerly known as Intermost Corporation) (the Company) and its eleven subsidiaries (of which three were totally impaired), two associate companies (of which one was totally impaired) and one affiliated company, constituting the group. Significant inter-company transactions have been eliminated in consolidation. The consolidated financial statements include 100% of the assets and liabilities of these majority-owned subsidiaries, and the ownership interests of minority investors are recorded as minority interests.
The Company’s subsidiaries and affiliated companies and their principal activities as of June 30, 2010 are summarized as follows:
Name
|
Place of
incorporation of
organization
|
Percentage of
Equity Interest
Attributable to
the Company
|
Principal Activities
|
|||||
Uni Core Holdings Corporation (f.k.a. Intermost Limited) (“IL”)
|
British Virgin Islands
|
100 | % |
Investment holding
|
||||
Leader Palace International Limited (LP)
|
British Virgin Islands
|
100 | % |
Inactive
|
||||
Intermost (H.K.) Limited (“IHKL”)
|
Hong Kong
|
100 | % |
Inactive
|
||||
IMOT Information Technology (Shenzhen) Ltd. (“IITSL”)*
|
PRC
|
100 | % |
Inactive
|
||||
China Equity Platform Holding Group Limited (“CEPHGL”)**
|
British Virgin Islands
|
53.42 | % |
Investment holding
|
||||
ChinaE.com E-Commerce Co. Ltd. (Formerly known as China E.com Information Technology Ltd. (“CECITL”))***
|
PRC
|
53.42 | % |
Business equity and financial consulting services
|
||||
ChinaE.com Technology (Shenzhen) Ltd.(“CECTSL”)***
|
PRC
|
53.42 | % |
Business equity and financial consulting services
|
13
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(b)
|
Principles of Consolidation (continued)
|
Name
|
Place of
incorporation of
organization
|
Percentage of
Equity Interest
Attributable to
the Company
|
Principal Activities
|
|||||
ChinaE.com Investment Consultants (Shenzhen) Company Ltd. (“CECICSL”)****
|
PRC
|
53.42 | % |
Inactive
|
||||
Intermost Focus Advertising Company Ltd.(“IFACL”)****
|
PRC
|
48.07 | % |
Inactive
|
||||
Shenzhen United Property And Share Rights Exchange (fka. “Shenzhen International Hi-Tech Property Right Exchange Centre”) (“SIHTPREC”)*****
|
PRC
|
8.01 | % |
Private equity exchange
|
||||
Hainan Special Economic Zone Property Right Exchange Center (“PREC”)*****
|
PRC
|
11.22 | % |
Private Property Right Exchange
|
||||
Easeway Investments Limited (“EIL”)
|
British Virgin Islands
|
100 | % |
Inactive
|
||||
APT Paper Group Limited (“APTPGL”)
|
Cayman Islands
|
100 | % |
Investment holding
|
||||
Plan Star Development Limited (“PSDL”)
|
Hong Kong
|
100 | % |
Investment holding
|
||||
Jin Long Paper Products Company Limited (“JLPPCL”)
|
PRC
|
100 | % |
Manufacturing and wholesale of paper product
|
||||
Ho Ni Long Honeycomb Paper Product (Shenzhen) Company Limited (“HNL”)
|
PRC
|
100 | % |
Manufacturing and wholesale of paper product
|
||||
Pheng Hoon Honeycomb Paper Products Pte. Limited (“PHHP”)
|
Singapore
|
12.67 | % |
Paper or paper product wholesale
|
14
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(b)
|
Principles of Consolidation (continued)
|
Name
|
Place of
incorporation of
organization
|
Percentage of
Equity Interest
Attributable to
the Company
|
Principal Activities
|
|||||
APT Investment Limited
|
British Virgin Islands
|
100 | % |
Investment holding
|
||||
ShenZhen Jin Li Honeycomb Paper Products Equipments Company Limited
|
PRC
|
100 | % |
Equipment manufacturing
|
||||
APT Management Limited
|
British Virgin Islands
|
100 | % |
Investment holding
|
||||
Su Zhou Eastern Sunrise Company Limited
|
PRC
|
100 | % |
Manufacturing and wholesale of paper product
|
||||
Ivanhoe Holdings Limited
|
Hong Kong
|
100 | % |
Investment holding
|
||||
Qing Dao Eastern Sunrise Company Limited
|
PRC
|
100 | % |
Manufacturing and wholesale of paper product
|
* IITSL is wholly foreign owned enterprises established in the PRC to be operated until 2018.
** During the fiscal year of June 30, 2009, the Company has transferred the subsidiary companies, CECITL, CECICSL, IFACL & CECTSL and investments in PRC companies, SIHTPREC & PREC to CEPHGL in exchanging 60% of shareholdings in CEPHGL. The group operations of CEPHGL are consolidated into the Company’s financial statements. As at June 30, 2010, the effective holding rate was reduced from 60% to 53.42% due to issuance of additional common stock.
15
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(b)
|
Principles of Consolidation (continued)
|
*** CECTSL and CECITL are wholly foreign owned enterprises established in the PRC to be operated until 2014 and 2018 respectively. They are subsidiaries of CEPHGL and their operations are consolidated into CEPHGL’s financial statements.
**** IFACL and CECICSL are equity joint ventures established in the PRC to be operated until 2011 and 2026 respectively. They are subsidiaries of CEPHGL and their operations are consolidated into CEPHGL’s financial statements.
***** PREC is equity joint venture established in the PRC to operate for a period of years until 2033. PREC is associated companies of CEPHGL and is accounted for under the equity method of accounting. SIHTPREC is an affiliated company and is accounted for under the cost method.
The Company owns certain of its subsidiaries through trusts that were created by a Declaration of Trust executed by Huang Liqiong and Jun Liang in February 2000. The trusts were created by, and therefore are revocable by, IL. Accordingly, IL consolidates the operations of CECITL since it is the beneficial owner of a majority of the outstanding interests and, through its ability to revoke the trusts, retains control of these interests. CECITL has transferred to CEPHGL.
(c)
|
Use of estimates
|
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
(d)
|
Economic and political risks
|
The Company’s operations are mainly conducted in the PRC and Taiwan (ROC). Accordingly, the Company’s business, financial condition and results of operations in the PRC and Taiwan may be influenced by the political, economic and legal environment in the PRC and Taiwan, and by the general state of the PRC and Taiwan economy.
The Company’s major operations in the PRC and Taiwan are subject to special considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC and Taiwan, and by changes in government administration, governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
16
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(e)
|
Cash and cash equivalents
|
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts only in the PRC, Taiwan and Hong Kong. The Company does not maintain any bank accounts in the United States of America.
(f)
|
Account receivable
|
Accounts receivable is carried at the net invoiced value charged to customer. The Company records an allowance for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance.
(g)
|
Investments
|
The non-marketable equity security investments are presented at historical cost because the Company does not have significant influence over the underlying investments. These investments are subject to a periodic impairment review. To the extent any impairment is considered other-than-temporary, the investment is written down to its fair value and the loss is recorded as interest income and other, net. The amount of unlisted investment is RMB 6,441,372 of Shenzhen United Property And Share Rights Exchange (f.k.a. “Shenzhen International Hi-Tech Property Right Exchange Centre”) (“SIHTPREC”), no impairment has been found necessary.
17
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(h)
|
Property and equipment
|
Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:
Computer equipment
|
3 years
|
Furniture and office equipment
|
5 years
|
Buildings
|
Over the lease terms
|
Leasehold improvements
|
Over the lease terms
|
Motor vehicles
|
5 years
|
Machinery and equipment
|
5 years
|
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.
(i)
|
Inventories
|
Inventories consist of finished goods, work in progress and raw materials, and stated at the lower of cost or market value. Substantially all inventory costs are determined using the weighted average basis. Finished goods are comprised of direct materials, direct labor and an appropriate proportion of overhead. The management regularly evaluates the composition of its inventory to identify slow-moving and obsolete inventories to determine if additional write-downs are required.
(j)
|
Goodwill
|
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. In accordance with Accounting Standards Codification ASC 350 “Intangibles - Goodwill and Other” formerly Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis. See Note 4 for goodwill impairment details.
18
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(k)
|
Accounting for the impairment of long-lived assets
|
Impairment of Long-Lived Assets is evaluated for impairment at a minimum on an annual basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360-10 “Impairments of Long-Lived Assets” formerly SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". An asset is considered impaired if its carrying amount exceeds the future net cash flow the asset is expected to generate. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair market value. The recoverability of long-lived assets is assessed by determining whether the unamortized balances can be recovered through undiscounted future net cash flows of the related assets. The amount of impairment, if any, is measured based on projected discounted future net cash flows using a discount rate reflecting the Company's average cost of capital.
(l)
|
Associated Company
|
An associated company is a business enterprise in which the Company owns between 20% and 50% of the equity capital, and does not have direct or indirect or joint control, and therefore, has only limited ability to participate in financial and operating policy decisions.
The Company's investment in associated companies is accounted for under the equity method of accounting, whereby the investment is initially recorded at cost and the carrying amount is adjusted thereafter for the post acquisition change in the Company's share of the associated company's results of operations.
19
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(m)
|
Revenue recognition
|
The Company recognizes revenue in accordance with ASC 605 “Revenue Recognition”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to PRC law, including factors such as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectability is probable.
Revenue from maintenance contracts is recognized on a straight-line basis over the term of the maintenance contract, generally twelve months. The unearned portion of maintenance revenue is classified as deferred revenue and amortized over the life of the contract.
Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers. Revenue is recognized when all of the following criteria are met:
- Persuasive evidence of an arrangement exists;
- Delivery has occurred or services have been rendered;
- The seller’s price to the buyer is fixed or determinable; and
- Collection is reasonably assured.
20
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(n)
|
Stock compensation
|
The Company may periodically issue shares of common stock for services rendered or for financing costs. Such shares are valued based on the market price of the shares on the transaction date.
The Company may periodically issue stock options to employees and stock options or warrants to non-employees in non-capital raising transactions for services and for financing costs.
ASC 718 "Compensation - Stock Compensation" formerly SFAS No. 123 prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity -Based Payments to Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.
In accordance with ASC 718, the cost of stock options and warrants issued to non-employees is measured at the grant date based on the fair value of the award. The fair value of the stock-based award is determined using the Black-Scholes option-pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive benefit, which is generally the vesting period.
Stock options issued to non-employee directors at fair market value will be accounted for under the intrinsic value method.
The Company did not have any stock options outstanding during the year ended June 30, 2011 (2010: Nil). Accordingly, no pro forma financial disclosure is provided herein.
21
UNI CORE HOLDINGS CORPORATION
|
(Formerly Known As INTERMOST CORPORATION)
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
(Stated in US Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(o)
|
Issuance of shares for service
|
The Company accounts for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable.
(p)
|
Advertising
|
The Company expensed all advertising costs as incurred. Advertising expenses included in selling expenses were $nil and $493 for the years ended June 30, 2011 and 2010 respectively.
(q)
|
Income taxes
|
The Company uses the accrual method of accounting to determine and report its taxable income and tax credit in the year in which they are available. The Company has implemented ASC 740 “Income Taxes” formerly SFAS No. 109, Accounting for Income Taxes.
Income tax liabilities computed according to the United States, People’s Republic of China (PRC), Taiwan (ROC) and Hong Kong SAR tax laws are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.
In respect of the Company’s subsidiaries domiciled and operated in China, Taiwan and Hong Kong, the taxation of these entities can be summarized as follows:
The subsidiaries incorporated in PRC are subject to the corporation income tax rate of 25% for 2011 and 2010.
The subsidiary incorporated in BVI while operated in Taiwan will be considered a non-resident for tax purposes to the profit-seeking enterprise income tax which is from 0% to 25%. However, it will be subject to profit-seeking enterprise income tax only for its income derived from Taiwan sources.
The subsidiaries are subject to Hong Kong profits tax rate of 16.5% (2010: 16.5%).
22
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(q)
|
Income taxes (continued)
|
The Company is subject to United States federal corporate income tax according to Internal Revenue Code Sections 951 and 957. Corporate income tax is imposed on graduated rates in the range of:
Taxable Income
Rate
|
Over
|
But not over
|
Of Amount Over
|
|||||||||||
15 | % | - | 50,000 | - | ||||||||||
25 | % | 50,000 | 75,000 | 50,000 | ||||||||||
34 | % | 75,000 | 100,000 | 75,000 | ||||||||||
39 | % | 100,000 | 335,000 | 100,000 | ||||||||||
34 | % | 335,000 | 10,000,000 | 335,000 | ||||||||||
35 | % | 10,000,000 | 15,000,000 | 10,000,000 | ||||||||||
38 | % | 15,000,000 | 18,333,333 | 15,000,000 | ||||||||||
35 | % | 18,333,333 | - | - |
(r)
|
Earnings per share
|
The Company computes net income (loss) per share in accordance with ASC 260 “Earnings Per Share” formerly SFAS No. 128. “Earnings Per Share”. ASC 260 requires presentation of both basic and diluted earnings per Share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
23
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
(s)
|
Foreign currency translation
|
The accompanying consolidated financial statements are presented in United States dollars. The functional currencies of the Company are Hong Kong Dollar (HKD), Taiwan Dollar (TWD) and Renminbi (RMB). The consolidated financial statements are translated into United States dollars from HKD, TWD and RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
June 30, 2011
|
June 30, 2010
|
|||||||
Year end HKD : US$ exchange rate
|
7.7834 | 7.7868 | ||||||
Average yearly HKD : US$ exchange rate
|
7.7745 | 7.7608 |
June 30, 2011
|
June 30, 2010
|
|||||||
Year end TWD : US$ exchange rate
|
28.9100 | 32.2763 | ||||||
Average yearly TWD : US$ exchange rate
|
30.1354 | 32.2198 |
June 30, 2011
|
June 30, 2010
|
|||||||
Year end RMB : US$ exchange rate
|
6.4635 | 6.7813 | ||||||
Average yearly RMB : US$ exchange rate
|
6.6278 | 6.8274 |
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.
(t)
|
Comprehensive income
|
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current components of other comprehensive income are the foreign currency translation adjustment.
24
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
(u)
|
Recent accounting pronouncements
|
In July 2010, the FASB issued ASU 2010-20 an accounting update to provide guidance to enhance disclosures related to the credit quality of a company's financing receivables portfolio and the associated allowance for credit losses (“FASB ASC Topic 310”). Pursuant to this accounting update, a company is required to provide a greater level of disaggregated information about its allowance for credit loss with the objective of facilitating users' evaluation of the nature of credit risk inherent in the company's portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. The revised disclosures as of the end of the reporting period are effective for the Company beginning in the second quarter of fiscal 2011, and the revised discourses related to activities during the reporting period are effective for the Company beginning in the third quarter of fiscal 2011. The adoption of such standard did not have a material impact on the Company's consolidated financial statements and disclosures.
In December 2010, the FASB issued ASU 2010-28 an accounting pronouncement related to intangibles – goodwill and other (“FASB ASC Topic 350”), which requires a company to consider whether there are any adverse qualitative factors indicating that an impairment may exist in performing step 2 of the impairment test for reporting units with zero or negative carrying amounts. The provisions for this pronouncement are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, with no early adoption. We will adopt this pronouncement for our fiscal year beginning July 1, 2011. The adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.
In December 2010, the FASB issued ASU 2010-29 an accounting pronouncement related to business combinations (“FASB ASC Topic 815”), which specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. It also expands the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.
25
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
(u)
|
Recent accounting pronouncements (continued)
|
In January 2011, the FASB issued ASU 2011-01 an accounting pronouncement related to receivables (“FASB ASC Topic 310”). The amendments in this update temporarily delay the effective date of the disclosures about troubled debt restructurings in ASU 2010-20 for public entities. The delay is intended to allow the Board time to complete its deliberations on what constitutes a troubled debt restructuring. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring will then be coordinated. Currently, that guidance is anticipated to be effective for interim and annual periods ending after June 15, 2011. The adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.
The FASB has issued Accounting Standards Update (ASU) No. 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The FASB believes the guidance in this ASU will improve financial reporting by creating greater consistency in the way GAAP is applied for various types of debt restructurings.
The ASU clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings.
In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. The amendments to FASB Accounting Standards Codification™ (Codification) Topic 310, Receivables, clarify the guidance on a creditor’s evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties.
For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. For nonpublic entities, the amendments to the Codification in the ASU are effective for annual periods ending on or after December 15, 2012, including interim periods within those annual periods. Early application is permitted.
The FASB has issued Accounting Standards Update (ASU) No. 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements. The ASU is intended to improve financial reporting of repurchase agreements (“repos”) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.
26
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
(u)
|
Recent accounting pronouncements (continued)
|
In a typical repo transaction, an entity transfers financial assets to a counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. FASB Accounting Standards Codification™ (Codification) Topic 860, Transfers and Servicing, prescribes when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements. That determination is based, in part, on whether the entity has maintained effective control over the transferred financial assets.
The amendments to the Codification in this ASU are intended to improve the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The guidance in the ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted.
The FASB has issued Accounting Standards Update (ASU) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB (the Boards) on fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs.
The amendments to the FASB Accounting Standards Codification™ (Codification) in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. For nonpublic entities, the amendments are effective for annual periods beginning after December 15, 2011. Early application by public entities is not permitted. Nonpublic entities may apply the amendments in ASU 2011-04 early, but no earlier than for interim periods beginning after December 15, 2011.
27
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
(u)
|
Recent accounting pronouncements (continued)
|
The FASB has issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU amends the FASB Accounting Standards Codification™ (Codification) to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments to the Codification in the ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.
ASU 2011-05 should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. Early adoption is permitted.
The FASB has issued Accounting Standards Update (ASU) No. 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%.
ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.
28
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
3.
|
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
|
Deposits, prepayments and other receivables are summarized as follow:
2011
|
2010
|
|||||||
Rental and utilities deposits
|
$ | 216,939 | $ | 67,433 | ||||
Advance to employees (c)
|
61,528 | 178,950 | ||||||
Prepaid expenses
|
133,563 | 611,001 | ||||||
Deposit for acquisition (e)
|
709,430 | - | ||||||
Deposit by court order (b)
|
622,193 | 622,193 | ||||||
Trade deposit paid
|
457,853 | - | ||||||
Other receivables (a)
|
57,308 | 100,000 | ||||||
Deposit for legal services
|
16,353 | - | ||||||
Advanced to third party (f)
|
753,735 | - | ||||||
Others
|
- | 2,571 | ||||||
Exchange difference
|
(17,156 | ) | - | |||||
$ | 3,011,746 | $ | 1,582,148 |
(a)
|
Other receivables are the amount that will be collected from an associated company, Golden Anke Technology, Ltd. It is unsecured, non-interest bearing, and, due and payable on demand.
|
(b)
|
Fu Xiang Peng and Liu Fang Rong Versus Shenzhen Jinlong Paper Products Co., Ltd., Honilong Honeycomb Paper Product (Shenzhen) Co., Ltd., Shenzhen Jinli Honeycomb Paper Products Equipments Co., Ltd., Suzhou Eastern Sunrise Wall Material Technology Co., Ltd. And Qingdao Eastern Sunrise Co., Ltd. All the parties of this case have reached a settlement agreement, and Shenzhen Jonlong Paper Products Co., Ltd. has deposited relevant amount of maoney into the specified bank account according to the court’s instruction.
|
(c)
|
Advances to employees are advances for purchases and travelling. They are unsecured, interest free and repayable on demand. The following table provides the rollforward of the activity in the advances to employees:
|
2011
|
2010
|
|||||||
Beginning balance, July 1
|
$ | 178,950 | $ | 7,412 | ||||
Add: Advanced during the year
|
- | 178,950 | ||||||
Less: Transferred to income statement
|
(117,422 | ) | (7,412 | ) | ||||
Recollected from employees
|
- | - | ||||||
Ending balance, June 30
|
$ | 61,528 | $ | 178,950 |
29
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
3.
|
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (continued)
|
(d)
|
The bad debt written-off in June 30, 2011 was $38,154 (2010: $300,441) which was trade debts written-off.
|
(e)
|
On December 21, 2009, Uni Core Holdings Corporation (UCHC) entered into Investment Cooperation Agreement (Agreement) with the shareholders of Shaanxi Prosperous Agriculture Company Limited (Prosperous Agriculture) to acquire 51% equity of Prosperous Agriculture by two phrases and exchanged in total 11 millions of UCHC shares.
|
(f)
|
Deposit of US$753,735 (RMB5,000,000) for the set-up of Avana Insurance Agency in PRC.
|
4.
|
GOODWILL
|
Pursuant to the Stock Exchange Agreement between the Company and China Equity Platform Holding Group Limited (CEPHGL), the Company has transferred the subsidiary companies, CECITL, CECICSL, IFACL & CECTSL and investments in PRC companies, SIHTPREC & PREC to CEPHGL in exchanging 60% of shareholdings in CEPHGL during the fiscal year end of June 30, 2010. The calculation of goodwill is list as below:
RMB
|
USD
|
|||||||
100% common stock of CECITL
|
$ | (13,920,093 | ) | $ | (2,038,021 | ) | ||
100% common stock of CECICSL
|
2,083,043 | 304,975 | ||||||
90% common stock of IFACL
|
(131,979 | ) | (19,323 | ) | ||||
100% common stock of CECTSL
|
15,142,471 | 2,216,988 | ||||||
10% common stock of SIHTPREC
|
1,941,372 | 284,234 | ||||||
14% common stock of PREC
|
8,649,826 | 1,266,409 | ||||||
Aggregate value
|
$ | 13,764,640 | $ | 2,015,262 | ||||
|
||||||||
60% common stock of CEPHGLL
|
(10,354,200 | ) | (1,515,944 | ) | ||||
Goodwill balance at June 30, 2009
|
$ | 3,410,440 | $ | 499,318 |
Goodwill of $499,318 represented the excess of the purchase price over the fair value of the net tangible asset acquired through the transaction of spin-off of the above-listed subsidiaries.
RMB
|
USD
|
|||||||
Goodwill acquired in CEPHGLL transaction during June 30, 2009
|
$ | 3,410,440 | $ | 499,318 | ||||
Foreign currency translation adjustment
|
- | - | ||||||
Impairment for the year ended June 30, 2009
|
- | - | ||||||
Elimination: Gain on spin-off subsidiaries
|
(3,410,440 | ) | (499,318 | ) | ||||
Consolidated Balance at June 30, 2009
|
$ | - | $ | - |
30
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
4.
|
GOODWILL (continued)
|
According to SAB No. 30 (Topic 5E) and SAB No, 81 (Topic 5U), the gain on spin-off subsidiaries are eliminated in the Company’s consolidated financial statements to reverse the immediate gain recognition on the spin-off subsidiaries transaction.
Pursuant to the acquisition agreement completed on May 31, 2010 with APT Paper Group Limited, the company issued 440,000,000 common stocks at market price at approximate $0.065 per share as of June 1, 2010. The transaction was shown as below:
RMB
|
USD
|
|||||||
Cost of acquisition
|
$ | 195,309,400 | $ | 28,600,000 | ||||
Net equity of APT Paper Group Limited
|
43,867,573 | 6,422,308 | ||||||
$ | 151,441,827 | $ | 22,177,692 | |||||
|
||||||||
Impairment on Goodwill
|
(94,694,140 | ) | (14,650,598 | ) | ||||
Exchange differences
|
- | 1,252,621 | ||||||
Goodwill balance at June 30, 2011
|
$ | 56,747,687 | $ | 8,779,715 |
RMB
|
USD
|
|||||||
Cost of acquisition
|
$ | 195,309,400 | $ | 28,600,000 | ||||
Net equity of APT Paper Group Limited
|
43,867,573 | 6,422,308 | ||||||
$ | 151,441,827 | $ | 22,177,692 | |||||
|
||||||||
Impairment on Goodwill
|
(75,778,245 | ) | (11,099,123 | ) | ||||
Exchange differences
|
- | 79,112 | ||||||
Goodwill balance at June 30, 2010
|
$ | 75,663,582 | $ | 11,157,681 |
31
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
5.
|
AMOUNT DUE FROM RELATED PARTIES
|
Amount due from related parties, it was unsecured, interest free and repayable on demand, it comprises the followings:
2011
|
2010
|
|||||||
Boxuan (Shanghai) Investment Consultant Limited.
|
$ | - | $ | 324,060 | ||||
Jinzuan (Beijing) Investment & Management Consultant Limited
|
- | 29,460 | ||||||
FG Management Company Limited
|
- | 58,986 | ||||||
First Federal Holdings Limited
|
634,768 | - | ||||||
Exchange currency difference
|
- | 1,423 | ||||||
$ | 634,768 | $ | 413,929 |
6.
|
OTHER LOAN RECEIVABLES
|
The Company made a loan to an un-related third party of US$250,000 and US$350,000 on November 28, 2005 and December 12, 2005, respectively with interest rate at 12% p.a. and due and payable on September 28, 2006 and September 12, 2006 respectively. The Company had written off US$123,845. The US$112,447 (2010: US$236,292) balances of the loans are still outstanding and the Company is continuously charging the loan interest accordingly.
32
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
7.
|
PLANT AND EQUIPMENT, NET
|
Plant and equipment comprise the followings:
2011
|
2010
|
|||||||
At cost
|
||||||||
Computer equipment
|
$ | - | $ | 381,502 | ||||
Buildings
|
4,669,747 | 4,381,646 | ||||||
Machinery and equipment
|
8,861,309 | 8,220,604 | ||||||
Motor vehicles
|
334,870 | 404,778 | ||||||
Leasehold improvement
|
211,052 | 242,653 | ||||||
Furniture and office equipment
|
523,418 | 32,478 | ||||||
$ | 14,600,396 | $ | 13,663,661 | |||||
Less: Accumulated depreciation
|
(7,370,588 | ) | (5,498,353 | ) | ||||
$ | 7,229,808 | $ | 8,165,308 |
Depreciation expenses were $1,055,646 and $143,138 for the years ended June 30, 2011 and 2010 respectively.
8.
|
INVENTORIES
|
Inventories comprise the followings:
2011
|
2010
|
|||||||
Finished goods
|
$ | 1,052,959 | $ | 1,180,279 | ||||
Work in process
|
72,732 | 218,216 | ||||||
Raw materials and low value consumables
|
737,783 | 1,036,874 | ||||||
$ | 1,863,474 | $ | 2,435,369 |
33
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
9.
|
INTANGIBLES, NET
|
Details of intangibles are as follows:
2011
|
2010
|
|||||||
Land use rights, at cost
|
$ | 1,200,877 | $ | 1,200,877 | ||||
Patents and trademark, at cost
|
53,512 | 53,512 | ||||||
Exchange difference
|
52,694 | - | ||||||
$ | 1,307,083 | $ | 1,254,389 | |||||
Less: accumulated amortization
|
(72,715 | ) | (57,089 | ) | ||||
Total intangibles, net
|
$ | 1,234,368 | $ | 1,197,300 |
Amortization expense included in the general and administrative expenses for the years ended 2011 and 2010 were $23,906 and $23,808 respectively.
10.
|
ACCRUED LIABILITIES AND OTHER PAYABLES
|
Accrued liabilities and other payables are summarized as follows:
2011
|
2010
|
|||||||
Wages and bonus
|
$ | 97,374 | $ | 472,417 | ||||
Consultancy fees
|
6,189 | - | ||||||
Accrual
|
1,249,102 | 1,616,295 | ||||||
Other payables to unrelated parties
|
355,844 | 362,461 | ||||||
Audit and review fees
|
40,000 | 40,000 | ||||||
Deposit from customers
|
888,978 | - | ||||||
Loan from shareholder
|
305,522 | 381,942 | ||||||
Other
|
- | 15,953 | ||||||
$ | 2,943,009 | $ | 2,889,068 |
11.
|
ADVANCE FROM A SHAREHOLDER
|
Advance from a shareholder, Pai, Chia-Hui, also known as Fred C.H. Peck, the shareholder of the group, who provided urgent funds for subsidiaries’ operation. The amount is unsecured, interest free and repayable on demand.
34
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
12.
|
FINANCE LEASES
|
Details of finance leases are as follows:
Lessee
|
Lease term
|
Nature of
lease
|
Outstanding
amount
|
|||||
Chailease International Finance Corporation
|
November 2007 – April 2011
|
Machinery
|
$ | 132,763 |
13.
|
SHORT TERM LOAN
|
Details of short term loan are as follows:
Due date
|
June 30, 2011
|
|||||
Bank Of Communications (Shenzhen Branch)
|
Feb 11, 2012
|
232,072 | ||||
Haier Financial Limited Company
|
Dec 9, 2011
|
1,864,018 | ||||
China Development Bank *
|
Apr 13, 2012
|
3,831,042 | ||||
Exchange currency difference
|
191,547 | |||||
6,118,679 |
Due date
|
June 30, 2010
|
|||||
Bank Of Communications (Shenzhen Branch)
|
Sept 10, 2011
|
95,745 | ||||
Haier Financial Limited Company
|
Jun 10, 2011
|
1,039,026 | ||||
Taiwan Business Bank (HK Branch)
|
Oct 20, 2011
|
540,000 | ||||
China Development Bank *
|
Apr 13, 2011
|
3,831,042 | ||||
Exchange currency difference
|
22,165 | |||||
5,527,978 |
* The loan was secured by the Company assets:
Land use rights
|
$ | 1,200,877 | ||
Buildings
|
$ | 2,937,099 |
35
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
14.
|
INCOME TAXES
|
The Company and its subsidiaries are subject to income taxes on an entity basis on income arising in, or derived from, the tax jurisdiction in which they operate.
The Company is subject to the United States federal corporate income tax at a rate of 33%. IL was incorporated under the International Business Companies Act of the British Virgin Islands and, accordingly, is exempted from payment of the British Virgin Islands income taxes. The subsidiaries (IITSL, CEPHGL, CECITL, CECTSL, CECICSL and IFACL) established in the PRC are subject to PRC enterprise income taxes at a rate of 15%. The subsidiary (LP) established in the British Virgin Islands while operated in Taiwan is subject to Taiwan non-resident profit-seeking enterprise income tax, which is from 0% to 25%, only for the income derived from Taiwan sources. IHKL is subject to Hong Kong profits tax at a rate of 16.5%.
The reconciliation of the United States federal income tax rate to the effective income tax rate based on loss before income taxes stated in the consolidated statements of operations is as follows:
Deferred taxation consisted of:
2011
|
2010
|
|||||||
Net operating loss carry forwards
|
$ | 7,956,452 | $ | 12,837,753 | ||||
Valuation allowance
|
(7,956,452 | ) | (12,837,753 | ) | ||||
Deferred tax assets, net
|
$ | - | $ | - |
The change in valuation allowance from June 30, 2010 to June 30, 2011 is primarily related to the tax effects of the increase in the net operating loss in the current fiscal year. The Company has net operating loss carry forwards totaling approximately $36 million as of June 30 2011 (2010: $23 million), primarily relating to operations in the PRC and Taiwan. A valuation allowance has been established for the full amount of the deferred tax benefit related to those loss carry forwards and other deferred tax assets as management believes that their realization is uncertain. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2008, 2009 and 2010 U.S. Corporation Income Tax Return are subject to U.S. Internal Revenue Service examination and the Company’s2004/2005, 2005/2006, 2006/2007, 2007/2008, 2008/2009, 2009/2010, 2010/2011 Hong Kong Corporations Profits Tax Return filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010 and 2011 China Corporate Income Tax are subject to China State Administration of Taxation examination.
36
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
15.
|
STOCKHOLDERS’ EQUITY
|
Year ended June 30, 2011
On November 18, 2010, Uni Core Holdings Corporation (“UCHC”) proceeded with a placement exercise with Alliance Harvest Limited and Gain Onway Limited for equity financing. The total fund to be raised will be US$3,000,000 in exchange of 37,500,000 new shares of UCHC.
Wise Link Management Limited will get the commission of another 1,875,000 shares of the Company as the financial consultant.
On December 21, 2009, Uni Core Holdings Corporation (UCHC) entered into Investment Cooperation Agreement (Agreement) with the shareholders of Shaanxi Prosperous Agriculture Company Limited (Prosperous Agriculture) to acquire 51% equity of Prosperous Agriculture by two phrases and exchanged in total 11 millions of UCHC shares.
The first phrase of 21% equity of Prosperous Agriculture transferred to UCHC’s subsidiaries, IMOT Information Technology (Shenzhen) Limited (IMOTSZ), was approved by PRC authority on December 24, 2010.
According to the term of the Agreement, the Board of Directors did on January 18, 2011 approved the allotment of the 4 million shares to the parties below:
Number of
shares
|
||||
Wang Fei
|
2,232,000 | |||
Wu Qiang
|
1,116,000 | |||
Zhao Jing Jing
|
372,000 | |||
China Equity Platform Holding Group Limited
|
160,000 | |||
Star Fair Ventures Corporation
|
120,000 | |||
4,000,000 |
37
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
15.
|
STOCKHOLDERS’ EQUITY (continued)
|
Year ended June 30, 2010
The board of directors authorized the issuance of 500,000 shares of common stock with a value of $0.05 per share to Mr. Deng Xiang Xiong on August 18, 2009, for the compensation of services during 2009 which has been accountend for in the accruals during the year ended June 30, 2009. The Company has issued 500,000 common shares on 19 August 2009 and forfeited 1,750,000 common shares during the fiscal year ended June 30, 2010. These transactions are already dispatched to the common stock transfer agent and completed.
On October 15, 2009, the Company approved to issue 12,000,000 shares of common stock at the price of $0.10 per share to the Star Fair Ventures Corporation for financial advisory, strategic business planning and public relations services etc.
On December 15, 2009, the Company entered five sale and purchase agreements with the shareholders of APT Paper Group Limited (“APT”) to purchase all shares of APT. On January 8, 2010 and June 1, 2010, the Company approved to issue totally 440,000,000 shares of common stock at the price of $0.065 per share for acquisition of APT Paper Group Limited. The business of APT is manufacturing paper packaging products. After the acquisition, the Company controls the new combined companies and the original Uni Core Holdings Corporation senior management team remained on the same original position oversight the operation of the entire group of companies.
16.
|
COMMITMENTS
|
Operating Leases - The Company has operating lease agreements for office premises, which expiring through Dec 2011. Future minimum rental payments under agreements classified as operating leases with non-cancelable terms for the next one year and thereafter are as follows:
June 30,
|
||||
2011
|
$ | 1,005,427 | ||
2012 and thereafter
|
- | |||
$ | 1,005,427 |
Rental expense paid for the years ended June 30, 2011 and 2010 were $1,357,736 and $929,094 respectively.
38
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
17.
|
SEGMENT INFORMATION
|
The Group is principally engaged in the operation of business equity and financial consulting services, and paper products in the PRC and international. The analysis of the Group’s sales by product and services, and geographical market are presented as follow:
Year Ended June 30
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
US$
|
US$
|
|||||||||||||||
Sales of paper products
|
19,375,862 | 1,460,651 | 98 | % | 54 | % | ||||||||||
E-commerce solutions
|
||||||||||||||||
- website design and development
|
- | 1,245,467 | - | 46 | % | |||||||||||
Consultant service income
|
359,482 | - | 2 | % | - | |||||||||||
19,735,344 | 2,706,118 | 100 | % | 100 | % |
Year Ended June 30
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
US$
|
US$
|
|||||||||||||||
British Virgin Island
|
- | 1,173,759 | - | 43 | % | |||||||||||
People Republic China
|
19,735,344 | 1,532,359 | 100 | % | 57 | % | ||||||||||
19,735,344 | 2,706,118 | 100 | % | 100 | % |
39
18.
|
IMPAIRMENT OF INVESTMENT IN ASSOCIATED COMPANY
|
An investment in an associated company Hainan Special Economic Zone Property Right Exchange Center (PREC) with an equity balance of 1,258,742 was found being impaired and written-off in last year statement of income.
2011
|
2010
|
|||||||
US$
|
US$
|
|||||||
At July 1
|
1 | 1 | ||||||
Add: Foreign currency gain
|
- | - | ||||||
Less: Impairment loss
|
- | - | ||||||
At June 30
|
1 | 1 |
40
UNI CORE HOLDINGS CORPORATION
(Formerly Known As INTERMOST CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
(Stated in US Dollars)
19.
|
GOING CONCERN
|
As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $7,956,452 for the year ended June 30, 2011 and has an accumulated deficit of $44,076,475 as of June 30, 2011. The Company also continues to experience negative cash flows from operations. The Company will be required to raise additional capital to fund its operations, and will continue to attempt to raise capital resources from both related and unrelated parties until such time as the Company is able to generate revenues sufficient to maintain itself as a viable entity. These factors have raised substantial doubt about the Company's ability to continue as a going concern. There can be no assurances that the Company will be able to raise additional capital or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company plans to strengthen its core business, control its overall expenditures, improve the efficiency of its operations and continue its efforts to expand by acquiring other business opportunities.
20.
|
SUBSEQUENT EVENT
|
On September 15, 2011, the shareholders and board of directors of China Equity (“CEPHGL”) authorized and agreed to issue a special dividend at US$986,548 (RMB 6,300,000) based on the shareholding cut-off date of August 31, 2011. The Company will receive US$527,014 (RMB 3,365,460) based on 53.42% of shareholding on August 31, 2011.
The retroactive effects in the balance sheet reflecting the dividend paid to non-control interest are as following:
Dr Non-control interest
|
$ | 459,534 | ||
Cr Cash at banks
|
$ | 459,534 |
|
1.
|
Total Current Assets and Total Assets will be reduced by $459,534
|
|
2.
|
Total Shareholders Equity and Total Liabilities – Shareholders’ Equity will be reduced by $459,534.
|
|
3.
|
Total Current Assets and Total Assets will be reduced by $459,534
|
|
4.
|
Total Shareholders Equity and Total Liabilities – Shareholders’ Equity will be reduced by $459,534.
|
The Company has evaluated all other subsequent events through October 11, 2011 the date these consolidated financial statements were issued, and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements except the balance sheet retrospective effects of subsidiary dividend issued after the balance sheet date disclosed on the above statements.
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In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTERMOST CORPORATION
|
|
By:
|
/s/ China Hsun Wu
|
Chia Hsun Wu
|
|
Chief Executive Officer
|
|
By:
|
/s/ Thomas Lee
|
Thomas Lee
|
|
Chief Financial Officer
|
Dated: October 14, 2011
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
|
Title
|
Date: October 14 , 2011
|
||
/s/ Fred Peck
|
Director
|
|||
Fred Peck
|
||||
/s/ China Hsun Wu
|
Director and Chief Executive Officer
|
|||
Chia Hsun Wu
|
||||
/s/Hiroshi Shinohara
|
Director
|
|||
Hiroshi Shinohara
|
||||
/s/ Wang Hsin-Wei
|
Director
|
|||
Wang Hsin-Wei
|
|
|
42