EXHIBIT 99.2

 

PREMA LIFE PTY. LTD.

 

INDEX TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

 

3 AND 6 MONTHS ENDED DECEMBER 31, 2020

 

TABLE OF CONTENTS

 

	Page
Balance Sheets	2
Statements of Operations and Other Comprehensive Income/(Loss)	3
Statements of Stockholders’ Equity	4
Statements of Cash Flows	5
Notes to the Unaudited Financial Statements	6-9

 

 

PREMA LIFE PTY. LTD.

BALANCE SHEETS

DECEMBER 31, 2020 and JUNE 30, 2020

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

				As of
		Note		December 31, 2020				June 30, 2020
ASSETS
CURRENT ASSETS
Cash and bank balances				$	108,590			$	244,533
Amount due from related parties		3			293,815				26,437
Other receivables, deposits and prepayments		4			-				53,355
Trade receivables		5			166,606				157,866
Inventories					490,183				315,601
Total current assets					1,059,194				797,792
NON-CURRENT ASSETS
Plant and equipment, net		6			-				-
Total non-current assets					-				-
TOTAL ASSETS				$	1,059,194			$	797,792
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade payables		7		$	107,652			$	99,739
Other payables and accrued liabilities		8			166,180				323,487
Total current liabilities					273,832				423,226
NON-CURRENT LIABILITIES
Loan		9			192,712				171,214
Total non-current liabilities					192,712				171,214
TOTAL LIABILITIES				$	466,544			$	594,440
STOCKHOLDERS’ EQUITY
Stockholders’ equity				$	1,410,998			$	1,420,978
Accumulated losses					(823,043	)			(1,174,199	)
Other comprehensive income/(losses)					4,695				(43,427	)
TOTAL STOCKHOLDERS’ EQUITY					592,650				203,352
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				$	1,059,194			$	797,792

 

The notes are an integral part of these financial statements.

 

 

PREMA LIFE PTY. LTD.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

FOR THE 3 AND 6 MONTHS PERIOD ENDED DECEMBER 31, 2020 and 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		3 months period ended								6 months period ended
		December 31,								December 31,
		2020				2019				2020				2019
REVENUE		$	414,650			$	401,043			$	951,610			$	984,804
COST OF REVENUE			(263,480	)			(221,487	)			(510,736	)			(470,472	)
GROSS PROFIT			151,170				179,556				440,874				514,332
OTHER INCOME			231,591				-				401,024				80,656
OPERATING EXPENSES			(250,434	)			(215,467	)			(490,742	)			(550,330	)
PROFIT/(LOSS) FROM OPERATIONS			132,327				(35,911	)			351,156				44,658
TAX EXPENSE:
Deferred tax			-				-				-				-
Income tax			-				-				-				-
TOTAL TAX EXPENSE			-				-				-				-
NET PROFIT/(LOSS)		$	132,327			$	(35,911	)		$	351,156			$	44,658
OTHER COMPREHENSIVE GAIN
Foreign currency translation gain			22,964				7,095				48,122				2,673
TOTAL COMPREHENSIVE INCOME/(LOSS)		$	155,291			$	(28,816	)		$	399,278			$	47,331

 

The notes are an integral part of these financial statements.

 

 

PREMA LIFE PTY. LTD.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD ENDED DECEMBER 31, 2020

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		Common stock												Accumulated other
		Number of shares				Amount				Accumulated losses				comprehensive (loss)/income				Total equity
Balance as of June 30, 2020			3,176			$	1,420,978			$	(1,174,199	)		$	(43,427	)		$	203,352
Cancellation of shares			(1,722	)			(9,980	)			-				-				(9,980	)
Net income for the year			-				-				351,156				-				351,156
Foreign currency translation gain			-				-				-				48,122				48,122
Balance as of December 31, 2020			1,454			$	1,410,998			$	(823,043	)		$	4,695			$	592,650

 

The notes are an integral part of these financial statements.

 

 

PREMA LIFE PTY. LTD.

STATEMENTS OF CASH FLOWS

FOR THE 6 MONTHS PERIOD ENDED DECEMBER 31, 2020 AND 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		6 months Period Ended
		December 31,
		2020				2019
Cash flows from operating activities:
Net profit		$	351,156			$	44,658
Adjustments to reconcile net profit to net cash used in operating activities:
Bad debts written off			48				954
Depreciation of plant and equipment			-				4,372
Operating profit before working capital changes			351,204				49,984
Changes in operating assets and liabilities:
Inventories			(134,954	)			30,960
Trade and other receivables			71,089				27,732
Trade and other payables			(202,535	)			(235,799	)
Amount due from related parties			(264,059	)			-
Cash used in operating activities			(179,255	)			(127,123	)
Cash flows from financing activities:
(Cancellation)/Issuance of shares			(9,980	)			79,308
Net cash (used in)/generated from financing activities			(9,980	)			79,308
Foreign currency translation adjustment			53,292				974
NET CHANGE IN CASH AND CASH EQUIVALENTS			(135,943	)			(46,841	)
CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR			244,533				70,261
CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR		$	108,590			$	23,420
CASH AND CASH EQUIVALENTS INFORMATION:
Cash and bank balances		$	108,590			$	23,420
Cash and cash equivalents, end of financial year			108,590				23,420

 

The notes are an integral part of these financial statements.

 

 

PREMA LIFE PTY. LTD.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Prema Life Pty. Ltd. (“we,” “us,” “our,” the “Company,” or “Prema Life”) is a private limited liability company, incorporated in Australia.

 

Prema Life is a HACCP certified manufacturer and supplier of functional foods and supplements, and of practitioner only naturopathic and homeopathic medicines. Prema Life produces an extensive range of products including proteins, green blends, sports nutrition, weight management and maintenance, and health and wellness products.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States and presented in United States dollars.

 

In the opinion of management, the balance sheet as of December 31, 2020 which has been derived from audited financial statements and these unaudited consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the six months ended December 31, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2021 or for any future period.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Foreign Currency Translation and Re-measurement

 

The Company translates its foreign operations to U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

 

Translation of amounts from the local currency, Australia Dollar (“AU$”) of the Company into US$1.00 has been made at the following exchange rates for the respective years:

 

		December 31, 2020				June 30, 2020
Year-end USD : AU$ exchange rate			1.297				1.460

 

		July 1, 2020 to December 31, 2020				July 1, 2020 to June 30, 2020
Yearly average USD : AU$ exchange rate			1.367				1.490

 

 

The Company’s functional currency is AU$ and reporting currency is the U.S. dollar.

 

The Company translates its records into U.S. dollar as follows:

 

	●	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	●	Equities at historical rate
	●	Revenue and expense items at the average rate of exchange prevailing during the period

 

Financial Instruments

 

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, amount due from related parties, prepaid expenses, deposits and other current assets, accounts payable, accrued liabilities and other payables. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

Plant and equipment

 

Plant and equipment are recorded at cost. Depreciation is calculated using reducing balance method over the estimated useful lives of the assets. The depreciation rates of the plant and equipment are as follows:

 

Plant and equipment			10 % to 100	%
Furniture and fittings			10 % to 20	%
Office equipment			10 % to 100	%
Manufacturing equipment			20	%

 

Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When plant and equipment are disposed of, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.

 

Accounting for the impairment of long-lived assets

 

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the period ended December 31, 2020 and 2019, the Company did not impair any long-lived assets.

 

Inventories

 

Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the weighted average method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Statements of Operations and Comprehensive Income.

 

Cash and cash equivalents

 

For the purpose of presentation in the statement of cash flows, cash and cash equivalents consist of cash on hand, bank balances and deposits with licensed banks, with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, net of bank overdrafts, if applicable.

 

 

Revenue Recognition

 

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

	●	identify the contract with a customer;
	●	identify the performance obligations in the contract;
	●	determine the transaction price;
	●	allocate the transaction price to performance obligations in the contract; and
	●	recognize revenue as the performance obligation is satisfied.

 

The Company records revenue at point in time which is recognized upon goods delivered or services rendered.

 

Income Taxes and Deferred Taxes

 

Tax expense in profit or loss comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or other comprehensive income.

 

Deferred tax is recognized using the liability method for all temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognized for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction which is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 – AMOUNT DUE FROM RELATED PARTIES

 

The amount due from related parties is unsecured, interest-free and repayable on demand.

 

 

NOTE 4 – OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

 

Other receivables, deposits and prepayments at December 31, 2020 and June 30, 2020 consist of the following:

 

		December 31,				June 30,
		2020				2020
Other receivables			-				14,226
Prepayments			-				39,129
		$	-			$	53,355

 

 

NOTE 5 – TRADE RECEIVABLES

 

The Company has performed an analysis on all its trade receivables and determined that all amounts are collectible by the Company. As such, trade receivables are reflected as a current asset and no allowance for expected credit loss has been recorded as of December 31, 2020 and June 30, 2020. A total of $48 and $954 of bad debts were written off for the period ended December 31, 2020 and December 31, 2019 respectively. The Company’s trade receivables consist of receivable from customers which are unrelated to the Company. The account receivables are non-interest bearing and is subject to normal trade terms.

 

NOTE 6 – PLANT AND EQUIPMENT

 

The plant and equipment were written off during the financial year June 30, 2020.

 

 

NOTE 7 – TRADE PAYABLES

 

Trade payables are amounts billed to the Company by suppliers for goods and services in the ordinary course of business. All amounts have short-term repayment terms and vary by supplier.

 

 

NOTE 8 - OTHER PAYABLES AND ACCRUED LIABILITIES

 

Other payables and accrued liabilities at December 31, 2020 and June 30, 2020 consist of the following:

 

		December 31,				June 30,
		2020				2020
Other payables and accrued liabilities		$	166,180			$	323,487

 

NOTE 9 – LOAN

 

The loan represents 10 years loan facility from Queensland Rural and Industry Development Authority for an assistance under Queensland COVID-19 support loan program for the purpose to assist the Company to manage its working capital expenses.

 

The loan is secured under the Company’s present and future property of any kind, including all personal property bearing interest at rate 0% for the first 12 months and 2.50% for the remainder of the loan term. First repayment commencing from July 2021.

 

The increase in loan amount from $171,214 to $192,712 was attributable to the translation loss on foreign exchange as at December 31, 2020.

 

NOTE 10 – INCOME TAXES

 

The Company provides for income taxes under ASC 740, “Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company is subject to the tax laws of the Australia at range from 27.5% to 30.0%. There is no taxation during the financial year ended June 30, 2020 and 2019.

 

NOTE 11 – SIGNIFICANT EVENTS

 

On 11 March 2020, the World Health Organization declared the Coronavirus (“Covid-19”) outbreak to be a pandemic, which has caused severe global social and economic disruptions and uncertainties, including markets where the Company operates or intends to operate. The Company is actively monitoring and managing its operations to respond to these changes, the Company does not consider it practicable to provide any quantitative estimate on the potential impact it may have on the Company as the outbreak continue to evolve as of the date of this report.

 

NOTE 12 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.

 

 

GGLG PROPERTIES PTY. LTD.

 

INDEX TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

 

3 AND 6 MONTHS ENDED DECEMBER 31, 2020

 

TABLE OF CONTENTS

 

	Page
Balance Sheets	2
Statements of Operations and Other Comprehensive Income/(Loss)	3
Statements of Stockholders’ Equity	4
Statements of Cash Flows	5
Notes to the Unaudited Financial Statements	6-10

 

 

GGLG PROPERTIES PTY. LTD.

BALANCE SHEETS

DECEMBER 31, 2020 and JUNE 30, 2020

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

				As of
		Note		December 31, 2020				June 30, 2020
ASSETS
CURRENT ASSETS
Cash and bank balances				$	2,134			$	1,485
Amount due from related parties		3			-				2,055
Other receivables, deposits and prepayments					-				325
Trade receivables		4			4,268				13,327
Total current assets					6,402				17,192
NON-CURRENT ASSETS
Property, plant and equipment, net		5			642,726				546,666
Total non-current assets					642,726				546,666
TOTAL ASSETS				$	649,128			$	563,858
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Other payables and accrued liabilities		6		$	9,781			$	6,016
Amount due to a Director		7			-				1,458
Amount due to a related party		8			25,560				16,411
Finance lease		9			8,076				-
Loan		10			508,760				452,006
Total current liabilities					552,177				475,891
NON-CURRENT LIABILITIES
Finance lease		9			24,696				-
Total non-current liabilities					24,696				-
TOTAL LIABILITIES				$	576,873			$	475,891
STOCKHOLDERS’ EQUITY
Common stocks				$	791,745			$	791,745
Capital reserve					(397,108	)			(397,108	)
Accumulated losses					(310,091	)			(284,995	)
Other comprehensive losses					(12,291	)			(21,675	)
TOTAL STOCKHOLDERS’ EQUITY					72,255				87,967
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				$	649,128			$	563,858

 

The notes are an integral part of these financial statements.

 

 

GGLG PROPERTIES PTY. LTD.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

FOR THE 3 AND 6 MONTHS PERIOD ENDED DECEMBER 31, 2020 and 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		3 months period ended								6 months period ended
		December 31,								December 31,
		2020				2019				2020				2019
REVENUE		$	18,537			$	13,960			$	36,586			$	30,966
OPERATING EXPENSES - general and administrative			(24,898	)			(7,108	)			(37,798	)			(54,700	)
(LOSS)/PROFIT FROM OPERATIONS			(6,361	)			6,852				(1,212	)			(23,734	)
FINANCE COSTS			(12,333	)			(7,111	)			(23,884	)			(14,622	)
LOSS FROM OPERATIONS			(18,694	)			(259	)			(25,096	)			(38,356	)
TAX EXPENSE:
Deferred tax			-				-				-				-
Income tax			-				-				-				-
TOTAL TAX EXPENSE			-				-				-				-
NET LOSS		$	(18,694	)		$	(259	)		$	(25,096	)		$	(38,356	)
OTHER COMPREHENSIVE GAIN/(LOSS)
Foreign currency translation gain/(loss)			5,828				6,849				9,384				(1,033	)
TOTAL COMPREHENSIVE (LOSS)/INCOME		$	(12,866	)		$	6,590			$	(15,712	)		$	(39,389	)

 

The notes are an integral part of these financial statements.

 

 

GGLG PROPERTIES PTY. LTD.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE 6 MONTHS PERIOD ENDED DECEMBER 31, 2020

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		Common stock																Accumulated other
		Number of shares				Amount				Capital loss				Accumulated losses				comprehensive losses				Total equity
Balance as of June 30, 2020			1,010,000			$	791,745			$	(397,108	)		$	(284,995	)		$	(21,675	)		$	87,967
Net loss for the year			-				-				-				(25,096	)			-				(25,096	)
Foreign currency translation gain			-				-				-				-				9,384				9,384
Balance as of December 31, 2020			1,010,000			$	791,745			$	(397,108	)		$	(310,091	)		$	(12,291	)		$	72,255

 

The notes are an integral part of these financial statements.

 

 

GGLG PROPERTIES PTY. LTD.

STATEMENTS OF CASH FLOWS

FOR THE 6 MONTHS PERIOD ENDED DECEMBER 31, 2020 AND 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

		6 months period ended
		December 31,
		2020				2019
Cash flows from operating activities:
Net loss		$	(25,096	)		$	(38,355	)
Adjustments to reconcile net loss to net cash generated from operating activities:
Depreciation of property, plant and equipment			3,018				14,556
Bad debts written off			-				15,794
Property, plant and equipment written off			-				13,667
Operating (loss)/profit before working capital changes			(22,078	)			5,662
Changes in operating assets and liabilities:
Trade and other receivables			14,770				9,485
Trade and other payables			3,376				8,179
Amount due from related parties			2,313				16,161
Amount due to related parties			5,447				-
Cash generated from operating activities			3,828				39,487
Foreign currency translation adjustment			(3,179	)			(897	)
NET CHANGE IN CASH AND CASH EQUIVALENTS			650				38,591
CASH AND CASH EQUIVALENTS, BEGINNING OF FINANCIAL YEAR			1,485				4,146
CASH AND CASH EQUIVALENTS, END OF FINANCIAL YEAR		$	2,134			$	42,736
CASH AND CASH EQUIVALENTS INFORMATION:
Cash and bank balances			2,134				42,736
Cash and cash equivalents, end of financial year		$	2,134			$	42,736

 

The notes are an integral part of these financial statements.

 

 

GGLG PROPERTIES PTY. LTD.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

 

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

GGLG Properties Pty. Ltd. (“we,” “us,” “our,” the “Company,” or “GGLG”) is a private limited liability company, incorporated in Australia.

 

GGLG is the owner and operator of 11 Aldinga Street, Brendale, Queensland, 4500, Australia. The facility has an area of 21,000 square feet with single floor buildings and is leased to Prema Life. The immediate plan is to build a double story building of 37,673 square feet for office, production and logistical support of Prema Life. The design and planning for this are in process at present.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States and presented in United States dollars.

 

In the opinion of management, the balance sheet as of December 31, 2020 which has been derived from audited financial statements and these unaudited consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the six months ended December 31, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2021 or for any future period.

 

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Foreign Currency Translation and Re-measurement

 

The Company translates its foreign operations to U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

 

Translation of amounts from the local currency, Australia Dollar (“AU$”) of the Company into US$1.00 has been made at the following exchange rates for the respective years:

 

		December 31, 2020				June 30, 2020
Year-end USD : AU$ exchange rate			1.297				1.460

 

		July 1, 2020 to December 31, 2020				July 1, 2020 to June 30, 2020
Yearly average USD : AU$ exchange rate			1.367				1.490

 

 

The Company’s functional currency is AU$ and reporting currency is the U.S. dollar.

 

The Company translates its records into U.S. dollar as follows:

 

	●	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	●	Equities at historical rate
	●	Revenue and expense items at the average rate of exchange prevailing during the period

 

Financial Instruments

 

The Company’s financial instruments consist primarily of cash and cash equivalents, amount due from related parties, prepaid expenses, deposits and other current assets, trade receivables, other payables, accrued liabilities and amount due to a Director, related party, finance lease and loan. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

Property, Plant and equipment

 

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment.

 

Property, plant and equipment, excluding freehold land, is depreciated on a straight-line basis over the assets’ useful lives, commencing when the asset is ready for use. The depreciation rates of the property, plant and equipment are as follows:

 

Building			2.2	%
Leasehold improvements			2.5	%
Plant and equipment			13.0	%
Furniture and fittings			10.0% to 30.0	%

 

Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. When plant and equipment are disposed of, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reported in the period the transaction takes place.

 

Accounting for the impairment of long-lived assets

 

The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. During the period ended December 31, 2020 and 2019, the Company did not impair any long-lived assets.

 

Cash and cash equivalents

 

For the purpose of presentation in the statement of cash flows, cash and cash equivalents consist of cash on hand, bank balances and deposits with licensed banks, with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, net of bank overdrafts, if applicable.

 

Revenue Recognition

 

Rental income from lease of property is recognised as revenue in profit or loss on a straight-line basis over the term of the lease term.

 

 

Income Taxes and Deferred Taxes

 

Tax expense in profit or loss comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or other comprehensive income.

 

Deferred tax is recognized using the liability method for all temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognized for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction which is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 – AMOUNT DUE FROM RELATED PARTIES

 

The amount due from related parties was unsecured, interest-free and repayable on demand.

 

NOTE 4 – TRADE RECEIVABLES

 

The Company has performed an analysis on all its trade receivables and determined that all amounts are collectible by the Company. As such, trade receivables are reflected as a current asset and no allowance for expected credit loss has been recorded as of December 31, 2020 and 2019. A total of $Nil and $15,794 of bad debts were written off for the 6 months period ended December 31, 2020 and 2019, respectively. The Company’s trade receivables consist of receivable from customers which are unrelated to the Company.  The account receivables are non-interest bearing and is subject to normal trade terms.

 

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment at December 31, 2020 and June 30, 2020 consist of the following:

 

		December 31,				June 30,
		2020				2020
Cost:
Land			538,397				538,397
Building		$	94,912			$	94,912
Leasehold improvements			21,648				21,648
Motor vehicle			28,735				-
			683,692				654,957
Less: accumulated depreciation			(28,554	)			(25,536	)
Foreign exchange translation			(12,412	)			(82,755	)
Property, plant and equipment, net		$	642,726			$	546,666

 

During the six months period ended December 31, 2020 and 2019, the Company recorded depreciation of $3,018 and $14,556, respectively.

 

 

NOTE 6 - OTHER PAYABLES AND ACCRUED LIABILITIES

 

Other payables and accrued liabilities at December 31, 2020 and June 30, 2020 consist of the following:

 

		December 31,				June 30,
		2020				2020
Other payables and accrued liabilities		$	9,781			$	6,016

 

NOTE 7 – AMOUNT DUE TO A DIRECTOR

 

The amount due to a Director was unsecured, interest-free and repayable on demand.

 

NOTE 8 – AMOUNT DUE TO A RELATED PARTY

 

The amount due to a related party is unsecured, interest-free and repayable on demand.

 

NOTE 9 – FINANCE LEASE

 

The Company purchased motor vehicle under finance lease agreements with the effective interest rate 5.03% of per annum, with principal and interest payable monthly. The obligations under the finance lease are as follows:

 

		As of
		December 31, 2020				June 30, 2020
Finance lease		$	36,000			$	-
Less: interest expense			(3,228	)			-
Net present value of finance lease			32,772				-
Current portion			8,076				-
Non-current portion			24,696				-
Total		$	32,772			$	-

 

As of December 31, 2020 and June 30, 2020, the maturities of the finance lease obligations are as follows:

 

		As of				As of
Years ending June 30:		December 31, 2020				June 30, 2020
2021		$	8,076			$	-
2022			8,492				-
2023 and after			16,204				-
Total		$	32,772			$	-

 

 

NOTE 10 – LOAN

 

The loan represents secured loan facility used by the Company to finance its acquisition of property with interest bearing at a rate of 6.23% and maturity term of 1 year as of June 30, 2019. The loan amount was refinanced during financial year June 30, 2020 with interest bearing at a rate of 10% which is repayable within the next 12 months as of June 30, 2020.

 

The increase in loan amount from $452,006 to $508,760 was attributable to the translation loss on foreign exchange as at December 31, 2020.

 

NOTE 11 – INCOME TAXES

 

The Company provides for income taxes under ASC 740, “Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company is subject to the tax laws of the Australia at range from 27.5% to 30.0%. There is no taxation during the financial period ended December 31, 2020 and 2019.

 

NOTE 12 – SIGNIFICANT EVENTS

 

On 11 March 2020, the World Health Organization declared the Coronavirus (“Covid-19”) outbreak to be a pandemic, which has caused severe global social and economic disruptions and uncertainties, including markets where the Company operates or intends to operate. The Company is actively monitoring and managing its operations to respond to these changes, the Company does not consider it practicable to provide any quantitative estimate on the potential impact it may have on the Company as the outbreak continue to evolve as of the date of this report.

 

NOTE 13 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure except for the acquisition of the entire interests of the Company by Rayont Inc. of which the transaction has been completed on February 22, 2021.