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 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.
On February 27, 2012, the Company has disposed the entire investment
in the China Equity Platform Holding Group Limited.
On June 30, 2013, the Company acquired 51% of Shaanxi Prosperous
Agriculture Co., Limited (“SPACL”), a company incorporated in the People’s Republic of China, and its subsidiary,
Xi’an Zoyo Management and Consulting Co., Limited (“XZMCCL”), a company incorporated in the People’s Republic
of China, by issuing 11,000,000 shares of its common stock with a par value of US$0.001 per share to the shareholders of SPACL.
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.
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.
The consolidated financial statements include the accounts of
Uni Core Holdings Corporation (the Company) and its sixteen subsidiaries 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 non-controlling
interests.
The Company acquired the Shaanxi Prosperous Agriculture Co.,
Limited and its subsidiary on June 30, 2013 with a consideration of USD1,100.
The Company’s subsidiaries and affiliated companies and
their principal activities as of June 30, 2013 are summarized as follows:
* IITSL is wholly foreign owned enterprise established in the
PRC to be operated until 2018.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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:
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, 2013 (2012: Nil). Accordingly, no pro forma financial disclosure is provided herein.
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.
The Company expensed all advertising costs as incurred. Advertising
expenses included in selling expenses were $nil and $nil for the years ended June 30, 2013 and 2012 respectively.
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 2013 and 2012.
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% (2012: 16.5%).
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:
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.
The accompanying consolidated financial statements are presented
in United States dollars. The functional currencies of the Company are Hong Kong Dollar (HKD) and Renminbi (RMB). The consolidated
financial statements are translated into United States dollars from HKD 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.
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June 30,
2013
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June 30,
2012
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Year end HKD : US$ exchange rate
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7.7565
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7.7573
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Average yearly HKD : US$ exchange rate
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7.756
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7.7738
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June 30,
2013
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June 30,
2012
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Year end RMB : US$ exchange rate
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6.1807
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6.3143
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Average yearly RMB : US$ exchange rate
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6.2767
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6.3519
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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.
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.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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(u)
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Recent accounting pronouncements
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In July 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities -- Refundable Advance
Fees. This ASU clarifies that an entity should classify an advance fee as deferred revenue when a continuing care retirement community
has a resident contract that provides for payment of the refundable advance fee upon reoccupancy by a subsequent resident, which
is limited to the proceeds of reoccupancy. Refundable advance fees that are contingent upon reoccupancy by a subsequent resident
but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability. For public entities (including
conduit bond obligors), the amendments in ASU No. 2012-01 are effective for fiscal periods beginning after December 15, 2012. For
nonpublic entities, the amendments to the codification in the ASU are effective for fiscal periods beginning after December 15,
2013. Early adoption is permitted. The amendments in ASU No. 2012-01 should be applied retrospectively by recording a cumulative-effect
adjustment to opening retained earnings (or unrestricted net assets) as of the beginning of the earliest period presented.
In July 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-02, Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for
Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence
of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If,
after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived
intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise,
then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment
test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles--Goodwill
and Other, General Intangibles Other than Goodwill. Under the guidance in this ASU, an entity also has the option to bypass the
qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative
impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments
in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.
Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if
a public 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.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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In August 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs
pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics.
In October 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications,
and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition
guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that
are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities,
the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.
In October 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-05, Statement of Cash Flows (Topic 230). This ASU addresses how cash receipts arising from the
sale of certain donated financial assets, such as securities, should be classified in the statement of cash flows of not-for-profit
entities (NFPs). Some NFPs classify those cash receipts as investing cash inflows, while other entities classify them as either
operating cash inflows or financing cash inflows, consistent with their treatment of inflows arising from cash contributions. The
objective of this Update is for an NFP to classify cash receipts from the sale of donated financial assets consistently with cash
donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon
receipt were directed without the NFP imposing any limitations for sale and were converted nearly immediately into cash. The amendments
in the ASU are effective prospectively for fiscal years, and interim fiscal periods within those years, beginning after June 15,
2013. Retrospective application to all periods presented upon the date of adoption is permitted. Early adoption from the beginning
of the fiscal year of adoption is permitted.
In October 2012, FASB has issued Accounting
Standards Update (ASU) No. 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized
at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. This ASU addresses the diversity
in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification
asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition
of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities,
the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December
15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired
after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted
acquisition of a financial institution.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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In October 2012, FASB has issued Accounting Standards Update
(ASU) No. 2012-07, Entertainment—Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement
Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs. This ASU eliminates the rebuttable presumption that
the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet
date. The amendments also eliminate the requirement that an entity incorporate into fair value measurements used in the impairment
tests the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would
not have been considered by market participants at the measurement date. or SEC filers, the amendments are effective for impairment
assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments
performed on or after December 15, 2013. The amendments resulting from this ASU should be applied prospectively. Earlier application
is permitted, including for impairment assessments performed as of a date before October 24, 2012, if, for SEC filers, the entity’s
financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not
yet been made available for issuance.
In January 2013, FASB has issued Accounting
Standards Update (ASU) No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and
Liabilities. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance
Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives,
repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either
offset in accordance with specific criteria contained in the FASB Accounting Standards Codification™ (Codification) or subject
to a master netting arrangement or similar agreement. The FASB undertook this clarification project in response to concerns expressed
by U.S. stakeholders about the standard’s broad definition of financial instruments. After the standard was finalized, companies
realized that many contracts have standard commercial provisions that would equate to a master netting arrangement, significantly
increasing the cost of compliance at minimal value to financial statement users. An entity is required to apply the amendments
in ASU 2013-01 for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity
should provide the required disclosures retrospectively for all comparative periods presented. The effective date is the same as
the effective date of ASU 2011-11.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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In February 2013, FASB has issued Accounting
Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other
Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes
gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified
out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements
for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already
is required to be disclosed elsewhere in the financial statements under U.S. GAAP.
The new amendments will require an organization
to:
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Present (either on the face of the statement
where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified
out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified
to net income in its entirety in the same reporting period.
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Cross-reference to other disclosures currently
required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to
net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out
of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related
amounts) instead of directly to income or expense.
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The amendments apply to all public and
private companies that report items of other comprehensive income. Public companies are required to comply with these amendments
for all reporting periods (interim and annual). A private company is required to meet the reporting requirements of the amended
paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However,
private companies are only required to provide the information about the effect of reclassifications on line items of net income
for annual reporting periods, not for interim reporting periods. The amendments are effective for reporting periods beginning after
December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private
companies. Early adoption is permitted.
In February 2013, FASB issued Accounting
Standards Update (ASU) No. 2013-03, Financial Instruments (Topic 825). This ASU clarifies the scope and applicability of a disclosure
exemption that resulted from the issuance of Accounting Standards Update No. 2011-04,Fair Value Measurement (Topic 820): Amendments
to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendment clarifies that the requirement
to disclose"the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety
(Level 1, 2, or 3)" does not apply to nonpublic entities for items that are not measured at fair value in the statement of
financial position, but for which fair value is disclosed. This ASU is the final version of Proposed Accounting Standards Update
2013-200—Financial Instruments (Topic 825) which has been deleted. The amendments are effective upon issuance.
In February 2013, FASB has issued Accounting
Standards Update (ASU) No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements
for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. This ASU provides guidance for the recognition, measurement,
and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation
within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in U.S.
GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay
on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of
its co-obligors. The guidance in this ASU also requires an entity to disclose the nature and amount of the obligation as well as
other information about those obligations. The amendments in this ASU are effective for fiscal years, and interim periods within
those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years ending after
December 15, 2014, and interim periods and annual periods thereafter. The amendments in this ASU should be applied retrospectively
to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASU’s
scope that exist at the beginning of an entity’s fiscal year of adoption. An entity may elect to use hindsight for the comparative
periods (if it changed its accounting as a result of adopting the amendments in this ASU) and should disclose that fact. Early
adoption is permitted.
In March 2013, FASB has issued Accounting
Standards Update (ASU) No. 2013-05, Foreign Currency Matters (Topic 830). This ASU resolve the diversity in practice about whether
Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements,
applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its
investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a
nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights)within
a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations
achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This ASU is the final version
of Proposed Accounting Standards Update EITF11Ar—Foreign Currency Matters (Topic 830), which has been deleted. The amendments
in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after
December 15, 2013. For nonpublic entities the amendments in this Update are effective prospectively for the first annual period
beginning after December 15, 2014, and interim and annual periods thereafter. The amendments should be applied prospectively to
derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If
an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption.
In April 2013, FASB Accounting Standards
Update 2013-06, Not-for-Profit Entities (Topic 958) - Services Received from Personnel of an Affiliate. This ASU specifies the
guidance that not-for-profit entities apply for recognizing and measuring services received from personnel of an affiliate. More
specifically, the amendments in this ASU apply to not-for-profit entities, including not-for-profit, business-oriented health care
entities that receive services from personnel of an affiliate that directly benefit the recipient not-for-profit entity and for
which the affiliate does not charge the recipient not-for-profit entity. The amendments in this ASU require a recipient not-for-profit
entity to recognize all services received from personnel of an affiliate that directly benefit the recipient not-for-profit entity.
Those services should be measured at the cost recognized by the affiliate for the personnel providing those services. However,
if measuring a service received from personnel of an affiliate at cost will significantly overstate or understate the value of
the service received, the recipient not-for-profit entity may elect to recognize that service received at either: (a) the cost
recognized by the affiliate for the personnel providing that service or; (b) the fair value of that service. The amendments in
this ASU are effective prospectively for fiscal years beginning after June 15, 2014, and interim and annual periods thereafter.
A recipient not-for-profit entity may apply the amendments using a modified retrospective approach under which all prior periods
presented upon the date should be adjusted, but no adjustment should be made to the beginning balance of net assets of the earliest
period presented. Early adoption is permitted.
In April 2013, FASB Accounting Standards
Update 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. This ASU clarifies when an entity
should apply the liquidation basis of accounting. In addition, the guidance provides principles for the recognition and measurement
of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. Liquidation
is the process by which a company converts its assets to cash or other assets and settles its obligations with creditors in anticipation
of ceasing all of its activities. An organization in liquidation must prepare its financial statements using a basis of accounting
that communicates information to users of those financial statements to enable those users to develop expectations about how much
the organization will have available for distribution to investors after disposing of its assets and settling its obligations.
The ASU requires organization to prepare its financial statements using the liquidation basis of accounting when liquidation is
“imminent.” Liquidation is considered imminent when the likelihood is remote that the organization will return from
liquidation and either: (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan
effective and the likelihood is remote that the execution of the plan will be blocked by other parties; or (b) a plan for liquidation
is being imposed by other forces (e.g., involuntary bankruptcy). In cases where a plan for liquidation was specified in the organization’s
governing documents at inception (e.g., limited-life entities), the organization should apply the liquidation basis of accounting
only if the approved plan for liquidation differs from the plan for liquidation that was specified in the organization’s
governing documents. The ASU requires financial statements prepared using the liquidation basis to present relevant information
about a company’s resources and obligations in liquidation, including the following:
|
|
l
|
The organization’s assets measured
at the amount of the expected cash proceeds from liquidation, including any items it had not previously recognized under U.S. GAAP
that it expects to either sell in liquidation or use in settling liabilities (e.g., trademarks).
|
|
|
l
|
The organization’s liabilities as
recognized and measured in accordance with existing guidance that applies to those liabilities.
|
|
|
l
|
Accrual of the costs it expects to incur
and the income it expects to earn during liquidation, including any anticipated disposal costs.
|
This ASU is effective for interim and annual
reporting periods beginning after December 15, 2013, with early adoption permitted.
In June 2013, FASB Accounting Standards
Update 2013-08, Financial Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure
Requirements. This ASU sets forth a new approach for determining whether a public or private company is an investment company.
The ASU also clarifies the characteristics and sets measurement and disclosure requirements for an investment company. The ASU
is effective for fiscal years beginning after December 15, 2013. Early adoption is not allowed.
This guidance is a result of the efforts
of the FASB and the IASB to develop a consistent approach for determining whether a company is an investment company, for which
fair value of investments is the most relevant measurement for the company’s financial statement users. The ASU affects the
scope, measurement, and disclosure requirements for investment companies under U.S. GAAP.
Under the ASU, a company regulated under
the Investment Company Act of 1940 is considered an investment company for accounting purposes. All other companies must assess
whether they have the following characteristics to be considered an investment company:
(a) The company obtains funds from investor(s)
and provides the investor(s) with investment management services;
(b) The company commits to its investor(s)
that its business purpose and only substantive activities are investing the funds for returns solely from capital appreciation,
investment income, or both;
(c) The company or its affiliates do not
obtain or have the objective of obtaining returns or benefits from an investee or its affiliates that are not normally attributable
to ownership interests or that are other than capital appreciation or investment income;
(d) The company has multiple investments;
(e) The company has multiple investors;
(f) The company has investors that are
not related to the parent or investment manager;
(g) The company’s ownership interests
are in the form of equity or partnership interests; and
(h) The company manages substantially all
of its investments on a fair value basis.
To be considered an investment company,
a company must have all the fundamental characteristics of (a) through (c) above. Typically, an investment company also has characteristics
(d) through (h). However, if a company does not possess one or more of the typical characteristics, it must apply judgment and
determine, considering all facts and circumstances, how its activities continue to be consistent (or are not consistent) with those
of an investment company.
An investment company also will be required
to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of
accounting. In addition, an investment company will be required to make the following additional disclosures: (a) the fact that
the company is an investment company and is applying specialized guidance; (b) information about changes, if any, in a company’s
status as an investment company; and (c) information about financial support provided or contractually required to be provided
by an investment company to any of its investees.
In July 2013, The FASB has published Accounting
Standards Update 2013-09, Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic
Employee Benefit Plans in Update No. 2011-04. This ASU defers indefinitely certain disclosures about investments held by nonpublic
employee benefit plans in their plan sponsors’ own nonpublic equity securities. The ASU was approved by the FASB on June
12, 2013. ASU No. 2013-09, Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic
Employee Benefit Plans in Update No. 2011-04, applies to disclosures of certain quantitative information about the significant
unobservable inputs used in Level 3 fair value measurement for investments held by certain employee benefit plans.
In July 2013, The FASB has issued Accounting
Standards Update (ASU) No. 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight
Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force).
The amendments in this ASU permit the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge
accounting purposes, in addition to UST and LIBOR. The amendments also remove the restriction on using different benchmark rates
for similar hedges.
Before the amendments in this ASU, only
UST and, for practical reasons, the LIBOR swap rate, were considered benchmark interest rates. Including the Fed Funds Effective
Swap Rate (OIS) as an acceptable U.S. benchmark interest rate in addition to UST and LIBOR will provide risk managers with a more
comprehensive spectrum of interest rate resets to utilize as the designated benchmark interest rate risk component under the hedge
accounting guidance.
The amendments apply to all entities that
elect to apply hedge accounting of the benchmark interest rate. The amendments are effective prospectively for qualifying new or
redesignated hedging relationships entered into on or after July 17, 2013.
In July 2013, The FASB has issued ASU No.
2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar
Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force).
U.S. GAAP does not include explicit guidance
on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss,
or a tax credit carryforward exists. The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized
tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward,
a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar
tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction
to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable
jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose,
the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred
tax assets.
This ASU applies to all entities that have
unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the
reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after
December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years,
beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized
tax benefits that exist at the effective date. Retrospective application is permitted
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
|
3.
|
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
|
Deposits, prepayments and other receivables
are summarized as follow:
|
|
|
2013
|
|
|
2012
|
|
|
Rental and utilities deposits
|
|
$
|
162
|
|
|
$
|
9,724
|
|
|
Advance to employees (b)
|
|
|
42,395
|
|
|
|
114,339
|
|
|
Prepaid expenses
|
|
|
-
|
|
|
|
28,908
|
|
|
Deposit for acquisition (c)
|
|
|
-
|
|
|
|
793,741
|
|
|
Other receivables (a)
|
|
|
|
|
|
|
73,082
|
|
|
Deposit for legal services
|
|
|
21,353
|
|
|
|
38,092
|
|
|
Advanced to third party (d)
|
|
|
-
|
|
|
|
756,283
|
|
|
Exchange difference
|
|
|
-
|
|
|
|
7,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
63,910
|
|
|
$
|
1,821,609
|
|
|
(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)
|
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:.
|
|
(c)
|
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. This transaction is not closed yet and may be subject to further negotiation.
|
|
(d)
|
Deposit of US$753,735 (RMB5,000,000) for the set-up of Avana Insurance Agency in PRC.
|
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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
|
|
|
51% common stock of SPACL
|
|
|
5,183,968
|
|
|
|
838,735
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate value
|
|
|
18,948,608
|
|
|
$
|
2,853,997
|
|
|
|
|
|
|
|
|
|
|
|
|
60% common stock of CEPHGLL
|
|
|
(10,354,200
|
)
|
|
|
(1,515,944
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill balance at June 30, 2009
|
|
|
8,594,408
|
|
|
$
|
1,338,053
|
|
Goodwill of $1,338,053 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
|
|
|
-
|
|
|
$
|
-
|
|
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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 June 30,
2013 with Shaanxi Prosperous Agriculture Company Limited, the company issued 11,000,000 common stocks at market price at approximate
$0.0001 per share as of June 30, 2013. The transaction was shown as below:
|
|
|
RMB
|
|
|
USD
|
|
|
Cost of acquisition
|
|
$
|
6,799
|
|
|
$
|
1,100
|
|
|
Net deficit of Shaanxi Prosperous Agriculture Company Limited
|
|
|
9,895,452
|
|
|
|
1,601,024
|
|
|
Non-controlling interest
|
|
|
(4,718,283
|
)
|
|
|
(763,389
|
)
|
|
|
|
$
|
5,183,968
|
|
|
$
|
838,735
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill balance at June 30, 2013
|
|
$
|
5,183,968
|
|
|
|
838,735
|
|
|
|
|
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
|
|
|
(151,441,827
|
)
|
|
|
(22,177,692
|
)
|
|
Exchange differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill balance at June 30, 2012
|
|
|
0
|
|
|
$
|
0
|
|
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(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:
|
|
|
2012
|
|
|
2011
|
|
|
First Federal Holdings Limited
|
|
$
|
663,812
|
|
|
$
|
634,768
|
|
|
Exchange currency difference
|
|
|
-
|
|
|
|
14,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
663,812
|
|
|
$
|
649,767
|
|
|
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$502,422 from advanced to third party. The US$97,578
(2012: US$105,531) balances of the loans are still outstanding and the Company is continuously charging the loan interest accordingly.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
|
7.
|
PLANT AND EQUIPMENT, NET
|
Plant and equipment comprise the followings:
|
|
|
2013
|
|
|
2012
|
|
|
At cost
|
|
|
|
|
|
|
|
|
|
Buildings
|
|
$
|
3,255,123
|
|
|
$
|
4,890,709
|
|
|
Machinery and equipment
|
|
|
2,856,216
|
|
|
|
8,111,412
|
|
|
Motor vehicles
|
|
|
75,798
|
|
|
|
273,068
|
|
|
Leasehold improvement
|
|
|
-
|
|
|
|
108,019
|
|
|
Furniture and office equipment
|
|
|
172,717
|
|
|
|
395,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,359,854
|
|
|
$
|
13,778,398
|
|
|
Less: Accumulated depreciation
|
|
|
(3,178,928
|
)
|
|
|
(7,124,471
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,180,926
|
|
|
$
|
6,653,927
|
|
Depreciation expenses were $358,089 and $1,004,573 for the years
ended June 30, 2013 and 2012 respectively.
Inventories comprise the followings:
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Finished goods
|
|
$
|
220,626
|
|
|
$
|
1,012,348
|
|
|
Work in process
|
|
|
135,199
|
|
|
|
158,863
|
|
|
Raw materials and low value consumables
|
|
|
139,347
|
|
|
|
404,100
|
|
|
|
|
$
|
495,172
|
|
|
$
|
1,575,311
|
|
|
Provision for obsolete stock
|
|
|
-
|
|
|
|
(42,927
|
)
|
|
Net inventory
|
|
$
|
495,172
|
|
|
$
|
1,532,384
|
|
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
As of June 30, 2012, a provision of impairment
is provided for the entire intangible asset owing to continuously loss of the APT Paper Group Limited which rendered the intangible
asset to be valueless. Details of intangibles are as follows:
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Land use rights, at cost
|
|
$
|
1,200,877
|
|
|
$
|
1,200,877
|
|
|
Patents and trademark, at cost
|
|
|
58,552
|
|
|
|
53,512
|
|
|
Exchange difference
|
|
|
52,694
|
|
|
|
52,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,312,123
|
|
|
$
|
1,307,083
|
|
|
Less: accumulated amortization
|
|
|
(97,236
|
)
|
|
|
(97,236
|
)
|
|
Intangibles after amortization
|
|
$
|
1,214,887
|
|
|
$
|
1,209,847
|
|
|
Less: provision for impairment
|
|
|
(1,209,847
|
)
|
|
|
(1,209,847
|
)
|
|
Total intangibles, net
|
|
$
|
5,040
|
|
|
$
|
0
|
|
Amortization expense included in the general and administrative
expenses for the years ended 2013 and 2012 were $24,521and $23,906 respectively.
|
10.
|
ACCRUED LIABILITIES AND OTHER PAYABLES
|
Accrued liabilities and other payables are summarized as follows:
|
|
|
2013
|
|
|
2012
|
|
|
Wages and bonus
|
|
$
|
132,429
|
|
|
$
|
4,942
|
|
|
Consultancy fees
|
|
|
40,081
|
|
|
|
25,695
|
|
|
Accrual
|
|
|
36,476
|
|
|
|
826,556
|
|
|
Other payables to unrelated parties
|
|
|
-
|
|
|
|
697,531
|
|
|
Audit and review fees
|
|
|
114,515
|
|
|
|
25,000
|
|
|
Deposit from customers
|
|
|
6,803,665
|
|
|
|
1,134,292
|
|
|
Loan from shareholder
|
|
|
242,942
|
|
|
|
247,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,370,108
|
|
|
$
|
2,961,858
|
|
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.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
|
12.
|
CONVERTIBLE PROMISSORY NOTES
|
The convertible promissory notes are convertible
within six months with interest accrued in accordance to the discount rate of the market price of the stock. There was no embedded
feature carried with the convertible note. Details of the convertible note are as follows:
As of June 30, 2012
|
Note providers
|
|
Note Principal
|
|
|
Interest
rate
|
|
|
Interest
accrued
|
|
|
Converted
amount
|
|
|
Outstanding
amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ash Enterprises, Inc.
|
|
|
319,500
|
|
|
|
12
|
%
|
|
|
8,780
|
|
|
|
228,280
|
|
|
|
100,000
|
|
|
Magna Group, LLC
|
|
|
275,000
|
|
|
|
12
|
%
|
|
|
1,050
|
|
|
|
196,050
|
|
|
|
80,000
|
|
|
Tonaquint, Inc.
|
|
|
631,000
|
|
|
|
18
|
%
|
|
|
6,775
|
|
|
|
494,924
|
|
|
|
142,851
|
|
|
TOTAL
|
|
|
1,225,500
|
|
|
|
|
|
|
|
16,605
|
|
|
|
919,254
|
|
|
|
322,851
|
|
As of June 30, 2013
|
Note providers
|
|
Note Principal
|
|
|
Interest
rate
|
|
|
Interest
accrued
|
|
|
Converted
amount
|
|
|
Outstanding
amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ash Enterprises, Inc.
|
|
|
423,000
|
|
|
|
12
|
%
|
|
|
8,780
|
|
|
|
233,480
|
|
|
|
198,300
|
|
|
Magna Group, LLC
|
|
|
345,000
|
|
|
|
12
|
%
|
|
|
1,251
|
|
|
|
276,511
|
|
|
|
69,740
|
|
|
Tonaquint, Inc.
|
|
|
631,000
|
|
|
|
18
|
%
|
|
|
26,497
|
|
|
|
589,817
|
|
|
|
67,680
|
|
|
TOTAL
|
|
|
1,399,000
|
|
|
|
|
|
|
|
36,528
|
|
|
|
1,099,808
|
|
|
|
335,720
|
|
Details of short term loans are as follows:
|
|
|
Due date
|
|
Interest rate
|
June 30, 2012
|
|
|
Bank Of Communications (Shenzhen Branch)
|
|
Feb 11, 2013
|
|
**Prime +10%
|
|
197,963
|
|
|
Haier Financial Limited Company
|
|
Dec 9, 2012
|
|
**Prime +40%
|
|
2,595,573
|
|
|
China Development Bank *
|
|
Apr 13, 2013
|
|
**Prime +10%
|
|
3,831,042
|
|
|
Exchange currency difference
|
|
|
|
|
|
286,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,911,174
|
|
|
|
|
Due date
|
|
Interest rate
|
June 30, 2013
|
|
|
Bank Of Communications (Shenzhen Branch)
|
|
Feb 11, 2014
|
|
**Prime +10%
|
|
456,405
|
|
|
Haier Financial Limited Company
|
|
Dec 9, 2013
|
|
**Prime +40%
|
|
725,377
|
|
|
China Mensheng Bank *
|
|
Apr 13, 2014
|
|
**Prime +10%
|
|
4,853,819
|
|
|
Exchange currency difference
|
|
|
|
|
|
113,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,148,857
|
|
* The loan was secured by the Company assets:
|
Land use rights
|
|
$
|
1,200,877
|
|
|
Buildings
|
|
$
|
3,112,037
|
|
** Prime rate is the periodical interest rate published by The
People’s Bank of China.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
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 established in the PRC are subject
to PRC enterprise income taxes at a rate of 15% to 25%. 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:
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
19,852,649
|
|
|
$
|
16,464,717
|
|
|
Valuation allowance
|
|
|
(19,852,649
|
))
|
|
|
(16,464,717
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets, net
|
|
$
|
-
|
|
|
$
|
-
|
|
The change in valuation allowance from June 30, 2012 to June
30, 2013 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 $75 million as of June 30 2013 (2012: $59 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 2009, 2010 and 2011 U.S. Corporation Income Tax Return are subject to U.S. Internal Revenue Service examination
and the Company’s 2006/2007, 2007/2008, 2008/2009, 2009/2010, 2010/2011, 2011/2012 and 2012/2013 Hong Kong Corporations Profits
Tax Return filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011 and 2012
China Corporate Income Tax are subject to China State Administration of Taxation examination.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
Year ended June 30, 2013
From July 2012 to June, 2013, Asher Enterprises, Inc. has exercised
conversion right of US$5,200 convertible promissory note to 74,285,714 share of ordinary common stock; Magna Group, LLC has exercised
conversion right of US$80,461 convertible promissory note to 1,017,953,143 share of ordinary common stock; Tonaquint Inc. has exercised
conversion right of US$177,060 convertible promissory note to 2,253,000,000 share of ordinary common stock. During January to June,
2012, the total fund raised from the conversion promissory note was $262,721. Total common stock issued was 3,345,238,857.
From August, 2012 to February, 2013, the Company has issued
533,333,333 share of ordinary common stock with market value of $110,000 to compensate Wise Alliance Management Ltd. for consultancy
services and disposition of collateral under secured convertible promissory note signed on 2012.
From July, 2012 to March, 2013, the Company has issued 2,563,333,333
share of ordinary common stock with market value of $675,000 to settle various loans due to Global Golden Group Investment Co.
Ltd.
On February 8, 2013, the Company has issued 800,000,000 share
of ordinary common stock with market value of $40,000 to settle a loan due to FG Management Co. Ltd. which was no longer a related
party of the Company from July 2012 onwards.
On September 17, 2012, the Company has issued 266,666,664 share
of ordinary common stock with market value of $80,000 to its officers as stock compensation. Details are as below:
|
|
|
Number of
shares
|
|
|
|
|
|
|
|
Fred Peck
|
|
|
66,666,666
|
|
|
James Wu
|
|
|
66,666,666
|
|
|
Shinihara Hiroshi
|
|
|
66,666,666
|
|
|
Thomas Lee
|
|
|
66,666,666
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
266,666,664
|
|
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
|
15.
|
STOCKHOLDERS’ EQUITY (Continue)
|
Year ended June 30, 2012
From January to June, 2012, Asher Enterprises, Inc. has exercised
conversion right of US$228,280 convertible promissory note to 170,334,867 share of ordinary common stock. From March to June, 2012,
Magna Group, LLC has exercised conversion right of US$196,050 convertible promissory note to 190,643,687 share of ordinary common
stock. From April to June, Tonaquint Inc. has exercised conversion right of US$316,362 convertible promissory note to 341,650,000
share of ordinary common stock. During January to June, 2012, the total fund raised from the conversion promissory note was $740,692.
Total common stock issued was 702,628,554.
From March to May, 2012, the Company has issued 78,000,000 share
of ordinary common stock with market value of $970,000 to compensate various consultants for consultancy services and disposition
of collateral under secured convertible promissory note signed on September 5, 2011. Details are as below:
|
|
|
Number of
shares
|
|
|
|
|
|
|
|
Brighton Capital Ltd.
|
|
|
2,000,000
|
|
|
George Capps
|
|
|
1,000,000
|
|
|
TG Private Equity Inc.
|
|
|
2,000,000
|
|
|
DC Global Consultancy Ltd.
|
|
|
2,000,000
|
|
|
Region Capital, Ltd.
|
|
|
500,000
|
|
|
Hung Kwok Wing
|
|
|
500,000
|
|
|
FG Management Co. Ltd.*
|
|
|
70,000,000
|
|
|
TOTAL
|
|
|
78,000,000
|
|
*Note: FG Management Co. Ltd. was considered as a related party
of the Company.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
|
15.
|
STOCKHOLDERS’ EQUITY (Continue)
|
On March 15, 2012, the Company has issued 19,000,000 share of
ordinary common stock with market value of $285,000 to its officers as stock compensation. Details are as below:
|
|
|
Number of
shares
|
|
|
|
|
|
|
|
Fred Peck
|
|
|
6,000,000
|
|
|
James Wu
|
|
|
5,000,000
|
|
|
Shinihara Hiroshi
|
|
|
3,000,000
|
|
|
Thomas Lee
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
19,000,000
|
|
On March 23, 2012, the Company has issued 7,000,000 share of
ordinary common stock with market value of $70,000 as a deposit to acquire 51% of Shaanxi Prosperous Agriculture Company Limited.
Operating Leases - The Company has operating lease agreements
for office premises, which expiring through Dec 2012. 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,
|
|
|
|
|
|
2014
|
|
$
|
-
|
|
|
2015 and thereafter
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
Rental expense paid for the years ended June 30, 2013 and 2012
were $1,054,782 and $1,054,782 respectively.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
(Stated in US Dollars)
The Company adopted ASC 280 “Segment
Reporting” in respect of its operating segments. The Company currently operates in three principle business segments which
are: sales of paper products, E-Commerce solutions and Consulting. Sales of paper product are undertaken by its subsidiary APT
Group and subsidiary companies in PR China. E-Commerce Solutions comprises revenue from web-site development contracts and maintenance
contracts. The Consulting segment comprises services rendered for provision of information on property exchange matters.
Each segment is managed separately because
each business requires different technology and marketing strategies. The Company evaluates performance based on operating earnings
of the respective business units. The accounting policies of the segments are the same as those described in the summary of significant
accounting policies. The corporate assets include primarily cash and cash equivalents and deposits and other receivables. There
were no significant intercompany transactions during any of the reported periods. In determining operating income (loss) by reportable
segment, general corporate expenses and other income and expense items of a non-operating nature are not considered; as such items
are not allocated to the Company's segments.
Based on the revenue information from 2013
and 2012, the Company generated over 90% revenue from APT Group companies which is operating the sales of paper products. Moreover,
the Company generated over 90% of revenue from PR China. Accordingly, the Company is not required to provide segment information
on product or geographic category.
|
18.
|
IMPAIRMENT OF INVESTMENT IN ASSOCIATED AND SUBSIDIARY COMPANIES
|
On February 17, 2012,
the entire investment in China Equity Platform Holding Group Limited was disposed for approximated US$1,600,128 (RMB 10,000,000).
PREC was included in this disposal transaction.
During the fiscal year
ended June 30, 2013, the company impaired the investment in APT paper group limited including the Su Zhou Eastern Sunrise Company
Limited, ShenZhen Jin Li Honeycomb Paper Products Equipments Company Limited, Jin Long Paper Products Company Limited and Ho Ni
Long Honeycomb Paper Product (Shenzhen) Company Limited. The total loss on the impairment disposal of these four subsidiaries was
$10,711,377.
UNI CORE HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(Stated in US Dollars)
As shown in the accompanying consolidated financial statements,
the Company incurred a net loss of $14,052,917 for the year ended June 30, 2013 and has an accumulated deficit of $75,281,821 as
of June 30, 2013. 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.
The audit procedure of the investment cooperation agreement
with the shareholders of Shaanxi Prosperous Agriculture Company Limited to acquire 51% equity of Shaanxi Prosperous Agriculture
Company Limited has finished on June 30, 2013. On July 10, 2013, the Company announced the completion and filed Form 8K to SEC
on July 18, 2013.
On July 21, 2013, the Company sold the Qingdao Eastern Sunrise
Company Limited to an investor at $1,544,360 (RMB 9,500,000). The first installment US$406,410 (RMB 2,500,000) was received on
September 30, 2013.
The Company has evaluated all other subsequent events through
October 11, 2013 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 above- mentioned matters.
Item 15. Exhibits and Financial Statement Schedules (II)
The following audited financial statements are filed as part
of this annual report:
|
|
PAGE
|
|
|
|
|
STATEMENTS OF ASSETS, LIABILITIES AND EQUITY
|
81 - 82
|
|
|
|
|
STATEMENTS OF
operations
|
83
|
|
|
|
|
Statement of cash flows
|
84
|
SHAANXI PROSPEROUS AGRICULTURE COMPANY
LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2013
(Stated in US Dollars)
|
ASSETS
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
10,654
|
|
|
Accounts receivable, net
|
|
|
32,197
|
|
|
Deposits, prepayment and other receivables
|
|
|
669,323
|
|
|
Inventory
|
|
|
8,312
|
|
|
|
|
|
|
|
|
Total current assets
|
|
$
|
720,486
|
|
|
|
|
|
|
|
|
Plant and equipment, net
|
|
|
28,884
|
|
|
Intangible assets, net
|
|
|
5,040
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
754,410
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
140,708
|
|
|
Accrued liabilities and other payable
|
|
|
1,971,123
|
|
|
Customers deposits
|
|
|
199,306
|
|
|
Business and other taxes payable
|
|
|
1,211
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
2,312,348
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
$
|
2,312,348
|
|
SHAANXI PROSPEROUS AGRICULTURE COMPANY
LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2013
(Stated in US Dollars)
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Registered capital
|
|
$
|
485,382
|
|
|
Additional paid-in capital
|
|
|
-
|
|
|
Accumulated deficit
|
|
|
(2,086,406
|
)
|
|
Non-control interest
|
|
|
43,086
|
|
|
|
|
|
|
|
|
|
|
$
|
(1,557,938
|
)
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
754,410
|
|
SHAANXI PROSPEROUS AGRICULTURE COMPANY
LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE LOSS
FOR THE PERIOD FROM JANUARY 1 TO JUNE 30,
2013
(Stated in US Dollars)
|
Net revenues
|
|
$
|
33,440
|
|
|
Cost of net revenues
|
|
|
(1,873
|
)
|
|
|
|
|
|
|
|
Gross profits
|
|
$
|
31,567
|
|
|
Selling, general and administrative expenses
|
|
|
(279,796
|
)
|
|
|
|
|
|
|
|
Loss from operations
|
|
$
|
(248,229
|
)
|
|
Interest income
|
|
|
40
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
$
|
(248,189
|
)
|
|
Income taxes
|
|
|
-
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(248,189
|
)
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
-Basic and diluted
|
|
$
|
(0.0827
|
)
|
|
|
|
|
|
|
|
Weighted average no. of common stock -Basic and diluted
|
|
|
3,000,000
|
|
SHAANXI PROSPEROUS AGRICULTURE COMPANY
LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
FOR THE PERIOD FROM JANUARY 1 TO JUNE 30,
2013
(Stated in US Dollars)
|
Cash flows from operating activities
|
|
|
|
|
|
Net loss
|
|
$
|
(248,189
|
)
|
|
Amortization of intangible assets
|
|
|
470
|
|
|
Depreciation
|
|
|
6,972
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
Accounts receivable, net
|
|
|
16,883
|
|
|
Deposits, prepayment and other receivable
|
|
|
(26,106
|
)
|
|
Inventory
|
|
|
74,849
|
|
|
Accounts payables
|
|
|
(33,080
|
)
|
|
Accrued liabilities and other payable
|
|
|
125,866
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(82,335
|
)
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
$
|
(82,335
|
)
|
|
Effect of foreign currency translation on cash and cash equivalents
|
|
|
-
|
|
|
Cash and cash equivalents–beginning of year
|
|
|
92,989
|
|
|
Cash and cash equivalents–end of period
|
|
$
|
10,654
|
|
|
|
|
|
|
|
|
Supplementary cash flow information:
|
|
|
|
|
|
Interest received
|
|
$
|
40
|
|
|
Interest expense
|
|
|
-
|
|