Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Nov. 30, 2013 | Jan. 22, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'ADGS Advisory, Inc. | ' |
Entity Central Index Key | '0001439237 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Nov-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--08-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 25,000,000 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Current assets | ' | ' |
Cash | $471,625 | $164,314 |
Restricted cash | 129,604 | 129,312 |
Accounts receivable | 715,945 | 564,773 |
Other receivables | 188,752 | 130,835 |
Due from a related party | 208,921 | 418,658 |
Prepaid expenses | 64,071 | 64,071 |
Total current assets | 1,778,918 | 1,471,963 |
Non-current assets | ' | ' |
Property and equipment, net | 2,080,942 | 2,088,690 |
Equity-method investment | 368,368 | 371,096 |
Intangible assets | 905,514 | 793,840 |
Goodwill | 475,605 | ' |
Utility and other deposits | 72,612 | 40,288 |
Total non-current assets | 3,903,041 | 3,293,914 |
TOTAL ASSETS | 5,681,959 | 4,765,877 |
Current liabilities | ' | ' |
Bank overdraft | 818,479 | 744,077 |
Assets held under capital lease | 23,775 | 23,775 |
Accrued liabilities and other payables | 223,207 | 218,242 |
Deferred revenue | 145,114 | 145,114 |
Income tax payable | 191,176 | 152,357 |
Consideration payable for acquisition of an intangible asset | 116,092 | ' |
Consideration payable for acquisition of a subsidiary | 386,972 | ' |
Bank loans - current portion | 107,548 | 107,548 |
Total current liabilities | 2,012,363 | 1,391,113 |
Non-current liabilities | ' | ' |
Assets held under capital lease, net of current portion | 82,459 | 88,306 |
Deferred revenue, net of current portion | 399,065 | 435,343 |
Bank loans - net of current portion | 2,148,594 | 2,179,237 |
Loan from a related party | 750,725 | 750,726 |
Total non-current liabilities | 3,380,843 | 3,453,612 |
Total liabilities | 5,393,206 | 4,844,725 |
Commitments and contingencies | ' | ' |
Stockholders' equity/(deficit) | ' | ' |
Preferred stock, $0.0001 par value per share, 2,000,000 authorized, none issued and outstanding | ' | ' |
Common stock, $0.0001 par value per share, 50,000,000 shares authorized, 25,000,000 shares issued and outstanding as of November 30, 2013 and 25,000,000 issued and outstanding as of August 31, 2013 | 2,500 | 2,500 |
Additional paid-in-capital | -2,500 | -2,500 |
Retained earning | 435,321 | 67,868 |
Accumulated other comprehensive loss | -4,442 | -10,364 |
Total ADGS Advisory, Inc. stockholders' equity | 430,879 | 57,504 |
Non-controlling interest | -142,126 | -136,352 |
Total liabilities and stockholders' equity | $5,681,959 | $4,765,877 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Stockholders' equity/(deficit) | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, authorized shares | 2,000,000 | 2,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 25,000,000 | 25,000,000 |
Common stock, outstanding shares | 25,000,000 | 25,000,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | ||
Consolidated Statements Of Operations | ' | ' | |
Revenue | $1,126,764 | $609,599 | [1] |
Less: Operating expenses: | ' | ' | |
Direct cost of revenue | -543,959 | -363,431 | [1] |
General and administrative expenses | -214,281 | -210,409 | [1] |
Total operating expenses | -758,240 | -573,840 | [1] |
Operating profit/(loss) | 368,524 | 35,759 | [1] |
Other income: | ' | ' | |
Bank interest received | 292 | ' | [1] |
Management fee income | 33,246 | ' | [1] |
Other income | 1,250 | ' | [1] |
Other expense: | ' | ' | |
Interest expense | -28,284 | -29,427 | [1] |
Profit before income taxes | 375,028 | 6,332 | [1] |
Less: Income tax expense | -13,349 | ' | [1] |
Net profit before allocation of non-controlling interest | 361,679 | 6,332 | [1] |
Net loss attributable to non-controlling interest | 5,774 | 5,671 | [1] |
Net income attributable to common stockholders | $367,453 | $12,003 | [1] |
Earnings per share - Basic and diluted | $0.01 | $0.24 | [1] |
Weighted average common shares outstanding - Basic and diluted | 25,000,000 | 50,000 | [1] |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | ||
Consolidated Statements Of Comprehensive Income | ' | ' | |
Net income | $361,679 | $6,332 | [1] |
Other comprehensive income/(loss) | ' | ' | |
Foreign currency translation adjustment | 5,922 | -51 | [1] |
Comprehensive income | 367,601 | 6,281 | [1] |
Comprehensive loss attributable to non-controlling interest | 5,774 | 5,671 | [1] |
Comprehensive income attributable to ADGS Advisory, Inc. | $373,375 | $11,952 | [1] |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Consolidated_Statements_Of_Cha
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Other Comprehensive Income / Loss | Retained Earnings/Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, Amount at Aug. 31, 2013 | ' | $2,500 | ($2,500) | ($10,364) | $67,868 | ($136,352) | ($78,848) |
Beginning balance, Shares at Aug. 31, 2013 | ' | 25,000,000 | ' | ' | ' | ' | ' |
Net profit/(loss) | ' | ' | ' | ' | 367,453 | -5,774 | 361,679 |
Foreign translation gain | ' | ' | ' | 5,922 | ' | ' | 5,922 |
Ending balance, Amount at Nov. 30, 2013 | ' | $2,500 | ($2,500) | ($4,442) | $435,321 | ($142,126) | $288,753 |
Ending balance, Shares at Nov. 30, 2013 | ' | 25,000,000 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | ||
Cash flows from operating activities: | ' | ' | |
Net profit/(loss) | $367,453 | $12,003 | [1] |
Less: Net loss attributable to non-controlling interest | -5,774 | -5,671 | [1] |
Net profit before allocation of non-controlling interest | 361,679 | 6,332 | [1] |
Adjustments to reconcile net profit/(loss) to net cash provided by operating activities: | ' | ' | |
Depreciation of property and equipment | 25,818 | 6,285 | [1] |
Equity in loss of equity-method investment | 2,728 | 2,712 | [1] |
Amortization of intangible assets | 49,013 | 44,875 | [1] |
Changes in assets and liabilities: | ' | ' | |
Utility and other deposits | -32,323 | 1,283 | [1] |
Account receivable | -61,483 | ' | [1] |
Other receivables | -57,913 | ' | [1] |
Prepaid expenses | ' | -17,768 | [1] |
Income tax payable | 13,349 | ' | [1] |
Accrued liabilities | -35,081 | 85,918 | [1] |
Deferred revenue | -36,276 | ' | [1] |
Net cash provided by operating activities | 229,511 | 129,637 | [1] |
Cash flows from investing activities: | ' | ' | |
Acquisition of an intangible asset, net of cash acquired | -38,705 | ' | [1] |
Acquisition of subsidiary, net of cash acquired | -112,826 | ' | [1] |
Cash paid for property and equipment | -18,071 | -8,118 | [1] |
Net cash used in investing activities | -169,602 | -8,118 | [1] |
Cash flows from financing activities: | ' | ' | |
Advances made and expenses paid on behalf of a related party | ' | -2,366,544 | [1] |
Repayment of advances made and expenses paid on behalf of a related party | 209,601 | 795,842 | [1] |
Proceeds from bank loans and bank overdraft | ' | 1,535,411 | [1] |
Repayment of bank loans | -30,641 | -41,017 | [1] |
Net increase in restricted cash | -292 | ' | [1] |
Net increase in bank overdraft | 74,398 | ' | [1] |
Repayment of capital lease obligations | -5,846 | -2,360 | [1] |
Net cash provided by/(used in) financing activities | 247,220 | -78,668 | [1] |
Net increase in cash | 307,129 | 42,851 | [1] |
Effect on change of exchange rates on cash | 182 | -33 | [1] |
Cash as of the beginning of the period | 164,314 | ' | |
Cash as of the end of period | 471,625 | 171,819 | [1] |
Supplemental disclosure of cash flow information: | ' | ' | |
Cash paid during the period for: Bank loan interest paid | 14,663 | 29,260 | [1] |
Cash paid during the period for: Capital lease interest | $990 | $167 | [1] |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Description_of_Business_and_Or
Description of Business and Organization | 3 Months Ended | ||||||
Nov. 30, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
Note 1. Description of Business and Organization | ' | ||||||
Nature of operations | |||||||
ADGS Advisory, Inc. (“the Company” or “ADGS”) was incorporated in the State of Delaware in September 2007 under the name Life Nutrition Products, Inc. Pursuant to a Certificate of Amendment to its Certificate of Incorporation filed with the State of Delaware and effective as of July 19, 2013, the Company changed its corporate name from “Life Nutrition Products, Inc.” to “ADGS Advisory, Inc.”. | |||||||
On December 7, 2012, the Company entered into a share exchange agreement (the “Original Exchange Agreement”) with ADGS Advisory Limited, a Hong Kong corporation (“ADGS Hong Kong”) and ADGS Advisory (Holding) Limited, a British Virgin Islands corporation (“ADGS”). Pursuant to the Original Exchange Agreement, at the closing of the transaction contemplated thereunder (the “ADGS Transaction”), the Company agreed to acquire 100% of the issued and outstanding capital stock of ADGS, making ADGS a wholly-owned subsidiary of the Company. On March 28, 2013, the Company entered into an amendment (the “Amendment”) to the Original Exchange Agreement (the Original Exchange Agreement, as amended is referred to herein as the “Exchange Agreement”) pursuant to which the Company agreed to acquire all of the outstanding shares of Almonds Kisses Limited (BVI), a British Virgin Islands company (“Almonds Kisses BVI”), from the eight shareholders of Almonds Kisses BVI (the “Shareholders”), instead of the shares of ADGS, on the same terms and conditions set forth in the Exchange Agreement. Almonds Kisses BVI is the owner of 100% of the issued and outstanding capital stock of ADGS. The Original Exchange Agreement incorrectly indicated that such owner was ADGS Holdings which error was corrected in the Amendment. | |||||||
On April 12, 2013, the ADGS Transaction closed whereby the Company acquired all of the issued and outstanding capital stock of Almonds Kisses BVI pursuant to the Exchange Agreement in exchange for an aggregate of 20,155,000 newly issued shares of the Company’s common stock which were issued to the eight former shareholders of Almonds Kisses BVI. As a result, on April 12, 2013, Almonds Kisses BVI became the Company’s wholly-owned subsidiary and the former shareholders of Almonds Kisses BVI became the Company’s controlling shareholders, and Almond Kisses BVI in turn owns all of the issued and outstanding capital stock of ADGS. Almond Kisses (BVI) also owns all of the issued and outstanding capital stock of Vantage Advisory Limited, a Hong Kong corporation. ADGS Hong Kong owns 80% of ADGS Tax Advisory Limited (“ADGS Tax”) which is a Hong Kong incorporated holding company, and ADGS Tax owns a 30% interest in Dynamic Golden Limited which is also a Hong Kong incorporated company and through Almonds Kisses owns its 30% effective on November 19, 2013. | |||||||
The Company also acquired a property holding company, Motion Tech Development Limited, incorporated in British Virgin Islands. The transfer of shares was completed in August 29, 2013 and it is now 100% owned by Almond Kisses. | |||||||
In October 20, 2013, the Company further acquired a Hong Kong incorporated company, T H Strategic Management Limited for purchase consideration of approximately $516,000 (HK$4,000,000) and it is now 100% owned by Almonds Kisses. T H Strategic Management Limited is engaged in providing accounting, taxation, company secretarial and consultancy services. | |||||||
ADGS Advisory, Inc. is a holding company and, through its subsidiaries and group company, engages in providing accounting, taxation, company secretarial, consultancy services and consultancy service for slope inspection. The Company together with its consolidated subsidiaries and its equity-method investment, are collectively referred to as the “Group”. The Share Exchange was accounted for as a "reverse merger", since the former stockholders of Almond Kisses own a majority of the outstanding shares of the Company's capital stock immediately following the Share Exchange. | |||||||
Reorganization | |||||||
Almond Kisses was incorporated on March 1, 2011 as a limited liability company in British Virgin Island. ADGS Advisory Limited (“ADGS) and its subsidiary and equity-method investment, were limited companies incorporated in Hong Kong had been wholly owned by the same group of shareholders until being acquired by Almonds Kisses pursuant to a reorganization (“Reorganization”) to prepare for the listing of the Company’s shares on a stock exchange. ADGS Tax Advisory Limited (“ADGS Tax”) provided the same type of services prior to the establishment of ADGS. ADGS Tax became a dormant holding company after ADGS incorporated. | |||||||
Details of the Company’s subsidiaries and equity-method investment which are included in these consolidated financial statements are as follows: | |||||||
Subsidiary’s name | Place and date of incorporation | Percentage of ownership by the Company | Principal activities | ||||
Almond Kisses Limited | British Virgin Island | 100% | Holding company | ||||
“Almond Kisses” | 1-Mar-11 | ||||||
ADGS Advisory Limited “ADGS Hong Kong” | Hong Kong, People's Republic of China (“PRC”) | 100% (though Almonds Kisses) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
28-Apr-11 | |||||||
ADGS Tax Advisory Limited | Hong Kong, PRC | 80% (through ADGS Hong Kong) | Holding company | ||||
“ADGS Tax” | 17-Mar-03 | ||||||
Dynamic Golden Limited | Hong Kong, PRC | 30% (through ADGS Tax, until November 19, 2013 and through Almonds Kisses thereafter) | Property holding company | ||||
“Dynamic” | 16-Apr-04 | ||||||
Vantage Advisory Limited “Vantage” | Hong Kong, PRC | 100% (though Almonds Kisses) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
6-Mar-08 | |||||||
Motion Tech Development Limited | British Virgin Islands | 100% (through Almonds Kisses effective on August 29, 2013) | Property holding company | ||||
“Motion Tech” | 3-Oct-07 | ||||||
T H Strategic Management Limited | Hong Kong, PRC | 100% (though Almonds Kisses effective on October 20, 2013) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
“T H” | 16-Mar-10 | ||||||
The Company also operates branches in Shenzhen, PRC and Bangkok, Thailand, The branches are set up to attract potential clients to go to Hong Kong and establish companies. A full range of services could be provided to these clients. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||
Nov. 30, 2013 | ||||
Notes to Financial Statements | ' | |||
Note 2. Summary of Significant Accounting Policies | ' | |||
Basis of presentation | ||||
These interim consolidated financial statements are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures for a fair presentation of these interim consolidated financial statements have been included. The results reported in the consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes of the Company for the year ended August 31, 2013, as filed in Form 10-K with the Securities and Exchange Commission on December 24, 2013. | ||||
The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries as disclosed in note 1. All material inter-company balances and transactions have been eliminated. | ||||
As both the Company and its subsidiaries, ADGS and ADGS Tax are under common control, the financial statements of the Company have been presented as if the receipt of assets and liabilities of the subsidiaries at their net carrying amount been entered into as of March 1, 2011 in accordance with ASC 805-50-15-6. Accordingly, financial information related to periods prior to the assets and liabilities are that of the Company’s operating subsidiaries. | ||||
Going concern | ||||
The accompanying consolidated financial statements are presented on a going concern basis. The Company has a working capital deficit of $233,445 at November 30, 2013. Management plans to continue its efforts to raise funds through debt or equity in the near future and improve its profitability to sustain its operations. | ||||
Foreign currency translation | ||||
The Group uses United States dollars (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, Hong Kong dollars (“HK$”), being the lawful currency in Hong Kong. Assets and liabilities of the subsidiaries are translated from H.K. Dollars into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income included in the stockholders’ equity section of the balance sheets. The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: | ||||
November 30, | August 31, | |||
2013 | 2013 | |||
(Unaudited) | ||||
Balance sheet items, except for equity accounts | HK$7.7525= | HK$7.7525= | ||
November 30, 2013 | November 30, 2012 | |||
(Unaudited) | ||||
Items in statements of income and cash flows for the three months ended | HK$7.7530= | HK$7.7554= | ||
Revenue recognition | ||||
The Company generates revenue primarily from providing accounting, taxation, company secretarial, consultancy services, consultancy service for slope inspection and rental income. | ||||
(i) | Revenue generates from providing accounting, taxation, company secretarial and consultancy services is recognized when persuasive evidence of an arrangement exists, the related services are provided and when the collection is probable, the price is fixed or determinable and collectability is reasonably assured. The Group generates its revenues from providing professional services under fixed-fee billing arrangements. | |||
In fixed-fee billing arrangements, the Company agrees to a pre-established fee in exchange for a pre-determined set of professional services. Generally, the client agrees to pay a fixed-fee in monthly installments over the specified contract term. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. | ||||
(ii) | Consultancy service for slope inspection represents under fixed price contract is recognized when the related services are provided and when the collection is probable, the price is fixed or determinable and collectability is reasonably assured. | |||
(iii) | Rental income | |||
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term. | ||||
(iv) | Management fee income | |||
The Company recognizes the management fee income when service is provided. Services include providing administration support service or accounting service to companies. | ||||
Direct cost of revenue | ||||
Direct costs of revenues generated from providing accounting, taxation, company secretarial and consultancy services consists primarily of billable employee compensation and related payroll benefits, the cost of consultants assigned to revenue generating activities and direct expenses billable to clients. Direct cost of revenues does not include an allocation of overhead costs. | ||||
Direct costs from providing consultancy service for slope inspections under fixed price contracts are recognized, as the related contact costs are incurred. | ||||
Cash | ||||
Cash represents cash in banks and cash on hand. | ||||
The Group considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Substantially all of the cash deposits of the Group are held with financial institutions located in the Hong Kong, PRC. Management believes these financial institutions are of high credit quality. The group held no cash equivalents at November 30, 2013 and August 31, 2013. | ||||
Restricted cash | ||||
Restricted cash represents cash in banks were restricted and deposited in certain banks as security for installment loans payable to the banks. | ||||
Accounts receivable | ||||
Accounts receivable are recorded at invoiced amounts, net of allowances for doubtful accounts and discounts. The allowance for doubtful accounts is the Group’s best estimate of the amount of probable credit losses in the Group’s existing accounts receivable. Management determines the allowance based on historical write-off experience, customer specific facts and economic conditions. The Group historically has been able to collect all of its receivable balances. | ||||
Outstanding account balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure to its customers. | ||||
Deferred revenue | ||||
The Company entered into a contract with a third party to provide corporate advisory and consulting services. The agreement has a fixed term of four years, and is renewable upon maturity. These fees are deferred and are amortized to income as earned over the term of the agreement. Deferred revenue that will be recognized in next fiscal year is classified within current liabilities. | ||||
Property and equipment | ||||
Property and equipment are recorded at cost less accumulated depreciation. Maintenance, repairs and minor renewals are expensed as incurred; major renewals and improvements that extend the lives or increase the capacity of plant assets are capitalized. | ||||
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the reporting period of disposition. | ||||
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. | ||||
The estimated useful lives of the assets are as follows: | ||||
Estimated Life | ||||
Investment property | Over the unexpired term of the lease | |||
Leasehold improvement | 5 years | |||
Furniture and fixtures | 5 years | |||
Office equipment | 5 years | |||
Motor vehicles | 5 years | |||
Equity-method investment | ||||
Affiliated companies, in which the Company has significant influence, but not control, are accounted for equity-method investment. Equity-method investment adjustments include the Company’s proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, adjustments to recognize certain differences between the Company’s carrying value and the Company’s equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Gain or losses are realized when such investments are sold. | ||||
Non-controlling interest | ||||
Non-controlling interests represents the 20% interest in ADGS Tax not owned by Almonds Kisses. | ||||
Purchased intangible assets | ||||
The Group assesses the useful lives and possible impairment of existing recognized intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: | ||||
- significant underperformance relative to historical or projected future operating results; | ||||
- significant changes in the manner of use of the acquired assets or the strategy for our overall business; | ||||
- identification of other impaired assets within a reporting unit; | ||||
- disposition of a significant portion of an operating segment; | ||||
- significant negative industry or economic trends; | ||||
The intangible assets are amortized using the straight line method over a period of 10 years. | ||||
Purchased goodwill | ||||
All business combinations are accounted for by applying the purchase method. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. | ||||
Positive goodwill arising on acquisitions is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortized but is tested annually for impairment. | ||||
Decreases in goodwill resulting from the non-payment of contingent consideration are recognized in the period when non-payment occurs. | ||||
Negative goodwill arising on an acquisition is recognized directly in profit or loss. | ||||
The Group assesses the useful lives and possible impairment of existing goodwill when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: | ||||
- significant underperformance relative to historical or projected future operating results; | ||||
- significant changes in the manner of use of the acquired assets or the strategy for our overall business; | ||||
- identification of other impaired assets within a reporting unit; | ||||
- disposition of a significant portion of business; | ||||
- significant negative industry or economic trends; | ||||
Goodwill is recorded as an indefinite-lived asset and is not amortized but tested for impairment on an accrual basis or when indications of impairment exist. | ||||
Assets under capital lease | ||||
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Depreciation expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. | ||||
Comprehensive income | ||||
Comprehensive income includes net income and also considers the effect of other changes to stockholders' equity that are not included in the determination of net income, but rather are reported as a separate component of stockholders' equity. The Group reports foreign currency translation adjustments and unrealized gains and losses on investments (those which are considered temporary) as components of comprehensive income. | ||||
Earnings per share | ||||
Basic earnings per share is computed on the basis of the weighted-average number of shares of the Company’s common stock outstanding during the fiscal years. Diluted earnings per share is computed on the basis of the weighted-average number of shares of the common stock plus any effect of dilutive potential common shares outstanding during the period using the if-converted method. | ||||
Income taxes | ||||
The Group accounts for income taxes under FASB ASC Topic 740 "Income Taxes". Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse. | ||||
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date. | ||||
The Group records uncertain tax positions when it is more likely than not that the tax positions will not be sustained upon examination by the respective tax authority. | ||||
The Group recognizes interest and penalty related to income tax matters as income tax expense. As of November 30, 2013 and 2012, there was no penalty or interest recognized as income tax expenses. | ||||
Employee benefits | ||||
i) | Salaries, wages, annual bonuses, paid annual leave and staff welfare are accrued in the year in which the associated services are rendered by employees of the Group. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. | |||
ii) | Contributions to appropriate local contribution retirement schemes pursuant to the relevant labor rules and regulations in Hong Kong which are charged to the cost of sales and general and administrative expenses in the statement of operation as and when the related employee service is provided. The Group incurred $13,818 and $9,159 for the period ended November 30, 2013 and 2012, respectively. | |||
Fair value measurements | ||||
FASB ASC Topic 820, “Fair Value Measurement and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. FASB ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Group. Unobservable inputs reflect the Group’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. | ||||
The fair value hierarchy is categorized into three levels based on the inputs as follows: | ||||
Level 1 - | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Group has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. | |||
Level 2 - | Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. | |||
Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||
The Group’s financial instruments consist principally of cash, accounts receivable, accounts payable, bank loans, and accrued liabilities. Pursuant to ASC 820, the fair value of the Group's cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Group believes that the carrying amounts of all of the Group's other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. | ||||
Business_Segments
Business Segments | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||||
Note 3. Business Segments | ' | ||||||||||||||||||||||||
A) Business segment reporting - by product | |||||||||||||||||||||||||
The Company has three (3) reportable business segments: providing accounting, taxation, company secretarial, consultancy services, and consultancy service for slope inspection. The Company evaluates performance based on net operating profit. Administrative functions are centralized however, where applicable, portions of the administrative function expenses are allocated between the operating segments. In the event any services are provided to one operating segment by the other, the transaction is valued according to the company’s transfer policy, which approximates market price. The administrative expenses are captured discretely within each segment. The Company’s property and equipment, and accounts receivable are captured and reported discretely within each operating segment. | |||||||||||||||||||||||||
The following tables set forth the Company's four main segments: | |||||||||||||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | ||||||||||||||||||||||||
Multi-Disciplinary Advisory | Corporate & Other Income | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Three months ended November 30, 2013 | |||||||||||||||||||||||||
Segment revenue | |||||||||||||||||||||||||
Revenue from external customer | $ | 279,642 | $ | 24,524 | $ | 822,598 | $ | - | $ | 1,126,764 | |||||||||||||||
Cost of sales | (167,697 | ) | (27,804 | ) | (348,458 | ) | - | (543,959 | ) | ||||||||||||||||
Administrative expense | (53,180 | ) | (4,664 | ) | (156,437 | ) | - | (214,281 | ) | ||||||||||||||||
Gross (profit) / loss | 58,765 | (7,944 | ) | 317,703 | - | 368,524 | |||||||||||||||||||
Other income | 8,634 | 757 | 25,397 | - | 34,788 | ||||||||||||||||||||
Finance cost | (7,019 | ) | (616 | ) | (20,649 | ) | - | (28,284 | ) | ||||||||||||||||
Income before income taxes | 60,380 | (7,803 | ) | 322,451 | - | 375,028 | |||||||||||||||||||
Income tax | (3,313 | ) | (291 | ) | (9,745 | ) | - | (13,349 | ) | ||||||||||||||||
Net income | $ | 57,067 | $ | (8,094 | ) | $ | 312,706 | $ | - | $ | 361,679 | ||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | Multi-Disciplinary Advisory | Corporate & Other Income | Total | |||||||||||||||||||||
Total assets | $ | 1,234,312 | $ | 99,433 | $ | 2,838,623 | $ | 1,509,591 | $ | 5,681,959 | |||||||||||||||
Total liabilities | $ | 895,340 | $ | 73,788 | $ | 2,696,894 | $ | 1,727,184 | $ | 5,393,206 | |||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | ||||||||||||||||||||||||
Multi-Disciplinary Advisory | Corporate & Other Income | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Three months ended November 30, 2012 | |||||||||||||||||||||||||
Segment revenue | |||||||||||||||||||||||||
Revenue from external customer | $ | 286,549 | $ | 248,287 | $ | 74,763 | $ | - | $ | 609,599 | |||||||||||||||
Cost of sales | (153,016 | ) | (159,933 | ) | (50,482 | ) | - | (363,431 | ) | ||||||||||||||||
Administrative expense | (98,905 | ) | (85,699 | ) | (25,805 | ) | - | (210,409 | ) | ||||||||||||||||
Gross profit/(loss) | 34,628 | 2,655 | (1,524 | ) | - | 35,759 | |||||||||||||||||||
Other income | - | - | - | - | - | ||||||||||||||||||||
Finance cost | (13,833 | ) | (11,985 | ) | (3,609 | ) | - | (29,427 | ) | ||||||||||||||||
Income/(loss) before income taxes | 20,795 | (9,330 | ) | (5,133 | ) | - | 6,332 | ||||||||||||||||||
Income tax | - | - | - | - | - | ||||||||||||||||||||
Net income/(loss) | $ | 20,795 | $ | (9,330 | ) | $ | (5,133 | ) | $ | - | $ | 6,332 | |||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | Multi-Disciplinary Advisory | Corporate & Other Income | Total | |||||||||||||||||||||
Inter-group Re-allocation | |||||||||||||||||||||||||
Total assets | $ | 1,905,154 | $ | 1,650,765 | $ | 780,130 | $ | (879,109 | ) | $ | - | $ | 3,456,940 | ||||||||||||
Total liabilities | $ | 1,947,899 | $ | 1,687,802 | $ | 1,387,332 | $ | (879,109 | ) | $ | - | $ | 4,143,924 | ||||||||||||
Acquisition_of_Business
Acquisition of Business | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 4. Acquisition of Business | ' | ||||
Almonds Kisses Limited (“Almonds Kisses”), a wholly owned subsidiary of ADGS Advisory Inc. (the "Company") entered into a purchase and sale agreement (the "Purchase Agreement") dated October 20, 2013 which was previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 23, 2013. Pursuant to the Purchase Agreement, the Company agreed to purchase all shares of T H Strategic Management Limited (“T H Strategic”), a Hong Kong, People’s Republic of China incorporated company (the "Acquisition") for purchase consideration of approximately $516,000 (HK$4 million). T H Strategic Management Limited is engaged in providing accounting, taxation, company secretarial and consultancy services. | |||||
In consideration for acquisition of the issued and outstanding shares of TH Strategic, Almonds Kisses has agreed to pay the seller the sum of about $516,000 (HK$4 million), payable in four equal monthly installments of about $129,000 (HK$1 million) each. Almonds Kisses has paid the first installment on October 18, 2013, and the remaining installments of $129,000 each which will be due on December 15, 2013, January 15, 2014 and February 15, 2014. | |||||
The following table summarizes the estimated fair values of tangible assets acquired and liabilities assumed as of the date of the Merger: | |||||
Assets/(liabilities) | |||||
Cash | $ | 16,189 | |||
Account receivables | 89,685 | ||||
Accrual and other payables | (17,544 | ) | |||
Tax payables | (25,469 | ) | |||
Due to a related party | (22,504 | ) | |||
Total identifiable net assets | $ | 40,357 | |||
Goodwill | 475,605 | ||||
Consideration | $ | 515,962 | |||
As the purchase price exceeds the fair value of assets and liabilities acquired or assumed, goodwill will be recognized. Goodwill is calculated as the difference between the Acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill is not expected to be deductible for income tax purposes. Goodwill is recorded as an indefinite-lived asset and is not amortized but tested for impairment on an annual basis or when indications of impairment exist. No acquisition related costs incurred in this acquisition. |
Cash
Cash | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 5. Cash | ' | ||||||||
Cash represents cash in bank and cash on hand. Cash as of November 30, 2013 and August 31, 2013 consists of the following: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Bank balances and cash | $ | 471,625 | $ | 164,314 | |||||
All cash was maintained in Hong Kong, PRC. In Hong Kong, there are no rules or regulations mandating an obligatory insurance of bank accounts. Management believes these financial institutions are of high credit quality. |
Restricted_Cash
Restricted Cash | 3 Months Ended |
Nov. 30, 2013 | |
Notes to Financial Statements | ' |
Note 6. Restricted Cash | ' |
As of November 30, 2013 and August 31, 2013 the Group's cash amounting to $129,604 and $129,312 respectively, were restricted and deposited in a bank as security for installment loans payable to the bank. | |
Due_From_A_Related_Party
Due From A Related Party | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 7. Due From A Related Party | ' | ||||
The amounts due from the Group CFO are interest free, unsecured and repayable on demand. The Advances to the CFO were funded by Group bank loans. These bank loans were secured by real property owned by the CFO. The activity for such amounts due to shareholders for the period/year ended November 30, 2013 and August 31, 2013 is as follows: | |||||
November 30, | |||||
2013 | |||||
(Unaudited) | |||||
Balance due from a related party at beginning of year | $ | 418,658 | |||
Amount repaid by her during the period | (209,601 | ) | |||
Exchange alignment | (136 | ) | |||
Balance due from a related party at end of period | $ | 208,921 | |||
August 31, | |||||
2013 | |||||
Balance due from a related party at beginning of year | $ | 241,036 | |||
Amount repaid/advanced to her during the year | 4,831,702 | ||||
Amount repaid by her during the year | (4,655,559 | ) | |||
Exchange alignment | 1,479 | ||||
Balance due from a related party at end of year | $ | 418,658 |
Loan_From_A_Related_Party
Loan From A Related Party | 3 Months Ended |
Nov. 30, 2013 | |
Notes to Financial Statements | ' |
Note 8. Loan From A Related Party | ' |
The loan from a related party is interest free, unsecured and is due and payable on August 30, 2017. | |
Property_and_Equipment_Net
Property and Equipment, Net | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 9. Property and Equipment, Net | ' | ||||||||
Property and equipment, net consist of the following: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Investment property | $ | 1,909,061 | $ | 1,909,062 | |||||
Leasehold improvement | 103,896 | 85,345 | |||||||
Furniture and fixtures | 5,632 | 5,632 | |||||||
Office equipment | 6,730 | 6,730 | |||||||
Motor vehicle | 145,406 | 145,407 | |||||||
2,170,725 | 2,152,176 | ||||||||
Less: Accumulated depreciation | (89,783 | ) | (63,486 | ) | |||||
$ | 2,080,942 | $ | 2,088,690 | ||||||
Depreciation expense for the three months ended November 30, 2013 and 2012 amounted to $25,818 and $6,285 respectively. | |||||||||
Included in motor vehicle of the Group, the net carrying amount of $112,913 (2012: $21,025) is under capital lease with the related depreciation charge for the three months ended November 30, 2013 of $7,270 and 2012 is $1,402. | |||||||||
The residential property held by Motion Tech is collateral for a banking facility with a maximum amount of $2,063,850 (HK$16 million). | |||||||||
Assets_Held_Under_Capital_Leas
Assets Held Under Capital Leases | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 10. Assets Held Under Capital Leases | ' | ||||
The Group leases a motor vehicle that is classified as capital lease. The cost of the motor vehicle under capital leases is included in the Balance Sheets as property and equipment and was $112,913 ($112,913 net of accumulated depreciation) at November 30, 2013. Amortization of assets under capital leases is included in depreciation expense. The future minimum lease payments required under the capital leases and the present value of the net minimum lease payments as of November 30, 2013, are as follows: | |||||
Amount | |||||
Year ending August 31, | |||||
2014 (Nine months) | $ | 22,488 | |||
2015 | 27,345 | ||||
2016 | 27,345 | ||||
2017 | 27,345 | ||||
2018 | 10,752 | ||||
Thereafter | - | ||||
Total minimum lease payment | 115,275 | ||||
Less: Imputed interest | (9,041 | ) | |||
Present value of net minimum lease payments | 106,234 | ||||
Less: Current maturities of capital leases obligations | (23,775 | ) | |||
Long-term capital leases obligations | $ | 82,459 |
Intangible_Asset
Intangible Asset | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 11. Intangible Asset | ' | ||||
Intangible assets consist of customer lists purchased from three unrelated parties pursuant to the agreements dated June 21, 2005, April 28, 2011 and September 30, 2013. | |||||
The intangible assets are amortized using the straight line method over a period of 10 years. Amortization expenses for the three months ended November 30, 2013 is $49,013 and 2012 is $44,875. The future amortization as of August 31 will be as follows: | |||||
Amount | |||||
Year ending August 31, | |||||
2014 (Nine months) | $ | 164,452 | |||
2015 | 219,270 | ||||
2016 | 87,063 | ||||
2017 | 116,084 | ||||
2018 | 73,520 | ||||
Thereafter | 245,125 | ||||
$ | 905,514 | ||||
Income_Taxes_Expenses
Income Taxes Expenses | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 12. Income Taxes Expenses | ' | ||||||||
The entities that comprise the Group file separate tax returns in the respective tax jurisdictions that they operate. The Company files income tax returns in the U.S. federal and state, and foreign jurisdictions such as Hong Kong, People’s Republic of China. The Inland Revenue Department of Hong Kong, People’s Republic of China would have a 7 year period that it could make changes on tax returns filed. | |||||||||
The Company is domiciled in the State of Delaware, U.S.A.. No provision for U.S.A. profits tax has been made as the Company has sustained losses. | |||||||||
The Company’s subsidiary, Almonds Kisses is domiciled in the British Virgin Islands, the law of which does not require the company to pay any income taxes or other taxes based on income, business activity or assets. | |||||||||
The Company’s subsidiary, Motion Tech is domiciled in the British Virgin Islands, the law of which does not require the company to pay any income taxes or other taxes based on income, business activity or assets. | |||||||||
The Company’s subsidiary, ADGS Advisory Limited, is domiciled in Hong Kong, and a provision for Hong Kong profits tax in the amount of $12,955 has been made for the three months ended November 30, 2013. No provision for Hong Kong profits tax has been made for 2012, as the subsidiary sustained tax losses in that period. | |||||||||
The Company’s subsidiary, ADGS Tax Advisory Limited, is domiciled in Hong Kong. No provision for Hong Kong profits tax has been made as the subsidiary sustained tax losses for the three months ended November 30, 2013 and 2012. | |||||||||
The Company’s subsidiary, Vantage Advisory Limited, is domiciled in Hong Kong. No provision for Hong Kong profits tax has been made as the subsidiary sustained tax losses for the three months ended November 30, 2013. | |||||||||
The Company’s subsidiary, T H Strategic Management Limited acquired on October 20, 2013, is domiciled in Hong Kong, and a provision for Hong Kong profits tax in the amount of $394 has been made for the three months ended November 30, 2013. | |||||||||
The Company's income tax for the three months ended November 30, 2013 and 2012 can be reconciled to the income before income tax expenses in the statement of operations as follows: | |||||||||
For the three months ended November 30, 2013 | For the three months ended November 30, 2012 | ||||||||
Profit before tax | $ | 375,028 | $ | 6,332 | |||||
Expected Hong Kong income tax expense | |||||||||
at statutory tax rate of 16.5% | 15,470 | 1,044 | |||||||
Temporary difference | (2,121 | ) | (1,044 | ) | |||||
Actual income tax expense | $ | 13,349 | $ | - | |||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Deferred tax asset: | |||||||||
Unrecognized tax losses | $ | - | $ | - | |||||
Deferred tax liability: | |||||||||
Difference between book and tax depreciation | $ | - | $ | 2,340 | |||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Other major temporary differences that give rise to the deferred tax assets and liabilities are net operating losses carry forwards. As the amounts are immaterial as of November 30, 2013 and August 31, 2013, no deferred taxes have been provided for in the accounts. | |||||||||
Bank_Loans
Bank Loans | 3 Months Ended | |||||||||||
Nov. 30, 2013 | ||||||||||||
Notes to Financial Statements | ' | |||||||||||
Note 13. Bank Loans | ' | |||||||||||
The details of the bank loans outstanding as of November 30, 2013 (unaudited) are as follows: | ||||||||||||
Name of bank | Outstanding loan amount | Current annualized interest rate | Nature of loans | Term of loans | Collateral | |||||||
Shanghai Commercial Bank ("SCB") | US$936,258 | SCB annual rate of 3% | Term loan | January 30, 2012 to December 31, 2035 | Property and personal guarantee from related party and third party | |||||||
(HK$7,258,338) | ||||||||||||
Hang Seng Bank ("HSB") | US$125,664 | HSB monthly rate of 0.38% | Term loan | June 27, 2012 to June 26, 2017 | Property and personal guarantee from related party and third party | |||||||
(HK$974,208) | ||||||||||||
Hitachi Capital (HK) Ltd ("HC") | US$2,539 | HC annual rate of 6.98% | Term loan | June 29, 2012 to November 25, 2013 | Personal guarantee from related party | |||||||
(HK$19,688) | ||||||||||||
DBS | US$1,191,681 | DBS annual rate of 2.75% | Term loan | November 12, 2012 to 12 October, 2037 | Property and personal guarantee from related party | |||||||
(HK$9,238,510) | ||||||||||||
$ | 2,256,142 | |||||||||||
The details of the bank loans outstanding as of August 31, 2013 are as follows: | ||||||||||||
Name of bank | Outstanding loan amount | Current annualized interest rate | Nature of loans | Term of loans | Collateral | |||||||
Shanghai Commercial Bank ("SCB") | US$943,651 | SCB annual rate of 3% | Term loan | January 30, 2012 to December 31, 2035 | Property and personal guarantee from related party and third party | |||||||
(HK$7,315,652) | ||||||||||||
Hang Seng Bank ("HSB") | US$136,863 | HSB monthly rate of 0.38% | Term loan | June 27, 2012 to June 26, 2017 | Property and personal guarantee from related party and third party | |||||||
(HK$1,061,028) | ||||||||||||
Hitachi Capital (HK) Ltd ("HC") | US$5,573 | HC annual rate of 6.98% | Term loan | June 29, 2012 to November 25, 2013 | Personal guarantee from related party | |||||||
(HK$43,204) | ||||||||||||
DBS | US$1,200,698 | DBS annual rate of 2.75% | Term loan | November 12, 2012 to 12 October, 2037 | Property and personal guarantee from related party | |||||||
(HK$9,308,419) | ||||||||||||
$ | 2,286,785 | |||||||||||
Interest expenses for the three months ended November 30, 2013 and 2012 amounted to $14,663 and $29,260 respectively. | ||||||||||||
Bank loans repayment schedule is as follows: | ||||||||||||
November 30, | August 31, | |||||||||||
2013 | 2013 | |||||||||||
Year ending August 31, | ||||||||||||
2014 (Nine months) | 76,905 | 107,548 | ||||||||||
2015 | 114,303 | 114,303 | ||||||||||
2016 | 118,253 | 118,253 | ||||||||||
2017 | 90,382 | 90,382 | ||||||||||
2018 | 79,363 | 79,363 | ||||||||||
Thereafter | 1,776,936 | 1,776,936 | ||||||||||
$ | 2,256,142 | $ | 2,286,785 | |||||||||
The bank loans as outlined in the aforementioned tables are secured by the directors' and third parties' properties and personal guarantees. | ||||||||||||
Deferred_Revenue
Deferred Revenue | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 14. Deferred Revenue | ' | ||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
Deferred revenue – current portion | $ | 145,114 | $ | 145,114 | |||||
Deferred revenue – net of current portion | 399,065 | 435,343 | |||||||
$ | 544,179 | $ | 580,457 | ||||||
The Company has an agreement with a third party for consultancy services with a fixed fee and term of four years, renewable upon expiration. Deferred revenue to be recognized in next fiscal year (2014) is classified as current liabilities with the remaining balance classified as a non-current liabilities. |
Concentrations_of_Risk
Concentrations of Risk | 3 Months Ended |
Nov. 30, 2013 | |
Notes to Financial Statements | ' |
Note 15. Concentrations of Risk | ' |
The Group's credit risk is somewhat limited due to a relatively large customer base. During the three months ended November 30, 2013 and the year ended August 31, 2013, the Group had no customer which accounted for 10% or more of total revenue or 10% or more of total accounts receivable. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 16. Related Party Transactions | ' | ||||||||
Significant operating expenses arising from transaction with a related company was as follows. | |||||||||
For the three months ended November 30, 2013 | For the three months ended November 30, 2012 | ||||||||
Sub-contracting fee | 24,935 | 107,534 | |||||||
These balances primarily represent sub-contracting fees included as part of the cost of revenues to the Company's Chief Operating Officer and a company controlled by one of the Company’s directors for the three months ended November 2013 and 2012. | |||||||||
See Notes 7 and 8 for discussion of advances to and from related parties. | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 17. Commitments And Contingencies | ' | ||||
Commitments and contingencies | |||||
(a) | In the normal course of business, the Group is subject to contingencies, including legal proceedings and claims arising within the normal course of businesses that relate to a wide range of matters. The Group records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, evidence and the specifics of each matter. The Group has not recognized a provision for claims or contingencies as of November 30, 2013 and August 31, 2013. | ||||
(b) | Rental expense amounted to $42,543 (HK$329,836) and $40,980 (HK$319,620) for three months ended November 30, 2013 and 2012 respectively. The total future minimum lease payments under non-cancellable operating leases with respect to premises as of November 30, 2013 are payable as follows: | ||||
Period Ended November 30, | Rental | ||||
2014 (Nine months) | $ | 100,191 | |||
2015 | 94,206 | ||||
2016 | - | ||||
2017 | - | ||||
2018 | - | ||||
Over five years | - | ||||
$ | 194,397 | ||||
(c) | Deferred revenue amounted to $544,179 (HK$4.2 million) and nil for three months ended November 30, 2013 and 2012 respectively. The total future revenue under non-cancellable agreement with respect to consultancy service income as of November 30, 2013 are receivable as follows: | ||||
Period Ended November 30, | Revenue | ||||
2014 (Nine months) | $ | 108,836 | |||
2015 | 145,114 | ||||
2016 | 145,114 | ||||
2017 | 145,115 | ||||
2018 | - | ||||
Over five years | - | ||||
$ | 544,179 | ||||
Economic and political risks | |||||
(d) | The major operations of the Group are conducted in Hong Kong, the PRC. Accordingly, the political, economic, and legal environments in Hong Kong, the PRC, as well as the general state of Hong Kong's economy may influence the business, financial condition, and results of operations of the Company. | ||||
Among other risks, the Group's operations are subject to the risks of restrictions on: changing taxation policies; and political conditions and governmental regulations. | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||
Nov. 30, 2013 | ||||
Notes to Financial Statements | ' | |||
Basis of presentation | ' | |||
These interim consolidated financial statements are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures for a fair presentation of these interim consolidated financial statements have been included. The results reported in the consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes of the Company for the year ended August 31, 2013, as filed in Form 10-K with the Securities and Exchange Commission on December 24, 2013. | ||||
The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries as disclosed in note 1. All material inter-company balances and transactions have been eliminated. | ||||
As both the Company and its subsidiaries, ADGS and ADGS Tax are under common control, the financial statements of the Company have been presented as if the receipt of assets and liabilities of the subsidiaries at their net carrying amount been entered into as of March 1, 2011 in accordance with ASC 805-50-15-6. Accordingly, financial information related to periods prior to the assets and liabilities are that of the Company’s operating subsidiaries. | ||||
Going Concern | ' | |||
The accompanying consolidated financial statements are presented on a going concern basis. The Company has a working capital deficit of $233,445 at November 30, 2013. Management plans to continue its efforts to raise funds through debt or equity in the near future and improve its profitability to sustain its operations. | ||||
Foreign currency translation | ' | |||
The Group uses United States dollars (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, Hong Kong dollars (“HK$”), being the lawful currency in Hong Kong. Assets and liabilities of the subsidiaries are translated from H.K. Dollars into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income included in the stockholders’ equity section of the balance sheets. The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: | ||||
November 30, | August 31, | |||
2013 | 2013 | |||
(Unaudited) | ||||
Balance sheet items, except for equity accounts | HK$7.7525= | HK$7.7525= | ||
30-Nov-13 | 30-Nov-12 | |||
(Unaudited) | ||||
Items in statements of income and cash flows for the three months ended | HK$7.7530= | HK$7.7554= | ||
Revenue Recognition | ' | |||
The Company generates revenue primarily from providing accounting, taxation, company secretarial, consultancy services, consultancy service for slope inspection and rental income. | ||||
(i) | Revenue generates from providing accounting, taxation, company secretarial and consultancy services is recognized when persuasive evidence of an arrangement exists, the related services are provided and when the collection is probable, the price is fixed or determinable and collectability is reasonably assured. The Group generates its revenues from providing professional services under fixed-fee billing arrangements. | |||
In fixed-fee billing arrangements, the Company agrees to a pre-established fee in exchange for a pre-determined set of professional services. Generally, the client agrees to pay a fixed-fee in monthly installments over the specified contract term. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. | ||||
(ii) | Consultancy service for slope inspection represents under fixed price contract is recognized when the related services are provided and when the collection is probable, the price is fixed or determinable and collectability is reasonably assured. | |||
(iii) | Rental income | |||
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term. | ||||
(iv) | Management fee income | |||
The Company recognizes the management fee income when service is provided. Services include providing administration support service or accounting service to companies. | ||||
Direct cost of revenue | ' | |||
Direct costs of revenues generated from providing accounting, taxation, company secretarial and consultancy services consists primarily of billable employee compensation and related payroll benefits, the cost of consultants assigned to revenue generating activities and direct expenses billable to clients. Direct cost of revenues does not include an allocation of overhead costs. | ||||
Direct costs from providing consultancy service for slope inspections under fixed price contracts are recognized, as the related contact costs are incurred. | ||||
Cash | ' | |||
Cash represents cash in banks and cash on hand. | ||||
The Group considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Substantially all of the cash deposits of the Group are held with financial institutions located in the Hong Kong, PRC. Management believes these financial institutions are of high credit quality. The group held no cash equivalents at November 30, 2013 and August 31, 2013. | ||||
Restricted cash | ' | |||
Restricted cash represents cash in banks were restricted and deposited in certain banks as security for installment loans payable to the banks. | ||||
Accounts receivable | ' | |||
Accounts receivable are recorded at invoiced amounts, net of allowances for doubtful accounts and discounts. The allowance for doubtful accounts is the Group’s best estimate of the amount of probable credit losses in the Group’s existing accounts receivable. Management determines the allowance based on historical write-off experience, customer specific facts and economic conditions. The Group historically has been able to collect all of its receivable balances. | ||||
Outstanding account balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure to its customers. | ||||
Deferred revenue | ' | |||
The Company entered into a contract with a third party to provide corporate advisory and consulting services. The agreement has a fixed term of four years, and is renewable upon maturity. These fees are deferred and are amortized to income as earned over the term of the agreement. Deferred revenue that will be recognized in next fiscal year is classified within current liabilities. | ||||
Property and equipment | ' | |||
Property and equipment are recorded at cost less accumulated depreciation. Maintenance, repairs and minor renewals are expensed as incurred; major renewals and improvements that extend the lives or increase the capacity of plant assets are capitalized. | ||||
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the reporting period of disposition. | ||||
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. | ||||
The estimated useful lives of the assets are as follows: | ||||
Estimated Life | ||||
Investment property | Over the unexpired term of the lease | |||
Leasehold improvement | 5 years | |||
Furniture and fixtures | 5 years | |||
Office equipment | 5 years | |||
Motor vehicles | 5 years | |||
Equity-method investment | ' | |||
Affiliated companies, in which the Company has significant influence, but not control, are accounted for equity-method investment. Equity-method investment adjustments include the Company’s proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, adjustments to recognize certain differences between the Company’s carrying value and the Company’s equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Gain or losses are realized when such investments are sold. | ||||
Non-controlling interest | ' | |||
Non-controlling interests represents the 20% interest in ADGS Tax not owned by Almonds Kisses. | ||||
Purchased intangible assets | ' | |||
The Group assesses the useful lives and possible impairment of existing recognized intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: | ||||
- significant underperformance relative to historical or projected future operating results; | ||||
- significant changes in the manner of use of the acquired assets or the strategy for our overall business; | ||||
- identification of other impaired assets within a reporting unit; | ||||
- disposition of a significant portion of an operating segment; | ||||
- significant negative industry or economic trends; | ||||
The intangible assets are amortized using the straight line method over a period of 10 years. | ||||
Purchased goodwill | ' | |||
All business combinations are accounted for by applying the purchase method. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. | ||||
Positive goodwill arising on acquisitions is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortized but is tested annually for impairment. | ||||
Decreases in goodwill resulting from the non-payment of contingent consideration are recognized in the period when non-payment occurs. | ||||
Negative goodwill arising on an acquisition is recognized directly in profit or loss. | ||||
The Group assesses the useful lives and possible impairment of existing goodwill when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: | ||||
- significant underperformance relative to historical or projected future operating results; | ||||
- significant changes in the manner of use of the acquired assets or the strategy for our overall business; | ||||
- identification of other impaired assets within a reporting unit; | ||||
- disposition of a significant portion of business; | ||||
- significant negative industry or economic trends; | ||||
Goodwill is recorded as an indefinite-lived asset and is not amortized but tested for impairment on an accrual basis or when indications of impairment exist. | ||||
Assets under capital lease | ' | |||
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Depreciation expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. | ||||
Comprehensive income | ' | |||
Comprehensive income includes net income and also considers the effect of other changes to stockholders' equity that are not included in the determination of net income, but rather are reported as a separate component of stockholders' equity. The Group reports foreign currency translation adjustments and unrealized gains and losses on investments (those which are considered temporary) as components of comprehensive income. | ||||
Earnings per share | ' | |||
Basic earnings per share is computed on the basis of the weighted-average number of shares of the Company’s common stock outstanding during the fiscal years. Diluted earnings per share is computed on the basis of the weighted-average number of shares of the common stock plus any effect of dilutive potential common shares outstanding during the period using the if-converted method. | ||||
Income Taxes | ' | |||
The Group accounts for income taxes under FASB ASC Topic 740 "Income Taxes". Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse. | ||||
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more-likely-than-not that the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date. | ||||
The Group records uncertain tax positions when it is more likely than not that the tax positions will not be sustained upon examination by the respective tax authority. | ||||
The Group recognizes interest and penalty related to income tax matters as income tax expense. As of November 30, 2013 and 2012, there was no penalty or interest recognized as income tax expenses. | ||||
Employee benefits | ' | |||
i) | Salaries, wages, annual bonuses, paid annual leave and staff welfare are accrued in the year in which the associated services are rendered by employees of the Group. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. | |||
ii) | Contributions to appropriate local contribution retirement schemes pursuant to the relevant labor rules and regulations in Hong Kong which are charged to the cost of sales and general and administrative expenses in the statement of operation as and when the related employee service is provided. The Group incurred $13,818 and $9,159 for the period ended November 30, 2013 and 2012, respectively. | |||
Fair Value Measurements | ' | |||
FASB ASC Topic 820, “Fair Value Measurement and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. FASB ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Group. Unobservable inputs reflect the Group’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. | ||||
The fair value hierarchy is categorized into three levels based on the inputs as follows: | ||||
Level 1 - | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Group has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. | |||
Level 2 - | Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. | |||
Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||
The Group’s financial instruments consist principally of cash, accounts receivable, accounts payable, bank loans, and accrued liabilities. Pursuant to ASC 820, the fair value of the Group's cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Group believes that the carrying amounts of all of the Group's other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. |
Description_of_Business_and_Or1
Description of Business and Organization (Tables) | 3 Months Ended | ||||||
Nov. 30, 2013 | |||||||
Notes to Financial Statements | ' | ||||||
Subsidiary and equity-method investment | ' | ||||||
Details of the Company’s subsidiaries and equity-method investment which are included in these consolidated financial statements are as follows: | |||||||
Subsidiary’s name | Place and date of incorporation | Percentage of ownership by the Company | Principal activities | ||||
Almond Kisses Limited | British Virgin Island | 100% | Holding company | ||||
“Almond Kisses” | 1-Mar-11 | ||||||
ADGS Advisory Limited “ADGS Hong Kong” | Hong Kong, People's Republic of China (“PRC”) | 100% (though Almonds Kisses) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
28-Apr-11 | |||||||
ADGS Tax Advisory Limited | Hong Kong, PRC | 80% (through ADGS Hong Kong) | Holding company | ||||
“ADGS Tax” | 17-Mar-03 | ||||||
Dynamic Golden Limited | Hong Kong, PRC | 30% (through ADGS Tax, until November 19, 2013 and through Almonds Kisses thereafter) | Property holding company | ||||
“Dynamic” | 16-Apr-04 | ||||||
Vantage Advisory Limited “Vantage” | Hong Kong, PRC | 100% (though Almonds Kisses) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
6-Mar-08 | |||||||
Motion Tech Development Limited | British Virgin Islands | 100% (through Almonds Kisses effective on August 29, 2013) | Property holding company | ||||
“Motion Tech” | 3-Oct-07 | ||||||
T H Strategic Management Limited | Hong Kong, PRC | 100% (though Almonds Kisses effective on October 20, 2013) | Engage in providing accounting, taxation, company secretarial, and consultancy services. | ||||
“T H” | 16-Mar-10 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||
Nov. 30, 2013 | ||||
Notes to Financial Statements | ' | |||
The exchange rates used to translate amounts | ' | |||
The exchange rates used to translate amounts in HKD into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: | ||||
November 30, | August 31, | |||
2013 | 2013 | |||
(Unaudited) | ||||
Balance sheet items, except for equity accounts | HK$7.7525= | HK$7.7525= | ||
30-Nov-13 | 30-Nov-12 | |||
(Unaudited) | ||||
Items in statements of income and cash flows for the three months ended | HK$7.7530= | HK$7.7554= | ||
The estimated useful lives of the assets | ' | |||
The estimated useful lives of the assets are as follows: | ||||
Estimated Life | ||||
Investment property | Over the unexpired term of the lease | |||
Leasehold improvement | 5 years | |||
Furniture and fixtures | 5 years | |||
Office equipment | 5 years | |||
Motor vehicles | 5 years |
Business_Segments_Tables
Business Segments (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||||
Business segment reporting | ' | ||||||||||||||||||||||||
The following tables set forth the Company's four main segments: | |||||||||||||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | ||||||||||||||||||||||||
Multi-Disciplinary Advisory | Corporate & Other Income | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Three months ended November 30, 2013 | |||||||||||||||||||||||||
Segment revenue | |||||||||||||||||||||||||
Revenue from external customer | $ | 279,642 | $ | 24,524 | $ | 822,598 | $ | - | $ | 1,126,764 | |||||||||||||||
Cost of sales | (167,697 | ) | (27,804 | ) | (348,458 | ) | - | (543,959 | ) | ||||||||||||||||
Administrative expense | (53,180 | ) | (4,664 | ) | (156,437 | ) | - | (214,281 | ) | ||||||||||||||||
Gross (profit) / loss | 58,765 | (7,944 | ) | 317,703 | - | 368,524 | |||||||||||||||||||
Other income | 8,634 | 757 | 25,397 | - | 34,788 | ||||||||||||||||||||
Finance cost | (7,019 | ) | (616 | ) | (20,649 | ) | - | (28,284 | ) | ||||||||||||||||
Income before income taxes | 60,380 | (7,803 | ) | 322,451 | - | 375,028 | |||||||||||||||||||
Income tax | (3,313 | ) | (291 | ) | (9,745 | ) | - | (13,349 | ) | ||||||||||||||||
Net income | $ | 57,067 | $ | (8,094 | ) | $ | 312,706 | $ | - | $ | 361,679 | ||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | Multi-Disciplinary Advisory | Corporate & Other Income | Total | |||||||||||||||||||||
Total assets | $ | 1,234,312 | $ | 99,433 | $ | 2,838,623 | $ | 1,509,591 | $ | 5,681,959 | |||||||||||||||
Total liabilities | $ | 895,340 | $ | 73,788 | $ | 2,696,894 | $ | 1,727,184 | $ | 5,393,206 | |||||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | ||||||||||||||||||||||||
Multi-Disciplinary Advisory | Corporate & Other Income | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
Three months ended November 30, 2012 | |||||||||||||||||||||||||
Segment revenue | |||||||||||||||||||||||||
Revenue from external customer | $ | 286,549 | $ | 248,287 | $ | 74,763 | $ | - | $ | 609,599 | |||||||||||||||
Cost of sales | (153,016 | ) | (159,933 | ) | (50,482 | ) | - | (363,431 | ) | ||||||||||||||||
Administrative expense | (98,905 | ) | (85,699 | ) | (25,805 | ) | - | (210,409 | ) | ||||||||||||||||
Gross profit/(loss) | 34,628 | 2,655 | (1,524 | ) | - | 35,759 | |||||||||||||||||||
Other income | - | - | - | - | - | ||||||||||||||||||||
Finance cost | (13,833 | ) | (11,985 | ) | (3,609 | ) | - | (29,427 | ) | ||||||||||||||||
Income/(loss) before income taxes | 20,795 | (9,330 | ) | (5,133 | ) | - | 6,332 | ||||||||||||||||||
Income tax | - | - | - | - | - | ||||||||||||||||||||
Net income/(loss) | $ | 20,795 | $ | (9,330 | ) | $ | (5,133 | ) | $ | - | $ | 6,332 | |||||||||||||
Accounting & Corporate Services | Corporate Restructuring & Insolvency | Multi-Disciplinary Advisory | Corporate & Other Income | Total | |||||||||||||||||||||
Inter-group Re-allocation | |||||||||||||||||||||||||
Total assets | $ | 1,905,154 | $ | 1,650,765 | $ | 780,130 | $ | (879,109 | ) | $ | - | $ | 3,456,940 | ||||||||||||
Total liabilities | $ | 1,947,899 | $ | 1,687,802 | $ | 1,387,332 | $ | (879,109 | ) | $ | - | $ | 4,143,924 | ||||||||||||
Acquisition_of_Business_Tables
Acquisition of Business (Tables) | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
The value of Vantage Advisory | ' | ||||
he following table summarizes the estimated fair values of tangible assets acquired and liabilities assumed as of the date of the Merger: | |||||
Assets/(liabilities) | |||||
Cash | $ | 16,189 | |||
Account receivables | 89,685 | ||||
Accrual and other payables | (17,544 | ) | |||
Tax payables | (25,469 | ) | |||
Due to a related party | (22,504 | ) | |||
Total identifiable net assets | $ | 40,357 | |||
Goodwill | 475,605 | ||||
Consideration | $ | 515,962 |
Cash_Tables
Cash (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Cash represents cash in bank and cash on hand | ' | ||||||||
Cash represents cash in bank and cash on hand. Cash as of November 30, 2013 and August 31, 2013 consists of the following: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Bank balances and cash | $ | 471,625 | $ | 164,314 |
Due_From_A_Related_Party_Table
Due From A Related Party (Tables) | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Due to shareholders | ' | ||||
The activity for such amounts due to shareholders for the period/year ended November 30, 2013 and August 31, 2013 is as follows: | |||||
November 30, | |||||
2013 | |||||
(Unaudited) | |||||
Balance due from a related party at beginning of year | $ | 418,658 | |||
Amount repaid by her during the period | (209,601 | ) | |||
Exchange alignment | (136 | ) | |||
Balance due from a related party at end of period | $ | 208,921 | |||
August 31, | |||||
2013 | |||||
Balance due from a related party at beginning of year | $ | 241,036 | |||
Amount repaid/advanced to her during the year | 4,831,702 | ||||
Amount repaid by her during the year | (4,655,559 | ) | |||
Exchange alignment | 1,479 | ||||
Balance due from a related party at end of year | $ | 418,658 |
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Property and equipment, net | ' | ||||||||
Property and equipment, net consist of the following: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Investment property | $ | 1,909,061 | $ | 1,909,062 | |||||
Leasehold improvement | 103,896 | 85,345 | |||||||
Furniture and fixtures | 5,632 | 5,632 | |||||||
Office equipment | 6,730 | 6,730 | |||||||
Motor vehicle | 145,406 | 145,407 | |||||||
2,170,725 | 2,152,176 | ||||||||
Less: Accumulated depreciation | (89,783 | ) | (63,486 | ) | |||||
$ | 2,080,942 | $ | 2,088,690 | ||||||
Assets_Held_Under_Capital_Leas1
Assets Held Under Capital Leases (Tables) | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Minimum lease payments required under the capital leases | ' | ||||
The future minimum lease payments required under the capital leases and the present value of the net minimum lease payments as of November 30, 2013, are as follows: | |||||
Amount | |||||
Year ending August 31, | |||||
2014 (Nine months) | $ | 22,488 | |||
2015 | 27,345 | ||||
2016 | 27,345 | ||||
2017 | 27,345 | ||||
2018 | 10,752 | ||||
Thereafter | - | ||||
Total minimum lease payment | 115,275 | ||||
Less: Imputed interest | (9,041 | ) | |||
Present value of net minimum lease payments | 106,234 | ||||
Less: Current maturities of capital leases obligations | (23,775 | ) | |||
Long-term capital leases obligations | $ | 82,459 | |||
Intangible_Asset_Tables
Intangible Asset (Tables) | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Intangible Asset Tables | ' | ||||
Amortization payment schedule | ' | ||||
Amortization expenses for the three months ended November 30, 2013 is $49,013 and 2012 is $44,875. The future amortization as of August 31 will be as follows: | |||||
Amount | |||||
Year ending August 31, | |||||
2014 (Nine months) | $ | 164,452 | |||
2015 | 219,270 | ||||
2016 | 87,063 | ||||
2017 | 116,084 | ||||
2018 | 73,520 | ||||
Thereafter | 245,125 | ||||
$ | 905,514 |
Income_Taxes_Expenses_Tables
Income Taxes Expenses (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Income tax expenses | ' | ||||||||
The Company's income tax for the three months ended November 30, 2013 and 2012 can be reconciled to the income before income tax expenses in the statement of operations as follows: | |||||||||
For the three months ended November 30, 2013 | For the three months ended November 30, 2012 | ||||||||
Profit before tax | $ | 375,028 | $ | 6,332 | |||||
Expected Hong Kong income tax expense | |||||||||
at statutory tax rate of 16.5% | 15,470 | 1,044 | |||||||
Temporary difference | (2,121 | ) | (1,044 | ) | |||||
Actual income tax expense | $ | 13,349 | $ | - | |||||
Deferred tax assets and liabilities | ' | ||||||||
Significant components of the Company’s deferred tax assets and liabilities are as follows: | |||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Deferred tax asset: | |||||||||
Unrecognized tax losses | $ | - | $ | - | |||||
Deferred tax liability: | |||||||||
Difference between book and tax depreciation | $ | - | $ | 2,340 | |||||
Bank_Loans_Tables
Bank Loans (Tables) | 3 Months Ended | |||||||||||
Nov. 30, 2013 | ||||||||||||
Notes to Financial Statements | ' | |||||||||||
Schedule Of Bank Loans | ' | |||||||||||
The details of the bank loans outstanding as of November 30, 2013 (unaudited) are as follows: | ||||||||||||
Name of bank | Outstanding loan amount | Current annualized interest rate | Nature of loans | Term of loans | Collateral | |||||||
Shanghai Commercial Bank ("SCB") | US$936,258 | SCB annual rate of 3% | Term loan | January 30, 2012 to December 31, 2035 | Property and personal guarantee from related party and third party | |||||||
(HK$7,258,338) | ||||||||||||
Hang Seng Bank ("HSB") | US$125,664 | HSB monthly rate of 0.38% | Term loan | June 27, 2012 to June 26, 2017 | Property and personal guarantee from related party and third party | |||||||
(HK$974,208) | ||||||||||||
Hitachi Capital (HK) Ltd ("HC") | US$2,539 | HC annual rate of 6.98% | Term loan | June 29, 2012 to November 25, 2013 | Personal guarantee from related party | |||||||
(HK$19,688) | ||||||||||||
DBS | US$1,191,681 | DBS annual rate of 2.75% | Term loan | November 12, 2012 to 12 October, 2037 | Property and personal guarantee from related party | |||||||
(HK$9,238,510) | ||||||||||||
$ | 2,256,142 | |||||||||||
The details of the bank loans outstanding as of August 31, 2013 are as follows: | ||||||||||||
Name of bank | Outstanding loan amount | Current annualized interest rate | Nature of loans | Term of loans | Collateral | |||||||
Shanghai Commercial Bank ("SCB") | US$943,651 | SCB annual rate of 3% | Term loan | January 30, 2012 to December 31, 2035 | Property and personal guarantee from related party and third party | |||||||
(HK$7,315,652) | ||||||||||||
Hang Seng Bank ("HSB") | US$136,863 | HSB monthly rate of 0.38% | Term loan | June 27, 2012 to June 26, 2017 | Property and personal guarantee from related party and third party | |||||||
(HK$1,061,028) | ||||||||||||
Hitachi Capital (HK) Ltd ("HC") | US$5,573 | HC annual rate of 6.98% | Term loan | June 29, 2012 to November 25, 2013 | Personal guarantee from related party | |||||||
(HK$43,204) | ||||||||||||
DBS | US$1,200,698 | DBS annual rate of 2.75% | Term loan | November 12, 2012 to 12 October, 2037 | Property and personal guarantee from related party | |||||||
(HK$9,308,419) | ||||||||||||
$ | 2,286,785 | |||||||||||
Schedule Bank loans repayment | ' | |||||||||||
Bank loans repayment schedule is as follows: | ||||||||||||
November 30, | August 31, | |||||||||||
2013 | 2013 | |||||||||||
Year ending August 31, | ||||||||||||
2014 (Nine months) | 76,905 | 107,548 | ||||||||||
2015 | 114,303 | 114,303 | ||||||||||
2016 | 118,253 | 118,253 | ||||||||||
2017 | 90,382 | 90,382 | ||||||||||
2018 | 79,363 | 79,363 | ||||||||||
Thereafter | 1,776,936 | 1,776,936 | ||||||||||
$ | 2,256,142 | $ | 2,286,785 |
Deferred_Revenue_Tables
Deferred Revenue (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Deferred Revenue | ' | ||||||||
November 30, | August 31, | ||||||||
2013 | 2013 | ||||||||
Deferred revenue – current portion | $ | 145,114 | $ | 145,114 | |||||
Deferred revenue – net of current portion | 399,065 | 435,343 | |||||||
$ | 544,179 | $ | 580,457 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Significant operating expenses | ' | ||||||||
Significant operating expenses arising from transaction with a related company was as follows. | |||||||||
For the three months ended November 30, 2013 | For the three months ended November 30, 2012 | ||||||||
Sub-contracting fee | 24,935 | 107,534 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||
Nov. 30, 2013 | |||||
Notes to Financial Statements | ' | ||||
Minimum lease payments under non-cancellable operating leases | ' | ||||
Period Ended November 30, | Rental | ||||
2014 (Nine months) | $ | 100,191 | |||
2015 | 94,206 | ||||
2016 | - | ||||
2017 | - | ||||
2018 | - | ||||
Over five years | - | ||||
$ | 194,397 | ||||
Revenue under non-cancellable agreement | ' | ||||
Period Ended November 30, | Revenue | ||||
2014 (Nine months) | $ | 108,836 | |||
2015 | 145,114 | ||||
2016 | 145,114 | ||||
2017 | 145,115 | ||||
2018 | - | ||||
Over five years | - | ||||
$ | 544,179 |
Description_of_Business_and_Or2
Description of Business and Organization (Details) | 3 Months Ended |
Nov. 30, 2013 | |
Almond Kisses Limited "Almond Kisses" [Member] | ' |
Place and date of incorporation | 'British Virgin Island, March 1, 2011 |
Percentage of ownership by the Company | 100.00% |
Principal activities | 'Holding company |
ADGS Advisory Limited [Member] | ' |
Place and date of incorporation | 'Hong Kong, People's Republic of China (BPRCB), April 28, 2011 |
Percentage of ownership by the Company | 100.00% |
Principal activities | 'Engage in providing accounting, taxation, company secretarial, and consultancy services. |
ADGS Tax Advisory Limited [Member] | ' |
Place and date of incorporation | 'Hong Kong, PRC, March 17, 2003 |
Percentage of ownership by the Company | 80.00% |
Principal activities | 'Holding company |
Dynamic Golden Limited [Member] | ' |
Place and date of incorporation | 'Hong Kong, PRC, April 16, 2004 |
Percentage of ownership by the Company | 30.00% |
Principal activities | 'Property holding company |
Vantage Advisory Limited [Member] | ' |
Place and date of incorporation | 'Hong Kong, PRC, March 6, 2008 |
Percentage of ownership by the Company | 100.00% |
Principal activities | 'Engage in providing accounting, taxation, company secretarial, and consultancy services. |
Motion Tech Development Limited [Member] | ' |
Place and date of incorporation | 'British Virgin Islands, October 3, 2007 |
Percentage of ownership by the Company | 100.00% |
Principal activities | 'Property holding company |
T H Strategic Management [Member] | ' |
Place and date of incorporation | 'Hong Kong, PRC March 16, 2010 |
Percentage of ownership by the Company | 100.00% |
Principal activities | 'Engage in providing accounting, taxation, company secretarial, and consultancy services. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | |
Notes to Financial Statements | ' | ' | ' |
Balance sheet items, except for equity accounts | 'HK$7.7525= | ' | 'HK$7.7525= |
Items in statements of income and cash flows | 'HK$7.7530= | 'HK$7.7554= | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended |
Nov. 30, 2013 | |
Investment property [Member] | ' |
Property, Plant and Equipment, Estimated Life | 'Over the unexpired term of the lease |
Leasehold improvement [Member] | ' |
Property, Plant and Equipment, Estimated Life | '5 years |
Furniture and Fixtures [Member] | ' |
Property, Plant and Equipment, Estimated Life | '5 years |
Office Equipment [Member] | ' |
Property, Plant and Equipment, Estimated Life | '5 years |
Motor vehicles [Member] | ' |
Property, Plant and Equipment, Estimated Life | '5 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | |
Notes to Financial Statements | ' | ' |
Working capital deficit | $233,445 | ' |
Interest of ADGS Tax not owned by Almonds Kisses | 20.00% | ' |
Retirement schemes expenses | $13,818 | $9,159 |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | |||
Nov. 30, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | ||
Segment revenue | ' | ' | ' | |
Revenue from external customer | $1,126,764 | $609,599 | [1] | ' |
Cost of sales | -543,959 | -363,431 | [1] | ' |
Administrative expense | -214,281 | -210,409 | [1] | ' |
Gross (profit) / loss | 368,524 | 35,759 | [1] | ' |
Other income | 34,788 | ' | ' | |
Finance cost | -28,284 | -29,427 | [1] | ' |
Income before income taxes | 375,028 | 6,332 | ' | |
Income tax | -13,349 | ' | [1] | ' |
Net income | 361,679 | 6,332 | [1] | ' |
Total assets | 5,681,959 | 3,456,940 | 4,765,877 | |
Total liabilities | 5,393,206 | 4,143,924 | 4,844,725 | |
Accounting & Corporate Services [Member] | ' | ' | ' | |
Segment revenue | ' | ' | ' | |
Revenue from external customer | 279,642 | 286,549 | ' | |
Cost of sales | -167,697 | -153,016 | ' | |
Administrative expense | -53,180 | -98,905 | ' | |
Gross (profit) / loss | 58,765 | 34,628 | ' | |
Other income | 8,634 | ' | ' | |
Finance cost | -7,019 | -13,833 | ' | |
Income before income taxes | 60,380 | 20,795 | ' | |
Income tax | -3,313 | ' | ' | |
Net income | 57,067 | 20,795 | ' | |
Total assets | 1,234,312 | 1,905,154 | ' | |
Total liabilities | 895,340 | 1,947,899 | ' | |
Corporate Restructuring & Insolvency [Member] | ' | ' | ' | |
Segment revenue | ' | ' | ' | |
Revenue from external customer | 24,524 | 248,287 | ' | |
Cost of sales | -27,804 | -159,933 | ' | |
Administrative expense | -4,664 | -85,699 | ' | |
Gross (profit) / loss | -7,944 | 2,655 | ' | |
Other income | 757 | ' | ' | |
Finance cost | -616 | -11,985 | ' | |
Income before income taxes | -7,803 | -9,330 | ' | |
Income tax | -291 | ' | ' | |
Net income | -8,094 | -9,330 | ' | |
Total assets | 99,433 | 1,650,765 | ' | |
Total liabilities | 73,788 | 1,687,802 | ' | |
Multi-Disciplinary Advisory [Member] | ' | ' | ' | |
Segment revenue | ' | ' | ' | |
Revenue from external customer | 822,598 | 74,763 | ' | |
Cost of sales | -348,458 | -50,482 | ' | |
Administrative expense | -156,437 | -25,805 | ' | |
Gross (profit) / loss | 317,703 | -1,524 | ' | |
Other income | 25,397 | ' | ' | |
Finance cost | -20,649 | -3,609 | ' | |
Income before income taxes | 322,451 | -5,133 | ' | |
Income tax | -9,745 | ' | ' | |
Net income | 312,706 | -5,133 | ' | |
Total assets | 2,838,623 | 780,130 | ' | |
Total liabilities | 2,696,894 | 1,387,332 | ' | |
Corporate & Other Income [Member] | ' | ' | ' | |
Segment revenue | ' | ' | ' | |
Revenue from external customer | ' | ' | ' | |
Cost of sales | ' | ' | ' | |
Administrative expense | ' | ' | ' | |
Gross (profit) / loss | ' | ' | ' | |
Other income | ' | ' | ' | |
Finance cost | ' | ' | ' | |
Income before income taxes | ' | ' | ' | |
Income tax | ' | ' | ' | |
Net income | ' | ' | ' | |
Total assets | 1,509,519 | ' | ' | |
Total liabilities | 1,727,184 | ' | ' | |
Inter-group Re-allocation [Member] | ' | ' | ' | |
Segment revenue | ' | ' | ' | |
Total assets | ' | -879,109 | ' | |
Total liabilities | ' | ($879,109) | ' | |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Acquisition_of_Subsidiary_Deta
Acquisition of Subsidiary (Details) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Notes to Financial Statements | ' | ' |
Cash | $16,189 | ' |
Account receivables | 89,685 | ' |
Accrual and other payables | -17,544 | ' |
Tax payables | -25,469 | ' |
Due to a related party | -22,504 | ' |
Total identifiable net assets | 40,357 | ' |
Goodwill | 475,605 | ' |
Consideration | $515,962 | ' |
Cash_Details
Cash (Details) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 | Nov. 30, 2012 | |
Notes to Financial Statements | ' | ' | ' | |
Bank balances and cash | $471,625 | $164,314 | $171,819 | [1] |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Restricted_Cash_Details_Narrat
Restricted Cash (Details Narrative) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Notes to Financial Statements | ' | ' |
Restricted cash | $129,604 | $129,312 |
Due_From_A_Related_Party_Detai
Due From A Related Party (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2013 | Aug. 31, 2012 | |
Notes to Financial Statements | ' | ' |
Balance due from a related party at beginning of year | $418,658 | $241,036 |
Amount repaid/advanced to her during the year | ' | 4,831,702 |
Amount repaid by her during the year | -209,601 | -4,655,559 |
Exchange alignment | -136 | 1,479 |
Balance due from a related party at end of year | $208,921 | $418,658 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | $2,170,725 | $2,152,176 |
Less: Accumulated depreciation | -89,783 | -63,486 |
Property Plant and Equipment, Net | 2,080,942 | 2,088,690 |
Investment property [Member] | ' | ' |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | 1,909,061 | 1,909,062 |
Leasehold Improvement | ' | ' |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | 103,896 | 85,345 |
Furniture and Fixtures [Member] | ' | ' |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | 5,632 | 5,632 |
Office Equipment [Member] | ' | ' |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | 6,730 | 6,730 |
Motor Vehicles | ' | ' |
Property Plant And Equipment | ' | ' |
Total Property Plant and Equipment | $145,406 | $145,407 |
Property_and_Equipment_Net_Det1
Property and Equipment, Net (Details Narrative) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | ||
Notes to Financial Statements | ' | ' | |
Depreciation expense | $25,818 | $6,285 | [1] |
Net carrying amounts under capital leases | 112,913 | 21,025 | |
Depreciation charge for vehicles | $7,270 | $1,402 | |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Assets_Held_Under_Capital_Leas2
Assets Held Under Capital Leases (Details) (USD $) | Nov. 30, 2013 |
Notes to Financial Statements | ' |
2014 (Nine months) | $22,488 |
2015 | 27,345 |
2016 | 27,345 |
2017 | 27,345 |
2018 | 10,752 |
Thereafter | ' |
Total minimum lease payment | 115,275 |
Less: Imputed interest | -9,041 |
Present value of net minimum lease payments | 106,234 |
Less: Current maturities of capital leases obligations | -23,775 |
Long-term capital leases obligations | $82,459 |
Assets_Held_Under_Capital_Leas3
Assets Held Under Capital Leases (Details Narrative) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Property and equipment | ($89,783) | ($63,486) |
Intangible_Asset_Details
Intangible Asset (Details) (USD $) | Nov. 30, 2013 |
Intangible Asset Details | ' |
2014 (Nine months) | $164,452 |
2015 | 219,270 |
2016 | 87,063 |
2017 | 116,084 |
2018 | 73,520 |
Thereafter | 245,125 |
Total Amortization | $905,514 |
Intangible_Asset_Details_Narra
Intangible Asset (Details Narrative) | 3 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | |
Notes to Financial Statements | ' | ' |
Amortization expenses | '49,013 | '44,875 |
Amortized of intangible assets are using the straight line method over a period | '10 years | ' |
Income_Taxes_Expenses_Details
Income Taxes Expenses (Details) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | ||
Notes to Financial Statements | ' | ' | |
Profit before tax | $375,028 | $6,332 | [1] |
Expected Hong Kong income tax expense at statutory tax rate of 16.5% | 15,470 | 1,044 | |
Temporary difference | -2,121 | -1,044 | |
Actual income tax expense | $13,349 | ' | [1] |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Income_Taxes_Expenses_Details_
Income Taxes Expenses (Details 1) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Deferred tax asset: | ' | ' |
Unrecognized tax losses | ' | ' |
Deferred tax liability: | ' | ' |
Difference between book and tax depreciation | ' | $2,340 |
Income_Taxes_Expenses_Details_1
Income Taxes Expenses (Details Narrative) (USD $) | 3 Months Ended | |||
Nov. 30, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | ||
Expected income tax expense, statutory tax rate | 16.50% | 16.50% | ' | |
Provision for tax | $13,349 | ' | [1] | ' |
Deferred tax asset | 0 | ' | 0 | |
ADGS Advisory Limited [Member] | ' | ' | ' | |
Provision for tax | 12,955 | 0 | ' | |
ADGS Tax Advisory Limited [Member] | ' | ' | ' | |
Provision for tax | 0 | 0 | ' | |
Vantage Advisory Limited [Member] | ' | ' | ' | |
Provision for tax | 0 | ' | ' | |
T H Strategic Management Limited [Member] | ' | ' | ' | |
Provision for tax | $394 | ' | ' | |
[1] | (A) Represents the consolidated statement of income of Almonds Kisses Limited and subsidiaries (the "Accounting Acquirer") (See note 1) |
Bank_Loans_Details
Bank Loans (Details) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Outstanding Loan Amount | $2,256,142 | $2,286,785 |
Shanghai Commercial Bank 3% [Member] | ' | ' |
Name of bank | 'Shanghai Commercial Bank ("SCB") | 'Shanghai Commercial Bank ("SCB") |
Outstanding Loan Amount | 936,258 | 943,651 |
Current annualized interest rate | 'SCB annual rate of 3% | 'SCB annual rate of 3% |
Nature of loans | 'Term loan | 'Term loan |
Term of loans | 'January 30, 2012 to December 31, 2035 | 'January 30, 2012 to December 31, 2035 |
Collateral | 'Property and personal guarantee from related party and third party | 'Property and personal guarantee from related party and third party |
Hang Seng Bank 0.38% [Member] | ' | ' |
Name of bank | 'Hang Seng Bank ("HSB") | 'Hang Seng Bank ("HSB") |
Outstanding Loan Amount | 125,664 | 136,863 |
Current annualized interest rate | 'HSB monthly rate of 0.38% | 'HSB monthly rate of 0.38% |
Nature of loans | 'Term loan | 'Term loan |
Term of loans | 'June 27, 2012 to June 26, 2017 | 'June 27, 2012 to June 26, 2017 |
Collateral | 'Property and personal guarantee from related party and third party | 'Property and personal guarantee from related party and third party |
Hitachi Capital Ltd 6.98% [Member] | ' | ' |
Name of bank | 'Hitachi Capital (HK) Ltd("HC") | ' |
Outstanding Loan Amount | 2,539 | ' |
Current annualized interest rate | 'HC annual rate of 6.98% | ' |
Nature of loans | 'Term loan | ' |
Term of loans | 'June 29, 2012 to November 25, 2013 | ' |
Collateral | 'Personal guarantee from related party | ' |
DBS Bank 2.75% [Member] | ' | ' |
Name of bank | 'DBS | 'DBS |
Outstanding Loan Amount | 1,191,681 | 1,200,698 |
Current annualized interest rate | 'DBS annual rate of 2.75% | 'DBS annual rate of 2.75% |
Nature of loans | 'Term loan | 'Term loan |
Term of loans | 'November 12, 2012 to 12 October, 2037 | 'November 12, 2012 to 12 October, 2037 |
Collateral | 'Property and personal guarantee from related party | 'Property and personal guarantee from related party |
Hitachi Capital Ltd 6.98% [Member] | ' | ' |
Name of bank | ' | 'Hitachi Capital (HK) Lt ("HC") |
Outstanding Loan Amount | ' | $5,573 |
Current annualized interest rate | ' | 'HC annual rate of 6.98% |
Nature of loans | ' | 'Term loan |
Term of loans | ' | 'June 29, 2012 to November 25, 2013 |
Collateral | ' | 'Personal guarantee from related party |
Bank_Loans_Details_1
Bank Loans (Details 1) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 |
Notes to Financial Statements | ' | ' |
2014 (Nine months) | $76,905 | $107,548 |
2015 | 114,303 | 114,303 |
2016 | 118,253 | 118,253 |
2017 | 90,382 | 90,382 |
2018 | 79,363 | 79,363 |
Thereafter | 1,776,936 | 1,776,936 |
Total Amount | $2,256,142 | $2,286,785 |
Bank_Loans_Details_Narrative
Bank Loans (Details Narrative) (USD $) | 3 Months Ended | |||||||||
Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Aug. 31, 2013 | Nov. 30, 2013 | Aug. 31, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | |
Shanghai Commercial Bank 3% [Member] | Shanghai Commercial Bank 3% [Member] | Hang Seng Bank 0.38% [Member] | Hang Seng Bank 0.38% [Member] | Hitachi Capital Ltd 6.98% [Member] | DBS Bank 2.75% [Member] | DBS Bank 2.75% [Member] | Hitachi Capital Ltd 6.98% [Member] | |||
Current annualized interest rate | ' | ' | 3.00% | 3.00% | 0.38% | 0.38% | 6.98% | 2.75% | 2.75% | 6.98% |
Interest expenses | $14,663 | $29,260 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred_Revenue_Details
Deferred Revenue (Details) (USD $) | Nov. 30, 2013 | Aug. 31, 2013 | Nov. 30, 2012 |
Notes to Financial Statements | ' | ' | ' |
Deferred revenue - current portion | $145,114 | $145,114 | ' |
Deferred revenue - net of current portion | 399,065 | 435,343 | ' |
Deferred revenue | $544,179 | $580,457 | $0 |
Concentrations_of_Risk_Details
Concentrations of Risk (Details Narrative) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2013 | Aug. 31, 2013 | |
Customer | Customer | |
Notes to Financial Statements | ' | ' |
Number of customer accounted for 10% or more of total revenue or total accounts receivable | 0 | 0 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | |
Notes to Financial Statements | ' | ' |
Sub-contracting fee | $24,935 | $107,534 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Nov. 30, 2013 |
Notes to Financial Statements | ' |
2014 (Nine months) | $100,191 |
2015 | 94,206 |
2016 | ' |
2017 | ' |
2018 | ' |
Over five years | ' |
Total future minimum lease payments under non-cancellable operating leases | $194,397 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 1) (USD $) | Nov. 30, 2013 |
Notes to Financial Statements | ' |
2014 (Nine months) | $108,836 |
2015 | 145,114 |
2016 | 145,114 |
2017 | 145,115 |
2018 | ' |
Over five years | ' |
Future minimum revenue | $544,179 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended | ||
Nov. 30, 2013 | Nov. 30, 2012 | Aug. 31, 2013 | |
Notes to Financial Statements | ' | ' | ' |
Provision for claims or contingencies | $0 | ' | $0 |
Rental expense | 42,543 | 40,980 | ' |
Deferred revenue | $544,179 | $0 | $580,457 |