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EX-32.2 - EX 32.2 - VERDE RESOURCES, INC.vrdr_ex322.htm
EX-32.1 - EX 32.1 - VERDE RESOURCES, INC.vrdr_ex321.htm
EX-31.2 - EX 31.2 - VERDE RESOURCES, INC.vrdr_ex312.htm
EX-31.1 - EX 31.1 - VERDE RESOURCES, INC.vrdr_ex311.htm

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-K

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended June 30, 2016

 

or

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from [______] to [______]

 

Commission file number: 000-55276

 

VERDE RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

32-0457838

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

Unit 701, 7/F, The Phoenix, 21-25 Luard Rd, Wanchai, Hong Kong

 

N/A

(Address of principal executive offices)

 

(Zip Code)

 

Registrant's telephone number, including area code: (852) 2152-1223

 

Securities registered pursuant to Section 12(b) of the Act:

 

Securities registered pursuant to Section 12(b)
of the Act:Title of Each Class

 

Name of Each Exchange
On Which Registered

 

 

 

N/A

 

N/A

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value. 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x No o

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration statement was required to submit and post such files). Yes x No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold of $0.05 (or the average bid and asked price of such common equity) as of the last business day of the registrant’s most recently completed second fiscal quarter, being December 31, 2015, was $3,740,308.

 

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.

 

91,288,909 as of September 26, 2016

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 
 
 

TABLE OF CONTENTS

 

 

Page

PART I

 

 

 

 

Item 1.

Business.

3

Item 1A.

Risk Factors.

10

Item 1B.

Unresolved Staff Comments.

14

Item 2.

Properties.

15

Item 3.

Legal Proceedings.

15

Item 4.

Mine Safety Disclosures

15

 

 

 

PART II

 

 

 

 

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

16

Item 6.

Selected Financial Data.

17

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

17

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

20

Item 8.

Financial Statements and Supplementary Data.

21

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

22

Item 9A.

Controls and Procedures.

22

Item 9B.

Other Information.

22

 

 

 

PART III

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance.

23

Item 11.

Executive Compensation.

25

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

26

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

27

Item 14.

Principal Accounting Fees and Services.

27

 

 

 

PART IV

 

 

 

 

Item 15.

Exhibits.

28

 

 

 

 

Signatures.

30

 

 
2

 

Part I

 

Cautionary Note Regarding Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections "Business," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." You should carefully review the risks described in this Annual Report on Form 10-K and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

All references in this Form 10-K to the "Company," "Verde," "we," "us" or "our" are to Verde Resources, Inc.

 

Item 1. Business.

 

Overview

 

Verde Resources, Inc. (the "Company" or "VRDR") was incorporated in the State of Nevada on April 22, 2010. The Company conducts business operations in Pahang Malaysia through Champmark Sdn Bhd ("CSB"), a privately limited liability company incorporated in Malaysia, which is a deemed subsidiary under the management control of our 100% subsidiary Gold Billion Global Limited ("GBL"), a company incorporated under the laws of the British Virgin Islands.

 

On October 25, 2013, we entered into an Assignment Agreement For the Assignment of Management Right in Merapoh Gold Mines in Malaysia ("Assignment Agreement") with Federal Mining Resources Limited ("FMR"), a company incorporated under the laws of the British Virgin Islands.

 

FMR owns 85% equity interest in CSB, a privately limited liability company incorporated in Malaysia. CSB is the Mining Contractor of the Mining Lease for Site IV-1 at the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit Holder of the Mining Lease.

 

Under the terms of the Assignment Agreement, FMR has assigned its management rights of CSB's mining operation in the Mining Lease to the Company, through its wholly-owned subsidiary Gold Billion Global Limited ("GBL"), in exchange for 80,000,000 shares of the Company's common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition.

 

GBL was formed on February 7, 2013, by the Board of Directors of FMR to monitor the CSB operation. The acquisition of 100% of the issued and outstanding capital stock of GBL was agreed upon on October 18, 2013, and completed on October 25, 2013, subject to the approval of the Board of Directors and the audit of GBL.

 

On February 17, 2014, we entered into a Supplementary Agreement to the Assignment Agreement and completed a reverse acquisition of GBL pursuant to the Supplementary Agreement. As a result of the acquisition, the Company holds 100% equity interest in GBL and 85% variable interest in CSB. Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL. On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

 

 
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Corporate History and Structure

 

Verde Resources, Inc. was incorporated on April 22, 2010, in the State of Nevada, U.S.A. On October 17, 2013, Stephen Spalding and Michael Stiege resigned from all of their positions as officers and directors of the Company that complies with the requirements of Section 14f-1 of the Exchange Act. The following persons were appointed to serve as directors and to assume the responsibilities of officers on October 17, 2013. Mr. Wu Ming Ding, as President and Director; Mr. Balakrishnan B S Muthu as Treasurer Chief Financial Officer, General Manager and Director; and Mr. Liang Wai Keen as Secretary. Mr. Wu and Mr. Muthu were added to the Board of Directors.

 

On October 17, 2013, the Company provided written notice to Gold Explorations, LLC, that the Purchase Agreement dated May 17, 2010, amended February 8, 2012, and further amended May 17, 2013 (the "Purchase Agreement"), has been cancelled according to the terms of the Purchase Agreement. By providing this notification, the Company has no further obligations under the Purchase Agreement and has released any interest in the mineral claims located in Esmeralda County, Nevada.

 

On April 1, 2014, the Board of Directors of Gold Billion Global Limited ("GBL") notified Federal Mining Resources Limited ("FMR") upon the decision to exercise the right of option to purchase 85% equity interest of Champmark Sdn Bhd ("CSB") under Management Agreement Section 3.2.4 dated July 1, 2013, between GBL and FMR. This acquisition was completed on April 1, 2014, with consideration of US$1, and GBL then became 85% shareholder of CSB.

 

Effective August 27, 2014, the Company's Articles of Incorporation were amended to increase the authorized shares of the Company from 100,000,000 shares of common stock to 250,000,000 shares of common stock.

 

Effective February 20, 2016, Mr. Wu Ming Ding resigned all of his positions as President and Director of the Company with Mr. Balakrishnan B S Muthu being appointed President to fill the vacancy created. Effective February 20, 2016, Mr. Chen Ching was appointed Director of the Company and the entire Board of Directors now consists of Mr. Balakrishnan B S Muthu and Mr. Chen Ching.

 

The following diagram illustrates our current corporate structure:

 

According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where GBL controls the Board of Directors of CSB, rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB. GBL has the power to direct the activities of CSB that most significantly impact CSB's economic performance and the obligation to absorb losses of CSB that could potentially be significant to the CSB or the right to receive benefits from CSB that could potentially be significant to CSB. GBL is the primary beneficiary of CSB because GBL can direct the activities of CSB through the common directors and 85% shareholder FMR. Under 810-23-42, 43, it is determined that CSB is de-facto agent of the principal GBL and so GBL will consolidate CSB from July 1, 2013. On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

 

 
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Contractual Arrangements

 

Our exploration and mining business is currently provided through contractual arrangements with CSB through our wholly-owned subsidiary GBL.

 

CSB, the VIE of GBL, sells gold minerals directly to the registered gold trading company in Malaysia. We have been and are expected to continue to be dependent on our VIE to operate our exploration and mining business. GBL has entered into contractual arrangements with its VIE, which enable us to exercise effective control over the VIE, receive substantially all of the economic benefits from the VIE, and have the option to purchase equity interests in the VIE.

 

On July 1, 2013, the Company's subsidiary GBL entered into a series of agreements ("VIE agreements") with FMR and details of the VIE agreements are as follows :

 

 

1.

Management Agreement, FMR entrusted the management rights of its subsidiary CSB to GBL that include:

 

i.)

management and administrative rights over the day-to-day business affairs of CSB and the mining operation at Site IV-1 of the Merapoh Gold Mine;

 

ii.)

final right for the appointment of members to the Board of Directors and the management team of CSB;

 

iii.)

act as principal of CSB;

 

iv.)

obligation to provide financial support to CSB;

 

v.)

option to purchase an equity interest in CSB;

 

vi.)

entitlement to future benefits and residual value of CSB;

 

vii.)

right to impose no dividend policy;

 

viii.)

human resources management.

 

 

 

2.

Debt Assignment, FMR assigned to GBL the sum of money in the amount of three hundred nine thousand three hundred thirty one dollars and ninety-two cents (US$ 309,331.92), now due to GBL from CSB under the financing obligation from the FMR to CSB.

 

With the above agreements, GBL demonstrates its ability to control CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements for the year ended June 30, 2014.

 

CSB holds the operating right to Merapoh Gold Mine (the "Mine") with all regulatory and government operating licenses in Malaysia.

 

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

 

Stage Of Operation

 

The Company does not own any title and/or concession right in any mines. The Company is undertaking natural mineral resource extraction management services. The Company expects to hire a mine management team to supervise the mineral resource extraction activities to ensure that the operations can be carried out without significant problems.

 

According to the United States Industry Guide 7 (a) (4) on mining operations, the Merapoh Gold Mine is currently in the production stage because the mine has produced approximately 30 kilograms of gold from July 2015 to June 2016. According to the ASC 930-330-20 Glossary, the production phase is defined as "when saleable minerals are extracted (produced) from an ore body, regardless of the level of production". However, the production is limited to a small part of the site, and extraction is alluvial gold only. The objective of the Company is preparing to improve the productivity of the mines to ensure that the operation will be carried out effectively and efficiently at minimum cost.

 

 
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Table of Contents

 

Current Mining Property and Location

 

Merapoh Gold Mine (the "Mine")

 

The Merapoh Gold Mine is located in northern Pahang, with convenient road access through Kelantan directly to the mine site and is about 400 kilometers away from Kuala Lumpur. The Mine is located in the middle of Malaysia's gold metallogenic belt. The central gold belt is the source of the majority of the gold deposits in the peninsula. It lies between the western and eastern tin belts and extends from Kelantan (Sungai Pergau, Sungai Galas) to Pahang (Merapoh, Kuala Lipis, Raub), Terengganu (Lubuk Mandi), Negri Sembilan and Johor (Gunung Ledang).

 

Mine Area:

 

Site IV-1 of the Merapoh Gold Mine consists of a mining area of 400 acres with mining lease.

 

Location and Access:

 

The Merapoh Gold Mine is about 280km from Kuala Lumpur, and 50km from Kuala Lipis, the former state capital of Pahang, accessible via secondary paved highways with a new major highway under construction expected to be complete d in 2018. The geological coordinates of the mine are 101 ° 58 ′ , 4 ° 35 ′ ,

 

 
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Type of Claim:

 

Champmark Sdn Bhd, the subsidiary of Gold Billion Global Limited, is the Mining Contractor of the Mining Lease for Site IV-1 of the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit Holder of the Mining Lease.

 

Identifying Information of the Merapoh Gold Mine:

 

Mining Right:

Mining Lease No.: ML 08/2008

Operational Mining Scheme No.: JMG.PHG.(M)24/2014/11(Au)

Concession Period: From April 4, 2014 to April 3, 2015

 

Regional Geology:

 

The Malaysia Central Gold Belt runs along the entire backbone of Peninsular Malaysia, extending further to the north. It was formed between the Sibumasu block in the west and Manabor block in the east that runs along major mineral deposits in Thailand, Myanmar and China. The regional gold deposits were made of Epithermal deposits that formed in a series of volcanic environment, where the tensional fractures along the subduction zone allows the intrusion of mineral rich acidic magma within deep faults.

 

Rock Formations and Mineralization:

 

Site IV-1 of the Merapoh Gold Mine covers an area of 400 acres with mineralization structure being Permian limestone dominating the South-East portion, felsic volcanic tuff in the Western portion of the area and intrusive dacite rock to the north-west of the area. Tectonic contact within the sheer zone of creates epithermal mineralization, forming mineral rich vein along the contact zone. The mineralized zone is made of highly altered tuffacaous rock with abundant pyrite dissemination and moderately spaced quartz vein.

 

Work Completed and Present Condition:

 

Lode gold exploration on Site IV-1 has commenced since 2011 and still in progress with both in-house drilling team and third party drilling services running in parallel to expedite data collection to generate a comprehensive JORC compliant gold reserve report.

 

Equipment, Infrastructure and Other Facilities of the Merapoh Gold Mine:

 

Parlongs

These are basic production plants and the processing method employed five high powered manual water guns, angled water buffering control and 5-lane carpeted sluice with lateral barriers. The processing capacity is between 40 - 45 tons per hour.

 

OPS 1

This is a modified production plant and the processing method employed four high powered manual water guns, tapered rotating screen scrubber, angled water flow buffering and 3-lane carpeted sluice with lateral barriers. The processing capacity is between 30 - 35 tons per hour.

 

GS 150

This is a non-self-propelled mobile production plant and the processing method employed fixed spray guns, 6m x 2m rotating screen scrubber, 6-lane carpeted sluice with lateral barriers and conveyer belt pebble dispenser. The processing capacity is between 25 - 30 tons per hour.

 

GS 120

This is a self-propelled mobile plant with concentrator and the processing method employed fixed spray guns, 4m x 3m rotating screen scrubber, fixed screen, conveyer belt pebble dispenser and triple concentrator processor. The processing capacity is between 15 - 20 tons per hour.

 

 
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Description of Processing Facilities:

 

Process for removing ore concentrates from the ore body

 

1.

The ore body is transported to the treatment plants in vehicles capable of hauling huge, heavy loads.

2.

The ore body is separated into Ore Type 1 Stockpile and Ore Type 2 Stockpile.

3.

The monitor washes finer gold bearing material off larger rocks which is screened on an inclined coarse wire screen.

4.

An excavator is used to turn over the rocks so wash is removed from all sides of the coarse material.

5.

A monitor pushes the rock down the inclined coarse screen where the course is removed and stockpiled at the bottom.

6.

Finer material passes through the mesh screen into the sluice system and runs over the sluice.

7.

The carpets are removed and taken to refining facility for gold recovery.

8.

A suction pipe recovers water of the fine tailings pond for use in the system.

 

Refining of the concentrate

 

1.

The carpets holding concentrate from the sluice are brought to a shed in the camp site where the gold is refined.

2.

The first stage of the refining is to wash the gold containing concentrate into large bins. This is pumped to a jig and shaking table.

3.

Nuggets are handpicked from the coarse fraction and the fine fraction is amalgamated to remove the gold. After distillation, gold from the amalgam and the coarse are melted with flux and the gold is poured into small bars.

 

Current State of Exploration:

 

As of the date of this report, the Merapoh Gold Mine property is without known reserves.

 

The Merapoh Gold Mine commenced exploratory operation in alluvia mining and achieved its first gold pour in July 2011. Through the years of operation, the Company has performed ongoing exercises to improve upon the matching of processing method with the types of ore in order to optimize cost to recovery ratio. In July 2013, production was outsourced to a reputable subcontractor, and developed a resource management system to match ore against processes to achieve the most cost efficient and highest recovery production procedure.

 

 
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Table of Contents

 

Gold ore extraction of the Merapoh Gold Mine for the twelve months ended June 30, 2016, was approximately 285,745 tons of gold ore or a monthly average of 23,812 tons (using a 12-month average), with an average gold grade of 0.106 g/t. Gold concentrate sold for the twelve months ended June 30, 2016, was approximately 27.47 kg. The production level, in units of daily tonnage of raw mineral rocks extracted, averaged 783 tons/day (12-month average) during the fiscal year 2016.

 

The Merapoh Gold Mine is currently at the production stage. In the effort to expand production capacity, the Company intends to purchase more vehicles, machineries and equipment as well as to conduct feasibility studies for exploration of alluvial and lode gold resources.

 

Subcontractors

 

In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd ("CSB") entered into an Operation Term Sheet ("OTS") agreement in July 2013 to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a third party subcontractor Borneo Oil & Gas Corporation Sdn Bhd ("BOG"). However, BOG became the Company's shareholder in January 29, 2014 and was no longer a third party subcontractor.

 

BOG has the experience and local knowledge in managing the exploitation of alluvial gold at the Merapoh Gold Mine. The Company currently intends to continue to outsource the exploitation of alluvial gold at our mine site to BOG as our third party subcontractor. The Company will provide necessary disclosure when any significant agreements have been made with the sub-contractor in the future.

 

Number of Employees

 

The Company had 3 employees during the year from July 1, 2015 to June 30, 2016.

 

Reports to Security Holders

 

The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company files its reports electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other electronic information regarding New Media and filed with the SEC at http://www.sec.gov.

 

Change of Control

 

On October 25, 2013, the Company entered into an Assignment Agreement for the Assignment of Management Right ("AAMA") in Merapoh Gold Mines in Malaysia with Federal Mining Resources Limited ("FMR"). Under the terms of the Agreement and relevant subsequent Supplemental Agreement, FMR assigned its management rights to the Company Board of Directors of FMR agreed to transfer 1 share common stock of Gold Billion Global Limited ("GBL") which represented all shares of common stock of GBL owned by the Investor, and the Company's Board of Directors agreed to issue 80,000,000 million shares of common stock in full value as consideration. At the time of closing under the AAMA, the Investor transferred 100% ownership of GBL shares to the Company, and the Company issued 80,000,000 million shares of common stock to the shareholders of FMR in exchange for the GBL Shares. The effect of the transaction was to make GBL and its deemed subsidiaries become wholly-owned and 85.00% owned subsidiaries of the Company, and to cause a change of control of GBL. Following the closing, there was a change of control in the Company.

 

The Transaction was accounted for as a "reverse merger," since FMR owned a majority of the outstanding shares of VRDR's common stock immediately following the execution of the transaction. The Company was deemed to be the accounting acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations that were reflected in the financial statements for periods prior to the transaction were those of the Company and its deemed subsidiaries, and were recorded at the historical cost basis of the Company. After completion of the transaction, the Company's consolidated financial statements were include the assets and liabilities of the Company and its subsidiaries, the historical operations of the Company and its subsidiaries, and the operations of the Company and its subsidiaries from the closing date of the transaction.

 

 
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Item 1A. Risk Factors

 

Risks Associated With Verde Resources, Inc.

 

We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.

 

Messrs. Balakrishnan Muthu, our current principal executive officer and financial officer, has extensive contacts and experience in the gold exploration and natural resource industry in Malaysia, and we are dependent upon his abilities and services to develop and market our business. He is responsible for overseeing all of our day-to-day business operations of our operating company, CSB, and its subsidiaries and VIEs, including the mining operations and negotiations for the sales of any gold concentrates extracted. We may not be able to retain the executive officers/managers for any given period of time. The loss of their services could have a material adverse effect upon our business operations, financial condition and results of operations. In addition, we must attract, recruit and retain a sizeable workforce of technically competent employees in Malaysia to run our mining operations. Our ability to effectively implement our proposed business strategies and expand our operations will depend upon the successful recruitment and retention of additional highly skilled and experienced management and other key personnel in Malaysia. If we cannot maintain highly experienced and skilled management teams, our business could fail and you could lose any investment you make in our shares.

 

Since our business consists of managing gold mining projects, the drop in the price of gold would negatively impact our asset values, cash flows, potential revenues and profits.

 

We plan to pursue opportunities in properties with gold mineralized material or reserves with exploration potential. Our potential future revenues are expected to be derived from the production and sale of gold from these properties, or from the sale of some of these properties. The value of any gold reserves or other mineralized materials, and the value of any potential mineral production will vary in direct proportion to changes in those mineral prices. The price of gold has fluctuated widely as a result of numerous factors beyond our control. The effect of these factors on the price of gold and other minerals, and therefore the economic viability of any of our projects, cannot accurately be predicted. Any drop in the price of gold and other minerals we may produce would negatively affect our asset values, cash flows and potential revenues and profits.

 

We may not be able to find commercially viable reserves.

 

Mineral exploration and development involve a high degree of risk and few properties that are explored are ultimately developed into producing mines. The reserve estimates, if any, are based only on prefeasibility studies that are inherited with the following drawbacks:

 

 

-

Limited amount of drilling completed to date;

 

-

The process testing is limited to small pilot plants and bench scale testing;

 

-

Difficulty in obtaining expected metallurgical recoveries when scaling up to production scale from pilot plant scale;

 

-

Preliminary nature of the mine plans and processing concepts;

 

-

Preliminary nature of operating and capital cost estimates

 

-

Metallurgical flow sheets and recoveries still in development;

 

-

Limited history of prefeasibility studies that might be underestimating capital and operating costs.

 

We cannot assure that any future mineral exploration and development activities will result in any discoveries of proven or probable reserves as defined by the SEC. Further, we cannot provide any assurance that, even if we discover commercial quantities of mineralization, a mineral property will be brought into commercial production. Development of our mineral property will follow only upon obtaining sufficient funding and satisfactory exploration results.

 

 
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Estimates of mineral reserves and of mineralized material are inherently forward-looking statements, subject to error, which could force us to curtail or cease our business operations.

 

Estimates of mineral reserves and of mineralized materials are inherently forward-looking statements subject to error. Unforeseen events and uncontrollable factors can have significant adverse impacts on the estimates. Actual conditions inherently differ from estimates. The unforeseen adverse events and uncontrollable factors may include: geologic uncertainties including inherent sample variability, metal price fluctuations, fuel price increases, variations in mining and processing parameters, and adverse changes in environmental or mining laws and regulations. The timing and effects of variances from estimated values cannot be predicted.

 

 

-

Geologic Uncertainty and Inherent Variability: Estimated reserves and additional mineralized materials are generally derived from appropriately spaced drilling to provide a high degree of assurance in the continuity of the mineralization; however, there is generally variability between duplicate samples taken adjacent to each other and between sampling points that cannot be reasonably eliminated. There are also unknown geologic details that are not always identified or correctly appreciated at the current level of delineation. This results in uncertainties that cannot be reasonably eliminated from the estimation process. Some of the resulting variances can have a positive effect, and others can have a negative effect on mining operations. Acceptance of these uncertainties is part of any mining operation.

 

 

-

Gold Price Variability: The prices for gold fluctuate in response to many factors beyond any ability to predict. The prices used in making the reserve estimates are disclosed and differ from daily prices quoted in the news media. The percentage change in the price of a metal cannot be directly related to the estimated reserve quantities, which are affected by a number of additional factors. For example, a ten percent (10%) change in price may have little impact on the estimated reserve quantities and affect only the resultant positive cash flow, or it may result in a significant change in the amount of reserves. Because mining occurs over a number of years, it may be prudent to continue mining for some period during which cash flows are temporarily negative for a variety of reasons, including a belief that the low price is temporary and/or the greater expense would be incurred in closing a property permanently.

 

 

-

Fuel Price Variability: The cost of fuel can be a major variable in the cost of mining; one that is not necessarily included in the contract mining prices obtained from mining contractors, but is passed on to the overall cost of operation. Future fuel prices and their impact are difficult to predict, but an increase in prices could force us to curtail or cease our business operations.

 

 

-

Variations in Mining and Processing Parameters: The parameters used in estimating mining and processing efficiency are based on testing and experience with previous operations at the properties or on operations at similar properties. Various unforeseen conditions can occur that may materially affect the estimates. In particular, past operations indicate that care must be taken to ensure that proper ore grade control is employed and that proper steps are taken to ensure that the leaching operations are executed as planned. Unforeseen difficulties may occur in our current or future operations which would force us to curtail or cease our business operations.

 

 

-

Changes in Environmental and Mining Laws and Regulations: Our reserve estimates contain cost estimates based on compliance with current laws and regulations in Malaysia. While there are no currently known proposed changes in these laws or regulations, significant changes have affected past operations of mining companies in Malaysia, and if additional changes do occur in the future, we may or may not be able to comply with them and continue our operations.

 

We may not be able to successfully compete with other mineral exploration and mining companies.

 

We compete with other mineral exploration and mining companies or individuals, including large, well established mining companies with substantial capabilities and financial resources in Malaysia, to research and acquire rights to mineral properties containing gold and other minerals. There is a limited supply of desirable mineral lands available for claim staking, lease or other acquisition in Malaysia. We do not know if we will be able to successfully acquire any prospective mineral properties against competitors with substantially greater financial resources than we have. If we cannot successfully acquire other mining properties to manage and explore and generally expand our business operations, our results of operations, financial condition and future revenues could be reduced and you could suffer a loss of any investment made in our shares.

 

 
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We are subject to the many risks of doing business internationally, including but not limited to the difficulty of enforcing liabilities in foreign jurisdictions.

 

We are a Nevada corporation and, as such, are subject to the jurisdiction of the State of Nevada and the United States courts for purposes of any lawsuit, action or proceeding by investors. An investor would have the ability to effect service of process in any action against the Company within the United States. In addition, we are registered as a foreign corporation doing business in Malaysia, and as such, are subject to the local laws of Malaysia governing an investors' ability to bring actions in foreign courts and enforce liabilities against a foreign private issuer, or any person, based on U.S. federal securities laws. Generally, a final and conclusive judgment obtained by investors in U.S. courts would be recognized and enforceable against us in the Malaysia courts having jurisdiction without re-examination of the merits of the case.

 

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in Malaysia based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

 

All of our current operations are conducted in Malaysia, and all of our directors and officers are nationals and residents of Malaysia and other foreign countries. All or substantially all of the assets of these persons are located outside the United States and in other foreign countries. As a result, it may not be possible to effect service of process within the United States or elsewhere outside Malaysia upon these persons. In addition, uncertainty exists as to whether the courts of Malaysia would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in Malaysia against us or such persons predicated upon the securities laws of the United States or any state thereof.

 

Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

 

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to maintain records that accurately and fairly represent our transactions and have an adequate system of internal accounting controls. Foreign companies, including some that may compete with us, are not subject to these prohibitions, and therefore may have a competitive advantage over us. Our executive officers and employees have not been subject to the United States Foreign Corrupt Practices Act prior to 2010. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

 

Mining risks and insurance could negatively effect on our profitability.

 

The business of mining for gold is generally subject to a number of risks and hazards including environmental hazards, industrial accidents, labor disputes, unusual or unexpected geological conditions, pressures, cave-ins, changes in the regulatory environment, and natural phenomena such as inclement weather conditions, floods, blizzards and earthquakes. At the present time, we have in effect statutory required social insurance for all employees and mine workers. There is currently no other insurance in place for the mining site and management, and even if we were to purchase additional insurance, we cannot be sure that such insurance would be available to us, or that we could afford the premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. In addition, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to companies in the mining industry on acceptable terms. We might also become subject to liability for pollution or other hazards which we may not be insured against, or which we may elect not to insure against, because of premium costs or other reasons. Any losses from any of these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations, which could negatively impact any investment you make in our shares.

 

 
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If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

 

Malaysian companies may not always adopt a Western style of management and financial reporting concepts and practices, which includes strong corporate governance, internal controls and computer, financial and other control systems. In addition, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in Malaysia. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards for foreign subsidiaries. As a result, we may experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002. This could result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management's assessment of our internal controls over financial reporting or disclosure of our public accounting firm's attestation to or report on management's assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

 

Changes in interest rates could negatively impact our results of operations, stockholders' equity (deficit) and fair value of net assets.

 

Our investment activities and credit guarantee activities expose us to interest rate and other market risks. Changes in interest rates, up or down, could adversely affect our net interest yield. Although the yield we earn on our assets and our funding costs tend to move in the same direction in response to changes in interest rates, either can rise or fall faster than the other, causing our net interest yield to expand or compress. For example, due to the timing of maturities or rate reset dates on variable-rate instruments, when interest rates rise, our funding costs may rise faster than the yield we earn on our assets. This rate change could cause our net interest yield to compress until the effect of the increase is fully reflected in asset yields. Changes in the slope of the yield curve could also reduce our net interest yield.

 

Interest rates can fluctuate for a number of reasons, including changes in the fiscal and monetary policies of the federal government and its agencies, such as the Federal Reserve. Federal Reserve policies directly and indirectly influence the yield on our interest-earning assets and the cost of our interest-bearing liabilities. The availability of derivative financial instruments (such as options and interest rate and foreign currency swaps) from acceptable counterparties of the types and in the quantities needed could also affect our ability to effectively manage the risks related to our investment funding. Our strategies and efforts to manage our exposures to these risks may not be effective in the future, which could negatively impact our results of operations and the price of our common stock.

 

The audit report included in our Annual Report was prepared by auditors who are not inspected by the Public Accounting Oversight Board (“PCAOB”) and as a result, our shareholders are deprived of the benefit of having PCAOB inspections. 

 

The independent registered public accounting firm that issues the audit reports included in our annual reports filed with the SEC, as auditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States), or the “PCAOB”, is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Because our auditors are located in Hong Kong SAR, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Hong Kong authorities, our auditors are not currently inspected by the PCAOB.

 

Inspections of other firms that the PCAOB has conducted outside Hong Kong SAR have identified deficiencies in those firms' audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of the PCAOB to conduct inspections in Hong Kong SAR prevents the PCAOB from regularly evaluating our auditor's statements, audits and quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

 

The inability of the PCAOB to conduct inspections of auditors in Hong Kong SAR makes it more difficult to evaluate the effectiveness of our auditor's quality control and audit procedures as compared to auditors outside of Hong Kong SAR that are subject to PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our financial statements.

 

We may be exposed to risks relating to management’s conclusion that our disclosure controls and procedures and internal controls over financial reporting are ineffective.

 

We do not have an independent audit committee and our Board of Directors may be unable to fulfill the functions of such a committee, which may compromise the management of our business. Our Board of Directors functions as our audit committee and is comprised of two directors, none of whom are considered to be "independent" in accordance with the requirements of Rule 10A-3 under the Securities Exchange Act of 1934. An independent audit committee plays a crucial role in the corporate governance process, assessment of the Company's processes relating to its risks and control environment, oversight of financial reporting, and evaluation of internal and independent audit processes. The lack of an independent audit committee may prevent the Board of Directors from being independent in its judgments and decisions and its ability to pursue the committee's responsibilities, which could compromise the management of our business. 

 

 
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Risks Associated with Our Common Stock

 

Our shares are defined as "penny stock." The rules imposed on the sale of the shares may affect your ability to resell any shares you may purchase, if at all.

 

Our shares are defined as a "penny stock" under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock, and may also affect your ability to resell any shares you may purchase.

 

Market for penny stock has suffered in recent years from patterns of fraud and abuse

 

Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

 

 

·

Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

 

·

Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

 

·

Boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;

 

·

Excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and,

 

·

The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses.

 

Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

 

Inability and unlikelihood to pay dividends

 

To date, we have not paid, nor do we intend to pay in the foreseeable future, dividends on our common stock, even if we become profitable. Earnings, if any, are expected to be used to advance our activities and for general corporate purposes, rather than to make distributions to stockholders. Prospective investors will likely need to rely on an increase in the price of Company stock to profit from his or her investment. There are no guarantees that any market for our common stock will ever develop or that the price of our stock will ever increase. 

 

Since we are not in a financial position to pay dividends on our common stock and future dividends are not presently being contemplated, investors are advised that return on investment in our common stock is restricted to an appreciation in the share price. The potential or likelihood of an increase in share price is questionable at best.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

 
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Item 2. Properties.

 

We do not currently own any properties.

 

On October 25, 2013, we entered into an Assignment Agreement For the Assignment of Management Right in Merapoh Gold Mines in Malaysia ("Assignment Agreement") with Federal Mining Resources Limited ("FMR"), a company incorporated under the laws of the British Virgin Islands.

 

FMR owns 85% equity interest in Champmark Sdn Bhd ("CSB"), a privately limited liability company incorporated in Malaysia. CSB is the Mining Contractor of the Mining Lease for Site IV-1 at the Merapoh Gold Mine under the Contract for Work with MMC Corporation Berhad, the Permit Holder of the Mining Lease.

 

Under the terms of the Assignment Agreement, FMR assigned its management rights of CSB's mining operation in the Mining Lease to the Company, through its wholly-owned subsidiary Gold Billion Global Limited ("GBL"), in exchange for 80,000,000 shares of the Company's common stock, which constituted 95.26% of our issued and outstanding capital stock as of and immediately after the consummation of the acquisition.

 

On April 1, 2014, the Board of Director of Gold Billion Global Limited ("GBL") notified Federal Mining Resources Limited ("FMR") upon the decision to exercise the right of option to purchase 85% equity interest of Champmark Sdn Bhd ("CSB") under Management Agreement Section 3.2.4 dated July 1, 2013, between GBL and FMR. The original agreement was filed with SEC as ex10-2.htm of Form 8K on February 20, 2014. This acquisition was completed on April 1, 2014, with consideration of US$1. GBL then became 85% shareholder of CSB.

 

As at June 30, 2016, the property and equipment owned by CSB are summarized, at net book values as follows:

 

Land and Building

 

$33,120

 

Plant and Machinery

 

$15,760

 

Office equipment

 

$921

 

Project equipment

 

$76,347

 

Computer

 

$403

 

Motor Vehicle

 

$25,074

 

 

 

$151,625

 

 

Item 3. Legal Proceedings.

 

None

 

Item 4. Mine Safety Disclosures.

 

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (" Dodd-Frank Act "), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic and annual reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Act of 1977. The Company did not have any mines in the United States during the year ended June 30, 2016.

 

 
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PART II

 

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

Our common stock is now quoted on the OTCQB, under the symbol "VRDR". Our stock was approved for quotation on the OTCBB on September 26, 2012. However, the Company's common stock did not begin active trading until October, 2013.

 

The following table sets forth the high and low bid prices for our common stock per quarter as reported by the OTCBB since trading began October 7, 2013, based on our fiscal year end June 30, 2016. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission, and may not represent actual transactions.

 

Fiscal Quarter Ended

 

High

 

 

Low

 

 

 

 

 

 

 

 

December 31, 2015

 

$0.068

 

 

$0.05

 

March 31, 2016

 

$0.075

 

 

$0.05

 

June 30, 2016

 

$0.05

 

 

$0.041

 

 

As of September 26, 2016, we had 26 shareholders of record of our common stock and 91,288,909 shares issued and outstanding.

 

Dividend Policy

 

We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.

 

Equity Compensation Plan Information

 

None.

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

We did not sell any equity securities which were not registered under the Securities Act during the year ended June 30, 2016, that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended June 30, 2016.

 

On October 25, 2013, the Company issued 80,000,000 common shares at par value under the terms of the Assignment Agreement whereby FMR will assign its management rights of CSB's mining operation in the Mining Lease to VRDR, through its wholly-owned subsidiary GBL, in exchange for 80,000,000 shares of the Company's common stock.

 

On November 11, 2013, the Company issued 75,000 common shares at US$1.75 per share to Marketing Management International, LLC ("MMI"), a Florida Limited Liability Company, under the terms of the Consulting Agreement for the engagement of its consulting services.

 

 
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On January 29, 2014, the Company issued a total of 643,229 common shares for $665,238, of which 288,288 common shares at US$1.25 per share, 183,661 common shares at US$0.83 per share and 171,280 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

 

On March 10, 2014, the Company issued a total of 693,180 common shares for $609,756, of which 179,340 common shares at US$0.85 per share and 513,840 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

 

On January 21, 2015, the Company issued 5,900,000 common shares at US$0.05 per share to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Consultant Agreement for the additional services of its sub-contractor.

 

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

 

We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended June 30, 2016.

  

Item 6. Selected Financial Data.

 

As a "smaller reporting company," we are not required to provide the information required by this Item.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" of this annual report.

 

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

 
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Results of Operations

 

We have generated $929,655 and $831,339 revenues for the year ended June 30, 2016 and 2015, respectively, and have recorded a gross loss of $205,153 and $731,989 for the year ended June 30, 2016 and 2015. We have incurred $498,411 and $803,741in operating expenses through June 30, 2016 and June 30, 2015. We have other income $77,093 and $38,014 for the year ended June 30, 2016 and 2015.

 

The following table provides selected financial data about our company for the year ended June 30, 2016 and June 30, 2015. 

 

Statement of Operation 

 

June 30,

2016

 

 

June 30,

2015

 

 

Change

 

 

Amount

 

 

Amount

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$929,655

 

 

$831,339

 

 

 

12

 

Cost of revenue

 

$1,134,808

 

 

$1,563,328

 

 

 

(27)

Gross Loss

 

$205,153

 

 

$731,989

 

 

 

(72)

Operating Expenses

 

$498,411

 

 

$803,741

 

 

 

(38)

Other Income

 

$77,093

 

 

$38,014

 

 

 

103

 

 

The revenue derived from the sales of gold mineral to customers in Malaysia. The increase of revenue for the period ended June 30, 2016 was mainly due to an increase in gold production and gold sales during the period. The decrease of cost of revenue was mainly due to a decrease of salaries and depreciation and increased of closing stock as at period ended and weakness of average rate for MYR:USD compared with last year. (2016: 0.2422 2015: 0.2883). Operating expenses comprised mainly of salaries, office costs, legal and professional fees and travelling expenses. The decrease in operating expenses for the period was mainly due to the due to the weakness of average rate for MYR:USD as mentioned above, and a reduction in the provision for professional and consultancy fees payable to related companies.

 

Plan of Operation

 

Our Industry and Principal Markets

 

Based on the forecast of Business Monitor International, a leading independent proprietary data provider, Malaysia's mining industry is anticipated to reach US$38.7bn by 2017, growing at an annual average rate of 2.5% from 2011 levels. The bulk of this growth will be led by the country's nascent gold mining sector, which has attracted a number of foreign investors in recent years. Our mineral exploration activities are subject to extensive national and local government regulations in Malaysia, which regulations may be revised or expanded at any time. Generally, compliance with these regulations requires the company to obtain the permits issued by government regulatory agencies. Certain permits require periodic renewal or review of their conditions. Malaysia provides an attractive mining legislative environment for foreign investors, but there is the risk that these laws will change once the country is able to attract enough foreign money.

 

 
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Subcontractor

 

In an effort to enhance the efficiency of mine operations at the Merapoh Gold Mine, Champmark Sdn Bhd ("CSB") entered into an Operation Term Sheet ("OTS") agreement in July 2013, to outsource the exploitation works of alluvial gold resources at Site IV-1 of the Merapoh Gold Mine to a third party subcontractor Borneo Oil & Gas Corporation Sdn Bhd ("BOG").

 

BOG has the experience and local knowledge in managing the exploitation of alluvial gold at the Merapoh Gold Mine. The Company currently intends to continue to outsource the exploitation of alluvial gold at our mine site to BOG as our third party subcontractor. The Company will provide necessary disclosure when any significant agreements have been made with the sub-contractor in the future.

 

BOG became the Company's shareholder in January 29, 2014 and was no longer a third party subcontractor.

 

Expansion Plans

 

At present, we are well positioned working with our third party subcontractor, who has the experience and local knowledge, in managing our exploitation of alluvial gold at the Merapoh Gold Mine. The Company believes that there are excellent growth opportunities for its business outside of Malaysia. We are constantly exploring for potential acquisition of mining projects in other parts of the world.

 

The Company is currently operating the gold mining operation at a small scale and is still in its initial stages to expand the production capacity of the gold mining operation. The Company has purchased a number of units of vehicles such as excavators, wheel loader, mobile mining equipment, motor vehicles and trucks for the mining of alluvial gold at the Mining Area. In the effort to expand production capacity, the Company intends to purchase more vehicles, machineries and equipment as well as to conduct feasibility studies for exploration of alluvial and lode gold resources.

 

As our business is affected by the fluctuations of gold prices, the Company intends to diversify its product line by acquiring mining projects with potential for different mineral resources other than gold. We are holding discussions with other mining companies for potential collaboration to carry out exploration and exploitation works on other mineral resources in Southeast Asia regions.

 

Limited Operating History; Need for Additional Capital

 

There is limited historical financial information about us upon which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

 

 
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Liquidity and Capital Resources

 

The following table provides selected cash flow data about our company for the year ended June 30, 2016 and 2015. 

 

Cash Flow Date

 

June 30,

2016

 

 

June 30,

2015

 

 

 

 

 

 

 

 

Net Loss from operation

 

$626,471

 

 

$1,497,716

 

Net Cash Generated/(Used) from operating activities

 

$(32,387)

 

$(322,244)

Net Cash Generated/(Used) from investing activities

 

$-

 

 

$76,456

 

Net Cash Generated/(Used) from financing activities

 

$(39,866)

 

$39,642

 

 

For the year ended June 30, 2016, the Company had incurred net loss from operation of $626,471 which posted a negative impact to the company's cash flow. The reconciliation on non-cash items such as depreciation provides negative impact on cash.

 

In the operation analysis, the net cash used in operating activities decreased from $322,244 to $32,387 for the years ended June 30, 2015 and 2016, respectively. The operation loss of $626,471 was partially offset by the noncash expenses such as $290,774 in depreciation. In the operating assets and liabilities, the net decrease in current assets, such as accounts receivable, inventory and deposits was $46,973 whereas the net increase in current liabilities, such as accounts payable, accrued liabilities, advanced from sub-contractor & related parties and taxation payable was $256,337, which provided $303,310 positive cash flow effect but not enough to offset the $626,471 loss in operation and loss from non-cash loss in the reorganization. The final result of the cash flow from operating activities was $32,387 negative cash flow effect.

 

In the investing and financing analysis, the repayments of bank loans end up with a negative cash flow of $39,866. The negative factors contribute to increase the negative operating cash flow. In addition, the net decrease in exchange rate effect of $51,439 also provided positive cash flow effect. The cash and cash equivalents at the end of June 30, 2016, was decreased by $20,814 with $16,113 as balance.

 

The cash flow situation will not allow for operations in the coming next 12 months by self-generated cash provided from operating activities. The Company needs to increase cash flow supplies with a long term plan until the Company makes sustainable profits and has a positive cash flow. Otherwise, loans from related parties may be a temporary solution, although we have no written loan agreements. There is no guarantee that we will be able to secure adequate financing. If we fail to secure sufficient funds, our business activities may be curtailed, or we may cease to operate.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

As a "smaller reporting company", we are not required to provide the information required by this Item.

 

 
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Item 8. Financial Statements and Supplementary Data

 

VERDE RESOURCES, INC.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2016

 

 

Page

 

Reports of Independent Registered Accounting Firm

F-1

 

Consolidated Balance Sheets

F-2

 

Consolidated Statements of Operations

F-3

 

 

 

Consolidated Statements of Changes in Shareholders' Equity (Deficit)

F-4

 

 

Consolidated Statements of Cash Flows

F-5

 

 

 

Notes to Consolidated Financial Statements

F-6

 

 
21
 

  

DCAW (CPA) LIMITED

CERTIFIED PUBLIC ACCOUNTANTS

7th Floor, Nan Dao Commercial Building

359-361 Queen's Road Central

Hong Kong

Tel : 2851 7954

Fax: 2545 4086

 

To:The board of directors and stockholders of

 

Verde Resources, Inc. ("the Company")

 

Report of Independent Registered Public Accounting Firm

 

We have audited the accompanying consolidated balance sheet of Verde Resources, Inc. and its subsidiaries as of June 30, 2016 and 2015, and the related consolidated statements of loss, stockholders' equity and cash flows for the year ended June 30, 2016 and 2015. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

We were not engaged to examine management's assertion about the effectiveness of the Company's internal control over financial reporting as of June 30, 2016 included in the Company's Item 9A "Controls and Procedures" in the Annual Report on Form 10-K and, accordingly, we do not express an opinion thereon.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Verde Resources, Inc. as of June 30, 2016 and 2015, and the results of its operations and its cash flows for the year ended June 30, 2016 and 2015 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 14 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Hong Kong, China

DCAW (CPA) Limited

September 26, 2016

Certified Public Accountants

 

 
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Verde Resources, Inc

Consolidated Balance Sheets

 

 

 

 

As at

June 30,

 

 

As at

June 30,

 

 

 

2016

 

 

2015

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$16,113

 

 

$36,927

 

Amount due from related parties

 

 

3,619

 

 

 

3,017

 

Inventories

 

 

123,238

 

 

 

11,865

 

Other deposit & prepayment

 

 

1,546

 

 

 

161,431

 

Total Current Assets

 

$144,516

 

 

$213,240

 

Long Term Assets

 

 

 

 

 

 

 

 

Property, plant and equipment

 

$151,625

 

 

$478,225

 

Total Long Term Assets

 

$151,625

 

 

$478,225

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$296,141

 

 

$691,465

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$1,626,524

 

 

$1,729,304

 

Advanced from related parties

 

 

781,333

 

 

 

524,522

 

Accrual

 

 

147,310

 

 

 

157,026

 

Taxation payable

 

 

2,473

 

 

 

1,495

 

Loans from banks

 

 

27,319

 

 

 

39,585

 

Total Current Liabilities

 

$2,584,959

 

 

$2,451,932

 

Long term Liabilities

 

 

 

 

 

 

 

 

Loans from banks (non-current)

 

$7,777

 

 

$37,207

 

Total Long Term Liabilities

 

$7,777

 

 

$37,207

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

$2,592,736

 

 

$2,489,139

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001, 50,000,000 shares authorized, none issued and outstanding

 

 

-

 

 

 

-

 

Common stock, par value $0.001, 250,000,000 shares authorized, 91,288,909 shares issued and outstanding as of June 30, 2016 & June 30, 2015

 

$91,289

 

 

$91,289

 

Additional paid-in capital

 

 

1,869,993

 

 

 

1,869,993

 

Accumulated deficit

 

 

(4,235,777)

 

 

(3,653,699)

Accumulated other comprehensive income(loss)

 

 

531,571

 

 

 

404,021

 

Non-controlled interest

 

 

(553,671)

 

 

(509,278)

Total Stockholders' Deficit

 

$(2,296,595)

 

$(1,797,674)

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$296,141

 

 

$691,465

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-2
Table of Contents

 

Verde Resources, Inc. 

Consolidated Statements of Operations

 

 

 

For the year

 

 

For the year

 

 

 

ended

 

 

Ended

 

 

 

June 30,
2016

 

 

June 30,
2015

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

Revenue

 

$929,655

 

 

$831,339

 

Cost of revenue

 

 

(1,134,808)

 

 

(1,563,328)

Gross loss

 

 

(205,153)

 

 

(731,989)

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

(498,411)

 

 

(803,741)

LOSS FROM OPERATIONS

 

$(703,564)

 

$(1,535,730)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

77,093

 

 

 

38,014

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE INCOME TAX

 

$(626,471)

 

$(1,497,716)

 

 

 

 

 

 

 

 

 

Provision of Income Tax

 

 

-

 

 

 

-

 

NET LOSS

 

$(626,471)

 

$(1,497,716)

 

 

 

 

 

 

 

 

 

Non-controlled interest

 

 

44,393

 

 

 

125,928

 

Net loss contributed to the group

 

 

(582,078)

 

 

(1,371,788)

 

Other comprehensive income(loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain(loss)

 

$127,550

 

 

$404,432

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$(454,528)

 

$(967,356)

 

 

 

 

 

 

 

 

 

Basic and Diluted Loss per Common Share

 

$(0.01)

 

$(0.02)

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding

 

 

91,288,909

 

 

 

87,991,375

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-3
Table of Contents

 

Verde Resources, Inc. 

Statement of Changes in Stockholders' Equity (Deficit)

 

 

 

Common Shares

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Non-Controlling

 

 

Accumulated Other
Comprehensive

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

 Deficit

 

 

Interest

 

 

 Income (Loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - June 30, 2014

 

 

85,388,909

 

 

$85,389

 

 

$1,580,893

 

 

$(2,281,911)

 

$(383,350)

 

$(411)

 

$(999,390)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued

 

 

5,900,000

 

 

 

5,900

 

 

 

289,100

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

295,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,371,788)

 

 

(125,928)

 

 

-

 

 

 

(1,497,716)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

404,432

 

 

 

404,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - June 30, 2015

 

 

91,288,909

 

 

$91,289

 

 

$1,869,993

 

 

$(3,653,699)

 

$(509,278)

 

$404,021

 

 

$(1,797,674)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(582,078)

 

 

(44,393)

 

 

-

 

 

 

(626,471)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

127,550

 

 

 

127,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - June 30, 2016

 

 

91,288,909

 

 

$91,289

 

 

$1,869,993

 

 

$(4,235,777)

 

$(553,671)

 

$531,571

 

 

$(2,296,595)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
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Table of Contents

  

Verde Resources, Inc. 

Consolidated Statements of Cash Flows

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$(626,471)

 

$(1,497,716)

Adjustments to reconcile loss to net cash used in operations

 

 

 

 

 

 

 

 

Depreciation

 

 

290,774

 

 

 

564,117

 

Gain on disposal of fixed assets

 

 

-

 

 

 

(16,996)

Issuance of common stock (non-cash)

 

 

-

 

 

 

295,000

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

(Increase) decrease in:

 

 

 

 

 

 

 

 

Amount due from related party

 

 

(773)

 

 

9,874

 

Deposits and prepayment

 

 

159,792

 

 

 

(103,309)

Inventory

 

 

(112,046)

 

 

42,701

 

Increase (decrease) in:

 

 

 

 

 

 

 

 

Accounts payable

 

 

(4,673)

 

 

199,373

 

Accrued liabilities

 

 

(7,419)

 

 

3,223

 

Advanced from sub-contractor & related parties

 

 

267,366

 

 

 

179,994

 

GST Tax payable

 

 

1,063

 

 

 

1,495

 

Net cash (used in) operating activities

 

 

(32,387)

 

 

(322,244)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from disposal of plant and equipment

 

 

-

 

 

 

92,646

 

Addition of motor vehicle

 

 

-

 

 

 

(16,190)

Net cash provided by investing activities

 

 

-

 

 

 

76,456

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from bank loans

 

 

-

 

 

 

137,774

 

Repayments of bank loans

 

 

(39,866)

 

 

(98,132)

Net cash (used in) provided by financing activities

 

 

(39,866)

 

 

39,642

 

 

 

 

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

 

(72,253)

 

 

(206,146)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

51,439

 

 

 

121,292

 

 

 

 

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

 

(20,814)

 

 

(84,854)

Cash and cash equivalents at beginning of year

 

 

36,927

 

 

 

121,781

 

Cash and cash equivalents at end of year

 

$16,113

 

 

$36,927

 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information

 

 

 

 

 

 

 

 

Income taxes paid

 

$-

 

 

$-

 

Interest paid

 

$2,453

 

 

$5,242

 

Supplementary non-cash information

 

 

 

 

 

 

 

 

Reorganization

 

$-

 

 

$-

 

Issuance of common stock (non-cash)

 

$-

 

 

$295,000

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-5
Table of Contents

 

Verde Resources, Inc . 

Notes to Consolidated Financial Statements

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Verde Resources, Inc. (the "Company" or "VRDR") was incorporated on April 22, 2010 in the State of Nevada, U.S.A. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company's fiscal year end is June 30.

 

Gold Billion Global Limited ("Gold Billion" or "GBL") was incorporated in British Virgin Islands on February 7, 2013. GBL is setup by the Board of Director of Federal Mining Resources Limited ("FMR"). The major operation of GBL is to manage and monitor the mineral exploration and mining projects of FMR.

 

On July 1, 2013, FMR has assigned its rights and obligation on Champmark Sdn Bhd ("CSB") to GBL. Four of the five members of CSB Board of Directors were appointed by FMR, with two of the GBL Board of Directors currently sitting on the CSB Board. According to ASC 810-05-08 A, CSB is a deemed subsidiary of GBL where it has controlled the CSB Board of Directors, has assigned rights to receive future benefits and residual value, and obligation to absorb loss and finance for CSB by GBL. GBL has the power to direct the activities of CSB that most significantly impact CSB's economic performance and the obligation to absorb losses of CSB that could potentially be significant to the CSB or the right to receive benefits from CSB that could potentially be significant to CSB. GBL is the primary beneficiary of CSB because it has been assigned with all relevant rights and obligation and can direct the activities of CSB through the common directors and the 85% shareholder, FMR. Under 810-23-42, 43, it is determined that CSB is de-facto agent of GBL and GBL is the de-facto principal of CSB. GBL will start to consolidate CSB from July 1, 2013 and the Company will consolidated GBL and CSB from October 25, 2013 onwards.

 

On February 17, 2014, the Company entered into a Supplementary Agreement to the Assignment Agreement and completed an acquisition of GBL pursuant to the Supplementary Agreement. The acquisition was a reverse acquisition in accordance with ASC 805-40 "Reverse Acquisitions". The legal parent was VRDR which was the accounting acquiree while GBL was the accounting acquirer. There was a 15% non-controlling interest of Champmark SDN BHD ("CSB") after the acquisition. This transaction was accounted for as a recapitalization effected by a share exchange, wherein GBL with its 85% deemed subsidiary CSB was considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

 

As a result of the acquisition, the Company holds 100% equity interest in GBL and 85% variable interest in CSB. Our consolidated subsidiaries include GBL being our wholly-owned subsidiary and 85% of CSB being a variable interest entity (VIE) and deemed subsidiary of GBL.

 

On March 17, 2014, the Company through GBL and its deemed subsidiary CSB entered into a Sub-Contract Agreement with Borneo Oil & Gas Corporation Sdn Bhd ("BOG") for the engagement of its sub-contractor services to carry out exploration and exploitation works on alluvial and lode gold resources at Site IV-1 of the Merapoh Mine. The Sub-Contract Agreement is for a period of 5 years with a renewal for another 5 years subject to review by both parties. BOG is a wholly-owned subsidiary of Borneo Oil Berhad (BOB) which is listed on the main market of Kuala Lumpur Stock Exchange. BOG being a local company in Malaysia provides the Company with the advantage of local knowledge and well-established connection in dealing with the relevant local authorities in our mining operations.

 

On April 1, 2014, GBL purchased 85% equity interest of CSB, and CSB became indirect subsidiary of the Company.

 

Effective August 27, 2014, the Company's Articles of Incorporation were amended to increase the authorized shares of the Company from 100,000,000 shares of common stock to 250,000,000 shares of common stock. A copy of the Certificate of Amendment was filed with the Nevada Secretary of State. The Form 8K announcing the increase of the authorized shares of the Company was filed with SEC on September 15, 2014.

 

Effective February 20, 2016, Mr. Wu Ming Ding resigned all of his positions as President and Director of the Company with Mr. Balakrishnan B S Muthu being appointed President to fill the vacancy created. Effective February 20, 2016, Mr. Chen Ching was appointed Director of the Company and the entire Board of Directors now consists of Mr. Balakrishnan B S Muthu and Mr. Chen Ching. The SC 14F1 and Form 8-K announcing the change in officers and directors were filed with SEC on February 10, 2016 and February 22, 2016 respectively.

 

 
F-6
Table of Contents

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP). These consolidated financial statements are expressed in United States dollars ($). Financial statements prepared in accordance with GAAP contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. These condensed consolidated audited financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

 

Basis of Consolidation

 

The condensed consolidated financial statements include the financial statements of Verde Resources, Inc., its wholly owned subsidiary Gold Billion Global Limited ("GBL") and the 85% of the deemed subsidiary variable interest of Champmark SDN BHD ("CSB"). All inter-company balances and transactions between the Company and its subsidiary and variable interest entity (VIE) have been eliminated upon consolidation.

 

The Company has adopted ASC Topic 810-10-5-8, "Variable Interest Entities", which requires a variable interest entity or VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE's residual returns.

 

Variable Interest Entity

 

On July 1, 2013, the Company's subsidiary, GBL entered into a series of agreements ("VIE agreements") with FMR and details of the VIE agreements are as follows :

 

 

1.

Management Agreement, FMR entrusted the management rights of its subsidiary CSB to GBL that include:

 

i)

management and administrative rights over the day-to-day business affairs of CSB and the mining operation at Site IV-1 of the Merapoh Gold Mine;

 

ii)

final right for the appointment of members to the Board of Directors and the management team of CSB;

 

iii)

act as principal of CSB;

 

iv)

obligation to provide financial support to CSB;

 

v)

option to purchase an equity interest in CSB;

 

vi)

entitlement to future benefits and residual value of CSB;

 

vii)

right to impose no dividend policy;

 

viii)

human resources management.

  

 

2.

Debt Assignment, FMR assigned to GBL the sum of money in the amount of US Dollars One Hundred Nine Thousand Eight Hundred One And Cents Seventy-Two Only (US$ 109,801.72), now due to GBL from CSB under the financing obligation from the FMR to CSB.

  

With the above agreements, GBL demonstrates its ability to control CSB as the primary beneficiary and the operating results of the VIE was included in the condensed consolidated financial statements for the year ended June 30, 2014.

 

On April 1, 2014, the Board of Director of GBL notified FMR upon the decision to exercise the right of option to purchase 85% equity interest of CSB under Management Agreement Section 3.2.4 dated July 1, 2013 between GBL and FMR. This acquisition was completed on April 1, 2014 with consideration of US$1. GBL then became 85% shareholder of CSB and is required to consolidate CSB as a subsidiary.

 

 
F-7
Table of Contents

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $16,113 and $36,927 in cash and cash equivalents at June 30, 2016 and June 30, 2015, respectively.

 

Concentrations of Credit Risk

 

The Company's financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company's management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Risks and Uncertainties

 

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

 

Accounts Receivable

 

Accounts receivable are recognized and carried at net realizable value. An allowance for doubtful accounts will be recorded in the period when a loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging, ongoing business relation and other factors. Accounts are written off after exhaustive efforts at collection. If accounts receivable are to be provided for, or written off, they would be recognized in the consolidated statement of operations within operating expenses. At June 30, 2016 and June 30, 2015, the Company has no allowance for doubtful accounts, as per management's judgment based on their best knowledge. As of June 30, 2016 and June 30, 2015, the longest credit term for certain customers are 60 days.

 

Provision for Doubtful Accounts

 

The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables and reviews accounts receivable by amounts due by customers which are past due to identify specific customers with known disputes or collectability issues. In determining the amount of the reserve, the Company makes judgments about the creditworthiness of customers based on past collection experience and ongoing credit risk evaluations. At June 30, 2016 and June 30, 2015 there was no allowance for doubtful accounts.

 

 
F-8
Table of Contents

 

Fair Value

 

ASC Topic 820 "Fair Value Measurement and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

 

·

Level 1 - defined as observable inputs such as quoted prices in active markets;

 

·

Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

·

Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The Company's financial instruments consist of cash and cash equivalents, trade receivables, other receivables, payables, and short term and long term debt. The carrying values of cash and cash equivalents, trade receivables, other receivables, and payables approximate their fair value due to their short maturities. The carrying value of long term debt approximates the fair value of debt of similar terms and remaining maturities available to the company.

 

The Company's non-financial assets are measured on a recurring basis. These non-financial assets are measured for impairment annually on the Company's measurement date at the reporting unit level using Level 3 inputs. For most assets, ASC 820 requires that the impact of changes resulting from its application be applied prospectively in the year in which the statement is initially applied.

 

The Company's non-financial assets measured on a non-recurring basis include the Company's property, plant and equipment and finite-use intangible assets which are measured for recoverability when indicators for impairment are present. ASC 820 requires companies to disclose assets and liabilities measured on a non-recurring basis in the period in which the re-measurement at fair value is performed.

 

The Company did not have any convertible bonds as of June 30, 2016 and June 30, 2015.

 

Foreign Currency Translation

 

The Company's reporting currency is the United States dollar ("$") and the accompanying consolidated financial statements have been expressed in United States dollars. The Company's functional currency is the Malaysian Ringgit ( "MYR") which is a functional currency as being the primary currency of the economic environment in which their operations are conducted.

 

In accordance with ASC Topic 830 "Translation of Financial Statements" , capital accounts of the consolidated financial statements are translated into United States dollars from MYR at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the respective year. The resulting exchange differences are recorded in the consolidated statement of operations.

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Year-end MYR : $1 exchange rate

 

 

0.2494

 

 

 

0.2644

 

Average MYR : $1 exchange rate

 

 

0.2442

 

 

 

0.2883

 

 

Comprehensive Income

 

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income and the foreign currency translation changes.

 

 
F-9
Table of Contents

 

Segment Reporting

 

The Company currently engages in one operation segment: Gold Mining. The expenses incurred were consisting principally of management services. The Company's major operation is located in Malaysia.

 

Mineral Acquisition and Exploration Costs

 

The Company has been in the exploration stage since its formation on April 22, 2010. It has been primarily engaged in the acquisition, exploration, and development of mining properties. The Company was no longer considered to be in the exploration stage after the reverse take-over with its subsidiary GBL.

 

Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.

 

Environmental Expenditures

 

The operations of the Company have been, and may in the future be affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company's policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

 

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

 

Revenue Recognition

 

In accordance with the ASC Topic 605, "Revenue Recognition", the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.

 

The Company derives revenues primarily from the sales of gold mineral to registered gold trading companies in Malaysia. The Company generally recognizes its revenues at the time of gold sales and its selling price is determined by the prevailing market value of gold bullion quoted by the leading registered gold trading company in Malaysia. Sales invoice will be duly presented to the trading companies when delivery is completed and revenue is then recognized.

 

Cost of Revenue

 

The cost of revenue consists of exploration cost, mine equipment depreciation, production cost, mine site management cost, sub-contractor cost, and royalty and tribute payment which are levied on the gross revenue at the rate of 18% on the invoiced value of gold sales.

 

Advertising Expenses

 

Advertising costs are expensed as incurred under ASC Topic 720, "Advertising Costs" . Advertising expenses incurred for the years ended June 30, 2016 and year ended June 30, 2015 were $0.

 

 
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Income Taxes

 

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, "Accounting for Income Taxes" ("ASC 740"). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. As of June 30, 2016 and June 30, 2015, the Company did not have any significant unrecognized uncertain tax positions.

 

Recent Accounting Pronouncements

 

The FASB has issued Accounting Standards Update (ASU) No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.

 

The FASB issued this ASU as part of its initiative to reduce complexity in accounting standards. The objective of the simplification initiative is to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to the users of financial statements.

 

This ASU eliminates from U.S. GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item.

 

If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item.

 

The FASB heard from stakeholders that the concept of extraordinary items causes uncertainty because it is unclear when an item should be considered both unusual and infrequent. Additionally, some stakeholders said that although users find information about unusual or infrequent events and transactions useful, they do not find the extraordinary item classification and presentation necessary to identify those events and transactions. Other stakeholders noted that it is extremely rare in current practice for a transaction or event to meet the requirements to be presented as an extraordinary item.

 

This ASU will also align more closely U.S. GAAP income statement presentation guidance with IAS 1, Presentation of Financial Statements, which prohibits the presentation and disclosure of extraordinary items.

 

The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities.

 

The FASB has issued an Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions).

 

The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations) that are required to evaluate whether they should consolidate certain legal entities. 

 

 
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In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification™ and improves current GAAP by:

 

 

-

Placing more emphasis on risk of loss when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in certain circumstances based solely on its fee arrangement, when certain criteria are met.

 

-

Reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity (VIE).

 

-

Changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs.

 

The ASU will be effective for periods beginning after December 15, 2015, for public companies. For private companies and not-for-profit organizations, the ASU will be effective for annual periods beginning after December 15, 2016; and for interim periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period.

 

The FASB has issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU.

 

For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.

Early adoption of the amendments is permitted for financial statements that have not been previously issued.

 

The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability).

 

The FASB has issued Accounting Standards Update (ASU) No. 2015-04, Compensation - Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets. For an entity with a fiscal year-end that does not coincide with a month-end, the amendments in this ASU provide a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The practical expedient should be applied consistently to all plans if an entity has more than one plan. Employee benefit plans are not within the scope of the amendments.

 

If a contribution or significant event (such as a plan amendment, settlement, or curtailment that calls for a remeasurement in accordance with existing requirements) occurs between the month-end date used to measure defined benefit plan assets and obligations and an entity’s fiscal year-end, the entity should adjust the measurement of defined benefit plan assets and obligations to reflect the effects of those contributions or significant events. However, an entity should not adjust the measurement of defined benefit plan assets and obligations for other events that occur between the month-end measurement and the entity’s fiscal year-end that are not caused by the entity (e.g., changes in market prices or interest rates).

 

If an entity applies the practical expedient and a contribution is made between the month-end date used to measure defined benefit plan assets and obligations and the entity’s fiscal year-end, the entity should not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the entity should disclose the amount of the contribution to permit reconciliation of the total fair value of all the classes of plan assets in the fair value hierarchy to the ending balance of the fair value of plan assets

 

 
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An entity is required to disclose the accounting policy election and the date used to measure defined benefit plan assets and obligations in accordance with the amendments in this ASU.

 

The amendments are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier application is permitted. The amendments should be applied prospectively.

 

IFRS does not have a practical expedient that permits an entity to measure defined benefit plan assets and obligations as of the month-end that is closest to the entity’s fiscal year-end (or the month-end that is closest to the date of a significant event that occurred in an interim period), whereas the amendments in this Update provide that practical expedient.

 

The amendments add guidance to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, which will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The guidance already exists in the FASB Accounting Standards Codification™ in paragraphs 985-605-55-121 through 55-123, but it is included in a Subtopic applied by cloud service providers to determine whether an arrangement includes the sale or license of software.

 

The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments do not change the accounting for a customer’s accounting for service contracts. As a result of the amendments, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets.

 

For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities.

 

An entity can elect to adopt the amendments either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively. For prospective transition, the only disclosure requirements at transition are the nature of and reason for the change in accounting principle, the transition method, and a qualitative description of the financial statement line items affected by the change. For retrospective transition, the disclosure requirements at transition include the requirements for prospective transition and quantitative information about the effects of the accounting change.

 

The amendments specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required.

 

 
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Current GAAP does not contain guidance for master limited partnerships that specifies how historical earnings per unit should be affected when a dropdown transaction occurs that is accounted for as a transaction between entities under common control.

 

The amendments are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments should be applied retrospectively for all financial statements presented.

 

The FASB has issued Accounting Standards Update 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). The amendments apply to reporting entities that elect to measure the fair value of an investment using the net asset value per share (or its equivalent) practical expedient.

 

Topic 820, Fair Value Measurement, permits a reporting entity, as a practical expedient, to measure the fair value of certain investments using the net asset value per share of the investment. Currently, investments valued using the practical expedient are categorized within the fair value hierarchy on the basis of whether the investment is redeemable with the investee at net asset value on the measurement date, never redeemable with the investee at net asset value, or redeemable with the investee at net asset value at a future date. For investments that are redeemable with the investee at a future date, a reporting entity must consider the length of time until those investments become redeemable to determine the classification within the fair value hierarchy.

 

The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient.

 

The amendments are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity’s financial statements. Earlier application is permitted.

 

The FASB has issued ASU No. 2015-08, Business Combinations (Topic 805): Pushdown Accounting-Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. This ASU amends various SEC paragraphs of the FASB Accounting Standards CodificationTM pursuant to the issuance of SEC Staff Accounting Bulletin No. 115.

 

The FASB has issued Accounting Standards Update (ASU) No. 2015-10, Technical Corrections and Improvements. The amendments cover a wide range of Topics in the FASB Accounting Standards Codification™ (Codification). The amendments generally fall into one of the types of amendments listed below.

 

 

1.

Amendments Related to Differences between Original Guidance and the Codification. These amendments arose because of differences between original guidance (e.g., FASB Statements, EITF Issues, and so forth) and the Codification. These amendments principally carry forward pre-Codification guidance or subsequent amendments into the Codification. Many times, either the writing style or phrasing of the original guidance did not directly translate into the Codification format and style. As a result, the meaning of the guidance might have been unintentionally altered. Alternatively, amendments in this section may relate to guidance that was codified without some text, references, or phrasing that, upon review, was deemed important to the guidance.

 

2.

Guidance Clarification and Reference Corrections. These amendments provide clarification through updating wording, correcting references, or a combination of both. In most cases, the feedback suggested that, without these enhancements, guidance may be misapplied or misinterpreted.

 

3.

Simplification. These amendments streamline or simplify the Codification through minor structural changes to headings or minor editing of text to improve the usefulness and understandability of the Codification.

 

4.

Minor Improvements. These amendments improve the guidance and are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

 

 
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The amendments represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. In addition, some of the amendments will make the Codification easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification.

 

Transition guidance varies based on the amendments. The amendments that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon issuance.

 

The FASB has issued Accounting Standards Update (ASU) No, 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory.

 

Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin.

 

The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost.

 

An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method.

 

The amendments more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards.

 

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.

 

The FASB has issued Accounting Standards Update (ASU) No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the guidance in ASU 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in ASU 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in ASU 2014-09.

 

The FASB has issued Accounting Standards Update (ASU) No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance is intended to improve the recognition and measurement of financial instruments. The ASU affects public and private companies, not-for-profit organizations, and employee benefit plans that hold financial assets or owe financial liabilities.

 

 
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The new guidance makes targeted improvements to existing U.S. GAAP by:

 

-Requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income;

 

-Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; -Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements;

 

-Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities;

 

-Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and

 

-Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

 

The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For private companies, not-for-profit organizations, and employee benefit plans, the new guidance becomes effective for fiscal years beginning after December 15, 2018, and for interim periods within fiscal years beginning after December 15, 2019.

 

The new guidance permits early adoption of the own credit provision. In addition, the new guidance permits early adoption of the provision that exempts private companies and not-for-profit organizations from having to disclose fair value information about financial instruments measured at amortized cost.

 

On February 25, 2016, the Financial Accounting Standards Board (FASB) issued its new lease accounting guidance in Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842).

 

Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date:

 

-A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and-A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

 

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers.

 

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

 

Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Nonpublic business entities should apply the amendments for fiscal years beginning after December 15, 2019 (i.e., January 1, 2020, for a calendar year entity), and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted for all public business entities and all nonpublic business entities upon issuance.

 

 
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Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach.

 

The FASB has issued Accounting Standards Update (ASU) No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments relate to when another party, along with the entity, is involved in providing a good or service to a customer. Topic 606 Revenue from Contracts with Customers requires an entity to determine whether the nature of its promise is to provide that good or service to the customer (i.e., the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is an agent).

 

The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the following:

 

-An entity determines whether it is a principal or an agent for each specified good or service promised to a customer.


-An entity determines the nature of each specified or service (e.g., whether it is a good, service, or a right to a good or service).


-When another entity is involved in providing goods or services to a customer, an entity that is a principal obtains control of: (a) a good or another asset from the other party that it then transfers to the customer; (b) a right to a service that will be performed by another party, which gives the entity the ability to direct that party to provide the service to the customer on the entity’s behalf; or (c) a good or service from the other party that it combines with other goods or services to provide the specified good or service to the customer.

 
-The purpose of the indicators in paragraph 606-10-55-39 is to support or assist in the assessment of control. The amendments in paragraph 606-10-55-39A clarify that the indicators may be more or less relevant to the control assessment and that one or more indicators may be more or less persuasive to the control assessment, depending on the facts and circumstances.

 

The amendments amend certain existing illustrative examples and add additional illustrative examples to assist in the application of the guidance.

 

The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Private entities must apply the amendments one year later.

 

The FASB has issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees.

 

Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments also simplify two areas specific to private companies:

 

1. Practical Expedient for Expected Term: In lieu of estimating the period of time that a share-based award will be outstanding, private companies can now apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics.

 

2. Intrinsic Value: Private companies can now make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. Previously, private companies were provided an option to measure all liability-classified awards at intrinsic value, but some private companies were unaware of that option.

 

 
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Accounting for employee share-based awards was identified by the Private Company Council (PCC) as an area of concern among private company stakeholders. The PCC worked with the FASB to discuss and analyze the issues that private companies have encountered in this area when applying the standard. The PCC also asked the FASB staff to conduct outreach with users as a part of the FASB’s pre-agenda research on the topic.

 

The FASB also considered the conclusions in the Financial Accounting Foundation’s Post-Implementation Review Report on Statement 123(R), Share-Based Payment. Though the report concluded that the prior standard achieved its purpose, it noted that certain areas within Statement 123(R) may be costly and difficult to apply.

 

For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any organization in any interim or annual period.

 

The FASB has issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606.

 

The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Early application for public entities is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The effective date for nonpublic entities is deferred by one year.

 

Identifying Performance Obligations

 

Before an entity can identify its performance obligations in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments add the following guidance:

 

1. An entity is not required to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer.

 

2. An entity is permitted, as an accounting policy election, to account for shipping and handling activities that occur after the customer has obtained control of a good as an activity to fulfill the promise to transfer the good rather than as an additional promised service.

 

To identify performance obligations in a contract, an entity evaluates whether promised goods and services are distinct. The amendments improve the guidance on assessing the promises are separately identifiable criterion by:

 

1. Better articulating the principle for determining whether promises to transfer goods or services to a customer are separately identifiable by emphasizing that an entity determines whether the nature of its promise in the contract is to transfer each of the goods or services or whether the promise is to transfer a combined item (or items) to which the promised goods and/or services are inputs.

 

2. Revising the related factors and examples to align with the improved articulation of the separately identifiable principle.

 

 
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Licensing Implementation Guidance

 

Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to improve the operability and understandability of the licensing implementation guidance by clarifying the following:

 

1. An entity’s promise to grant a customer a license to intellectual property that has significant standalone functionality (e.g., the ability to process a transaction, perform a function or task, or be played or aired) does not include supporting or maintaining that intellectual property during the license period.

 

2. An entity’s promise to grant a customer a license to symbolic intellectual property (that is, intellectual property that does not have significant standalone functionality) includes supporting or maintaining that intellectual property during the license period.

 

3. An entity considers the nature of its promise in granting a license, regardless of whether the license is distinct, in order to apply the other guidance in Topic 606 to a single performance obligation that includes a license and other goods or services (in particular, the guidance on determining whether a performance obligation is satisfied over time or at a point in time and the guidance on how best to measure progress toward the complete satisfaction of a performance obligation satisfied over time).

 

The FASB has issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.

 

The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

 

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances.

 

The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements.

 

In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

 

The ASU is effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020, for calendar year entities). For public companies that are not SEC filers, the ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other organizations, the ASU on credit losses will take effect for fiscal years beginning after December 15, 2020, and for interim periods within fiscal years beginning after December 15, 2021.

 

Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.[u2]  

 

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information

 

 
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NOTE 3 - CASH AND CASH EQUIVALENT

 

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. At of June 30, 2016 and June 30, 2015 cash and cash equivalents consisted of bank deposits in banks in Malaysia and petty cash on hands.

 

NOTE 4 - AMOUNT DUE FROM RELATED PARTIES

 

Amount due from related parties at June 30, 2016 and June 30, 2015 consist of the following items:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Amount due from Stable Treasure Sdn. Bhd. (*)

 

$3,619

 

 

$3,017

 

_______ 

(*) One of the directors of Stable Treasure Sdn. Bhd., Mr. Balakrishnan B S Muthu is also the director of the Company. The advances related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

 

NOTE 5 - INVENTORIES

 

Inventories are valued at cost, not in excess of market. Inventories are determined at first in first out basis and comprised of production cost, mine site management cost and sub-contractor cost. Inventories, at June 30, 2016 and June 30, 2015 are summarized as follows:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Inventories

 

$123,238

 

 

$11,865

 

 

The inventories represent the gold minerals as at June 30, 2016 and June 30, 2015, which were comprised of 8% share by the Company and 92% share by the sub-contractor and the other parties such as original mine assigner.

 

NOTE 6 - ACCOUNTS PAYABLE AND ADVANCED FROM RELATED PARTIES

 

Accounts Payable

 

Accounts payable at June 30, 2016 and June 30, 2015 consist of the following items:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Due to Changxin Wanlin Technology Co Ltd(*)

 

$1,607,775

 

 

$1,704,474

 

Other accounts payable

 

 

18,749

 

 

 

24,830

 

 

 

$1,626,524

 

 

$1,729,304

 

_______

(*) Due to Changxin Wanlin Technology Co Ltd are accounts payable derived from ordinary business transactions. One of the directors of Changxin Wanlin Technology Co. Ltd., Mr. Wu Ming Ding, has resigned as director of VRDR (as of February 20, 2016), GBL (as of February 11, 2016) and CSB (as of February 17, 2016). This accounts payable bears no interest or collateral, repayable and renewable under normal business accounts payable terms .

 

 
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Advanced from related parties

 

Advanced from related parties at June 30, 2016 and June 30, 2015 consist of the following items:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Advanced from BOG (#1)

 

$492,868

 

 

$186,057

 

Advanced from Federal Mining Resources Limited(#2)

 

$173,465

 

 

$173,465

 

Advanced from Federal Capital Investment Limited (#3)

 

$88,000

 

 

$120,000

 

Advanced from Yorkshire Capital Limited (#4)

 

$27,000

 

 

$45,000

 

 

 

$781,333

 

 

$524,522

 

________ 

(#1) BOG is one of the shareholders of the Company. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

 

(#2) One of the directors of Federal Mining Resources Limited, Mr. Chen Ching, has been appointed as director of the Company effective February 20, 2016. Another director of Federal Mining Resources Limited, Mr. Wu Ming Ding, has resigned as director of the Company effective February 20, 2016. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

 

(#3) One of the directors of Federal Capital Investment Limited, Mr. Wu Ming Ding, has resigned as director of the Company effective February 20, 2016. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

 

(#4) One of the directors of Yorkshire Capital Limited, Mr. Lai Kui Shing, Andy, has resigned as director of CSB effective February 17, 2016. The advances are related to ordinary business transactions and bear no interest or collateral, repayable and renewable under normal business advancement terms.

 

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

 

Property and equipment at June 30, 2016, and June 30, 2015, are summarized as follows:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Land and Building

 

$980,855

 

 

$1,039,848

 

Plant and Machinery

 

 

154,489

 

 

 

163,780

 

Office equipment

 

 

19,640

 

 

 

20,821

 

Project equipment

 

 

1,112,294

 

 

 

1,179,193

 

Computer

 

 

10,683

 

 

 

11,325

 

Motor Vehicle

 

 

114,988

 

 

 

121,904

 

Accumulated depreciation

 

 

(2,241,324)

 

 

(2,058,646)

 

 

$151,625

 

 

$478,225

 

 

The depreciation expenses charged for the year ended June 30, 2016 and 2015 were $290,774 and $564,117 respectively.

 

 
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NOTE 8 - LOANS FROM BANKS (HIRE PURCHASE INSTALLMENT LOANS)

 

The loans from banks include long term and short term and are summarized as follow:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Loans from banks

 

$27,319

 

 

$39,585

 

Loans from banks(non-current)

 

 

7,777

 

 

 

37,207

 

Total

 

$35,096

 

 

$76,792

 

 

Hire purchase installment loans with total amount $36,377 and $80,828 as at June 30, 2016, and June 30, 2015, are $35,096 and $76,792 net of imprest charges equivalent to interest $1,281 and $4,036 respectively are summarized as follows:

 

 

 

 

Interest Rate

 

Monthly Due

 

 

June 30,

2016

 

 

June 30,

2015

 

Financial institution in Malaysia

 

N/A*

 

 

655

 

 

 

-

 

 

 

655

 

Financial institution in Malaysia

 

N/A*

 

 

283

 

 

 

1,405

 

 

 

5,085

 

Financial institution in Malaysia

 

N/A*

 

 

283

 

 

 

1,405

 

 

 

5,085

 

Financial institution in Malaysia

 

N/A*

 

 

1,055

 

 

 

-

 

 

 

7,387

 

Financial institution in Malaysia

 

N/A*

 

 

1,627

 

 

 

21,141

 

 

 

43,105

 

Financial institution in Malaysia

 

N/A*

 

 

285

 

 

 

4,558

 

 

 

8,461

 

Financial institution in Malaysia

 

N/A*

 

 

213

 

 

 

7,868

 

 

 

11,050

 

Hire purchase loans payable to banks

 

 

 

 

 

 

 

$36,377

 

 

$80,828

 

_____ 

(*) Hire purchase installment loans with Motor Vehicles as collateral. The financial institutions in Malaysia are Islamic banks and bear no interest in the installment agreement. However, there are certain imprest charges equivalent to interests which are being calculated at an average annual rate of approximate 5.26% for the rest of entire loans life and periods.

 

The scheduled maturities of the CSB's hire purchase installment loans are as follows:

 

June 30,

 

 

 

2017

 

$28,310

 

2018

 

 

5,311

 

2019

 

 

2,556

 

2020

 

 

200

 

Later years

 

 

 

 

Total minimum hire purchase installment payment

 

$36,377

 

Less: Amount representing imprest charges equivalent to interest (current portion: $991 and non-current portion:$290)

 

 

1,281

 

Present value of net minimum lease payments (#)

 

$35,096

 

_____

(#) Minimum payment reflected in the balance sheet as current and non-current obligations under hire purchases installment loans as at June 30, 2016.

 

 
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NOTE 9 - INCOME TAX

 

The Company and its subsidiaries are subject to income taxes on an entity basis on income arising in, or derived from, the tax jurisdiction in which they operate. The Company is a Nevada incorporated company and subject to United State Federal Income Tax. GBL is a British Virgin Islands incorporated company and not required to pay income tax on corporate income. CSB is a Malaysia incorporated company and required to pay corporate income tax at 25% of taxable income.

 

A reconciliation between the income tax computed at the relevant statutory rate and the Company's provision for income tax is as follows:

 

 

 

For the year ended

 

 

For the period ended

 

 

 

June 30,

2016

 

 

June 30,

2015

 

US Federal Income Tax Rate.

 

 

34%

 

 

34%

Valuation allowance - US Rate

 

 

(34)%

 

 

(34)%

BVI Income Tax Rate

 

 

0%

 

 

0%

Valuation allowance - BVI Rate

 

 

(0)%

 

 

(0)%

Malaysia Income Tax Rate

 

 

25%

 

 

25%

Valuation allowance - Malaysia Rate

 

 

(25)%

 

 

(25)%

Provision for income tax

 

 

-

 

 

 

-

 

 

Summary of the Company's net deferred tax liabilities and assets are as follows:

 

 

 

June 30,

2016

 

 

June 30,

2015

 

Deferred tax assets:

 

 

 

 

 

 

Tax attribute carryforwards

 

$229,475

 

 

$509,223

 

Valuation allowances

 

 

(229,475)

 

 

(509,223)

Total

 

$-

 

 

$-

 

 

The Company has recorded valuation allowances for certain tax attribute carry forwards and other deferred tax assets due to uncertainty that exists regarding future realizability. If in the future the Company believes that it is more likely than not that these deferred tax benefits will be realized, the majority of the valuation allowances will be recognized in the consolidated statement of operations. The Company did not have any interest and penalty provided or recognized in the income statements for years ended June 30, 2016 and June 30, 2015 or balance sheet as of June 30, 2016 and June 30, 2015. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months.

 

NOTE 10 - COMMITMENTS AND CONTINGENCIES

 

As at June 30, 2016, the Company's office rent has expired and is currently being rent under month to month term. There are no commitments and contracts on such rental expenses as at June 30, 2016.

 

As at June 30, 2016, the Company's hire purchase installment agreements are disclosed in Note 8. See Note 8 for the commitments for minimum installment payments under these agreements.

 

NOTE 11 - EARNINGS/(LOSS) PER SHARE

 

The Company has adopted ASC Topic No. 260, "Earnings Per Share," ("EPS") which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year.

 

 
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Table of Contents

  

The following table sets forth the computation of basic and diluted earnings per share:

 

 

 

Year Ended June 30,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Net loss applicable to common shares

 

$(582,078)

 

$(1,371,788)

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding (Basic)

 

 

91,288,909

 

 

 

87,991,375

 

Options

 

 

-

 

 

 

-

 

Warrants

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding (Diluted)

 

 

91,288,909

 

 

 

87,991,375

 

 

 

 

 

 

 

 

 

 

Net loss per share (Basic and Diluted)

 

$(0.01)

 

$(0.02)

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

NOTE 12 - CAPITAL STOCK

 

Authorized Stock

 

The Company has authorized 250,000,000 common shares and 50,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

Share Issuance

 

As of September 30, 2013, the Company has issued 2,500,000 and 1,477,500 common shares at $0.01 and $0.04 per share, respectively, resulting in total cash proceeds of $84,100, being $3,978 for par value shares and $80,122 for capital in excess of par value.

 

On October 25, 2013, the Company issued 80,000,000 common shares at par value under the terms of the Assignment Agreement whereby FMR will assign its management rights of CSB's mining operation in the Mining Lease to VRDR, through its wholly-owned subsidiary GBL, in exchange for 80,000,000 shares of the Company's common stock.

 

On November 11, 2013, the Company issued 75,000 common shares at US$1.75 per share to Marketing Management International, LLC ("MMI"), a Florida Limited Liability Company, under the terms of the Consulting Agreement for the engagement of its consulting services.

 

On January 29, 2014, the Company issued a total of 643,229 common shares for $665,238, of which 288,288 common shares at US$1.25 per share, 183,661 common shares at US$0.83 per share and 171,280 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

 

On March 10, 2014, the Company issued a total of 693,180 common shares for $609,756, of which 179,340 common shares at US$0.85 per share and 513,840 common shares at US$0.89 per share, to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Sub-Contractor Agreement for the engagement of its sub-contractor services.

 

On January 21, 2015, the Company issued 5,900,000 common shares at US$0.05 per share to Borneo Oil & Gas Corporation Sdn Bhd ("BOG"), a Malaysia Limited Liability Company, under the terms of the Consultant Agreement for the additional services of its sub-contractor.

 

There were 91,288,909 common shares issued and outstanding at June 30, 2016 and June 30, 2015.

 

There are no preferred shares outstanding. The Company has issued no authorized preferred shares. The Company has no stock option plan, warrants, or other dilutive securities.

 

 
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NOTE 13 - RELATED PARTY TRANSACTIONS

 

As at June 30, 2016, advances were made by five companies of $2,389,108  related to ordinary business transactions. All advances related to ordinary business transactions, bear no interest or collateral, repayable and renewable under normal advancement terms. Details are disclosed in Note 6.

 

As of June 30, 2016, amounts due from one company of $3,619 related to ordinary business transactions. The receivable amounts related to ordinary business transactions bear no interest or collateral, repayable and renewable under normal advancement terms. Details are disclosed in Note 4.

 

During the year ended June 30, 2016, the Company sold $428 worth of gold to BOG.

 

During the year ended June 30, 2016, the Company incurred cost of revenue worth of $687,628 to BOG.

 

NOTE 14 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of and for the year ended June 30, 2016, the Company has a loss from operations of $703,564 and working capital deficiency of $2,288,818. The Company intends to fund operations through debt and equity financing arrangements.

 

The ability of the Company to survive is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.

 

In response to these problems, management intends to raise additional funds through public or private placement offerings, and related party loans.

 

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 
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Table of Contents

 

NOTE 15 - CONCENTRATIONS

 

Suppliers

 

The Company's major suppliers for the year ended June 30, 2016 and 2015 are listed as following:

 

 

 

Subcontractors

 

 

Accounts Payable

 

 

 

Year

 

 

Year

 

 

 

 

 

 

 

 

 

Ended

 

 

Ended

 

 

 

 

 

 

 

Major Suppliers

 

June 30,

2016

 

 

June 30,

2015

 

 

June 30,

2016

 

 

June 30,

2015

 

Company A

 

 

100%

 

 

100%

 

 

0%

 

 

0%

 

Customers

 

The Company's major customers for the year ended June 30, 2016 and 2015 are listed as following:

 

 

 

Sales

 

 

Accounts Receivable

 

 

 

Year

 

 

Year

 

 

 

 

 

 

 

Ended

 

 

Ended

 

 

 

 

 

 

Major Customers

 

June 30,

2016

 

 

June 30,

2015

 

 

June 30,

2016

 

 

June 30,

2015

 

Company M

 

 

0%

 

 

21%

 

 

0%

 

 

0%

Company N

 

 

1%

 

 

32%

 

 

0%

 

 

0%

Company O

 

 

0%

 

 

35%

 

 

0%

 

 

0%

Company P

 

 

99%

 

 

12%

 

 

0%

 

 

0%

 

NOTE 16 - SUBSEQUENT EVENTS

 

The Company's office rent has expired as at June 30, 2016 and the Company intends to renew the rental agreement for one year period pending final execution with the landlord.

 

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined that there are no additional items to disclose except above mentioned matters.

 

 
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Table of Contents

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

Independent Accountants:

 

On April 30, 2016, our independent public accounting firm, AWC (CPA) Limited (“AWC”) had merged with Dominic K.F. Chan & Co (“DKFC”) and formed DCAW (CPA) Limited, which is registered with the Public Company Accounting Oversight Board (PCAOB). As a result of the Merger, AWC resigned as the Company’s independent registered public accounting firm on April 30, 2016. On May 10 2016, the Company engaged DCAW (CPA) Limited (“DCAW”) as its independent registered public accounting firm. The engagement of DCAW was approved by the Company’s board of directors on May 10, 2016. A current report on Form 8-K under item 4.01 pertaining to this event was filed on May 10, 2016.

 

Item 9A. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission ("SEC") reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Management's Annual Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2016 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework. Based upon such evaluation, our management concluded that we did maintain effective internal control over financial reporting as of June 30, 2016 based on the COSO framework criteria.

 

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

 

Officers' Certifications

 

Appearing as exhibits to this Annual Report are "Certifications" of our Chief Executive Officer and Chief Financial Officer. The Certifications are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the "Section 302 Certifications"). This section of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting that occurred during the year ended June 30, 2016, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

Item 9B. Other Information.

 

Not applicable.

 

 
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Table of Contents

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

All directors of the Company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of the Company are appointed by the board of directors and hold office until their death, resignation or removal from office. The directors and executive officers, their ages, positions held, and duration as such, are as follows:

 

Name

 

Position Held
with the Company

 

Age

 

Date First
Elected or Appointed

 

 

 

 

 

 

 

 

 

Balakrishnan B S Muthu

 

President

 

54

 

February 20, 2016

 

Balakrishnan B S Muthu

 

Treasurer, Chief Financial Officer, General Manager and Director

 

54

 

October 17, 2013

 

Chen Ching

 

Director

 

56

 

February 20, 2016

 

Liang Wai Keen

 

Secretary

 

45

 

October 17, 2013

 

 

Business Experience

 

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of the Company, indicating the person's principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

 

Mr. Balakrishnan B S Muthu

 

Apr 1987 - Dec 1989:

Graduated with Diploma in Business Administration,

The Association of Business Executives ABE, UK.

 

 

Dec 2007 - Present:

General Manager, Champmark Sdn. Bhd

 

Mr. Muthu has more than 20 years of experience in financial auditing and business strategic planning. He has been involved in preliminary alluvial mine planning and initial development of Merapoh Project since 2008. His previous experience includes working for Petroliam Nasional Berhad (Petronas) in various departments including the roles in compilation of seismic data, kiosk coordination and upstream financial auditing. He has also worked as a consultant providing financial and technical services for several oil and gas projects. He is also a Chartered Financial Planner (CFP).

 

Mr. Chen Ching

 

1979 - 1982:

Graduated with BA in Business Administration,

University of Santa Clara

 

 

1990 - Present:

Managing Director, C&K Holdings Pte Ltd.

 

Mr. Chen is an entrepreneur with many successes through his investment holding company C&K Holdings Pte Ltd, with which he currently serves as the Managing Director. C&K Holdings. Pte Ltd was founded in Singapore in 1990 with diverse interests in Singapore, Malaysia, Taiwan, China, UK, Thailand and Vietnam; its portfolio spans property development and management, furniture manufacturing, fuel product technology, public transportation, software development, commodity electronic trading platform, and gold mining. Mr. Chen is also a director of Dynamic Offshore Pte Ltd, Premier International Holdings Pte Ltd and Dynamics Holding (Thailand) Co., Ltd.

 

Employment Agreements

 

Other than as set out below, we have no formal employment agreements with any of our employees, directors or officers.

  

 
23
Table of Contents

 

Family Relationships

 

There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

None. 

 

Compliance with Section 16(a) of the Exchange Act

 

As of August 27, 2014, the Company's common stock is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, officers, directors and principal shareholders are subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act. As of the date of this Annual Report, no officer or director has filed beneficial ownership reports as required by Section 16(a).

 

Code of Ethics

 

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. The Company will provide to any person, without charge and upon request, a copy of the code of ethics. Any such request must be made in writing to the Company at, unit 701, 7/F, The Phoenix, 21-25 Luard Rd, Wanchai, Hong Kong.

 

Board and Committee Meetings

 

Our board of directors currently consists of two members, Balakrishnan B S Muthu and Chen Ching. The Board held no formal meetings during the year ended June 30, 2016. Until the Company develops a more comprehensive Board of Directors, all proceedings will be conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

 

Nomination Process

 

As of June 30, 2016, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company's requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.

 

Audit Committee

 

 Currently, the Company is developing a comprehensive Board of Directors and does not have an Audit Committee. The Company intends to appoint audit, compensation and other applicable committee members as it appoints individuals with pertinent expertise.

 

Audit Committee Financial Expert

 

Our board of directors does not have a member that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.

 

 
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Table of Contents

 

Item 11. Executive Compensation.

 

The particulars of the compensation paid to the following persons:

 

 

(a)

our principal executive officer; and

 

(b)

each of our two executive officers who were serving as executive officers at the end of the year ended June 30, 2016.

 

SUMMARY COMPENSATION TABLE

Name and Principal Position

 

Year

 

 

Salary
 ($)

 

 

Bonus
 ($)

 

 

Stock Awards
 ($)

 

 

Option Awards
 ($)

 

 

Non-Equity Incentive Plan Compensation
 ($)

 

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings
 ($)

 

 

All Other Compensation
 ($)

 

 

Total
 ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balakrishnan B S Muthu (1)

 

2016 

 

 

 

53,591

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

53,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President, Treasurer, Chief Financial Officer, General Manager, and Director

 

2015

 

 

 

52,424

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

52,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wu Ming Ding (2)

 

2016

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

2015

 

 

 

4,613

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

4,613

 

 

(1)

Mr. Muthu was appointed Treasurer, Chief Financial Officer, General Manager and a director of the Company on October 17, 2013. He was also appointed President of the Company on February 20, 2016. Mr. Muthu was paid a total salary of $53,591 for the year ended June 30, 2016.

(2)

Mr. Wu was appointed President and a director of the Company on October 17, 2013. He resigned from all of his positions as President and director of the Company on February 20, 2016. Mr. Wu was paid a total salary of $0 for the year ended June 30, 2016.

 

Other than set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.

 

Grants of Plan-Based Awards

 

There were no grants of plan based awards during the year ended June 30, 2016.

 

Outstanding Equity Awards at Fiscal Year End

 

There were no outstanding equity awards at the year ended June 30, 2016.

 

Option Exercises and Stock Vested

 

During our Fiscal year ended June 30, 2016, there were no options exercised by any officer or director. 

 

 
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Compensation of Directors

 

We do not have any agreements for compensating our directors for their services in their capacity as directors.

 

Pension, Retirement or Similar Benefit Plans

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

 

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth, as of September 26, 2016, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

 

Name and Address of Beneficial Owner

 

Amount and Nature of
Beneficial Ownership

 

Percentage
of Class (1)

 

 

 

 

 

 

 

Balakrishnan B.S. Muthu
  Unit 701, /F., The Phoenix, 21-25 Luard Road,

  Wanchai, Hong Kong

 

500,000 common shares

Indirect ownership

through Banavees Resources

 

 

0.5%

 

 

 

 

 

 

 

Chen Ching
  Unit 701, /F., The Phoenix, 21-25 Luard Road,

  Wanchai, Hong Kong

 

4,746,341 common shares

Indirect ownership

through Goldlynn Invest Limited

 

 

5.2%

 

 

 

 

 

 

 

Directors and Executive Officers as a Group (1)

 

5,246,341 common shares

 

 

5.7%

 

 

 

 

 

 

 

Borneo Oil & Gas Corporation Sdn Bhd

 

11,236,409 common shares

Direct ownership

 

 

12.3%

 

 

 

 

 

 

 

Internet.com Ltd

 

6,406,910 common shares

Direct ownership

 

 

7.0%

 

 

 

 

 

 

 

Dynamic State Investments Ltd.

 

5,650,407 common shares

Direct ownership

 

 

6.2%

 

 

 

 

 

 

 

Goldlynn Invest Limited

 

4,746,341 common shares

Direct ownership

 

 

5.2%

 

 

(1)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding on September 26, 2016. As of September 26, 2016, there were 91,288,909 shares of our company's common stock issued and outstanding.

 

(2)

Balakrishnan Muthu, our President, CFO and a director, Chen Ching, our director, and Borneo Oil & Gas Corporation Sdn Bhd have not filed their respective Forms 3. These shareholders expect to file the forms in the near future.

 

Changes in Control

 

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company. 

 

 
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Table of Contents

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Messrs. Muthu, one of our two directors, is not an independent director as he also serves as our executive officer. Messrs Chen, one of our two directors, is an independent director as he does not hold any position as our executive officer.

 

Item 14. Principal Accounting Fees and Services.

 

The aggregate fees billed for the most recently completed fiscal year ended June 30, 2016 and 2015 for professional services rendered by the principal accountant for the audit of our annual financial statements on Form 10-K, and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

 

 

 

Year Ended

June 30,

2016

 

 

Year Ended

June 30,

2015

 

Audit Fees (1)

 

$40,000

 

 

$40,000

 

Audit Related Fees (2)

 

$-

 

 

$-

 

Tax Fees (3)

 

$2,000

 

 

$2,000

 

All Other Fees (4)

 

$-

 

 

$-

 

Total

 

$42,000

 

 

$42,000

 

 

 

(1)

Audit fees consist of fees incurred for professional services rendered for the audit of our financial statements, for reviews of our interim financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.

 

 

(2)

Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our financial statements, but are not reported under "Audit fees."

 

 

(3)

Tax fees consist of fees billed for professional services relating to tax compliance only.

 

 

(4)

All other fees consist of fees billed for all other services.

 

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

 

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors' independence.

 

 
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PART IV

 

Item 15. Exhibits, Financial Statement Schedules

 

Exhibits

 

In reviewing the agreements included as exhibits to this Form 10-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

 

 

·

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

 

 

·

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

 

 

·

may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

 

 

·

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Form 10-K and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

 

The following exhibits are included as part of this report:

 

Exhibit No.

 

SEC Report

Reference No.

 

Description

 

3.1

 

3.1

 

Articles of Incorporation of Registrant (1)

 

 

3.2

 

3.2

 

By-Laws of Registrant (2)

 

 

14.1

 

14.1

 

Code of Ethics (3)

 

31.1

 

*

 

Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

 

31.2

 

*

 

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

 

 

32.1

 

*

 

Rule 1350 Certification of Chief Executive Officer

 

 

 

32.2

 

*

 

Rule 1350 Certification of Chief Financial Officer

 

 

101.INS (4)

 

*

 

XBRL Instance

 

 

101.SCH (4)

 

*

 

XBRL Taxonomy Extension Schema

 

 

101.CAL (4)

 

*

 

XBRL Taxonomy Extension Calculations

 

 

101.DEF (4)

 

*

 

XBRL Taxonomy Extension Definitions

 

 

 

101.LAB (4)

 

*

 

XBRL Taxonomy Extension Labels

 

101.PRE (4)

 

*

 

XBRL Taxonomy Extension Presentation

 

 
28
Table of Contents

  

 

(1)

Filed with the Securities and Exchange Commission on December 2, 2010 as an exhibit, numbered as indicated above, to the Registrant's registration statement on Form S-1 (file no. 333-17093 5), which exhibit is incorporated herein by reference.

 

 

(2)

Filed with the Securities and Exchange Commission on July 19, 2011 as an exhibit, numbered as indicated above, to the Registrant's Form 8-K (file no. 333-170935), which exhibit is incorporated herein by reference.

 

 

(3)

Filed with the Securities and Exchange Commission on September 28, 2011 as an exhibit, numbered as indicated above, to the Registrant's Form 10-K (file no. 333-170935), which exhibit is incorporated herein by reference.

 

 

(4)

XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

_______ 

* Filed herewith.

 

 
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Table of Contents

 

 SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

 

 

VERDE RESOURCES, INC.

 

(Registrant)

 

Dated: September 26, 2016

By:

/s/ Balakrishnan B S Muthu

 

Balakrishnan B S Muthu

 

President and Director

 

(Principal Executive Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

Dated: September 26, 2016

By:

/s/ Balakrishnan B S Muthu

 

Balakrishnan B S Muthu

 

President and Director

 

(Principal Executive Officer)

 

Date: September 26, 2016

By:

/s/ Balakrishnan B S Muthu

 

Balakrishnan B S Muthu

 

Chief Financial Officer, Treasurer, General Manager and Director

 

(Principal Financial Officer)

 

 

30