Gushcloud financial statements 2013

GUSHCLOUD PTE. LTD.

Registration Number: 201114278R

FINANCIAL STATEMENTS

Year ended 31 December 2013

This document contains no signatures as it is system-generated from the full set ofFinancial Statements filed in XBRL by company with ACRA.

GUSHCLOUD PTE. LTD. 2

Gushcloud Pte. Ltd. and its Subsidiary

(Incorporated in Singapore. Registration Number: 201114278R)

Annual ReportFor the financial year ended 31 December 2013

Gushcloud Pte. Ltd. and its Subsidiary(Incorporated in Singapore)

Annual ReportFor the financial year ended 31 December 2013

Contents

Page

Directors Report 1

Statement by Directors 3

Independent Auditors Report 4

Balance Sheets 7

Consolidated Statement of Comprehensive Income 8

Consolidated Statement of Changes in Equity 9

Consolidated Statement of Cash Flows 10

Notes to the Financial Statements 11


The directors present their report to the members together with the audited financial statements of the Groupfor the financial year ended 31 December 2013 and the balance sheet of the Company at 31 December 2013.

Directors

The directors of the Company in office at the date of this report are as follows:

Vincent Ha Kwang YuenAlthea Lim

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangementwhose object was to enable the directors of the Company to acquire benefits by means of the acquisition ofshares in, or debentures of, the Company or any other body corporate.

Directors interests in shares or debentures

According to the register of directors shareholdings, none of the directors holding office at the end of thefinancial year had any interest in the shares or debentures of the Company or its related corporations, exceptas follows:

Holdings registeredin the name of director

At31.12.2013

At1.1.2013

The Company

(No. of ordinary shares)Vincent Ha Kwang Yuen 13,565 11,700Althea Lim 11,570 11,570


Directors contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefitby reason of a contract made by the Company or a related corporation with the director or with a firm ofwhich he is a member or with a company in which he has a substantial financial interest, except as disclosedin the accompanying financial statements and in this report, and except that certain directors receiveremuneration as a result of their employment with related corporations.

Share options

There were no options granted during the financial year to subscribe for unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissuedshares of the Company.

There were no unissued shares of the Company under option at the end of the financial year.

Independent auditor

The independent auditor, WSC Partnership, has expressed its willingness to accept re-appointment.

On behalf of the directors

Vincent Ha Kwang YuenDirector

Althea LimDirector

20 June 2014


In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set outon pages 7 to 25 are drawn up so as to give a true and fair view of the state of affairs of theCompany and of the Group as at 31 December 2013 and of the results of the business, changes inequity and cash flows of the Group for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be ableto pay its debts as and when they fall due.

On behalf of the directors

Vincent Ha Kwang YuenDirector

Althea LimDirector

20 June 2014


Independent Auditors Report to the members of Gushcloud Pte. Ltd. and its Subsidiary

Report on the financial statements

We have audited the accompanying financial statements of Gushcloud Pte. Ltd. (the Company) and itssubsidiary (the Group) set out on pages 7 to 25, which comprise the consolidated balance sheet of theGroup and the balance sheet of the Company as at 31 December 2013, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated statement ofcash flows of the Group for the financial year then ended, and a summary of significant accounting policiesand other explanatory notes.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view inaccordance with the provisions of the Singapore Companies Act (the Act) and Singapore FinancialReporting Standards, and for devising and maintaining a system of internal accounting controls sufficient toprovide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition,that transactions are properly authorised and that they are recorded as necessary to permit the preparation oftrue and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance as to whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors judgement, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entitys preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ourqualified audit opinion.

Basis for qualified opinion

a. Prior years operating expenses and subsidiarys records

In the previous financial year, the Groups accounting records do not provide sufficient evidencesupporting operating expenses amounting to US$186,862 (S$233,444) recorded by Gushcloud, Inc(the Subsidiary). In addition, certain cost of services paid to third party subcontractors do nothave appropriate supporting evidence such as vendor invoices. There were no other satisfactoryaudit procedures that we could have performed to obtain reasonable assurance that the expenseswere properly recorded. As a result, we were unable to determine whether any adjustments wouldbe required in the balance sheet, the income statement of comprehensive income, the statement ofchanges in equity and the cash flow statement for the financial year then ended.

b. Prior years revenue supported only by Paypal statements


Included in the revenue of the Company for the previous year ended 31 December 2012 was anamount of $12,865 received via Paypal account. This amount was payments received fromcustomers who chose to pay through the Companys Paypal account. However, there were no othersupporting documents such as revenue invoice which could provide the source or purpose of suchreceipt of funds. Accordingly, we were unable to ascertain the accuracy and existence of thisincome.

Our audit opinion on the financial statements for the financial year ended 31 December 2012 wasmodified accordingly. Our opinion on the current years financial statements is also modified becauseof the possible effect of this matter on the comparability of the current years figures and thecorresponding figures.

Qualified opinion

In our opinion, except for the possible effects on the corresponding figures of matters described in paragraphabove, the consolidated financial statements of the Group and the balance sheet of the Company are properlydrawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as togive a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2013,and the results, changes in equity and cash flows of the Group for the financial year ended on that date.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company have beenproperly kept in accordance with the provisions of the Act.

WSC PartnershipPublic Accountants and Chartered AccountantsSingapore, 20 June 2014


Group CompanyNote 2013 2012 2013 2012

$ $ $ $

ASSETSCash and cash equivalents 16,215 9,447 16,215 -Trade and other receivables 4 388,013 125,968 388,013 439,057Total current assets 404,228 135,415 404,228 439,057

Property, plant and equipment 5 5,359 11,360 5,359 11,360Total non-current assets 5,359 11,360 5,359 11,360

Total assets 409,587 146,775 409,587 450,417

LIABILITIESTrade and other payables 6 386,855 206,831 386,855 206,831Convertible loan 7 100,000 100,000 100,000 100,000Redeemable convertible preference shares 8 615,000 615,000 615,000 615,000Total current liabilities 1,101,855 921,831 1,011,855 921,831

NET LIABILITIES (692,268) (775,056) (692,268) (471,414)

EQUITYShare capital 9 260,000 260,000 260,000 260,000Currency translation reserve 33,455 6,883 - -Accumulated losses (985,723) (1,041,939) (952,268) (731,414)Total equity (692,268) (775,056) (692,268) (471,414)


Note 2013 2012$ $

Sales 965,418 396,005Cost of services (420,565) (363,776)Gross profit 544,853 32,229

Other income 10 160,071 12,822

Expenses - Administrative (431,374) (763,926) - Other operating cost (216,100) (270,806) - Finance (1,234) (2,078)

Profit/(loss) before income tax 11 56,216 (991,759)

Income tax 13 - -

Profit/(loss) after income tax 56,216 (991,759)

Other comprehensive income/(loss) that may besubsequently reclassified to profit or loss:

- Currency translation differences arising fromconsolidation 26,572 6,883

Total comprehensive profit/(loss) for the year 82,788 (984,876)


NoteShare

capital

Currencytranslation

reserve Accumulated

lossesTotalequity

$ $ $ $2013Beginning of financial year 260,000 6,883 (1,041,939) (775,056)

Total comprehensive profit for the year - 26,572 56,216 82,788

End of financial year 260,000 33,455 (985,723) (692,268)

2012Beginning of financial year 1,000 - (50,180) (49,180)

Issue of shares 9 259,000 - - 259,000

Total comprehensive loss for the year - 6,883 (991,759) (984,876)

End of financial year 260,000 6,883 (1,041,939) (775,056)


2013 2012$ $

Cash flows from operating activitiesProfit/(loss) after income tax 56,216 (991,759)Adjustments for: - Depreciation of property, plant and equipment 8,490 6,676

64,706 (985,083)Change in working capital

- Trade and other receivables (262,045) (96,371)- Trade and other payables 180,024 97,831

Cash used in operations (17,315) (983,623)

Net cash used in operating activities (17,315) (983,623)

Cash flows from investing activitiesPurchase of property, plant and equipment (2,489) (18,036)Net cash used in investing activities (2,489) (18,036)

Cash flows from financing activitiesIssuance of shares - 259,000Issuance of redeemable convertible preference shares - 615,000Proceeds from convertible loan - 100,000Net cash provided by financing activities - 974,000

Net decrease in cash and cash equivalents (19,804) (27,659)Cash and cash equivalents at beginning of financial year 9,447 37,106Effect of currency translation on cash and cash equivalents 26,572 -Cash and cash equivalents at end of financial year 16,215 9,447


These notes form an integral part of and should be read in conjunction with the accompanying financialstatements.

1. General information

Gushcloud Pte. Ltd. (the Company) is incorporated in Singapore and has its registered office at625 Lorong 4 Toa Payoh, #05-01 General Magnetics Building, Singapore 319519.

The principal activities of the Company are those relating to advertising.

2. Going concern

As at 31 December 2013, the Companys total liabilities exceeded its total assets by $692,268(2012: $775,056). The financial statements have been prepared on a going concern basisnotwithstanding the deficiency in shareholders funds as the shareholders have undertaken toprovide such financial support as necessary to enable the Company to continue its operations for theforeseeable future.

3. Significant accounting policies

3.1 Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial ReportingStandards (FRS). The financial statements have been prepared under the historical costconvention, except as disclosed in the accounting policies below.

The preparation of these financial statements in conformity with FRS requires management toexercise its judgement in the process of applying the Groups accounting policies. There are nosignificant areas involving a higher degree of judgement or complexity, or areas where estimatesand assumptions are significant to the financial statements.

Interpretations and amendments to published standards effective during the year

During the year, the Company adopted the new or amended FRS and Interpretations to FRS (INTFRS) that are mandatory for application from that date. Changes to the Companys accountingpolicies have been made as required, in accordance with the transitional provisions in the respectiveFRS and INT FRS.

The adoption of these new or amended FRS and INT FRS did not result in substantial changes tothe Companys accounting policies and had no material effect on the amounts reported for thecurrent or prior financial years.


3. Significant accounting policies (continued)

3.2 Group accounting

Subsidiaries

Subsidiaries are entities (including special purpose entities) over which the Group has power togovern the financial and operating policies, generally accompanied by a shareholding giving rise toa majority of the voting rights. The existence and effect of potential voting rights that are currentlyexercisable or convertible are considered when assessing whether the Group controls another entity.

The purchase method of accounting is used to account for the acquisition of subsidiaries. The costof an acquisition is measured as the fair value of the assets given, equity instruments issued orliabilities incurred or assumed at the dates of exchange, plus costs directly attributable to theacquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in abusiness combination are measured initially at their fair value on the date of acquisition, irrespectiveof the extent of any minority interest.

Subsidiaries are consolidated from the date on which control is transferred to the Group. They arede-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains ontransactions between group entities are eliminated. Unrealised losses are also eliminated butconsidered an impairment indicator of the assets transferred. Accounting policies of subsidiarieshave been changed where necessary to ensure consistency with the policies adopted by the Group.

Please refer to the paragraph Investments in subsidiaries for the accounting policy on investmentsin subsidiaries in the separate financial statements of the Company.

3.3 Currency translation

Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using thecurrency of the primary economic environment in which the entity operates (functional currency).The financial statements are presented in Singapore Dollars.

Transactions and balances

Transactions in a currency other than the functional currency (foreign currency) are translated intothe functional currency using the exchange rates at the dates of the transactions. Currencytranslation differences from the settlement of such transactions and from the translation of monetaryassets and liabilities denominated in foreign currencies at the closing rates at the balance sheet dateare recognised in profit or loss, unless they arise from borrowings in foreign currencies and othercurrency instruments designated and qualifying as net investment hedges and net investment inforeign operations. Those currency translation differences are recognised in the currency translationreserve in the consolidated financial statements and transferred to profit or loss as part of the gain orloss on disposal of the foreign operation.



3.3 Currency translation (continued)

Transactions and balances (continued)

Non-monetary items measured at fair values in foreign currencies are translated using the exchangerates at the date when the fair values are determined.

Translation of Group entities financial statements

The results and financial position of all the Group entities (none of which has the currency of ahyperinflationary economy) that have a functional currency different from the presentation currencyare translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the reporting date;

(ii) Income and expenses are translated at average exchange rates (unless the average is not areasonable approximation of the cumulative effect of the rates prevailing on the transactiondates, in which case income and expenses are translated using the exchange rates at thedates of the transactions); and

(iii) All resulting currency translation differences are recognised in the currency translationreserve.

3.4 Revenue recognition

Sale comprises the fair value of the consideration received or receivable for services rendered in theordinary course of the Companys activities. Sales are presented, net of goods and services tax,rebates and discounts.

Revenue from advertising is recognised when the services are rendered.

Interest income is recognised using the effective interest method.

3.5 Bank balancesTrade and other receivables

Bank balances and trade and other receivables are initially recognised at their fair values plustransaction costs and subsequently carried at amortised cost using the effective interest method, lessaccumulated impairment losses.



3.5 Bank balancesTrade and other receivables (continued)

The Company assesses at each balance sheet date whether there is objective evidence that thesefinancial assets are impaired and recognises an allowance for impairment when such evidenceexists. Significant financial difficulties of the debtor, probability that the debtor will enterbankruptcy and default or significant delay in payments are objective evidence that these financialassets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance accountwhich is calculated as the difference between the carrying amount and the present value of estimatedfuture cash flows, discounted at the original effective interest rate.

These assets are presented as current assets except for those that are expected to be realised laterthan 12 months after the balance sheet which are presented as non-current assets.

3.6 Property, plant and equipment

Property, plant and equipment are recognised at cost less accumulated depreciation andaccumulated impairment losses.

Depreciation is calculated using the straight line method to allocate depreciable amounts over theirestimated useful lives. The estimated useful lives are as follows:

Useful livesComputer 3 yearsRenovations 3 yearsFurniture and fittings 3 years

The residual values, estimated useful lives and depreciation method of property, plant andequipment are reviewed, and adjusted as appropriate, at the end of each reporting period. Theeffects of any revision are recognised in profit or loss when the changes arise.

Subsequent expenditure relating to property, plant and equipment that has already been recognisedis added to the carrying amount of the asset only when it is probable that future economic benefitsassociated with the item will flow to the Group and the cost of the item can be measured reliably.All other repair and maintenance expenses are recognised in profit or loss when incurred.

On disposal of an item of property, plant and equipment, the difference between the disposalproceeds and its carrying amount is recognised in profit or loss. Any amount in revaluation reserverelating to that asset is transferred to retained profits directly.



3.7 Impairment of non-financial assets

Property, plant and equipmentInvestments in subsidiary

Property, plant and equipment and investments in subsidiary are tested for impairment wheneverthere is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value lesscost to sell and the value-in-use) is determined on an individual asset basis unless the asset does notgenerate cash inflows that are largely independent of those from other assets. If this is the case, therecoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, thecarrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairmentloss profit or loss, unless the asset is carried at revalued amount, in which case, such impairmentloss is treated as a revaluation decrease.

An impairment loss for an asset other than goodwill is reversed if, and only if, there has been achange in the estimates used to determine the assets recoverable amount since the last impairmentloss was recognised. The carrying amount of this asset is increased to its revised recoverableamount, provided that this amount does not exceed the carrying amount that would have beendetermined (net of any accumulated amortisation or depreciation) had no impairment loss beenrecognised for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unlessthe asset is carried at revalued amount, in which case, such reversal is treated as a revaluationincrease. However, to the extent that an impairment loss on the same revalued asset was previouslyrecognised as an expense, a reversal of that impairment is also credited to profit or loss.



3.8 Investments in subsidiary

Investments in subsidiary are carried at cost less accumulated impairment losses in the Companysbalance sheet. On disposal of investments in subsidiary, the difference between disposal proceedsand the carrying amounts of the investments are recognised in profit or loss.

3.9 Trade and other payables

Trade and other payables are initially recognised at fair value, and subsequently carried at amortisedcost using the effective interest method.

3.10 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includecash on hand, deposits with financial institutions which are subject to an insignificant risk of changein value, and bank overdrafts. Bank overdrafts are presented as current borrowings on the balancesheet.

3.11 Operating lease payments

Payments made under operating leases (net of any incentives received from the lessors) arerecognised in profit or loss on a straight-line basis over the period of the lease.

Contingent rents are recognised as an expense in profit or loss when incurred.

3.12 Income taxes

Current income tax is recognised at the amount expected to be paid to or recovered from the taxauthorities.

Deferred income tax is recognised for all temporary differences except when the deferred incometax arises from the initial recognition of an asset or liability that affects neither accounting nortaxable profit or loss at the time of the transaction.

Current and deferred income tax is measured using the tax rates and tax laws that have been enactedor substantively enacted by the balance sheet date, and are recognised as income or expenses inprofit or loss, except to the extent that the tax arises from a transaction which is recognised directlyin equity.



3.13 Fair value estimation of financial assets and liabilities

The fair values of current financial assets and liabilities carried at amortised cost approximate theircarrying amounts.

3.14 Employee compensation

Defined contribution plans

The Groups contributions to defined contribution plans are recognised as employee compensationexpense when the contributions are due, unless they can be capitalised as an asset.

3.15 Borrowings

Convertible loans and redeemable convertible preference shares

Convertible loans and redeemable convertible preference shares which are mandatorily redeemableon a specific date are classified as liabilities.

The total proceeds from the loans and shares are allocated to the liability component and the equitycomponent, which are separately presented on the balance sheet.

The liability component is recognised initially at its fair value, determined using a market interestrate for equivalent non-convertible shares. It is subsequently carried at amortised cost using theeffective interest method until the liability is extinguished on conversion or redemption of theshares.

The difference between the total proceeds and the liability component is allocated to the conversionoption (equity component), which is presented in equity net of any deferred tax effect. The carryingamount of the conversion option is not adjusted in subsequent periods. When the conversion optionis exercised, its carrying amount is transferred to the share capital. When the conversion optionlapses, its carrying amount is transferred to retained profits.

3.16 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance ofnew ordinary shares are deducted against the share capital account.


4. Trade and other receivables

Group Company2013 2012 2013 2012

$ $ $ $

Trade receivables 376,853 109,254 376,853 107,991Non trade amount due from

subsidiary - - - 314,352Deposits 11,160 16,714 11,160 16,714

388,013 125,968 388,013 439,057

The non-trade amounts due from subsidiary were unsecured, interest free and repayable on demand.

5. Property, plant and equipment Group and company

ComputersFurniture and

fittings Renovations Total$ $ $ $

2013CostBeginning of financial year 1,382 11,154 5,500 18,036Additions 2,489 - - 2,489End of financial year 3,871 11,154 5,500 20,525

Accumulated depreciationBeginning of financial year 991 4,081 1,604 6,676Depreciation 392 5,348 2,750 8,490End of financial year 1,383 9,429 4,354 15,166

Net book valueEnd of financial year 2,488 1,725 1,146 5,359

2012CostBeginning of financial year - - - -Additions 1,382 11,154 5,500 18,036End of financial year 1,382 11,154 5,500 18,036

Accumulated depreciationBeginning of financial year - - - -Depreciation 991 4,081 1,604 6,676End of financial year 991 4,081 1,604 6,676

Net book valueEnd of financial year 391 7,073 3,896 11,360


6. Trade and other payables

Group Company2013 2012 2013 2012

$ $ $ $

Trade payables 219,822 26,390 219,822 26,390Accrual of GushAd fees 131,539 144,842 131,539 144,842Accrued operating expenses 5,494 11,099 5,494 11,099Amount due to a related party 10,000 4,500 10,000 4,500Amount due to a former staff 20,000 20,000 20,000 20,000

386,855 206,831 386,855 206,831

The amounts due to a related party and a former staff are non-trade in nature, unsecured, interestfree, denominated in Singapore Dollar and repayable on demand.

7. Convertible loan

On 31 October 2012, the Company issued 6% convertible loan denominated in Singapore Dollarswith a nominal value of $100,000. The loan is due for repayment three years from the issue date attheir nominal value of $100,000 or conversion into shares of the Company at the holders option toUS$3 million shares or at a 30% discount to the pre-monies valuation of the next round of financingto be raised by the Company.

The fair value of the liability component, included in current borrowings, is calculated using amarket interest rate for an equivalent non-convertible bond at the date of issue. The residual amountrepresenting the value of the equity conversion component, if any, is included in shareholdersequity in other reserves.

8. Redeemable convertible preference shares

On 2 March 2012, the Company issued 5,000 redeemable convertible preference shares amountingto US$500,000 (S$615,000) to a third party investor. The shares are redeemable at US$100 pershare or could be converted into ordinary shares amounting to 14.29% of the enlarged issued andpaid share capital of the Company on conversion date. The shares are classified as currentborrowings.

9. Share capital

The Companys share capital comprises fully paid-up 30,000 (2012: 30,000) ordinary shares withno par value, amounting to a total of $260,000 (2012: $260,000). Fully paid ordinary shares carryone vote per share and carry a right to dividends as and when declared by the Company.

10. Other income

Group2013 2012

$ $

Other miscellaneous income 25,472 7,256Other Service income 105,800 -Lisencing Fee 28,799 -Currency translation gain - 5,566

160,071 12,822


11. Expenses by nature

Group2013 2012

$ $

Depreciation expenses 8,490 6,676Staff cost 349,165 490,929Sub-contractor charges 110,519 -Rental on operating lease 43,124 100,067

12. Staff cost

Group2013 2012

$ $

Salaries and bonuses 294,046 390,325Directors remuneration 15,000 48,970Employers contribution to Central Provident Fund 39,288 51,582Other 831 52

349,165 490,929

13. Income tax

Income tax expenseGroup

2013 2012$ $

Tax expense attributable to profit is made up of:- Current income tax - -

13. Income tax (continued)

The tax expense on profit differs from the theoretical amount that would arise using the Singaporestandard rate of income tax as follows:

Group2013 2012

$ $

Profit/(loss) before income tax 56,216 (991,759)

Tax calculated at a tax rate of 17% 9,557 (168,599)Effects of:

- Expenses not deductible for tax purposes 6,197 45,275- Tax incentive (1,552) -- Utilisation of previously unrecognised tax losses (19,704) -- Deferred tax asset not recognised 155 -- Tax losses not recognised 5,347 123,324

Tax charge - -


Deferred income tax assets are recognised to the extent that realisation of the related tax benefitsthrough future taxable a profit is probable. The Company has unrecognised tax losses ofapproximately $193,774 (2012: $700,000) at the balance sheet date which can be carried forwardand used to offset against future taxable income subject to meeting certain statutory requirements.

14. Operating lease commitments

The Group lease office premise from non-related parties under non-cancellable operating leases.The future minimum lease payables under non-cancellable operating leases contracted for at thebalance sheet date but not recognised as payables, are as follows:

Group and company2013 2012

$ $

Not later than one year 35,000 60,000Between one and five years - 35,000

35,000 95,000

15. Financial risk management

Financial risk factors

The Group is exposed to credit, interest rate and other market risk arising in the normal course ofthe Groups business. The Board of Directors is responsible for setting the objectives andunderlying principles of financial risk management for the Group. The management team thenestablishes detailed policies such as risk identification and measurement, exposure limits andhedging strategies.

The Group does not have written risk management policies and guidelines. However, the board ofdirectors meets periodically to analyse and formulate measures to manage the Groups risks. Generally, management continually monitors the Groups risk management process to ensure that anappropriate balance between risk and control is achieved.

(a) Market risk

(i) Currency risk

The Companys business operations are not exposed to significant foreign currency risks asits monetary assets and liabilities are mostly denominated in Singapore dollars.

(ii) Interest rate risk

The Company does not have significant financial assets or liabilities that are exposed tointerest rate risk.

(b) Credit risk

Credit risk is the risk of loss that may arise from outstanding financial instruments should acounterparty defaults its obligations. The Groups exposure to credit risk arises primarily from trade


and other receivables. For cash at banks, the Group minimise credit risk by dealing exclusively withfinancial institutions with high credit ratings.

The Group monitors and manage its credit risk by collecting deposits from customers wherepossible. In addition, the Group does not have any concentration of credit risk since its customerbase is much diversified and that there is no singular major debtor who makes up a large percentageof the Groups receivable at year end.

The maximum exposure to credit risk for each class of financial instruments is the carrying amountof that class of financial instruments presented on the balance sheet.

15. Financial risk management (continued)

The Groups major classes of financial assets are bank deposits and trade receivables.

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks whichhave high credit-ratings as determined by international credit-rating agencies. Trade andother receivables that are neither past due nor impaired are substantially companies withgood collection track records with the Group.

(ii) Financial assets that are past due and/or impaired

There is no other class of financial assets that is past due and/or impaired.

(c) Liquidity risk

The table below analyses the Companys financial liabilities grouped into relevant maturitygroupings based on the remaining period from the balance sheet date to the contractual maturitydate. The amounts disclosed in the table are the contractual undiscounted cash flows.

GroupLess thanone year

More thanone year

$ $At 31 December 2013Trade and other payables 386,855 -Convertible loans 100,000 -Redeemable convertible preference shares 615,000 -

At 31 December 2012Trade and other payables 206,831 -Convertible loans 100,000 -Redeemable convertible preference shares 615,000 -

(d) Capital risk

Management ensures that the Group is adequately capitalised and maintains an optimal capitalstructure by issuing additional debt instruments when necessary.

The Group actively and regularly reviews and manages its capital structure to ensure optimal capitalstructure and shareholders returns, taking into consideration the future capital requirements of the


Group and capital efficiency, prevailing and projected profitability, projected operating cash flows,projected capital expenditures and projected strategic investment opportunities.

The Groups composition of capital is represented by total equity as disclosed on the balance sheet. The Company is not subject to any externally imposed capital requirements.

15. Financial risk management (continued)

(e) Fair value measurements

The Group presents assets and liabilities measured at fair value and classified by level of thefollowing fair value measurement hierarchy:

(i) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);(ii) inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (ie as prices) or indirectly (ie derived from prices) (Level 2); and(iii) inputs for the asset or liability that are not based on observable market data (unobservable

inputs) (Level 3).

The carrying value less impairment provision of current financial assets and liabilities approximatetheir fair values. There are no other financial assets or liabilities as at 31 December 2013 whichapplied fair value measurement.

(f) Financial instruments by category

The aggregate carrying amounts of loans and receivables and financial liabilities at amortised costare as follows:

Group2013 2012

$ $

Loans and receivables 404,228 135,415Financial liabilities at amortised cost 1,101,855 921,831

16. Related party transactions

Key management personnel remuneration is as follows:

Group2013 2012

$ $

Directors remuneration 15,000 7,800Employers contributions to Central Provident Fund 5,760 6,240

20,760 14,040


17. New or revised accounting Standards and Interpretations

Below are the mandatory standards, amendments and interpretations to existing standards that havebeen published, and are relevant for the Companys accounting periods beginning on or after 1January 2014 or later periods and which the Company has not early adopted:

Amendments to FRS 110 Consolidated Financial Statements (effective for annual periodsbeginning on or after 1 January 2014)

Amendments to FRS 112 Disclosures of Interests in Other Entities (effective for annualperiods beginning on or after 1 January 2014)

The management anticipates that the adoption of the above FRSs, INT FRSs and amendments toFRS in the future periods will not have a material impact on the financial statements of theCompany in the period of their initial adoption.

18. Authorisation of financial statements

These financial statements were authorised for issue in accordance with a resolution of the Board ofDirectors of Gushcloud Pte. Ltd. and its Subsidiary on 20 June 2014.

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Gushcloud financial statements 2013

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