Life Clips 8K/A Report of the Directors for the Financial Year Ended 30 June 2019 | LCLP 8 Dec 21

Exhibit 99.1

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

The directors present their report to the members together with the financial statements of the Company for the year ended 30 June 2019.

1.	DIRECTORS

The directors in office at the date of this report are:-

Raju Sekar

Vijayakumar Praveenkumar

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS

Except as disclosed in note 4 below, neither at the end of nor at any time during the financial year was the company a party to any arrangement whose object is to enable the director of the company to acquire benefits by means of the acquisition of shares or debentures of the company or of any other corporate body.

3.	DIRECTORS’ CONTRACTUAL BENEFITS

Since the beginning of the financial year no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a Company in which he has a substantial financial interest (except in respect of professional fees and/or remuneration as shown in the financial statements).

4.	DIRECTORS’ INTEREST IN SHARES AND DEBENTURES

The directors holding office as at 30 June 2019 and their interests in the share capital of the company as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Companies Act, Cap.50 is as follows:-

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

5.	SHARE OPTIONS

No options were granted during the financial year to take up unissued shares of the company. No shares were issued by virtue of the exercise of options. There were no unissued shares under option at the end of the financial year.

6.	AUDITORS

The company has elected under Section 205C (3) of the Companies Act to have the financial statements exempted from audit requirements.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS


Raju Sekar
DIRECTOR


Vijayakumar Praveenkumar
DIRECTOR

Dated:

Singapore

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

STATEMENT BY DIRECTORS

REG NO: 201529263D

In the opinion of the directors:-

(a)	The accompanying balance sheet, statement of comprehensive income, statement of changes in equity and the cash flow statement, together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the company as at 30 June 2019 and of the results of the business of the Company for the financial year ended on that date; and

(b)	At the date of this statement, having assurance of continued financial support from the Company’s shareholder and director, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has authorized these financial statements for issue on the date of this statement.

SIGNED ON BEHALF OF THE DIRECTORS



Raju Sekar
DIRECTOR



Vijayakumar Praveenkumar
DIRECTOR

Dated:

Singapore

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

STATEMENT BY AN EXEMPT PRIVATE COMPANY EXEMPT FROM AUDIT REQUIREMENTS

UNDER SECTION 205C (3) OF THE COMPANIES ACT

Name of Company:	BELFRICS GLOBAL PTE LTD

Registration No:	201529263D

We, Raju Sekar and Vijayakumar Praveenkumar are being the director of the abovementioned company, hereby declare on behalf of the Board of Directors that:

	a)	as at the end of the financial year 30 June 2019, the Company is exempt from audit requirements.

	b)	No notice has been received from any member under Section 205B(6) requiring the Company to obtain an audit of its accounts in relation to the year; and

	c)	The accounting and other records required to be kept by the Company in accordance with Section 199 of the Companies Act have been so kept.


Raju Sekar
DIRECTOR



Vijayakumar Praveenkumar
DIRECTOR

Dated:

Singapore

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

BALANCE SHEET

AS AT 30 JUNE 2019

	NOTES		2019
			S$
FIXED ASSETS
Software				502,437

CURRENT ASSETS
Cash and cash equivalent		5		103
Director account				368,134
Loan and advances				1,058,787
				1,427,024
CURRENT LIABILITY
Sundry creditor				124,751
Unsecured loan				11,818
Other creditors				1,856,808
				1,993,377

Net assets				(63,916	)

EQUITY AND RESERVE
Share capital		3		1,000
Retained earning				(64,916	)
Share holder’s fund				(63,916	)

The accompanying notes form a part of these accounts.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2019

	NOTES	2019
		S$
Revenue			-
Purchases			(136,569	)
GROSS PROFIT			(136,569	)

Administratiive expenses			1,860

Finance cost			(138,429	)
Profit before tax	6		(138,429	)

Profit after tax			(138,429	)
Other comprehensive income			73,513
Total comprehensive income for the year			(64,916	)

The accompanying notes form a part of these accounts.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2019

	SHARE		RETAINED
	CAPITAL		EARNINGS			TOTAL
	S$		S$			S$
Total comprehensive income for the year	1,000		73,513			74,513
				(138,429	)		(138,429	)
Balance at 30 June 2019		1,000		(64,916	)		(63,916	)

The accompanying notes form a part of these accounts.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2019

	2019
		S$
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) before tax		(138,429	)
Adjustments for:- Depreciation		-

Operating profit before working capital changes		(138,429	)

Receivables		(1,058,787	)
Payables		1,993,377
Cash used in operations		796,161
Income tax paid		-
Net cash used in operating activities		796,161

Investing activites
Purchase of plant and equipment		(502,437	)
Net cash flow from investing activities		(502,437	)

Financing activites
Share capital		1,000
Other creditor		-
Amount due from director		(294,621	)
Amount due from related party		-
Net cash flow from financing activities		(293,621	)

Net increase in cash and cash equivalents		103
Cash and cash equivalents at beginning of year		-
Cash and cash equivalents at end of year - NOTE 6		103

The accompanying notes form a part of these accounts.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

NOTES TO THE FINANCIAL STATEMENTS – 30 JUNE 2019

These notes form an integral part of and should be read in conjunction with the balance sheet, income statement, statement of changes in equity and cash flow statement.

1.	CORPORATE INFORMATION AND PRINCIPAL ACTIVITIES

The Company is domiciled and incorporated as a limited private company in the Republic of Singapore. Its registered office and principal place of business is located at 35 Selegie Road, #01-21, Parklane Shopping Mall, Singapore 188307.

The principal activities of the company are those of information technology. There have been no significant changes in the nature of these activities during the financial year.

The financial statements of the company for the year ended 30 June 2019 were authorized for issue in accordance with the resolution of the directors on

2	SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial statements are prepared in accordance with the Singapore Financial Reporting Standards (“FRS”).

The financial statements are presented in Singapore dollars (which is also the functional currency of the company) and have been prepared on historical cost basis except as disclosed in the accounting policies below.

Receivables

Receivables are stated invoiced amount, less allowance for doubtful in collection and are written off when they are considered to be uncollectible. The net amount approximates fair value.

Payables

Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the company.

Payables include trade and non-trade balances.

Revenue recognition and revenue

Revenue is recognized to the extent that it is probable that economic benefits will flow to the company and the revenue could be reliably measured.

Revenue for services is recognized upon their completion and acceptance by customers.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

NOTES TO THE FINANCIAL STATEMENTS – 30 JUNE 2019

2.	SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Provisions

Provisions are recognized when:-

	(i)	the company has a present obligation (legal or constructive) as a result of a past event;

	(ii)	it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

	(iii)	a reliable estimate can be made of the amount of the obligation.

Income Tax

The tax expense is determined on the basis of tax effect accounting, using the liability method. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred income tax.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

(g)

Cash and cash equivalent

Cash and cash equivalents comprise cash balances in hand and at bank.

	(h)	Employee benefits

Pension obligation

The company contributes to the Central Provident Fund (CPF), a defined contribution plan regulated and managed by the Government of Singapore. The company’s contributions to CPF are charged to the income statement in the year to which the contributions relate.

ii)

Employee leave entitlement

Employees are required to take their annual leave before end of the calendar year or face forfeiture of leave.

(i)

Operating lease

Rental lease is charged to the income statement on a straight-line basis over the lease term. Lease incentives, if any recognized as an integral part of net consideration agreed for the use of the leased asset. Penalty payments on early termination, if any, are recognized in the income statement when incurred.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

NOTES TO THE FINANCIAL STATEMENTS – 30 JUNE 2019

2.	SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

(j)

Related party

Related party refers to a party that has the ability to control the other party or exercise significant influence over the other party in making financial and operating decision.

(k)

Impairment of assets

The carrying amounts of the company’s assets subject to impairment are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is defined as the higher of value in use and net selling price.

Any impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it is charged to equity.

(i)

Financial instruments

Financial instruments carried on the balance sheet include, trade debtors, trade creditors, amount due to director, accrual and cash and cash equivalents. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

(j)

Grant

Government grants are recognized at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

NOTES TO THE FINANCIAL STATEMENTS – 30 JUNE 2019

3.	SHARE CAPITAL

	2019
	S$
Issued and fully paid
Ordinary shares		1,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the company. All ordinary shares carry one vote per share without restrictions. The ordinary share has no par value.

4.	AMOUNT DUE BY DIRECTOR

The amount due by director is unsecured, interest free, non-trade in nature and repayable on demand.

5.	CASH AND CASH EQUIVALENT

	2019
	S$
Cash in hand		103

6.	TAXATION

	2019
	S$
Accounting (loss)		(138,429	)
Tax at 17%		(23,533	)
Deferred tax		23,533
Income tax expenses		-

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

NOTES TO THE FINANCIAL STATEMENTS – 30 JUNE 2019

7.	FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Though the company has no written risk management policies and guidelines, the directors have adopted policies that seek to mitigate these risks in a cost-effective manner.

Credit risk

The company’s credit risk is negligible. There was no concentration of credit risk.

Liquidity risk

The company monitors and maintains a level of cash and bank balances deemed adequate to finance the Company’s operations.

Interest rate risk

The company has no significant exposure to market risk for changes in interest rates because it has no borrowings from any external sources.

Fair value

The carrying amounts of the company’s financial assets and liabilities as reflected in the balance sheet approximate their fair value.

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

CONTENTS

INDEX		PAGE

REPORT OF THE DIRECTORS		1-2

STATEMENT BY DIRECTORS		3

STATEMENT BY AN EXEMPT PRIVATE COMPANY		4

BALANCE SHEET		5

INCOME STATEMENT		6

STATEMENT OF CHANGES IN EQUITY		7

CASH FLOW STATEMENT		8

NOTES TO THE FINANCIAL STATEMENTS		9-13

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

Registration No. 201529263D

ANNUAL REPORT FOR THE YEAR ENDED

30 JUNE 2019

BELFRICS GLOBAL PTE LTD

(Incorporated in Singapore)

DETAILED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2019

	2019
	S$
Revenue	-
Purchases		(136,569	)
Gross (loss)		(136,569	)
Less: Administrative expenses
Secreterial fee		1,860
		1,860
Net (loss) before tax		(138,429	)

This statement does not form part of the accounts.

BELFRICS TANZANIA LIMITED

DAR ES SALAAM

AUDITED FINANCIAL STATEMENTS

FOR

THE YEAR ENDED 31^ST DECEMBER, 2019.

MKUKI Consultants

Certified Public Accountants & Tax Consultants

Dar es Salaam

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

CONTENTS		PAGE

Report of Directors		2 – 4

Statement of Directors’ Responsibilities		5

Independent Auditors report		6 - 7

Financial statements:

Statement of financial position		8
	��
Statement of Profit or Loss and Other comprehensive income		9

Statement of Changes in Equity		10

Statement of cash flows		11

Notes to the financial statements		12 - 22

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2019

1.	The Directors of Belfrics Tanzania Limited present their report together with the financial statements for the year ended 31 December 2019, which disclose the state of affairs of the entity as at 31 December 2019 and the results of the operation for the year ended on that date.

2.	INCORPORATION AND REGISTERED OFFICE

Belfrics Tanzania Limited is a private company that was registered on 2^nd February, 2018 and given registration number 141049 by registrar of companies under the Companies Act, 2002 Cap 212 of the laws of Tanzania. Its registered office is Plot 38 South Ursino, New Bagamoyo Road, Kinondoni Dar es Salaam

3.	PRINCIPAL ACTIVITY

Belfrics Tanzania Limited carries on business of ICT in Blockchain Technology. The company operates in Plot 38 South Ursino, New Bagamoyo Road, Kinondoni Dar Es Salaam and other parts in the United Republic of Tanzania.

4.	COMPOSITION OF THE BOARD OF DIRECTORS

The directors of the company who held office during the year and up to the date of this report are:

Name	Nationality	Position
Praveen Kumar Vijayakumar	Non Tanzanian	Director
Aziz Rashid Chonya	Tanzanian	Director

Directors’ interest in the shares of the company

None of the Directors have any beneficial interest in the issued share capital of the company as at 31 December 2019.

5.	CORPORTAE GOVERNANCE

The Board consists of four directors. The Board takes overall responsibility for the Company, including responsibility for identifying key risk areas, considering and monitoring investment decisions, considering significant financial matters and reviewing the performance of management business plans and budgets. The Board is also responsible for ensuring that a comprehensive system of internal control policies and procedures is operative, and for compliance with sound corporate governance principles. The company is committed to the principles of effective corporate governance. The directors also recognize the importance of integrity, transparency and accountability.

6.	CAPITAL STRUCTURE AND SHAREHOLDING

Capital Structure

The Company’s capital structure for the year is shown below:

Authorized, :

The authorized share capital of the company is Tanzania Shillings One Billion (Tshs.100,000,000) divided into Five Hundred Thousand (500,000) ordinary shares at Tanzania Shillings Two Hundred (Tshs. 200) each.

Shareholding

The authorized share capital is held by:

Name	Number		2019 Nominal value
			TZS
Praveerkumar Vijayakumar		499,999		99,999,800
Aziz Rashid Chonya		1		200
Total		500,000		100,000,000

7.	RESULTS AND DIVIDEND

The performance of the Company for the year is set out on page 7 of these financial statements. During the year no dividend was declared and approved.

8.	RISK MANAGEMENT AND INTERNAL CONTROL

The Board accepts final responsibility for the risk management and internal control system of the company. It is the task of management to ensure that adequate internal financial and operational control systems are developed and maintained on an going basis in order to provide reasonable assurance regarding:

	●	The business is owned by two shareholders
	●	The safeguarding of the company’s assets
	●	Compliance with applicable laws and regulations
	●	The reliability of accounting records
	●	Business sustainability under normal as well as adverse conditions; and
	●	Responsible behaviors towards all stakeholders

The efficiency of any internal control system is dependent on strict observance of prescribed measure. There is always a risk of non-compliance of such measures by staff.

Whilst no system, of internal control can provide absolute assurance against misstatement or losses, the company system is designed to provide the Board with reasonable assurance that the procedures in place are operating effectively.

The Board assessed the internal control systems throughout the financial year ended 31 December 2019 and is of the opinion that they met accepted criteria. The Board is directly responsible for risk and internal control assessment as a separate audit committee is not considered necessary.

INDEPENDENT AUDITORS’ REPORT

To the Directors of

BELFRICS TANZANIA LIMITED

Report on the financial statement

We have audited the accompanying financial statements of Belfrics Tanzania Limited as set out on page 8 to 24, which comprise the statement of financial position as at 31 December 2019 and the statement of Profit or loss and other comprehensive income, a statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the financial statements

Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the Companies Act, Cap 212 Act NO.12 of 2002. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion the accompanying financial statements give a true and fair view of the state of the company’s financial affairs at 31 December 2019 and of its loss and cash flows for the year then ended in accordance with International Financial Reporting Standards and the Companies Act, CAP 212 Act No. 12 of 2002.

BELFRICS TANZANIA LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31st DECEMBER 2019

	NOTE	2019			2018

Sales Revenue	6		10,649,747			9,738,284
Cost of Sales	7		-			-
Gross Profit			10,649,747			9,738,284

Administrative Costs
Operating costs	8		111,199,841			118,576,704
Finance charges	9		882,587			-
Depreciation of Non-current assets	13		7,591,384			2,530,461
			119,673,812			121,107,165

Net Profit before tax			(109,024,065	)		(111,368,881	)

Less: Corporate tax provision			-			-
Net Profit for the year			(109,024,065	)		(111,368,881	)

Other Comprehensive Income			-			-

Total comprehensive income for the year			(109,024,065	)		(111,368,881	)

Notes and related statements forming part of these financial statements are set out on pages 13 to 24

BELFRICS TANZANIA LIMITED

STATEMENT OF CHANGE IN EQUITY

FOR THE YEAR ENDED 31st DECEMBER 2019

	Share Capital		Retained Earnings			Total
	TZS		TZS			TZS
As at 1 January 2019		100,000,000		(111,368,881	)		(11,368,881	)
Profit for the year		-		(109,024,065	)		(109,024,065	)
Additions for the year		-		-			-
As at 31 September 2019		100,000,000		(220,392,946	)		(120,392,946	)

As at 1 January 2018		100,000,000		-			100,000,000
Profit for the year		-		(111,368,881	)		(111,368,881	)
Additions for the year		-		-			-
As at 31 September 2018		100,000,000		(111,368,881	)		(11,368,881	)

Notes and related statements forming part of these financial statements are set out on pages 12 to 24.

BELFRICS TANZANIA LIMITED

STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 31st DECEMBER 2019

	2019			2018

Profit / Loss as per Account		(109,024,065	)		(111,368,881	)
Add back:
Depreciation		7,591,384			2,530,461
		(101,432,681	)		(108,838,420	)
Change in Working Capital
(Increase)/Decrease in Trade and Other Receivables		-			-
Increase/(Decrease) in Trade and Other Payables		-			876,999,558
Cash Flows from Operation		(101,432,681	)		(768,161,138	)

Tax Paid		-			(1,500,000	)
		-			(1,500,000	)

Net Cash Flows from Operating Activities		(101,432,681	)		(769,661,138	)

Less: Investing Activities
Purchase of property, plant and equipment		-			(48,331,071	)
Cash flow after Investing activities		-			(48,331,071	)

Financing Activities
Capital		-			100,000,000
Shareholder Loan		95,161,325			724,266,897
Cash Flows After financing activities		95,161,325			824,266,897

Cash and Cash Equivalent		(6,271,356	)		6,274,688
Add: Opening Cash / Bank		6,274,688			-
Net Cash and cash Equivalent		3,332			6,274,688

Notes and related statements forming part of these financial statements are set out on pages 12 to 24.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

1.	REPORTING ENTITY

Belfrics Tanzania Limited (‘the Company’) is incorporated in Tanzania under the Companies Act 2002 as a private limited liability company, and is domiciled in Tanzania. The financial statements of the Company are for the year ended 31 December 2019.

2.	BASIS OF PREPARATION AND GOING CONCERN Statement of Compliance

The financial statements are prepared in accordance with International Financial Reporting Standard (IFRS) and its international adopted by the International Accounting Standards Board (IASB) and comply with the requirements of the Tanzanian Companies Act, 2002.

Basis of preparation

The financial statements are prepared under the historical cost conversion and in accordance with International Financial Reporting Standards. The financial statements are presented in Tanzania shillings (TZS), except where otherwise indicated.

The preparation of financial statements in conformity with IFRSs requires management to make judgement, estimates and assumptions that affect the application of policies and reported amount of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgement about carrying values of assets and liabilities that are not readily apparently from other sources. Actual results may differ from these estimates.

The estimate and underlying assumption are reviewed on ongoing basis. Revision to accounting estimate are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future period if the revision affects both current and future periods.

Going Concern

The financial statements are prepared on the basis of accounting policies applicable to a going concern basis. This basis presumes that funds will be available to finance future operation and that the realization of assets and settlement of liabilities will occur in the ordinary course of business.

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

Revenue recognition

Revenue comprised amounts commissioned for the services supplied in Block chain capacity building and trainings (Belfrics Academy) during the year, excluding value added tax and trade discount. Revenue is recognised when the company has delivered the services to the customer has accepted the performance of the work to be satisfactory and collectability of the related receivables is reasonably assured.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign currencies

(i)

Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates or the currency that mainly influences sales price for goods and services, and labour, material or other costs of providing goods and services (“the functional currency”). The financial statements are presented in Tanzania Shillings, which is the Company’s functional and presentation currency.

(ii)

Transactions and balances

Transactions denominated in currencies other than functional currency are translated into the Tanzanian Shillings using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities at the reporting date, which are expressed in foreign currencies, are translated into Tanzanian Shillings at the spot rate ruling at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit and loss. Non- monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gains or losses on change in fair value of the item.

Depreciation

Item of property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is provided so as to write off the cost of fixed assets on straight line basis over their expected useful lives. The principal annual rates used for this purpose, which are consistent with those used in prior period are as follows:

Office Tools	12.50	%
Furniture and Equipments	12.50	%
Computer and Software	37.50	%

Cash and cash equivalents

For purpose of the cash flow statement cash and cash equivalent comprise cash in hand, deposit held on call with the banks.

Trade and other receivable

Trade receivable are recognised initially at fair value and subsequently measured at amortised cost using effective interest method, less provision for impairment. A provision for impairment of the trade receivable is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets carrying amounts and the present value of the estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the profit and loss account.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

Trade and other payable

Payable are obligation for pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Taxation

Income earned from provision of technical services to mining companies is subject to withholding tax as a final tax on the same basis as individuals. Income from technical mining services is recognised gross of such taxes and the withholding tax is included under tax charge for the year.

Income tax expense is the charge to the profit and loss account in respect of the current income tax. Current tax is the amount of income tax payable on the taxable profit for the period determined in accordance with the Tanzania Income Tax Act, 2004

Employee Benefits

The company has defined contribution plan. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity.

Under the defined contribution, the Company contributes to a publicly administered pension plan (NSSF) on a mandatory basis. The Company has no further payment obligation once the contributions have been paid. The contributions are recognised as an employee benefits when they are due.

Financial instruments

Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for- sale financial assets, as appropriate. The Company determines the classification of its financial assets at initial recognition.

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

The Company’s financial assets include cash and short-term deposits (included under cash and cash equivalents), trade and other receivables. All the Company’s financial assets are classified as loans and receivables.

Subsequent measurement

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The EIR amortisation is not included in finance income in profit or loss. The losses arising from impairment are recognised in profit or loss if applicable.

De-recognition

A financial asset, or where applicable a part of a financial asset or part of a group of similar financial assets is derecognised when:

	●	The rights to receive cash flows from the asset have expired;
	●	The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‗pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset, or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.

Financial assets (continued)

In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‗loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial instruments (continued)

Financial assets carried at amortised cost (continued)

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in profit or loss.

Financial assets, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to profit or loss.

ii)

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings measured at amortised cost, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings measured at amortised cost, plus directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables and interest bearing borrowings.

Subsequent measurement

After initial recognition, trade and other payables and interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit or loss.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

	i)	Financial instruments (continued)
	ii)	Financial liabilities (continued)

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

iii)

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Changes in accounting policies

New and amended standards that became effective

The accounting policies adopted are consistent with those used in the previous year. The following new and amended standards and interpretations that became effective for the Company during the year did not have any impact on the accounting policies, financial position or performance of the Company:

	a)	Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

	b)	Annual Improvements 2010-2012 Cycle

	●	IFRS 2 Share-based Payment
	●	IFRS 3 Business Combinations
	●	IFRS 8 Operating Segments
	●	IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
	●	IAS 24 Related Party Disclosures

	c)	Annual Improvements 2011-2013 Cycle

	●	IFRS 3 Business Combinations
	●	IFRS 13 Fair Value Measurement
	●	IAS 40 Investment Property

Standards issued or amended but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

IFRS 9 Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2019, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.

The Company plans to adopt the new standard on the required effective date. During 2019, the Company has performed a high-level impact assessment of all three aspects of IFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Company in the future. Overall, the Company expects no significant impact on its statement of financial position and equity except for the effect of applying the impairment requirements of IFRS 9. The Company expects a higher

Standards issued or amended but not yet effective (continued)

loss allowance resulting in a negative impact on equity and will perform a detailed assessment in the future to determine the extent.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 January 2019, when the IASB finalises their amendments to defer the effective date of IFRS 15 by one year. Early adoption is permitted. The Company plans to adopt the new standard on the required effective date using the full retrospective method. During 2019, the Company performed a preliminary assessment of IFRS 15, which is subject to changes arising from a more detailed ongoing analysis. Furthermore, the Company is considering the clarifications issued by the IASB in an exposure draft in July 2015 and will monitor any further developments. The Company is still assessing the impact the new standard will have on its revenue.

Amendments to IAS 7 Statement of cash flows

The improvements to disclosures require companies to provide information about changes in their financing liabilities. The amendments will help investors to evaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes (such as foreign exchange gains or losses).

The improvements are part of the Board’s Disclosure Initiative—a portfolio of projects aimed at improving the effectiveness of disclosures in financial reports.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Changes in accounting policies (continued)

The IAS 7 amendments become mandatory for annual periods beginning on or after 1 January 2019. The impact of the amendments is being assessed by the Company.

IFRS 16 Leases

The scope of the new standard includes leases of all assets, with certain exceptions. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. The key features of the new standard are:

	●	The new standard requires lessees to account for all leases under a single on-balance sheet model (subject to certain exemptions) in a similar way to finance leases under IAS 17.
	●	Lessees recognise a liability to pay rentals with a corresponding asset, and recognise interest expense and depreciation separately.

Standards issued or amended but not yet effective (continued)

	●	The new standard includes two recognition exemptions for lessees – leases of ‘low- value’ assets (e.g., personal computer) and short-term leases (i.e., leases with a lease term of 12 months or less).
	●	Reassessment of certain key considerations (e.g., lease term, variable rents based on an index or rate, discount rate) by the lessee is required upon certain events.
	●	Lessor accounting is substantially the same as today’s lessor accounting, using IAS 17’s dual classification approach.

The new standard is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. The new standard permits a lessee to choose either a full retrospective or a modified retrospective transition approach. The new standard’s transition provisions permit certain reliefs.

The new standard requires lessees and lessors to make more extensive disclosures than under IAS 17. The impact of the new standard is being assessed by the Company.

Other standards issued but not yet effective

The following new and amended standards are not expected to have an impact on the financial statements of the Company:

	a)	Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests
	b)	Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation
	c)	IFRS 14 Regulatory Deferral Accounts
	d)	Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants
	e)	Amendments to IAS 27: Equity Method in Separate Financial Statements
	f)	Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Annual Improvements 2012-2014 Cycle - These improvements are effective for annual periods beginning on or after 1 January 2019.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Changes in accounting policies (continued)

They include:

	●	IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
	●	IFRS 7 Financial Instruments: Disclosures - Servicing contracts and Applicability of the amendments to IFRS 7 to condensed interim financial statements
	●	IAS 19 Employee Benefits
	●	IAS 34 Interim Financial Reporting

	h)	Amendments to IAS 1 Disclosure Initiative
	i)	Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception

4.	SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments

In the process of applying the Company’s accounting policies, management has made the judgments, apart from those involving estimations, which have had significant effects on the amounts recognized in the financial statements.

Operating lease commitments – Company as lessee

The Company has entered into lease agreements for office space. The Company has determined that it does not retain significant risks and rewards of ownership of these properties and so accounts for them as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments may, however, change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Asset useful lives

Critical estimates are made by the directors in determining depreciation rates for property, plant and equipment and their residual values. The depreciation rates are based on the estimated useful lives of the assets. The rates used are set out in Note 3(c) and the carrying amounts of property, plant and equipment are set in Note 14.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

Impairment of non-financial assets

Impairment exists when the carrying amount of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash generating unit and choose a suitable discount rate in order to calculate the present value of the cash flow.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities.

The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues, depending on the conditions prevailing in the country.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of the deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

5.	FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks from its use of financial instruments:

	-	Credit risk
	-	Liquidity risk
	-	Market risk

The company’s Director have overall responsibility of the establishment and oversight of the company’s risk management framework.

Credit risk

The company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered.

Liquidity risk

The company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company’s reputation. All liquidity policies and procedures are subject to review and approval by the Board of Directors.

BELFRICS TANZANIA LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019 (Continued)

Market Risk

Market risk is the risk that changes in the market prices, such as foreign exchange rates, interest rates etc. will affect the company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

BELFRICS TANZANIA LIMITED

DAR ES SALAAM

AUDITED FINANCIAL STATEMENTS

FOR

THE YEAR ENDED 31^ST DECEMBER, 2020.

MKUKI Consultants

Certified Public Accountants & Tax Consultants

Dar es Salaam

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

CONTENTS		PAGE

Report of Directors		3 – 5

Statement of Directors’ Responsibilities		6

Independent Auditors report		7 - 8

Financial statements:

Statement of financial position		9

Statement of Profit or Loss and Other comprehensive income		10

Statement of Changes in Equity		11

Statement of cash flows		12

Notes to the financial statements		13 - 25

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	The Directors of Belfrics Tanzania Limited present their report together with the financial statements for the year ended 31 December 2020, which disclose the state of affairs of the entity as at 31 December 2020 and the results of the operation for the year ended on that date.

2.	INCORPORATION AND REGISTERED OFFICE

3.	PRINCIPAL ACTIVITY

4.	COMPOSITION OF THE BOARD OF DIRECTORS

The directors of the company who held office during the year and up to the date of this report are:

Name	Nationality	Position
Praveen Kumar Vijayakumar	Non Tanzanian	Director
Azizi Rashid Chonya	Tanzanian	Director

Directors’ interest in the shares of the company

None of the Directors have any beneficial interest in the issued share capital of the company as at 31 December 2020.

5.	CORPORTAE GOVERNANCE

6.	CAPITAL STRUCTURE AND SHAREHOLDING

Capital Structure

The Company’s capital structure for the year is shown below:

Authorized, :

Shareholding

The authorized share capital is held by:

Name	Number		2020 Nominal value
			TZS
Praveerkumar Vijayakumar		499,999		99,999,800
Azizi Rashid Chonya		1		200
Total		500,000		100,000,000

7.	RESULTS AND DIVIDEND

The performance of the Company for the year is set out on page 7 of these financial statements. During the year no dividend was declared and approved.

8.	RISK MANAGEMENT AND INTERNAL CONTROL

	●	The business is owned by two shareholders
	●	The safeguarding of the company’s assets
	●	Compliance with applicable laws and regulations and supervisory requirements.
	●	The reliability of accounting records
	●	Business sustainability under normal as well as adverse conditions; and
	●	Responsible behaviors towards all stakeholders

The efficiency of any internal control system is dependent on strict observance of prescribed measure. There is always a risk of non-compliance of such measures by staff.

INDEPENDENT AUDITORS’ REPORT

To the Directors of

BELFRICS TANZANIA LIMITED

Report on the financial statement

We have audited the accompanying financial statements of Belfrics Tanzania Limited as set out on page 8 to 24, which comprise the statement of financial position as at 31 December 2020 and the statement of Profit or loss and other comprehensive income, a statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility For The Financial Statements

Auditors’ Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion the accompanying financial statements give a true and fair view of the state of the company’s financial affairs at 31 December 2020 and of its loss and cash flows for the year then ended in accordance with International Financial Reporting Standards and the Companies Act, CAP 212 Act No. 12 of 2002.

STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31st DECEMBER 2020

	NOTE	2020			2019


Sales Revenue	6		2,036,404			10,649,747
Cost of Sales	7		-			-
Gross Profit			2,036,404			10,649,747

Administrative Costs
Operating costs	8		65,541,600			111,199,841
Finance charges	9		394,296			882,587
Depreciation of Non-current assets	13		7,591,384			7,591,384
			73,527,280			119,673,812

Net Profit before tax			(71,490,876	)		(109,024,065	)

Less: Corporate tax provision			-			-
Net Profit for the year			(71,490,876	)		(109,024,065	)

Other Comprehensive Income			-			-

Total comprehensive income for the year			(71,490,876	)		(109,024,065	)

Notes and related statements forming part of these financial statements are set out on pages 13 to 24

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31st DECEMBER 2020

	Share Capital		Retained Earnings			Total
	TZS		TZS			TZS
As at 1 January 2020		100,000,000		(220,392,946	)		(120,392,946	)
Profit for the year		-		(71,490,876	)		(71,490,876	)
Additions for the year		-		-			-
As at 31 September 2020		100,000,000		(291,883,823	)		(191,883,823	)

As at 1 January 2019		100,000,000		(111,368,881	)		(11,368,881	)
Profit for the year		-		(109,024,065	)		(109,024,065	)
Additions for the year		-		-			-
As at 31 September 2019		100,000,000		(220,392,946	)		(120,392,946	)

Notes and related statements forming part of these financial statements are set out on pages 12 to 24.

STATEMENT OF CASH FLOW

FOR THE FINANCIAL YEAR ENDED 31st DECEMBER 2020

	2020			2019

Profit / Loss as per Account		(71,490,876	)		(109,024,065	)
Add back:
Depreciation		7,591,384			7,591,384
		(63,899,492	)		(101,432,681	)
Change in Working Capital
(Increase)/Decrease in Trade and Other Receivables		(1,800,000	)		-
Increase/(Decrease) in Trade and Other Payables		(177,210,211	)		-
Cash Flows from Operation		(242,909,703	)		(101,432,681	)

Tax Paid		-			-
		-			-

Net Cash Flows from Operating Activities		(242,909,703	)		(101,432,681	)

Less: Investing Activities
Purchase of property, plant and equipment		-			-
Cash flow after Investing activities		-			-

Financing Activities
Capital		-			-
Shareholder Loan		246,651,539			95,161,325
Cash Flows After financing activities		246,651,539			95,161,325

Cash and Cash Equivalent		3,741,836			(6,271,356	)
Add: Opening Cash / Bank		3,332			6,274,688
Net Cash and cash Equivalent		3,745,168			3,332

Notes and related statements forming part of these financial statements are set out on pages 12 to 24.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

1.	REPORTING ENTITY

2.	BASIS OF PREPARATION AND GOING CONCERN

Statement of Compliance

Basis of preparation

Going Concern

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

Revenue comprised amounts commissioned for the services supplied in Block chain capacity building and trainings ( Belfrics Academy ) during the year, excluding value added tax and trade discount. Revenue is recognised when the company has delivered the services to the customer has accepted the performance of the work to be satisfactory and collectability of the related receivables is reasonably assured.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign currencies

(i)

Functional and presentation currency

(ii)

Transactions and balances

Depreciation

Office Tools	12.50	%
Furniture and Equipments	12.50	%
Computer and Software	37.50	%

Cash and cash equivalents

For purpose of the cash flow statement cash and cash equivalent comprise cash in hand, deposit held on call with the banks.

Trade and other receivable

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

Trade and other payable

Taxation

Employee Benefits

The company has defined contribution plan. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity.

Financial instruments

i) Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The EIR amortisation is not included in finance income in profit or loss. The losses arising from impairment are recognised in profit or loss if applicable.

De-recognition

A financial asset, or where applicable a part of a financial asset or part of a group of similar financial assets is derecognised when:

	●	The rights to receive cash flows from the asset have expired;
	●	The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‗pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Financial assets (continued)

Impairment of financial assets

Financial assets carried at amortised cost

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial instruments (continued)

Financial assets carried at amortised cost (continued)

ii)

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings measured at amortised cost, plus directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables and interest bearing borrowings.

Subsequent measurement

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial instruments (continued)

ii)

Financial liabilities (continued)

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.

iii)

Offsetting of financial instruments

Changes in accounting policies

New and amended standards that became effective

	a)	Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

	b)	Annual Improvements 2010-2012 Cycle

	●	IFRS 2 Share-based Payment
	●	IFRS 3 Business Combinations
	●	IFRS 8 Operating Segments
	●	IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
	●	IAS 24 Related Party Disclosures

	c)	Annual Improvements 2011-2013 Cycle

	●	IFRS 3 Business Combinations
	●	IFRS 13 Fair Value Measurement
	●	IAS 40 Investment Property

Standards issued or amended but not yet effective

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

IFRS 9 Financial Instruments

Standards issued or amended but not yet effective (continued)

loss allowance resulting in a negative impact on equity and will perform a detailed assessment in the future to determine the extent.

IFRS 15 Revenue from Contracts with Customers

Amendments to IAS 7 Statement of cash flows

The improvements are part of the Board’s Disclosure Initiative—a portfolio of projects aimed at improving the effectiveness of disclosures in financial reports.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Changes in accounting policies (continued)

The IAS 7 amendments become mandatory for annual periods beginning on or after 1 January 2019. The impact of the amendments is being assessed by the Company.

IFRS 16 Leases

	●	The new standard requires lessees to account for all leases under a single on-balance sheet model (subject to certain exemptions) in a similar way to finance leases under IAS 17.
	●	Lessees recognise a liability to pay rentals with a corresponding asset, and recognise interest expense and depreciation separately.

Standards issued or amended but not yet effective (continued)

	●	The new standard includes two recognition exemptions for lessees – leases of ‘low- value’ assets (e.g., personal computer) and short-term leases (i.e., leases with a lease term of 12 months or less).
	●	Reassessment of certain key considerations (e.g., lease term, variable rents based on an index or rate, discount rate) by the lessee is required upon certain events.
	●	Lessor accounting is substantially the same as today’s lessor accounting, using IAS 17’s dual classification approach.

The new standard requires lessees and lessors to make more extensive disclosures than under IAS 17. The impact of the new standard is being assessed by the Company.

Other standards issued but not yet effective

The following new and amended standards are not expected to have an impact on the financial statements of the Company:

	a)	Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests
	b)	Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation
	c)	IFRS 14 Regulatory Deferral Accounts
	d)	Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants
	e)	Amendments to IAS 27: Equity Method in Separate Financial Statements
	f)	Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Annual Improvements 2012-2014 Cycle - These improvements are effective for annual periods beginning on or after 1 January 2019.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Changes in accounting policies (continued)

They include:

	●	IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
	●	IFRS 7 Financial Instruments: Disclosures - Servicing contracts and Applicability of the amendments to IFRS 7 to condensed interim financial statements
	●	IAS 19 Employee Benefits
	●	IAS 34 Interim Financial Reporting

	h)	Amendments to IAS 1 Disclosure Initiative
	i)	Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception

4.	SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

Judgments

Operating lease commitments – Company as lessee

Estimates and assumptions

Asset useful lives

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

Impairment of non-financial assets

Taxes

5.	FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks from its use of financial instruments:

	-	Credit risk
	-	Liquidity risk
	-	Market risk

The company’s Director have overall responsibility of the establishment and oversight of the company’s risk management framework.

Credit risk

Liquidity risk

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020 (Continued)

Market Risk

BELFRICS NIGERIA PVT LIMITED

Financial Statements — 31 December 2019

Together with Directors’ and Auditors’ Reports

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Legal and Administrative details

Board of Directors:

Appointed

●	Vijayankumar Praveenkumar	Chairman
●	Oyeniyi Chris Ayodeji	Director
●	Ukachukwu Jeremiah	Director
●	Evoh Victor	Director
●	Okoro Nkiruka	Director

Company Secretary:	A & E Law Partnership
	1^stFloor UACN Building, Central Business District
	Abuja - FCT

Incorporation Number:	RC: 1471641

Date of incorporation:	15^thFeb 2018

Date of Commencement:	1^stMarch 2018

Constitution:	Limited Liability Company

Registered Office:	10, Mustapha Akande Close 69 Road, Gwarimpa Estate Abuja, FCT

Auditors:	Logic Professional Services (Chartered Accountants) Rear wing, 4^th Floor
	17/19, Allen Avenue Ikeja, Lagos

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Financial Highlights

				2018
	2019			(10 months from Inception)
	N			N
Revenue		133,355.07			1,870,332.00
Other Income		-			107,400.00
Operating Expenses		10,864,879.2			32,269,893.00
EBITDA		(10,731,524.1	)		(30,292,161.00	)
Profit before Income Tax		(11,775,719.2	)		(32,022,343.00	)
Profit After Tax		(11,775,719.2	)		(32,022,343.00	)
EPS		(0.59	)		(1.60	)
Declared Dividend		-
Share Capital		20,000,000.00			20,000,000.00
Total Equity		3,955,634.70			9,307,932.00

In the year ending 31 December 2019, with comparable year 2018 figures.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Directors’ Report

For the period ended 31 December 2019

The directors present their ten months report on affairs of the Company, together with the financial statements and auditors’ report for the period ended 31 December 2019.

Principal Activity and Business Review

The principal activity of the Company continues to be fintech operations with specialization in blockchain technology, offering services as online financial advisers, as a broker and foreign exchange services.

Turnover wasN133,355 for the period ended 31 December 2019 while Profit/ (loss) before tax was (N11,775,719). During the period, the Company generated income from its sole business activities.

Operating Results

The following is a summary of the Company’s operating results and retained earnings:

	2019 N			2018 N
RETAINED EARNINGS, beginning of period		(32,0022,343	)		-

Profit/(loss) for the year		(11,775,719	)		(32,022,343	)

RETAINED EARNINGS, end of period		(43,798,062	)		(32,022,343	)

Directors and Their Interests

The directors who served during the period, together with their interests in the shares of the Company as at 31 December 2019 were as follows:

	Date appointed	Number of Ordinary shares ofN1.00 each
Mr. Vijayankumar Praveenkumar	14^thFebruary 2018		16,000,000
Mr. Chris Oyeniyi	14^thFebruary 2018		-
Mr. Ukachukwu Jeremiah	14^thFebruary 2018		-
Mr. Evoh Victor	14^thFebruary 2018		-
Mrs. Okoro Nkiruka	14^thFebruary 2018		-

The directors not allotted shares in the Company as at 31 December 2019 do not have a diluting effect on the current shareholding structure of the Company as at year-ending 31^st December 2019.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

In accordance with Section 277 of the Companies and Allied Matters Act, 1990, none of the directors has notified the Company of any declarable interests in contracts with the Company.

Analysis of Shareholding Structure

*Shareholder*	Position	*No. of Shares held as at 31^st Dec. 2019*
Vijayankumar Praveenkumar	Chairman		16,000,000
Kannankattu Mangalatu	Ordinary Shareholder		6,000,000
Chris Oyeniyi	Executive Director		-
Ukachukwu Jeremiah	Executive Director		-
Evoh Victor	Executive Director		-
Okoro Nkiruka	Executive Director		-

TOTAL			22,000,000

Fixed Assets

The Company had fixed assets as at the year end.

Charitable Contributions

The Company made no charitable contributions and gifts to any charitable institutions and organisations during the year. No donation was made to political parties.

Employment of Disabled Persons

The Company has no disabled persons in its employment. However, applications for employment by disabled persons will be fully considered bearing in mind the respective aptitudes and abilities of the applicants concerned. In the event of members of staff becoming disabled, every effort will be made to ensure that their employment with the Company continues and that appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Employee Consultation and Training

The Company places considerable value on the involvement of its employees and has continued its practice of keeping them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. The Company has in-house training sessions when and where necessary with additional facilities from educational institutions for the training of its employees.

Health, Safety and Welfare at Work

The Company places a high premium on the health, safety and welfare of its employees in their place of work. Medical facilities are provided for employees at the Company’s expense up to stated limits.

Post Balance Sheet Events

There are no post balance sheet events which could have had a material effect on the state of affairs of the Company as at 31 December 2019 and profit for the year ended on that date, that have not been adequately provided for.

Auditors

In accordance with Section 357(2) of the Companies and Allied Matters Act, 1990, the auditors, Logic Professional Services were appointed and have expressed their interest and will continue in office as Auditors of the Company.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Statement of Director’s Responsibilities

For the preparation and approval of the Financial Statements

The Directors of Belfrics Nigeria Pvt Limited are responsible for the preparation of the financial statements that give a true and fair view of the financial position of the Company as at 31 December 2019, and the results of its operations, cash flows and changes in equity for the year ended, in compliance with International Financial Reporting Standards (“IFRS”) and in the manner required by the Companies and Allied Matters Act of Nigeria, the Financial Reporting Council of Nigeria Act, 2011.

In preparing the financial statements, the Directors are responsible for:

	●	properly selecting and applying accounting policies;
	●	presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
	●	providing additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance; and
	●	making an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for:

	●	designing, implementing and maintaining an effective and sound system of internal controls throughout the Company;
	●	maintaining adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company, and which enable them to ensure that the financial statements of the Company comply with IFRS;
	●	maintaining statutory accounting records in compliance with the legislation of Nigeria and IFRS;
	●	taking such steps as are reasonably available to them to safeguard the assets of the Company; and preventing and detecting fraud and other irregularities.

Going Concern:

The Directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the Company will not remain a going concern in the year ahead.

The financial statements of the Company for the year ended 31 December 2019 were approved by directors on 7 July, 2020

INDEPENDENT AUDITOR’S REPORT

To the Members of Belfrics Nigeria Pvt Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Belfrics Nigeria Pvt Limited (“the Company”), which comprise the balance sheets as at 31 December 2019, the profit and loss accounts, statement of cash flows and statement of changes in equity for the period then ended, the statement of accounting policies and the notes to the financial statements as set out on pages 8 to 18.

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with Statements of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, these financial statements give a true and fair view of the financial position of Belfrics Nigeria Pvt Limited (“the Company”) as at 31 December 2019, and of the Company’s financial performance and cash flows for the period then ended in accordance with Statements of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Statement of Significant Accounting Policies

These financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities issued by the International Accounting Standards Board. They are presented in the currency units of Nigeria. A summary of the significant accounting policies, all of which have been applied consistently throughout the current and preceding year, is set out below:

(a)	Basis of Accounting

The financial statements are prepared under the historical cost convention.

(b)	Revenue

Revenue is commission based, and is recognized when the related services have been rendered. Any unearned revenues are deferred and amortized to the income statement over the period to which it relates. Also, Revenue is measured at the fair value of the consideration received or receivable, net of discounts and sales-related taxes collected on behalf of the government of Nigeria.

(c)	Fixed Assets

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The following rates are used for the depreciation of property, plant and equipment:

	%
Furniture & Fittings		25
Office equipments		25
Motor vehicles		25
Computer Software		50

(d)	Intangible Assets

Intangible assets are stated at cost less accumulated amortization and any accumulated impairment losses. It is amortized over its estimated life of five years using the straight-line method. If there is an indication that there has been a significant change in amortization rate, useful life or residual value of an intangible asset, the amortization is revised accordingly to reflect the new expectations.

(e)	Inventories

The company does not deal in inventory and holds no form of inventory as its entire operations is service based.

(f)	Impairment of Assets

At each reporting date, property, plant and equipment and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognized immediately in profit or loss.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Similarly, at each reporting date, inventories are assessed for impairment by comparing the carrying amount of each item of inventory (or group of similar items) with its selling price less costs to complete and sell. If an item of inventory (or group of similar items) is impaired, its carrying amount is reduced to selling price less costs to complete and sell, and an impairment loss is recognized immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount (selling price less costs to complete and sell, in the case of inventories), but not in excess of the amount that would have been determined had no impairment loss been recognized for the asset (or group of related assets) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

(g)	Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the company. All other leases are classified as operating leases.

Rights to assets held under finance leases are recognized as assets of the company at the fair value of the leased property (or, if lower, the present value of minimum lease payments) at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in property, plant and equipment, and depreciated and assessed for impairment losses in the same way as owned assets.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the lease.

(h)	Trade and Other Receivables

Most sales are made on cash & carry and few on the basis of normal credit terms, and the receivables do not bear interest. Where credit is extended beyond normal credit terms, receivables are measured at amortized cost using the effective interest method. At the end of each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognized immediately in profit or loss.

(i)	Trade Payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest, essentially the fiat currency balances in each individual client account or the fiat valuation of the currencies held at the end of the period.

(j)	Taxation

Income tax payable is provided on taxable profits at the current rate.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases (known as temporary differences). Deferred tax liabilities are recognized for all temporary differences that are expected to increase taxable profit in the future. Deferred tax assets are recognized for all temporary differences that are expected to reduce taxable profit in the future, and any unused tax losses or unused tax credits. Deferred tax assets are measured at the highest amount that, on the basis of current or estimated future taxable profit, is more likely than not to be recovered. The net carrying amount of deferred tax assets is reviewed at each reporting date and is adjusted to reflect the current assessment of future taxable profits. Any adjustments are recognized in profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the taxable profit (tax loss) of the periods in which it expects the deferred tax asset to be realized or the deferred tax liability to be settled, on the basis of tax rates that have been enacted or substantively enacted by the end of the reporting period.

(k)	Cash at Bank and in hand

For the purpose of reporting cash flows, cash at bank and in hand includes cash on hand and cash balances with banks

(l)	Borrowing costs, Bank Loans and Overdrafts

All borrowing costs are recognized in profit or loss in the period in which they are incurred. Interest expenses are recognized on the basis of the effective interest method and are included in finance costs.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Statement of Comprehensive Income for the period ended 31 December 2019

	Notes	2019 N			2018 N
Revenue – (Brokerage commissions)	1		133,355.07			1,870,332.00
Other income			-			107,400.00
Total Revenue			133,355.07			1,977,732.00
Operating expenses	2		(10,864,879.18	)		(32,269,893.00	)
Depreciation			(1,015,765.75	)		(1,591,078.00	)
Finance Costs			(28,429.34	)		(139,104.00	)
Profit/(loss) before tax	3		(11,775,719.20	)		(32,022,343.00	)
Provision for Tax	4		-			-
Profit/ (Loss) for the year			(11,775,719.20	)		(32,022,343.00	)
Retained earnings at start of the year			(32,022,343.00	)		-
Retained Earnings End of Period			(43,798,062.20	)		(32,022,343.00	)
Earnings per share	5		(0.59	)		(1.60	)

The statement of significant accounting policies on page 8 and the accompanying notes on pages 15 to 18 form an integral part of this Statement of Comprehensive Income.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Statement of financial position as at 31 December 2019

	Notes	2019 N			2018 N
Non-Current Assets
Office Equipment	10		2,119,543.75			2,516,461.00
Furniture & Fittings			2,770,458.50			3,289,271.00
Computer Software			-			100,035.00
			4,890,002.25			5,905,767.00
Current assets
Trade and other receivables	7		-			107,400.00
Prepayments	7(a)		-			3,450,000.00
Cash and cash equivalents	6		1,642.94			2,022,907.00
			1,642.94			5,580,307.00
TOTAL ASSETS			4,891,645.19			11,486,074.00
EQUITY & LIABILITIES
Equity
Share Capital	9(a)		20,000,000.00			20,000,000.00
Deposit for shares	9(b)		27,753,696.92			21,330,275.00
Retained earnings			(43,798,062.20	)		(32,022,343.00	)
TOTAL EQUITY			3,955,634.72			9,307,932.00
Current liabilities
Trade & Other Payables	8		507,890.47			1,399,743.00
Tax Payable	8(a)		428,120.00			778,400.00
			936,010.47			2,178,143.00
TOTAL LIABILITIES			936,010.47			2,178,143.00
TOTAL EQUITY & LIABILITIES			4,891,645.19			11,486,074.00

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Attributable to equity holders of the company

	Share Capital		Deposit for Shares		Retained Earnings			Total Equity
Opening balance:
Issue of ordinary shares of N1/share		20,000,000.00		21,330,275.00		(32,022,343.00	)		9,307,932.00

Profit for the year
Profit or loss						(11,775,719.20	)		(11,775,719.20	)
Transactions recorded directly in equity
Additional Capital invested by the Director				6,423,421.92					6,423,421.92
Balance as at 31st December 2019		20,000,000.00		27,753,696.92		(43,798,062.20	)		3,955,634.72

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Statement of Cash Flows for the year ended 31 December 2019

	Notes	2019 N			2018 N
Cash flows from operating activities
Profit / (Loss) for the year			(11,775,719.20	)		(32,022,343.00	)
- Finance costs			28,429.34			139,104.00
Adjustments for non-cash income and expenses:
- Depreciation			915,730.75			1,520,113.00
- Amortization			100,035.00			70,965.00
Changes in operating assets and liabilities:
- Decrease / (Increase) in trade and other receivables			107,400.00			(107,400.00	)
- Increase / (Decrease) in trade and other payables			(1,242,132.53	)		1,399,743.00
Cash generated from operations			(11,866,256.64	)		(28,999,818.00	)
Income tax paid			-			-
*Net cash from operating activities*			(11,866,256.64	)		(28,999,818.00	)
Cash flows from investing activities
Purchases of property, plant & equipment			-			(7,325,846.00	)
Purchases of intangible assets			-			(171,000.00	)
Net cash used in investing activities						(7,496,846.00	)
Cash flows from financing activities
Proceeds from Directors initial capital			-			27,511,570.00
Proceed from Directors deposit			9,844,992.58			11,008,000.00
Net cash used in financing activities						38,519,570.00
Net increase / (decrease) in cash and cash equivalents			(2,021,264.06	)		(2,022,907.00	)
Cash and cash equivalents pre-incorporation- (beginning)			2,022,907.00			-
Cash and cash equivalents at end of year			1,642.94			2,022,907.00

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

Notes to the Financial Statements

For the period ended 31 December 2019

1.	Revenue

	2019		2018
	N		N

Total Commission		133,355		1,870,332

Revenue represents the value of commissions earned on every sell and buy trades on the Belfrics exchange from all customers during the period covered.

2.	Operating Expense

Admin Expenses	205,838.64	3,296,800.00
Internet Subscriptions	216,800.00	149,000.00
IT Services	62,500.00	132,500.00
Legal & Professional Fees	750,000.00	1,717,360.00
Media & Printing	29,350.00	129,300.00
Miscellaneous Expense	-	7,777,965.00
Office Rental Prepaid	3,450,000.00	3,450,000.00
Office Stationeries	50,800.00	178,480.00
Office Supplies	22,800.00	79,420.00
Postage & Courier	30,000.00	56,627.50
Repairs & Maintenance	121,815.00	116,200.00
Staff Salaries	4,760,821.23	12,010,000.00
Subscription & Registrations	-	550,000.00
Taxes	16,532.31	68,390.88
Telephone & Communication	26,500.00	32,000.00
Training	5,000.00	361,000.00
Transportation	90,652.50	80,900.00
Travel & Accommodation	854,669.50	1,685,090.00
Utilities - Electricity	170,800.00	398,860.00
Total	10,864,879	32,269,893

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

3.	Profit on Ordinary Activities before Taxation

3(a) Profit/ (loss) before taxation is stated after charging the following:

2019

2018

Depreciation

1,015,766

1,591,078

Finance cost

28,429

139,104

ii.	Higher-paid employees of the Company, other than directors, whose duties were wholly or mainly discharged in Nigeria, received remuneration (excluding pension contributions) in the following ranges:

	2019 Number		2018 Number
N 30,001 -N 40,000		1		1
N 40,001 -N 50,000		-		-
N 50,000 - Upwards		3		3

4.	Tax Provision

The Directors advise that there is no requirement to provide for tax, which they consider being a realistic appraisal of the tax liability as there are substantial amount of losses during the period under review and can be carried forward into the future. In the opinion of the Directors, the probability of significant exposure in excess of the amounts captured as losses is remote and accordingly, no further provisions have been made.

5.	Earnings per Share

Earnings per share are based on the profit/(loss) for the year ofN(11,775,719.20), and on 20,000,000 ordinary shares being the number of shares in issue during the year.

6.	Cash & Bank Balances

		2018
		N
Cash at Hand	-		10,800
Cash at Bank	1,642.94		2,012,107
	1,642.94		2,022,907

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

7.	Trade and Other Receivables

The company does not have any trade receivable as it does not provide any of its customers margins. Customers trade only after fiat deposit or cryptocurrencies are confirmed and credited to their account.

7(a) Prepayment figures is the rental payment apportioned for the second year.

8.	Trade and Other Payables

	2019		2018

Customer Balances		507,890		1,399,743
Tax Liabilities		428,120		778,400
		936,010		2,178,143

The schedule of balances in individual customer wallets per each asset class is as detailed below:

BTC		BET		NGN		BCH		LTC		XRP		ETH		BEL
0.0323843		52		0.00		0.2674665		0.119652		0		1.08837906		196.82
NGN358:$1		NGN358:$1		NGN358:$1		NGN358:$1		NGN358:$1		NGN358:$1		NGN358:$1		NGN358:$1		TOTAL
	84,846.87		74,462.56		0.00		14,463.49		1,305.20		0.00		51,966.25		281,846.24		508,890.47

9.(a)

Share Capital

	2019
	N
Authorised:
1,000,000 ordinary shares ofN1.00 each		20,000,000
Allotted, called-up and fully paid:
1,000,000 ordinary shares ofN1.00 each		20,000,000

The share capital is contributed as follows:

	2019
● Mr. Vijayankumar Praveenkumar		16,000,000
● Mr. Kannankattu Mangalatu		6,000,000
		22,000,000

(b) Deposit for shares

During the course of the year 2019, the existing shareholder has injected more capital beyond the existing authorized share capital of 20,000,000. Whilst an increase in share capital would be processed with the Corporate Affairs Commission of Nigeria CAC to accommodate the excess above the current share capital, the excess has currently been classified as deposit for shares in the accounts of the Company at the end of the period.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2019

Together with Directors’ and Auditors’ Reports

10.

Fixed Assets

The movement on these accounts during the year was as follows:

	Computer Software			Office Equipment			Furniture & Fittings			TOTAL
COST:	N			N			N			N

Cost		171,000.00			3,175,346.00			4,150,500.00			7,496,846.00
Accumulated depreciation		(70,965.00	)		(658,884.00	)		(861,229.00	)		(1,591,078.00	)
Additions		-			-			-			-
Disposals		-			-			-			-
Beginning of Period		100,035.00			2,516,462.00			3,289,271.00			5,905,768.00
DEPRECIATION:
Beginning of period		(70,965.00	)		(658,884.00	)		(861,229.00	)		(1,591,078.00	)
Charged for the period		(100,035.00	)		(396,918.25	)		(518,812.50	)		(1,015,765.75	)
End of period		(171,000.00	)		(1,055,802.25	)		(1,380,041.50	)		(2,606,843.75	)
CARRYING AMOUNT
31-12-2019		-			2,119,543.75			2,770,458.50			4,890,002.25

13.

Contingencies

The Company is not engaged in any lawsuits that may have arisen in the normal course of its business; thus no provision has been made in these financial Statements.

BELFRICS NIGERIA PVT LIMITED

Financial Statements — 31 December 2020

Together with Directors’ and Auditors’ Reports

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Legal and Administrative details

Board of Directors:			Appointed
	●	Vijayankumar Praveenkumar	Chairman
	●	Oyeniyi Chris Ayodeji	Director
	●	Ukachukwu Jeremiah	Director
	●	Evoh Victor	Director
	●	Okoro Nkiruka	Director

Company Secretary:	A & E Law Partnership
	1^stFloor UACN Building, Central Business District Abuja - FCT

Incorporation Number:	RC: 1471641

Date of incorporation:	15^thFeb 2018

Date of Commencement:	1^stMarch 2018

Constitution:	Limited Liability Company

Registered Office:	10, Mustapha Akande Close 69 Road, Gwarimpa Estate Abuja, FCT

Auditors:	Logic Professional Services (Chartered Accountants) Rear wing, 4^th Floor
	17/19, Allen Avenue Ikeja, Lagos

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Financial Highlights

	2020			2019
	N			N

Revenue		-			133,355.07
Other Income		-			-
Operating Expenses		(341,250	)		(10,864,879.2	)
EBITDA		(351,686.24	)		(10,731,524.1	)
Profit before Income Tax		(351,686.24	)		(11,775,719.2	)
Profit After Tax		(351,686.24	)		(11,775,719.2	)
EPS		(0.02	)		(0.59	)
Declared Dividend					-
Share Capital		20,000,000.00			20,000,000.00
Total Equity		5,073,046.14			3,955,634.70

In the year ending 31 December 2020, with comparable year 2019 figures.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Directors’ Report

For the period ended 31 December 2020

The directors present their ten months report on affairs of the Company, together with the financial statements and auditors’ report for the period ended 31 December 2020.

Principal Activity and Business Review

The Company has generated no income from any business activities in the year and its going concern is currently in doubt.

Operating Results

The following is a summary of the Company’s operating results and retained earnings:

	2020			2019
	N			N
RETAINED EARNINGS, beginning of period		(43,798,062	)		(32,022,343	)

Profit/(loss) for the year		(351,686.24	)		(11,775,719	)

RETAINED EARNINGS, end of period		(44,149,748	)		(43,798,062	)

Directors and Their Interests

The directors who served during the period, together with their interests in the shares of the Company as at 31 December 2020 were as follows:

		Number of Ordinary shares of
	Date appointed	N1.00 each

Mr. Vijayankumar Praveenkumar	14^thFebruary 2018		16,000,000
Mr. Chris Oyeniyi	14^thFebruary 2018		-
Mr. Ukachukwu Jeremiah	14^thFebruary 2018		-
Mr. Evoh Victor	14^thFebruary 2018		-
Mrs. Okoro Nkiruka	14^thFebruary 2018		-

The directors not allotted shares in the Company as at 31 December 2020 do not have a diluting effect on the current shareholding structure of the Company as at year-ending 31^st December 2020.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

In accordance with Section 277 of the Companies and Allied Matters Act, 1990, none of the directors has notified the Company of any declarable interests in contracts with the Company.

Analysis of Shareholding Structure

Shareholder	Position	*No. of Shares held as at 31^st Dec. 2020*
Vijayankumar Praveenkumar	Chairman		16,000,000
Kannankattu Mangalatu	Ordinary Shareholder		6,000,000
Chris Oyeniyi	Executive Director		-
Ukachukwu Jeremiah	Executive Director		-
Evoh Victor	Executive Director		-
Okoro Nkiruka	Executive Director		-
TOTAL			22,000,000

Fixed Assets

The Company had fixed assets as at the year end.

Charitable Contributions

The Company made no charitable contributions and gifts to any charitable institutions and organisations during the year. No donation was made to political parties.

Employment of Disabled Persons

Employee Consultation and Training

Health, Safety and Welfare at Work

Post Balance Sheet Events

There are no post balance sheet events which could have had a material effect on the state of affairs of the Company as at 31 December 2020 and profit for the year ended on that date, that have not been adequately provided for.

Auditors

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Statement of Director’s Responsibilities

For the preparation and approval of the Financial Statements

The Directors of Belfrics Nigeria Pvt Limited are responsible for the preparation of the financial statements that give a true and fair view of the financial position of the Company as at 31 December 2020, and the results of its operations, cash flows and changes in equity for the year ended, in compliance with International Financial Reporting Standards (“IFRS”) and in the manner required by the Companies and Allied Matters Act of Nigeria, the Financial Reporting Council of Nigeria Act, 2011.

In preparing the financial statements, the Directors are responsible for:

	●	properly selecting and applying accounting policies;
	●	presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
	●	providing additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance; and
	●	making an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for:

	●	designing, implementing and maintaining an effective and sound system of internal controls throughout the Company;
	●	maintaining adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company, and which enable them to ensure that the financial statements of the Company comply with IFRS;
	●	maintaining statutory accounting records in compliance with the legislation of Nigeria and IFRS;
	●	taking such steps as are reasonably available to them to safeguard the assets of the Company; and
	●	preventing and detecting fraud and other irregularities.

Going Concern:

The Directors have made an assessment of the Compnay’s ability to continue as a going concern and have no reason to believe the Company will not remain a going concern in the year ahead.

The financial statements of the Company for the year ended 31 December 2020 were approved by directors on 21 June, 2021

INDEPENDENT AUDITOR’S REPORT

To the Members of Belfrics Nigeria Pvt Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Belfrics Nigeria Pvt Limited (“the Company”), which comprise the balance sheets as at 31 December 2020, the profit and loss accounts, statement of cash flows and statement of changes in equity for the period then ended, the statement of accounting policies and the notes to the financial statements as set out on pages 8 to 18.

Directors’ Responsibility for the Financial Statements

Auditor’s Responsibility

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

Opinion

In our opinion, these financial statements give a true and fair view of the financial position of Belfrics Nigeria Pvt Limited (“the Company”) as at 31 December 2020, and of the Company’s financial performance and cash flows for the period then ended in accordance with Statements of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Statement of Significant Accounting Policies

(a)	Basis of Accounting

The financial statements are prepared under the historical cost convention.

(b)	Revenue

(c)	Fixed Assets

	%

Furniture & Fittings		25
Office equipments		25
Motor vehicles		25
Computer Software		50

If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised accordingly to reflect the new expectations. However, in the current year under review, no depreciation has been charged on the assets as the company never operated in year.

(d)	Intangible Assets

(e)	Inventories

The company does not deal in inventory and holds no form of inventory as its entire operations is service based.

(f)	Impairment of Assets

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

(g)	Leases

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the lease.

(h)	Trade and Other Receivables

(i)	Trade Payables

(j)	Taxation

Income tax payable is provided on taxable profits at the current rate.

(k)	Cash at Bank and in hand

For the purpose of reporting cash flows, cash at bank and in hand includes cash on hand and cash balances with banks

(l)	Borrowing costs, Bank Loans and Overdrafts

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Statement of Comprehensive Income for the period ended 31 December 2020

		2020			2019
	Notes	N			N

Revenue – (Brokerage commissions)	1		-			133,355.07
Other income			-			-
Total Revenue			-			133,355.07
Operating expenses	2		(341,250.00	)		(10,864,879.18	)
Depreciation			-			(1,015,765.75	)
Finance Costs			(10,436.24	)		(28,429.34	)
Profit/(loss) before tax	3		(351,686.24	)		(11,775,719.20	)
Provision for Tax	4		-			-
Profit/ (Loss) for the year			(351,686.24	)		(11,775,719.20	)
Retained earnings at start of the year			(43,798,062.20	)		(32,022,343.00	)
Retained Earnings End of Period			(44,149,748.44	)		(43,798,062.20	)
Earnings per share	5		(0.02	)		(0.59	)

The statement of significant accounting policies on page 8 and the accompanying notes on pages 15 to 18 form an integral part of this Statement of Comprehensive Income.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Statement of financial position as at 31 December 2020

	Notes	2020 N			2019 N
Non-Current Assets
Office Equipment	10		2,119,543.75			2,119,543.75
Furniture & Fittings			2,770,458.50			2,770,458.50
Computer Software			-			-
Current assets			4,890,002.25			4,890,002.25
Trade and other receivables	7		-			-
Prepayments	7(a)		-			-
Cash and cash equivalents	6		183,043.89			1,642.94
			183,043.89			1,642.94
TOTAL ASSETS			5,073,046.14			4,891,645.19
EQUITY & LIABILITIES
Equity
Share Capital	9(a)		20,000,000.00			20,000,000.00
Deposit for shares	9(b)		27,972,696.92			27,753,696.92
Retained earnings			(42,899,650.78	)		(43,798,062.20	)
TOTAL EQUITY			5,073,046.14			3,955,634.72
Current liabilities
Trade & Other Payables	8		-			507,890.47
Tax Payable	8(a)		-			428,120.00
			-			936,010.47
TOTAL LIABILITIES			-			936,010.47
TOTAL EQUITY & LIABILITIES			5,073,046.14			4,891,645.19

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Attributable to equity holders of the company

	Share Capital		Deposit for Shares		Retained Earnings			Total Equity
Opening balance:
Issue of ordinary shares of N1/share		20,000,000.00		27,753,696.92		(43,798,062.20	)		3,955,634.72
Profit for the year
Profit or loss						(351,686.24	)		(351,686.24	)
Transactions recorded directly in equity
Additional Capital invested by the Director				219,000					219,000
Revaluation Surplus on Assets						1,250,097.66			1,250,097.66
Balance as at 31st December 2020		20,000,000.00		27,972,696.92		(42,899,650.78	)		5,073,046.14

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Statement of Cash Flows for the year ended 31 December 2020

		2020			2019
	Notes	N			N
Cash flows from operating activities
Profit / (Loss) for the year			(351,686.24	)		(11,775,719.20	)
- Finance costs			10,436.24			28,429.34
Adjustments for non-cash income and expenses:
- Depreciation			-			915,730.75
- Amortization			-			100,035.00
Changes in operating assets and liabilities:
- Decrease / (Increase) in trade and other receivables			-			107,400.00
- Increase / (Decrease) in trade and other payables			-			(1,242,132.53	)
Cash generated from operations			(341,250.00	)		(11,866,256.64	)
Income tax paid			-			-
Net cash from operating activities			(341,250.00	)		(11,866,256.64	)
Cash flows from investing activities
Purchases of property, plant & equipment			-			-
Purchases of intangible assets			-			-
Net cash used in investing activities						-
Cash flows from financing activities
Proceeds from Directors initial capital			-			-
Proceed from Directors deposit			219,000.00			9,844,992.58
Net cash used in financing activities			219,000.00			9,844,992.58
Net increase / (decrease) in cash and cash equivalents			181,400.95			(2,021,264.06	)
Cash and cash equivalent (beginning)			1,642.94			2,022,907.00
Cash and cash equivalents at end of year			183,043.89			1,642.94

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

Notes to the Financial Statements

For the period ended 31 December 2020

1.	Revenue

2020

2019

Total Commission

133,355

Revenue represents the value of commissions earned on every sell and buy trades on the Belfrics exchange from all customers during the period covered.

2.	Operating Expense

Admin Expenses	-	205,838.64
Internet Subscriptions	-	216,800.00
IT Services	-	62,500.00
Legal & Professional Fees	-	750,000.00
Media & Printing	-	29,350.00
Miscellaneous Expense	-	-
Office Rental Prepaid	-	3,450,000.00
Office Stationeries	-	50,800.00
Office Supplies	-	22,800.00
Postage & Courier	-	30,000.00
Repairs & Maintenance	-	121,815.00
Staff Salaries	-	4,760,821.23
Subscription & Registrations	-	-
Taxes	-	16,532.31
Telephone & Communication	-	26,500.00
Training	-	5,000.00
Transportation	341,250	90,652.50
Travel & Accommodation	-	854,669.50
Utilities - Electricity	-	170,800.00
Total	341,250	10,864,879.18

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

3.	Profit on Ordinary Activities before Taxation

3(a) Profit/ (loss) before taxation is stated after charging the following:

2020

2019

Depreciation

1,015,766

Finance cost

28,429

ii.	Higher-paid employees of the Company, other than directors, whose duties were wholly or mainly discharged in Nigeria, received remuneration (excluding pension contributions) in the following ranges:

	2020 Number	2019 Number

N 30,001 -N 40,000	-	-
N 40,001 -N 50,000	-	-
N 50,000 - Upwards	-	-

4.	Tax Provision

5.	Earnings per Share

Earnings per share are based on the profit/(loss) for the year ofN(351,686.24), and on 20,000,000 ordinary shares being the number of shares in issue during the year.

6.	Cash & Bank Balances

	2020		2019
	N		N

Cash at Bank		183,043.89		1,642.94

		183,043.89		1,642.94

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

7.	Trade and Other Receivables

7(a) Prepayment figures is the rental payment apportioned for the second year.

8.	Trade and Other Payables

	2020		2019

Customer Balances		-		507,890
Tax Liabilities		-		428,120
		-		936,010

9.(a) Share Capital

	2020
	N
Authorised:
1,000,000 ordinary shares ofN1.00 each		20,000,000

Allotted, called-up and fully paid:
1,000,000 ordinary shares ofN1.00 each		20,000,000

The share capital is contributed as follows:

	2020

● Mr. Vijayankumar Praveenkumar		16,000,000
● Mr. Kannankattu Mangalatu		6,000,000
		22,000,000

(b) Deposit for shares

During the course of the year 2020, the existing shareholder has injected more capital beyond the existing authorized share capital of 20,000,000. Whilst an increase in share capital would be processed with the Corporate Affairs Commission of Nigeria “CAC” to accommodate the excess above the current share capital, the excess has currently been classified as deposit for shares in the accounts of the Company at the end of the period.

Belfrics Nigeria PVT Limited

Financial Statements -- 31 December 2020

Together with Directors’ and Auditors’ Reports

10. Fixed Assets

The movement on these accounts during the year was as follows:

	Computer Software			Office Equipment			Furniture & Fittings			TOTAL
	N			N			N			N
COST:

Cost		171,000.00			3,175,346.00			4,150,500.00			7,496,846.00
Accumulated depreciation		(171,000.00	)		(1,055,802.25	)		(1,380,041.50	)		(2,606,843.75	)
Additions		-			-			-			-
Disposals		-			-			-			-
Beginning of Period		-			2,119,543.75			2,770,458.50			4,890,002.25
DEPRECIATION:

Beginning of period		(171,000.00	)		(1,055,802.25	)		(1,380,041.50	)		(2,606,843.75	)
Charged for the period		-			-			-			-

End of period		(171,000.00	)		(1,055,802.25	)		(1,380,041.50	)		(2,606,843.75	)

CARRYING AMOUNT

31-12-2020		-			2,119,543.75			2,770,458.50			4,890,002.25

13. Contingencies

The Company is not engaged in any lawsuits that may have arisen in the normal course of its business; thus no provision has been made in these financial Statements.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

REPORTS AND FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

CHENGCOPLT

201806002622

(LLP00l7004-LCA) & AF0886

CHARTERED ACCOUNTANTS

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

CORPORATE INFORMATION

Director	:	Praveenkumar Vijayakumar

Company secretary	:	Yap Wai Bing (MAICSA 7023640)

Registered office	:	Unit l 3A-08, Menara Kl
		Lorong 3/137C
		Off Jalan Klang Lama
		58200 Kuala Lumpur

Principal business address	:	B1-16-6, Soho Suites
		Jalan Perak
		50450 Kuala Lumpur

Auditors	:	CHENGCOPLT
		201806002622
		(LLP00l 7004-LCA) & AF 0886
		No. 8-2 & 10-2, Jalan 2/114
		Kuchai Business Centre
		Off Jalan Klang Lama
		58200 Kuala Lumpur

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

CONTENTS		PAGES

Director’ report		1-4

Statement by director		5

Statutory declaration		5

Independent auditors’ report		6-8

Statement of financial position		9

Statement of comprehensive income		10

Statement of changes in equity		11

Statement of cash flows		12

Notes to the financial statements		13-27

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

DIRECTOR’S REPORT

For the financial year ended 31 December 2020

The director has pleasure in submitting their report together with the audited financial statements of the Company for the financial year ended 31 December 2020.

Principal activities

The Company is principally engaged in providing information technology services and related activities. There has been no significant change in the nature of its activity during the financial year.

Results	RM

Net loss for the financial year		353,687

In the opinion of the directors, the results of the operations of the Company during the financial year have not been substantially affected by any item, transaction or event of material and unusual nature.

Dividends

No dividends have been paid or declared by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividend in respect of the current financial year.

Reserves and provisions

There were no material transfers to or from reserves or provisions during the financial year.

Issue of shares and debentures

During the financial year, the Company did not issue any new shares or debentures.

Options granted over unissued shares

No options have been granted by the Company to any parties during the financial year to take up any unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take up unissued shares of the Company. At the end of the financial year, there were no unissued shares of the Company under options.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Director

The director in office during the financial year and during the period from the end of the financial year to the date of the report is:

Praveenkumar Vijayakumar

Director’s interests

No director holding office at 31 December 2020 had any interest in the shares and options over shares of the Company during the year.

By virtue of the Company being a wholly-owned subsidia1y of Belfries Malaysia Sdn. Bhd., the directors’ interests in shares in the holding company and its related corporations during the year as required by Section 59(3) of the Companies Act, 2016 to be disclosed in the directors’ report, is deemed to have been complied with, as such interests are disclosed in the directors’ report of the holding company.

Director’ benefits

Since the date of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than the benefit shown under directors’ remuneration) by reason of a contract made by the Company with the directors or with a finn of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during, nor at the end of the financial year, did there subsist any arrangement to which the Company was a patty, whereby the directors might acquire benefits by means of the acquisition of shares 111, or debentures of, the Company or any other body corporate.

Director’s remuneration

The details of director’s remuneration paid are set out in Note 17 to the financial statements.

Other statutory information

Before the financial statements of the Company were prepared, the director took reasonable steps:

(a)	to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that no known bad debts to be written off and that no allowance for doubtful debts is required; and

(b)	to ensure that any current assets, which were unlikely to be realised in the ordinary course of business including the values of current assets as shown in accounting records of the Company had been written down to an amount which the current assets might be expected so to realise.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Other statutory information (cont’d)

At the date of this report, the directors are not aware of any circumstances:

(a)	which would require the writing off of bad debts or making of allowance for doubtful debts in the financial statements of the Company; or

(b)	which would render the values attributed to current assets in the financial statements of the Company misleading; or

(c)	which have arisen and render adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate; or

(d)	not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the Company misleading.

At the date of this report, there does not exist:

(a)	any charge on the assets of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(b)	any contingent liability of the Company which has arisen since the end of the financial year.

Other than as disclosed in Note 2 to the financial statements, no contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due.

In the opinion of the director, no item, transaction, or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Company for the financial year in which this report is made.

Indemnities to directors, officers or auditors

There was no indemnity given to or insurance effected for the director, officer or auditors of the Company during the financial year.

Auditors’ remuneration

Details of auditors’ remuneration are set out in Note 15 to the financial statements.

Holding company

The company is a wholly-owned subsidiary of Belfries Malaysia Sdn. Bhd., a company incorporated in Malaysia.

Significant events during the reporting period

The details of significant events during the reporting period are disclosed in Note 19 to the financial statements.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Auditors

The auditors, CHENGCO PLT, have expressed their willingness to continue in office.

Signed on behalf of the board of director in accordance with a resolution of the director,

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

STATEMENT BY DIRECTOR

PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT, 2016

I, Praveenkumar Vijayakumar, being the director of Belfricsbt Sdn. Bhd., do hereby state that in my opinion, the financial statements as set out on pages 9 to 2 7 , are drawn up in accordance with Malaysian Private Entity Reporting Standard and the requirements of the Companies Act, 2016 in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2020 and of the results of its financial performance and cash flows of the Company for the financial year ended 31 December 2020.

Signed on behalf of the board of director in accordance with a resolution of the director,

	CHENGCO PLT 201806002622 (LLP0017004-LCA) & AF0886
	Wisma Cheng & Co
	No. 8-2 & 10-2, Jalan 2/114, Kuchai Business Centre, Off Jalan Klang Lama, 58200 Kuala Lumpur.
	Tel: 03-7984 8988 Fax: 03-7984 4402
	Email: enquiry@chengco.asia Website: www.chengco.asia

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBER OF BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Belfricsbt Sdn. Bhd., which comprise the statement of financial position as at 31 December 2020, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 9 to 27.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and of its financial performance and its cash flows for the financial year then ended in accordance with Malaysian Private Entities Reporting Standard and the requirements of the Companies Act, 2016 in Malaysia.

Basis of Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a net loss of RM353,687 (2019: RM157,757) for the current financial year and as at 31 December 2020, the Company’s current liabilities exceeded its current assets by RM630,510 (2019: RM240,386) and has capital deficiencies of RM442,119 (2019: RM88,432). As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Information Other than the Financial Statements and Auditors’ Report Thereon

The director of the Company is responsible for the other information. The other information comprises the director’s report but does not include the financial statements of the Company and our auditors’ report thereon.

Kuala Lumpur (HQ) • Cheras Selatan • Pandan lndah • lpoh • Taiping • Penang • Seremgan • Melaka • Batu Pahat • Johor Bahru • K.Terengganu • Sabah • Labuan

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBER OF BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Report on the Audit of the Financial Statements (con’d)

Information Other than the Financial Statements and Auditors’ Report Thereon (cont’d)

Our opinion on the financial statements of the Company does not cover the director’s report and we do not express any forn1 of assurance conclusion thereon.

In connection with our audit of the financial statements of the Company, our responsibility is to read the director’s report and, in doing so, consider whether the director’s report is materially inconsistent with the financial statements of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a mate1ial misstatement of the director’s report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Director for the Financial Statements

The director of the Company is responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with Malaysian Private Entities Reporting Standard and the requirements of the Companies Act, 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Company, the director is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Fi,wncial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from material misstatement, whether due to fraud or e1Tor, and to issue an auditors’ repoti that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

●

Identify and assess the risks of material misstatement of the financial statements of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from e1Tor, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBER OF BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

Report on the Audit of the Financial Statements (con’d)

Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d)

●	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

●	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

●	Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

●	Evaluate the overall presentation, structure and content of the financial statements of the Company, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

		2020			2019
	Notes	RM			RM
ASSETS
Non-current assets
Property, plant and equipment	7		71,667			91,667
Intangible assets	8		116,724			60,287
			188,391			151,954

Current assets
Deposits			53,672			33,883
Amount due from related companies	9		336,884			332,159
Cash and cash equivalents	10		35,005			15,842
			425,561			381,884
TOTAL ASSETS			613,952			533,838

EQUITY AND LIABILITIES

EQUITY
Share capital	11		50,000			50,000
Accumulated losses			(492,119	)		(138,432	)
CAPITAL DEFICIENCIES			(442,119	)		(88,432	)

LIABILITIES
Current liabilities
Other payables and accruals	12		302,072			335,442
Amount due to a director	9		753,352			286,181
Amount due to related company	9		647			647
TOTAL LIABILITIES			1,056,071			622,270
NET CURRENT LIABILITIES			(630,510	)		(240,386	)
TOTAL EQUITY AND LIABILITIES			613,952			533,838

The accompanying notes form an integral part of these financial statements

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

STATEMENT OF COMPREHENSIVE INCOME

For the financial year ended 31 December 2020

			2020			2019
	Notes		RM			RM

Revenue		13		794,748			311,067

Cost of sales				(593,421	)		(196,922	)

Gross profit				201,327			114,145

Other operating income		14		1			-

General and administration expenses				(555,015	)		(263,400	)

Loss before tax		15		(353,687	)		(149,255	)

Tax expense		16		-			(8,502	)

Net loss for the financial year, representing total comprehensive loss for financial year				(353,687	)		(157,757	)

The accompanying notes form an integral part of these financial statements

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 December 2020

	Share capital		Retained profits/ (Accumulated losses)			Total
	RM		RM			RM

At 1 January 2019		50,000		19,325			69,325

Net loss for the financial year, representing total comprehensive loss for the financial year		-		(157,757	)		(157,757	)

At 31 December 2019 and 1 January 2020		50,000		(138,432	)		(88,432	)

Net loss for the financial year, representing total comprehensive loss for the financial year		-		(353,687	)		(353,687	)

At 31 December 2020		50,000		(492,119	)		(442,119	)

The accompanying notes form an integral part of these financial statements

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

STATEMENT OF CASH FLOWS

For the financial year ended 31 December 2020

			2020			2019
	Note		RM			RM
Cash flows from operating activities
Loss before tax				(353,687	)		(149,255	)
Adjustments for:
Depreciation of property, plant and equipment		7		20,000			8,333
Loss on foreign exchange (unrealised)				3,609			621
Operating loss before working capital changes				(330,078	)		(140,301	)
Changes in:
Deposits				(19,789	)		(33,883	)
Other payables and accruals				(33,370	)		313,385
Cash (used in)/generated from operations				(383,237	)		139,201
Tax paid				-			(13,881	)
Net cash (used in)/from operating activities				(383,237	)		125,320

Cash flows from investing activities
Acquisition of property, plant and equipment				-			(100,000	)
Acquisition of intangible assets				(60,175	)		(31,054	)
Net cash used in investing activities				(60,175	)		(131,054	)

Cash flows from financing activities
Director’s financing				467,171			225,715
Advance from related company				(4,725	)		(253,241	)
Net cash from/(used in) financing activities				462,446			(27,526	)

Net increase/(decrease) in cash and cash equivalents				19,034			(33,260	)
Effect of exchange rate changes				129			(621	)
Cash and cash equivalents at beginning of financial year				15,842			49,723
Cash and cash equivalents at end of financial year		10		35,005			15,842

The accompanying notes form an integral part of these financial statements

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

1.	General information

	The Company is a private limited company, incorporated and domiciled in Malaysia. The registered office of the Company is located at Unit 13A-08, Menara Kl, Lorong 3/137C, Off Jalan Klang Lama, 58200 Kuala Lumpur.

	The Company is principally engaged in providing information technology services and related activities. There has been no significant change in the nature of its activity during the financial year. The principal place of business of the Company is located at B1-16-6, Soho Suites, Jalan Perak, 50450 Kuala Lumpur.

	The financial statements were authorised for issue by the board of directors in accordance with a resolution of the directors on 30 September 2021.

	The financial statements are expressed in Ringgit Malaysia (“RM”).

2.	Going concern

	The Company incurred a net loss ofRM353,687 (2019: RM157,757) for the current financial year and as at 31 December 2020, the Company’s current liabilities exceeded its current assets by RM630,5l 0 (2019: RM240,386) and has capital deficiencies of RM442,l 19 (2019: RM88,432). These factors indicate the existence of material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern. The validity of the going concern assumption on which these financial statements are prepared depends on the continuous financial support from the shareholders and the ability of the Company to achieve future profitable operations and cash flows to meet its liabilities of the Company as and when they fall due. The financial statements of the Company have been prepared on a going concern basis and do not include any adjustments relating to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

3.	Compliance with Financial Reporting Standards and the Companies Act, 2016

	The financial statements of the Company have been prepared in compliance with Malaysian Private Entities Reporting Standard (“MPERS”) issued by the Malaysian Accounting Standards Board (“MASB”) and the requirements of the Companies Act, 2016 in Malaysia.

4.	Basis of preparation of financial statements

	The financial statements of the Company have been prepared using cost basis.

	Management has used estimates and assumptions in measuring the reported amounts of assets and liabilities at the end of the reporting year and the reported amounts of revenues and expenses during the reporting year. Judgements and assumptions are applied in the measurement, and hence, the actual results may not coincide with the reported amounts.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5.	Significant accounting policies

5.1	Property, plant and equipment

	Operating tangible assets that are used for more than one accounting period in the production and supply of goods and services, for administrative purpose or for rental to others are recognised as property, plant and equipment when the Company obtain control of the asset. These include assets constructed or acquired for environmental protection purpose and investment propetty measured on the cost model. The assets, including major spares, stand-by equipment and servicing equipment, are classified into appropriate classes based on the nature. Any subsequent replacement of a significant component in an existing asset is capitalised as a new component in the asset and the old component is derecognised.

	All property, plant and equipment are initially measured at cost. For a purchased asset, cost comprises purchases price plus all directly attributable costs incun-ed in bringing the asset to its present location and condition for management’s intended use. For a self-constructed asset, costs comprise all direct and indirect cost of construction (including provision for restoration and cost of major inspection) but excludes internal profits.

	All prope1ty, plant and equipment are subsequently measured at cost less accumulated depreciation and accumulated impairment losses.

	All property, plant and equipment are depreciated by allocating the depreciable amount of a significant component or of an item over the remaining useful life. The depreciation methods used and useful lives of the respective classes of property, plant and equipment are as follows:

	Method		Useful life (years)
Computer software	Straight-line		5

	At the end of each reporting year, the residual values, useful lives and depreciation methods for the property, plant and equipment are reviewed for reasonableness. Any change in estimate of an item is adjusted prospectively over its remaining useful life, commencing in the cun-ent financial year.

	The carrying amounts of items of property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising from the derecognition of items of property, plant and equipment, detennined as the difference between the net disposal proceeds, if any, and the can-ying amounts of the item, is recognised in profit or loss. Neither the sale proceeds nor any gain on disposal is classified as revenue.

5.2	Impairment of non-financial assets

	An impairment loss arises when the carrying amount of a Company’s asset exceeds its recoverable amount.

	At the end of each reporting date, the Company assesses whether there is any indication that a stand alone asset or a cash-generating unit may be impaired by using external and internal sources of infonnation. If any such indication exists, the Company estimates the recoverable amount of the assets or cash-generating unit.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (cont’d)

5.2	Impairment of non-financial assets (cont’d)

	If an individual asset generates independent cash inflows, it is tested for impainnent as a stand-alone asset. If an asset does not generate independent cash inflows, it is tested for impainnent together with other assets in a cash-generating unit, at the lowest level in which independent cash inflows are generated and monitoring for internal management purposes.

	The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and the value in use. The Company detennines the fair value less costs to sell of an asset or a cash-generating unit in a hierarchy based on: (i) price in a binding sale agreement; (ii) market price traded in an active market; and (iii) estinrnte of market price using the best available infonnation. The value in use is estimated by discounting the net cash inflows (by an appropriate discount rate) of the asset or unit, using reasonable and supportable management budgets and forecasts of five years and extrapolation of cash inflows for period beyond the five-year forecast or budget.

	For an asset measured on a cost-based model, any impainnent loss is recognised in profit or loss.

	For a cash-generating unit, any impairment loss is allocated to the assets of the unit pro rata based on the relative carrying amounts of the assets.

	The Company reassesses the recoverable amount of an impaired asset or a cash-generating unit if there is any indication that an impairment loss recognised previously may have reversed. Any reversal of impairment loss for an asset carried at a cost-based model is recognised in profit or loss, subject to the limit that the revised can-ying amount does not exceed the amount that would have been detennined had no impairment loss been recognised previously.

5.3	Share capital and distributions

(a)	Share capital

	Ordinai-y shares issued that can-y no mandatory contractual obligation: (i) to deliver cash or another financial asset; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Company, are classified as equity instruments.

	When ordinary shares are issued in a private placement or in a right issue to existing shareholders, they are recorded at the issued price, for ordinary shares issued in exchange for non-monetary assets, they are measured by reference to the fair values of the assets received.

	When ordinary shares and other equity instruments are issued as consideration transferred in a business combination or as settlement of an existing financial liability, they are measured at their fair value at the date of the exchange transaction.

	Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax effect.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (cont’d)

5.3	Share capital and distributions (cont’d)

(b)	Distributions

	Distributions to holders of an equity instrument are debited directly in equity, net of any related income tax effect.

	A dividend declared is recognised as a liability only after it has been appropriately authorised, which is the date when the Board of Directors declares an interim dividend, or in the case of proposed final dividend, the date the shareholders of the Company approve the proposed final dividend in an annual general meeting of shareholders.

5.4	Financial instruments

(a)	Initial recognition and measurement

	The Company recognises a financial asset or a financial liability (including derivative instruments) in the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the instrument.

	On initial recognition, all financial assets and financial liabilities are measured at fair value, which is generally the transaction price, plus transaction costs if the financial asset or financial liability is not measured at fair value through profit or loss. For instruments measured at fair value through profit or loss, transaction costs are expensed to profit or loss when incurred.

(b)	Derecognition of financial instruments

	A financial asset, whether as a single item or as a part, is derecognised when, and only when, the conceptual rights to receive the cash flows from the financial asset expire, or when the Company transfers the contractual rights to receive cash flows of the financial asset, including circumstances when the Company acts only as a collecting agent of the transferee, and retains no significant risks and rewards of ownership of the financial asset or no continuing involvement in the control of the financial asset transferred.

	A financial liability is derecognised when, and only when, it is legally extinguished, which is either when, the obligation specified in the contract is discharged or cancelled or expires. A substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. For this purpose, the Company considers a modification as substantial if the present value of the revised cash flows of the modified tenns discounted at the original effective interest rate differs by 10% or more when compared with the carrying amount of the original liability.

(c)	Subsequent measurement of financial assets

	For the purpose of subsequent measurement, the Company classifies financial assets into two categories, namely: (i) financial assets at fair value through profit or loss; and (ii) financial assets at amortised cost.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (cont’d)

5.4	Financial instruments (cont’d)

(c)	Subsequent measurement of financial assets (cont’d)

	After initial recognition, the Company measures investments in quoted preference shares, quoted ordinary shares and derivatives that are assets at their fair values by reference to the active market prices, if observable, or otherwise by a valuation technique, without any deduction for transaction costs it may incur on sale or other disposal.

	Investments in debt instruments, whether quoted or unquoted, are subsequently measured at amortised cost using the effective interest method. Investments in unquoted equity instruments and whose fair value cannot be reliably measured are measured at cost.

	Other than financial assets measured at fair value through profit or loss, all other financial assets are subject to review for impailn1ent in accordance with 5.4(g).

(d)	Subsequent measurement of financial liabilities

	After initial recognition, the Company measures all financial liabilities at amortised cost using the effective interest method.

(e)	Fair value measurement of financial instruments

	The fair value of a financial asset or a financial liability is detennined by reference to the quoted market price in an active market, and in the absence of an observable market price, by a valuation technique using unobservable mputs with reasonable and supportable assumptions.

(I)	Recognition of gains and losses

	Fair value changes of financial assets and financial liabilities classified as at fair value through profit or loss are recognised in profit or loss when they arise.

	For financial assets and financial liabilities carried at amortised cost, a gain or loss is recognised in profit or loss only when the financial asset or financial liability is derecognised or impaired, and through the amortisation process of the instrument.

(g)	Impairment and uncollectibility of financial assets

	The Company applies the incurred loss model to recognise impairment losses of financial assets. At the end of each reporting period, the Company examines whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Evidences of trigger loss events include: (i) significant difficulty of the issuer or obligor; (ii) a breach of contract, such as a default or delinquency in interest or principal payment; (iii) granting exceptional concession to a customer; (iv) it is probable that a customer will enter bankruptcy or other financial reorganisation; (v) the disappearance of an active market for that financial asset because of financial difficulties; or (vi) any observable market data indicating that there may be measurable decrease in the estimated future cash flows from a group of financial assets.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (cont’d)

5.4	Financial instruments (cont’d)

(g)	Impairment and uncollectibility of financial assets (cont’d)

	For a non-current loan and receivable carried at amortised cost, the revised estimated cash flows are discounted at the original effective interest rate. Any impairment loss is recognised in profit or loss and a corresponding amount is recorded in a loss allowance account. Any subsequent reversal of impaim1ent loss of the financial asset is reversed in profit or loss with a corresponding adjustment to the allowance account, subject to the limit that the reversal should not result in the revised ca1Tying amount of the financial asset exceeding the amount that would have been detennined had no impainnent loss been recognised previously.

	For short-tenn trade and other receivables, where the effect of discounting is immaterial, impairment loss is tested for each individually significant receivable wherever there is any indication of impairment. Individually significant receivables for which no impairment loss is recognised are grouped together with all other receivables by classes based on credit risk characteristics and aged according to their past due periods. A collective allowance is estimated for a class group based on the Company’s experiences of loss ratio in each class, taking into consideration current market conditions.

	For an unquoted equity investment measured at cost less impairment, the impairment is the difference between the asset’s carrying amount and the best estimate (which will necessarily be an approximation) of the amount (which might be zero) that the Company expects to receive for the asset if it were sold at the reporting date. The Company may estimate the recoverable amount using an adjusted net asset value approach.

5.5	Tax assets and liabilities

	A current tax for current and prior financial year, to the extent unpaid, recognised as a cmTent tax liability. If the amounts already paid in respect of current and prior financial year exceed the amount due for those periods, the excess is recognised as a current tax asset. A current tax liability (asset) is measured at the amount the entity expects to pay (recover) using tax rates and laws that have been enacted or substantially enacted by the reporting date.

	A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from; (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit (or tax loss). The exceptions for initial recognition differences include items of prope11y, plant and equipment that do not qualify for capital allowances and acquired intangible assets that are not deductible for tax purposes.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (cont’d)

5.5	Tax assets and liabilities (cont’d)

	A defen-ed tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the defen-ed tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (or tax loss). The exceptions for the initial recognition differences include non-taxable government grants received and reinvestment allowances and investment tax allowances on qualifying prope1iy, plant and equipment.

	A defen-ed tax asset is recognised for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. Unused tax credits do not include unabsorbed reinvestment allowances and unabsorbed investment tax allowances because the Company treats these as paii of initial recognition differences.

	Defen-ed taxes are measured using tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting year. The measurement of deferred taxes reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting year, to recover or settle the carrying amount of its assets or liabilities. For an investment property measured at fair value, if the Company does not have a business model to hold the property solely for rental income, the deferred tax liability on the fair value gain is measured based on the presumption that the property is recovered through sale at the end of the reporting year.

	At the end of each repo1iing year, the carrying amount of a deferred tax asset is reviewed, and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of a part or all of that deferred tax asset to be utilised. Any such reduction will be reversed to the extent that it becomes probable that sufficient taxable profit will be available.

	A current or deferred tax is recognised as income or expense in profit or loss for the financial year, except to the extent that the tax arises from items recognised outside profit or loss. For an income or expense item recognised in other comprehensive income, the current or deferred tax expense or tax income is recognised in other comprehensive income. For items recognised directly in equity, the related tax effect is also recognised directly in equity.

5.6	Intangible assets

	Cryptocurrencies

	The Company recognises cryptocun-ency and related assets as intangible assets where it is a resource controlled by the Company (that is, the Company has the power to obtain the economic benefits that the asset will generate and to restrict the access of others to those benefits) as a result of past events and from which future economic benefits are expected to flow to the Company. It is identifiable because it can be sold, exchanged and transferred individually, and not in cash or any physical fom1.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (Cont’d)

5.6	Intangible assets (Cont’d)

	Cryptocurrencies (Cont’d)

	On initial recognition, the cryptographic assets are recognised at cost. Subsequently, the assets will be carried at cost less any impairment.

5.7	Revenue recognition and measurement

	The Company measures revenue from a sale of goods transaction at the fair value of the consideration received or receivable, which is usually the invoice price, net of any trade discounts and volume rebates given to the customer in a sale transaction.

	Revenue from a sale of goods is recognised when: (i) the Company has transferred to the buyer the significant risks and rewards of the goods; (ii) the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (iii) the amount of the revenue can be measured reliably; (iv) it is probable that the economic benefits associated with the transaction will flow to the Company; and (v) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

5.8	Employee benefits

	The Company recognises a liability when an employee has provided service in exchange for employee benefits to be paid in the future and an expense when the Company consumes the economic benefits arising from service provided by an employee in exchange for employee benefits.

(a)	Short-term employee benefits

	Wages and salaries are usually accrued and paid on a monthly basis and are recognised as an expense, unless they relate to cost of producing inventories or other assets.

	Paid absences (annual leave, maternity leave, paternity leave, sick leave, etc.) are accrued in each financial period if they are accumulating paid absences that can be carried forward, or in the case of non-accumulating paid absences, recognised as and when the absences occur.

(b)	Post-employment benefits - defined contributions plans

	The Company make statutory contributions to approved provident funds and the contributions made are charged to profit or loss in the financial period to which they relate. When the contributions have been paid, the Company has no further payment obligations.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

5	Significant accounting policies (Cont’d)

5.9	Cash and cash equivalents

	Cash and cash equivalents consist of cash at bank and cash in hand that are used by the Company in the management of their short term commitments.

5.10	Related party

	A related party is a person or entity that is related to the Company. A related party transaction is a transfer of resources, services or obligations between the Company and its related party, regardless of whether a price is charged.

(a)	A person or a close member of that person’s family is related to a reporting entity if that person:

	(i)	is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
	(ii)	has control or joint control over the reporting entity, or
	(iii)	has significant influence over the reporting entity.

(b)	An entity is related to a reporting entity if any of the following conditions applies:

	(i)	the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
	(ii)	one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the entity is a member).
	(iii)	both entities are joint ventures of the same third entity.
	(iv)	one entity is a joint ventures of a third party and the other entity is an associate of the third entity.
	(v)	the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
	(vi)	the entity is controlled or jointly controlled by a person identified in (a).
	(vii)	the entity, or any member of a group of which is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
	(viii)	a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

6.	Critical judgement and estimation uncertainty

6.1	Judgements and assumptions applied

	The directors are of the opinion that any instances of application of judgements are not expected to have a significant effect on the amounts recognised in the financial statements.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

6.	Critical judgement and estimation uncertainty (cont’d)

6.2	Estimation uncertainty

	A related party is a person or entity that is related to the Company. A related party transaction is a transfer of resources, services or

	The measurement of some assets and liabilities requires management to use estimates based on various observable inputs and other assumptions. The areas or items that are subject to significant estimation uncertainties of the Company are in measuring: (a) depreciation of property, plant and equipment; and (b) measurement of income taxes.

(a)	Depreciation of property, plant and equipment

	The costs of an item of property, plant and equipment is depreciated on the straight-line method or another systematic method that reflects the consumption of the economic benefits of the asset over its useful life. Estimates are applied in the selection of the depreciation method, the useful lives and the residual values. The actual consumption of the economic benefits of the property, plant and equipment may differ from the estimates applied and this may lead to gain or loss on an eventual disposal of an item of property, plant and equipment.

(b)	Measurement of income taxes

	Significant judgement is required in determining the Company’s provision for current and deferred taxes because the ultimate tax liability for the Company as a whole is uncertain. When the final outcome of the taxes payable is determined with the tax authorities, the amount might be different from the initial estimates of the taxes payable. Such differences may impact the current and deferred taxes in the financial period when such determination is made. The Company will adjust for the differences as over-or under-provision of current or deferred taxes in the current financial year in which those differences arise.

7.	Property, plant and equipment

Cost	Computer software RM
At 1 January 2019, 31 December 2019, 1 January 2020and 31 December 2020		100,000

Accumulated depreciation
At 1 January 2019		-
Charge for the financial year		8,333
At 1 31 December 20I9 and I January 2020 Charge for the financial year		8,333
At 31 December 2020		20,000

Carrying amount		28,333
At 31 December 20I9		91,667
At 31 December 2020		71,667

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

8.	Intangible assets

	2020			2019
	RM			RM

Cryptocurrencies		116,724			60,287

At beginning of the financial year		60,287			29,233
Additions		60,175			31,054
Effect on foreign exhange		(3,738	)		-
At end of the financial year		116,724			60,287

9.	Amounts due from/(to) related companies/a director/

	The amounts are non-trade in nature, non-interest bearing, unsecured and recoverable/(repayable) on demand.

10.	Cash and cash equivalents

	2020		2019
	RM		RM

Cash in hand		4,000		15,000
Cash at bank		31,005		842
		35,005		15,842

Cash and cash equivalents are denominated in the following currencies:

	2020		2019
	RM		RM

Ringgit Malaysia		33,689		15,563
United States Dollar		1,316		279
		35,005		15,842

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

11.	Share capital

	Number of ordinary shares				2020		2019
	2020		2019		RM		RM
Issued and fully paidOrdinary shares		50,000		50,000		50,000		50,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

12.	Other payables and accruals

	2020		2019
	RM		RM

Other payables		18,320		18,320
Accruals		21,122		17,122
Deposits received		262,630		300,000
		302,072		335,442

13.	Revenue

	Revenue derived from services rendered, represents the invoiced value of goods sold less discounts. It is recognised at a point in time when the services have been rendered to the customers, where performance obligation has been completed.

14.	Other operating income

	2020		2019
	RM		RM

Interest income		1		-

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

15.

Loss before tax

	2020		2019
	RM		RM
This is stated after charging:

Auditors’ remuneration		4,000		4,000
Depreciation of property, plant and equipment		20,000		8,333
Loss on foreign exchange (unrealised)		3,609		621
Staff costs:
Salaries and allowances		40,408		93,271
EIS contribution		117		185
EPF contribution		6,863		8,785
SOCSO contribution		659		1,251

16.	Tax expense

(a)	Major components of tax expense

	2020 RM		2019 RM
Income tax		-		-
Current financial year		-		8,502
Under provision in prior financial year		-		8,502

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

16.	Tax expense (cont’d)

(b)	Relationship between tax expense and accounting profit/(loss)

	Reconciliation between tax expense and the product of accounting profit/(loss ) multiplied by the ) applicable tax rate is as follows:

	2020			2019
	RM			RM

Loss before tax		(353,687	)		(149,255	)

Income tax calculated at tax rate of 17%		(60,127	)		(25,373	)
Tax effects of:
Expenses not deductible for tax purposes		3,400			7,613
Under provision of income tax in prior financial year		-			8,502
Deferred tax assets not recognised during the financial year		56,727			17,760
		-			8,502

The amounts of temporary differences for which no deferred tax assets have been recognised in the statement of financial position are as follows:

	2020 RM		2019 RM

Unitilised tax losses		66,936		10,209

Deferred tax assets have not been recognised in respect of these items as it is not probable that the future taxable profit of the Company will be available against which the deductible temporary differences can be utilised.

17.	Related party disclosures

	Key management personnel compensation

	2020		2019
	RM		RM

Directors’ remuneration
Salaries		100,000		30,000

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

For the financial year ended 31 December 2020

18.

Categories of financial instruments

	2020		2019
	RM		RM
Financial assets
Amortised cost
Amount due from a related parties		336,884		332,159
Cash and cash equivalents		35,005		15,842
		371,889		348,001
Financial liabilities
Measured at amortised cost
Other payables and accruals		302,072		335,442
Amount due to a director		753,352		286,181
Amount due to related company		647		647
		1,056,071		622,270

19.	Significant events during the reporting period

	On 11 March 2020, the World Health Organisation declared the Coronavirus (“Covid-19) outbreak as of its rapid spread across the globe. On 16 March 2020, the Malaysian Government has imposed Movement Control Order (“MCO”) starting from 18 March 2020 to curb the spread of the Covid-19 outbreak in Malaysia. The Covid-19 outbreak also resulted in travel restriction, lockdown and other precautionary measures imposed in various countries. The emergence of the Covid-19 outbreak has brought significant economic uncertainties in Malaysia and markets which the Company operates.

	Up to the date of this report, the directors are in opinion that, the enforcement of MCO in Malaysia and spread of the COVID-19 throughout the world is expected to have material impact on the Company’s operations and trading results based on current assessment. Management is proactively managing the Company’s businesses, maintaining vigilance and will take the necessary actions to ensure their long-term sustainability.

BELFRICSBT SON. BHD.

[Company No.: 201701041174 (1255347-V)]

(Incorporated in Malaysia)

DETAILED STATEMENT OF COMPREHENSIVE INCOME

For the financial year ended 31 December 2020

	2020			2019
	RM			RM

REVENUE		794,748			311,067

LESS: COST OF SALES
Purchases		-			38,823
Software development charges		593,421			158,099
		593,421			196,922

GROSS PROFIT		201,327			114,145

ADD: OTHER OPERATING INCOME		1			-
Interest income		1			-

LESS: GENERAL AND ADMINISTRATIVE EXPENSES
Accounting fee		11,670			-
Auditors’ remuneration		4,000			4,000
Bank charges		3,844			510
Bootcamp program expenses		29,732			-
Business promotion expenses		-			2,500
Commission		-			9,600
Communication expenses		2,435
Consulting expenses		252,806			5,975
Depreciation of property, plant and equipment		20,000			8,333
Director’s salaries		100,000			30,000
Documentation fees		-			53
Gmail services charges		10,013
Loss on foreign exchange (unrealised)		3,609			621
Printing and stationery		-			95
Secretarial fees		-			1,655
SST expenses		-			60
Staff costs:
Salaries and allowances		40,408			93,271
EPF contribution		6,863			8,785
EIS contribution		117			185
SOCSO contribution		659			1,251
Tax agent fees		-			922
Telephone charges		-			320
Travelling expenses		3,000			95,199
Upkeep of office		5,095			65
Upkeep of website		I0,811			-
Visa processing charges		49,953			-
		555,015			263,400
LOSS BEFORE TAX		(353,687	)		(149,255	)

This Statement is prepared for the purpose of the Management’s use only and does not form part of the statutory audited financial statements.

Belfries Holding Limited

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Reports and Financial Statements

For The Financial Year Ended

31 December 2019

(In US Dollars)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Contents		Pages

Statement by Director		1

Report of the independent auditors		2-4

Statement of profit or loss and other comprehensive income		5

Statement of financial position		6

Statement of changes in equity		7

Statement of cash flows		8

Notes to the financial statements		9-23

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT BY DIRECTOR

I, Praveenkumar Vijayakumar, being the Director of BELFRICS HOLDING LIMITED, do hereby state that in my opinion, the financial statements set out on pages 5 to 23 are drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards so as to give a true and fair view of the financial position of the Company as at 31 December 2019 and of its financial performance and cash flows for the financial year ended on that date.


Praveenkumar Vijayakumar

Dated

01 OCT 2021

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Disclaimer of Opinion

We were engaged to audit the financial statements of BELFRICS HOLDING LIMITED, which comprise the statement of financial position as at 31 December 2019 of the Company, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 5 to 23.

We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for Disclaimer of Opinion

1.	Intangible assets

The intangible asset as of 31 December 2019 of USD3,332,030 consists of Belrium cryptocurrency for which we are unable to obtain sufficient appropriate audit evidence in order to satisfy ourselves as to the accuracy, existence, completeness, rights and obligation and valuation of this intangible asset.

2.	Consolidation

The Company has 100% equity interests in Belfics International Limited but did not prepare consolidated financial statements of the Group, which represents a departure from Malaysian Financial Reporting Standard (MFRS) 10, Consolidated and Separate Financial Statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a net loss of USD118,346 during the financial year ended 31 December 2019 and, as of that date, the Company’s current liability exceeded its current asset by USD3,482,139 and there is a deficiency in shareholders’ funds of USD110,146. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Tel +6087-442 212 • Fax +6087-428 828 • Email: pkfl<k@pkfmalaysia.com • Web: www.pkfmalaysia.com Level 1 • Lot 8 Block F • Saguking Commercial Building • Jalan Palau-Palau • 87000 Labuan F.T. • Malaysia

PKF Malaysia is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any other individual member or correspondent firm or firms.

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

(continued)

Responsibility of the Director for the Financial Statements

The Director of the Company is responsible for the preparation of these financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Labuan Companies Act, 1990 in Malaysia. The Director is also responsible for such internal control as the Director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Company, the Director is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Director either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our responsibility is to conduct and audit of the Company’s financial statements in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, and to issue an auditors’ report. However, because of the matters described in the Basis of Disclaimer of Opinion section of our report, we are not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Independence and Other Ethical Responsibilities

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Other Matter

This report is made solely to the members of the Company, as a body, in accordance with Section 117 of the Labuan Companies Act, 1990 and for no other purpose. We do not assume responsibility to any other person for the content of this report. The financial statements of the Company as at 31 December 2018, are unaudited.


PKF		DIVAHARAN SIVARAMAN KANNAN
AAL 0039		03446/08/2023 J
CHARTERED ACCOUNTANTS		CHARTERED ACCOUNTANT

Federal Territory of Labuan

Dated

01 OCT 2021

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

			1.1.2019			Unaudited 30.11.2018
			to 31.12.2019			to 31.12.2018
	Note		USD			USD

Revenue				-			-
Administrative expenses				(8,309	)		(1,800	)
Other operating expense		5		(110,037	)
Loss before taxation		6		(118,346	)		(1,800	)
Income tax expense		7		-			-
Total comprehensive loss for the financial year/period				(118,346	)		(1,800	)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

	Note		31.12.2019 USD			Unaudited 31.12.2018 USD
ASSETS
Non-current assets
Investment in subsidiary		8		39,963			-
Intangible assets		9		3,332,030			3,332,030
				3,371,993			3,332,030
Current asset
Cash at cash equivalents		10		1,801			-
				1,801			-
TOTAL ASSETS				3,373,794			3,332,030
EQUITY AND LIABILITY
Equity attributable to owners of
the parent
Share capital		11		10,000			10,000
Accumulated losses		12		(120,146	)		(1,800	)
TOTAL EQUITY				(110,146	)		8,200
Current liability
Trade and other payables		13		3,483,940			3,323,830
TOTAL LIABILITY				3,483,940			3,323,830
TOTAL EQUITY AND LIABILITY				3,373,794			3,332,030

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

	Share capital USD		Accumulated Losses USD			Total USD

At 30 November 2018 (date of incorporation) (unaudited)		10,000		-			10,000
Total comprehensive loss for the financial period		-		(1,800	)		(1,800	)
At 31 December 2018 (unaudited)		10,000		(1,800	)		8,200
Total comprehensive loss for the financial year		-		(118,346	)		(118,346	)
At 31 December 2019		10,000		(120,146	)		(110,146	)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

	Note		31.12.2019 USD			Unaudited 31.12.2018 USD

Cash flows from operating activities
Loss before taxation Adjustments for:				(118,346	)		(1,800	)
Impairment loss on investments				110,037			-
Operating loss before working capital changes				(8,309	)		(1,800	)
Change in payables*				160,110			(8,200	)
Net cash from operations				151,801			(10,000	)
Cash flow from investing activity
Acquisition of intangible assets *				-			-
Acquisition of investment in subsidiary				(150,000	)		-
Net cash used in investing activity				(150,000	)		-
Cash flow from financing activity
Issuance of ordinary shares				-			10,000
Net cash from financing activity				-			10,000
Net increase in cash and cash equivalents				1,801			-
Cash and cash equivalents at beginning of financial year/period				-			-
Cash and cash equivalents at end of financial year/period		10		1,801

Non-cash transactions

*	Acquisition of intangible assets - The Company acquired intangible assets of USDNil from a director of the Company (2018: USD3,332,030). This amount has not been paid in cash and reflected within amounts due from a director in trade and other payables as reflected in Note 13.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

1.	General information

The Company was registered under the Labuan Companies Act, 1990 on 30 November 2018. The Company is principally engaged in investment holding and investment in cryptocurrency.

The registered office of the Company is located at Level 9F(2), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 F.T. Labuan,Malaysia.

2.	Basis of preparation

The financial statements of the Company are prepared under the historical cost convention, other than as disclosed in the notes to the financial statements, and in accordance with the Malaysian Financial Reporting Standards (‘MFRSs’) in Malaysia and International Financial Reporting Standards. The Company did not present financial statements for previous perioas.

The financial statements of the Company for the financial year ended 31 December 2019 are the first set of financial statements prepared in accordance with MFRS, including MFRS 1 - First-time Adoption of Malaysia Financial Reporting Standards. The adoption of MFRS had no impact on the amounts reported in these financial statements. The presentation currency of these financial statements is in United States Dollars (USO) which is the Company’s functional currency.

The financial statements are also prepared on the going concern basis. However, as at 31 December 2019, the Company incurred a net foss of USD118,346. As at that date, the Company’s current liability exceeded its current asset by USD3,482,139 and there is a deficiency in shareholders’ funds of USD110,146. The ability of the Company to continue as a going concern and meet its obligations is therefore dependent on the financial support of the shareholders who are also the Directors of the Company and the achievement of future profitable operations by the Company.

Without such financial support and the achievement of future profitable operations, the Company may not be able to continue as a going concern and adJustments may have to be made to reflect the situation that assets may need to be realised other than the amounts at which they are currently recorded in the Statement of Financial Position. In addition, the Company may have to provide for future liabilities that might arise. The Directors are of the opinion that the Company will be able to achieve future profitable operations and have undertaken to provide continuing financial support to the Comi:>any, and therefore believe that it is appropriale for the financial statements of the Company to be prepared on the going concern basis.

(a)

Adoption of new and revised MFRSs

During the financial year, the Company adopted certain new accounting standards and amendments to standards issued by the Malaysian Accounting Standards Board that are mandatory for current financial year. These standards and amendment to standards did not have any material impact and are therefore not disclosed.

(b)

Standards issued but not yet effective

Certain new accounting standards and interpretations have been issued but not yet effective for 31 December 2019 reporting periods and have not been early adopted by the Company. These standards are not expected to have a material impact on the Company in the current or future reporting periods.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

3.	Significant accounting judgments and estimates

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i)

Impairment of investment in subsidiary company

Investment in subsidiary company is reviewed for impairment annually in accordance with its accounting policy as disclosed in Note 4 (f)(ii) to the financial statements, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Significant judgement is required in the estimation of the recoverable amounts which is based on the net tangible assets of the subsidiary.

(ii)

Impairment of intangible asset

The Company tests for impairment of indefinite useful life intangible asset at each reporting date. Where the Directors estimates the recoverable amount of the asset based on it’s higher of value in use (VIU) OR fair value less costs to dispose (“FVLCD”) is lower than it’s carrying amount, an adjustment for impairment is affected.

4.	Significant accounting policies

(a)

Foreign currency transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each financial year end, monetary items denominated in foreign currencies are translated at the rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising in the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(a)

Foreign currency transactions (continued)

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(b)

Income taxes

Tax expense for the financial year represents the expected tax payable on the taxable income for the financial year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

(c)

Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i)

Financial assets

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practicar expedient are measured at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(i)

Financial assets (continued)

For purposes of subsequent measurement, financial assets are classified in four categories:

	●	Financial assets at amortised cost (debt instruments)
	●	Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
	●	Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
	●	Financial assets at fair value through profit or loss

The Company only has financial assets at amortised cost.

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Company. The Company measure financial assets at amortised cost if both of the following conditions are met:

	●	The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and
	●	The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

	●	The rights to receive cash flows from the asset have expired; or

	●	The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(i)

Financial assets (continued)

Derecognition (continued)

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continue to recognise the transferred asset to the extent of its continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

(ii)

Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of IFRS 9, are recognised in the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost.

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Company has no financial liabilities in this category.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(ii)

Financial liabilities (continued)

Financial liabilities measured at amortised cost

The Company’s financial liabilities measured at amortised cost include trade and other payables.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(d)

Intangible assets

Intangible asset of the Company consists of investment in cryptocurrency which has indefinite useful life and is tested for impairment annually, or more frequently if events and circumstances indicate that the carrying amount may be impaired. This Intangible asset is not amortised.

(e)

Cash and cash equivalents

Cash comprises cash in hand and at banks. Cash equivalents are highly liquid investments which are readily convertible to cash with short periods to maturity and are subject to an insignificant risk of changes in value.

(f)

Impairment

(i)

Impairment of financial assets

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(f)

Impairment (continued)

(i)

Impairment of financial assets (continued)

ECLs are recognised in two (2) stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL).For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For debt instruments at fair value through OCI, the Company applies the low credit risk simplification. At every reporting date, the Company evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Company reassesses the internal credit rating of the debt instrument. In addition, the Company considers that there has been a significant increase in credit risk when contractual payments are more than one year past due. It is the Company’s policy to measure ECLs on such instruments on a 12-month basis. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.

The Company considers a financial asset in default when contractual payments are one year past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(f)

Impairment (continued)

(ii)

Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Company makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless that asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(g)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are classified as equity.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares are recognised as an appropriation of retained profits upon declaration, and are only taken up as liabilities upon the necessary approval being obtained.

(h)

Provisions

Provisions are recognised when the Company has present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations, and a reliable estimate of the amount can be made.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed. Where the effect of the time value of money is material, provisions are discounted using a current per tax rate that reflects, where appropriate, the risks specific to the liability and the present value of the expenditure expected to be required to settle the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

(i)

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transactions to sell the asset or transfer the liability takes place either:

(i)

In the principal market for the asset or liability, or

(ii)

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

4.	Significant accounting policies (continued)

(i)

Fair value measurement (continued)

The fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

(i)

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

(ii)

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

(iii)

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

5.	Other operating expense

1.1.2019

31.12.2019

USD

Unaudited

30.11.2018

31.12.2018

USD

Impairment loss on investment in subsidiary (Note 8)

110,037

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

6.	Loss before taxation

	1.1.2019 to 31.12.2019 USD		Unaudited 30.11.2018 to 31.12.2018 USD

Other than as disclosed in Note 5, loss before taxation is arrived at after charging

Auditors’ remuneration:		3,800		-

7.	Income tax expense

	1.1.2019 to 31.12.2019 USD		Unaudited 30.11.2018 to 31.12.2018 USD

Current taxation

- Labuan Business Activity Tax Act		-		-

For the current and prior financial year, the Company is subject to tax charged at the rate of Twenty Four Percent (24%) upon any profit before taxation pursuant to Section 2B(1A) of the Labuan Business Activity Tax (Amendment) Act, 2020 as it is unable to satisfy the economic substance regulations under the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018. However, the Company made losses for both financial years and therefore not subject to tax.

8.	Investment in subsidiary

	31.12.2019 USD			Unaudited 30.11.2018 to 31.12.2018 USD

Unquoted share at cost		150,000
Less: Allowance for impairment		(110,037	)
		39,963

Detail of the subsidiary company, which is incorporated in Malaysia is as follows:

	Group’s effective percentage of equity capital
Name of subsidiary company	2019		2018		Principal activity
		%		%
Belfries International Limited		100		-		Dormant

The Company acquired 100% equity interests in Belfries International Limited on 1 April 2020 for a total consideration of USD150,000.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

9.	Intangible assets

	Cryptocurrency
	USD
Cost
At 30 November 2018 (date of incorporation)		-
Additions		3,332,030
At 1 January 2019/31 December 2019		3,332,030

Cryptocurrency has indefinite useful life and is not amortised. This cryptocurrency consisting of 1,196,420 Belrium coins at USO 2.785 per coin was acquired in 20 December 2018 from a director of the Company.

10.

Cash and cash equivalents

31.12.2019

USD

Unaudited

31.12.2018

USD

Cash at banks/Cash and cash equivalents

1,801

11.

Share capital

Issued and fully paid

31.12.2019

USD

Unaudited 31.12.2018

USD

Ordinary share

10,000

12.

Accumulated losses

The Company’s policy is to treat all gains and losses that pass through the statement of comprehensive income (i.e. non-owner transactions or events) as revenue reserves. Other than retained profits, all other revenue reserves are regarded as non-distributable in the form of cash dividends to shareholders. Accumulated losses is the opposite of retained profits and when an entity in the Company is in an accumulated loss position, it is prohibited from disturbing cash dividends to shareholders.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

13.

Trade and other payables

	31.12.2019 USD		Unaudited 31.12.2018 USD

Other payables

Accruals		9,375		1,800
Amount due to a director		3,474,565		3,322,030
Total trade and other payables		3,483,940		3,323,830

Amount due to a director includes an amount of USD3,332,030 on acquisition of intangible assets as explained in Note 9 and is unsecured, interest free and repayable on demand.

14.

Related party disclosures

Control relationship

The Company has no immediate parent. Related party transactions

The Group’s and Company’s related party transactions are as follows:

	31.12.2019 USD		Unaudited 31.12.2018 USD

With a director:
- Purchase of cryptocurrency		-		3,332,030

With a related party:
- Mining fee		1,575		-

The terms and conditions and prices of the above transaction are mutually agreed between the parties.

15.

Financial instruments

(a)

Categories of financial instruments

	31.12.2019 USD		31.12.2018 USD

Financial asset
Debt instruments measured at amortised cost
Cash at banks		1,801		-

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

15.

Financial instruments (continued)

(a)

Categories of financial instruments (continued)

Financial liability	31.12.2019 USD		31.12.2018 USD

Financial liability measured at amortised cost
Trade and other payables		3,483,940		3,323,830

(b)

Financial risk management

The Company is exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk and liquidity risk.

The Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the management team.

The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risk.

(i)

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. For other financial assets (including cash and bank balances), the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

As at the reporting date, the Company’s maximum exposures to credit risk are represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

Cash and cash equivalents

The cash and cash equivalents are held with bank. As at the end of the reporting period, the maximum exposure to credit risk is represented by its carrying amount in the statement of financial position.

The bank has low credit risk. Consequently, the Company are of the view that loss allowance is not material and hence, it is not provided for.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

14.

Financial instruments (continued)

(b)

Financial risk management (continued)

(ii)

Liquidity risk

Liquidity risk arises mainly from general funding and business activities. The Company maintains a level of cash and cash equivalents deemed adequate by the Director to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):

Carrying amount

Contractual undiscounted cash flows

Within

1 year

1-5

Years

2019

USD

Trade and other payables

3,483,940

Carrying amount

Contractual undiscounted cash flows

Within

1 year

1-5

Years

2018

USD

Trade and other payables

3,323,830

15.

Fair value information

The financial assets and financial liabilities maturing within the next twelve (12) months approximated their fair values due to the relatively short-term maturity of the financial instruments.

16.

Subsequent event

On 9 July 2020, the Company had acquired Belfircs Academy Sdn. Bhd. with 100% equity interest.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

DETAILED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

	1.1.2019 to			30.11.2018 to
	31.12.2019			31.12.2018
	USD			USD
Revenue		-			-

Less: Administrative expenses
Auditors’ remuneration		3,800			-
Bank charges		84			-
Mining Fee		1,575			-
Professional fee		2,850			1,800
		8,309			1,800
Less: Other operating expense

Impairment loss on investment in subsidiary		110,037			-
Loss before taxation		(118,346	)		(1,800	)

This Statement is prepared for management purposes only and does not form part of the statutory audited financial statements of the Company.

Belfries Holding Limited

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Reports and Financial Statements

For The Financial Year Ended

31 December 2020

(In US Dollars)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Contents		Pages

Statement by Director		1

Report of the independent auditors		2-4

Statement of profit or loss and other comprehensive income		5

Statement of financial position		6

Statement of changes in equity		7

Statement of cash flows		8

Notes to the financial statements		9-23

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT BY DIRECTOR

I, Praveenkumar Vijayakumar, being the Director of BELFRICS HOLDING LIMITED, do hereby state that in my opinion, the financial statements set out on pages 5 to 23 are drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards so as to give a true and fair view of the financial position of the Company as at 31 December 2020 and of its financial performance and cash flows for the financial year ended on that date.


Praveenkumar Vijayakumar

Dated

01 OCT 2021

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Disclaimer of Opinion

We were engaged to audit the financial statements of BELFRICS HOLDING LIMITED, which comprise the statement of financial position as at 31 December 2020 of the Company, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 5 to 23.

Basis for Disclaimer of Opinion

1.	Intangible assets

The intangible asset as of 31 December 2020 of USD3,332,030 consists of Belrium cryptocurrency for which we are unable to obtain sufficient appropriate audit evidence in order to satisfy ourselves as to the accuracy, existence, completeness, rights and obligation and valuation of this intangible asset.

2.	Consolidation

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Company incurred a net loss of USD32,466 during the financial year ended 31 December 2020 and, as of that date, the Company’s current liability exceeded its current asset by USD3,500,951 and there is a deficiency in shareholders’ funds of USD142,612. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Tel +6087-442 212 • Fax +6087-428 828 • Email: pkfkk@pkfmalaysia.com • Web: www.pkfmalaysia.com Level 1 • Lot 8 Block F • Saguking Commercial Building • Jalan Patau-Patau • 87000 Labuan F.T. • Malaysia

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

(continued)

Responsibility of the Director for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Independence and Other Ethical Responsibilities

INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

Other Matter

This report is made solely to the members of the Company, as a body, in accordance with Section 117 of the Labuan Companies Act, 1990 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.


PKF		DIVAHARAN SIVARAMAN KANNAN
AAL 0039		03446/08/2023 J
CHARTERED ACCOUNTANTS		CHARTERED ACCOUNTANT

Federal Territory of Labuan

Dated

01 OCT 2021

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

	Note		2020 USD			2019 USD
Revenue				-			-
Administrative expenses				(7,107	)		(8,309	)
Other operating expense		5		(25,359	)		(110,037	)
Loss before taxation		6		(32,466	)		(118,346	)
Income tax expense		7		-			-
Total comprehensive loss for the financial year				(32,466	)		(118,346	)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

	Note		2020 USD			2019 USD
ASSETS
Non-current assets
Investment in subsidiary		8		26,309			39,963
Intangible assets		9		3,332,030			3,332,030
				3,358,339			3,371,993
Current asset
Cash and cash equivalents		10		4,284			1,801
				4,284			1,801
TOTAL ASSETS				3,362,623			3,373,794
EQUITY AND LIABILITY
Equity attributable to owners of the parent
Share capital		11		10,000			10,000
Accumulated losses		12		(152,612	)		(120,146	)
TOTAL EQUITY				(142,612	)		(110,146	)
Current liability
Trade and other payables		13		3,505,235			3,483,940
TOTAL LIABILITY				3,505,235			3,483,940
TOTAL EQUITY AND LIABILITY				3,362,623			3,373,794

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

	Share capital		Accumulated Losses			Total
	USD		USD			USD
At 1 January 2018		10,000		(1,800	)		8,200
Total comprehensive loss for the financial year		-		(118,346	)		(118,346	)
At 31 December 2019		10,000		(120,146	)		(110,146	)
Total comprehensive loss for the financial year		-		(32,466	)		(32,466	)
At 31 December 2020		10,000		(152,612	)		(142,612	)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

	Note		2020 USD			2019 USD
Cash flows from operating activities
Loss before taxation				(32,466	)		(118,346	)
Adjustments for:
Impairment loss on investments				25,359			110,037
Operating loss before working capital changes				(7,107	)		(8,309	)
Change in payables				21,295			160,110
Net cash from operations				14,188			151,801
Cash flow from investing activity
Acquisition of investment in subsidiary				(11,705	)		(150,000	)
Net cash used in investing activity				(11,705	)		(150,000	)
Net increase in cash and cash equivalents				2,483			1,801
Cash and cash equivalents at beginning of the financial year				1,801			-
Cash and cash equivalents at end of financial year		10		4,284			1,801

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

1.	General information

The Company was registered under the Labuan Companies Act, 1990 on 30 November 2018. The Company is principally engaged in investment holding and investment in cryptocurrency.

The registered office of the Company is located at Level 9F(2), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 F.T. Labuan, Malaysia.

2.	Basis of preparation

The significant accounting policies adopted by the Company are consistent with those adopted in previous financial year unless otherwise stated.

The financial statements of the Company are prepared under the historical cost convention, other than as disclosed in the notes to the financial statements, and in accordance with the Malaysian Financial Reporting Standards (‘MFRSs’) in Malaysia and International Financial Reporting Standards. The financial statements are prepared in United States Dollars (USO) which is the Company’s functional currency.

The financial statements are also prepared on the going concern basis. However, as at 31 December 2019, the Company incurred a net loss of USD32,466. As at that date, the Company’s current liability exceeded its current asset by USD3,500,951 and there is a deficiency in shareholders’ funds of USD142,612. The ability of the Company to continue as a going concern and meet its obligations is therefore dependent on the financial support of the shareholders who are also the Directors of the Company and the achievement of future profitable operations by the Company.

Without such financial support and the achievement of future profitable operations, the Company may not be able to continue as a going concern and adjustments may have to be made to reflect the situation that assets may need to be realised other than the amounts at which they are currently recorded in the Statement of Financial Position. In addition, the Company may have to provide for future liabilities that might arise. The Directors are of the opinion that the Company will be able to achieve future profitable operations and have undertaken to provide continuing financial support to the Company, and therefore believe that it is appropriate for the financial statements of the Company to be prepared on the going concern basis.

(a)

Adoption of new and revised MFRSs

(b)

Standards issued but not yet effective

Certain new accounting standards and interpretations have been issued but not yet effective for 31 December 2020 reporting periods and have not been early adopted by the Company. These standards are not expected to have a material impact on the Company in the current or future reporting periods.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

3.	Significant accounting judgments and estimates

Key sources of estimation uncertainty

(i)

Impairment of investment in subsidiary company

Significant judgement is required in the estimation of the recoverable amounts which is based on the net tangible assets of the subsidiary.

(ii)

Impairment of intangible asset

4.	Significant accounting policies

(a)

Foreign currency transactions

Exchange differences arising in the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(a)

Foreign currency transactions (continued)

(b)

Income taxes

(c)

Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i)

Financial assets

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under IFRS 15.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(i)

Financial assets (continued)

For purposes of subsequent measurement, financial assets are classified in four categories:

	●	Financial assets at amortised cost (debt instruments)
	●	Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
	●	Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
	●	Financial assets at fair value through profit or loss

The Company only has financial assets at amortised cost.

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Company. The Company measure financial assets at amortised cost if both of the following conditions are met:

	●	The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and
	●	The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

●

The rights to receive cash flows from the asset have expired; or

●

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(i)

Financial assets (continued)

Derecognition (continued)

(ii)

Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

The Company has no financial liabilities in this category.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(c)

Financial instruments (continued)

(ii)

Financial liabilities (continued)

Financial liabilities measured at amortised cost

The Company’s financial liabilities measured at amortised cost include trade and other payables.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

(d)

Intangible assets

(e)

Cash and cash equivalents

(f)

Impairment

(i)

Impairment of financial assets

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(f)

Impairment (continued)

(i)

Impairment of financial assets (continued)

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(f)

Impairment (continued)

(ii)

Impairment of non-financial assets

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(g)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are classified as equity.

(h)

Provisions

(i)

Fair value measurement

(i)

In the principal market for the asset or liability, or

(ii)

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

4.	Significant accounting policies (continued)

(i)

Fair value measurement (continued)

(i)

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

(ii)

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

(iii)

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

5.	Other operating expense

2020

USD

2019

USD

Impairment loss on investment in subsidiary (Note 8)

25,359

110,037

6.	Loss before taxation

	2020 USD		2019 USD

Other than as disclosed in Note 5, loss before taxation is arrived at after charging

Auditors’ remuneration:		3,800		3,800

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

7.	Income tax expense

	2020 USD		2019 USD

Current taxation

- Labuan Business Activity Tax Act		-		-

8.	Investment in subsidiary

	2020 USD			2019 USD

Unquoted share at cost		161,705			150,000
Less: Allowance for impairment		(135,396	)		(110,037	)
		26,309			39,963

Detail of the subsidiary company, which is incorporated in Malaysia is as follows:

	Group’s effective percentage of equity capital
Name of subsidiary company	2020		2019		Principal activity
		%		%
Belfrics International Limited		100		100		Dormant
Belfrics International Limited		100		-		Dormant

2020

The Company acquired 100% equity interests in Belfries Academy Sdn. Bhd. on 9 July 2020 for a total consideration of USD11,705.

2019

The Company acquired 100% equity interests in Belfries International Limited on 1 April 2020 for a total consideration of USD150,000.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

8.	Investment in subsidiary (continued)

Movement of the allowance for Impairment account is as follows:

	USD

At 1 January 2018		-
Charge for the financial year (Note 5)		110,037
At 31 December 2019		110,037
Charge for the financial year (Note 5)		25,359
At 31 December 2020		135,396

9.	Intangible assets

	Cryptocurrency
	USD
Cost
At 1 January 2019/31 December 2019/ - 31 December 2020		3,332,030

10.

Cash and cash equivalents

2020

USD

2019

USD

Cash at banks/Cash and cash equivalents

4,284

1,801

11.

Share capital

Issued and fully paid

2020

USD

2019

USD

Ordinary share

10,000

12.

Accumulated losses

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

13.

Trade and other payables

	2020 USD		2019 USD

Other payables

Accruals		16,502		9,375
Amount due to a director		3,488,733		3,474,565
Total trade and other payables		3,505,235		3,483,940

Amount due to a director includes an amount of USD3,332,030 on acquisition of intangible assets as explained in Note 9 and is unsecured, interest free and repayable on demand.

14.

Related party disclosures

Control relationship

The Company has no immediate parent.

Related party transactions

The Group’s and Company’s related party transactions are as follows:

	2020 USD		2019 USD

With a related party:
- Mining fee		3,150		1,575

The terms and conditions and prices of the above transaction are mutually agreed between the parties.

15.

Financial instruments

(a)

Categories of financial instruments

	2020 USD		2019 USD

Financial asset
Debt instruments measured at amortised cost
Cash at banks		4,284		1,801

Financial liability	2020 USD		2019 USD

Financial liability measured at amortised cost
Trade and other payables		3,505,235		3,483,940

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

15.

Financial instruments (continued)

(b)

Financial risk management

The Company is exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk and liquidity risk.

The Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the management team.

The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risk.

(i)

Credit risk

The Company’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

As at the reporting date, the Company’s maximum exposures to credit risk are represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

Cash and cash equivalents

The bank has low credit risk. Consequently, the Company are of the view that loss allowance is not material and hence, it is not provided for.

(ii)

Liquidity risk

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2020

15.

Financial instruments (continued)

(b)

Financial risk management (continued)

(ii)

Liquidity risk (Continued)

Carrying amount

Contractual undiscounted cash flows

Within

1 year

1-5

Years

2020

USD

Trade and other payables

3,505,235

Carrying amount

Contractual undiscounted cash flows

Within

1 year

1-5

Years

2019

USD

Trade and other payables

3,483,940

16.

Fair value information

The financial assets and financial liabilities maturing within the next twelve (12) months approximated their fair values due to the relatively short-term maturity of the financial instruments.

BELFRICS HOLDING LIMITED

(Co. No. LL15351)

(Registered in the Federal Territory of Labuan)

DETAILED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020

	2020 USD			2019 USD

Revenue		-			-

Less: Administrative expenses
Auditors’ remuneration		3,800			3,800
Bank charges		157			84
Mining Fee		3,150			1,575
Professional fee		-			2,850
		7,107			8,309
Less: Other operating expense

Impairment loss on investment in subsidiary		25,359			110,037
Loss before taxation		(32,466	)		(118,346)

This Statement is prepared for management purposes only and does not form part of the statutory audited financial statements of the Company.

Belfries Academy Sdn. Bhd

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

Reports and Financial Statements

For The Financial Period

From 4 April 2018 (Date of Incorporation)

to 30 June 2019

(In Ringgit Malaysia)

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

Contents		Pages

Directors' report		1-4

Statement by Directors		5

Statutory declaration		5

Report of the independent auditors		6-9

Statement of comprehensive income		10

Statement of financial position		11

Statement of changes in equity		12

Statement of cash flows		13

Notes to the financial statements		14-25

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

DIRECTORS' REPORT

The Directors hereby submit their report and the audited financial statements of the Company for the financial period from 4 April 2018 (Date of Incorporation) to 30 June 2019.

Principal activity

The Company was incorporated on 4 April 2018 and principally engaged in carrying out education business related to blockchain during the financial period.

Results		RM

Loss for the financial period		39,986

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial period except as disclosed in the financial statements.

Dividends

No dividend has been paid, declared or proposed since the date of incorporation. The Directors do not recommend any dividends for the current financial period ended 30 June 2019.

Directors

The Directors who have held office during the financial period and up to the date of this report are:

Maya Praveen Kumar (Named as First Director on 4 April 2018)

Praveenkumar Vijayakumar (Named as First Director on 4 April 2018)

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

DIRECTORS' REPORT

Directors' interests in shares

Being a wholly owned subsidiary company of another Malaysian incorporated company, information in respect of Directors' interest in shares of holding company or related corporations are disclosed in the Directors' report of the holding company pursuant to the provision of Section 59 (3) of the Companies Act, 2016.

Directors' benefits

Since the date of incorporation, no Director of the Company has received nor become entitled to receive any benefit by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than that as disclosed in Note 13 to the financial statements.

There were no arrangements during and at the end of the financial period, which had the object of enabling the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate.

Directors' remuneration

There was no remuneration given to any Director of the Company during the financial period.

Indemnity and insurance for Directors and officers

There was no indemnity given to or liability insurance effected for any Director or officer of the Company during the financial period.

Issues of shares and debentures

The Company did not issue any new shares or debentures during the financial period.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial period.

Other statutory information

Before the financial statements of the Company were made out, the Directors took reasonable steps to ascertain that:

(i)	all known bad debts had been written off and adequate allowance had been made for doubtful debts; and

(ii)	all current assets have been stated at the lower of cost and net realisable value.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

DIRECTORS' REPORT

Other statutory information (continued)

At the date of this report, the Directors are not aware of any circumstances:

(i)	which would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the financial statements of the Company inadequate to any substantial extent; or

(ii)	which would render the value attributed to the current assets in the financial statements of the Company misleading; or

(iii)	which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate; or

(iv)	not otherwise dealt with in this report or the financial statements, which would render any amount stated in the financial statements of the Company misleading.

As at the date of this report, there does not exist:

(i)	any charge on the assets of the Company that has arisen since the end of the financial period which secures the liabilities of any other person; or

(ii)	any contingent liability in respect of the Company that has arisen since the end of the financial period.

No contingent liability or other liability of the Company has become enforceable, or is likely to become enforceable within the period of twelve (12) months after the end of the financial period which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due.

In the opinion of the Directors, the financial performance of the Company for the financial period ended 30 June 2019 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of the financial period and the date of this report.

Holding company

The Directors regard Belfries Malaysia Sdn. Bhd., a company incorporated in Malaysia, as the holding company of the Company.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of BELFRICS ACADEMY SON. BHD., which comprise the statement of financial position as at 30 June 2019, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the financial period from 4 April 2018 (Date of Incorporation) to 30 June 2019, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 10 to 25.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 30 June 2019, and of its financial performance and its cash flows for the financial period from 4 April 2018 (Date of Incorporation) to 30 June 2019 in accordance with Malaysian Private Entities Reporting Standard and the requirements of the Companies Act, 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ("By-Laws") and the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Information Other than the Financial Statements and Auditors' Report Thereon

The Directors are responsible for the other information. The other information comprises the Directors' Report but does not include the financial statements of the Company and our auditors' report thereon.

Our opinion on the financial statements of the Company does not cover the Directors' Report and we do not express any form of assurance conclusion thereon.

Tel +6088-266 723 • Fax +6088-267 721 • Email: pkfkk@pkfmalaysia.com • Web: www.pkfmalaysia.com

Lot 23-1 & 25-1 • 1st Floor • Lintas Plaza • Lorong Lintas Plaza •88300 Kota Kinabalu • Sabah • Malaysia

CMK is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

(continued)

Information Other than the Financial Statements and Auditors' Report Thereon

(continued)

In connection with our audit of the financial statements of the Company, our responsibility is to read the Directors' Report and, in doing so, consider whether the Directors' Report is materially inconsistent with the financial statements of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of the Directors' Report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with Malaysian Private Entities Reporting Standard and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Company, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia) (continued)

Auditors' Responsibilities for the Audit of the Financial Statements (continued)

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

(i)	Identify and assess the risks of material misstatement of the financial statements of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(ii)	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

(iii)	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

(iv)	Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

(v)	Evaluate the overall presentation, structure and content of the financial statements of the Company, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL PERIOD FROM 4 April 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

		4.4.2018 to
		30.6.2019
	Note	RM
Revenue			1,255
Administrative expenses			(41,241	)
Loss before taxation	5		(39,986	)
Tax expense	6		-
Loss for the financial period			(39,986	)

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

		30.6.2019
	Note	RM
Current assets
Trade and other receivables	7		48,181
Cash at bank	8		653
Total current assets			48,834
TOTAL ASSETS			48,834

Equity
Share capital	9		50,000
Accumulated losses	10		(39,986	)
Total equity			10,014

Current liability
Trade and other payables	11		38,820
Total current liability			38,820
Total liability			38,820
TOTAL EQUITY AND LIABILIY			48,834

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

	Share capital	Accumulated losses			Total
	RM	RM			RM

Balance at 4 April 2018 (Date of Incorporation)	50,000		-			50,000
Non-owner changes in equity
Loss for the financial period	-		(39,986	)		(39,986	)
Balance at 30 June 2019	50,000		(39,986	)		10,014

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

STATEMENT OF CASH FLOWS

FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

		4.4.2018
		to
		30.6.2019
	Note	RM

Cash flows from operating activities
Loss before taxation			(39,986	)
Operating loss before working capital changes			(39,986	)
Change in trade and other receivables			(48,181	)
Change in trade and other payables			38,820
Net cash used in operating activities			(49,347	)
Cash flows from investing activity			-
			(49,347	)

Cash flows from financing activity
Proceeds from issuance of shares			50,000
Net cash generated from financing activity			50,000
Net increase in cash and cash equivalents			653
Cash and cash equivalents at 4 April 2018 (Date of Incorporation)			-
Cash and cash equivalents at 30 June 2019	8		653

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

1.	General information

	The Company is a private limited liability company that is incorporated and domiciled in Malaysia. The Company was incorporated on 4 April 2018 and principally engaged in carrying out education business related to blockchain during the financial period.

	The registered office of the Company is located at Unit 13A-07, Menara K1, Lorong 3/137C, Off Jalan Klang Lama, 58200, Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia.

	These financial statements were authorised for issue by the Directors in accordance with a resolution of the Board of Directors dated 20 SEP 2019

2.	Basis of preparation

	The financial statements of the Company have been prepared under the historical cost convention, other than as disclosed in the notes to the financial statements, and in accordance with the Malaysian Private Entities Reporting Standard ("MPERS") issued by the Malaysian Accounting Standard Board ("MASB") and the provisions of the Malaysian Companies Act 2016.

	Management has used estimates and assumptions in measuring the reported amounts of assets and liabilities at the end of the reporting period and the reported amount of revenues and expenses during the reporting period. Judgements and assumptions are applied in the measurement, and hence, the actual results may not coincide with the reported amounts. The areas involving significant judgements and estimation uncertainties are disclosed in Note 4.

	These financial statements are presented in Ringgit Malaysia ("RM"), which is the Company's functional currency.

3.	Significant accounting policies

	(a)	Revenue recognition

		Revenue represents invoiced value of service rendered.

	(b)	Tax assets and tax liabilities

		A current tax for current and prior periods, to the extent unpaid, is recognised as a current tax liability. If the amount already paid in respect of current and prior periods exceed the amount due for those periods, the excess is recognised as a current tax asset. A current tax liability (asset) is measured at the amount the entity expects to pay (recover) using tax rates and laws that have been enacted or substantially enacted by the reporting date.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(b)	Tax assets and tax liabilities (continued)

		A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (or tax loss). The exceptions for initial recognition differences include items of property, plant and equipment that do not qualify for capital allowances and acquired intangible assets that are not deductible for tax purposes.

		A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (or tax loss). The exceptions for the initial recognition differences include non-taxable government grants received and reinvestment allowances and investment tax allowances on qualifying property, plant and equipment.

		A deferred tax asset is recognised for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. Unused tax credits do not include unabsorbed reinvestment allowances and unabsorbed investment tax allowances because the Company treats these as part of initial recognition differences.

		Deferred taxes are measured using tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred taxes reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets or liabilities.

		At the end of each reporting period, the carrying amount of a deferred tax asset is reviewed, and is reduced to the extent that it is no longer probably that sufficient taxable profit will be available to allow the benefit of a part or all of that deferred tax asset to be utilised. Any such reduction will be reversed to the extent that it becomes probably that sufficient taxable profit will be available.

		A current or deferred tax is recognised as income and expense in profit or loss for the period, except to the extent that the tax arises from items recognised outside profit or loss. For an income or expense item recognised in other comprehensive income, the current or deferred tax expense or tax income is recognised in other comprehensive income. For items recognised directly in equity, the related tax effect is also recognised directly in equity.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(c)	Impairment of non-financial assets

		An impairment loss arises when the carrying amount of a Company's asset exceeds its recoverable amount. At the end of each reporting date, the Company assesses whether there is any indication that a stand-alone asset or a cash-generating unit may be impaired by using external and internal sources of information. If any such indication exists, the Company estimates the recoverable amount of the asset or cash-generating unit.

		If an individual asset generates independent cash inflows, it is tested for impairment as a stand-alone asset. If an asset does not generate independent cash inflows, it is tested for impairment together with other assets in a cash-generating unit, at the lowest level in which independent cash inflows are generated and monitored for internal management purposes.

		The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and the value in use. The Company determines the fair value less cost to sell of an asset or a cash-generating unit in a hierarchy based on: (i) price in a binding sale agreement; (ii) market price traded in an active market; and (iii) estimate of market price using the best available information. The value in use is estimated by discounting the net cash inflows (by an appropriate discount rate) of the asset or unit, using reasonable and supportable management's budgets and forecasts of five years and extrapolation of cash inflows for period beyond the five-year forecast or budget.

		For an asset measured on a cost-based model, any impairment loss is recognised in profit or loss. For a plant and equipment measured on the revaluation model, any impairment loss is treated as a revaluation decrease.

		The Company reassesses the recoverable amount of an impaired asset or a cash-generating unit if there is any indication that an impairment loss recognised previously may have reversed. Any reversal of impairment loss for an asset carried at a cost-based model is recognised in profit or loss, subject to the limit that the revised carrying amount does not exceed the amount that would have been determined had no impairment loss been recognised previously.

	(d)	Equity instruments

		The Company classifies and presents an issued financial instrument (or its component parts), on initial recognition as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instruments.

		(i)	Share capital

			Ordinary shares and non-redeemable preference shares issued that carry no put option and no mandatory contractual obligations: (i) to deliver cash or another financial asset; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Company, are classified as equity instruments.

•

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(d)	Equity instruments (continued)

		(i)	Share capital (continued)

			When ordinary shares and other equity instruments are issued in a private placement or in a rights issue to existing shareholders, they are recorded at the issue price. For ordinary shares and other equity instruments issued in exchange for non-monetary assets, they are measured by reference to the fair values of the assets received.

			When ordinary shares and other equity instruments are issued as consideration transferred in a business combination or as settlement of an existing financial liability, they are measured at their fair value at the date of the exchange transaction.

			Transaction cost of an equity transaction are accounted for as a deduction from equity, net of any related income tax effect.

			Preference shares that carry mandatory dividend payments and mandatory redemption are classified as a financial liability in their entirety. Preference shares that carry mandatory dividend payments only without a redemption feature or preference shares that carry mandatory redemption with discretionary dividend payments are accounted for a compound financial instruments. The liability component is initially measured at the present value of the future cash payments discounted at market rate of interest of a similar risk class debt instrument. The subsequent measurement of the liability component is at amortised cost using the effective interest rate method.

		(ii)	Compound financial instruments

			The Company evaluates the terms of an issued financial instrument to determine whether it contains both a liability component and an equity component. The proceeds of a convertible bond or other compound instruments are allocated to the liability component measured at fair value, using the discounted cash flow method, and the balance to the equity component. Transaction costs are allocated pro rata based on the relative carrying amounts. The Company treats any taxable temporary differences between the carrying amount of the liability component and its tax bases as an initial recognition difference for which no deferred tax liability is recognised.

		(iii)	Distributions

			The Company establishes a distribution policy whereby cash dividends can only be paid out of retained profits. Other distributions, such as stock dividends and distribution in specie, may be paid out of any reserve to the extent that the utilisation is permitted by company laws and regulations.

			Distributions to holders of an equity instruments are debited directly in equity, net of any related income tax effect.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(d)	Equity instruments (continued)

		(iii)	Distributions (continued)

			A dividend declared is recognised as a liability only after it has been appropriately authorised, which is the date when the Board of Directors declares an interim dividend, or in the case of a proposed final dividend, the date the shareholders of the Company approve the proposed final dividend in an annual general meeting of shareholders.

	(e)	Financial instruments

		(i)	Initial recognition and measurement

			The Company recognises a financial asset or a financial liability (including derivative instruments) in the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the instruments.

			On initial recognition, all financial assets and financial liabilities are measured at fair value, which is generally the transaction price, plus transaction costs if the financial asset or financial liability is not measured at fair value through profit or loss. For instruments measured at fair value through profit or loss, transaction costs are expensed to profit or loss when incurred. For contractual arrangements that constitute a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instruments.

		(ii)	Derecognition of financial instruments

			For derecognition purposes, the Company first determines whether a financial asset or a financial liability should be derecognised in its entirety as a single item or derecognised part-by-part of a single item or a group of similar items.

			A financial asset, whether as a single item or as a part, is derecognised when, and only when, the contractual rights to receive the cash flows from the financial asset expire, or when the Company transfers the contractual rights to receive cash flows of the financial asset, including circumstances when the Company acts only as a collecting agent of the transferee, and retains no significant risks and rewards of ownership of the financial asset or no continuing involvement in the control of the financial asset transferred.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(e)	Financial instruments (continued)

		(ii)	Derecognition of financial instruments (continued)

			A financial liability is derecognised when, and only when, it is legally extinguished, which is either when the obligation specified in the contract is discharged or cancelled or expires. A substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. For this purpose, the Company considers a modification as substantial if the present value of the revised cash flows of the modified terms discounted at the original effective interest rate differs by 10% or more when compared with the carrying amount of the original liability.

		(iii)	Subsequent measurement of financial assets

			For the purpose of subsequent measurement, the Company classifies financial assets into two categories, namely: (i) financial assets at fair value through profit or loss; and (ii) financial assets at amortised cost.

			After initial recognition, the Company measures investments in quoted preference shares, quoted ordinary shares and derivatives that are assets at their fair value by reference to their active market prices, if observable, or otherwise by a valuation technique, without any deduction for transaction costs it may incur on sale or other disposal.

			Investments in debt instruments, whether quoted or unquoted, are subsequently measured at amortised cost using the effective interest method. Investments in unquoted equity instruments and whose fair value cannot be reliably measured are measured at cost.

			Other than financial assets measured at fair value through profit or loss, all other financial assets are subject to review for impairment.
		(iv)	Subsequent measurement of financial liabilities

			After initial recognition, the Company measures all financial liabilities at amortised cost using the effective interest method, except for derivatives instruments that are liabilities, which are measured at fair value.

		(v)	Fair value measurement of financial instruments

			The fair value of a financial asset or a financial liability is determined by reference to the quoted market price in an active market, and in the absence of an observable market price, by a valuation technique.

		(vi)	Recognition of gains and losses

			Fair value changes of financial assets and financial liabilities classified as at fair value through profit or loss are recognised in profit or loss when they arise.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(e)	Financial instruments (continued)

		(vi)	Recognition of gains and losses (continued)

			For financial assets and financial liabilities carried at amortised cost, a gain or loss is recognised in profit or loss only when the financial asset or financial liability is derecognised or impaired, and through the amortisation process of the instrument.

		(vii)	Impairment of financial assets

			The Company applies the incurred loss model to recognise impairment losses of financial assets. At the end of each reporting period, the Company examines whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Evidences of trigger loss events include: (i) significant difficulty of the issue or obliger; (ii) a breach of contract, such as a default or delinquency in interest or principal payment; (iii) granting exceptional concession to a customer; (iv) it is probable that a customer will enter bankruptcy or other financial reorganisation; (v) the disappearance of an active market for that financial asset because of financial difficulties; or (vi) any observable market data indicating that there may be a measurable decrease in the estimated future cash flows from a group of financial assets.

			For a non-current loan and receivable carried at amortised cost, the revised estimated cash flows are discounted at the original effective interest rate. Any impairment loss is recognised in profit or loss and a corresponding amount is recorded in a loss allowance account. Any subsequent reversal of impairment loss of the financial asset is reversed in profit or loss with a corresponding adjustment to the allowance account, subject to the limit that the reversal should not result in the revised carrying amount of the financial asset exceeding the amount that would have been determined had no impairment loss been recognised previously.

			For short-term trade and other receivables, where the effect of discounting is immaterial, impairment loss is tested for each individually significant receivable whenever there is any indication of impairment. Individually significant receivables for which no impairment loss is recognised are grouped together with all other receivables by classes based on credit risk characteristics and aged according to their past due period. A collective allowance is estimated for a class group based on the Company's experiences of loss ratio in each class, taking into consideration current market conditions.

			For an unquoted equity investment measured at cost less impairment, the impairment is the difference between the asset's carrying amount and the best estimate (which will necessarily be an approximation) of the amount (which might be zero) that the Company expects to receive for the asset if it were sold at the reporting date. The Company may estimate the recoverable amount using an adjusted net asset value approach.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

3.	Significant accounting policies (continued)

	(f)	Provisions

		The Company recognises a liability as a provision if the outflows required to settle the liability are uncertain in timing or amount. A provision is recognised when the Company has a present legal or constructive obligation as a result of a past event, and of which the outflows of resources on settlement are probable and a reliable estimate of the amount can be made. No provision is recognised if these conditions are not met.

		Any reimbursement attributable to a recognised provision from a counter-party (such as an insurer) is not off-set against the provision but recognised separately as an asset when, and only when, the reimbursement is virtually certain.

		A provision is measured at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. A provision is measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects the time value of money and the risk that the actual outcome might differ from the estimate made. The unwinding of the discount is recognised as an interest expense.

	(g)	Fair value measurement

		For assets, liability and equity instruments (whether financial or non-financial items) that require fair value measurement or disclosure, the Company establishes a fair value measurement hierarchy that gives the highest priority to quoted prices (unadjusted) in active markets for identical assets, liabilities or equity instruments and the lowest priority to unobservable inputs.

		A fair value measurement of an item is estimated using a quoted price in an active market if that price is observable. The active market is the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability; and for which the Company can enter into a transaction for the asset or liability at the price in that market at the measurement date.

		In the absence of an active market, the fair value of an item is estimated by an established valuation technique using inputs from the marketplace that are observable for substantially the full term of the asset or liability.

		In the absence of both market price and observable inputs, a fair value measurement of an item is estimated by an established valuation techniques using unobservable inputs, including internally developed assumptions that are reasonable and supportable.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

4.	Critical judgements and estimation uncertainty Estimation uncertainties

	The measurement of some assets and liabilities requires management to use estimates based on various observable inputs and other assumptions. The areas or items that are subject to significant estimation uncertainties are as follows:

	(i)	Measurement of income taxes

		Significant judgements is required in determining the Company's provision for current and deferred tax because the ultimate tax liability is uncertain. When the final outcome of the taxes payable is determined with the tax authorities, the amounts might be different from the initial estimates of the taxes payable. Such differences may impact the current and deferred taxes in the period when such determination is made. The Company will adjust for the differences as over or under provision of current or deferred taxes in the current period in which those differences arise.

	(ii)	Loss allowances of financial assets

		The Company recognises impairment losses for loans and receivables using the incurred loss model. Individually significant loans and receivables are tested for impairment separately by estimating the cash flows expected to be recoverable. All others are group into credit risk classes and tested for impairment collectively, using the Company's past experience of loss statistics, ageing of past due amounts and current economic trends. The actual eventual losses may be different from the allowances made and this may affect the Company's financial position and results.

5.	Loss before taxation

	4.4.2018
	to
	30.6.2019
	RM

Loss before taxation is arrived at after charging:

Auditors' remuneration		1,000
Formation expense		2,968

6.	Tax expense

	4.4.2018
	to
		30.6.2019
		RM

Current income tax expense		-

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

6.	Tax expense (continued)

	The significant differences between the tax expense and accounting loss multiplied by the statutory tax rate are due to the tax effects arising from the following items:

	4.4.2018
	to
		30.6.2019
		RM

Loss before taxation		(39,986	)
Statutory effective tax rate		18	%
Taxation at Malaysian statutory tax rate		(7,197	)
Non-tax deductible expenses		151
Tax effect of deductible temporary differences arising from initial recognition of assets but not utilised as deferred tax assets		7,046

No deferred tax asset has been recognised for the following items:

	4.4.2018
	to
		30.6.2019
		RM

Unutilised tax losses		(39,146	)

Deferred tax assets at 18% not recognised in the financial statements		(7,046	)

The unutilised tax losses disclosed above are available indefinitely for offsetting against future taxable profits of the Company whereas the unutilised losses is available to be carried forward up to the maximum of seven (7) years, subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

These deferred tax assets are not recognised due to uncertainty of its recoverability.

7.	Trade and other receivables

	30.6.2019
	RM

Trade receivable
Third party		1,255
Amount due from holding company		46,926
Total trade and other receivables		48,181

Amount due from holding company is unsecured, interest free and repayable on demand.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

8.	Cash and cash equivalents

		30.6.2019
		RM

Cash at bank/Cash and cash equivalents		653

9.	Share capital

	No. of shares	30.6.2019
	30.6.2019	RM

Issued and fully paid
At 4 April 2018 (Date of incorporation) and at 30 June 2019	50,000	50,000

10.	Accumulated losses

The Company's policy is to treat all gains and losses that pass through the statement of comprehensive income (i.e. non-owner transactions or events) as revenue reserves. Other than retained profits, all other revenue reserves are regarded as non-distributable in the form of cash dividends to shareholders. Accumulated losses are the opposite of retained profits and when an entity in the Company is in an accumulated loss position, it is prohibited from distributing cash dividends to shareholders.

11.	Trade and other payables

		30.6.2019
		RM

Other payables
Related party		8,000
Third parties		12,820
Accrual		1,000
		21,820
Amount due to a Director		17,000
Total trade and other payables		38,820

Amounts due to related party and Director are unsecured, interest free and repayable on demand.

BELFRICS ACADEMY SDN. BHD

(Co. No. 1274981 - U)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 4 APRIL 2018 (DATE OF INCORPORATION) TO 30 JUNE 2019

12.	Financial instruments

		30.6.2019
Categories of financial instruments		RM

Financial assets
Debt instruments measured at amortised cost
Trade and other receivables		48,181
Cash at bank		653
Total financial assets		48,834

Financial liabilities
Measured at amortised cost
Trade and other payables		38,820
Total financial liabilities		38,820

13.	Related party disclosures

Control relationship

The Directors regard Belfries Malaysia Sdn. Bhd., a company incorporated in Malaysia, as the holding company of the Company.

14.	Comparative figures

There were no comparative figures as this is the first set of financial statements• prepared.

	LODGED BY :	BBS BUSINESS MANAGEMENT SDN. BHD. (1101469-T)
	ADDRESS:	UNIT 13A-07, MENARA Kl, LORONG 3/137C, OFF JALAN KLANG LAMA 58200 KUALA LUMPUR.
	TEL:	603-7772 6333
	FAX:	603-7772 6555

Life Clips (LCLP) 8-K/AReport of the Directors for the Financial Year Ended 30 June 2019