Annual Financial Report

Fortune Graphite Inc. - Fortune Graphite Inc. Audited Financial Results 2014. PR Newswire London, February 6, 2015 Fortune Graphite Inc. (FORT) released audited financial results for financial year 2014. Fortune Graphite Inc. (FORT) released today its audited financial report for the 2014 financial year ending January 31, 2015. The report includes financial statements of Fortune Graphite Inc., which are comprised of the statement of financial position as at January 31, 2015 and the related statements of profit or loss and other comprehensive income, changes in shareholders' equity, and cash flows statement. The complete audited financial report was posted on the GXG site for further review. The audited financial report presents the following results Fortune Graphite Inc. (An Exploration Stage Enterprise) Financial Statements As of and for the Years Ended January 31, 2015 and 2014 And Report of Independent Public Accounting Firm Fortune Graphite Inc. (An Exploration Stage Enterprise) Index to Financial Statements January 31, 2015 and 2014 Financial Statements: Statement of Financial Position ............................ 2 Statement of Profit or Loss and Other Comprehensive Income ................................. 3 Statement of Changes in Shareholders' Equity ............... 4 Statement of Cash Flows .................................... 5 Notes to Financial Statements............................. 6 -10 GREGORYSCOTT 875 N Michigan Ave Suite 3100 Chicago, IL 6061 1 USA (312) 752-5426 www.gregoryscottinternational.com REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Fortune Graphite Inc.: Report on the Financial Statements We have audited the financial statements of Fortune Graphite Inc., (an exploration stage enterprise) which are comprised of the statemen t of fin an cial position as at January 31, 2015 and 2014, and the related statements of pr ofit of loss an d oth er comprehensive income, changes in shareholders' equity, and cash flows for each of the years then ended, and a summar y of significant accounting policies and other explanator y notes. Management's Responsibility for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards ("IFRS") and for such internal control as management deter mines is necessar y to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's 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 about whether the financial statements are free from material misstatement. An audit involves per for ming 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 control relevant to the entity's preparation of financial statements that give a true and fair view 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 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 financial position of Fortune Graphite Inc. as at January 31, 2015 and 2014, and of their financial performance and cash flows for each of the years then ended in accordance with IFRS. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 of the accompanying financial statements, the Company is dependent on generating revenue and obtaining outside sources of financing for the continuation of its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Chicago, Illinois USA February 1, 2015 Statement of Financial Position As of January 31, 2015 and 2014 Assets January 31, January 31, Note 2015 2014 Noncurrent assets Intangible assets - mineral rights 6 3,900,000 3,900,000 Furniture and fixtures 3 8,287 2,390 Total noncurrent assets $ 3,908,287 $ 3,902,390 Current assets Cash 3 8,431 11,015 Receivables 3 24,477 23,502 Total current assets $ 32,908 $ 34,517 Total assets $ 3,941,195 $ 3,936,907 Shareholders' Equity & Liabilities Shareholders' equity Share capital 7 $ 3,939,800 $ 3,939,800 Accumulated deficit 7 (345,392) (280,275) Total shareholders' equity $ 3,594,408 $ 3,659,525 Current liabilities Due to related parties 8 346,787 277,382 Total current liabilities $ 346,787 $ 277,382 Total liabilities $ 346,787 $ 277,38 Total shareholders' equity and liabilities $ 3,941,195 $ 3,936,907 The accompanying notes are in integral part of the financial statements. Statement of Profit of Loss and Other Comprehensive Income As of January 31, 2015 and 2014 Year Ended Year Ended January 31, January 31, 2015 2014 Note Revenue 3 $ - $ - Operating Expenses Filing and transfer agent fees $ (14,505) $ (24,510) General and administrative (12,933) (11,831) Management fees (9,382) (4,311) Professional fees (14,466) (3,210) Rent (6,597) (7,992) Telecommunications (2,246) (1,787) Transportation (4,988) (2,912) Total expenses 3 $ (65,117) $ (56,553) Income taxes 3 $ - $ - Net loss $ (65,117) $ (56,553) Other comprehensive income 3 $ - $ - Total comprehensive loss $ (65,117) $ (56,553) Loss per share Loss per common share - basic and diluted 3 $ (0.003) $ (0.002) Weighted average common shares outstanding - basic and diluted 3 25,749,118 25,749,118 The accompanying notes are in integral part of the financial statements Statement of Changes in Shareholders' Equity As of January 31, 2015 and 2014 Share Capital Accumulated Note Shares Amount Deficit Total Balance at February 1, 2013 10,203,636 $ 1,039,800 $ (223,722) $ 816,078 Common stock issued for mineral rights 7 18,000,000 1,800,000 - 1,800,000 Common stock issued for notes payable 7 11,000,000 1,100,000 - 1,100,000 Net loss for the year ended January 31, 2014 7 - - (56,553) (56,553) Balance at January 31, 2014 39,203,636 $ 3,939,800 $ (280,275) $ 3,659,525 Net loss for the year ended January 31, 2015 7 - - (65,117) (65,117) 1:1.54 reverse stock split 7 (13,454,518) - - - Balance at January 31, 2015 25,749,118 $ 3,939,800 $ (345,392) $ 3,594,408 Statement of Cash Flow As of January 31, 2015 and 2014 January 31, January 31, 2015 2014 Cash flow from operating activities: Net loss $ (65,117) $ (56,553) Adjustments to reconcile net loss to cash flow used in operating activities: - - Depreciation 478 598 Increase in due to related parties 69,405 19,107 Increase in receivables (975) (23,502) Net used in operating activities $ 3,791 $ (60,350) Cash flow from investing activities: $ (6,375) $ - Cash flow from financing activities: $ - $ - Net change in cash and cash equivalents $ (2,584) $ (60,350) Cash and cash equivalents at beginning of the period 11,015 71,365 Cash and cash equivalents at end of the period $ 8,431 $ 11,015 Interest paid $ - $ - Taxes paid $ - $ - Non cash investing and financing activities - debit (credit) Acquisition of mineral rights for common stock payable Common stock payable $ - $1,800,000 Common stock $ - $(1,800,000) Common stock issued for notes payable - related party Notes payable - related party $ - $1,100,000 Common stock $ - $1,100,000 1. Nature of Operations Fortune Graphite Inc. ("Fortune Graphite" or "the Company") was incorporated on March 10, 2010, in British Columbia, Canada. The Company identifies and brings to market valuable mining properties bearing graphite carbon, gold, silver and other precious metals. Based on the Company's business plan, it is an exploration stage enterprise since planned principle mining operations have not yet commenced. Accordingly, the Company has prepared its financial statements i n accordance with International Financial Reporting Standards ("IFRS") that apply to developing enterprises. 2. Going Concern The preparation of financial statements in accordance with IFRS contemplates that operations will be sustained for a reasonable period. The Company is in the exploration stage and is dependent on generating revenue and outside sources of financing for continuation of its operations. These conditions raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. The company plans to improve its financial condition through raising capital and ultimately generating revenue. However, there is no assurance that the company will be successful in accomplishing this objective. Management believes that this plan provides an opportunity for the Company to continue as a going concern. We cannot give any assurances regarding the success of management's plans. Our financial statements do not include adjustments relating to the recoverability of recorded assets or liabilities that might be necessary should we be unable to continue as a going concern. 3. Summary of Significant Accounting Policies The principal accounting policies applied in the preparation of these financial statements are set out below. Basis of Preparation - The financial statements are presented in Canadian dollars in accordance with IFRS, using the historical cost convention. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes that the estimates are reasonable. Intangible Assets: Mineral Rights - Purchased intangible assets are recorded at cost, where cost is the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition. The cost of such an intangible asset is measured at fair value unless the exchange transaction lacks commercial substance or the fair value of neither the asset received nor the asset given up is reliably measurable. If the fair value of either the asset received or the asset given up can be measured reliably, then the fair value of the asset given up is used to measure cost unless the fair value of the asset received is more clearly evident. The Company capitalizes acquisition and annual renewal costs associated with mineral rights as intangible assets. The amount capitalized represents fair value at the time the mineral rights are acquired. Upon commencement of commercial production, the mineral rights will be amortized using the unit-of-production method over their expected useful life. Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highl y liquid investments with original maturities of three months of less to be cash equivalents. Cash and cash equivalents are stated at cost which approximates fair value. Receivables - Receivables are recorded at cost, less any necessary allowance for impairment in value. Due to Related Parties - Due to related parties represent related obligations allocated from affiliated entities t o pay for goods or services that have been acquired in the ordinary course of business from suppliers. Revenue and Associated Costs - The Company recognizes revenue when persuasive evidence of an arrangement exists, services are rendered, the sales price or fee is fixed or determinable, and collectability is reasonably assured. Costs associated with the production of revenues are expensed as incurred. Impairment of Non-Financial Assets - Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows, such as the mining property level. Income Taxes - The Company follows the asset and liability method of accounting for future income taxes. Under this method, future income tax assets and liabilities are recorded based on temporary differences between the carrying amount of assets and liabilities and their corresponding tax basis. In addition, the future benefits of income tax assets including unused tax losses, are recognized, subject to a valuation allowance to the extent that it is more likely than not that such future benefits will ultimately be realized. The Company has provided a 100% valuation allowance to its deferred tax assets associated with net operating losses, resulting in no net tax impact for any of the years presented. Future income tax assets and liabilities are measured using enacted tax rates and laws expected to apply when they are to be either settled or realized. The Company does not have any significant deferred tax asset or liabilities at January 31, 2015. The Company's effective tax rate approximates the Federal statutory rates. Other Comprehensive Income - Other comprehensive income represents the change in equity of an enterprise during a period from transactions from non-owner sources. The Company has no accounts or transactions that give rise to other comprehensive income. Loss Per Common Share - Basic loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during that period. Diluted loss per share is calculated by based on the treasury stock method, by dividing loss available to common shareholders, adjusted for the effects of dilutive convertible securities, by the weighted average number of common shares outstanding during the per iod and all additional common shares that would have been outstanding had all potential dilutive common share been issued. This method computes the number of additional shares by assuming all dilutive options are exercised. That the total number of shares is then reduced by the number of common shares assumed to be repurchased from the total of issuance proceeds, using the average market price of the Company's common shares for the period. There were no dilutive securities during the period presented in the accompa nyin g financial statements. Segment Reporting - Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. The Company operates in one segment described in Note 1, consisting of its mining operations. Accounting Policy Changes In November 2009, the IASB issued IFRS 9 Financial Instruments as the first step in its project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on an entity's business model and the contractual cash flow of the financial Asset. Classification is made at the time the financial asset is initially recognized, namely when the entity becomes a party to the contractual provisions of the instrument. IFRS 9 amends some of the requirements of IFRS 7 Financial Instruments: Disclosures including added disclosures about investments in equity instruments measured at fair value in OCI, and guidance on financial liabilities and de-recognition of financial instruments. In December 2011, the IASB issued an amendment that adjusted the mandatory effective date of IFRS 9 from January 1, 2013 to January 1, 2015. The adoption of this standard had no material impact on our financial statements. In May 2011, the IASB issued IFRS 10 Consolidated Financial Statements to replace IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation - Special Purpose Entities. The new consolidation standard changes the definition of control so that the same criteria apply to all entities, both operating and special purpose entities, to determine control. The revised definition focuses on the need to have both power and variable returns before control is present. IFRS 10 must be applied starting January 1, 2013 with early adoption permitted. The adoption of this standard had no material impact on our financial statements. In May 2011, the IASB issued IFRS 11 Joint Arrangements to replace IAS 31, Interests in Joint Ventures. The new standard defines two types of arrangements: Joint Operations and Joint Ventures. Focus is on the rights and obligations of the parties involved to reflect the joint arrangement, thereby requiring parties to recognize the individual assets and liabilities to which they have rights or for which they are responsible, even if the joint arrangement operates in a separate legal entity. IFRS 11 must be applied starting January 1, 2013 with early adoption permitted. The adoption of this standard had no material impact on our financial statements. In May 2011, the IASB issued IFRS 12 Disclosure of Interests in Other Entities to create a comprehensive disclosure standard to address the requirements for subsidiaries, joint arrangements and associates including the reporting entity's involvement with other entities. It also includes the requirements for unconsolidated structured entities (i.e. special purpose entities). IFRS 12 must be applied starting January 1, 2013 with early adoption permitted. The adoption of this standard had no material impact on our financial statements. In May 2011, the IASB issued IFRS 13 Fair Value Measurement as a single source of guidance for all fair value measurements required by IFRS to reduce the complexity and improve consistency across its application. The standard provides a definition of fair value and guidance on how to measure fair value as well as a requirement for enhanced disclosures. Enhanced disclosures about fair value are required to enable financial statement users to understand how the fair values were derived. IFRS 13 must be applied starting January 1, 2015 with early adoption permitted. The adoption of this standard had no material impact on our financial statements. In October 2011, the IASB issued IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine. IFRIC 20 provides guidance on the accounting for the costs of stripping activity in the production phase of surface mining when two benefits accrue to the entity from the stripping activity: useable ore that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods. IFRIC 20 Must be applied starting January 1, 2013 with early adoption permitted. The adoption of this standard had no Material impact on our financial statements. 4. Critical Accounting Estimates and Judgments Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include: Mineral Rights - Significant estimates and assumptions are required to determine the expected useful lives for amortizing the Company's intangible assets with finite useful lives. Estimates are also necessary in assessing whether there is an impairment of their value requiring a write-down of their carrying amount. In order to ensure that its assets are carried at no more than their recoverable amount, the Company evaluates at each reporting date certain indicators that would result, if applicable, in the calculation of an impairment test. The recovera ble amount of an asset or group of assets may require the Company to use estimates and mainly to assess the future cash flows expected to arise from the asset or group of assets and a suitable discount rate in order to calculate present value. Any negative change in relation to the operating performance or the expected future cash flows of individual assets or group of assets will change the expected recoverable amount of these assets or group of assets, and therefore may require a write-down of their carrying amount. Contingent Liabilities - The Company is required to make judgments about contingent liabilities including the probability of pending and potential future litigation outcomes that, by their nature, are dependent on future events that are inherently uncertain. In making its determination of possible scenarios, management considers the evaluation of outside counsel knowledgeable about each matter, as well as known outcomes in case law. 5. Financial Risk Management Objectives and Policies The Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risk . Management continually monitors the Company's risk management process to ensure that an appropriate balance between risk and control is achieved. Ris k management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company reviews and agrees policies and procedures for the management of these risks. The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, credit risk, and liquidity risk. The following section provides details regarding the Company's exposure to these risks and the objectives, policies and processes for the management of these risks. Market Risk - Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Company's income or the value of its holdings of financial instruments. Management believes the Company is not exposed to significant market risk. Credit Risk - Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. Credit risk arising from the inability of a customer to meet the terms of the Company's financial instrument contracts is generally limited to the amounts, if any, by which the customer's obligations exceed the obligations of the Company. The Company's exposure to credit risk arises primarily from its cash & cash equivalents and amounts due from affiliates for which the Company minimizes credit risk by dealing with reputable counterparties with high credit ratings and no history of default Liquidity Risk - Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company's liquidity risk management policy is to monitor its net operating cash flows and maintain an adequate level of cash and cash equivalents through regular review of its working capital requirements. The Company monitors and maintains a level of cash considered adequate by management to finance the Company's operations and mitigate the effects of the fluctuations in cash flows. Capital Management - The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes i n economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, or issue new shares. The Company has complied with all externally imposed capital requirements as at January 31, 2015, and no changes were made to the Company's capital management objectives, policies or processes during the year then ended. 6. Intangible Assets - Mineral Rights The Company acquired mineral rights associated with the following properties from related parties in exchange for shares of its common stock, cash, and notes payable due to the related parties. These mineral rights are located in the Slocan Mining Division, a reported graphite mineral bearing region I n British Columbia, Canada, and in the reported gold and silver bearing placer properties in British Columbia, Canada. The mineral rights are recorded in the accompanying statement of financial position at their carryover basis, representing the original cost paid by these related parties to acquire the mineral rights. Year Mineral Acquired Rights Description AA Bentinck 2010 $500,000 Harris Gold 2010 600,000 Creek King David 2010 750,000 Castle McVicar 2010 550,000 Superior 2011 1,500,000 $3,900,000 During the year ended January 31, 2014, the Company paid the final contractual amounts due for the mineral rights by issuing 18,000,000 shares of common stock to settle the remaining $1,800,000 "common stock payable" obligation due on various properties, and by issuing 11,000,000 shares of common stock to settle the remaining $1,100,000 due on various notes payable due to these related parties in connection with the mineral rights purchase agreements. As a result, the Company has fully paid for its mineral rights as of January 31, 2015 and 2014. Pursuant to these acquisitions, the Company is the legal and registered owner of 2,924 hectares containing graphite carbon, 60 hectares containing gold, and 21 hectares containing silver at January 31, 2015. 7. Shareholders' Equity The Company is authorized to issue an unlimited number of no-par value shares of common stock. On April 12, 2013, the Company's common stock was admitted to trading on the GXG Markets ("Market") First Quote segment under the symbol "FORT". On January 1, 2015 the Company's Board of Directors amended its bylaws to implement a reverse split of its common stock with a ratio of 1 post-split share for every 1.54 share issued and outstanding on that date, resulting in a reduction of the Company's issued and outstanding common shares from 39,203,636 to 25,749,118. This was executed to meet the €0.10 per-share equivalent value required by new Market rules. All share and related information presented in these financial statements and accompanying footnotes has been adjusted retroactively to reflect the decreased number of shares resulting from the split. At January 31, 2015, the Company has 25,749,118 shares of common stock issued and outstanding. All shares of the Company's common stock have equal rights and privileges with respect to voting, liquidation and dividend rights. Each share of common stock entitles the holder thereof to: one non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders; to participate equally and to receive any and all such dividends as may be declared by the Board of Directors out of funds legally available therefore; and to participate pro rata in any distribution of assets available for distribution upon liquidation. Stockholders have no pre-emptive rights to acquire additional shares of common stock or any other securities. Common shares are not subject to redemption and carry no subscription or conversion rights. All outstanding shares of common stock are fully paid and non-assessable. 8. Due to Related Parties Due to related parties represents obligations allocated from affiliated entities to pay for goods or services that have been acquired in the ordinary course of business from suppliers by the affiliates on the Company's behalf. This obligation is non-interest bearing, and has no stated maturity date. 9 . Subsequent Events No events occurred subsequent to January 31, 2015 that would require adjustment to the accompanying financial statements. 10. Approval of Financial Statements The accompanying financial statements were approved by the board of directors and authorized for issue on February 1, 2015. The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a deficit accumulated during the development stage of approximately $345,000 at January 31, 2015, had a net loss of approximately $345,000 for the period from Inception through January 31, 2015, and net cash used in operating activities of approximately $345,000 for the period from Inception through January 31, 2015. The Directors take responsibility for this announcement. For further information: Fortune Graphite Inc. Dr. Klaus Wagner-Bartak President and CEO Chairman of the Board of Directors 260 Queen's Quay West #3104 Toronto, Ontario M5J 2N3 Canada Toll Free: (+1) 866 209-0451 Tel: (+1) 416 367-8240 Fax: (+1) 416 367-8334 email: info@fortunegraphite.com web: www.fortunegraphite.com

Companies

Forterra (FORT)
UK 100

Latest directors dealings