XENITRA LIMITED - Annual Report 2021

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

1. Company details

Name of entity: Aumake Limited ACN: 150 110 017 Reporting period: For the year ended 30 June 2021 Previous period: For the year ended 30 June 2020

2. Results for announcement to the market

Revenues from ordinary activities down 79% Loss from ordinary activities after tax attributable to the owners of Aumake Limited up 291% Loss for the year attributable to the owners of Aumake Limited up 291%	30 June 2021 30 June 2020
	$12,442,733 $60,056,562 $20,147,809 $5,147,947 $20,147,809 $5,147,947

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Previous period Cents Cents (1.0) 1.7

The net tangible assets per security is calculated based on 537,846,762 ordinary shares on issue as at 30 June 2021. The previous period net tangible assets per ordinary security is calculated based on 332,436,968 ordinary shares on issue as at 30 June 2020.

Net tangible assets calculation above includes the right-of-use assets and lease liabilities but excludes goodwill.

4. Control gained or lost over entities having material effect

In April 2021 Aumake provided financial contribution to establish Hangzhou Ouyi Brand Management, a Chinese domiciled ecommerce operator. Whilst Aumake does not hold any direct ownership interest in Hangzhou Ouyi Brand Management, the Agreements that are in place regarding the financial contribution effectively provides Aumake with control.

There was no other control gained or lost over entities during the period (where material).

5. Details of associates and joint venture entities

There are no associates or joint venture entities.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

6. Audit qualification or review

The financial statements are based on accounts which are in the process of being audited but the audit has not yet completed.

7. Attachments

Relevant extracts from the Annual Report of Aumake Limited for the year ended 30 June 2021 (currently being audited) is attached.

8. Signed

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Signed _________

Date: 31 August 2021

Keong Chan Executive Chairman Sydney

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Commentary

Revenue

Total revenue of $12.4 million reflected the continued impact of COVID-19 on the business. Online Gross Merchandise Value (GMV) grew to $9.0 million, representing 72% of total revenue as active users purchased more products from the Company’s new online platform.

Operating results

The Company’s results FY21 was a $20.1m loss, consisting of non-cash losses of $13.5 million and a cash loss of $6.6 million which resulted primarily from decreased gross profit due to impact of COVID-19 and continued investment into the development of the Company’s online platform.

The Company has reduced non-core operating expenditure, streamlined its labour force including staff redundancies, divested physical stores and benefited from increased government subsidies (e.g., JobKeeper).

Current liabilities

With the settlement of the final tranche of Broadway acquisition on 23 July 2021, current liabilities have reduced to $5.2 million, which primarily consists of $1.3 million in trade payables and $3.3 million total rent owed and commissions payable to travel agents.

The Company continues to maintain good relationships with landlords and travel agents, to effectively manage this $3.3 million in accrued expenses.

Inventory

Inventory book value of $1.8 million as at 30 June 2021 reflected adequate inventory levels to support the operation of Aumake’s social e-commerce marketplace.

Cash at bank

Cash at bank of $4.3 million as at 30 June 2021 ensures the Company is well-placed to execute its strategic objectives in FY22.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Statement of profit or loss and other comprehensive income For the year ended 30 June 2021 Note Revenue Sales revenue 4 Other income 5 Expenses Cost of sales Administrative expenses Employee benefits expense Marketing expenses Travel and accommodation expenses Share based payment expense (options and performance shares) 23 Depreciation and amortisation Loss on disposal of assets Loss on impairment of assets 24 Loss before income tax expense Income tax expense 6 Loss after income tax expense for the year Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations 20 Total comprehensive loss attributable to owners of Aumake Limited Loss for the year is attributable to: Non-controlling interest Owners of Aumake Limited Total comprehensive loss for the year is attributable to: Non-controlling interest Owners of Aumake Limited Loss per share for loss from continuing operations attributable to the owners of Aumake Limited Basic earnings per share 27	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	12,442,733 1,894,990 (10,659,060) (4,499,912) (4,947,036) (748,088) (66,078) (410,230) (439,307) (1,242,129) (11,473,692) (20,147,809) - (20,147,809) (71,707) (20,219,516) (28,923) (20,118,886)	60,056,562 1,263,128 (34,707,746) (3,938,568) (8,145,742) (15,223,835) (166,353) (12,052) (3,623,870) (649,471) -
		(5,147,947) -
		(5,147,947)
		249,216
		(4,898,731)
		- (5,147,947)
	(20,147,809)	(5,147,947)
	(28,923) (20,190,593) (20,219,516) Cents	- (5,147,947)
		(5,147,947)
		Cents
	(3.75)	(1.55)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Statement of financial position

Statement of financial position
As at 30 June 2021 Note Assets Current assets Cash and cash equivalents 7 Trade and other receivables 8 Inventories 9 Other assets 10 Total current assets Non-current assets Plant and equipment 11 Right-of-use asset 12 Intangibles 13 Other assets 14 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 15 Borrowings 16 Provisions 17 Lease liabilities 18 Total current liabilities Non-current liabilities Borrowings 16 Lease liabilities 18 Other payables 15 Total non-current liabilities Total liabilities Net assets Equity Issued capital 19 Reserves 20 Non-controlling interests 21 Accumulated losses 22 Total equity	Consolidated 2021 2020 $ $
	4,264,616 156,142 1,799,618 464,140 6,684,516 1,051,618 2,850,381 5,438,887 1,310,463 10,651,349 17,335,865 7,305,356 39,497 1,387,967 1,654,590 10,387,410 - 1,361,367 228,904 1,590,271 11,977,681 5,358,184 49,094,462 1,884,638 (28,923) (45,591,993) 5,358,184	8,228,008 807,109 1,732,702 91,671
		10,859,490
		2,297,636 14,782,275 16,250,898 1,208,928
		34,539,737

		45,399,227
		11,218,101 193,274 471,277 2,425,055
		14,307,707
		43,148 12,893,822 2,127,000
		15,063,970

		29,371,677

		16,027,550
		35,954,542 5,546,115 - (25,473,107)
		16,027,550

The above statement of financial position should be read in conjunction with the accompanying notes

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Issued Capital $	Reserves $	Accumulated Losses $	Non- Controlling Interests $	Total Equity $
32,873,815 - 2,609,000 (28,273) 500,000 35,954,542 35,954,542 - 2,504,000 7,000,000 4,000,000 (364,080) - - 49,094,462	5,284,848 249,216 - - 12,051 5,546,115 5,546,115 - - - (4,000,000) - 410,230 (71,707) 1,884,638	(20,325,160) (5,147,947) - - - (25,473,107) (25,473,107) (20,118,886) - - - - - - (45,591,993)	- - - - - - - (28,923) - - - - - - (28,923)	17,833,503 (4,898,731) 2,609,000 (28,273) 512,051
				16,027,550
				16,027,550 (20,147,809) 2,504,000 7,000,000 - (364,080) 410,230 (71,707)
				5,358,184

The above statement of changes in equity should be read in conjunction with the accompanying notes

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Statement of cash flows For the year ended 30 June 2021 Note Cash flows related to operating activities Receipts from product sales and related debtors Payments to suppliers and employees Other income Interest received Income tax paid Net cash outflow from/(used in) operating activities Cash flows related to investing activities Payments for plant and equipment 11 Acquisition of intangibles Secured deposits paid / (refunded) Net cash outflow used in investing activities Cash flows related to financing activities Proceeds from issue of shares Share issue costs Interest paid Repayment of the borrowings Net cash inflow from financing activities Net (decrease) increase in cash held Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 7	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	12,442,733 (21,978,346) 1,538,169 7,450 - (7,989,994) (137.688) (2,354,000) (101,535) (2,593,223) 7,000,000 (364,080) - (43,148) 6,592,772 (3,990,445) 8,228,008 27,053 4,264,616	62,414,848 (60,692,207) 1,263,128 23,366 -
		3,009,135
		(961,193) (4,963,000) 54,308
		(5,869,885)
		3,109,000 (28,273) (2,676) (2,005,146)
		1,072,905
		(1,787,845) 10,015,853 -
		8,228,008

The above statement of cash flows should be read in conjunction with the accompanying notes

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Notes to the financial statements

Note 1. Significant accounting policies

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

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

Conceptual Framework for Financial Reporting (Conceptual Framework)

The consolidated entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a material impact on the consolidated entity’s financial statements.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the AASB and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Going concern

The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

As disclosed in the financial statements, the Group incurred a loss of $20,147,809 and outflows from operating activities and investing activities of $7,989,994 and $2,593,223 respectively for the year ended 30 June 2021. As at that date, the Group had net current liabilities of $3,702,894.

The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to manage cash flows in line with available funds and to secure funds by raising additional capital from equity markets, as and when required.

The Directors believe that there are reasonable grounds that the Group will be able to continue as a going concern, after consideration of the following factors:

The Group held a positive cash position of $4,264,616 as at 30 June 2021 and has prepared a cash flow forecast to manage cash in line with available funds;
The Group has reduced or removed all non-essential costs as to conserve cash;
The Group has closed all non-profitable stores;
The ability to defer payments to major creditors such as commission payments to travel agents based on existing strong relationships;
The net current liabilities of $3,702,894 includes consideration payable of $2,127,000 of which $1,595,000 was settled in shares on 23 July 2021; and
The Group expects to be successful in sourcing further capital from the issue of additional equity securities to fund its ongoing operations, as and when required.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Aumake Limited ('company' or 'parent entity') as at 30 June 2021 and 30 June 2020 and the results of all subsidiaries for the year then ended. Aumake Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Aumake Limited's functional and presentation currency.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

Revenue recognition

The financial reporting standard on revenue from contracts with customers establishes a five-step model to account for revenue arising from contracts with customers. Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer (which excludes estimates of variable consideration that are subject to constraints, such as right of return exists, trade discounts, volume rebates and changes to the transaction price arising from modifications), net of any related sales taxes and excluding any amounts collected on behalf of third parties. An asset (goods or services) is transferred when or as the customer obtains control of that asset. As a practical expedient the effects of any significant financing component is not adjusted if the payment for the good or service will be within one year.

Sale of goods

Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery.

Travel commission

Revenue generated from the travel commission is recognised at the point in time when the customers are introduced to the tour agencies.

Interest

Interest revenue is recognised as interest accrues using the effective interest method.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Aumake Limited (the 'head entity') and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime subsequent to 30 June 2018. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.

Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any provision for impairment.

Inventories

Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a weighted average cost basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.

Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of rebates and discounts received or receivable.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

Impairment of investments

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Plant and equipment

Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment (excluding land) over their expected useful lives as follows:

Leasehold improvements	3-10 years
Plant and equipment	3-10 years
Motor vehicle	5-8 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.

Intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

Goodwill

Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.

Software

Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 3 years.

Agency relationships

Agency relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 20 years.

Impairment of non-financial assets

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-inuse is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred

Provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.

Employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplie by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on 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; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Dividends

Dividends are recognised when declared during the financial year and no longer at the discretion of the company.

Business combinations

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued, or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any noncontrolling interest in the acquiree and the fair value of the consideration transferred and the fair value of any preexisting investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Aumake Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except were included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit and loss as incurred.

Lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index, or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 1. Significant accounting policies (cont’d)

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.

Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relations to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. The consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Goodwill

The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 1. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows.

Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.

Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Lease term

The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the consolidated entity's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 2. Critical accounting judgements, estimates and assumptions (cont’d)

Incremental borrowing rate

Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.

Note 3. Operating segments

The consolidated entity is organised into two operating segments based on differences in the type of selling that occurs. The main operation is its traditional multi-brand, omni-channel retail business, and during this financial year the consolidated entity has development its online platform and will begin to shift the business model from a predominately bricks-and-mortar business to an online influencer-based marketplace. This latter segment has not contributed sufficient revenue to justify separate disclosure in these financial statements.

The Directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the Board in allocating resources, and have concluded that at this time, there are no separately identifiable segments.

The consolidated entity is domiciled in Australia. Revenue from external customers is generated from Australia, New Zealand and China. Segment revenues are allocated based on the country in which the customer is located. Assets are located in Australia, New Zealand and China. For the years ended 30 June 2021 and 30 June 2020, the revenues from China and New Zealand are not material to the Group.

Note 4. Revenue		Consolidated
	2021		2020
	$		$
Revenue from contracts with customers
Sale of goods	12,442,733		60,056,562
Revenue from contracts with customers are recognised at the point in time, when the customer obtains control of the
goods, which is generally at the time of delivery.
Geographical
Australia	12,442,773		53,183,490
New Zealand		-	6,873,072
Sale of goods	12,442,733		60,056,562

Revenue from contracts with customers are recognised at the point in time, when the customer obtains control of the goods, which is generally at the time of delivery.

Note 5. Other income Other income Interest income Cash Flow Boost JobKeeper subsidies	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	543,405 - 227,585 1,124,000 1,894,990	1,239,762 23,366 - -
		1,263,128

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 6. Income tax expense

(a) Income tax recognised in profit/loss

No income tax is payable by the Group as it recorded a loss for income tax purposes for the year.

(b) Numerical reconciliation between income tax expense and the loss before income tax

The prima facie income tax benefit on pre-tax accounting loss from operations reconciles to the income tax expense in the financial statements as follows:

Accounting loss before tax Income tax benefit at 26% (2020: 30%) Tax effect of non-allowable items and temporary differences Unrecognised tax losses Income tax expense/(benefit) attributable to loss from ordinary activities nrecognised deferred tax balances Previous year deferred tax asset Tax losses at 26% (2020: 30%) Net unrecognised deferred tax asset at 26%(2020: 30%)	Consolidated 2021 $ 2020 $	Consolidated 2021 $ 2020 $
	(20,147,809) (5,238,430) 2,340,261 2,898,169 - 5,668,076 2,097,072 7,765,148	(5,147,947)
		(1,544,384) 725,275 819,109
		-
		3,684,012 1,984,064
		5,668,076

(c) Unrecognised deferred tax balances

A deferred tax asset attributable to income tax losses has not been recognised at the reporting date as the probability criteria disclosed in Note 1 is not satisfied and such benefit will only be available if the consolidated entity can satisfy the tax loss recoupment test as defined in each taxation jurisdiction.

Note 7. Current assets - cash and cash equivalents Cash at bank Term deposits Cash on hand Note 8. Current assets - trade and other receivables Trade receivables Other receivables	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	4,043,799 8,070,585 210,667 78,345 10,150 79,078 4,264,616 8,228,008 Consolidated 2021 2020 $ $	8,070,585 78,345 79,078
		8,228,008
	143,015 13,127 156,142	383,506 423,601
		807,109

Allowance for expected credit losses

There is no allowance for expected credit losses recognised as at 30 June 2021 (30 June 2020: Nil).

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 9. Current assets - inventories Finished goods Less: provision for impairment Note 10. Current assets - other assets Prepayments Note 11. Non-current assets - plant and equipment Leasehold improvements - at cost Less: Accumulated depreciation Plant and equipment - at cost Less: Accumulated depreciation Motor vehicles - at cost Less: Accumulated depreciation Capital work in progress	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	1,919,589 1,983,793 (119,961) (251,091) 1,799,618 1,732,702 Consolidated 2021 2020 $ $	1,983,793 (251,091)
		1,732,702
	464,140 91,671 Consolidated 2021 2020 $ $	91,671
	1,578,392 (732,432) 845,960 430,855 (300,034) 130,820 190,693 (115,855) 74,838 - 1,051,618	2,397,592 (606,106)
		1,791,486
		712,348 (390,902)
		321,446
		208,703 (108,552)
		100,151
		84,553
		2,297,636

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Consolidated Balance at 30 June 2020 Additions Disposals Depreciation expense Foreign exchange differences Balance at 30 June 2021	Leasehold improvements	Plant and equipment	Motor vehicles	Capital work in progress	Total
	$ 1,791,486 99,249 (1,006,976) (33,612) (4,187) 845,960	$ 321,446 38,439 (132,590) (96,232) (243) 130,820	$ 100,151 - (18,010) (7,303) - 74,838	$ 84,553 - (84,553) - - -	$ 2,297,636 137,688 (1,242,129) (137,147) (4,430)
					1,051,618

Consolidated Balance at 30 June 2019 Additions Disposals/Transfer Depreciation expense Foreign exchange differences Balance at 30 June 2020	Leasehold improvements	Plant and equipment	Motor vehicles	Capital work in progress	Total
	$ 1,987,741 792,525 (550,557) (438,009) (214) 1,791,486	$ 384,812 163,868 (31,507) (195,448) (279) 321,446	$ 164,600 - (25,451) (39,073) 75 100,151	$ 128,339 4,800 (48,586) - - 84,553	$ 2,665,492 961,193 (656,101) (672,530) (418) 2,297,636

Note 12. Non-current assets - right-of-use assets

Note 12. Non-current assets - right-of-use assets
Right-of-use assets Less: Accumulated depreciation	Consolidated 2021 2020 $'000 $'000
	5,848,772 (2,998,391) 2,850,381	17,431,454 (2,649,180)
		14,782,275

The consolidated entity has exited or surrendered several property leases during this financial year. The remaining leases over buildings for its offices and retail outlets are under agreements with a duration of between one to three and a half years to expiry. The leases have various escalation clauses. On renewal, the terms of the leases will be renegotiated.

Note 13. Non-current assets - intangibles Goodwill Agency relationships - at cost Less: Accumulated amortisation Total	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	- 6,043,208 (604,321) 5,438,887 5,438,887	10,509,851 6,043,208 (302,161)
		5,741,047

		16,250,898

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Agency Relationships	Goodwill	Total
$ - 6,043,208 (302,161) 5,741,047 (302,160) - 5,438,887	$ 2,373,059 8,136,792 - 10,509,851 - (10,509,851) -	$ 2,373,059 14,180,000 (302,161)
		16,250,898 (302,160) (10,509,851)
		5,438,887

Impairment testing

Given the impact of COVID-19 on the Group’s operations for the year ended 30 June 2021 and the likelihood that COVID-19 will continue to affect the Group’s revenue at least in the short-term post the date of this financial report, the Directors have fully impaired the goodwill as at 30 June 2021.

Note 14. Non-current assets - other assets Security deposits Note 15. Trade and other payables Current Trade payables Other payables1 Payment in advance Accrued expenses2 Non-current Other payables	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	1,310,463 1,208,928 Consolidated 2021 2020 $ $	1,208,928
	1,306,698 2,459,692 2,651,131 4,986,875 3,609 12,443 3,343,918 3,759,091 7,305,356 11,218,101 Consolidated 2021 2020 $ $	2,459,692 4,986,875 12,443 3,759,091
		11,218,101
	228,904	2,127,000

1The total current other payables of $2,651,131 includes the final tranche of the Broadway consideration payment of $2,127,000 which was settled on 23 July 2021. $1,595,000 of the consideration was settled through the issue of shares.

2The total accrued expenses balance of $3,343,918 includes rent owed of $1,071,452 and accrued commission of $2,166,271 which are payable to travel agents and agencies.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 16. Borrowings Current Credit card facility Finance lease liability - motor vehicles Non-current Finance lease liability – motor vehicles The financial lease liability is payable as follows: 30 June 2021 Less than one year Between one and five years 30 June 2020 Less than one year Between one and five years	Consolidated 2021 2020 $ $ - 160,017 39,497 33,257 39,497 193,274 Consolidated 2021 2020 $ $ - 43,148 Future minimum leasepayments Interest Present value of minimum lease payments	Consolidated 2021 2020 $ $ - 160,017 39,497 33,257 39,497 193,274 Consolidated 2021 2020 $ $ - 43,148 Future minimum leasepayments Interest Present value of minimum lease payments
	$ $ 39,514 (17) - -	$ 39,497 -
	39,514 (17)	39,497
	Future minimum leasepayments Interest	Present value of minimum lease payments
	$ $ 33,863 (606) 43,933 (785)	$ 33,257 43,148
	77,796 (1,391)	76,405

The finance lease liability is secured by a charge over the underlying finance leased asset.

Note 17. Current liabilities – provisions Provision for lease payments due (not included in Lease Liabilities)1 Employee benefits provision	Consolidated 2021 2020 $ $	Consolidated 2021 2020 $ $
	750,068 637,899 1,387,967	- 471,277
		471,277

1The provision balance of $750,068 relates to the amount of rent payable over the entire remaining lease period for the Q1, Surfers Paradise and the China Town stores. As these stores are no longer open, the lease liabilities have been accounted for as provisions (moved out of lease liabilities). Management is endeavouring to surrender, exit, or sub-lease these locations.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 17. Current liabilities – provisions (cont’d)

Amounts not expected to be settled within the next 12 months

The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current since the consolidated entity does not have an unconditional right to defer settlement. The consolidated entity expects all employees to take the full amount of accrued leave or require payment within the next 12 months.

Note 18. Lease liabilities

Note 18. Lease liabilities
Current Lease liability Non-current Lease liability	Consolidated 2021 2020 $'000 $'000
	1,654,590 2,425,055 Consolidated 2021 2020 $'000 $'000	2,425,055
	1,361,367	12,893,822

Note 19. Equity - issued capital

Consolidated 2021 2020 2021 2020 Shares Shares $ $ 537,846,762 332,436,698 49,094,462 35,594,542 2021 2020 No. of shares $ No. of shares $	Consolidated 2021 2020 2021 2020 Shares Shares $ $ 537,846,762 332,436,698 49,094,462 35,594,542 2021 2020 No. of shares $ No. of shares $	Consolidated 2021 2020 2021 2020 Shares Shares $ $ 537,846,762 332,436,698 49,094,462 35,594,542 2021 2020 No. of shares $ No. of shares $	2020 $
			35,594,542
332,436,698 36,417,816 50,000,000 2,325,581 116,666,667 - 537,846,762	35,954,542 2,354,000 4,000,000 150,000 7,000,000 (364,080) 49,094,462	312,079,202 17,232,496 - - 3,125,000 - 332,436,698	32,873,815 2,609,000 - - 500,000 (28,273)
			35,954,542

Ordinary shares participate in dividends and the proceeds on winding up of the consolidated entity in proportion to the number of and amounts paid on the shares held. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 19 Equity – issued capital (cont’d)

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.

The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.

The capital risk management policy remains unchanged from the 30 June 2020 Annual Report.

Note 20. Equity - reserves Options reserve (a) Performance rights reserve (b) Foreign currency translation reserve (c)	Consolidated 2021 2020	Consolidated 2021 2020
	$ 1,734,795 148,697 1,146 1,884,638	$ 1,473,262 4,000,000 72,853
		5,546,115

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 20. Equity – reserves (cont’d)

(a) Options reserve

Movements in option reserve

2021 No. of Securities $ Consolidated At the beginning of the financial year 8,550,000 1,473,262 Issue/(forfeited) of options to employees in pursuant to Employee Share Option Plan (‘ESOP’) with an exercise price of $0.20 (5,000,000) - Amortisation of expense on options issued1 - - Issue of options to Non-Executive Director pursuant to Long-Term Incentive Plan with an exercise price of $0.20 (expiry 29 September 2022) 5,000,000 - Issue of options to staff pursuant to Employee Share Option Plan with an exercise price of $0.20 (expiry 4 December 2024) 3,600,000 68,400 Issue of options to Director pursuant to Long-Term Incentive Plan with an exercise price of $0.20 (expiry 4 December 2024) 33,600,000 167,712 Issue of free attaching options pursuant to Tranche 2 $7.0 m placement with an exercise price of $0.14 (expiry 16 March 2024) 58,333,364 - At the end of the financial year 104,083,364 1,734,795	2021 No. of Securities $	2021 No. of Securities $	2020 No. of Securities $
		1,473,262 - - - 68,400 167,712 -	10,250,000 1,461,211 (1,700,000) - - 12,051 - - - - - - - -
	104,083,364	1,734,795	8,550,000 1,473,262

1 The value disclosed above is the portion of the fair value of the options recognised as an expense in each reporting period in accordance with the requirements of AASB 2. Remaining amount will be recognised in future reporting periods over the vesting period.

(b) Performance rights reserve

Movement in performance rights reserve

2021 No. of Securities $ Consolidated At the beginning of the financial year 50,000,000 4,000,000 Issue of Class A Performance Rights to founding shareholders of Aumake Limited with an exercise price of $0.09 7,000,000 - Issue of Class B Performance Rights to Non- Executive Director 2,100,000 34,705 Reclassify Share Payment Reserve to Issued Capital (50,000,000) (4,000,000) Issue of Class C Performance Rights to Non- Executive Director 882,000 14,576 Issue of Short-Term Performance Rights to staff 4,450,000 99,416 At the end of the financial year 14,432,000 148,697	2021 No. of Securities $	2021 No. of Securities $	2020 No. of Securities $
		4,000,000 - 34,705 (4,000,000) 14,576 99,416	- - 25,000,000 2,000,000 25,000,000 2,000,000 - - - - - -
	14,432,000	148,697	50,000,000 4,000,000

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 20. Equity – reserves (cont’d)

(c) Foreign currency translation reserve

The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars.

Movements in foreign currency translation reserve

At the beginning of the financial year Exchange difference on translation of foreign operations At the end of the financial year	Consolidated 2021 2020	Consolidated 2021 2020
	$ 72,853 (71,707) 1,146	$ (176,363) 249,216
		72,853

Note 21. Non-Controlling Interest

In April 2021 Aumake invested AUD$1,000,000 to establish Hangzhou Ouyi Brand Management, a Chinese domiciled ecommerce operator. Whilst Aumake does not hold any direct ownership interest in Hangzhou Ouyi Brand Management, the Agreements that are in place regarding the AUD$1,000,000 investment effectively provides Aumake with control and 76% of the business results.

Movement in minority interests At the beginning of the financial year Share of loss Accumulated losses at the end of the financial year	Consolidated 2021 2020	Consolidated 2021 2020
	$ - (28,923) (28,923)	$ - -
		-

Note 22. Equity – accumulated losses

Accumulated losses at the beginning of the financial year Loss after income tax expense for the year Accumulated losses at the end of the financial year	Consolidated 2021 2020	Consolidated 2021 2020
	$ (25,473,107) (20,118,886) (45,591,993)	$ (20,325,160) (5,147,947)
		(25,473,107)

Note 23. Share-based payments

Total expenses arising from share-based payment transactions recognised during the year were as follows:

Options 20(a) Performance rights 20(b)	Consolidated 2021 2020	Consolidated 2021 2020
	$ 261,533 148,697 410,230	$ 12,052 -
		12,052

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 23. Share-based payments (cont’d)

(a) Options

All options granted to key employees, consultants and advisors of the Company are for ordinary shares in Aumake Limited which confer a right of one ordinary share for every option held.

2021

2021
Grant Date	ExpiryDate	Exercise Price	Balance at start ofyear	Options Issued during the period	Exercised during the period	Forfeited during the period	Balance at end of theperiod	Vested & exercisable at end of the period
			Number	Number	Number	Number	Number	Number
12/09/2017	12/09/2022	$0.20	5,000,000	-	-	(5,000,000)	-	-
22/01/2018	22/01/2023	$0.20	3,550,000	-	-	-	3,550,000	3,550,000
22/01/2018	22/01/2023	$0.20	-	33,600,000	-	-	33,600,000	-
4/12/2020	29/9/2022	$0.20	-	5,000,000	-	-	5,000,000	5,000,000
4/12/2020	4/12/2024	$0.20	-	2,300,000	-	-	2,300,000	-
4/12/2020	4/12/2024	$0.20	-	1,300,000	-	-	1,300,000	1,300,000
			8,550,000	42,200,000	-	(5,000,000)	45,750,000	9,850,000

2020

2020
Grant Date	ExpiryDate	Exercise Price	Balance at start ofyear	Options Issued during the period	Exercised during the period	Forfeited during the period	Balance at end of theperiod	Vested & exercisable at end of the period
			Number	Number	Number	Number	Number	Number
12/09/2017	12/09/2022	$0.20	5,000,000	-	-	-	5,000,000	5,000,000
22/01/2018	22/01/2023	$0.20	3,250,000	-	-	(1,700,000)	1,550,000	-
22/01/2018	22/01/2023	$0.20	2,000,000	-	-	-	2,000,000	-
			10,250,000	-	-	(1,700,000)	8,550,000	5,000,000

The following table sets out the assumptions made in determining the fair value of the options granted during the financial year using the Black-Scholes option pricing model:

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 23. Share-based payments (cont’d)


Note 23. Share-based payments (cont’d)	Options	Options
	Granted	Granted
2021	4 December 2020	4 December 2020
Expected volatility (%)	296	206
Risk free interest rate (%)	0.06	0.77
Weighted average expected life of options
(years)	2	5
Expected dividends	Nil	Nil
Option exercise price (cents)	20	20
Share price at grant date (cents)	3	3
Fair value of option (cents)	2.6	2.6
Number of options	5,000,000	33,600,000
Expiry date	29 September 2022	4 December 2024
Vesting date	29 September 2022	4 December 2023
Share-based payment expensed recognised
for the year ended 30 June 2021 ($)	25,126	167,711
	Options	Options
2021	Granted	Granted
	4 December 2020	4 December 2020
Expected volatility (%)	206	206
Risk free interest rate (%)	0.77	0.77
Weighted average expected life of options
(years)	5	5
Expected dividends	Nil	Nil
Option exercise price (cents)	20	20
Share price at grant date (cents)	3	3
Fair value of option (cents)	2.6	2.6
Number of options	2,300,000	1,300,000
Expiry date	4 December 2024	4 December 2024
Vesting date	3 December 2021	4 December 2020
Share-based payment expensed recognised
for the year ended 30 June 2021 ($)	34,535	34,160

(b) Performance shares 2021

(b) Performance shares 2021
Grant Date ExpiryDate	Balance at start ofyear Granted during the period Forfeited/Recl assified during theperiod Balance at end of the period Vested & exercisable at end of the period
	Number Number Number Number Number
12/09/2017 12/09/2022 4/12/2020 30/6/2022 4/12/2020 30/6/2023 4/12/2020 4/12/2023 4/12/2020 4/12/2024	50,000,000 - (50,000,000) - - - 7,000,000 - 7,000,000 - - 2,100,000 - 2,100,000 - - 882,000 - 882,000 - - 4,450,000 - 4,450,000 -
	50,000,000 14,432,000 (50,000,000) 14,432,000 -

The 50.0 m Performance Share relating to the Company’s IPO vested and on 4 December 2020 were converted into ordinary shares. No other Performance shares were exercised during the financial year ended 30 June 2021.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 23. Share-based payments (cont’d)

2020 Grant Date Expiry Date	Balance at start of year Granted during the period Exercised during the period Balance at end of the period Vested & exercisable at end of the period Number Number Number Number Number
12/9/2017 12/9/2022	- 50,000,000 - 50,000,000 -
	- 50,000,000 - 50,000,000 -

The performance share reserve is related to the 50,000,000 Performance Shares, comprising 25,000,000 Class A Performance Shares and 25,000,000 Class B Performance Shares to founding shareholders of Aumake Subsidiary.

2021	Class A	Class B
	Granted	Granted
	4 December 2020	4 December 2020
Expected volatility (%)	296	216
Risk free interest rate (%)	0.06	0.20
Weighted average expected life of rights
(years)	2	3
Rights exercise price (cents)	-	-
Fair value of right (cents)	2.6	2.9
Number of rights	7,000,000	2,100,000
Probability	0%	100%
Expiry date	30 June 2022	4 December 2023
Vesting date	30 June 2021	4 December 2021
Share-based payment expensed recognised
for the year ended 30 June 2021 ($)	Nil	34,705
	Class C	Short-Term Rights
2021	Granted	Granted
	4 December 2020	4 December 2020
Expected volatility (%)	216	206
Risk free interest rate (%)	0.20	0.77
Weighted average expected life of options
(years)	3	5
Rights exercise price (cents)	-	-
Fair value of right/options (cents)	2.9	2.6
Number of rights	882,000	4,450,000
Probability	100%	100%
Expiry date	4 December 2023	5 December 2020
Vesting date	4 December 2021	4 December 2020
Share-based payment expensed recognised
for the year ended 30 June 2021 ($)	14,576	99,416

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 24. Loss on impairment of assets

Note 24. Loss on impairment of assets
Leased property asset Goodwill	Consolidated 2021 2020
	$ 963,841 10,509,851 11,473,692	$ - -
		-

The Group has ceased operating out of Q1 (Surfers Paradise) and the China Town (Sydney) stores but still has Lease Agreements in place re these locations. As these sites are no longer revenue generating, the Group has ceased to recognise the future rental payments as right-of-use assets and impair this value.

COVID-19 has forced the Group to close all non-profitable stores and as a result the Group can no longer justify the Goodwill and as a result, this asset has fully impaired.

Note 25. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following wholly owned subsidiaries in accordance with the accounting policy described in Note 1:

		Ownership	interest
	Principal place of business	30 June 2021	30 Jun 2020
Name	/ Country of incorporation	%	%
Parent entity
Aumake Limited
(formerly Aumake International Limited)	Australia
Name of subsidiary entities
ITM Corporation Ltd	Australia	100%	100%
Aumake Australia Pty Ltd	Australia	100%	100%
Jumbuck Australia Pty Ltd	Australia	49%	49%
168 Express Pty Ltd	Australia	100%	100%
Newera Australia Pty Ltd	Australia	100%	100%
Kiwibuy Australia Pty Ltd	Australia	100%	100%
Medigum Honey Pty Ltd	Australia	50%	50%
One Kangaroo Ltd	China	100%	100%
Syd Star Pty Ltd	Australia	100%	100%
Gold Harbour Pty Ltd	Australia	100%	100%
Round Forest Pty Ltd	Australia	100%	100%
M Best Pty Ltd	Australia	100%	100%
Broadway Australia Pty Ltd	Australia	100%	100%
AUBW Pty Ltd	New Zealand	100%	100%

Whilst the Group does not hold any direct ownership in Hangzhou Ouyi Brand Management, the Agreements that are in place over its contribution, effectively provides the Group with control and 76% of the business results.

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Note 26. Events after the reporting period

No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Note 27. Loss per share

Basic loss per share (cents) Diluted loss per share (cents) Net loss used in the calculation of basic loss per share and diluted loss per share Weighted average number of ordinary shares outstanding during the year used in calculating diluted loss per share	Consolidated 2021 2020
	$ $ (3.75) (1.55) (4.43) (1.55) (20,147,809) (5,147,947) 454,412,244 302,232,494

Options have not been included in the calculation of dilutive loss per shares as the options are anti-dilutive.

AI assistant

XENITRA LIMITED — Annual Report 2021

66096_rns_2021-08-30_326f9d0c-e03e-4263-b6b8-f741f1f85da9.pdf

1. Company details

2. Results for announcement to the market

3. Net tangible assets

4. Control gained or lost over entities having material effect

5. Details of associates and joint venture entities

6. Audit qualification or review

7. Attachments

8. Signed

Commentary

Revenue

Operating results

Current liabilities

Inventory

Cash at bank

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Statement of financial position

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Aumake Limited Appendix 4E – preliminary final report 30 June 2021

Notes to the financial statements

Note 1. Significant accounting policies

New or amended Accounting Standards and Interpretations adopted

Conceptual Framework for Financial Reporting (Conceptual Framework)

Basis of preparation

Historical cost convention

Going concern

Note 1. Significant accounting policies (cont’d)

Parent entity information

Principles of consolidation

Operating segments

Foreign currency translation

Foreign currency transactions

Note 1. Significant accounting policies (cont’d)

Foreign operations

Revenue recognition

Sale of goods

Travel commission

Interest

Other revenue

Income tax

Note 1. Significant accounting policies (cont’d)

Current and non-current classification

Cash and cash equivalents

Trade and other receivables

Note 1. Significant accounting policies (cont’d)

Inventories

Investments and other financial assets

Financial assets at fair value through profit or loss

Impairment of investments

Note 1. Significant accounting policies (cont’d)

Plant and equipment

Intangible assets

Goodwill

Software

Agency relationships

Impairment of non-financial assets

Note 1. Significant accounting policies (cont’d)

Trade and other payables

Borrowings

Finance costs

Provisions

Employee benefits

Short-term employee benefits

Other long-term employee benefits

Share-based payments

Note 1. Significant accounting policies (cont’d)

Fair value measurement

Note 1. Significant accounting policies (cont’d)

Issued capital

Dividends

Business combinations

Earnings per share

Basic earnings per share

Note 1. Significant accounting policies (cont’d)

Diluted earnings per share

Goods and Services Tax ('GST') and other similar taxes

Right-of-use assets

Lease liabilities

XENITRA LIMITED Annual Report 2021