Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2018 | Aug. 20, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | ADDENTAX GROUP CORP. | |
Entity Central Index Key | 1,650,101 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 506,920,000 | |
Trading Symbol | ATXG | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 301,640 | $ 264,806 |
Accounts receivables, net | 3,264,347 | 3,416,618 |
Inventories, net | 173,594 | 239,229 |
Other receivables | 2,163,472 | 2,005,112 |
Advances to suppliers | 258,328 | 266,377 |
Amounts due from related parties | 252,885 | 202,426 |
Total current assets | 6,414,266 | 6,394,568 |
NON-CURRENT ASSETS | ||
Plant and equipment, net | 643,327 | 648,540 |
Goodwill | 475,003 | 475,003 |
Total non-current assets | 1,118,330 | 1,123,543 |
TOTAL ASSETS | 7,532,596 | 7,518,111 |
CURRENT LIABILITIES | ||
Accounts payable | 2,793,001 | 1,549,847 |
Amount due to related parties | 5,102,919 | 5,319,418 |
Advances from customers | 556,461 | 1,561,861 |
Accrued expenses and other payables | 267,009 | 185,855 |
Income tax payable | 4,141 | 6,064 |
Total current liabilities | 8,723,531 | 8,623,045 |
TOTAL LIABILITIES | 8,723,531 | 8,623,045 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Common stock ($0.001 par value, 506,920,000 shares issued and outstanding for the three months ended June 30, 2018 and the year ended March 31, 2018) | 506,920 | 506,920 |
Additional paid-in capital | (420,524) | (420,524) |
Retained earnings | (1,242,104) | (1,081,198) |
Statutory reserve | 21,539 | 21,539 |
Accumulated other comprehensive income | (56,766) | (131,671) |
Total equity | (1,190,935) | (1,104,934) |
TOTAL LIABILITIES AND EQUITY | $ 7,532,596 | $ 7,518,111 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Mar. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 506,920,000 | 506,920,000 |
Common stock, shares outstanding | 506,920,000 | 506,920,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||
REVENUES | $ 2,731,793 | $ 3,639,409 |
COST OF REVENUES | (2,437,174) | (3,366,652) |
GROSS PROFIT | 294,619 | 272,757 |
OPERATING EXPENSES | ||
Selling and marketing | (4,720) | (11,926) |
General and administrative | (463,900) | (375,808) |
Total operating expenses | (468,620) | (387,734) |
LOSS FROM OPERATIONS | (174,001) | (114,977) |
OTHER INCOME (EXPENSE), NET | 13,704 | (1,616) |
LOSS BEFORE INCOME TAX EXPENSE | (160,297) | (116,593) |
INCOME TAX EXPENSE | (609) | (2,243) |
NET LOSS | (160,906) | (118,836) |
Foreign currency translation gain (loss) | 74,905 | (48,454) |
TOTAL COMPREHENSIVE LOSS | $ (86,001) | $ (167,290) |
EARNINGS PER SHARE | ||
Basic and diluted | $ 0 | $ 0 |
Weighted average number of shares outstanding - Basic and diluted | 506,920,000 | 500,000,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (160,906) | $ (118,836) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation | 30,805 | 27,527 |
(Increase) decrease in: | ||
Accounts receivable | 152,271 | (381,166) |
Inventories | 65,636 | 150,267 |
Advances to suppliers | 8,049 | (489,606) |
Other receivables | 25,796 | (85,643) |
Increase (decrease) in: | ||
Accounts payables | 1,243,154 | 962,315 |
Accrued expenses and other payables | 132,582 | 699,538 |
Advances from customers | (1,005,399) | (820,138) |
Taxes payable | (1,923) | 1,263 |
Net cash provided by (used in) operating activities | 490,065 | (54,479) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of plant and equipment | (25,592) | (12,695) |
Payment for acquisition of subsidiaries | (3,025,751) | |
Net cash (used in) provided by investing activities | (25,592) | (3,038,446) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from related party borrowings | 294,043 | 4,633,089 |
Repayment of related party borrowings | (561,001) | (644,301) |
Proceeds from third party borrowings | 840,670 | 14,481 |
Repayment of third party borrowings | (998,627) | (167) |
Net cash provided by (used in) financing activities | (424,915) | 4,003,102 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 39,558 | 910,177 |
Effect of exchange rate changes on cash and cash equivalents | (2,724) | 14,489 |
Cash and cash equivalents, beginning of year | 264,806 | 176,905 |
CASH AND CASH EQQIVALENTS, END OF YEAR | $ 301,640 | $ 1,101,571 |
Organization and Business Acqui
Organization and Business Acquisitions | 3 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Acquisitions | 1. ORGANIZATION AND BUSINESS ACQUISITIONS Addentax Group Corp. (“ATXG”) was incorporated in Nevada on October 28, 2014, and before the transaction described below, ATXG is engaged in the field of producing images on multiple surfaces using heat transfer technology. On December 28, 2016, ATXG acquired 250,000,000 shares of the issued and outstanding stock of Yingxi Industrial Chain Group Co., Ltd. (“Yingxi”). The 250,000,000 shares of Yingxi were acquired from the members of Yingxi in a share exchange transaction in return for the issuance of 500,000,000 shares of common stock of ATXG. The 250,000,000 shares of Yingxi constitute 100% of its issued and outstanding stock, and as a result of the transaction, Yingxi became a wholly-owned subsidiary of ATXG. And following the consummation of the reverse acquisition effective on September 25, 2017, and giving effect to the securities exchanged in the offering, the members of Yingxi will beneficially own approximately ninty-nine (99%) of the issued and outstanding common stock of ATXG. For accounting purposes, the Company was treated as an acquiree and Yingxi as an acquirer, as a result, the business and financial information contained in this report is that of the acquirer prior to the consummation date and that of the combined entity after that date. Yingxi was incorporated in the Republic of Seychelles on August 4, 2016. ATXG, together with Yingxi and its subsidiaries (the “Company”) operates primarily in the People’s Republic of China (“PRC” or “China”) and is engaged in the business of garments manufacturing and providing logistic services. On December 15, 2016, Yingxi entered into an equity transfer agreement with the shareholder of Yingxi Industrial Chain Investment Co., Ltd (“Yingxi HK”) under which Yingxi agreed to pay total consideration of RMB21,008,886 (approximately $3,048,936) in cash in exchange for a 100% ownership interest in Yingxi HK. Yingxi HK was incorporated in Hong Kong in 2016. Yingxi HK is a holding company with no assets other than a 100% equity interest of the following subsidiaries: Qianhai Yingxi Textile & Garments Co., Ltd (“QYTG”), a wholly-owned subsidiary of Yingxi HK, was incorporated in PRC in 2016. Shenzhen Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), a wholly-owned subsidiary of QYTG, was incorporated in PRC in 2016. Xin Kuai Jie Transport Co., Ltd (“XKJ”), a wholly-owned subsidiary of YX, was incorporated in PRC in 2001. XKJ is engaged in the provision of logistic services. Shenzhen Hua Peng Fa Logistics Co., Ltd (“HPF”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2006. HPF is engaged in the provision of logistic services. Dongguan Heng Sheng Wei Garments Co., Ltd (“HSW”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2009. HSW is a garment manufacturer. Shantou Chenghai Dai Tou Garments Co., Ltd (“DT”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2009. DT is a garment manufacturer. |
Basis of Presentation, Liquidit
Basis of Presentation, Liquidity | 3 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Liquidity | 2. BASIS OF PRESENTATION, LIQUIDITY The accompanying consolidated financial statements of the Company and its subsidiaries are prepared pursuant to the rules and regulations of the U.S Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). All material inter-company accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred net losses of $160,906 and $118,836 during the three months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and March 31, 2018, the Company had net current liability of $1,190,935 and $1,104,934, respectively, and an deficit on total equity of $1,190,934 and $1,104,934, respectively. The ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company expects to finance operations primarily through cash flow from revenue and capital contributions from the CEO. In the event that the Company requires additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, the CEO has indicated the intent and ability to provide additional equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on the Company’s ability to meet obligations as they become due and to obtain additional equity or alternative financing required to fund operations until sufficient sources of recurring revenues can be generated. There can be no assurance that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable terms, or if at all. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Economic and Political Risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. (b) Foreign Currency Translation The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of equity. (c) Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates. (d) Fair Value Measurement Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). At June 30, 2018, the Company has no financial assets or liabilities subject to recurring fair value measurements. The Company’s financial instruments include cash, accounts receivable, advances to suppliers, other receivables, accounts payable, other payables, taxes payables and related party receivables or payables. Management estimates that the carrying amounts of financial instruments approximate their fair values due to their short-term nature. The fair value of amounts with related parties is not practicable to estimate due to the related party nature of the underlying transactions. (e) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2018 and March 31, 2018. (f) Accounts Receivable Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. No allowance for doubtful accounts was made for the three months ended June 30, 2018 and 2017. The following customers had an accounts receivable balance greater than 10% of total accounts receivable June 30, 2018 and March 31, 2018. June 30, 2018 March 31, 2018 Customer A 55 % 56 % Customer B nil % 21 % Customer C nil % 12 % Customer D nil % 6 % (g) Inventories Manufacturing segment inventories consist of raw materials, work in progress and finished goods and are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period the impairment or loss occurs. No allowance for obsolete finished goods was made for the three months ended June 30, 2018 and 2017, respectively. During the three months ended June 30, 2018 and 2017, approximately 71% and 77% of total inventory purchases were from the Company’s five largest suppliers, respectively. Management believes that should the Company lose any one of its major suppliers, other suppliers are available that could provide similar products to the Company on comparable terms. (h) Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows: Production plant 5-10 years Motor vehicles 10-15 years Office equipment 5-10 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to the statement of income as incurred, whereas significant renewals and betterments are capitalized. (i) Goodwill Goodwill represents the excess of the purchase price over the net fair value of the identifiable tangible and intangible assets acquired and the fair value of liabilities assumed in acquisitions. ASC350-30-50 “Goodwill and Other Intangible Assets”, requires the testing of goodwill and indefinite-lived intangible assets for impairment at least annually. The Company tests goodwill for impairment in the fourth quarter of each years. Under applicable accounting guidance, the goodwill impairment analysis is a two-step test. The first step of the goodwill impairment test involves comparing the fair value of each reporting unit with its carrying amount including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired; however, if the carrying amount of the reporting unit exceeds its fair value, the second step must be performed to measure potential impairment. The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated possible impairment. If the implied fair value of goodwill exceeds the goodwill assigned to the reporting unit, there is no impairment. If the goodwill assigned to a reporting unit exceeds the implied fair value of goodwill, an impairment charge is recorded for the excess. The Company tested goodwill for impairment as of March 31, 2018 and it was determined that recoverable amount of one of the Company’s reporting units was lower than the carrying amount of the goodwill recorded. Therefore it was concluded that carrying amount of goodwill of $454,659 was impaired. (j) Accounting for the Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment of long-lived assets as of June 30, 2018 and March 31, 2018. (k) Revenue Recognition The Company recognizes manufacturing revenue from product sales, net of value added taxes, upon delivery at which time title passes to the customer provided that there are no uncertainties regarding customer acceptance, persuasive evidence of an arrangement exists, the sales price is fixed and determinable and collectability is deemed probable. Service revenue is recognized at the time at the point in time when delivery is completed, and the shipping terms of the contract have been satisfied. Cost of revenues for manufacturing segment includes the direct raw material cost, direct labor cost, manufacturing overheads including depreciation of production equipment and rent. Cost of for service segment includes gasoline and diesel fuel, toll charges and subcontracting fees. (l) Earnings Per Share The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued. The Company had no potentially dilutive ordinary shares as of June 30, 2018 and March 31, 2018. (m) Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company does not have any material unrecognized tax benefits. The Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory tax rate is 25%. The Company files income tax returns with the relevant government authorities in the PRC. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the three months ended June 30, 2018 and 2017. The Company’s effective tax rate differs from the PRC federal statutory rate primarily due to non-deductible expenses, temporary differences and preferential tax treatment. New U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to F21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. The Company measured the current and deferred taxes based on the provisions of the Tax legislation. After the Company’s measurement, no deferred tax benefit nor expense relating to the Tax Act changes for the three months ended June 30, 2018. (n) Related party balances and transactions A related party is generally defined as: (i) any person that holds the Company’s securities including such person’s immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. (o) Recently issued and adopted accounting pronouncements In February 2018, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on September 1, 2020. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” (“ASU 2014-09”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 supersedes most existing revenue recognition guidance in US GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date In January 2016, the FASB issued ASU 2016-01, “ Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, “Lease (Topic 842) In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash flows -—Classification of Certain Cash Receipts and Cash Payment” In January, 2017, the FASB issued 2017-01 “ Business Combinations In February 2017, the FASB issued ASU 2017-05 “ Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition | 4. BUSINESS ACQUISITION On December 10, 2016, the Company entered into an equity transfer agreement relating to the acquisition of 100% of the equity of Yingxi Industrial Chain Investment Co., Ltd (“Yingxi HK”) and subsidiaries. The acquisition was financed with proceeds from the Company’s borrowings from a third party. The acquisition was closed on December 15, 2016. The results of operations of Yingxi HK are included in the Company’s consolidated financial statements beginning on December 15, 2016. The following represents the purchase price allocation at the dates of the acquisition: Cash and cash equivalents $ 230,390 Other current assets 6,373,688 Plant and equipment 710,829 Goodwill 929,662 Current liabilities (5,174,094 ) Statutory reserves (21,539 ) Total purchase price $ 3,048,936 |
Accounts Receivables
Accounts Receivables | 3 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivables | 5. ACCOUNTS RECEIVABLES The receivables and allowance balances at June 30, 2018 and March 31, 2018 are as follows: June 30, 2018 March 31, 2018 (unaudited) (audited) Accounts receivable $ 3,264,347 $ 3,416,618 Less: allowance for doubtful accounts - - Accounts receivable, net $ 3,264,347 $ 3,416,618 No allowance for doubtful accounts was made for the three months ended June 30, 2018 and 2017. |
Other Receivables
Other Receivables | 3 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Other Receivables | 6. OTHER RECEIVABLES Other receivables primarily represent refundable security deposits to customers for quality assurance on the provision of logistic service; and unsecured and non-interest bearing short-term advances that the Company makes from time-to-time to employees and third-party entities. These advances are unsecured and due on demand. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. RELATED PARTY TRANSACTIONS Name of Related Parties Relationship with the Company Zhida Hong President, CEO, CFO and a director of the Company Zhongpeng Chen A legal representative of HPF Bihua Yang A legal representative of XKJ Dewu Huang A legal representative of DT Qiuying Chen A spouse of legal representative of DT Yingping Ding A legal representative of HSW Jinlong Huang A spouse of legal representative of HSW Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd Huizhu Ma is a legal representative and principal shareholder Shenzhen Bitun Textile Co., Ltd. Huizhu Ma is a legal representative and principal shareholder Shenzhen Yingxi Investment & Development Co., Ltd. Sister of Huizhu Ma is a legal representative Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd is a legal representative and principal shareholder Bitun Apparel (Shenzhen) Co., Ltd Huijun Ma is a legal representative Huizhu Ma A director and principal shareholder of the Company’s principal shareholder Xijuan Huang A spouse of legal representative of HPF The Company leases Shenzhen XKJ office rent-free from Bihua Yang. The Company had the following related party balances as of June 30, 2018 and March 31, 218 Amounts due from related parties June 30, 2018 March 31, 2018 (unaudited) (audited) Yinping Ding $ 27,732 $ - Bihua Yang 65,533 - Shenzhen Bitun Textile Co., Ltd. 5,508 39,883 Shenzhen Yingxi Investment & Development Co., Ltd. 154,112 162,543 $ 252,885 $ 202,426 Amounts due to related parties June 30, 2018 March 31, 2018 (unaudited) (audited) Zhida Hong $ 161,045 38,196 Zhongpeng Chen 831,963 739,317 Dewu Huang 215,297 248,031 Yinping Ding - 118,952 Jinlong Huang 363,572 338,115 Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd. 3,399,600 3,665,347 Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) 119,965 159,356 Huizhu Ma 11,477 12,104 $ 5,012,919 $ 5,319,418 The balances with related parties are unsecured, non-interest bearing and repayable on demand. |
Inventories
Inventories | 3 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 8. INVENTORIES Inventories consist of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Raw materials $ 111,533 $ 126,079 Work in progress 62,061 113,150 Total 173,594 239,229 Less: allowance for obsolete inventories - - Inventories, net $ 173,594 $ 239,229 |
Advances to Suppliers
Advances to Suppliers | 3 Months Ended |
Jun. 30, 2018 | |
Advances To Suppliers | |
Advances to Suppliers | 9. ADVANCES TO SUPPLIERS The Company has made advances to third-party suppliers in advance of receiving inventory parts. These advances are generally made to expedite the delivery of required inventory when needed and to help to ensure priority and preferential pricing on such inventory. The amounts advanced to suppliers are fully refundable on demand. |
Plant and Equipment
Plant and Equipment | 3 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Plant and Equipment | 10. PLANT AND EQUIPMENT Plant and equipment consists of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Production plant $ 147,461 $ 155,529 Motor vehicles 953,637 944,539 Office equipment 11,843 12,491 1,112,941 1,112,559 Less: accumulated depreciation (469,614 ) (464,019 ) Plant and equipment, net $ 643,327 $ 648,540 Depreciation expense for the three months ended June 30, 2018 and 2017 was $30,805 and $27,527, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. INCOME TAXES (a) Enterprise Income Tax (“EIT”) The Company operates in the PRC and files tax returns in the PRC jurisdictions. Yingxi Industrial Chain Group Co., Ltd was incorporated in the Republic of Seychelles and, under the current laws of the British Virgin Islands, is not subject to income taxes. Yingxi HK was incorporated in Hong Kong and is subject to Hong Kong income tax at a tax rate of 16.5%. No provision for income taxes in Hong Kong has been made as Yingxi HK had no taxable income for the three months ended June 30, 2018 and 2017. YX were incorporated in the PRC and is subject to the PRC federal statutory tax rate is 25%. No provision for income taxes in the PRC has been made as YX had no taxable income for the three months ended June 30, 2018 and 2017. The Company is governed by the Income Tax Laws of the PRC. Yingxi’s operating companies, QYTG, HSW, HPF and DT were subject to an EIT rate of 25% in 2018. XKJ enjoyed the preferential tax benefits and its EIT rate was 15% in 2018. The Company’s parent entity, Addentax Group Corp. is an U.S entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as Addentax Group Corp. had no United States taxable income for the three months ended June 30, 2018 and 2017. No deferred taxes were recognized for the three months ended June 30, 2018 and 2017. The reconciliation of income taxes computed at the PRC federal statutory tax rate applicable to the PRC, to income tax expenses are as follows: June 30, 2018 June 30, 2017 (unaudited) (unaudited) PRC statutory tax rate 25 % 25 % Computed expected benefits $ (40,074 ) $ (17,695 ) Temporary differences (1,949 ) (38,164 ) Tax losses not recognized 42,632 58,102 Income tax expense $ 609 $ 2,243 (b) Value Added Tax (“VAT”) In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 17%, which is levied on the invoiced value of sales and is payable by the purchaser. The Company is required to remit the VAT it collects to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales. For services, the applicable VAT rate is 11% under the relevant tax category for logistic company, except the branch of HPF enjoyed the preferential VAT rate of 3% in 2018. The Company is required to pay the full amount of VAT calculated at the applicable VAT rate of the invoiced value of sales as required. A credit is available whereby VAT paid on gasoline and toll charges can be used to offset the VAT due on service income. |
Consolidated Segment Data
Consolidated Segment Data | 3 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Consolidated Segment Data | 12. CONSOLIDATED SEGMENT DATA Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The segment data presented reflects this segment structure. The Company reports financial and operating information in the following two segments: (a) Manufacturing of garments (the “Manufacturing segment”); and (b) Providing logistic services (the “Service segment”). The Company also provides general corporate services to its segments and these costs are reported as “Corporate and others”. Selected information in the segment structure is presented in the following tables: Revenues by segment for the three months ended June 30, 2018 and 2017 are as follows: Revenues June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 1,142,490 $ 1,309,586 Service segment 1,589,303 2,329,823 $ 2,731,793 $ 3,639,409 Income from operations by segment for the three months ended June 30, 2018 and 2017 are as follows: Operating income (loss) June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 12,856 $ (33,296 ) Service segment (58,543 ) (32,510 ) Corporate and other (128,314 ) (49,171 ) Loss from operations $ (174,001 ) $ (114,977 ) Manufacturing segment 10,988 (1,595 ) Service segment 121 (21 ) Corporate and other 2,595 - Loss before income tax $ (160,297 ) $ (116,593 ) Income tax expense (609 ) (2,243 ) Net loss $ (160,906 ) $ (118,836 ) Depreciation and amortization by segment for the three months ended June 30, 2018 and 2017 are as follows: Depreciation June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 8,246 $ 7,694 Service segment 22,560 19,833 $ 30,805 $ 27,527 Total assets by segment at June 30, 2018 and March 31, 2018 are as follows: Total assets June 30, 2018 March 31, 2018 (unaudited) (audited) Manufacturing segment $ 3,736,989 $ 3,775,765 Service segment 3,518,081 3,391,945 Corporate and other 277,526 350,400 $ 7,532,596 $ 7,518,111 Goodwill by segment at June 30, 2018 and March 31, 2018 is as follows: Goodwill June 30, 2018 March 31, 2018 (unaudited) (audited) Manufacturing segment $ 475,003 $ 475,003 Service segment - - $ 475,003 $ 475,003 The recoverable amounts of reporting units are determined based on discounted cash flow calculations. The calculations use budget for the first year and cash flow projections based on financial forecasts prepared by management covering the remaining 4-year operating period. The key assumptions include revenue, cost of sales and operating expenses which were determined by management based on the past performance and its expectations on market development. Based on the impairment test of goodwill, the recoverable amount was lower than the carrying amount of the goodwill recorded and it was concluded that carrying amount of goodwill of $454,659 was impaired as of March 31, 2018. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 3 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Payables | 13. ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables consist of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Loan from third parties (i) $ 79,798 $ 56,739 Employee advances 1,027 1,073 Accrued wages and welfare 114,214 66,972 Other payables 71,970 61,071 $ 267,009 $ 185,855 (i) Loan from third parties represent unsecured and non-interest bearing short-term advances that the Company makes from time-to-time from third-party entities. These advances are unsecured and due on demand. |
Reserves
Reserves | 3 Months Ended |
Jun. 30, 2018 | |
Reserves | |
Reserves | 14. RESERVES (a) Statutory reserve In accordance with the relevant laws and regulations of the PRC, the subsidiary of the Company established in the PRC is required to transfer 10% of its profit after taxation prepared in accordance with the accounting regulations of the PRC to the statutory reserve until the reserve balance reaches 50% of the subsidiary’s paid-up capital. Such reserve may be used to offset accumulated losses or increase the registered capital of the subsidiary, subject to the approval from the PRC authorities, and are not available for dividend distribution to the shareholders. At June 30, 2018 and March 31, 2018, the paid-up statutory reserve was RMB148,418 or $21,539. (b) Currency translation reserve The currency translation reserve represents translation differences arising from translation of foreign currency financial statements into the Company’s functional currency. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. COMMITMENTS AND CONTINGENCIES Leases The Company leased offices in various cities in the PRC, under operating leases expiring on various dates through 2019. Rent expense for the three months ended June 30, 2018 and 2017 was approximately $28,010 and $19,009, respectively. Future minimum lease payments for leases with initial or remaining non-cancelable lease terms in excess of one year are as follows: 2019 $ 22,641 2020 2,516 25,157 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. SUBSEQUENT EVENTS In accordance with ASC 855, the Company evaluated all of its activity through the issue date of the financial statements and concluded that no other subsequent events have occurred that would require recognition or disclosure in the financial statements. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Economic and Political Risks | (a) Economic and Political Risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. |
Foreign Currency Translation | (b) Foreign Currency Translation The Company’s reporting currency is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company’s operating subsidiaries is the Chinese Renminbi (“RMB”). For the subsidiaries whose functional currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of equity. |
Use of Estimates | (c) Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates. |
Fair Value Measurement | (d) Fair Value Measurement Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). At June 30, 2018, the Company has no financial assets or liabilities subject to recurring fair value measurements. The Company’s financial instruments include cash, accounts receivable, advances to suppliers, other receivables, accounts payable, other payables, taxes payables and related party receivables or payables. Management estimates that the carrying amounts of financial instruments approximate their fair values due to their short-term nature. The fair value of amounts with related parties is not practicable to estimate due to the related party nature of the underlying transactions. |
Cash and Cash Equivalents | (e) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2018 and March 31, 2018. |
Accounts Receivable | (f) Accounts Receivable Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. No allowance for doubtful accounts was made for the three months ended June 30, 2018 and 2017. The following customers had an accounts receivable balance greater than 10% of total accounts receivable June 30, 2018 and March 31, 2018. June 30, 2018 March 31, 2018 Customer A 55 % 56 % Customer B nil % 21 % Customer C nil % 12 % Customer D nil % 6 % |
Inventories | (g) Inventories Manufacturing segment inventories consist of raw materials, work in progress and finished goods and are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period the impairment or loss occurs. No allowance for obsolete finished goods was made for the three months ended June 30, 2018 and 2017, respectively. During the three months ended June 30, 2018 and 2017, approximately 71% and 77% of total inventory purchases were from the Company’s five largest suppliers, respectively. Management believes that should the Company lose any one of its major suppliers, other suppliers are available that could provide similar products to the Company on comparable terms. |
Plant and Equipment | (h) Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows: Production plant 5-10 years Motor vehicles 10-15 years Office equipment 5-10 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to the statement of income as incurred, whereas significant renewals and betterments are capitalized. |
Goodwill | (i) Goodwill Goodwill represents the excess of the purchase price over the net fair value of the identifiable tangible and intangible assets acquired and the fair value of liabilities assumed in acquisitions. ASC350-30-50 “Goodwill and Other Intangible Assets”, requires the testing of goodwill and indefinite-lived intangible assets for impairment at least annually. The Company tests goodwill for impairment in the fourth quarter of each years. Under applicable accounting guidance, the goodwill impairment analysis is a two-step test. The first step of the goodwill impairment test involves comparing the fair value of each reporting unit with its carrying amount including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired; however, if the carrying amount of the reporting unit exceeds its fair value, the second step must be performed to measure potential impairment. The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated possible impairment. If the implied fair value of goodwill exceeds the goodwill assigned to the reporting unit, there is no impairment. If the goodwill assigned to a reporting unit exceeds the implied fair value of goodwill, an impairment charge is recorded for the excess. The Company tested goodwill for impairment as of March 31, 2018 and it was determined that recoverable amount of one of the Company’s reporting units was lower than the carrying amount of the goodwill recorded. Therefore it was concluded that carrying amount of goodwill of $454,659 was impaired. |
Accounting for the Impairment of Long-lived Assets | (j) Accounting for the Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There was no impairment of long-lived assets as of June 30, 2018 and March 31, 2018. |
Revenue Recognition | (k) Revenue Recognition The Company recognizes manufacturing revenue from product sales, net of value added taxes, upon delivery at which time title passes to the customer provided that there are no uncertainties regarding customer acceptance, persuasive evidence of an arrangement exists, the sales price is fixed and determinable and collectability is deemed probable. Service revenue is recognized at the time at the point in time when delivery is completed, and the shipping terms of the contract have been satisfied. Cost of revenues for manufacturing segment includes the direct raw material cost, direct labor cost, manufacturing overheads including depreciation of production equipment and rent. Cost of for service segment includes gasoline and diesel fuel, toll charges and subcontracting fees. |
Earnings Per Share | (l) Earnings Per Share The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued. The Company had no potentially dilutive ordinary shares as of June 30, 2018 and March 31, 2018. |
Income Taxes | (m) Income Taxes The Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company does not have any material unrecognized tax benefits. The Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory tax rate is 25%. The Company files income tax returns with the relevant government authorities in the PRC. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the three months ended June 30, 2018 and 2017. The Company’s effective tax rate differs from the PRC federal statutory rate primarily due to non-deductible expenses, temporary differences and preferential tax treatment. New U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to F21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. The Company measured the current and deferred taxes based on the provisions of the Tax legislation. After the Company’s measurement, no deferred tax benefit nor expense relating to the Tax Act changes for the three months ended June 30, 2018. |
Related Party Balances and Transactions | (n) Related party balances and transactions A related party is generally defined as: (i) any person that holds the Company’s securities including such person’s immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. |
Recently Issued and Adopted Accounting Pronouncements | (o) Recently issued and adopted accounting pronouncements In February 2018, the Financial Accounting Standards Board (“ FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on September 1, 2020. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” (“ASU 2014-09”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 supersedes most existing revenue recognition guidance in US GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date In January 2016, the FASB issued ASU 2016-01, “ Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, “Lease (Topic 842) In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash flows -—Classification of Certain Cash Receipts and Cash Payment” In January, 2017, the FASB issued 2017-01 “ Business Combinations In February 2017, the FASB issued ASU 2017-05 “ Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Concentration of Risk by Customers | The following customers had an accounts receivable balance greater than 10% of total accounts receivable June 30, 2018 and March 31, 2018. June 30, 2018 March 31, 2018 Customer A 55 % 56 % Customer B nil % 21 % Customer C nil % 12 % Customer D nil % 6 % |
Schedule of Plant and Equipment Useful Lives | Estimated useful lives of the plant and equipment are as follows: Production plant 5-10 years Motor vehicles 10-15 years Office equipment 5-10 years |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation for Acquisition | The following represents the purchase price allocation at the dates of the acquisition: Cash and cash equivalents $ 230,390 Other current assets 6,373,688 Plant and equipment 710,829 Goodwill 929,662 Current liabilities (5,174,094 ) Statutory reserves (21,539 ) Total purchase price $ 3,048,936 |
Accounts Receivables (Tables)
Accounts Receivables (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables and Allowance Balances | The receivables and allowance balances at June 30, 2018 and March 31, 2018 are as follows: June 30, 2018 March 31, 2018 (unaudited) (audited) Accounts receivable $ 3,264,347 $ 3,416,618 Less: allowance for doubtful accounts - - Accounts receivable, net $ 3,264,347 $ 3,416,618 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Parties | Name of Related Parties Relationship with the Company Zhida Hong President, CEO, CFO and a director of the Company Zhongpeng Chen A legal representative of HPF Bihua Yang A legal representative of XKJ Dewu Huang A legal representative of DT Qiuying Chen A spouse of legal representative of DT Yingping Ding A legal representative of HSW Jinlong Huang A spouse of legal representative of HSW Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd Huizhu Ma is a legal representative and principal shareholder Shenzhen Bitun Textile Co., Ltd. Huizhu Ma is a legal representative and principal shareholder Shenzhen Yingxi Investment & Development Co., Ltd. Sister of Huizhu Ma is a legal representative Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd is a legal representative and principal shareholder Bitun Apparel (Shenzhen) Co., Ltd Huijun Ma is a legal representative Huizhu Ma A director and principal shareholder of the Company’s principal shareholder Xijuan Huang A spouse of legal representative of HPF |
Schedule of Related Parties Transactions | The Company had the following related party balances as of June 30, 2018 and March 31, 218 Amounts due from related parties June 30, 2018 March 31, 2018 (unaudited) (audited) Yinping Ding $ 27,732 $ - Bihua Yang 65,533 - Shenzhen Bitun Textile Co., Ltd. 5,508 39,883 Shenzhen Yingxi Investment & Development Co., Ltd. 154,112 162,543 $ 252,885 $ 202,426 Amounts due to related parties June 30, 2018 March 31, 2018 (unaudited) (audited) Zhida Hong $ 161,045 38,196 Zhongpeng Chen 831,963 739,317 Dewu Huang 215,297 248,031 Yinping Ding - 118,952 Jinlong Huang 363,572 338,115 Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd. 3,399,600 3,665,347 Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) 119,965 159,356 Huizhu Ma 11,477 12,104 $ 5,012,919 $ 5,319,418 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Raw materials $ 111,533 $ 126,079 Work in progress 62,061 113,150 Total 173,594 239,229 Less: allowance for obsolete inventories - - Inventories, net $ 173,594 $ 239,229 |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment | Plant and equipment consists of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Production plant $ 147,461 $ 155,529 Motor vehicles 953,637 944,539 Office equipment 11,843 12,491 1,112,941 1,112,559 Less: accumulated depreciation (469,614 ) (464,019 ) Plant and equipment, net $ 643,327 $ 648,540 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Taxes | The reconciliation of income taxes computed at the PRC federal statutory tax rate applicable to the PRC, to income tax expenses are as follows: June 30, 2018 June 30, 2017 (unaudited) (unaudited) PRC statutory tax rate 25 % 25 % Computed expected benefits $ (40,074 ) $ (17,695 ) Temporary differences (1,949 ) (38,164 ) Tax losses not recognized 42,632 58,102 Income tax expense $ 609 $ 2,243 |
Consolidated Segment Data (Tabl
Consolidated Segment Data (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Revenues by segment for the three months ended June 30, 2018 and 2017 are as follows: Revenues June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 1,142,490 $ 1,309,586 Service segment 1,589,303 2,329,823 $ 2,731,793 $ 3,639,409 Income from operations by segment for the three months ended June 30, 2018 and 2017 are as follows: Operating income (loss) June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 12,856 $ (33,296 ) Service segment (58,543 ) (32,510 ) Corporate and other (128,314 ) (49,171 ) Loss from operations $ (174,001 ) $ (114,977 ) Manufacturing segment 10,988 (1,595 ) Service segment 121 (21 ) Corporate and other 2,595 - Loss before income tax $ (160,297 ) $ (116,593 ) Income tax expense (609 ) (2,243 ) Net loss $ (160,906 ) $ (118,836 ) Depreciation and amortization by segment for the three months ended June 30, 2018 and 2017 are as follows: Depreciation June 30, 2018 June 30, 2017 (unaudited) (unaudited) Manufacturing segment $ 8,246 $ 7,694 Service segment 22,560 19,833 $ 30,805 $ 27,527 Total assets by segment at June 30, 2018 and March 31, 2018 are as follows: Total assets June 30, 2018 March 31, 2018 (unaudited) (audited) Manufacturing segment $ 3,736,989 $ 3,775,765 Service segment 3,518,081 3,391,945 Corporate and other 277,526 350,400 $ 7,532,596 $ 7,518,111 Goodwill by segment at June 30, 2018 and March 31, 2018 is as follows: Goodwill June 30, 2018 March 31, 2018 (unaudited) (audited) Manufacturing segment $ 475,003 $ 475,003 Service segment - - $ 475,003 $ 475,003 |
Accrued Expenses and Other Pa31
Accrued Expenses and Other Payables (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Payables | Accrued expenses and other payables consist of the following as of June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 (unaudited) (audited) Loan from third parties (i) $ 79,798 $ 56,739 Employee advances 1,027 1,073 Accrued wages and welfare 114,214 66,972 Other payables 71,970 61,071 $ 267,009 $ 185,855 (i) Loan from third parties represent unsecured and non-interest bearing short-term advances that the Company makes from time-to-time from third-party entities. These advances are unsecured and due on demand. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | Future minimum lease payments for leases with initial or remaining non-cancelable lease terms in excess of one year are as follows: 2019 $ 22,641 2020 2,516 25,157 |
Organization and Business Acq33
Organization and Business Acquisitions (Details Narrative) - Yingxi Industrial Chain Group Co., Ltd [Member] | Dec. 28, 2016shares | Dec. 15, 2016USD ($) | Dec. 15, 2016CNY (¥) |
Number of shares acquired | 250,000,000 | ||
Number of shares issued | 500,000,000 | ||
Equity investment percentage | 100.00% | ||
Beneficially owned percentage | 99.00% | ||
Equity Transfer Agreement [Member] | |||
Equity investment percentage | 100.00% | 100.00% | |
Business combination total consideration | $ | $ 3,048,936 | ||
Equity Transfer Agreement [Member] | RMB [Member] | |||
Business combination total consideration | ¥ | ¥ 21,008,886 |
Basis of Presentation, Liquid34
Basis of Presentation, Liquidity (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (160,906) | $ (118,836) | |
Current liability | 1,190,935 | $ 1,104,934 | |
Total equity | $ 1,190,935 | $ 1,104,934 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | |
Cash equivalents | |||
Allowance for doubtful accounts | |||
Allowance for obsolete finished goods | |||
Impairment loss on goodwill | 454,659 | ||
Impairment of long-lived assets | |||
Potentially dilutive ordinary shares | |||
Penalties and interest accrued | |||
Deferred tax benefit | |||
U.S. Tax Reform [Member] | |||
Effective federal statutory tax rate | 21.00% | ||
Income tax examination, description | The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017 | ||
People's Republic of China [Member] | |||
Effective federal statutory tax rate | 25.00% | 25.00% | |
Five Largest Suppliers [Member] | |||
Percentage of inventory purchase | 71.00% | 77.00% |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Concentration of Risk by Customers (Details) - Accounts Receivable [Member] | 3 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Mar. 31, 2018 | |
Customer A [Member] | ||
Concentration risk percentage | 55.00% | 56.00% |
Customer B [Member] | ||
Concentration risk percentage | 0.00% | 21.00% |
Customer C [Member] | ||
Concentration risk percentage | 0.00% | 12.00% |
Customer D [Member] | ||
Concentration risk percentage | 0.00% | 6.00% |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Schedule of Concentration of Risk by Customers (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Mar. 31, 2018 | |
Accounts Receivable [Member] | Customers [Member] | ||
Concentration risk percentage | 10.00% | 10.00% |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Schedule of Plant and Equipment Useful Lives (Details) | 3 Months Ended |
Jun. 30, 2018 | |
Production Plant [Member] | Minimum [Member] | |
Plant and equipment, useful lives | 5 years |
Production Plant [Member] | Maximum [Member] | |
Plant and equipment, useful lives | 10 years |
Motor Vehicles [Member] | Minimum [Member] | |
Plant and equipment, useful lives | 10 years |
Motor Vehicles [Member] | Maximum [Member] | |
Plant and equipment, useful lives | 15 years |
Office Equipment [Member] | Minimum [Member] | |
Plant and equipment, useful lives | 5 years |
Office Equipment [Member] | Maximum [Member] | |
Plant and equipment, useful lives | 10 years |
Business Acquisition (Details N
Business Acquisition (Details Narrative) | Dec. 10, 2016 |
Equity Transfer Agreement [Member] | Yingxi Industrial Chain Investment Co., Ltd [Member] | |
Business acquisition interest percentage | 100.00% |
Business Acquisition - Schedule
Business Acquisition - Schedule of Purchase Price Allocation for Acquisition (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 15, 2016 |
Business Combinations [Abstract] | |||
Cash and cash equivalents | $ 230,390 | ||
Other current assets | 6,373,688 | ||
Plant and equipment | 710,829 | ||
Goodwill | $ 475,003 | $ 475,003 | 929,662 |
Current liabilities | (5,174,094) | ||
Statutory reserves | (21,539) | ||
Total purchase price | $ 3,048,936 |
Accounts Receivables (Details N
Accounts Receivables (Details Narrative) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 |
Receivables [Abstract] | |||
Allowance for doubtful accounts |
Accounts Receivables - Schedule
Accounts Receivables - Schedule of Accounts Receivables and Allowance Balances (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 |
Receivables [Abstract] | |||
Accounts receivable | $ 3,264,347 | $ 3,416,618 | |
Less: allowance for doubtful accounts | |||
Accounts receivable, net | $ 3,264,347 | $ 3,416,618 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties (Details) | 3 Months Ended |
Jun. 30, 2018 | |
Zhida Hong [Member] | |
Name of Related Parties | Zhida Hong |
Relationship with the Company | President, CEO, CFO and a director of the Company |
Zhongpeng Chen [Member] | |
Name of Related Parties | Zhongpeng Chen |
Relationship with the Company | A legal representative of HPF |
Bihua Yang [Member] | |
Name of Related Parties | Bihua Yang |
Relationship with the Company | A legal representative of XKJ |
Dewu Huang [Member] | |
Name of Related Parties | Dewu Huang |
Relationship with the Company | A legal representative of DT |
Qiuying Chen [Member] | |
Name of Related Parties | Qiuying Chen |
Relationship with the Company | A spouse of legal representative of DT |
Yinping Ding [Member] | |
Name of Related Parties | Yingping Ding |
Relationship with the Company | A legal representative of HSW |
Jinlong Huang [Member] | |
Name of Related Parties | Jinlong Huang |
Relationship with the Company | A spouse of legal representative of HSW |
Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd [Member] | |
Name of Related Parties | Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd |
Relationship with the Company | Huizhu Ma is a legal representative and principal shareholder |
Shenzhen Bitun Textile Co., Ltd. [Member] | |
Name of Related Parties | Shenzhen Bitun Textile Co., Ltd. |
Relationship with the Company | Huizhu Ma is a legal representative and principal shareholder |
Shenzhen Yingxi Investment & Development Co., Ltd. [Member] | |
Name of Related Parties | Shenzhen Yingxi Investment & Developmet Co., Ltd. |
Relationship with the Company | Sister of Huizhu Ma is a legal representative |
Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) [Member] | |
Name of Related Parties | Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) |
Relationship with the Company | Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd is a legal representative and principal shareholder |
Bitun Apparel (Shenzhen) Co., Ltd [Member] | |
Name of Related Parties | Bitun Apparel (Shenzhen) Co., Ltd |
Relationship with the Company | Huijun Ma is a legal representative |
Huizhu Ma [Member] | |
Name of Related Parties | Huizhu Ma |
Relationship with the Company | A director and principal shareholder of the Company's principal shareholder |
Xijuan Huang [Member] | |
Name of Related Parties | Xijuan Huang |
Relationship with the Company | A spouse of legal representative of HPF |
Related Party Transactions - 44
Related Party Transactions - Schedule of Related Parties Transactions (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Due from related parties | $ 252,885 | $ 202,426 |
Due to related parties | 5,102,919 | 5,319,418 |
Yinping Ding [Member] | ||
Due from related parties | 27,732 | |
Due to related parties | 118,952 | |
Bihua Yang [Member] | ||
Due from related parties | 65,533 | |
Shenzhen Bitun Textile Co., Ltd. [Member] | ||
Due from related parties | 5,508 | 39,883 |
Shenzhen Yingxi Investment & Development Co., Ltd. [Member] | ||
Due from related parties | 154,112 | 162,543 |
Zhida Hong [Member] | ||
Due to related parties | 161,045 | 38,196 |
Zhongpeng Chen [Member] | ||
Due to related parties | 831,963 | 739,317 |
Dewu Huang [Member] | ||
Due to related parties | 215,297 | 248,031 |
Jinlong Huang [Member] | ||
Due to related parties | 363,572 | 338,115 |
Shenzhen Qianhai Bitun Investment Fund Management Co., Ltd [Member] | ||
Due to related parties | 3,399,600 | 3,665,347 |
Shenzhen Bitun Yihao Fund Partnership (Limited Partnership) [Member] | ||
Due to related parties | 119,965 | 159,356 |
Huizhu Ma [Member] | ||
Due to related parties | $ 11,477 | $ 12,104 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 111,533 | $ 126,079 |
Work in progress | 62,061 | 113,150 |
Total | 173,594 | 239,229 |
Less: allowance for obsolete inventories | ||
Inventories, net | $ 173,594 | $ 239,229 |
Plant and Equipment (Details Na
Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 30,805 | $ 27,527 |
Plant and Equipment - Schedule
Plant and Equipment - Schedule of Plant and Equipment (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Plant and equipment, gross | $ 1,112,941 | $ 1,112,559 |
Less: accumulated depreciation | (469,614) | (464,019) |
Plant and equipment, net | 643,327 | 648,540 |
Production Plant [Member] | ||
Plant and equipment, gross | 147,461 | 155,529 |
Motor Vehicles [Member] | ||
Plant and equipment, gross | 953,637 | 944,539 |
Office Equipment [Member] | ||
Plant and equipment, gross | $ 11,843 | $ 12,491 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Percentage on enterprise income tax | 0.25 | |
Percentage of preferential tax benefits and EIT rate | 15.00% | |
Deferred taxes | ||
Percentage of preferential value added tax | 3.00% | |
Domestic Tax Authority [Member] | ||
Percentage of value added tax | 17.00% | |
Logistic Company [Member] | ||
Percentage of value added tax | 11.00% | |
Hong Kong [Member] | ||
Income tax rate | 16.50% | 16.50% |
People's Republic of China [Member] | ||
Federal statutory tax rate | 25.00% | 25.00% |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Taxes (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income tax expense | $ 609 | $ 2,243 |
People's Republic of China [Member] | ||
PRC statutory tax rate | 25.00% | 25.00% |
Computed expected benefits | $ (40,074) | $ (17,695) |
Temporary differences | (1,949) | (38,164) |
Tax losses not recognized | 42,632 | 58,102 |
Income tax expense | $ (609) | $ (2,243) |
Consolidated Segment Data (Deta
Consolidated Segment Data (Details Narrative) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2018Segment | Mar. 31, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segments | Segment | 2 | |
Impairment loss on goodwill | $ | $ 454,659 |
Consolidated Segment Data - Sch
Consolidated Segment Data - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 15, 2016 | |
Revenues | $ 2,731,793 | $ 3,639,409 | ||
Loss from operations | (174,001) | (114,977) | ||
(Loss) income before income tax | (160,297) | (116,593) | ||
Income tax expense | (609) | (2,243) | ||
Net (loss) income | (160,906) | (118,836) | ||
Depreciation | 30,805 | 27,527 | ||
Total assets | 7,532,596 | $ 7,518,111 | ||
Goodwill | 475,003 | 475,003 | $ 929,662 | |
Manufacturing Segment [Member] | ||||
Revenues | 1,142,490 | 1,309,586 | ||
Loss from operations | 12,856 | (33,296) | ||
(Loss) income before income tax | 10,988 | (1,595) | ||
Depreciation | 8,246 | 7,694 | ||
Total assets | 3,736,989 | 3,775,765 | ||
Goodwill | 475,003 | 475,003 | ||
Service Segment [Member] | ||||
Revenues | 1,589,303 | 2,329,823 | ||
Loss from operations | (58,543) | (32,510) | ||
(Loss) income before income tax | 121 | (21) | ||
Depreciation | 22,560 | 19,833 | ||
Total assets | 3,518,081 | 3,391,945 | ||
Goodwill | ||||
Corporate and Other [Member] | ||||
Loss from operations | (128,314) | (49,171) | ||
(Loss) income before income tax | 2,595 | |||
Total assets | $ 277,526 | $ 350,400 |
Accrued Expenses and Other Pa52
Accrued Expenses and Other Payables - Schedule of Accrued Expenses and Other Payables (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |||
Loan from third parties | [1] | $ 79,798 | $ 56,739 |
Employee advances | 1,027 | 1,073 | |
Accrued wages and welfare | 114,214 | 66,972 | |
Other payables | 71,970 | 61,071 | |
Accrued expenses and other payables | $ 267,009 | $ 185,855 | |
[1] | Loan from third parties represent unsecured and non-interest bearing short-term advances that the Company makes from time-to-time from third-party entities. These advances are unsecured and due on demand. |
Reserves (Details Narrative)
Reserves (Details Narrative) | 3 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | |
Description on statutory reserve | In accordance with the relevant laws and regulations of the PRC, the subsidiary of the Company established in the PRC is required to transfer 10% of its profit after taxation prepared in accordance with the accounting regulations of the PRC to the statutory reserve until the reserve balance reaches 50% of the subsidiaryâs paid-up capital. | |||
Paid-up statutory reserve | $ | $ 21,539 | $ 21,539 | ||
RMB [Member] | ||||
Paid-up statutory reserve | ¥ | ¥ 148,418 | ¥ 148,418 |
Commitments and Contingencies54
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating leases expiring, term | operating leases expiring on various dates through 2019 | |
Operating leases, rent expense | $ 28,010 | $ 19,009 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 22,641 |
2,020 | 2,516 |
Future minimum lease payments for leases | $ 25,157 |