What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-06-29 compared with 2020-06-29 · 577 added, 620 removed, 161 unchanged (88% of the section changed)

Financial Statements and Supplementary Data

the year ended March 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm

Consolidated Balance sheets as of March 31, 2020 and 2019

Consolidated Statements of Loss and Comprehensive Loss for the years ended March 31, 2020 and 2019

Consolidated Statements of Changes in Equity for the years ended March 31, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended March 31, 2020 and 2019

Notes to Consolidated Financial Statements for the years ended March 31, 2020 and 2019

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Balance sheets as of March 31, 2021 and 2020

Statements of Operations and Comprehensive Income (Loss) for the years ended March 31, 2021 and 2020

Statements of Changes in Equity for the years ended March 31, 2021 and 2020

Statements of Cash Flows for the years ended March 31, 2021 and 2020

to Consolidated Financial Statements for the years ended March 31, 2021 and 2020

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of Addentax Group Corp.:

on the Financial Statements

have audited the accompanying balance sheets of Addentax Group Corp.

together with its subsidiaries (“the Company”)

as of March 31, 2020 and 2019, and the related consolidated statements of loss and comprehensive loss, stockholders’

and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as of

March 31, 2020 and 2019, and the results of its operations and its cash flows for the year then ended, in conformity with accounting

principles generally accepted in the United States.

have audited the accompanying consolidated balance sheets of Addentax Group Corp.

(the “Company”) as of March 31, 2021 and

2020, and the related consolidated statements of operations and comprehensive income (loss), changes in equity, and cash flows for each

of the two years in the period ended March 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as of March

31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2021,

in conformity with accounting principles generally accepted in the United States.

concern uncertainty

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the financial statements, the Company incurred recurring losses from operations, has net current liabilities and

an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.

Management’s plans

in regard to these matters are also described in Note 2.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

As discussed in Note

2 to the financial statements, the Company incurred recurring losses from operations, has net current liabilities and an accumulated

deficit that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Company has significant transactions with related parties, which are described in Note 5 to the financial statements.

involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of

competitive, free market dealings may not exist.

Pan-China Singapore PAC

involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of competitive,

free market dealings may not exist.

B F Borgers CPA PC

have served as the Company’s auditor since 2020.

2 unchanged sentences

Dollars, except share data or otherwise stated)

OF MARCH 31, 2020 AND 2019

cash equivalents

CURRENT ASSETS

Cash and cash equivalents

Accounts receivables

Inventories, net

Other receivables

current assets

Plant and equipment,

lease right of use asset

Advances to suppliers

Amount due from related

Total current assets

NON-CURRENT ASSETS

Plant and equipment, net

Operating lease right

Total non-current assets

CURRENT LIABILITIES

Short-term loan

Accounts payable

Amount due to related

Related party borrowings

Advances from customers

expenses and other payables

liabilities, current portion

current liabilities

lease liability, net of current portion

non-current liabilities

AND CONTINGENCIES

Common stock ($0.001

par value, 25,346,004 shares issued and outstanding for the year ended March 31, 2020 and 2019 respectively)

Additional paid-in

Retained earnings

Accrued expenses and other payables

Lease liabilities, current

Total current liabilities

Lease liability, net

of current portion

Common stock ($0.001 par value, 50,000,000 shares authorized, 26,693,004

and 25,346,004 shares issued and outstanding as of March 31, 2021 and 2020 respectively)

Additional paid-in capital

Accumulated deficits

Statutory reserve

other comprehensive loss

Accumulated other comprehensive

income (loss)

Total deficit

LIABILITIES AND EQUITY

4 unchanged sentences

THE YEARS ENDED MARCH 31, 2021 AND 2020

and marketing

COST OF REVENUES

(25,921,936 )

GROSS (LOSS)/PROFIT

OPERATING EXPENSES

Selling and marketing

and administrative

1 unchanged sentence

FROM OPERATIONS

LOSS ON GOODWILL

(EXPENSES)/INCOME

BEFORE INCOME TAX EXPENSE

currency translation gain

Interest income

Interest expenses

income/(expenses)

LOSS BEFORE INCOME TAX EXPENSE

currency translation (loss)/gain

COMPREHENSIVE LOSS

9 unchanged sentences

comprehensive

BALANCE AT MARCH 31, 2018

BALANCE AT MARCH 31, 2019 (Restated)

$ (2,250,770 )

$ (2,177,550 )

Transfer to Statutory

Transfer to Statutory reserve

Foreign currency translation

loss for the year

Net loss for the year

BALANCE AT MARCH 31, 2020

1 unchanged sentence

$ (3,066,724 )

Transfer to Statutory

Issuance of common stocks for cash

Appropriation of Statutory reserve and

release of Statutory Reserve with disposition of subsidiaries

Foreign currency translation

loss for the year

Net loss for the year

BALANCE AT MARCH 31, 2020

$ (6,834,228 )

$ (3,066,724 )

accompany notes to the consolidated financial statements.

3 unchanged sentences

THE YEARS ENDED MARCH 31, 2021 AND 2020

FLOWS FROM OPERATING ACTIVITIES:

CASH FLOWS FROM OPERATING

$ (3,590,169 )

Adjustments to reconcile

net income to net cash used in operating activities:

on disposal of plant and equipment

loss on goodwill

Changes in operating

assets and liabilities:

due from related parties

expenses and other payables

Adjustments to reconcile net income to net

cash used in operating activities:

Loss on disposal of plant

and equipment

Changes in operating assets and liabilities:

Accounts receivable

Advances to suppliers

Other receivables

Accounts payables

Accrued expenses and other

from customers

Net cash (used in)

provided by operating activities

Net cash used in operating

$ (4,223,008 )

FLOWS FROM INVESTING ACTIVITIES:

of plant and equipment

$ (1,150,853 )

CASH FLOWS FROM INVESTING

Purchase of plant and equipment

Proceeds from sale of property and equipment

Proceeds from disposal of subsidiaries

Cash decreased in disposal

of subsidiaries

Net cash used in investing

FLOWS FROM FINANCING ACTIVITIES:

Proceeds from related

party borrowings

Repayment of related

party borrowings

Proceeds from bank

CASH FLOWS FROM FINANCING

Proceeds from related party borrowings

Repayment of related party borrowings

Proceeds from bank borrowings

Repayment of bank borrowings

of third party borrowings

Proceeds from issue

of common stocks

Net cash provided by

(used in) financing activities

INCREASE IN CASH AND CASH EQUIVALENTS

Effect of exchange

rate changes on cash and cash equivalents

and cash equivalents, beginning of year

financing activities

NET INCREASE IN CASH AND

CASH EQUIVALENTS

Effect of exchange rate changes on cash and

cash equivalents

Cash and cash equivalents,

beginning of year

AND CASH EQUIVALENTS, END OF YEAR

disclosure of cash flow information:

Cash paid during the

year for interest

Cash paid during the

year for income tax

disclosure of non-cash investing and financing activities:

assets obtained in exchange for operating lease obligations

Supplemental disclosure

of cash flow information:

Cash paid during the year for interest

Cash paid during the year for income tax

Supplemental disclosure

of non-cash investing and financing activities:

Right-of-use assets

obtained in exchange for operating lease obligations

accompany notes to the consolidated financial statements.

3 unchanged sentences

AND BUSINESS ACQUISITIONS

(“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.

December 28, 2016, ATXG acquired 250,000,000 shares of the issued and outstanding stock of Yingxi Industrial Chain Group Co.,

(“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 percent (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.

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.

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.

a holding company with no assets other than a 100% equity interest of the following subsidiaries:

Yingxi Textile & Garments Co., Ltd (“QYTG”), a wholly-owned subsidiary of Yingxi HK, was incorporated in the PRC

Qianhai Yingxi Industrial Chain Services Co., Ltd (“YX”), a wholly-owned subsidiary of QYTG, was incorporated in the

Kuai Jie Transport Co., Ltd (“XKJ”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2001.

engaged in the provision of logistic services.

Hua Peng Fa Logistics Co., Ltd (“HPF”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2006.

is engaged in the provision of logistic services.

Heng Sheng Wei Garments Co., Ltd (“HSW”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2009.

is a garment manufacturer.

Chenghai Dai Tou Garments Co., Ltd (“DT”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2009.

is a garment manufacturer.

Yingxi Daying Commercial Co., Ltd (“DY”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2019.

is a property management company for the garment manufacturing industry.

Yushang Clothing Co., Ltd (“YS”), a wholly-owned subsidiary of YX, was incorporated in the PRC in 2019.

YS is a garment

manufacturer.

Yi Bai Yi Garments Co., Ltd (“YBY”), a wholly-owned subsidiary of YX, was incorporated in PRC in 2019, YBY is a garment

manufacturer.

OF PRESENTATION, LIQUIDITY

and its subsidiaries (the “Company”) are engaged in the business of garments manufacturing, providing logistic services,

property leasing and management service in the People’s Republic of China (“PRC”

or “China”) and epidemic

prevention supplies manufacturing and distribution both in China and overseas markets.

OF PRESENTATION

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

of the U.S Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in

(“US GAAP”).

All material inter-company accounts and transactions have been eliminated in consolidation.

CONCERN UNCERTAINTY

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 .

Company incurred net loss of $1,455,620, $694,329 for the years ended March 31, 2020 and 2019, respectively.

As of March 31, 2020

and 2019, the Company had net current liability of $4,095,286 and $2,871,981, respectively, and a deficit on total equity of $3,066,724

and $1,702,547, respectively.

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 going concern assumption

contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Company incurred net loss of $3,590,169 and $980,617 for the year ended March 31, 2021 and 2020, respectively.

As of March 31, 2021 and

2020, the Company had net current liability of $4,430,933 and $4,095,286, respectively, and a deficit on total equity of $81,498 and

$3,066,724, respectively.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

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.

Company expects to finance operations primarily through cash flow from revenue and capital contributions from the CEO.

the year, the CEO has provided financial support for the operations of the Company.

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.

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.

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.

During the year,

the CEO has provided financial support for the operations of the Company.

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 its strategic objectives, the

CEO has indicated the intent and ability to provide additional equity financing.

OF SIGNIFICANT ACCOUNTING POLICIES

and Political Risks

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

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.

Currency Translation

Company’s reporting currency is the U.S.

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 adjustments

to other comprehensive loss, a component of equity.

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.

makes these estimates using the best information available at the time the estimates are made;

however actual results could differ

materially from those estimates.

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.

Value Measurement

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.

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.

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

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or

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;

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).

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:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

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;

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).

March 31, 2021, the Company has no financial assets or liabilities subject to recurring fair value measurements.

3 unchanged sentences

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.

The fair value of amounts with related parties is not practicable

to estimate due to the related party nature of the underlying transactions.

and Cash Equivalents

Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

All cash and cash equivalents relate to cash on hand and cash at bank at March 31, 2020 and 2019.

cash and cash equivalents relate to cash on hand and cash at bank at March 31, 2021 and 2020.

Renminbi is not freely convertible into foreign currencies.

Under the PRC Foreign Exchange Control Regulations and Administration

of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies

through banks that are authorized to conduct foreign exchange business.

Under the PRC Foreign Exchange Control Regulations and Administration of

Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies through

banks that are authorized to conduct foreign exchange business.

instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable.

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.

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.

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.

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

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.

receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts.

for doubtful accounts receivable is made when collection of the full amount is no longer probable.

Bad debts are written off as

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 years ended March 31, 2021 and 2020.

followings are the percentages of accounts receivable balance of the top five customers over total accounts receivable as at March

31, 2020 and 2019.

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.

for obsolete finished goods for both year ended March 31, 2020 and 2019.

the years ended March 31, 2020 and 2019, approximately 92.7% and 39% 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.

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 write-downs for obsolete finished goods for

both years ended March 31, 2021 and 2020.

and Equipment

1 unchanged sentence

Depreciation is provided over the assets’

estimated useful

lives, using the straight-line method.

estimated useful lives,

using the straight-line method.

Estimated useful lives of the plant and equipment are as follows:

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.

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.

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.

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

Company tested goodwill for impairment as of March 31, 2020 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 $475,003 was impaired (Nil for 2019).

for the Impairment of Long-Lived Assets

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

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

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 loss and comprehensive loss.

The cost of maintenance and repairs is charged to the statement of income as

incurred, whereas significant renewals and betterments are capitalized.

for the Impairment of Long-Lived Assets and Goodwill

previous, the Company early adopted ASU 2017-04.

Under the new accounting guidance, the Company should perform its annual, or interim,

goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

An entity should recognize an impairment

charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should

not exceed the total amount of goodwill allocated to that reporting unit.

Additionally, an entity should consider income tax effects

from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

In previous financial statements for the year ended March 31, 2020, the Company impaired goodwill of $475,003.

The Company reperformed

the test on goodwill for impairment for the time of reissuance of March 31, 2020 consolidated financial statements 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 as

of March 31, 2018.

The Company has restated the impairment of goodwill as if it was impaired during the year ended March 31, 2018.

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.

disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

was no impairment of long-lived assets as of March 31, 2021 and 2020.

is generated through sale of goods and delivery services.

Revenue is recognized when a customer obtains control of promised goods

or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for

those goods or services.

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue

and cash flows arising from contracts with customers.

The amount of revenue that is recorded reflects the consideration that the

Company expects to receive in exchange for those goods and services.

The Company applies the following five-step model in order

to determine this amount:

Revenue is recognized when a customer obtains control of promised goods or

services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising

from contracts with customers.

The amount of revenue that is recorded reflects the consideration that the Company expects to receive

in exchange for those goods and services.

The Company applies the following five-step model in order to determine this amount:

identification of the promised goods and services in the contract;

determination of whether the promised goods and services are performance obligations, including whether they are distinct in the

context of the contract;

determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context

of the contract;

measurement of the transaction price, including the constraint on variable consideration;

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recognition of revenue when (or as) the Company satisfies each performance obligation.

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is

entitled to in exchange for the goods or services it transfers to the customer.

Once a contract is determined to be within the

scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company

must deliver and which of these performance obligations are distinct.

The Company recognizes as revenues the amount of the transaction

price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.

Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service

revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under

the adopted rules

of revenues for manufacturing segment includes the direct raw material cost, direct labor cost, manufacturing overheads including

Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled

to in exchange for the goods or services it transfers to the customer.

Once a contract is determined to be within the scope of ASC 606

at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which

of these performance obligations are distinct.

The Company recognizes as revenues the amount of the transaction price that is allocated

to the respective performance obligation when the performance obligation is satisfied or as it is satisfied.

Generally, the Company’s

performance obligations are transferred to customers at a point in time, typically upon delivery of the good or service.

all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product and service revenue

contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules

as of March 31, 2021 and 2020.

of revenues for garment 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.

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

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 reporting 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.

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.

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 March 31, 2020 and 2019.

Cost of revenue for logistics services segment includes gasoline and diesel fuel, toll

charges and subcontracting fees.

Cost of revenue of property management and subleasing business was mainly the amortization of right-of-used

assets for the subleasing business.

Cost of revenue for epidemic prevention supplies business includes cost of merchandise and cost of

direct raw materials, direct labor, and manufacturing overheads of our own products.

Company reports earnings (loss) 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 reporting 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.

Company had no potentially dilutive ordinary shares as of March 31, 2021 and 2020 .

Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”.

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

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.

Company has a history of tax losses and there is no convincing evidence that sufficient taxable income will be available against

which the deferred tax asset can be utilised, therefore, the Company does not recognize any tax benefits for the year ended March

31, 2020 & 2019.

Company is governed by the Income Tax Laws of the PRC.

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.

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.

Company has a history of tax losses and there is no convincing evidence that sufficient taxable income will be available against which

the deferred tax asset can be utilized, therefore, the Company does not recognize any tax benefits for the year ended March 31, 2021

Company’s Chinese subsidiaries are 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.

Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income

The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was

any interest expense recognized during the years ended March 31, 2020 and 2019.

The Company’s effective tax rate differs

from the PRC federal statutory rate primarily due to non-deductible expenses, temporary differences and preferential tax treatments.

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.

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 years ended March 31, 2021 and 2020.

The Company’s effective tax rate differs from the PRC federal statutory

rate primarily due to non-deductible expenses, temporary differences and preferential tax treatments.

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.

Tax Reform”), was signed into

law on December 22, 2017.

Tax Reform modified the U.S.

Internal Revenue Code by, among other things, reducing the

statutory U.S.

Internal Revenue Code by, among other things, reducing the statutory

federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017;

and/or eliminating many business deductions;

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.

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 were recorded relating to the Tax Act changes for the year ended March 31, 2020 and 2019.

party balances and transactions

related party is generally defined as:

any person that holds the Company’s securities including such person’s immediate families,

the Company’s management,

someone that directly or indirectly controls, is controlled by or is under common control with the Company, or

anyone who can significantly influence the financial and operating decisions of the Company.

transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related

Company’s exposure to interest rate risk primarily relates to the interest expenses on our outstanding bank borrowings and

the interest income generated by cash invested in cash deposits and liquid investments.

As of March 31, 2020, the total outstanding

borrowings amounted to $353,114 (RMB 2,500,000) with various interest rate from4.84% to 6.96% p.a.

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.

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 was recorded relating

to the Tax Act changes for the years ended March 31, 2021 and 2020.

Company determines if an arrangement is a lease at inception.

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assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets.

Finance leases are included

in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.

assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make

lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on

the present value of lease payments over the lease term.

As most of the leases do not provide an implicit rate, The Company generally

use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of

the lease payments at commencement date.

The operating lease ROU asset also includes any lease payments made and excludes lease

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease

payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present

value of lease payments over the lease term.

As most of the leases do not provide an implicit rate, The Company generally use the incremental

borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

Lease expense for lease payments

is recognized on a straight-line basis over the lease term.

a lessor, the Company’s leases are classified as operating leases under ASC 842.

Leases, in which the Company is the lessor, are

substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately.

income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

Initial direct costs incurred

in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line

basis over the lease term.

issued and adopted accounting pronouncements

November 2016, the FASB issued ASU 2016-18:

Statement of Cash Flows (Topic 230):

Restricted Cash.

The amendments in this Update

require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts

generally described as restricted cash or restricted cash equivalents.

Therefore, amounts generally described as restricted cash

and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and

end-of-period total amounts shown on the statement of cash flows.

The amendments in this Update do not provide a definition of

restricted cash or restricted cash equivalents.

The amendments in this ASU on update are effective for public business entities

for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

Early adoption is permitted,

including adoption in an interim period.

The amendments in this Update should be applied using a retrospective transition method

each period presented.

The Company adopted this ASU on April 1, 2018 and determined it had no impact on its consolidated financial

statements as of March 31, 2020.

August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value

Measurement to ASC Topic 820, Fair Value Measurement (“ASC 820”) .

ASU 2018-13 modifies the disclosure requirements

for fair value measurements by removing, modifying, and/or adding certain disclosures.

ASU 2018-13 is effective for interim and

annual reporting periods in fiscal years beginning after December 15, 2019.

An entity is permitted to early adopt by modifying

existing disclosures and delay adoption of the additional disclosures until the effective date.

The Company is evaluating the

effect that adoption of this guidance will have on its consolidated financial statements and related disclosures.

February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

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 was effective for the Company on September 1,

The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results

of operations or cash flows.

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 December 15 2019.

The Company is currently evaluating

the impact the adoption of this ASU will have on its consolidated financial statements.

January 2016, the FASB issued ASU 2016-01, “

Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement

of Financial Assets and Financial Liabilities (“ASU 2016-01”)”.

The standard addresses certain aspects of

recognition, measurement, presentation, and disclosure of financial instruments.

ASU 2016-01 is effective for fiscal years, and

interim periods within those years, beginning after December 15, 2017.

The Company evaluated the impact of adopting the new standard

and concluded that there was no material impact to its consolidated financial statements.

February 2016, the FASB issued ASU 2016-02, “Lease (Topic 842) “

, which amends recognition of lease assets

and lease liabilities by lessees for those leases classified as operating leases.

Under the new guidance, lessees will be required

to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement

This standard takes effect for fiscal years, and interim periods within those fiscal years, beginning after December 15,

According to this new standard, the Company recorded both right-of-use asset and lease liability of $1.8 million on its

consolidated financial statements for the fiscal year ended March 31, 2020.

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

This standard will be effective for the Company on April 1, 2023.

The Company is currently evaluating the impact the adoption

of this ASU will have on its consolidated financial statements.

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.

receivables and allowance balances at March 31, 2020 and 2019 are as follows:

Accounts receivable

for doubtful accounts

Accounts receivable,

allowance for doubtful accounts was made for the years ended March 31, 2020 and 2019.

receivables primarily represent rental deposit;

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.

These advances are unsecured and due on demand.

Management has not identified any other new standards that it believes will have

a significant impact on the Company’s consolidated financial statements.

OF SUBSIDIARIES

Company sold its subsidiary DT, a manufacturing company in garment manufacturing segment on October 1, 2020 to a third party and

sold HPF, a subsidiary in logistics services segment in November 2020 to another third party.

After disposition, the two subsidiaries

became third parties to the Company.

The Company will not have any businesses with the two subsidiaries nor the buyers.

operations, customers and suppliers of DT and HPF were retained by the Company;

therefore, the disposition of the two subsidiaries did

not qualify as discontinued operations.

position of the entities at disposal date and gain or loss on disposal:

Manufacturing Segment

position of DT

30, 2020, date of disposal

Current assets

Noncurrent assets

Current liabilities

consideration was at the fair value as of date of disposal, which was also the carrying value of DT, resulting no gain or loss recognized

on the disposal.

Services Segment

position of HPF

16, 2020, date of disposal

Current assets

Noncurrent assets

Current liabilities

consideration was at the fair value as of date of disposal, which was also the carrying value of DT, resulting no gain or loss recognized

on the disposal.

PARTY TRANSACTIONS

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CEO, and a director of the Company

legal representative of HPF

Financial Consulting (Shenzhen) Co., Ltd.

company controlled by CEO, Mr.

legal representative of HPF, became not a related party when HPF was disposed of in November, 2020

legal representative of XKJ

legal representative of DT

legal representative of YBY

spouse of legal representative of HSW

Company leases Shenzhen XKJ office rent-free from Bihua Yang.

September, the Company disposed of $114,229 aged inventories in HSW to Mr.

Jinlong Huang at cost with no gain or loss recognized.

Company had the following related party balances at the end of the years:

Amounts due to

related parties

due from related party

Financial Consulting (Shenzhen) Co., Ltd.

lease of the quarter ended March 31, 2021 paid on behalf of Hongye Financial Consulting (Shenzhen) Co., Ltd.

for the shared office in

Zhida Hong (1)

Bihua Yang (2)

Dewu Huang (3)

Zhongpeng Chen

Jinlong Huang

balances with related parties are unsecured, non-interest bearing and repayable on demand.

decrease was due to net repayment of debt due to Zhida Hong.

During years ended March

31, 2021, the Company received financial support of $2.2 million from Zhida Hong and repaid

$3.6 million of debts due to him.

financial support from Bihua Yang for XKJ’s daily operation.

increase of related party debt was additional financial support provided by

Dewu Huang for YBY’s daily operation.

borrowing balances of related party are unsecured, non-interest bearing and repayable on demand.

consist of the following as of March 31, 2021 and 2020:

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Total inventories

is no inventory allowance for the year ended March 31, 2020 and 2019.

is no inventory write-downs for the years ended March 31, 2021 and 2020.

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.

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.

advanced to suppliers are fully refundable on demand.

Company reviews a supplier’s credit history and background information before advancing a payment.

If the financial condition

of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company

would recognize bad debt expense in the period they are considered unlikely to be collected.

If the financial condition of

its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would

recognize bad debt expense in the period they are considered unlikely to be collected.

AND OTHER RECEIVABLES

and other receivables consists of the following as of March 31, 2021 and 2020:

Receivable of consideration on disposal

of subsidiaries

Other receivables

AND EQUIPMENT

and equipment consists of the following as of March 31, 2021 and 2020:

Production plant

Motor vehicles

Office equipment

equipment, net

accumulated depreciation

and equipment, net

expense for the years ended March 31, 2021 and 2020 was $101,014 and $114,391, respectively.

September 2018, HSW, a subsidiary of the Company entered into a facility agreement with Dongguan Agricultural Commercial Bank

and obtained a line of credit, which allows the Company to borrow up to approximately $211,868 (RMB1,500,000) for daily operations.

September 2018, HSW, a subsidiary of the Company entered into a facility agreement with Dongguan Agricultural Commercial Bank and obtained

a line of credit, which allows the Company to borrow up to approximately $212,334 (RMB1,500,000) for daily operations with fixed interest

rate of 6.96% per annum.

The loans are guaranteed at no cost by legal representative of HSW.

As of March 31, 2020, the Company has borrowed $211,868 (RMB1,500,000)

under this line of credit with fixed interest rate of 6.96% per annum.

The line of credit is fully used.

The outstanding loan

balance will be due in September 2020.

August 2019, HSW entered into a new facility agreement with Agricultural Bank of China and obtained a line of credit, which allows

the Company to borrow up to approximately $141,246 (RMB1,000,000) for daily operations.

The loans are guaranteed at no cost by

the legal representative of HSW.

As of March 31, 2020, the Company has borrowed $141,246 (RMB1,000,000) under this line of credit

with various annual interest rates from 4.84% to 4.9%.

The line of credit is fully used.

The outstanding loan balance will be

due in July 2020.

As of March 31, 2020, the Company has borrowed

$211,868 (RMB1,500,000) under this line of credit.

In September 2020, the Company fully repaid the outstanding loan and this line of

credit was cancelled.

August 2019, HSW entered into a facility agreement with Agricultural Bank of China and obtained a line of credit, which allows the Company

to borrow up to approximately $147,264 (RMB1,000,000) for daily operations.

The loans are guaranteed at no cost by the legal representative

As of March 31, 2020, the Company has borrowed $152,607 (RMB1,000,000) under this line of credit with various annual interest

rates from 4.34% to 4.9%.

The outstanding loan balance will be due on July 31, 2021.

August 2020, DT entered into a new facility agreement with Webank and obtained a credit facility of $88,358 (RMB600,000) for daily operations

with various annual interest rate from 16.2% to 16.29%.

The loans are guaranteed at no cost by the legal representative of DT.

borrowing was $Nil as of March 31, 2021 as the loan was transferred to the buyer with the disposal of DT on September 30, 2020.

Income Tax (“EIT”)

Company operates in the PRC and files tax returns in the PRC jurisdictions.

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.

HK was incorporated in Hong Kong and is subject to Hong Kong income tax at a tax rate of 16.5%.

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.

HK was incorporated in Hong Kong and is subject to Hong Kong income tax at a progressive rate of 16.5%.

No provision for income taxes

1 unchanged sentence

were incorporated in the PRC and is subject to the EIT tax rate of 25%.

No provision for income taxes in the PRC has been made

as YX had no taxable income for the years ended March 31, 2020 and 2019.

No provision for income taxes in the PRC has been made as YX

had no taxable income for the years ended March 31, 2021 and 2020.

Company is governed by the Income Tax Laws of the PRC.

Yingxi’s operating companies, QYTG, HSW, HPF, DT and YS were subject

to an EIT rate of 25% in 2020 and 2019.

XKJ enjoyed the preferential tax benefits and its EIT rate was 15% in 2020 and 2019.

All Yingxi’s operating companies were subject to progressive EIT rates from

5% to 15% in 2021 and 2020.

The preferential tax rate will be expired at end of year 2022 and the EIT rate will be 25% from year 2023.

Company’s parent entity, Addentax Group Corp.

is an U.S entity and is subject to the United States federal income tax.

provision for income taxes in the United States has been made as Addentax Group Corp.

had no United States taxable income for

the years ended March 31, 2020 and 2019.

deferred taxes were recognized for the years ended March 31, 2020 and 2019.

reconciliation of income taxes computed at the PRC federal statutory tax rate applicable to the PRC, to income tax expenses are

PRC statutory tax rate

Computed expected benefits

Temporary differences not recognized

tax assets not recognized

Expense not deductible

for income tax

is a U.S entity and is subject to the United States federal income tax.

for income taxes in the United States has been made as Addentax Group Corp.

had no United States taxable income for the years ended March

31, 2021 and 2020.

reconciliation of income taxes computed at the PRC federal statutory tax rate applicable to the PRC, to income tax expenses are as follows:

statutory tax rate

expected benefits

in valuation allowance

income tax expense

of March 31, 2021, the accumulated tax losses in China amounting to $1.5 million (2020:

$0.8 million) will expire in five years.

March 31, 2021, the accumulated net operating loss carried forward in the US entity was $4.7 million (2020:

$1.2 million).

Added Tax (“VAT”)

2 unchanged sentences

The subsidiaries HSW, DT and YS enjoyed preferential VAT rate of 13%.

The Companies

are required to remit the VAT they collect to the tax authority.

A credit is available whereby VAT paid on purchases can be used

to offset the VAT due on sales.

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 2020 and 2019.

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.

The Companies are

required to remit the VAT they collect to the tax authority.

A credit is available whereby VAT paid on purchases can be used to offset

the VAT due on sales.

services, the applicable VAT rate is 9% under the relevant tax category for logistic company, except the branch of HPF enjoyed the preferential

VAT rate of 3% in 2021 and 2020.

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.

information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses

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The segment data presented reflects this segment structure.

The Company reports financial and operating

information in the following two segments:

The Company reports financial and operating information

in the following four segments:

manufacturing .

of garments (the “Manufacturing segment”);

logistic services (the “Service segment”).

Company also provides general corporate services to its segments and these costs are reported as “Corporate and others”.

Including manufacturing and distribution of garments;

Providing logistic services;

prevention supplies .

Including manufacturing, distribution and trading of epidemic prevention supplies;

management and subleasing.

Providing shops subleasing and property management services for garment wholesalers and retailers

in garment market.

Company also provides general corporate services to its segments and these costs are reported as “Corporate and other”.

information in the segment structure is presented in the following tables:

by segment for the years ended March 31, 2020 and 2019 are as follows:

Manufacturing segment

Service segment

from operations by segment for the years ended March 31, 2020 and 2019 are as follows:

income (loss)

Manufacturing segment

Service segment

Loss from operations

Manufacturing segment

Service segment

Loss before income

$ (1,439,550 )

$ (1,455,620 )

and amortization by segment for the years ended March 31, 2020 and 2019 are as follows:

Manufacturing segment

Service segment

assets by segment at March 31, 2020 and 2019 are as follows:

Manufacturing segment

Service segment

by segment at March 31, 2020 and 2019 is as follows:

Manufacturing segment

recoverable amounts of reporting units are determined based on discounted cash flow calculations.

The calculations use forecast

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 the implementation of the Company’s strategy.

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 the carrying amount

of goodwill of $475,003 as of March 31, 2020 was fully impaired.

management and leasing

prevention supplies

Revenue from external customers

Intersegment revenue

Interest income

Interest expense

Depreciation and amortization

Operating income (loss)

Segment assets

Expenditures for segment assets

Company operates predominantly in China.

In presenting information on the basis of geographical location, revenue is based on the geographical

location of customers and long-lived assets are based on the geographical location of the assets.

United States

EXPENSES AND OTHER PAYABLES

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Accrued wages and welfare

Accrued expenses

Other tax payable

Rental payable

Customers’

Other payables

RIGHT-OF-USE ASSET AND LEASE LIABILITIES

Company implemented new accounting policy according to the ASC 842, Leases, on April 1, 2019 on a modified retrospective basis

and did not restate comparative periods.

Under the new policy, the Company recognized approximately $0.06 million lease liability

as well as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date.

Lease liabilities

are measured at present value of the sum of remaining rental payments as of March 31, 2020, with discounted rate of 4.35%.

lease cost is recognized over the lease term on a generally straight-line basis.

All cash payments of operating lease cost are

classified within operating activities in the statement of cash flows.

of March 31, 2020 and March 31, 2019, the right-of use asset and lease liabilities are as follows:

asset –

operating leases

Lease liabilities –

Lease liabilities

non-current portion

Operating lease cost

Cash paid for amounts included in the

measurement of lease liabilities

cash flow from operating leases

Right-of-use assets obtained in exchange

for new operating leases liabilities

Weighted average remaining lease term

- Operating leases (years)

Company implemented new accounting policy according to the ASC 842, Leases, on April 1, 2019 on a modified retrospective basis and did

not restate comparative periods.

Under the new policy, the Company recognized approximately $0.06 million lease liability as well as

right-of-use asset for all leases (with the exception of short-term leases) at the commencement date.

Lease liabilities are measured

at present value of the sum of remaining rental payments as of March 31, 2021, with discounted rate of 4.35%.

A single lease cost is

recognized over the lease term on a generally straight-line basis.

All cash payments of operating lease cost are classified within operating

activities in the statement of cash flows.

Company leases its head office.

The lease period is 5 years with an option to extend the lease.

The Company leases its plant and dormitory

for 4.5 years with an option to extend the lease.

Company leased three floors of a commercial building for 3 years with an option to extend the lease in Humen Town of Dongguan City from

the landlord and provides shops subleasing and property management services for garment wholesalers and retailers in the leased property.

Following table summarizes the components of lease expense:

following table summarizes supplemental information related to leases:

Cash paid for amounts included in the measurement

of lease liabilities

Operating cash flow used in operating

Right-of-use assets obtained in exchange for

new operating leases liabilities

Weighted average remaining lease term - Operating

leases (years)

Weighted average discount rate - Operating

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.

The paid-up statutory reserve was $23,514 and $21,779 as of March 31, 2020 and

following table summarizes the maturity of operating lease liabilities:

Total lease payments

SHARE CAPITAL AND RESERVES

August 2020, the Company offered 747,000 common stocks to an individual investor.

The subscription price was $5.00 per share.

were all received in August 2020.

December 31, 2020, the Company offered 600,000 common stocks to an individual investor.

The subscription price was $5.00 per share.

proceeds received will be used for working capital and other general corporate purposes.

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.

The amount appropriated to statutory reserve for the years ended March 31, 2021 and 2020 were $10,937 and $1,735,

respectively.

translation reserve

currency translation reserve represents translation differences arising from translation of foreign currency financial statements

into the Company’s functional currency.

REVERSE STOCK SPLIT

January 24, 2019, the Board of Directors of the Company approved a reverse stock split of the Company’s issued and outstanding

shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-20 (the “Reverse

Stock Split”).

The Reverse Stock Split was effective on February 27, 2019 (the “Effective Date”).

of the filing of the Certificate, the number of shares of the Company’s authorized Common Stock was reduced from 1,000,000,000

shares to 50,000,000 shares and the issued and outstanding number of shares of the Company’s Common Stock was correspondingly

decreased to 25,346,004.

There was no change to the par value of the Company’s Common Stock.

The decrease of Share Capital

was transferred to and increased the Additional Paid In Capital.

The Company has adjusted all references to number of share and

loss per share amounts in the accompanying consolidated financial statements and notes to reflect the reverse stock split.

Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level

of uncertainty to global economic prospects and this has impacted the Company’s operations and its financial performance

in the last two months of the financial year and subsequent to the financial year end.

the situation continues to evolve with significant level of uncertainty, the Company is unable to reasonably estimate the full

financial impact of the COVID-19 outbreak.

The Company is monitoring the situation closely and to mitigate the financial impact,

it is conscientiously managing its cost by adopting an operating cost reduction strategy and conserving liquidity by working with

major creditors to align repayment obligations with receivable collections.

In November 2020, consolidated statutory reserve of $20,630 was transferred to additional paid in capital because there

was no liability for the company to provide such reserve due to disposal of a subsidiary.

The balance of paid-up statutory reserve was

$13,821 and $23,514 as of March 31, 2021 and 2020, respectively.

AND UNCERTAINTIES

and Political Risks

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.

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.

Currency Translation

Company’s reporting currency is the U.S.

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, which are 6.55 and 7.08

as at March 31, 2021 and March 31, 2020, respectively.

Revenue and expenses are translated at the average yearly exchange rates, which

are 6.78 and 6.94 for the two years ended March 31, 2021 and 2020, respectively.

The equity is translated at historical exchange rates.

Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to

other comprehensive loss, a component of equity.

Concentration

followings are the percentages of accounts receivable balance of the top five customers over accounts receivable for each segment as

at March 31, 2021 and 2020.

manufacturing segment

high concentration as at March 31, 2021 was mainly due to business development of a large distributor of garments.

Management believes

that should the Company lose any one of its major customers, it was able to sell similar products to other customers.

services segment

management and subleasing

accounts receivable of Property management and subleasing segment as at March 31, 2021 was from one customer only.

prevention supplies segment

accounts receivables in this segment.

the year ended March 31, 2021, two customers, one from garment segment and the other from Epidemic prevention supplies segment, provided

more than 10% of total consolidated revenue of the Company, represented 57.4% of total revenue of the Company.

high concentration in year ended March 31, 2021 was mainly due to concentration of distributors in garment manufacturing business and

epidemic prevention supplies business.

Management believes that should the Company lose any one of its major customers, it was able to

sell similar products to other customers.

following tables summarized the percentages of purchases from five largest suppliers of each of the reportable segment purchase for the

years ended March 31, 2021 and 2020.

Garment manufacturing segment

Logistics services segment

Property management and subleasing

Epidemic prevention supplies

believes that should the Company lose any one of its major suppliers, other suppliers are available that could provide similar products

to the Company.

Company’s exposure to interest rate risk primarily relates to the interest expenses on our outstanding bank borrowings and the

interest income generated by cash invested in cash deposits and liquid investments.

As of March 31, 2021, the total outstanding borrowings

amounted to $152,607 (RMB 1,000,000) with various interest rate from4.84% to 6.96% p.a.

Coronavirus Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty

to global economic prospects and this has impacted the Company’s operations and its financial performance of the financial year

and subsequent to the financial year end.

the situation continues to evolve with significant level of uncertainty, the Company is unable to reasonably estimate the full financial

impact of the COVID-19 outbreak.

The Company is monitoring the situation closely and to mitigate the financial impact, it is conscientiously

managing its cost by adopting an operating cost reduction strategy and conserving liquidity by working with major creditors to align

repayment obligations with receivable collections.

is no other subsequent events have occurred that would require recognition or disclosure in the financial statements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data