What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-06-23 compared with 2021-06-29 · 268 added, 218 removed, 520 unchanged (48% of the section changed)

1 unchanged sentence

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 (PCAOB ID:

Consolidated Balance sheets as of March 31, 2022 and 2021

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended March 31, 2022 and 2021

Consolidated Statements of Changes in Equity for the years ended March 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended March 31, 2022 and 2021

Notes to Consolidated Financial Statements for the years ended March 31, 2022 and 2021

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

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

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

(the “Company”) as of March 31, 2022 and

2021, 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”).

of the two years in the period ended March 31, 2022, 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

1 unchanged sentence

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.

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 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.

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

5 unchanged sentences

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.

8 unchanged sentences

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.

Transactions 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.

AND SUBSIDIARIES

1 unchanged sentence

Dollars, except share data or otherwise stated)

March 31, 2022

March 31, 2021

CURRENT ASSETS

3 unchanged sentences

Advances to suppliers

Amount due from related

Amount due from related party

Total current assets

1 unchanged sentence

Plant and equipment, net

Operating lease right

Operating lease right of use asset

Long-term prepayment

Total non-current assets

LIABILITIES AND EQUITY

CURRENT LIABILITIES

4 unchanged sentences

Accrued expenses and other payables

Lease liabilities, current

Lease liabilities, current portion

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)

NON-CURRENT LIABILITIES

Lease liability, net of current portion

TOTAL LIABILITIES

Common stock ($ 0.001 par value, 50,000,000 shares authorized, 26,693,004 shares issued and outstanding as of March 31, 2022 and 2021)

Additional paid-in capital

Accumulated deficits

( 6,756,230 )

( 6,834,228 )

Statutory reserve

Accumulated other comprehensive

income (loss)

Accumulated other comprehensive income (loss)

Total deficit

LIABILITIES AND EQUITY

TOTAL LIABILITIES AND EQUITY

accompany notes to the consolidated financial statements.

5 unchanged sentences

( 10,627,379 )

GROSS (LOSS)/PROFIT

( 25,921,936 )

GROSS PROFIT/(LOSS)

$ ( 1,187,177 )

OPERATING EXPENSES

Selling and marketing

and administrative

operating expenses

FROM OPERATIONS

General and administrative

( 1,914,008 )

( 2,007,343 )

Total operating expenses

$ ( 2,120,259 )

$ ( 2,420,997 )

LOSS FROM OPERATIONS

( 3,608,174 )

Interest income

Interest expenses

income/(expenses)

LOSS BEFORE INCOME TAX EXPENSE

currency translation (loss)/gain

COMPREHENSIVE LOSS

Other income/(expenses)

INCOME/(LOSS) BEFORE INCOME TAX EXPENSE

$ ( 3,564,302 )

LOSS PER SHARE

average number of shares outstanding –

Income tax expense

NET INCOME/(LOSS)

( 3,590,169 )

Foreign currency translation loss

TOTAL COMPREHENSIVE INCOME/(LOSS)

$ ( 3,749,774 )

EARNING/(LOSS) PER SHARE

Basic and diluted

Weighted average number of shares outstanding – Basic and diluted

accompany notes to the consolidated financial statements.

3 unchanged sentences

THE YEARS ENDED MARCH 31, 2022 AND 2021

comprehensive

BALANCE AT MARCH 31, 2019 (Restated)

Retained earnings

Accumulated other

Statutory reserve

comprehensive loss

Equity (Deficit)

BALANCE AT MARCH 31, 2020

$ ( 3,233,122 )

$ ( 3,066,724 )

Transfer to Statutory reserve

Issuance of common stocks for cash

Appropriation of Statutory reserve and release of Statutory Reserve with disposition of subsidiaries

Foreign currency translation

Net loss for the year

( 3,590,169 )

BALANCE AT MARCH 31, 2021

1 unchanged sentence

$ ( 103,117 )

Issuance of common stocks for cash

Appropriation of Statutory reserve and

release of Statutory Reserve with disposition of subsidiaries

Foreign currency translation

2 unchanged sentences

$ ( 6,756,230 )

$ ( 170,894 )

accompany notes to the consolidated financial statements.

3 unchanged sentences

THE YEARS ENDED MARCH 31, 2022 AND 2021

CASH FLOWS FROM OPERATING

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 3,590,169 )

Adjustments to reconcile net income to net

cash used in operating activities:

Loss on disposal of plant

and equipment

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

Loss on disposal of plant and equipment

Changes in operating assets and liabilities:

3 unchanged sentences

Accounts payables

Accrued expenses and other

from customers

Net cash used in operating

( 1,786,890 )

Accrued expenses and other payables

Advances from customers

Net cash provided by (used in) operating activities

$ ( 4,223,008 )

CASH FLOWS FROM INVESTING

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of plant and equipment

1 unchanged sentence

Proceeds from disposal of subsidiaries

Cash decreased in disposal

of subsidiaries

Net cash used in investing

CASH FLOWS FROM FINANCING

Cash decreased in disposal of subsidiaries

Net cash used in investing activities

$ ( 198,122 )

$ ( 563,052 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from related party borrowings

Repayment of related party borrowings

( 5,878,286 )

( 9,702,083 )

Proceeds from bank borrowings

Repayment of bank borrowings

Proceeds from issue

of common stocks

Net cash provided by

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

Supplemental disclosure

of cash flow information:

Proceeds from issue of common stocks

Net cash used in financing activities

$ ( 1,372,803 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents, beginning of year

CASH AND CASH EQUIVALENTS, END OF YEAR

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

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.

2 unchanged sentences

THE YEARS ENDED MARCH 31, 2022 AND 2021

AND BUSINESS ACQUISITIONS

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

ORGANIZATION AND BUSINESS ACQUISITIONS

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

BASIS 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 in

(“US GAAP”).

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

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

3 unchanged sentences

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 incurred net income of $ 77,998 and a net loss of $ 3,590,169 for the year ended March 31, 2022 and 2021, respectively.

31, 2022 and 2021, the Company had net current liability of $ 4,703,213 and $ 4,430,933 , respectively, and a deficit on total equity of

$ 71,367 and $ 81,498 , respectively.

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

2 unchanged sentences

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

growth and development of our business will require a significant amount of additional working capital.

We currently have limited financial

resources and based on our current operating plan, we will need to raise additional capital in order to continue as a going concern.

We currently do not have adequate cash to meet our short or long-term objectives.

In the event additional capital is raised, it may have

a dilutive effect on our existing stockholders.

are subject to all the substantial risks inherent in the development of a new business enterprise within an extremely competitive industry.

Due to the absence of a long standing operating history and the emerging nature of the markets in which we compete, we anticipate operating

losses until we can successfully implement our business strategy, which includes all associated revenue streams.

Our revenue model is

new and evolving, and we cannot be certain that it will be successful.

The potential profitability of this business model is unproven.

We may never ever achieve profitable operations.

Our future operating results depend on many factors, including demand for our services,

the level of competition, and the ability of our officers to manage our business and growth.

As a result of the emerging nature of the

market in which we compete, we may incur operating losses until such time as we can develop a substantial and stable revenue base.

development expenses may delay or negatively impact the ability of the Company to generate profits.

Accordingly, we cannot assure you

that our business model will be successful or that we can sustain revenue growth, achieve or sustain profitability, or continue as a

going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Use of Estimates

preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions

4 unchanged sentences

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

(b) Fair 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.

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March 31, 2022, the Company has no financial assets or liabilities subject to recurring fair value measurements.

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.

3 unchanged sentences

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.

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banks that are authorized to conduct foreign exchange business.

(d) Accounts Receivable

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

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.

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

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

5 unchanged sentences

No allowance for doubtful accounts was made for the years ended March 31, 2022 and 2021.

(e) Inventories

Manufacturing

7 unchanged sentences

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

Write-downs for obsolete finished goods for

the year ended March 31, 2022 was approximately $ 0.02 million.

No write-downs for obsolete finished goods for the year ended March 31,

(f) Plant and Equipment

and equipment are carried at cost less accumulated depreciation.

Depreciation is provided over the assets’

estimated useful lives,

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:

SCHEDULE OF PLANT AND EQUIPMENT USEFUL LIVES

cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is

2 unchanged sentences

incurred, whereas significant renewals and betterments are capitalized.

for the Impairment of Long-Lived Assets and Goodwill

(g) Accounting for the Impairment of Long-Lived Assets and Goodwill

previous, the Company early adopted ASU 2017-04.

2 unchanged sentences

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

5 unchanged sentences

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.

10 unchanged sentences

was no impairment of long-lived assets as of March 31, 2022 and 2021.

(h) Revenue Recognition

is generated through sale of goods and delivery services.

19 unchanged sentences

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.

10 unchanged sentences

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

(i) Earnings Per Share

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.

8 unchanged sentences

Company had no potentially dilutive ordinary shares as of March 31, 2022 and 2021.

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

(j) Income Taxes

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

Under this method,

7 unchanged sentences

the deferred tax asset can be utilized, therefore, the Company does not recognize any tax benefits for the year ended March 31, 2022

Company’s Chinese subsidiaries are governed by the Income Tax Laws of the PRC.

The PRC federal statutory tax rate is 25 %.

2 unchanged sentences

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, 2022 and 2021.

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

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.

14 unchanged sentences

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, 2022 and 2021.

Company determines if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”)

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

8 unchanged sentences

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

4 unchanged sentences

basis over the lease term.

issued and adopted accounting pronouncements

(l) Recently issued and adopted accounting pronouncements

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326), Measurement of Credit Losses on

2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on

Financial Instruments.

8 unchanged sentences

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.

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

DISPOSITION 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.

The business 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

SUMMARY OF FINANCIAL POSITION OF ENTITIES AND GAIN OR LOSS ON DISPOSAL

Financial position of DT

September 30, 2020,

date of disposal

5 unchanged sentences

Services Segment

position of HPF

Financial position of HPF

November 16, 2020,

date of disposal

4 unchanged sentences

on the disposal.

PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

OF RELATED PARTIES RELATIONSHIP WITH THE COMPANY

of Related Parties

6 unchanged sentences

legal representative of YBY

spouse of legal representative of HSW

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

2 unchanged sentences

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

due from related party

Financial Consulting (Shenzhen) Co., Ltd.

OF RELATED PARTIES

Amount due from related party

Hongye Financial Consulting (Shenzhen) Co., Ltd.

lease of the quarter ended March 31, 2022 paid on behalf of Hongye Financial Consulting (Shenzhen) Co., Ltd.

for the shared office in

OF RELATED PARTIES TRANSACTIONS

Related party debt

Zhida Hong (1)

1 unchanged sentence

Dewu Huang (3)

Zhongpeng Chen

Jinlong Huang

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.

During year ended March 31, 2022, the Company received financial support

of approximately $ 0.5 million from Zhida Hong and repaid approximately $ 0.9 million of debts due to him.

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

decrease of related party debt was mainly due to the repayment of the debt.

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

consist of the following as of March 31, 2022 and 2021:

OF INVENTORIES

Raw materials

2 unchanged sentences

Total inventories

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

ADVANCES TO SUPPLIERS

Company has made advances to third-party suppliers in advance of receiving inventory parts.

2 unchanged sentences

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

1 unchanged sentence

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

AND OTHER RECEIVABLES

PREPAYMENTS AND OTHER RECEIVABLES

and other receivables consists of the following as of March 31, 2022 and 2021:

Receivable of consideration on disposal

of subsidiaries

OF PREPAYMENTS AND OTHER RECEIVABLES

Receivable of consideration on disposal of subsidiaries

Other receivables

AND EQUIPMENT

PLANT AND EQUIPMENT

and equipment consists of the following as of March 31, 2022 and 2021:

OF PROPERTY PLANT AND EQUIPMENT

Production plant

Motor vehicles

Office equipment

accumulated depreciation

and equipment, net

Plant and equipment, net

expense for the years ended March 31, 2022 and 2021 was $ 132,152 and $ 101,014 , 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 $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.

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

credit was cancelled.

SHORT-TERM BANK LOAN

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

1 unchanged sentence

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”)

As of March 31, 2022, the Company has borrowed $ 151,090 (RMB 958,079 ) (March 31, 2021:

$ 152,607 , or RMB 1,000,000 ) under this line

of credit with various annual interest rates from 4.34 % to 4.9 %.

The outstanding loan balance was due on September 30, 2021.

was not able to renew the loan facility with the bank.

The Company is negotiating with the bank on repayment schedule of the loan balance

and interest payable.

Income Tax (“EIT”)

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

8 unchanged sentences

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

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

5 % to 15 % in 2022 and 2021.

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

3 unchanged sentences

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 EFFECTIVE INCOME TAX RATE RECONCILIATION

PRC statutory tax rate

Computed expected benefits

$ ( 891,076 )

Temporary differences

Permanent difference

Changes in valuation allowance

Reported income tax expense

of March 31, 2022, the accumulated tax losses in China amounting to $ 1.9 million (2021:

2 unchanged sentences

$ 4.7 million).

Added Tax (“VAT”)

accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 13 %, which is levied on the invoiced

6 unchanged sentences

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.

VAT rate of 3 % in 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

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

11 unchanged sentences

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:

management and leasing

prevention supplies

OF SEGMENT REPORTING

Logistics Services

Property management and leasing

Epidemic prevention supplies

Corporate and other

Revenue from external customers

9 unchanged sentences

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

OF GEOGRAPHICAL INFORMATION

Long-Lived Assets

United States

EXPENSES AND OTHER PAYABLES

ACCRUED EXPENSES AND OTHER PAYABLES

expenses and other payables consist of the following as of March 31, 2022 and 2021:

OF ACCRUED EXPENSES AND OTHER PAYABLES

Accrued wages and welfare

2 unchanged sentences

Rental payable

Customers’

Customers’ deposits

Other payables

RIGHT-OF-USE ASSET AND LEASE LIABILITIES

expenses and other payables

LEASE 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

15 unchanged sentences

following table summarizes the components of lease expense:

OF LEASE COST

Operating lease cost

Short-term lease cost

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

OF SUPPLEMENTAL INFORMATION RELATED TO LEASES

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flow used in operating leases

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 leases

following table summarizes the maturity of operating lease liabilities:

OF OPERATING LEASE LIABILITY

Years ending March 31

Total lease payments

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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

1 unchanged sentence

to the shareholders .

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

The amount appropriated to statutory reserve for the years ended March 31, 2022 and 2021 were $ Nil and $ 10,937 ,

respectively.

2 unchanged sentences

The balance of paid-up statutory reserve was

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

AND UNCERTAINTIES

$ 13,821 as of both March 31, 2021 and 2020.

RISKS AND UNCERTAINTIES

and Political Risks

Company’s operations are conducted in the PRC.

Accordingly, the Company’s business, financial condition and results of operations

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.

1 unchanged sentence

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,

1 unchanged sentence

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

10 unchanged sentences

manufacturing segment

OF CONCENTRATION RISKS

March 31, 2022

March 31, 2021

high concentration as at March 31, 2022 was mainly due to business development of a large distributor of garments.

2 unchanged sentences

services segment

March 31, 2022

March 31, 2021

management and subleasing

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

is no account receivable for Property management and subleasing segment as for March 31, 2022.

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.

accounts receivable of Epidemic prevention supplies segment as at March 31, 2022 was from one customer only.

the year ended March 31, 2022, one from garment segment provided more than 10 % of total consolidated revenue of the Company, represented

19.3 % of total revenue of the Company.

high concentration in year ended March 31, 2022 was mainly due to concentration of distributors in garment manufacturing business and

4 unchanged sentences

years ended March 31, 2022 and 2021.

OF PURCHASES FROM SUPPLIERS

Garment manufacturing segment

4 unchanged sentences

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.

2 unchanged sentences

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.

4 unchanged sentences

repayment obligations with receivable collections.

SUBSEQUENT EVENTS

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

1 unchanged sentence

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