| Summary of significant accounting policies | 2.
Summary of significant accounting policies Basis
of Presentation The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim
financial information. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual
consolidated financial statements. In the opinion of management, the accompanying condensed consolidated financial statements
include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial
statements of the Company as of December 31, 2023, and for the three and nine months ended December 31, 2023 and 2022. The results
of operations for the three and nine months ended December 31, 2023 are not necessarily indicative of the operating results for the
full year ending March 31, 2023 or any other period. These unaudited condensed consolidated financial statements have been derived
from the accounting records of the Company and should be read in conjunction with the consolidated financial statements and notes
thereto included in the Company’s annual report on Form 10-K for the year ended March 31, 2023, filed with the Securities and
Exchange Commission (the “SEC”) on June 29, 2023. Use
of Estimates The
preparation of the Company’s consolidated financial statements in conformity with the U.S. GAAP requires the Company to make certain
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements. The reported amounts of revenues and expenses may be affected by the estimates that management
is required to make. Actual results could differ from those estimates. Foreign
Currency and Foreign Currency Translation The
Company’s reporting currency is the United States Dollar (“US$” or “$”). The Company’s operations
are principally conducted in Hong Kong where Hong Kong dollar is the functional currency. The functional currency of the Company’s
two subsidiaries, Lutter Global Limited and QDMI Software Group Limited, is the Euro. Transactions
denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates
prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies
are translated into the functional currency at the prevailing rates of exchange at the balance sheet date. The resulting exchange differences
are reported in the statements of operations and comprehensive loss. The
exchanges rates used for translation from Hong Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system
in Hong Kong. This pegged rate was used to translate Company’s balance sheets, income statement items and cash flow items for both
the three and nine months ended December 31, 2023 and 2022, and the year ended March 31, 2023. The
exchanges rates used for translation from Euro to US$ are as follows:
December
31, December
31, March
31,
Year-end
spot rate EUR 1 = US$1.1062 EUR 1 = US$1.0698 EUR 1 = US$1.0872
Average
rate for the period EUR 1 = US$1.0845 EUR 1 = US$1.0310 EUR 1 = US$1.0414 Certain
Risks and Concentration The
Company’s financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily
of cash and cash equivalents and receivables, and other assets. As of December 31, 2023, substantially all of the Company’s cash
and cash equivalents were held in major financial institutions located in Hong Kong, which management considers to being of high credit
quality. Cash
and Cash Equivalents Cash
and cash equivalents consist of petty cash on hand and cash held in banks, which are highly liquid and have original maturities of three
months or less and are unrestricted as to withdrawal or use. Accounts
Receivable The
Company’s receivables are initial recorded at fair value when billed and represent amounts owed by third-party customers. The carrying
value of the Company’s receivables, net of the expected credit loss, represents their estimated net realizable value. The Company
evaluates the expected credit loss of accounts receivable on a loss rate method based on historical information adjusted for current
conditions and future estimated economic performance. The
Company historically did not have bad debts in accounts receivable. There were no bad debt expenses for the three and nine months ended
December 31, 2023 and 2022 and there was no provision of expected credit loss as of December 31, 2023 and March 31, 2023. Revenue
Recognition The
Company generates revenue primarily by providing insurance brokerage services in Hong Kong. The Company sells insurance products underwritten
by insurance companies operating in Hong Kong to its individual customers and primarily generates its income through commissions paid
by insurance companies, typically based on a percentage of the premium paid by the insured. Commissions generally vary based on the type
and term of insurance products, as well as the particular underwriting insurance carrier, and can be shared with other insurance agent
or broker partners. ASC
606 provides for a five-step model for recognizing revenue from contracts with customers. These five steps include:
(i) Identify the contract
(ii) Identify performance obligations
(iii) Determine transaction price
(iv) Allocate transaction price
(v) Recognize revenue The
Company enters into insurance brokerage contracts with customers (insurance companies). Performance obligation for these insurance brokerage
contracts is to help insurance company customers to promote, coordinate and complete subscriptions of insurance policies offered by customers. Under
ASC 606, revenue is recognized when the customer obtains control of a good or service. A customer obtains control of a good or service
if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. The transfer
of control of the Company’s brokerage services generally occurs at a point in time on the effective date of the associated insurance
contract when the policy transfers to the customer. The insurance policy entered between the insurance company and the insured customer
generally contains a cool-off period of one to two months. When the cool-off period elapses and the insured customer does not withdraw
from the insurance policy, the policy becomes effective. Once the transfer of control of a service occurs, the Company has satisfied
its insurance brokerage performance obligation and recognizes revenue. Fair
Value Measurement Fair
value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to
be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers
assumptions that market participants would use when pricing the asset or liability. The
established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs
when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level
of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value as follows:
Level 1: Quoted prices (unadjusted)
in active markets for identical assets or liabilities.
Level 2: Observable,
market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.
Level 3: Unobservable
inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The
Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities,
lease liabilities and due to related party. The carrying amounts of these financial instruments approximate their fair values due to
the short-term nature of these instruments. For lease liabilities, fair value approximates their carrying value at the period end as
the interest rates used to discount the host contracts approximate market rates.
The
Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured
at fair value on a recurring nor non-recurring basis as of December 31, 2023. Property
and Equipment Property
and equipment are recorded at cost, less accumulated depreciation and impairment. Depreciation of property and equipment is calculated
on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated annual deprecation
rate of these assets are generally as follows:
Category Depreciation Estimated
Office
equipment 3 years Nil
Leasehold
improvements Shorter of lease term or 3 years Nil Expenditures
for maintenance and repairs are expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and
carrying amount of the relevant assets and are recognized in the statements of operations and comprehensive loss. Impairment
of Long-Lived Assets The
Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted
cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the
amount by which the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets. There
were no Leases Arrangements
meeting the definition of a lease are classified as operating or finance leases, and are recorded on the consolidated balance sheet as
both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit
in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each
period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization
of the right of use asset result in straight-line rent expense over the lease term. In
calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under
ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy
election and recognizes rent expense on a straight-line basis over the lease term. Taxation Current
income taxes are provided on the basis of net profit for financial reporting purposes, adjusted for income and expense items which are
not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred
income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the
financial statements, net operating loss carryforwards and credits. Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current
income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured
using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect
on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operations and comprehensive income
in the period of the enactment of the change. The
Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely
than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses,
forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused,
and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient
future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences
become deductible. When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income
including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing
temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific
known trend of profits expected to be reflected within the industry. The
Company recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the
position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition
threshold, the Company initially and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater
than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Company’s liability associated with
unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments
and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Company’s
effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered
appropriate by management. The Company classifies interest and penalties recognized on the liability for unrecognized tax benefits as
income tax expense. Stock-Based
Compensation The
Company recognizes stock-based compensation in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting
from all stock-based transactions be recorded in the financial statements. It establishes fair value as the measurement objective in
accounting for stock-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for stock-based
payment transactions with employees. ASC 718 also establishes fair value as the measurement objective for transactions in which an entity
acquires goods or services from non-employees in stock-based payment transactions. Earnings
per share Basic
earnings per share is computed by dividing net income attributable to holders of common stock by the weighted average number of shares
of common stock outstanding during the period using the two-class method. Under the two-class method, net income is allocated between
shares of common stock and other participating securities based on their participating rights. Net loss is not allocated to other participating
securities if based on their contractual terms they are not obligated to share in the losses. Diluted earnings per share is calculated
by dividing net income attributable to holders of common stock by the weighted average number of common and dilutive common equivalent
shares outstanding during the period. Common equivalent shares are not included in the denominator of the diluted loss per share calculation
when inclusion of such shares would be anti-dilutive. Recently
Issued Accounting Standards In
June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326)
Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires an entity to utilize a new impairment model known
as the current expected credit loss (CECL) model to estimate its lifetime “expected credit loss” and record an allowance
that, when deducted from the amortized cost basis of the financial assets and certain other instruments, including but not limited to
available-for-sale debt securities. Credit losses relating to available-for-sale debt securities will be recorded through an allowance
for credit losses rather than as a direct write-down to the security. ASU 2016-13 requires a cumulative effect adjustment to the balance
sheet as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU 2019-10,
Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which
defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies
that are not smaller reporting companies. ASU 2016-13 became effective for the Company beginning April 1, 2023. The adoption of the new
standard does not have a material impact on the Company. The
Company has reviewed all the other recent accounting pronouncements issued to date of the issuance of these financial statements, and
does not believe any of these pronouncements will have a material impact on the Company. |
