| Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis
of Presentation The accompanying unaudited consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America
for interim financial information and with the instructions to Regulation S-X. In the opinion of management, all adjustments
consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position;
(b) the result of operations; and (c) cash flows, have been made in order to make the consolidated financial statements presented
not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Basis of Consolidation These consolidated financial statements
include the accounts of Yingxi Industrial Chain Group Co., Ltd and its wholly-owned subsidiaries. All material intercompany balances
and transactions have been eliminated in consolidation. Principal of subsidiaries The details of the principal subsidiaries
of the Company are set out as follows:
Name of subsidiaries Place of incorporation Percentage of interest Principal activities
Shares held directly
Yingxi Industrial Chain Group Co., Ltd (“Yingxi”) Seychelles 100% Investment holdings
Shares held indirectly
Yingxi Industrial Chain Investment Co., Ltd (“YICI”)
Hong Kong China 100% Investment holdings
Dongguan Heng Sheng Wei Garments Co., Ltd (“DHSW”) China 100% Garment manufacturing and business consultancy
Qianhai Yingxi Textile and Garments Co., Ltd (“QYTG”) China 100% Investment holdings
Shantou Chenghai Dai Tou Garments Co., Ltd (“SCDT”) China 100% Garment manufacturing
Shenzhen Hua Peng Fa Logistics Co., Ltd (“SHPF”) China 100% Logistics and business consultancy
Shenzhen Qianhai Yingxi Industrial Chain Service Co., Ltd (“SQYI”) China 100% Investment holdings
Shenzhen Xin Kuai Jie Transport Co., Ltd (“SXKJ”) China 100% Logistics Use of Estimates The preparation of the consolidated
financial statements is in conformity with the GAAP that requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities. It also requires the disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Foreign Currency Translation The Company’s reporting currency
is the U.S. Dollars (“USD”). The functional currency of the Company and its subsidiaries is Chinese Yuan Renminbi (“RMB”).
All transactions initiated in RMB are translated into USD in accordance with ASC 830, “Foreign Currency Matters,”
i) Assets and liabilities at the rate of exchange in effect at the balance sheet date.
ii) Equities at historical rate
iii) Revenue and expense items at the average rate of exchange prevailing during the period. Adjustments arising from such translations
are included in accumulated other comprehensive income in shareholders’ equity.
September 30, 2017 March 31, 2017 September 30, 2016
Spot CNY: USD exchange rate $ 0.1503 $ 0.1452 $ 0.15
Average CNY: USD exchange rate $ 0.1458 - 0.1500 $ 0.1487 $ 0.1500 - 0.1531
Spot HKD: USD exchange rate $ 0.1289 $ 0.1289 $ 0.1289
Average HKD: USD exchange rate $ 0.1289 $ 0.1289 $ 0.1289 Accounts Receivable The Company’s accounts receivable
consists of trade receivables from customers. The Company maintains an allowance for doubtful accounts based on the Company’s
assessment of collectability of the customer receivable. The Company analyzes past history with a customer, customer credit, collection
history, and financial condition when evaluating the collectability of customer accounts. Uncollectible accounts are charged off
to the allowance when it is deemed probable that the receivable will not be recovered.
September 30, 2017 March 31, 2017
Within 1 year $ 2,132,179 $ 2,335,027
1 - 2 year 2,343,906 2,372,796
2 - 3 year 1,653
$ 4,476,085 $ 4,709,476 For the concentration risk disclosure,
please refer to Note 10. Financial Instruments The Company’s consolidated financial
instruments consist primarily of cash, accounts receivable, prepaid expenses, inventory and other assets, accounts payable and
accrued expenses and other payables. The carrying amounts of such financial instruments approximate their respective estimated
fair value due to their short-term maturities. Concentrations of Credit Risks The Company’s exposure to concentrations
of credit risk primarily related to its cash and cash equivalents. The Company places its cash and cash equivalents with financial
institutions of high credit worthiness. The Company’s management assess the financial strength and credit worthiness of any
parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. Inventory Inventory is stated at the lower of
cost (weighted average) or net realizable value. The Company’s inventory is constantly monitored for obsolescence. This is
based on the management’s estimates and they have taken into considerations factors such as turnover, technical obsolescence,
right of return status to suppliers and price protection offered by suppliers. These estimates are necessarily subject to a degree
of measurement uncertainty. Reserves for slow-moving and obsolete inventory at September 30, 2017 were $0 and at March 31, 2017were
$0. Related
Parties The Company
follows ASC 850, “Related Party Disclosures,” Property and Equipment Property and
equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets
for use. The costs of
repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add
to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset’s
cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings. Depreciation
of plant and equipment, is recorded on the straight-line method over estimated useful lives, generally as follows:
Years
Production equipment 5 - 10
Vehicles 3 - 15
Office equipment 5 - 10 Impairment of long-lived assets We evaluate carrying value of long-lived
assets whenever events or changes in circumstances would indicate that it is more likely than not their carrying values may exceed
their realizable values, and records impairment charges when considered necessary. When circumstances indicate that impairment
may have occurred, the Company tests such assets for recoverability by comparing the estimated undiscounted future cash flows expected
to result from the use of such assets and their eventual disposition to their carrying amount. In estimating these future cash
flows, assets and liabilities are grouped at a lowest level for which there are identifiable cash flows that are largely independent
of the cash flows generated by other such groups. If the undiscounted future cash flows are less than the carrying amount of the
asset, an impairment loss, measured as the excess of the carrying value of the asset over its estimated fair value, is recognized.
Fair values are determined based on discounted cash flows, quoted market values or external appraisals as applicable. Revenue Recognition The Company
recognizes revenue only when all of the following criteria have been met:
i) Persuasive evidence for an agreement exists;
ii) Service has been provided;
iii) The fee is fixed or determinable; and,
iv) Collection is reasonably assured. Deferred Revenue Deferred revenue are services billed
to customers for which the services have not been fully performed. As of September 30, 2017 and March 31, 2017, deferred revenue
were $492,553 and $290,099, respectively. Income Taxes The Company accounts for income taxes
using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes.” Uncertain Tax Positions The Company follows guidance issued
by the FASB regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing
the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements
and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first
made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon
examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit
recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate
settlement. The Company records income tax related
interest and penalties as a component of the provision for income tax expense. As of September 30, 2017 and March 31, 2017, the
Company determined there were no uncertain tax provisions. Earnings (Loss) Per Share The Company has adopted ASC 260, “Earnings
Per Share,” The Company had no potentially dilutive
securities, such as convertible debt, options or warrants, issued and outstanding during the six months ended September 30, 2017
and 2016. Recent
Accounting Pronouncements The Company
has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on our consolidated financial statements. In September 2017, the FASB has issued
Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers
(Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the
July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” In May 2014, the FASB issued an accounting
standards update and introduced a 5-step approach which modifies the requirements for identifying, allocating, and recognizing
revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional
disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers.
This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively
to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s
consolidated financial statements. In December 2016, the FASB has issued
Accounting Standards Update (ASU) No. 2016-20 , “Technical Corrections and Improvements to Topic 606, Revenue from Contracts
with Customers.” |
