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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended
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Sep. 30, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Schedule of carrying amounts of the assets, liabilities, the results of operations and cash flows of the VIE and its subsidiaries | The carrying amounts of the assets, liabilities, the results of operations and cash flows of the VIE and its subsidiaries included in the Group’s consolidated financial statements after the elimination of intercompany balances and transactions among the VIE and its subsidiaries, and other entities within the Group are as follows:
|  | September 30, |  | September 30,
|  | 2020 |  | 2019
ASSETS |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 5,493,215 |  | $ | 4,594,440
Accounts receivable, net |  |  | 660,398 |  |  | 603,760
Bank acceptance receivable |  |  | 11,460,512 |  |  | 5,476,707
Inventories, net |  |  | 11,994,471 |  |  | 12,522,884
Advances to suppliers, net |  |  | 465,755 |  |  | 958,005
Other current assets |  |  | 535,981 |  |  | 813,932
Total current assets |  |  | 30,610,332 |  |  | 24,969,728
Property and equipment, net |  |  | 7,395,965 |  |  | 7,665,322
Intangible assets, net |  |  | 1,881,722 |  |  | 1,834,130
Long-term investment |  |  | 540,517 |  |  | 539,680
Long term security deposits |  |  | 179,325 |  |  | —
Right of use assets-lease |  |  | 134,511 |  |  | —
Deferred tax assets |  |  | 361,250 |  |  | 259,384
Total assets |  | $ | 41,103,622 |  | $ | 35,268,244
LIABILITIES |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Bank loans |  | $ | 7,349,375 |  | $ | 4,903,128
Accounts payable |  |  | 3,958,804 |  |  | 3,570,148
Advance from customers |  |  | 3,511,198 |  |  | 1,911,748
Advance from customers - related parties |  |  | 33,152 |  |  | 2,171
Deferred government grants - current |  |  | 384,802 |  |  | 391,142
Taxes payable |  |  | 1,322,354 |  |  | 347,930
Operating lease liabilities, current |  |  | 22,354 |  |  | —
Accrued expenses and other payables |  |  | 1,301,881 |  |  | 531,713
Total current liabilities |  |  | 17,883,920 |  |  | 11,657,980
Operating lease liabilities, long term |  |  | 124,406 |  |  | —
Deferred government grants - noncurrent |  |  | 722,137 |  |  | 972,338
Total liabilities |  |  | 18,730,463 |  |  | 12,630,318
|  | For the year ended
|  | September 30,
|  | 2020 |  | 2019 |  | 2018
Net revenue |  | $ | 46,731,913 |  | $ | 46,096,684 |  | $ | 50,369,013
Net income |  | $ | 4,936,357 |  | $ | 5,908,479 |  | $ | 5,202,609
|  | For the Year Ended
|  | September 30,
|  | 2020 |  | 2019 |  | 2018
Net cash provided by (used in) operating activities |  | $ | 4,131,468 |  | $ | (580,197) |  | $ | 4,438,015
Net cash used in investing activities |  |  | (5,648,762) |  |  | (666,629) |  |  | (1,386,080)
Net cash provided by financing activities |  |  | 2,140,503 |  |  | 373,650 |  |  | (3,116,213)
Effect of exchange rate on cash |  |  | 275,566 |  |  | (157,163) |  |  | (181,798)
Net increase (decrease) in cash and cash equivalents |  | $ | 898,775 |  | $ | (1,030,339) |  | $ | (246,076)
Schedule of estimated useful lives of the assets | The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:
Items |  | Useful life
Property and buildings |  | 20–25 years
Leasehold improvement |  | Lesser of useful life and lease term
Machinery and equipment |  | 5–10 years
Automobiles |  | 3–5 years
Office and electric equipment |  | 3–5 years
Schedule of estimated useful lives of intangible assets | Intangible assets are amortized using the straight-line method with the following estimated useful lives:
Items |  | Useful life
Land use rights |  | 50 years
Software |  | 10 years
License for drug manufacturing |  | 10 years
Schedule of shareholders' equity for the non-controlling interest from each subsidiary that is not 100% owned | The following table summarizes the shareholders’ equity for the non-controlling interest from each subsidiary that is not 100% owned by the Company:
|  | As of
|  | September 30, |  | September 30,
|  | 2020 |  | 2019
Gansu QLS |  | $ | 387,420 |  | $ | 298,322
Chengdu QLS |  |  | 2,355,853 |  |  | 2,448,765
Ahan |  |  | — |  |  | (2,511)
Total |  | $ | 2,743,273 |  | $ | 2,744,576
Schedule of currency exchange rates | The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:
|  | September 30, 2020 |  | September 30, 2019 |  | September 30, 2028
Year-end spot rate |  | US$1=RMB 6.8033 |  | US$1=RMB 7.1383 |  | US$1=RMB 6.8683
Average rate |  | US$1=RMB 7.0077 |  | US$1=RMB 6.8767 |  | US$1=RMB 6.5400

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- Definition Tabular disclosure of redeemable noncontrolling interest (as defined) included in the statement of financial position as either a liability or temporary equity. As of the date of the statement of financial position, such redeemable noncontrolling interest is currently redeemable, as defined, for cash or other assets of the entity at (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder of the noncontrolling interest, or (3) upon occurrence of an event that is not solely within the control of the entity. + References No definition available. + Details
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- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=121559654&loc=SL6759159-111685 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=121559654&loc=d3e5747-111685 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121559654&loc=SL6228884-111685 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=121559654&loc=d3e5710-111685 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=121559654&loc=d3e5728-111685 + Details
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