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Credit Facilities
 3 Months Ended
Jun. 30, 2023
Line of Credit Facility [Abstract]  
CREDIT FACILITIES

NOTE 12 – CREDIT FACILITIES

 

On January 31, 2019, Standard Chartered Bank (Hong Kong) Limited (“SCBHK”) offered to provide an import facility of up to $3.0 million to Treasure Success pursuant to a facility letter dated June 15, 2018. Pursuant to the agreement, SCBHK agreed to finance import invoice financing and pre-shipment financing of export orders up to an aggregate of $3.0 million. The SCBHK facility bears interest at 1.3% per annum over SCBHK’s cost of funds. As of June 30, 2023 and March 31, 2023, the Company had $nil outstanding in import invoice financing under the SCBHK facility. In June 2022, the Company was informed by SCBHK that the facility was cancelled due to persistently low usage and zero loan outstanding.

 

Starting from May and October 2021, the Company has participated in a financing program with two customers, in which the Company may receive early payments for approved sales invoices submitted by the Company through the bank the customer cooperates with. For any early payments received, the Company is subject to an early payment charge imposed by the customer’s bank, for which the rate is revised based on Secured Overnight Financing Rate (“SOFR”) plus a spread. In certain scenarios, the Company submits the sales invoice and receives payments prior to the shipment of the relative products. In that case, instead of recording the cash receipts as a reduction to accounts receivables, the Company records the cash receipts as receipts in advance from a customer until products are entitled to transfer. The Company records the early payment charge in interest expenses consolidated statements of comprehensive income. For the three months ended June 30, 2023 and 2022, the early payment charge was $356,247 and $87,114 respectively. As of June 30, 2023, there was $52,054 in receipts in advance from a customer. The Company recorded the receipts in advance as deferred revenue on the consolidated balance sheet as of June 30, 2023.

 

On January 12, 2022, DBS Bank (Hong Kong) Limited (“DBSHK”) offered to provide a banking facility of up to $5.0 million to Treasure Success pursuant to a facility letter dated January 12, 2022. Pursuant to the facility, DBSHK agreed to finance cargo receipt, trust receipt, account payable financing, and certain type of import invoice financing up to an aggregate of $5.0 million, with certain financial covenants. The DBSHK facility bears interest at 1.5% per annum over Hong Kong Interbank Offered Rate for HKD bills and 1.3% per annum over DBSHK’s cost of funds for foreign currency bills. The facility is guaranteed by Jerash Holdings and became available to the Company on June 17, 2022.

 

As of June 30, 2023 and March 31, 2023, the Company had $3,117,337 and $nil outstanding under the DBSHK facility, respectively. The DBSHK facility is reviewed annually.

 

On June 1, 2023, the Company received documents from Capital Bank of Jordan for a credit facility of $10 million, and entered into the credit facility after reviewing the documents. Execution is still in process and the credit facility is not effective as of the date of this quarterly report.