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RISKS AND UNCERTAINTIES
 6 Months Ended
Sep. 30, 2025
Risks and Uncertainties [Abstract]  
RISKS AND UNCERTAINTIES

18. RISKS AND UNCERTAINTIES

 

(a) Economic and Political Risks

 

The 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.

 

The 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. These include risks associated with, among others, the political, economic and legal environment 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, remittances abroad, and rates and methods of taxation.

 

(b) Foreign Currency Translation

 

The Company’s reporting currency is the U.S. dollar. 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 currencies are the RMB, all assets and liabilities are translated at exchange rates at the balance sheet date, which was 7.12 and 7.26 as of September 30, 2025 and March 31, 2025, respectively. Revenue and expenses are translated at the average yearly exchange rates, which was 7.231 and 7.004, 7.194 and 7.20 for the three and six months ended September 30, 2025 and 2024, respectively. Equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustments to other comprehensive loss, a component of equity.

 

 

(c) Concentration Risks

 

The followings are the percentages of accounts receivable balance of the top customers over accounts receivable for each segment as of September 30, 2025 and March 31, 2025.

 

Garment manufacturing segment

 

   September 30, 2025   March 31, 2025 
Customer A   100.0%   100.0%

 

The high concentration as of September 30, 2025 was mainly due to business development of a large distributor of garments.

 

Logistics services segment

 

   September 30, 2025   March 31, 2025 
Customer A   23.4%   20.2%
Customer B   23.1%   17.6%
Customer C   6.6%   3.4%
Customer D   6.0%   5.4%
Customer E   5.9%   5.9%

 

Property management and subleasing segment

 

There was no account receivable for the property management and subleasing segment as of September 30, 2025 and March 31, 2025.

 

Concentration on customers

 

For the three months ended September 30, 2025, three customers from the logistics services segment provided more than 10% of total revenue of the Company, representing 63.5% of total revenue of the Company for that period. For the six months ended September 30, 2025, three customers from the logistics services segment provided more than 10% of total revenue of the Company, representing 53.8%  of total revenue of the Company for that period .

 

For the three months ended September 30, 2024, three customers from the logistics services segment provided more than 10% of total revenue of the Company, representing 48.6% of total revenue of the Company for that period. For the six months ended September 30, 2024, two customers from logistics services segment provided more than 10% of total revenue of the Company, representing 36.5% of total revenue of the Company for that period.

 

Concentration on suppliers

 

The following tables summarize the purchases from five largest suppliers of each of the reportable segments for the three and six months ended September 30, 2025 and 2024.

 

   Three months ended   Six months ended 
   September 30,   September 30, 
   2025   2024   2025   2024 
Garment manufacturing segment   Nil%   60.6%   100%   41.8%
Logistics services segment   100%   100%   100%   100%

 

(d) Interest Rate Risk

 

The 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. As of September 30, 2025, the total outstanding borrowings amounted to $643,194 (RMB4,579,969) with various interest rate from 4.34% to 16.2% p.a. (Note 12)