XML 27 R12.htm IDEA: XBRL DOCUMENT
v3.25.2

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2025
Income Taxes [Abstract] |
INCOME TAXES |
3. | INCOME TAXES
Income is subject to tax in the various countries in which the Group operates. No income tax arose in the United States of America in any of the periods presented. The Company is not taxed in the British Virgin Islands. The Group’s operating subsidiaries, other than Nissin Metal and Plastic (Shenzhen) Company Limited (“Nissin PRC”) and Kayser Myanmar Manufacturing Company Ltd. (“Kayser Myanmar”), are all incorporated in Hong Kong and are subject to Hong Kong taxation on income derived from their activities conducted in Hong Kong. Hong Kong Profits Tax has been calculated at 16.5% of the estimated assessable profit for the years ended March 31, 2023, 2024 and 2025. As of March 21, 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million (equivalent to $257) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%. The Group has selected Kayser Limited (“Kayser”) as the qualified entity under two-tiered profit tax rates regime and the remaining Hong Kong based subsidiaries are not qualifying under the regime and continue to be taxed at 16.5%. Nissin PRC, which is established and operated in China, was subject to the uniform income tax rate of 25% in China. In March 2023, the State Taxation Administration of PRC issued an announcement and Nissin PRC satisfies the requirements of a “small-size, low profit” enterprise. Starting from January 1, 2023 and until December 31, 2024, Nissin PRC is eligible to enjoy a preferential income tax rate of 5% for the first 3 million Renminbi (“RMB”) assessable profit. The Group’s manufacturing operations were conducted mainly in Long Hua, Shenzhen and Yangon of Myanmar during the years ended March 31, 2023, 2024 and 2025. However, Kayser Myanmar enjoyed a tax exemption for the period from the date of incorporation through the end of December 31, 2017 and was subject to an income tax rate of 25% from January 1, 2018 to September 30, 2021. Starting from October 1, 2021 onwards, income tax rate was reduced to 22%. The components of (loss) income before income taxes are as follows:
|  | Year ended March 31, |
|  | 2023 |  |  | 2024 |  |  | 2025 |
|  | $ |  |  | $ |  |  | $ |
Hong Kong |  |  | (1,065 | ) |  |  | (346 | ) |  |  | (502 | )
China |  |  | 774 |  |  |  | 39 |  |  |  | 567 |
Myanmar |  |  | (22 | ) |  |  | (832 | ) |  |  | 82 |
Total |  |  | (313 | ) |  |  | (1,139 | ) |  |  | 147 |
Income tax (credit) expense consists of the following:
|  | Year ended March 31, |
|  | 2023 |  |  | 2024 |  |  | 2025 |
|  | $ |  |  | $ |  |  | $ |
Current tax: |  |  |  |  |  |  |  |  |  |  |  |
Hong Kong |  |  |  |  |  |  |  |  |  |  |  |
Current tax |  |  | - |  |  |  | - |  |  |  | - |
Over provision in prior year |  |  | (12 | ) |  |  | (59 | ) |  |  | - |
China |  |  |  |  |  |  |  |  |  |  |  |
Current tax |  |  | 1 |  |  |  | - |  |  |  | 38 |
(Over)/under provision in prior year |  |  | - |  |  |  | - |  |  |  | - |
Myanmar |  |  |  |  |  |  |  |  |  |  |  |
Current tax |  |  | - |  |  |  | - |  |  |  | - |
Under provision in prior year |  |  | 3 |  |  |  | 5 |  |  |  | - |
Deferred tax |  |  | (12 | ) |  |  | (107 | ) |  |  | - |
Total |  |  | (20 | ) |  |  | (161 | ) |  |  | 38 |
A reconciliation between income taxes computed by applying the Hong Kong profits tax rate to loss/profit before income taxes, the income taxes are as follows:
|  | Year ended March 31, |
|  | 2023 |  |  | 2024 |  |  | 2025 |
|  | % |  |  | % |  |  | % |
Profits tax rate in Hong Kong |  |  | 16.5 |  |  |  | 16.5 |  |  |  | 16.5 |
Non-deductible items/non-taxable income* |  |  | 15.9 |  |  |  | (7.9 | ) |  |  | (50.0 | )
Changes in valuation allowances |  |  | 22.6 |  |  |  | 10.4 |  |  |  | 138.3 |
Overprovision of profits tax in prior year |  |  | 2.9 |  |  |  | 4.7 |  |  |  | - |
Effect of different tax rate of subsidiaries operating in other jurisdictions |  |  | (18.8 | ) |  |  | (0.4 | ) |  |  | 47.0 |
Effect of preferential tax rate |  |  | - |  |  |  | - |  |  |  | (77.3 | )
Tax effect of tax losses not recognized |  |  | (55.7 | ) |  |  | (12.3 | ) |  |  | (52.7 | )
Tax effect of other temporary difference not recognized |  |  | - |  |  |  | - |  |  |  | (21.8 | )
Profit tax expense from disposal of PRC property |  |  | - |  |  |  | - |  |  |  | 26.1 |
Others |  |  | 23.0 |  |  |  | 3.1 |  |  |  | - |
Effective tax rate |  |  | 6.4 |  |  |  | 14.1 |  |  |  | 26.1 |
* | The Non-deductible items/non-taxable income are mainly including the non-deductible entertainment expense, gain from disposal of PRC property, exempt interest income and other non-deductible expenses.
Deferred income tax liabilities (assets) are as follows:
|  | As of March 31, |
|  | 2024 |  |  | 2025 |
|  | $ |  |  | $ |
Deferred tax assets: |  |  |  |  |  |
Property, plant and equipment |  |  | 64 |  |  |  | 45 |
Other social benefits |  |  | - |  |  |  | 46 |
Lease liabilities |  |  | 171 |  |  |  | 52 |
Tax loss carry forwards |  |  | 720 |  |  |  | 918 |
Total deferred tax assets |  |  | 955 |  |  |  | 1,061 |
Valuation allowance |  |  | (792 | ) |  |  | (995 | )
Total deferred tax assets, net of valuation allowance |  |  | 163 |  |  |  | 66 |
Deferred tax liabilities: |  |  |  |  |  |
Operating lease right-of-use assets |  |  | (163 | ) |  |  | (66 | )
Total deferred tax liabilities |  |  | (163 | ) |  |  | (66 | )
Net deferred tax (assets) / liabilities |  |  | - |  |  |  | - |
Movement of valuation allowances are as follows:
|  | Year ended March 31, |
|  | 2023 |  |  | 2024 |  |  | 2025 |
|  | $ |  |  | $ |  |  | $ |
At the beginning of the year |  |  | 494 |  |  |  | 469 |  |  |  | 792 |
Current year (reduction) addition |  |  | (25 | ) |  |  | 323 |  |  |  | 203 |
At the end of the year |  |  | 469 |  |  |  | 792 |  |  |  | 995 |
A valuation allowance has been provided on the deferred tax asset because the Group believes it is not more than likely that the asset will be realized. As of March 31, 2024 and 2025, a valuation allowance was provided for the deferred tax asset relating to the future benefit of net operating loss carryforward and deferred deductible expenses, as the management determined that the net operating loss carryforward and deferred deductible expenses were not more likely than not to be utilized. If events occur in the future that allows the Group to realize more of its deferred tax assets than the presently recorded amount, an adjustment to the valuation allowance will be made when those events occur. As of March 31, 2024, tax losses amounted to approximately $4,270. As of March 31, 2024, the other tax losses carried forward of $4,093, may be carried forward indefinitely. According to PRC tax regulations, the PRC enterprise net operating loss can generally carry forward for no longer than five years, and HNTE’s net operating losses can be carried forward for no more than 10 years, starting from the year subsequent to the year in which the loss was incurred. Carryback of losses is not permitted. Considering the future strategic development, the Company will not re-apply for the HNTE certificate for Nissin SZ when the prior certificate expires at December 31, 2024. Total net operating losses (NOLs) carryforward of the Company's subsidiary in mainland China is $368 as of March 31, 2025. As of March 31, 2025, net operating loss carryforwards from PRC will expire in calendar years 2025 through 2034, if not utilized. The NOLs carryforward of the Company's subsidiaries in Hong Kong is $5,370 as of March 31, 2025, which can be carried forward without an expiration date. In addition, the NOLs carryforward of the Company's subsidiary in Myanmar is $62. As of March 31, 2025, net operating loss carryforwards from Myanmar will expire on March 31, 2027. The Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. Under the applicable accounting standards, management has considered the Company’s history of losses and concluded that it is more likely than not that the Company will not generate future taxable income prior to the expiration of the majority of net operating losses. Accordingly, as of March 31, 2025, a $995 valuation allowance has been established. Uncertainties exist with respect to how China’s current income tax law applies to the Group’s overall operations, and more specifically, with regard to tax residency status. China’s Enterprise Income Tax (“EIT”) Law includes a provision specifying that legal entities organized outside of China will be considered residents for China income tax purposes if their place of effective management or control is within China. The Implementation Rules to the EIT Law provides that non-resident legal entities will be considered as China residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. occur within China. The Company does not believe that its legal entities organized outside of China should be treated as residents for the EIT Law’s purposes. Substantially, the Company’s overall management and business operation are located outside China. The Company does not expect any significant adverse impact on the Company’s consolidated results of operations. The Group has made its assessment of the level of the tax authority for each tax position (including the potential application of interest and penalties) based on the technical merits and has measured the unrecognized tax benefits associated with the tax positions. Based on the evaluation by the Group, it was concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements. The Group classifies interest and/or penalties related to unrecognized tax benefits as a component of income tax provisions; however, as of March 31, 2024 and 2025, there is no interest and penalties related to uncertain tax positions, and the Group has no material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods. The Group does not anticipate any significant increases or decreases to its liability for unrecognized tax benefit within the next twelve months. The fiscal years 2018 to 2025 remain subject to examination by the Hong Kong tax authority. For PRC, fiscal years 2015 to 2025 remain subject to examination by the PRC tax authority. For Myanmar, fiscal years 2021 to 2025 remain subject to examination by Myanmar tax authority.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration