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Related Party Transactions and Balances
 6 Months Ended
Sep. 30, 2024
Related Party Transaction [Line Items]  
RELATED PARTY TRANSACTIONS AND BALANCES

15. RELATED PARTY TRANSACTIONS AND BALANCES

 

1. Related Party Balances

 

1) Prepayment, a related party

 

As of September 30, 2024 and March 31, 2024, the balance of prepayment to a related party represented automobile lease prepayment made by the Company to Jinkailong, the Company’s equity investee company, with amount of $36,223 and $0, respectively.

 

2) Due from related parties

 

As of September 30, 2024 and March 31, 2024, balances due from related parties from the Company’s operations were comprised of the following:

 

   September 30,   March 31, 
   2024   2024 
   (Unaudited)     
Total due from related parties  $6,779,894   $6,495,608 
Less: Allowance for credit losses   (3,554,026)   (3,099,701)
Due from related parties, net  $3,225,868   $3,395,907 
Due from related parties, net, current  $249,750   $648,594 
Due from a related party, net, non-current  $2,976,118   $2,747,313 

 

As of September 30, 2024, balances due from Jinkailong, the Company’s equity investee company, was $3,147,117, net of allowance for credit losses, of which, $2,976,118 is to be repaid over a period from October 2025 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $2,341,837 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $805,280 represents daily operation expenses paid by the Company’s subsidiary, Jiekai, on behalf of Jinkailong.

 

As of March 31, 2024, balances due from Jinkailong, the Company’s equity investee company was $3,245,907, net of allowance for credit losses, of which, $2,747,313 is to be repaid over a period from April 2025 to December 2026, which was classified as due from a related party, net, non-current. The balances due from Jinkailong consist of outstanding balance of $2,651,078 as a result of Jinkailong’s deconsolidation on March 31, 2022 and $594,829 represents revenue collected by Jinkailong on behalf of the Company’s subsidiary, Jiekai.

 

Movement of allowance for credit losses due from Jinkailong for the six months ended September 30, 2024 and for the year ended March 31, 2024 are as follows:

 

   September 30,   March 31, 
   2024   2024 
   (Unaudited)     
Beginning balance  $3,099,701   $1,481,036 
Addition   355,436    1,703,563 
Translation adjustment   98,889    (84,898)
Ending balance  $3,554,026   $3,099,701 

 

On January 3, 2024, Xiang Hu, the Legal Representative of Sichuan Senmiao and a shareholder of the Company, entered into a loan agreement wherein the Company agreed to provide an interest-free special reserve loan of $150,000 for a period of 12 months. As September 30, 2024, the outstanding balance was $78,751.

  

3) Due to related parties

 

   September 30,   March 31, 
   2024   2024 
   (Unaudited)     
Loan payable to a related party (i)  $45,936   $12,354 
Other payable due to a related party (ii)   167,875    158,632 
Total due to related parties  $213,811   $170,986 

 

(i) As of September 30, 2024 and March 31, 2024, the balances represented borrowings from Xi Wen, the CEO of the Company, of which, $45,936 and $12,354 are unsecured, interest free and due on demand, respectively.

 

(ii) As of September 30, 2024 and March 31, 2024, the balances represented outstanding lease payments due to Hong Li, the Supervisor of Sichuan Senmiao, upon termination of existing lease.

 

4) Operating lease right-of-use assets - a related party and Operating lease liabilities - a related party

 

   September 30,   March 31, 
   2024   2024 
   (Unaudited)     
Operating lease right-of-use assets – a related party  $28,118   $47,128 
Operating lease liabilities – a related party  $31,793   $51,741 

 

In November 2018, Hunan Ruixi entered into an office lease agreement with Hunan Dingchentai Investment Co., Ltd. (“Dingchentai”), a company where one of the Company’s independent directors serves as the legal representative and general manager. The term of the lease agreement was from November 1, 2018 to October 31, 2023 and the rent was approximately $44,250 per year, payable on a quarterly basis. The original lease agreement with Dingchentai was terminated on July 1, 2019. The Company entered into another lease with Dingchentai on substantially similar terms on September 27, 2019, and a renewal lease contract was signed on June 2022 which extended the original lease to May 2025.

 

2. Related Party Transactions

 

For the three and six months ended September 30, 2024, the Company incurred $0 and $4,516, respectively, in rental expenses to Hong Li, supervisor of Sichuan Senmiao, pursuant to three office lease agreements. For the three and six months ended September 30, 2023, the Company incurred $29,956 and $60,283, respectively, in rental expenses to Hong Li, supervisor of Sichuan Senmiao, pursuant to three office lease agreements.

 

For the three and six months ended September 30, 2024, the Company incurred $10,536 and $20,886 in rental expenses, respectively, compared to $10,481 and $20,618 for the same periods in 2023, to Dingchentai, a company where one of the Company’s independent directors serves as the legal representative and general manager.

 

During the three months ended September 30, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $3,622 and $8,399, while Jiekai leased automobiles from Jinkailong and had a rental cost of $17,334 and $182,165 respectively. 

 

During the six months ended September 30, 2024 and 2023, Corenel leased automobiles to Jinkailong and generated revenue of $8,865 and $22,147, while Jiekai leased automobiles from Jinkailong and had a rental cost of $18,961 and $392,344 respectively.