ADDENTAX GROUP CORP. - Annual Report: 2016 (Form 10-K)

Item 1B. Unresolved Staff Comments

Not applicable to smaller reporting companies.

Item 2.  Description of Property

We do not own any real estate or other properties.  

Item 3.  Legal Proceedings

Item 4.  Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Common Equity and Related Stockholder Matters      

Market Information

There is a limited public market for our common shares.  Our common shares are not quoted on the OTC Bulletin Board at this time.  Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects.  We cannot assure you that there will be a market in the future for our common stock.

OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange.  Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks.  OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

As of March 31, 2016, no shares of our common stock have traded.

Number of Holders

As of March 31, 2016, the 3,441,500 issued and outstanding shares of common stock were held by a total of 26 shareholders of record.

Dividends

No cash dividends were paid on our shares of common stock during the fiscal year ended March 31, 2016 and from October 28, 2014 (inception) to March 31, 2015.  We have not paid any cash dividends since October 28, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable future. 

Recent Sales of Unregistered Securities

On December 26, 2014, the Company issued a total of 3,000,000 common shares to its founder for cash contributions of $3,000.

During November 2015, the Company issued a total of 8,000 common shares for cash contributions of $240 at $0.03 per share.

During December 2015, the Company issued a total of 8,000 common shares for cash contributions of $240 at $0.03 per share, and real cash contribution of $215 because of $25 wire transfer charge.

During January 2016, the Company issued a total of 18,500 common shares for cash contributions of $555 at $0.03 per share.

During February 2016, the Company issued a total of 74,000 common shares for cash contributions of $2,220 at $0.03 per share.

During March 2016, the Company issued a total of 333,000 common shares for cash contributions of $9,862 at $0.03 per share.

There were 3,441,500 shares of common stock issued and outstanding as of March 31, 2016.

Purchase of our Equity Securities by Officers and Directors

On December 26, 2014, the Company offered and sold 3,000,000 restricted shares of common stock to our president and director, Otmane Tajmouati, for a purchase price of $0.001 per share, for aggregate offering proceeds of $3,000, pursuant to Section 4(2) of the Securities Act of 1933 as he is a sophisticated investor and is in possession of all material information relating to us. Further, no commissions were paid to anyone in connection with the sale of these shares and general solicitation was not made to anyone.

Other Stockholder Matters

None.

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Item 6. Selected Financial Data                                       

Not applicable to smaller reporting companies.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This annual report and other reports filed by Addentax Group Corp.   (“we,” “us,” “our,” or the “Company”), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.

Overview

Addentax Group Corp. was incorporated in the State of Nevada on October 28, 2014 and established a fiscal year-end of March 31. We are in the development stage and were incorporated to produce images on multiple surfaces, such as glass, leather, plastic, ceramic, textile, and others using a 3D sublimation vacuum heat transfer machine.

Our business office is located at 70, Av Allan Ben Abdellah, Fes, Morocco 30000. Our telephone number is +17026606161.

Our Business

The Company is working on a field of producing images on a surface such as glass, leather, plastic, ceramic, textile, and others using 3D sublimation vacuum heat transfer machines. Heat transfer technology is one of most economical methods of application. This modern technology has been quiet popular for many years and has not lost its relevance. Materials for images can be varied, such as ceramics, glass, crockery of different quality, metal, clothing, caps, bags, leather products and other products. Our products are intended for individuals, business owners associated with the sale of souvenirs, and business owners who intend to order souvenirs in the corporate style. In order to organize our business, we need equipment and supplies, so that we can make the images on customer’s products, and then we will rent more warehouse space for goods on which to apply the images. We plan to conclude a contract of carriage with local shipping companies for delivery of our goods to other cities such as Meknes, Rabat, Kenitra and worldwide.

3D sublimation vacuum heat transfer machine

We use 3D sublimation vacuum heat transfer technology to apply images on many surfaces. The 3D sublimation vacuum heat transfer machine does not require high technical skill for product production. A set of printing materials include the machine itself, and all raw materials necessary for setting up and testing, and raw materials for the production process.

Our industrial flatbed printing machine is not large, is user-friendly, is simple to maintain, and doesn’t require any special service.

Target market

We can determine two different directions our product can cover - corporate and private. By corporate, we mean large and small companies, who always care about image and updating company information. Corporate styles of any company are often reflected by

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printed images on pens, souvenirs, notepads, laptops and others. We are ready to provide image printing on any of the aforesaid products. By private we mean any private events, where memorable gifts can be suitable. Weddings, birthdays, and anniversaries – any holiday of any scale can become even more memorable with some kind of commemorative image on a glass or metal souvenir, which can be hung on the wall, for example. Addentax Group Corp. is able to offer any type of client the printed product that can meet its special requirements.

We have signed a contract for the sale of goods with Derb il Horra, a small enterprise, which is involved mostly in selling souvenirs not only in Fes, but also in another cities of Morocco.

Marketing

Our sole officer and director, Otmane Tajmouati, is responsible for the marketing of the Company. We intend to use marketing strategies, such as the World Wide Web, namely, dissemination of information on social networks such as Facebook, Twitter and other sites with ads, direct mailing, and distribution of flyers in hotels, cafes and restaurants, by handing out flyers in public and tourists’ spots and shopping malls to acquire potential customers. We believe that one of the most powerful aspects of online marketing is the ability to target our chosen group with a high degree of accuracy that will also be cost effective. We will use many online marketing tools to direct traffic to our website and identify potential customers. As of the date of these financial statements we have registered a domain name for our website www.addentaxgroup.com and have included initial information about the Company and its products. To accomplish this, we plan to contact an independent web designing company. Our website describes our products, shows our contact information, and includes some general information and pictures of our products. We also plan to attend shows and exhibitions in our industry and other related industries, where it would be appropriate to attract new customers and advertise our products. We will also promote our products through word-of-mouth.

Also, we have prepared a brochure representing Addentax Group Corp. and our business, which contains basic information about the Company. We believe it will help us in our marketing upon commencement of our production process and for making our products known to potential customers.

Storage and delivery

The product produced by Addentax Group Corp. does not require any storage facilities. It is produced directly for each order. The number of demonstration samples kept is insignificant and doesn’t require any special premises for storage. We intend to sign a contract with a freight company to deliver our products. We expect that term of delivery shall be not more than 15 days, which shall include production and acceptance by clients.

Competition

We are in direct competition with other companies offering similar products. Nearly all Addentax Group Corp.'s competitors have significantly greater financial resources, technical expertise, and managerial capabilities than Addentax Group Corp. We are, consequently, at a competitive disadvantage in being able to provide such products and become a successful company in the printing industry. Therefore, Addentax Group Corp. may not be able to establish itself within the industry at all.

Insurance

We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs, a judgment could be rendered against us that could cause us to cease operations.

Employees

We are at a development stage and do not have employees, other than our sole officer, Otmane Tajmouati, who will initially perform all works in production and organization of our business.

Offices

Our business office is located at 70, Av Allan Ben Abdellah, Fes, Morocco 30000. Our telephone number is +17026606161.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the year ended March 31, 2016:

Revenue and cost of goods sold

For the year ended March 31, 2016 and from October 28, 2014 (inception) to March 31, 2015, the Company generated total revenue of $5,700, and $1,080 respectively from selling printed products to its customer. The cost of goods sold for the year ended March 31, 2016 and from October 28, 2014 (inception) to March 31, 2015 was $713, and $284 respectively, which represents the cost of raw materials. We expect to generate revenue as we expand our business operations.

Operating expenses

Total operating expenses for the year ended March 31, 2016 and from October 28, 2014 (inception) to March 31, 2015, were $14,729 and $607 respectively. The operating expenses included accounting fees of $7,850 for the year ended March 31, 2016 and $0 from October 28, 2014 (inception) to March 31, 2015; bank charges of $611 for the year ended March 31, 2016 and $150 from October 28, 2014 (inception) to March 31, 2015; depreciation expense of $1,068 for the year ended March 31, 2016 and $267 from October 28, 2014 (inception) to March 31, 2015; regulatory filings of $920 for the year ended March 31, 2016 and $0 from October 28, 2014 (inception) to March 31, 2015; legal fees of $2,000 for the year ended March 31, 2016 and $0 from October 28, 2014 (inception) to March 31, 2015; and rent expense of $2,280 for the year ended March 31, 2016 and $190 from October 28, 2014 (inception) to March 31, 2015.

Net Income/Loss

The net loss for the year ended March 31, 2016 was $9,714 and $161 of net income from October 28, 2014 (inception) to March 31, 2015.

Liquidity and Capital Resources and Cash Requirements

At March 31, 2016, the Company had cash of $10,052 ($6,990 as of March 31, 2015). Furthermore, the Company had positive working capital of $4,259 (deficit of $188 as of March 31, 2015).

During the year ended March 31, 2016, the Company used $10,031 of cash in operating activities due to increases in raw material inventory of $977, increase in prepaid rent of $380, decrease in taxes of $28 and depreciation of $1,068.  

During the year ended March 31, 2016, the Company did not generate or use cash in investing activities.

During the ended of March 31, 2016, the Company generated $13,093 cash in financing activities as we issued a total of 441,500 common shares for cash contribution of $13,093.

We are planning to raise $90,000 through a public offering. There is no assurance that the full amount, or any amount, will be obtained. The following table sets forth the uses of proceeds for the twelve months assuming the funding of 33%, 66%, and 100%, respectively:

There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon public offering and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant

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dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited consolidated financial statements, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Future Financing Requirements

We will need to obtain proper funding from equity and/or additional debt financing in order to be able to fulfill our projections. Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material adverse effect on our ability to achieve our business objectives and will greatly affect our ability to continue as a going concern.

Effective March 2, 2015, the Company entered into a Loan Agreement with Otmane Tajmouati, the Company’s sole officer and director. Under the terms of the Loan Agreement, Mr. Tajmouati has agreed to loan up to $30,000 to the Company to fund ongoing expenses and operational needs. No funds under this Loan Agreement were advanced to the Company during the year ended March 31, 2016. The balance of $8,100 that had been loaned to the Company by Mr. Tajmouati as of March 31, 2016 was not advanced under the terms of this loan agreement.  

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is March 31.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $10,052 of cash as of March 31, 2016, and $6,990 as of March 31, 2015.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these will have a material impact on the Company.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk   

Not applicable to smaller reporting companies.

Item 8. Financial Statements and Supplementary Data   

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ADDENTAX GROUP CORP.  

FINANCIAL STATEMENTS

For the year ended March 31, 2016 and March 31, 2015

Table of Contents

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      REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Addentax Group Corp.

We have audited the accompanying balance sheet of Addentax Group Corp. (a development stage company) as of March 31, 2015 and the related statement of operations, changes in shareholder’s equity and cash flow for the period from October 28, 2014 (Inception) to March 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Addentax Group Corp. as of March 31, 2015 and the related statement of operations and cash flow for the period from October 28, 2014 (Inception) to March 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements the Company has nominal income from operations since Inception (October 28, 2014) and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cutler & Co., LLC

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Board of Directors

Addentax Group Corp.

70, Ave Allal Ben Abdellah

Fes, Morocco, 30000

We have audited the accompanying balance sheet of Addentax Group Corp. as of March 31, 2016 and the related statements of operations, changes in stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Addentax Group Corp. as of March 31, 2016 and the results of its operations and its cash flows for the period then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered continuing losses and has not yet established a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

/s/ Pritchett, Siler and Hardy PC

Pritchett, Siler and Hardy PC

Farmington Utah

May 13, 2016

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ADDENTAX GROUP CORP.

Balance Sheets

The accompanying notes are an integral part of these financial statements.

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ADDENTAX GROUP CORP.

Statements of Operations

The accompanying notes are an integral part of these financial statements.

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ADDENTAX GROUP CORP.

Statement of Stockholders’ Equity

The accompanying notes are an integral part of these financial statements.

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ADDENTAX GROUP CORP.

Statements of Cash Flows

The accompanying notes are an integral part of these financial statements.

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ADDENTAX GROUP CORP.

Notes to the Financial Statements

For the year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015

Addentax Group Corp. (“the Company”, “we”, “us” or “our”) was incorporated in Nevada on October 28, 2014, and the Company is engaged in the field of producing images on multiple surfaces using heat transfer technology.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. However, the Company has generated only limited revenues and has a working capital deficit as of March 31, 2016. The Company has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time and currently does not have the funding to fully implement its business-plan. Therefore there is substantial doubt about the Company’s ability to continue as a going concern.

The Company's ability to continue as a going concern is dependent upon the Company generating sustainable profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due and finance the implementation of its business plan.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s yearend is March 31.

Development Stage Company

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification and among the additional disclosures required as a development stage company are that its financial statements were identified as those of a development stage company, and that the statements of operations, stockholders' deficit and cash flows disclosed activity since the date of its inception (October 28, 2014) as a development stage company. All losses accumulated since Inception (October 28, 2014) have been considered as part of the Company's development stage activities. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. Consequently these additional disclosures are not included in these financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $10,052 of cash as of March 31, 2016, and $6,990 as of March 31, 2015.

Inventory

Inventory is recorded at lower of cost or market; cost is computed on a first-in first-out basis. As of March 31, 2016 the Company had $977 of raw material inventory.

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ADDENTAX GROUP CORP.

Notes to the Financial Statements

For the year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015

Fixed Assets

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. Since inception, the Company has generated limited revenues from producing images on multiple surfaces using heat transfer technology.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company did not incur any advertising expenses during the year ended March 31, 2016.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. During the year ended March 31, 2016 there were no potentially dilutive debt or equity instruments issued or outstanding.  

Comprehensive Income

Comprehensive income is defined as all changes in stockholders' equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. During the year ended March 31, 2016 were no differences between our comprehensive loss and net loss.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these will have a material impact on the Company.

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ADDENTAX GROUP CORP.

Notes to the Financial Statements

For the year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015

Note 4.

FIXED ASSETS

We recognized depreciation expense of $1,068 and $267 in respect of equipment during year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015 respectively. No depreciation was recognized in respect of the website as of March 31, 2016 as the website was not yet operational during the period.

The Company will continue to rely on advances from related parties until when it can support its operations through generating revenue, attaining adequate financing through sales of its equity securities or traditional debt financing. There is no formal written commitment by the shareholders to continue to support the company’s operation. The amounts due to shareholders represent advances or amounts paid on behalf of the Company in satisfaction of liabilities. These advances are considered temporary in nature and have not been formalized by promissory notes.  

The balance due to Otmane Tajmouati, the Company’s sole officer and director, as of March 31, 2016 was $8,100. This loan is unsecured, non-interest bearing and due on demand.

Note 6.

SHAREHOLDER’S EQUITY

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

On December 26, 2014, the Company issued 3,000,000 shares of common stock to a director for cash proceeds of $3,000 at $0.001 per share.

During November 2015, the Company issued a total of 8,000 common shares for cash contributions of $240 at $0.03 per share.

During December 2015, the Company issued a total of 8,000 common shares for cash contributions of $240 at $0.03 per share, and real cash contribution of $215 because of $25 wire transfer charge.

During January 2016, the Company issued a total of 18,500 common shares for cash contributions of $555 at $0.03 per share.

During February 2016, the Company issued a total of 74,000 common shares for cash contributions of $2,220 at $0.03 per share.

During March 2016, the Company issued a total of 333,000 common shares for cash contributions of $9,990 at $0.03 per share and real cash contribution of $9,862 because of $128 wire transfer charge.

There were 3,441,500 shares of common stock issued and outstanding as of March 31, 2016.

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ADDENTAX GROUP CORP.

Notes to the Financial Statements

For the year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015

Lease agreement

Company has extended its six months rental agreement, signed on December 15, 2014 for additional six months. The lease expires in February 29, 2016.  On February 25, 2016 Company has signed new a year rental agreement. The lease expires in February 28, 2017. The Company is renting 30 square meters of office space for $190 per month.

Litigation

We were not subject to any legal proceedings during the year ended March 31, 2016 and for the period from October 28, 2014 (inception) to March 31, 2015, and we know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers, affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

As of March 31, 2016 the Company had net operating loss carry forwards of approximately $9,553 that may be available to reduce future years’ taxable income in varying amounts through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for Federal income tax consists of the following:

The cumulative tax effect at the expected rate of 15% of significant items comprising our net deferred tax amount is as follows:

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $9,553 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to March 31, 2016 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A (T). Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a‐15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of March 31, 2016. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2016 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of March 31, 2016, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

1.

We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit

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Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

2.

We did not maintain appropriate cash controls – As of March 31, 2016, the Company has not maintained sufficient internal controls over financial reporting for cash, including failure to segregate cash handling and accounting functions, and did not require dual signatures on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in its bank accounts.

3.

We did not implement appropriate information technology controls – As at March 31, 2016, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2016 based on criteria established in Internal Control- Integrated Framework issued by COSO.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company

DIRECTORS AND EXECUTIVE OFFICERS

The name, age and titles of our executive officer and director is as follows:

Otmane Tajmouati has acted as our President, Treasurer, Secretary and sole Director since our incorporation on October 28, 2014. Mr. Tajmouati owns 87% of the outstanding shares of our common stock. He graduated from University of New England, Tangier, Morocco, on the Faculty of Business administration for the period of 2007-2013. Mr. Tajmouati worked for GLOBAL PROJECT SARL from 2013 till 2014 as a manager in customers department, and fulfilled duties concerning customer communication and assistance. The enterprise is working on import and distribution different piece of furniture and accessories for the house and offices. Mr. Tajmouati is devoting 75% of his time a week for planning and organizing activities of Addentax Group Corp.

During the past ten years, Mr. Tajmouati has not been the subject to any of the following events:

    1. Any bankruptcy petition filed by or against any business of which Mr. Tajmouati was a general partner or executive

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officer either at the time of the bankruptcy or within two years prior to that time.

    2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding.

    3. An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Tajmouati’s involvement in any type of business, securities or banking activities.

    4. Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to violate a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

    5.  Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

    6.  Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

    7.  Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i. Any Federal or State securities or commodities law or regulation; or

ii. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

    8.  Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

AUDIT COMMITTEE

We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.

SIGNIFICANT EMPLOYEES

We have no employees other than our sole director Mr. Tajmouati. We intend to hire employees on an as needed basis.

Item 11. Executive Compensation

The following tables set forth certain information about compensation paid, earned or accrued for services by our Executive Officer from inception on October 28, 2014 until March 31, 2016:

Summary Compensation Table

There are no current employment agreements between the Company and its officer.

Mr. Tajmouati currently devotes approximately 75% per week of his time to manage the affairs of the Company. He has agreed to work with no remuneration until such time as the Company receives significant revenues necessary to provide management

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salaries. At this time, we cannot accurately estimate when significant revenues will occur to implement this compensation, or what the amount of the compensation will be.

There are no annuity, pension or retirement benefits proposed to be paid to the officer or director or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the Company or any of its subsidiaries, if any.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information as of March 31, 2016 concerning the number of shares of common stock beneficially owned by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our director, and or (iii) our officer.  Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.

The percent of class is based on 3,441,500 shares of common stock issued and outstanding as of the date of this annual report.

Item 13. Certain Relationships and Related Transactions

During the year ended March 31, 2016, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.

As of March 31, 2016, a director had loaned $8,100 ($8,100 as of March 31, 2015) to the Company to provide working capital for its business operations. The loan is unsecured, non-interest bearing and due on demand.

Item 14. Principal Accountant Fees and Services 

During fiscal year ended March 31, 2016, we incurred approximately $11,200 in fees to our principal independent accountants for professional services rendered in connection with the audit of our March 31, 2015 financial statements and for the reviews of our financial statements for the quarters ended June 30, 2015, September 30, 2015 and December 31, 2015.

PART IV

Item 15. Exhibits

The following exhibits are included as part of this report by reference:

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the Fes, Morocco on May 31, 2016.

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