11. Concentrations of Risk

9 Months Ended

Sep. 30, 2019

Risks and Uncertainties [Abstract]

Concentrations of Risk

NOTE 11 –    CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a)       Major customer

For the three months ended September 30, 2019 and 2018, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows:

		Three months ended September 30, 2019					September 30, 2019
Customers		Revenues		Percentage of revenues			Accounts Receivable
Customer B		$	71,116		53%		$	18,740
Customer A			41,651		31%			3,944
	Total:	$	112,767		84%	Total:	$	22,684

		Three months ended September 30, 2018					September 30, 2018
Customers		Revenues		Percentage of revenues			Accounts Receivable
Customer A		$	73,393		36%		$	23,077
Customer B			73,240		36%			–
	Total:	$	146,633		72%	Total:	$	23,077

For the nine months ended September 30, 2019 and 2018, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows:

		Nine months ended September 30, 2019					September 30, 2019
Customers		Revenues		Percentage of revenues			Accounts Receivable
Customer B		$	183,056		46%		$	18,740
Customer A			151,819		38%			3,944
	Total:	$	334,875		84%	Total:	$	22,684

		Nine months ended September 30, 2018					September 30, 2018
Customers		Revenues		Percentage of revenues			Accounts Receivable
Customer B		$	271,047		48%		$	23,077
Customer A			200,061		36%			–
	Total:	$	471,108		84%	Total:	$	23,077

All customers are located in the Hong Kong.

(b)       Major vendors

For the three and nine months ended September 30, 2019, one vendor represented more than 10% of the Company’s purchase. This vendor (Vendor C) accounted for 23% of the Company’s purchase amounting to $14,382.

For the three and nine months ended September 30, 2018, one vendor represented more than 10% of the Company’s operating cost. This vendor accounted for 11% and 13% of the Company’s operating cost amounting to $15,210 and $62,468, respectively with $22,459 of accounts payable at September 30, 2018.

All vendors are located in the Hong Kong.

(c)       Credit risk

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d)      Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from borrowing under finance lease. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of September 30, 2019, borrowings under finance lease were at fixed rates.

(e)       Exchange rate risk

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in HKD and a significant portion of the assets and liabilities are denominated in HKD. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and HKD. If HKD depreciates against US$, the value of HKD revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.